{"id":132,"date":"2018-09-24T14:45:46","date_gmt":"2018-09-24T14:45:46","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/suny-osintrobus\/chapter\/trends-in-organizational-structure\/"},"modified":"2018-10-05T16:05:34","modified_gmt":"2018-10-05T16:05:34","slug":"trends-in-organizational-structure","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-osintrobus\/chapter\/trends-in-organizational-structure\/","title":{"raw":"Trends in Organizational Structure","rendered":"Trends in Organizational Structure"},"content":{"raw":"<ol id=\"fs-idm311613680\" start=\"8\">\r\n \t<li>What trends are influencing the way businesses organize?<\/li>\r\n<\/ol>\r\n<p id=\"fs-idm334673088\">To improve organizational performance and achieve long-term objectives, some organizations seek to reengineer their business processes or adopt new technologies that open up a variety of organizational design options, such as virtual corporations and virtual teams. Other trends that have strong footholds in today\u2019s organizations include outsourcing and managing global businesses.<\/p>\r\n\r\n<div id=\"fs-idm340505200\" class=\"bc-section section\">\r\n<h3>Reengineering Organizational Structure<\/h3>\r\n<p id=\"fs-idm327481040\">Periodically, all businesses must reevaluate the way they do business. This includes assessing the effectiveness of the organizational structure. To meet the formidable challenges of the future, companies are increasingly turning to <strong>reengineering<\/strong>\u2014the complete redesign of business structures and processes in order to improve operations. An even simpler definition of reengineering is \u201cstarting over.\u201d In effect, top management asks, \u201cIf we were a new company, how would we run this place?\u201d The purpose of reengineering is to identify and abandon the outdated rules and fundamental assumptions that guide current business operations. Every company has many formal and informal rules, based on assumptions about technology, people, and organizational goals, that no longer hold. Thus, the goal of reengineering is to redesign business processes to achieve improvements in cost control, product quality, customer service, and speed. The reengineering process should result in a more efficient and effective organizational structure that is better suited to the current (and future) competitive climate of the industry.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fs-idm341080992\" class=\"bc-section section\">\r\n<h3>The Virtual Corporation<\/h3>\r\n<p id=\"fs-idm336916352\">One of the biggest challenges for companies today is adapting to the technological changes that are affecting all industries. Organizations are struggling to find new organizational structures that will help them transform information technology into a competitive advantage. One alternative that is becoming increasingly prevalent is the <strong>virtual corporation<\/strong>, which is a network of independent companies (suppliers, customers, even competitors) linked by information technology to share skills, costs, and access to one another\u2019s markets. This network structure allows companies to come together quickly to exploit rapidly changing opportunities. The key attributes of a virtual corporation are:<\/p>\r\n\r\n<ul id=\"fs-idm332023872\">\r\n \t<li><em>Technology.<\/em> Information technology helps geographically distant companies form alliances and work together.<\/li>\r\n \t<li><em>Opportunism.<\/em> Alliances are less permanent, less formal, and more opportunistic than in traditional partnerships.<\/li>\r\n \t<li><em>Excellence.<\/em> Each partner brings its core competencies to the alliance, so it is possible to create an organization with higher quality in every functional area and increase competitive advantage.<\/li>\r\n \t<li><em>Trust.<\/em> The network structure makes companies more reliant on each other and forces them to strengthen relationships with partners.<\/li>\r\n \t<li><em>No borders.<\/em> This structure expands the traditional boundaries of an organization.<\/li>\r\n<\/ul>\r\n<p id=\"fs-idm335292896\">In the concept\u2019s purest form, each company that links up with others to create a virtual corporation is stripped to its essence. Ideally, the virtual corporation has neither a central office nor an organization chart, no hierarchy, and no vertical integration. It contributes to an alliance only its core competencies, or key capabilities. It mixes and matches what it does best with the core competencies of other companies and entrepreneurs. For example, a manufacturer would only manufacture, while relying on a product design firm to decide what to make and a marketing company to sell the end result.<\/p>\r\n<p id=\"fs-idm334992160\">Although firms that are purely virtual organizations are still relatively scarce, many companies are embracing several characteristics of the virtual structure. One example is <span class=\"no-emphasis\">Cisco Systems<\/span>. Cisco uses many manufacturing plants to produce its products, but the company owns none of them. In fact, Cisco now relies on contract manufacturers for all of its manufacturing needs. Human hands probably touch fewer than 10 percent of all customer orders, with fewer than half of all orders processed by a Cisco employee. To the average customer, the interdependency of Cisco\u2019s suppliers and inventory systems makes it look like one huge, seamless company.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fs-idm334993632\" class=\"bc-section section\">\r\n<h3>Virtual Teams<\/h3>\r\n<p id=\"fs-idm335747888\">Technology is also enabling corporations to create virtual work teams. Geography is no longer a limitation when employees are considered for a work team. Virtual teams mean reduced travel time and costs, reduced relocation expenses, and utilization of specialized talent regardless of an employee\u2019s location.<\/p>\r\n<p id=\"fs-idm339722384\">When managers need to staff a project, all they need to do is make a list of required skills and a general list of employees who possess those skills. When the pool of employees is known, the manager simply chooses the best mix of people and creates the virtual team. Special challenges of virtual teams include keeping team members focused, motivated, and communicating positively despite their locations. If feasible, at least one face-to-face meeting during the early stages of team formation will help with these potential problems.<\/p>\r\n\r\n<div id=\"fs-idm339911648\" class=\"scaled-down\">\r\n<div class=\"bc-figcaption figcaption\">\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"1300\"]<img src=\"https:\/\/cnx.org\/resources\/319aede2e7a07b256cd1ab38e25e91b9bac1a1a0\" alt=\"A photograph shows a woman on a laptop while she sits at a coffee shop.\" width=\"1300\" height=\"867\" \/> <strong>Exhibit 7.11\u00a0<\/strong>In today\u2019s high-tech world, teams can exist any place where there is access to the internet. With globalization and outsourcing being common strategies in business operations today, companies of all shapes and sizes utilize virtual teams to coordinate people and projects halfway around the world. Unlike coworkers in traditional teams, virtual team members rarely meet in person, working from different locations and continents. What practical benefits do virtual teams offer to businesses, employees, and other members? (Credit: ThoroughlyReviewed\/ Flickr\/ Attribution 2.0 Generic (CC BY 2.0))[\/caption]\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<div id=\"fs-idm311696224\" class=\"bc-section section\">\r\n<h3>Outsourcing<\/h3>\r\n<p id=\"fs-idm488528912\">Another organizational trend that continues to influence today\u2019s managers is outsourcing. For decades, companies have outsourced various functions. For example, payroll functions such as recording hours, managing benefits and wage rates, and issuing paychecks have been handled for years by third-party providers. Today, however, outsourcing includes a much wider array of business functions: customer service, production, engineering, information technology, sales and marketing, and more.