21 Borderless Organisations

Dimple Khosla

Borderless Organisations

Introduction

Every organisation is affected in some way by the global environment. Globalisation along with increased market volatility is forcing organisations to reflect on their enterprise design. Now for the sustainability of any organisation it has become the need of the hour that it should open its doors and break its boundaries and be adaptable towards the today’s changing environment. In the times to come the borderless organisations will become the pre-condition of survival. In this chapter, we will learn what managers need to know about managing globally through Borderless organisations.

Meaning

The term Borderless Organisation is comprised of two words – Borderless and Organisation.

Border Means a line that indicates a boundary and Borderless means a situation in which the border between Countries is not important usually in relation to movement of goods , people, knowledge etc.

Organisation means an act of forming or establishing something.

Thus Borderless Organisation means an organisation that manages globally by eliminating structural divisions that impose artificial geographical barriers to increase efficiency and effectiveness in a competitive global market place.

Jack Welch, CEO General Electric used this term way back in 1990. He wrote in the annual report of General Electrics, “Our dream for the 1990’s is a boundary-less company….where we knock down the walls that separate us from each other on the inside and from our key constituencies on the outside.”

Marshelkar.R, stated in his speech that our minds should be open and uninhibited. It should be open to new ideas and new thinking. There should be no artificial walls or boundaries between people. A borderless mind and borderless thinking alone can lead to a borderless world.

Features of Borderless Organisations:

• Flexible organisational structure

• Global open environment

• Best and maximum use of technology

• Quick transmission of information

• Listening patiently to new ideas whether given by the subordinates and trying to implement them if they are good for the organisation.

• Team work is preferred in such an organisation.

• More transparent and healthy relationship.

• Collaborative style of leadership.

• Outsourcing knowledge or finding solutions from ad-hoc teams made up of diverse participants from different parts of the world.

• Encourage and develop the hidden talents of the employees.

• More effective learning environment.

• Initiate out of the box thinking.

Difference between Multinational Corporations, Transnational Corporation and Borderless Organisations

Some times the people get the term Borderless mixed with what is usually known as multinational or transnational. So here it is important to understand the difference and have a clear view-point.

Multinational Corporations/ organisations:- These are those organisations which have their headquarters in one country and establish their subsidiaries in several other countries. These companies consider the world market as an integrated whole and focus on the need for global efficiency, Normally a firm is considered multinational when its sales made outside its home country constitute 25 percent or more of its total sales.For example Unilever, Sony, Mc Donalds etc. Unilever is a British –Dutch multinational consumer goods company having different subsidiaries in different countries like Unilever Bangladesh, unilever Nepal, Hindustan Unilever, Unilever Pakistan, Unilever Australasia and Unilever Phillippines.

Transnational Corporations:-These organisations maintains significant operations in more than one country but decentralise management to the local country. Local people are employed to meet out the local requirements and these people manage the business and match the company’s product according to the individual country’s customers characteristics. For example Nestle a Swiss transnational food and beverage company headquartered in Vevey, Vaud, Switzerland operate in almost every country on the globe.

Borderless Organisations: A borderless organisation is an organisation that tries to eradicate the chain of command and to replace departmentalisation with team authority. This means the organisation is trying to get rid of borders whether vertical or horizontal or external barriers. This is done with a view to share ideas and to enable employees, managers, customers and suppliers to work together and identify the best course for the organisation.

Key Drivers of Borderless Organisations

As we are discussing about borderless organisations, the question arises that what are the driving forces that led to the growth of this concept. The main forces are:-

1. Globalisation

2. Technology Advancement

3. Limitless Connectivity

Globalisation:

Globalisation is a term which was introduced along with Liberalisation and Privatisation. It covers all aspects whether it is political, social, cultural or economic. Now no organisation can think that it is the only player in the domestic market since due to globalisation competition is coming rapidly from the international market. Globalisation is the process of integrating the whole world into one huge market. The concept of globalisation has assumed great importance in the light of recent structural changes in the business organisation.