<\/p>\r\nHistorically, companies have outsourced for two main reasons: cost reduction and labor needs. Often, to satisfy both requirements, companies outsource work to firms in foreign countries. In 2017, outsourcing remains a key component of many businesses\u2019 operations but is not strictly limited to low-level jobs. Some of the insights highlighted in <span class=\"no-emphasis\">Deloitte<\/span>\u2019s recent Global Outsourcing Survey bear this out. According to survey respondents from 280 global organizations, outsourcing continues to be successful because it is adapting to changing business environments. According to the survey, outsourcing continues to grow across mature functions such as HR and IT, but it has successfully moved to nontraditional business functions such as facilities management, purchasing, and real estate. In addition, some businesses view outsourcing as a way of infusing their operations with innovation and using it to maintain a competitive advantage\u2014not just as a way to cut costs. As companies increasingly view outsourcing as more than a cost-cutting strategy, they will be expecting more of their vendors in terms of supplying innovation and other benefits.[footnote]\u201cKey Outsourcing Trends from Deloitte\u2019s 2016 Global Outsourcing Survey,\u201d https:\/\/www2.deloitte.com, accessed July 19, 2017.[\/footnote]\r\n<p id=\"fs-idm339837200\">Another form of outsourcing has become prevalent over the last several years, in part as the result of the slow economic recovery from the global recession of 2007\u20132009. As many U.S. businesses hesitated to hire full-time workers even as they began to experience gradual growth, some companies began to offer contract work to freelancers, who were not considered full-time employees eligible for company benefits. Known as the <em>gig economy,<\/em> this work approach has advantages and disadvantages. Some gig workers like the independence of being self-employed, while others acknowledge that they are taking on multiple small projects because they can\u2019t find full-time work as company employees. Another group of individuals work as full-time employees but may sign up for gigs such as driving for <span class=\"no-emphasis\">Uber<\/span> or <span class=\"no-emphasis\">Lyft<\/span> to supplement their income. Recent estimates suggest that the gig economy may impact more than one-third of the U.S. workforce over the next few years.[footnote]Patrick Gillespie, \u201cIntuit: Gig Economy Is 34% of US Workforce,\u201d CNN Money, http:\/\/money.cnn.com, May 24, 2017.[\/footnote]<\/p>\r\n<p id=\"fs-idm351566608\">Despite the challenges, outsourcing programs can be effective. To be successful in outsourcing efforts, managers must do the following:<\/p>\r\n\r\n<ul id=\"fs-idm330204400\">\r\n \t<li>Identify a specific business problem.<\/li>\r\n \t<li>Consider all possible solutions.<\/li>\r\n \t<li>Decide whether outsourcing the work is the appropriate answer to the problem.<\/li>\r\n \t<li>Develop a strategic outsourcing partnership with vendors and a solid framework that promotes seamless collaboration and communication.<\/li>\r\n \t<li>Engage with outsourcing partners on a regular basis to instill trust between the two entities.<\/li>\r\n \t<li>Remain flexible when it comes to working with outsourcing providers in terms of accommodating requests or adjusting needs when necessary in an effort to build a long-term strategic partnership beneficial to both parties.[footnote]Missy Chaiet, \u201c6 Steps to Creating Better Strategic Outsourcing Partnerships,\u201d https:\/\/www.cgsinc.com, July 1, 2016.[\/footnote] <a href=\"#rfin-ch07_19\">\r\n<\/a><\/li>\r\n<\/ul>\r\n<\/div>\r\n<div class=\"bc-section section\">\r\n<h3>Structuring for Global Mergers<\/h3>\r\n<p id=\"fs-idm350253840\">Recent mergers creating mega-firms (such as <span class=\"no-emphasis\">Microsoft<\/span> and <span class=\"no-emphasis\">LinkedIn<\/span>, <span class=\"no-emphasis\">Amazon<\/span> and <span class=\"no-emphasis\">Whole Food<\/span>s, and <span class=\"no-emphasis\">Verizon<\/span> and <span class=\"no-emphasis\">Yahoo<\/span>) raise some important questions regarding corporate structure. How can managers hope to organize the global pieces of these huge, complex new firms into a cohesive, successful whole? Should decision-making be centralized or decentralized? Should the firm be organized around geographic markets or product lines? And how can managers consolidate distinctly different corporate cultures? These issues and many more must be resolved if mergers of global companies are to succeed.<\/p>\r\n<p id=\"fs-idm310025088\">Beyond designing a new organizational structure, one of the most difficult challenges when merging two large companies is uniting the cultures and creating a single business. The merger between <span class=\"no-emphasis\">Pfizer<\/span> and <span class=\"no-emphasis\">Pharmacia<\/span>, makers of Dramamine and Rogaine, is no exception. Failure to effectively merge cultures can have serious effects on organizational efficiency.<\/p>\r\nAs part of its strategic plan for the giant merger, <span class=\"no-emphasis\">Pfizer<\/span> put together 14 groups that would make recommendations concerning finances, human resources, operation support, capital improvements, warehousing, logistics, quality control, and information technology. An outside consultant was hired to facilitate the process. One of the first tasks for the groups was to deal with the conqueror (<span class=\"no-emphasis\">Pfizer<\/span>) versus conquered (<span class=\"no-emphasis\">Pharmacia<\/span>) attitudes. Company executives wanted to make sure all employees knew that their ideas were valuable and that senior management was listening.\r\n<p id=\"fs-idm350485024\">As more and more global mergers take place, sometimes between the most unlikely suitors, companies must ensure that the integration plan includes strategies for dealing with cultural differences, establishing a logical leadership structure, implementing a strong two-way communications channel at all levels of the organization, and redefining the \u201cnew\u201d organization\u2019s vision, mission, values, and culture.[footnote]Allan Steinmetz, \u201cSeven Steps for Cultural Integration During a Merger or Acquisition,\u201d http:\/\/www.inwardconsulting.com, accessed July 21, 2017.[\/footnote]<\/p>\r\n\r\n<div id=\"fs-idm335993248\" class=\"concept-check\">\r\n<div class=\"textbox key-takeaways\">\r\n<h3>concept check<\/h3>\r\n<ol>\r\n \t<li>How does technology enable firms to organize as virtual corporations?<\/li>\r\n \t<li>What effect could the gig economy have on a company\u2019s decision to outsource?<\/li>\r\n \t<li>What are some organizational issues that must be addressed when two firms merge?<\/li>\r\n<\/ol>\r\n<\/div>\r\n<span style=\"color: #6c64ad;font-size: 1em;font-weight: 600\">Summary of Learning Outcomes<\/span>\r\n\r\n<\/div>\r\n<\/div>\r\n<div id=\"fs-idm349105712\" class=\"section-summary\">\r\n<ol start=\"8\">\r\n \t<li>What trends are influencing the way businesses organize?<\/li>\r\n<\/ol>\r\n<p id=\"fs-idm488213616\">Reengineering is a complete redesign of business structures and processes in order to improve operations. The goal of reengineering is to redesign business processes to achieve improvements in cost control, product quality, customer service, and speed.<\/p>\r\n<p id=\"fs-idm488236032\">The virtual corporation is a network of independent companies (suppliers, customers, even competitors) linked by information technology to share skills, costs, and access to one another\u2019s markets. This network structure allows companies to come together quickly to exploit rapidly changing opportunities.<\/p>\r\n<p id=\"fs-idm354976928\">Many companies are now using technology to create virtual teams. Team members may be down the hall or across the ocean. Virtual teams mean that travel time and expenses are eliminated and the best people can be placed on the team regardless of where they live. Sometimes, however, it may be difficult to keep virtual team members focused and motivated.<\/p>\r\n<p id=\"fs-idm340134336\">Outsourcing business functions\u2014both globally and domestically\u2014continues to be a regular business practice for companies large and small. Companies choose to outsource either as a cost-saving measure or as a way to gain access to needed human resource talent and innovation. To be successful, outsourcing must solve a clearly articulated business problem. In addition, managers must use outsourcing providers that fit their company\u2019s actual needs and strive to engage these providers as strategic partners for the long term. A recent phenomenon known as the gig economy has taken on more importance as it pertains to the U.S. labor force and outsourcing. More people are working as freelancers on a per-project basis, either because they can\u2019t get hired as full-time employees or because they prefer to work as self-employed individuals.<\/p>\r\n<p id=\"fs-idm489278688\">Global mergers raise important issues in organizational structure and culture. The ultimate challenge for management is to take two organizations and create a single, successful, cohesive organization.<\/p>\r\n\r\n<\/div>\r\n<div class=\"prep-workplace\">\r\n<h3>Preparing for Tomorrow\u2019s Workplace Skills<\/h3>\r\n<ol>\r\n \t<li>When people talk of climbing the corporate ladder, they are referring to moving vertically upward through the organizational structure. Many employees plot career paths that will take them to increasingly higher levels of management. Do you think you would be more interested in climbing higher in an organization, or being a middle-management bridge between the employees who do the work and the executives who set the strategy? Explain the reasons for your choice. (Resources, Interpersonal)<\/li>\r\n \t<li>Teams are an increasingly popular method of organizing corporations, but not all people are suited for teamwork. As a manager, what do you do with employees who are talented but unapproachable? Can you think of a way to involve people who are uncomfortable in team settings so that your teams have the perspective of these employees as well? (Interpersonal)<\/li>\r\n \t<li>Think about how gossip and rumors travel through a grapevine. Draw as many grapevines as you can think of that reflect the different ways rumors move through an organization. Can you think of information that a manager would want to disseminate through the grapevine? Is there information that is inappropriate to disseminate through informal channels? Provide examples. (Information)<\/li>\r\n \t<li>Do you think companies that outsource will inevitably become virtual corporations? Why or why not? (Resources, Systems)<\/li>\r\n \t<li>It used to be that only high-level executives and CEOs were able to work out of the office. Mobile computing, however, is trickling down the organizational chart. In your opinion, is there a point in the organizational structure at which working remotely (at home, on the road) should stop? Should all employees in the hierarchy be allowed to work in a virtual environment, or should there be limits? Explain your reasoning. (Technology, Systems)<\/li>\r\n \t<li><strong>Team Activity<\/strong> Have you ever worked on a team with an underperforming member, such as a slacker, a complainer, or a critic? Assemble a team of three to five students and brainstorm a list of \u201cbad\u201d team members you have experience working with. Once you have a list of types, discuss how that person affected the work of the team and the outcome the team produced. Brainstorm ways to better manage and mitigate the negative effects of \u201cbad\u201d team members. Share your results with the class. (Interpersonal, Systems)<\/li>\r\n<\/ol>\r\n<\/div>\r\n<div id=\"fs-idm339156352\" class=\"ethics-activity\">\r\n<h3>Ethics Activity<\/h3>\r\n<div id=\"fs-idm353461200\" class=\"bc-section section\">\r\n<h4>Training IT Replacements<\/h4>\r\nRecently the University of California at San Francisco (UCSF) announced it would lay off more than 80 IT workers and outsource their jobs to India. This change is part of a larger plan by UCSF to increase its technology outsourcing, which over time could save the organization more than $30 million. A large part of UCSF\u2019s IT work focuses on its hospital services, and many other health care facilities have already outsourced these types of \u201cback-end\u201d jobs to foreign countries.\r\n\r\nWorking through a multinational contractor that will manage the outsourcing process, UCSF has also asked workers who will soon be out of a job to train their overseas replacements via videoconferencing calls to India. One such worker remarked, \u201cI\u2019m speechless. How can they do this to us?\u201d\r\n<p id=\"fs-idm336005504\">A UCSF spokesperson explained that the organization provides millions of dollars in charity care for the poor, and that to continue providing those services, the school has to focus on more specialized tech work related to patients and medical research and send other IT work overseas.<\/p>\r\n<p id=\"fs-idm335760400\">UCSF is not alone in sending IT jobs overseas and making the laid-off workers train their Indian replacements. Recently ManpowerGroup, a staffing and workforce services firm with more than 3,000 offices worldwide, issued pink slips to 150 workers in Milwaukee whose jobs were outsourced to India.<\/p>\r\nUsing a web search tool, locate articles about this topic and then write responses to the following questions. Be sure to support your arguments and cite your sources.\r\n\r\n<strong>Ethical Dilemma:<\/strong> Are UCSF and other companies justified in outsourcing technology jobs to India? Do they have any obligation to find other jobs or provide training for displaced workers? Should organizations ask employees who are being laid off to train their replacements?\r\n<p id=\"fs-idm349269392\">Sources: Sam Harnett, \u201cOutsourced: In a Twist, Some San Francisco IT Jobs Are Moving to India,\u201d <em>All Tech Considered,<\/em> http:\/\/www.npr.org, accessed July 19, 2017; Dan Shafer, \u201cExclusive: ManpowerGroup HQ Workers Being Laid Off Required to Train Overseas Replacements,\u201d <em>Milwaukee Business Journal,<\/em> https:\/\/www.bizjournals.com, March 30, 2017; Bill Whitaker, \u201cAre U.S. Jobs Vulnerable to Workers with H-1B Visas?\u201d <em>60 Minutes,<\/em> http:\/\/www.cbsnews.com, March 19, 2017; Louis Hansen, \u201cAfter Pink Slips, USCF Tech Workers Train Their Foreign Replacements,\u201d <em>The Mercury News,<\/em> http:\/\/www.mercurynews.com, November 3, 2016.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n<div id=\"fs-idm312565392\" class=\"working-net\">\r\n<h3>Working the Net<\/h3>\r\n<ol id=\"fs-idm340429520\">\r\n \t<li>Using a search engine, look for the term \u201ccompany organizational charts,\u201d and find at least three examples of organizational charts for corporations, not-for-profits, or government agencies. Analyze each entity\u2019s organizational structure. Is it organized by function, product\/service, process, customer type, or geographic location?<\/li>\r\n \t<li>Search the archives at the <em>Bloomberg Businessweek<\/em> (<strong>https:\/\/www.bloomberg.com<\/strong>), <em>Fortune<\/em> (<strong>http:\/\/fortune.com<\/strong>), or <em>Forbes<\/em> (<strong>http:\/\/www.forbes.com<\/strong>) website for stories about companies that have reorganized. Pick two examples, and prepare a summary of their reorganization efforts, including the underlying reasons the company chose to reorganize, the key elements of the reorganization plan, and if possible, how successful it has been.<\/li>\r\n \t<li>Visit the <em>Inc.<\/em> magazine website, <strong>http:\/\/www.inc.com<\/strong>, and use the search engine to find articles about virtual corporations. Using a search engine, find the website of at least one virtual corporation, and look for information about how the company uses span of control, informal organization, and other concepts from this module.<\/li>\r\n \t<li>FlexJobs (<strong>http:\/\/www.flexjobs.com<\/strong>) is an online company devoted to matching job hunters with flexible job experiences, whether they are telecommuting jobs, contract work, or part-time gigs. Read more on how the company started and the void its services have filled over the past decade for people looking for a flexible job situation. Share your findings with classmates, and lead a discussion on the pros and cons of the flexible job movement.<\/li>\r\n \t<li>Managing change in an organization is no easy task, as you\u2019ve discovered in your new job with a consulting firm that specializes in change management. To get up to speed, go to Bpubs.com, the Business Publications Search Engine (<strong>http:\/\/www.bpubs.com<\/strong>), and navigate to the Change Management section of the Management Science category. Select three articles that discuss how companies approached the change process, and summarize their experiences.