There are various reasons of going global. These can be more financial resources, reduction in cost of production, growth potential of foreign markets, demand constraints in domestic markets etc. Being borderless, organisation can improve its functioning by adopting various strategies for globalisation i.e. by exporting goods to different countries, by purchasing a franchisee, by engaging into joint ventures, by mergers and acquisitions, by contract manufacturing etc. while going global a borderless organisation have to manage a borderless workforce. A borderless workforce includes individuals who have international job responsibilities and are dispersed geographically, virtually and across countries and regions. Cross cultural and ethnic differences have a great influence on how individuals interact with one another. Globalisation of markets have increased the need of diversified workforce and cultural sensitiveness. The movement of such skilled labour force is possible only if an organisation breaks its boundaries. So due to globalisation several new opportunities and competitions have emerged which need to be coped and that can be done only by being borderless.

Technological Advancement:

Technology is the most dramatic force shaping the destiny of people all over the world. With the advent of technology now no organisation can give useless excuses. New inventions in the technology has made the world a global market place. Technology change is an important force in reconfiguring the industry boundaries, it may broader or narrow generally accepted industry boundaries. Product substitution and product differentiation are the by-products of technology. In many organisations the speed of technological process far outstrips the capacity of management to use its collaborative potential effectively. The emergence of such technologies as e-mail, the internet, the tele-communication and voice mail have revolutionised organisations as various dealings are done through these measures.

Limitless Connectivity:

Today’s fast networking systems has enabled collaboration and major data and information transmission much easier and faster. We are fighting for a world where everyone can access and develop a connected, borderless, permission-less and limitless internet that creates opportunity and progress for all. But one can’t get it alone. A connected world is only built through collaboration with a wide range of extraordinary partners. That’s why organisation work together with other businesses, Governments, local communities and individual donor to drive change at the scale needed.

Types of Boundaries:

In every organisation a structure is followed to establish relations among all the persons working in the organisation. Under organisation structure the superior and subordinate relationships are established so that to make it clear that who is responsible to whom. Organisational structure varies from organisation to organisation depending upon their own requirements. Although a clear structure plays an important role in an organisation, it can also create barriers between people in different parts of the organisation and between the organisation and stakeholders outside the organisation.

There exist four types of boundaries which hinder the growth of an organisation and to compete with the today’s competitive environment it has become necessary to eliminate these imaginary walls. These are as follows:

(1) Vertical Boundaries

(2) Horizontal Boundaries

(3) External Boundaries

(4) Geographical Boundaries

Vertical Boundaries:

In Vertical structure authorities move from top to bottom in a clearly defined hierarchy and every superior has a limited number of subordinates. These vertical boundaries overload the key person and employees do not take initiative, they depend on their officer and work only when they are asked to perform. These boundaries impede communication and interaction between organisational members who operate at different levels within the organisation.

Horizontal Boundaries:

In Horizontal structure whole organisation is divided according to the major activities performed by it. Under this kind of structure all the functions of similar nature are divided in different sections usually called as departments such as manufacturing department, purchase department, finance department, personnel department etc. Here horizontal barriers come in a way that each department works according to their self motive first neglecting the overall objective of the organisation. Conflicts of interest and inadequate communication leads to inefficiency and ineffectiveness.

External Boundaries:

External boundaries are those which act as a barriers between members of the organisation and the outside world including stakeholders, customers suppliers etc.

Geographical Boundaries:

Geographical boundaries are those which stop an organisation to deal with some segments or regions or states or countries. Geographical organisational structure restricts the firm to operate in a specific region.

Now the time has come to give a close view to our present system of organisation and transform the structure of organisation according to the prevailing scenario. Presently to survive, organisation must be adaptive to the new borderless organisation eliminating all the boundaries and be open to the new opportunities, challenges, difficulties and side by side having a good balance of centralisation and decentralisation of authority. It doesn’t at all mean that there will be no need of any structure in an organisation, rather a more systematic set of psychological boundaries will replace the traditional set of boundaries. These boundaries will completely differ from those of conventional boundaries in regard to their presence since these can’t be shown on an organisational chart like line organisation or line and staff organisation or military organisation etc., these boundaries will have their place in the mind sets of the people. In nature these are like intangible assets that can’t be seen or touched but their presence can be felt in the organisation.