<\/li>\r\n \t<li>After managing your first project team, you think you might enjoy a career in project management. The Project Management Institute is a professional organization for project managers. Its website, <strong>http:\/\/www.pmi.org<\/strong>, has many resources about this field. Start at the Professional Practices section to learn what project management is, then go to the professional Development and Careers pages. What are the requirements to earn the Project Management Professional designation? Explore other free areas of the site to learn more about the job of project manager. Prepare a brief report on the career and its opportunities. Does what you\u2019ve learned make you want to follow this career path?<\/li>\r\n \t<li>Many companies are outsourcing portions of their IT departments. Should they, and why? Develop a position on this issue by researching outsourcing trends on <em>Information Week,<\/em> (<strong>http:\/\/www.informationweek.com<\/strong>), or an IT website of your choosing. Then divide the class into two groups, those that support outsourcing and those that oppose it, and have a debate on this subject.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<div id=\"fs-idm340527904\" class=\"critical-thinking\">\r\n<h3>Creative Thinking Case<\/h3>\r\n<div id=\"fs-idm339070544\" class=\"bc-section section\">\r\n<h4>Gore\u2019s Flat Structure Works Well<\/h4>\r\n<p id=\"fs-idm341113344\">Imagine an organization with more than 10,000 employees working in 30 countries around the world\u2014with no hierarchy structure. W. L. Gore &amp; Associates, headquartered in Newark, Delaware, is a model of unusual business practices. Wilbert Gore, who left Dupont to explore new uses for Teflon, started the company in 1958. Best known for its breathable, weatherproof Gore-Tex fabric, Glide dental floss, and Elixir guitar strings, the company has no bosses, no titles, no departments, and no formal job descriptions. There is no managerial hierarchy at Gore, and top management treats employees, called associates, as peers.<\/p>\r\n<p id=\"fs-idm339571008\">In 2005, the company named 22-year associate Terri Kelly as its new chief executive officer. Unlike large public corporations, Gore\u2019s announcement was made without much fanfare. Today, more than 12 years later, Kelly continues as chief executive but is the first to admit that it\u2019s not about the CEO at Gore\u2014it\u2019s about the people who work there and their relationships with one another.<\/p>\r\n<p id=\"fs-idm341217488\">The company focuses on its products and company values rather than on individuals. Committees, comprised of employees, make major decisions such as hiring, firing, and compensation. They even set top executives\u2019 compensation. Employees work on teams, which are switched around every few years. In fact, all employees are expected to make minor decisions instead of relying on the \u201cboss\u201d to make them. \u201cWe\u2019re committed to how we get things done,\u201d Kelly says. \u201cThat puts a tremendous burden on leaders because it\u2019s easier to say \u2018Just do it\u2019 than to explain the rationale. But in the long run, you\u2019ll get much better results because people are making a commitment.\u201d<\/p>\r\n<p id=\"fs-idm351166640\">Because no formal lines of authority exist, employees can speak to anyone in the company at any time. This arrangement also forces employees to spend considerable time developing relationships. As one employee described it, instead of trying to please just one \u201cboss,\u201d you have to please everyone. Several years ago the company underwent a \u201cstrategy refresh,\u201d conducting surveys and discussions with employees about how they fit into the organization\u2019s culture. Not surprisingly, there was a cultural divide based on multiple generations of workers and length of service stature, which Kelly and her associates have worked hard to overcome. She realizes that not everyone will become a \u201clifer\u201d at Gore, but recognizes the importance of younger employees who have helped the company become more tech-savvy in communications and stay well-connected in a fast-moving business world.<\/p>\r\nThe informal organizational structure continues to work well. With revenues of $3 billion, the company produces thousands of advanced technology products for the electronics, industrial, fabrics, and medical markets. Its corporate structure fosters innovation and has been a significant contributor to associate satisfaction. Employee turnover is a low 3 percent a year, and the company can choose new associates from the thousands of job applications it receives annually. In 2017, Gore was named one of the 12 legends on<em> Fortune\u2019s<\/em> \u201c100 Best Companies to Work For.\u201d These companies have made <em>Fortune\u2019s<\/em> list for all 20 years the magazine has published its annual \u201cBest\u201d rankings.\r\n<div>\r\n<div><strong>Critical Thinking Questions<\/strong><\/div>\r\n<ol>\r\n \t<li>Given the lack of formal structure, how important do you think Gore\u2019s informal structure becomes?<\/li>\r\n \t<li>Is W. L. Gore a mechanistic or an organic organization? Support your answer with examples from the case.<\/li>\r\n \t<li>How do you think Gore\u2019s flat organizational structure affects innovation at the company?<\/li>\r\n<\/ol>\r\n<\/div>\r\nSources: \u201cOur Story,\u201d https:\/\/www.gore.com, accessed July 18, 2017; Jeremy Hobson, \u201cWhat It\u2019s Like to Lead a Non-Hierarchical Workplace,\u201d http:\/\/www.wbur.org, accessed July 18, 2017; Alan Deutschman, \u201cThe Un-CEO,\u201d <em>Fast Company,<\/em> https:\/\/www.fastcompany.com, accessed July 18, 2017; Claire Zillman, \u201cSecrets from Best Companies All Stars,\u201d <em>Fortune,<\/em> http:\/\/fortune.com, March 9, 2017; Daniel Roberts, \u201cAt W.L. Gore, 57 Years of Authentic Culture,\u201d <em>Fortune,<\/em> http:\/\/fortune.com, March 5, 2015.\r\n\r\n<\/div>\r\n<\/div>\r\n<div class=\"hot-links\">\r\n<h3>Hot Links Address Book<\/h3>\r\n<ol id=\"fs-idm335231664\">\r\n \t<li>Like corporations, government agencies have organization charts, too. Learn how the Department of Health and Human Services is structured at <strong>http:\/\/www.hhs.gov\/about\/orgchart.html<\/strong>.<\/li>\r\n \t<li>Find team-building resources galore, from team-building activities and training exercises to guidance in solving team problems, at Team Builders Plus website, <strong>http:\/\/teambuildersplus.com<\/strong>.<\/li>\r\n \t<li>To read articles on current best practices in outsourcing for both buyers and providers and find other outsourcing resources, visit <strong>http:\/\/outsourcing.com<\/strong>.<\/li>\r\n \t<li>What benefits can a company gain by using web-based organizational charting software? Check out the features Organimi offers companies at <strong>http:\/\/www.organimi.com<\/strong>.<\/li>\r\n \t<li>How can your organization develop better group skills? A good place to start is Management Help\u2019s Group Skills page. Go to <strong>http:\/\/managementhelp.org<\/strong> and click on Group\/Team Skills for links to resources on many topics, including self-directed and self-managed work teams and virtual teams.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<div class=\"textbox shaded\">\r\n<h3>Glossary<\/h3>\r\n<dl>\r\n \t<dt>reengineering<\/dt>\r\n \t<dd id=\"fs-idm484403616\">The complete redesign of business structures and processes in order to improve operations.<\/dd>\r\n<\/dl>\r\n<dl id=\"fs-idm336235296\">\r\n \t<dt>virtual corporation<\/dt>\r\n \t<dd id=\"fs-idm312530800\">A network of independent companies linked by information technology to share skills, costs, and access to one another\u2019s markets; allows the companies to come together quickly to exploit rapidly changing opportunities.<\/dd>\r\n<\/dl>\r\n<\/div>","rendered":"<ol id=\"fs-idm311613680\" start=\"8\">\n<li>What trends are influencing the way businesses organize?<\/li>\n<\/ol>\n<p id=\"fs-idm334673088\">To improve organizational performance and achieve long-term objectives, some organizations seek to reengineer their business processes or adopt new technologies that open up a variety of organizational design options, such as virtual corporations and virtual teams. Other trends that have strong footholds in today\u2019s organizations include outsourcing and managing global businesses.