Working of Borderless Organisations

Borderless organisation structure can be said to have flexible working system. The workplace today are becoming more and more holistic and borderless so that no bar is there in the path of success. If we compare today’s organisations with that of conventional type of organisation, we can find a huge difference. These differences are in terms of saving of time, increasing employee productivity, reducing office equipments cost, reducing paper work, having an access to the resources any time any where, reduced communication cost and fast transmission of information etc. Earlier the structures were used to be very rigid but at that time the roles of people working in the organisation were very clear and stable.

Principles of management like division of work, scaler chain, span of control etc are losing their importance in the today’s structure where a manager performs multiple tasks at a time and easily controls a number of persons without even having a direct contact with them. Earlier organisations follow the principle of division of labour which led to specialisation since one worker is supposed to do similar kind of work most of the time. But that lacks the importance of working in a team. In recent years the trend of working in a team has developed a lot since it enjoys diversified ideas, skills, knowledge and talent yet aiming towards a single goal. Each employee in the team must inculcate the value of being committed towards the organisation. In such an organisation the challenges are bigger as managers and other employees have to recognize that they have to play different roles at different times to get the best productive results. In this new system a subordinate can challenge the work of a superior since if he knows that the boss is wrong and still keeps quiet he is doing injustice with his job and the importance of being borderless is no more. This is based on the thinking that everybody has a mind which can think differently and the boss is not always right. New innovations, improved productivity, better level of efficiency can be obtained by creating and understanding the required kind of mutual relationship at the required time. The need is just to understand the concept of borderless organisation and grab the available opportunities with the help of available resources.

Challanges of being Borderless

• Technology has always been a two edged sword offering both upsides and downsides. Human trafficking is the leading example of the negative use of technology. Recently on 7/10/2015, the Home Minister Sh. Rajnath Singh dubbed human trafficking as a borderless organised crime and that his ministry had put in place an effective mechanism to curb the menace. He said, “Human Trafficking is a very sensitive and serious issue. It is a borderless organised crime and India alone is not a victim of it as it is a global phenomenon.” So the more cyber security is required.

• Unfocused or untargeted communication creates inefficiency in knowledge transfer.

• Excessive concentration on removing the conventional boundaries can cause the managers to misunderstand their basic role in the flexible organisation. So it will always be required from them to understand and make their employees understand what the new boundaries are.

• Some times in team work the task is not clearly defined, responsibilities are not clear, resources are not properly allocated then there are chances of duplication of activity or may be a chance that some activity is not at all done. Being non-clarity of authority and responsibility nobody is ready to take important decisions for the fear of failure or criticism.

• In team work senior-junior work together so sometimes when junior is having more intelligent ideas it is to be accepted by the senior with due respect and this is also a key to success. But in some cases seniors are not ready to accept this that a subordinate can think better than him and in result the organisation suffer.

• Fear to lose the power stops the top executives from accepting the borderless organisation, so they should be taught first the benefits of collaborative workings.

• Thinking of shifting to borderless organisation without a borderless infrastructure is not at all possible.

Conclusion

Borderless Organisations are the most effective way to be in this competitive world. To capture more and more markets this style has an edge over the others. In the present scenario with the help of mobile technology, employees have a very easy access to a company’s resources. They can deal with their clients from anywhere any time. All that is needed is an excellent set up of technology, techno-friendly workers and a collaborative team.

References:

• Larrt Hirschhorn, Thomas Gilmore, “The New Boundaries of the „Boundaryless‟ Company.” (1992), Harvard Business Review, May-June.
• Mashelkar. R., “Building Borderless minds and Borderless thinking.” (2001), Council of Scientific and Industrial Research, Memorial Oration, New Delhi, India.
• Blog: The borderless Organisation….and the need for „Laser-Like Connectivity‟.
• Deloitte, The Borderless Organisation: A new approach to addressing the 21st -Century global mobility challenge.
• Jarilli.J., Strategic Networks: Creating the Borderless Organisation, (1993),Butterworth-Heinemann.