<\/p>\n<div id=\"fs-idm340505200\" class=\"bc-section section\">\n<h3>Reengineering Organizational Structure<\/h3>\n<p id=\"fs-idm327481040\">Periodically, all businesses must reevaluate the way they do business. This includes assessing the effectiveness of the organizational structure. To meet the formidable challenges of the future, companies are increasingly turning to <strong>reengineering<\/strong>\u2014the complete redesign of business structures and processes in order to improve operations. An even simpler definition of reengineering is \u201cstarting over.\u201d In effect, top management asks, \u201cIf we were a new company, how would we run this place?\u201d The purpose of reengineering is to identify and abandon the outdated rules and fundamental assumptions that guide current business operations. Every company has many formal and informal rules, based on assumptions about technology, people, and organizational goals, that no longer hold. Thus, the goal of reengineering is to redesign business processes to achieve improvements in cost control, product quality, customer service, and speed. The reengineering process should result in a more efficient and effective organizational structure that is better suited to the current (and future) competitive climate of the industry.<\/p>\n<\/div>\n<div id=\"fs-idm341080992\" class=\"bc-section section\">\n<h3>The Virtual Corporation<\/h3>\n<p id=\"fs-idm336916352\">One of the biggest challenges for companies today is adapting to the technological changes that are affecting all industries. Organizations are struggling to find new organizational structures that will help them transform information technology into a competitive advantage. One alternative that is becoming increasingly prevalent is the <strong>virtual corporation<\/strong>, which is a network of independent companies (suppliers, customers, even competitors) linked by information technology to share skills, costs, and access to one another\u2019s markets. This network structure allows companies to come together quickly to exploit rapidly changing opportunities. The key attributes of a virtual corporation are:<\/p>\n<ul id=\"fs-idm332023872\">\n<li><em>Technology.<\/em> Information technology helps geographically distant companies form alliances and work together.<\/li>\n<li><em>Opportunism.<\/em> Alliances are less permanent, less formal, and more opportunistic than in traditional partnerships.<\/li>\n<li><em>Excellence.<\/em> Each partner brings its core competencies to the alliance, so it is possible to create an organization with higher quality in every functional area and increase competitive advantage.<\/li>\n<li><em>Trust.<\/em> The network structure makes companies more reliant on each other and forces them to strengthen relationships with partners.<\/li>\n<li><em>No borders.<\/em> This structure expands the traditional boundaries of an organization.<\/li>\n<\/ul>\n<p id=\"fs-idm335292896\">In the concept\u2019s purest form, each company that links up with others to create a virtual corporation is stripped to its essence. Ideally, the virtual corporation has neither a central office nor an organization chart, no hierarchy, and no vertical integration. It contributes to an alliance only its core competencies, or key capabilities. It mixes and matches what it does best with the core competencies of other companies and entrepreneurs. For example, a manufacturer would only manufacture, while relying on a product design firm to decide what to make and a marketing company to sell the end result.<\/p>\n<p id=\"fs-idm334992160\">Although firms that are purely virtual organizations are still relatively scarce, many companies are embracing several characteristics of the virtual structure. One example is <span class=\"no-emphasis\">Cisco Systems<\/span>. Cisco uses many manufacturing plants to produce its products, but the company owns none of them. In fact, Cisco now relies on contract manufacturers for all of its manufacturing needs. Human hands probably touch fewer than 10 percent of all customer orders, with fewer than half of all orders processed by a Cisco employee. To the average customer, the interdependency of Cisco\u2019s suppliers and inventory systems makes it look like one huge, seamless company.<\/p>\n<\/div>\n<div id=\"fs-idm334993632\" class=\"bc-section section\">\n<h3>Virtual Teams<\/h3>\n<p id=\"fs-idm335747888\">Technology is also enabling corporations to create virtual work teams. Geography is no longer a limitation when employees are considered for a work team. Virtual teams mean reduced travel time and costs, reduced relocation expenses, and utilization of specialized talent regardless of an employee\u2019s location.<\/p>\n<p id=\"fs-idm339722384\">When managers need to staff a project, all they need to do is make a list of required skills and a general list of employees who possess those skills. When the pool of employees is known, the manager simply chooses the best mix of people and creates the virtual team. Special challenges of virtual teams include keeping team members focused, motivated, and communicating positively despite their locations. If feasible, at least one face-to-face meeting during the early stages of team formation will help with these potential problems.<\/p>\n<div id=\"fs-idm339911648\" class=\"scaled-down\">\n<div class=\"bc-figcaption figcaption\">\n<div style=\"width: 1310px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cnx.org\/resources\/319aede2e7a07b256cd1ab38e25e91b9bac1a1a0\" alt=\"A photograph shows a woman on a laptop while she sits at a coffee shop.\" width=\"1300\" height=\"867\" \/><\/p>\n<p class=\"wp-caption-text\"><strong>Exhibit 7.11\u00a0<\/strong>In today\u2019s high-tech world, teams can exist any place where there is access to the internet. With globalization and outsourcing being common strategies in business operations today, companies of all shapes and sizes utilize virtual teams to coordinate people and projects halfway around the world. Unlike coworkers in traditional teams, virtual team members rarely meet in person, working from different locations and continents. What practical benefits do virtual teams offer to businesses, employees, and other members? (Credit: ThoroughlyReviewed\/ Flickr\/ Attribution 2.0 Generic (CC BY 2.0))<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"fs-idm311696224\" class=\"bc-section section\">\n<h3>Outsourcing<\/h3>\n<p id=\"fs-idm488528912\">Another organizational trend that continues to influence today\u2019s managers is outsourcing. For decades, companies have outsourced various functions. For example, payroll functions such as recording hours, managing benefits and wage rates, and issuing paychecks have been handled for years by third-party providers. Today, however, outsourcing includes a much wider array of business functions: customer service, production, engineering, information technology, sales and marketing, and more.<\/p>\n<p>Historically, companies have outsourced for two main reasons: cost reduction and labor needs. Often, to satisfy both requirements, companies outsource work to firms in foreign countries. In 2017, outsourcing remains a key component of many businesses\u2019 operations but is not strictly limited to low-level jobs. Some of the insights highlighted in <span class=\"no-emphasis\">Deloitte<\/span>\u2019s recent Global Outsourcing Survey bear this out. According to survey respondents from 280 global organizations, outsourcing continues to be successful because it is adapting to changing business environments. According to the survey, outsourcing continues to grow across mature functions such as HR and IT, but it has successfully moved to nontraditional business functions such as facilities management, purchasing, and real estate. In addition, some businesses view outsourcing as a way of infusing their operations with innovation and using it to maintain a competitive advantage\u2014not just as a way to cut costs. As companies increasingly view outsourcing as more than a cost-cutting strategy, they will be expecting more of their vendors in terms of supplying innovation and other benefits.<a class=\"footnote\" title=\"\u201cKey Outsourcing Trends from Deloitte\u2019s 2016 Global Outsourcing Survey,\u201d https:\/\/www2.deloitte.com, accessed July 19, 2017.\" id=\"return-footnote-132-1\" href=\"#footnote-132-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p id=\"fs-idm339837200\">Another form of outsourcing has become prevalent over the last several years, in part as the result of the slow economic recovery from the global recession of 2007\u20132009. As many U.S. businesses hesitated to hire full-time workers even as they began to experience gradual growth, some companies began to offer contract work to freelancers, who were not considered full-time employees eligible for company benefits. Known as the <em>gig economy,<\/em> this work approach has advantages and disadvantages. Some gig workers like the independence of being self-employed, while others acknowledge that they are taking on multiple small projects because they can\u2019t find full-time work as company employees. Another group of individuals work as full-time employees but may sign up for gigs such as driving for <span class=\"no-emphasis\">Uber<\/span> or <span class=\"no-emphasis\">Lyft<\/span> to supplement their income. Recent estimates suggest that the gig economy may impact more than one-third of the U.S. workforce over the next few years.<a class=\"footnote\" title=\"Patrick Gillespie, \u201cIntuit: Gig Economy Is 34% of US Workforce,\u201d CNN Money, http:\/\/money.cnn.com, May 24, 2017.\" id=\"return-footnote-132-2\" href=\"#footnote-132-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a><\/p>\n<p id=\"fs-idm351566608\">Despite the challenges, outsourcing programs can be effective. To be successful in outsourcing efforts, managers must do the following:<\/p>\n<ul id=\"fs-idm330204400\">\n<li>Identify a specific business problem.<\/li>\n<li>Consider all possible solutions.<\/li>\n<li>Decide whether outsourcing the work is the appropriate answer to the problem.<\/li>\n<li>Develop a strategic outsourcing partnership with vendors and a solid framework that promotes seamless collaboration and communication.<\/li>\n<li>Engage with outsourcing partners on a regular basis to instill trust between the two entities.<\/li>\n<li>Remain flexible when it comes to working with outsourcing providers in terms of accommodating requests or adjusting needs when necessary in an effort to build a long-term strategic partnership beneficial to both parties.<a class=\"footnote\" title=\"Missy Chaiet, \u201c6 Steps to Creating Better Strategic Outsourcing Partnerships,\u201d https:\/\/www.cgsinc.com, July 1, 2016.\" id=\"return-footnote-132-3\" href=\"#footnote-132-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a> <a href=\"#rfin-ch07_19\"><br \/>\n<\/a><\/li>\n<\/ul>\n<\/div>\n<div class=\"bc-section section\">\n<h3>Structuring for Global Mergers<\/h3>\n<p id=\"fs-idm350253840\">Recent mergers creating mega-firms (such as <span class=\"no-emphasis\">Microsoft<\/span> and <span class=\"no-emphasis\">LinkedIn<\/span>, <span class=\"no-emphasis\">Amazon<\/span> and <span class=\"no-emphasis\">Whole Food<\/span>s, and <span class=\"no-emphasis\">Verizon<\/span> and <span class=\"no-emphasis\">Yahoo<\/span>) raise some important questions regarding corporate structure. How can managers hope to organize the global pieces of these huge, complex new firms into a cohesive, successful whole? Should decision-making be centralized or decentralized? Should the firm be organized around geographic markets or product lines? And how can managers consolidate distinctly different corporate cultures? These issues and many more must be resolved if mergers of global companies are to succeed.<\/p>\n<p id=\"fs-idm310025088\">Beyond designing a new organizational structure, one of the most difficult challenges when merging two large companies is uniting the cultures and creating a single business. The merger between <span class=\"no-emphasis\">Pfizer<\/span> and <span class=\"no-emphasis\">Pharmacia<\/span>, makers of Dramamine and Rogaine, is no exception. Failure to effectively merge cultures can have serious effects on organizational efficiency.<\/p>\n<p>As part of its strategic plan for the giant merger, <span class=\"no-emphasis\">Pfizer<\/span> put together 14 groups that would make recommendations concerning finances, human resources, operation support, capital improvements, warehousing, logistics, quality control, and information technology. An outside consultant was hired to facilitate the process. One of the first tasks for the groups was to deal with the conqueror (<span class=\"no-emphasis\">Pfizer<\/span>) versus conquered (<span class=\"no-emphasis\">Pharmacia<\/span>) attitudes. Company executives wanted to make sure all employees knew that their ideas were valuable and that senior management was listening.<\/p>\n<p id=\"fs-idm350485024\">As more and more global mergers take place, sometimes between the most unlikely suitors, companies must ensure that the integration plan includes strategies for dealing with cultural differences, establishing a logical leadership structure, implementing a strong two-way communications channel at all levels of the organization, and redefining the \u201cnew\u201d organization\u2019s vision, mission, values, and culture.<a class=\"footnote\" title=\"Allan Steinmetz, \u201cSeven Steps for Cultural Integration During a Merger or Acquisition,\u201d http:\/\/www.inwardconsulting.com, accessed July 21, 2017.\" id=\"return-footnote-132-4\" href=\"#footnote-132-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a><\/p>\n<div id=\"fs-idm335993248\" class=\"concept-check\">\n<div class=\"textbox key-takeaways\">\n<h3>concept check<\/h3>\n<ol>\n<li>How does technology enable firms to organize as virtual corporations?<\/li>\n<li>What effect could the gig economy have on a company\u2019s decision to outsource?<\/li>\n<li>What are some organizational issues that must be addressed when two firms merge?<\/li>\n<\/ol>\n<\/div>\n<p><span style=\"color: #6c64ad;font-size: 1em;font-weight: 600\">Summary of Learning Outcomes<\/span><\/p>\n<\/div>\n<\/div>\n<div id=\"fs-idm349105712\" class=\"section-summary\">\n<ol start=\"8\">\n<li>What trends are influencing the way businesses organize?<\/li>\n<\/ol>\n<p id=\"fs-idm488213616\">Reengineering is a complete redesign of business structures and processes in order to improve operations. The goal of reengineering is to redesign business processes to achieve improvements in cost control, product quality, customer service, and speed.<\/p>\n<p id=\"fs-idm488236032\">The virtual corporation is a network of independent companies (suppliers, customers, even competitors) linked by information technology to share skills, costs, and access to one another\u2019s markets. This network structure allows companies to come together quickly to exploit rapidly changing opportunities.<\/p>\n<p id=\"fs-idm354976928\">Many companies are now using technology to create virtual teams. Team members may be down the hall or across the ocean. Virtual teams mean that travel time and expenses are eliminated and the best people can be placed on the team regardless of where they live. Sometimes, however, it may be difficult to keep virtual team members focused and motivated.<\/p>\n<p id=\"fs-idm340134336\">Outsourcing business functions\u2014both globally and domestically\u2014continues to be a regular business practice for companies large and small. Companies choose to outsource either as a cost-saving measure or as a way to gain access to needed human resource talent and innovation. To be successful, outsourcing must solve a clearly articulated business problem. In addition, managers must use outsourcing providers that fit their company\u2019s actual needs and strive to engage these providers as strategic partners for the long term. A recent phenomenon known as the gig economy has taken on more importance as it pertains to the U.S. labor force and outsourcing. More people are working as freelancers on a per-project basis, either because they can\u2019t get hired as full-time employees or because they prefer to work as self-employed individuals.<\/p>\n<p id=\"fs-idm489278688\">Global mergers raise important issues in organizational structure and culture. The ultimate challenge for management is to take two organizations and create a single, successful, cohesive organization.<\/p>\n<\/div>\n<div class=\"prep-workplace\">\n<h3>Preparing for Tomorrow\u2019s Workplace Skills<\/h3>\n<ol>\n<li>When people talk of climbing the corporate ladder, they are referring to moving vertically upward through the organizational structure. Many employees plot career paths that will take them to increasingly higher levels of management. Do you think you would be more interested in climbing higher in an organization, or being a middle-management bridge between the employees who do the work and the executives who set the strategy? Explain the reasons for your choice. (Resources, Interpersonal)<\/li>\n<li>Teams are an increasingly popular method of organizing corporations, but not all people are suited for teamwork. As a manager, what do you do with employees who are talented but unapproachable? Can you think of a way to involve people who are uncomfortable in team settings so that your teams have the perspective of these employees as well? (Interpersonal)<\/li>\n<li>Think about how gossip and rumors travel through a grapevine. Draw as many grapevines as you can think of that reflect the different ways rumors move through an organization. Can you think of information that a manager would want to disseminate through the grapevine? Is there information that is inappropriate to disseminate through informal channels? Provide examples. (Information)<\/li>\n<li>Do you think companies that outsource will inevitably become virtual corporations? Why or why not? (Resources, Systems)<\/li>\n<li>It used to be that only high-level executives and CEOs were able to work out of the office. Mobile computing, however, is trickling down the organizational chart. In your opinion, is there a point in the organizational structure at which working remotely (at home, on the road) should stop? Should all employees in the hierarchy be allowed to work in a virtual environment, or should there be limits? Explain your reasoning. (Technology, Systems)<\/li>\n<li><strong>Team Activity<\/strong> Have you ever worked on a team with an underperforming member, such as a slacker, a complainer, or a critic? Assemble a team of three to five students and brainstorm a list of \u201cbad\u201d team members you have experience working with. Once you have a list of types, discuss how that person affected the work of the team and the outcome the team produced. Brainstorm ways to better manage and mitigate the negative effects of \u201cbad\u201d team members. Share your results with the class. (Interpersonal, Systems)<\/li>\n<\/ol>\n<\/div>\n<div id=\"fs-idm339156352\" class=\"ethics-activity\">\n<h3>Ethics Activity<\/h3>\n<div id=\"fs-idm353461200\" class=\"bc-section section\">\n<h4>Training IT Replacements<\/h4>\n<p>Recently the University of California at San Francisco (UCSF) announced it would lay off more than 80 IT workers and outsource their jobs to India. This change is part of a larger plan by UCSF to increase its technology outsourcing, which over time could save the organization more than $30 million. A large part of UCSF\u2019s IT work focuses on its hospital services, and many other health care facilities have already outsourced these types of \u201cback-end\u201d jobs to foreign countries.<\/p>\n<p>Working through a multinational contractor that will manage the outsourcing process, UCSF has also asked workers who will soon be out of a job to train their overseas replacements via videoconferencing calls to India. One such worker remarked, \u201cI\u2019m speechless. How can they do this to us?\u201d<\/p>\n<p id=\"fs-idm336005504\">A UCSF spokesperson explained that the organization provides millions of dollars in charity care for the poor, and that to continue providing those services, the school has to focus on more specialized tech work related to patients and medical research and send other IT work overseas.<\/p>\n<p id=\"fs-idm335760400\">UCSF is not alone in sending IT jobs overseas and making the laid-off workers train their Indian replacements. Recently ManpowerGroup, a staffing and workforce services firm with more than 3,000 offices worldwide, issued pink slips to 150 workers in Milwaukee whose jobs were outsourced to India.<\/p>\n<p>Using a web search tool, locate articles about this topic and then write responses to the following questions. Be sure to support your arguments and cite your sources.<\/p>\n<p><strong>Ethical Dilemma:<\/strong> Are UCSF and other companies justified in outsourcing technology jobs to India? Do they have any obligation to find other jobs or provide training for displaced workers? Should organizations ask employees who are being laid off to train their replacements?<\/p>\n<p id=\"fs-idm349269392\">Sources: Sam Harnett, \u201cOutsourced: In a Twist, Some San Francisco IT Jobs Are Moving to India,\u201d <em>All Tech Considered,<\/em> http:\/\/www.npr.org, accessed July 19, 2017; Dan Shafer, \u201cExclusive: ManpowerGroup HQ Workers Being Laid Off Required to Train Overseas Replacements,\u201d <em>Milwaukee Business Journal,<\/em> https:\/\/www.bizjournals.com, March 30, 2017; Bill Whitaker, \u201cAre U.S. Jobs Vulnerable to Workers with H-1B Visas?\u201d <em>60 Minutes,<\/em> http:\/\/www.cbsnews.com, March 19, 2017; Louis Hansen, \u201cAfter Pink Slips, USCF Tech Workers Train Their Foreign Replacements,\u201d <em>The Mercury News,<\/em> http:\/\/www.mercurynews.com, November 3, 2016.<\/p>\n<\/div>\n<\/div>\n<div id=\"fs-idm312565392\" class=\"working-net\">\n<h3>Working the Net<\/h3>\n<ol id=\"fs-idm340429520\">\n<li>Using a search engine, look for the term \u201ccompany organizational charts,\u201d and find at least three examples of organizational charts for corporations, not-for-profits, or government agencies. Analyze each entity\u2019s organizational structure. Is it organized by function, product\/service, process, customer type, or geographic location?<\/li>\n<li>Search the archives at the <em>Bloomberg Businessweek<\/em> (<strong>https:\/\/www.bloomberg.com<\/strong>), <em>Fortune<\/em> (<strong>http:\/\/fortune.com<\/strong>), or <em>Forbes<\/em> (<strong>http:\/\/www.forbes.com<\/strong>) website for stories about companies that have reorganized. Pick two examples, and prepare a summary of their reorganization efforts, including the underlying reasons the company chose to reorganize, the key elements of the reorganization plan, and if possible, how successful it has been.<\/li>\n<li>Visit the <em>Inc.<\/em> magazine website, <strong>http:\/\/www.inc.com<\/strong>, and use the search engine to find articles about virtual corporations. Using a search engine, find the website of at least one virtual corporation, and look for information about how the company uses span of control, informal organization, and other concepts from this module.<\/li>\n<li>FlexJobs (<strong>http:\/\/www.flexjobs.com<\/strong>) is an online company devoted to matching job hunters with flexible job experiences, whether they are telecommuting jobs, contract work, or part-time gigs. Read more on how the company started and the void its services have filled over the past decade for people looking for a flexible job situation. Share your findings with classmates, and lead a discussion on the pros and cons of the flexible job movement.<\/li>\n<li>Managing change in an organization is no easy task, as you\u2019ve discovered in your new job with a consulting firm that specializes in change management. To get up to speed, go to Bpubs.com, the Business Publications Search Engine (<strong>http:\/\/www.bpubs.com<\/strong>), and navigate to the Change Management section of the Management Science category. Select three articles that discuss how companies approached the change process, and summarize their experiences.<\/li>\n<li>After managing your first project team, you think you might enjoy a career in project management. The Project Management Institute is a professional organization for project managers. Its website, <strong>http:\/\/www.pmi.org<\/strong>, has many resources about this field. Start at the Professional Practices section to learn what project management is, then go to the professional Development and Careers pages. What are the requirements to earn the Project Management Professional designation? Explore other free areas of the site to learn more about the job of project manager. Prepare a brief report on the career and its opportunities. Does what you\u2019ve learned make you want to follow this career path?<\/li>\n<li>Many companies are outsourcing portions of their IT departments. Should they, and why? Develop a position on this issue by researching outsourcing trends on <em>Information Week,<\/em> (<strong>http:\/\/www.informationweek.com<\/strong>), or an IT website of your choosing. Then divide the class into two groups, those that support outsourcing and those that oppose it, and have a debate on this subject.<\/li>\n<\/ol>\n<\/div>\n<div id=\"fs-idm340527904\" class=\"critical-thinking\">\n<h3>Creative Thinking Case<\/h3>\n<div id=\"fs-idm339070544\" class=\"bc-section section\">\n<h4>Gore\u2019s Flat Structure Works Well<\/h4>\n<p id=\"fs-idm341113344\">Imagine an organization with more than 10,000 employees working in 30 countries around the world\u2014with no hierarchy structure. W. L. Gore &amp; Associates, headquartered in Newark, Delaware, is a model of unusual business practices. Wilbert Gore, who left Dupont to explore new uses for Teflon, started the company in 1958. Best known for its breathable, weatherproof Gore-Tex fabric, Glide dental floss, and Elixir guitar strings, the company has no bosses, no titles, no departments, and no formal job descriptions. There is no managerial hierarchy at Gore, and top management treats employees, called associates, as peers.<\/p>\n<p id=\"fs-idm339571008\">In 2005, the company named 22-year associate Terri Kelly as its new chief executive officer. Unlike large public corporations, Gore\u2019s announcement was made without much fanfare. Today, more than 12 years later, Kelly continues as chief executive but is the first to admit that it\u2019s not about the CEO at Gore\u2014it\u2019s about the people who work there and their relationships with one another.<\/p>\n<p id=\"fs-idm341217488\">The company focuses on its products and company values rather than on individuals. Committees, comprised of employees, make major decisions such as hiring, firing, and compensation. They even set top executives\u2019 compensation. Employees work on teams, which are switched around every few years. In fact, all employees are expected to make minor decisions instead of relying on the \u201cboss\u201d to make them. \u201cWe\u2019re committed to how we get things done,\u201d Kelly says. \u201cThat puts a tremendous burden on leaders because it\u2019s easier to say \u2018Just do it\u2019 than to explain the rationale. But in the long run, you\u2019ll get much better results because people are making a commitment.\u201d<\/p>\n<p id=\"fs-idm351166640\">Because no formal lines of authority exist, employees can speak to anyone in the company at any time. This arrangement also forces employees to spend considerable time developing relationships. As one employee described it, instead of trying to please just one \u201cboss,\u201d you have to please everyone. Several years ago the company underwent a \u201cstrategy refresh,\u201d conducting surveys and discussions with employees about how they fit into the organization\u2019s culture. Not surprisingly, there was a cultural divide based on multiple generations of workers and length of service stature, which Kelly and her associates have worked hard to overcome. She realizes that not everyone will become a \u201clifer\u201d at Gore, but recognizes the importance of younger employees who have helped the company become more tech-savvy in communications and stay well-connected in a fast-moving business world.<\/p>\n<p>The informal organizational structure continues to work well. With revenues of $3 billion, the company produces thousands of advanced technology products for the electronics, industrial, fabrics, and medical markets. Its corporate structure fosters innovation and has been a significant contributor to associate satisfaction. Employee turnover is a low 3 percent a year, and the company can choose new associates from the thousands of job applications it receives annually. In 2017, Gore was named one of the 12 legends on<em> Fortune\u2019s<\/em> \u201c100 Best Companies to Work For.\u201d These companies have made <em>Fortune\u2019s<\/em> list for all 20 years the magazine has published its annual \u201cBest\u201d rankings.<\/p>\n<div>\n<div><strong>Critical Thinking Questions<\/strong><\/div>\n<ol>\n<li>Given the lack of formal structure, how important do you think Gore\u2019s informal structure becomes?<\/li>\n<li>Is W. L. Gore a mechanistic or an organic organization? Support your answer with examples from the case.<\/li>\n<li>How do you think Gore\u2019s flat organizational structure affects innovation at the company?<\/li>\n<\/ol>\n<\/div>\n<p>Sources: \u201cOur Story,\u201d https:\/\/www.gore.com, accessed July 18, 2017; Jeremy Hobson, \u201cWhat It\u2019s Like to Lead a Non-Hierarchical Workplace,\u201d http:\/\/www.wbur.org, accessed July 18, 2017; Alan Deutschman, \u201cThe Un-CEO,\u201d <em>Fast Company,<\/em> https:\/\/www.fastcompany.com, accessed July 18, 2017; Claire Zillman, \u201cSecrets from Best Companies All Stars,\u201d <em>Fortune,<\/em> http:\/\/fortune.com, March 9, 2017; Daniel Roberts, \u201cAt W.L. Gore, 57 Years of Authentic Culture,\u201d <em>Fortune,<\/em> http:\/\/fortune.com, March 5, 2015.<\/p>\n<\/div>\n<\/div>\n<div class=\"hot-links\">\n<h3>Hot Links Address Book<\/h3>\n<ol id=\"fs-idm335231664\">\n<li>Like corporations, government agencies have organization charts, too. Learn how the Department of Health and Human Services is structured at <strong>http:\/\/www.hhs.gov\/about\/orgchart.html<\/strong>.<\/li>\n<li>Find team-building resources galore, from team-building activities and training exercises to guidance in solving team problems, at Team Builders Plus website, <strong>http:\/\/teambuildersplus.com<\/strong>.<\/li>\n<li>To read articles on current best practices in outsourcing for both buyers and providers and find other outsourcing resources, visit <strong>http:\/\/outsourcing.com<\/strong>.<\/li>\n<li>What benefits can a company gain by using web-based organizational charting software? Check out the features Organimi offers companies at <strong>http:\/\/www.organimi.com<\/strong>.<\/li>\n<li>How can your organization develop better group skills? A good place to start is Management Help\u2019s Group Skills page. Go to <strong>http:\/\/managementhelp.org<\/strong> and click on Group\/Team Skills for links to resources on many topics, including self-directed and self-managed work teams and virtual teams.<\/li>\n<\/ol>\n<\/div>\n<div class=\"textbox shaded\">\n<h3>Glossary<\/h3>\n<dl>\n<dt>reengineering<\/dt>\n<dd id=\"fs-idm484403616\">The complete redesign of business structures and processes in order to improve operations.<\/dd>\n<\/dl>\n<dl id=\"fs-idm336235296\">\n<dt>virtual corporation<\/dt>\n<dd id=\"fs-idm312530800\">A network of independent companies linked by information technology to share skills, costs, and access to one another\u2019s markets; allows the companies to come together quickly to exploit rapidly changing opportunities.<\/dd>\n<\/dl>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-132\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Intro to Business. <strong>Authored by<\/strong>: Gitman, et. al. <strong>Provided by<\/strong>: OpenStax. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2\">http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em>. <strong>License Terms<\/strong>: Download for free at http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-132-1\">\u201cKey Outsourcing Trends from Deloitte\u2019s 2016 Global Outsourcing Survey,\u201d https:\/\/www2.deloitte.com, accessed July 19, 2017. <a href=\"#return-footnote-132-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-132-2\">Patrick Gillespie, \u201cIntuit: Gig Economy Is 34% of US Workforce,\u201d CNN Money, http:\/\/money.cnn.com, May 24, 2017. <a href=\"#return-footnote-132-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-132-3\">Missy Chaiet, \u201c6 Steps to Creating Better Strategic Outsourcing Partnerships,\u201d https:\/\/www.cgsinc.com, July 1, 2016. <a href=\"#return-footnote-132-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-132-4\">Allan Steinmetz, \u201cSeven Steps for Cultural Integration During a Merger or Acquisition,\u201d http:\/\/www.inwardconsulting.com, accessed July 21, 2017. <a href=\"#return-footnote-132-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":311,"menu_order":9,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Intro to Business\",\"author\":\"Gitman, et. al\",\"organization\":\"OpenStax\",\"url\":\"http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.2\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Download for free at 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