Boundaryless Organization

A Boundaryless Organization is a contemporary approach in organizational design. In a boundaryless organization, the boundaries that divide employees such as hierarchy, job function, and geography as well as those that distance companies from suppliers and customers are broken down. A boundaryless organization seeks to remove vertical, horizontal, and external barriers so that employees, managers, customers, and suppliers can work together, share ideas, and identify the best ideas for the organization. Boundaryless organizations share many of the characteristics of flat organizations. Some believe that the boundaryless organization is the perfect organizational structure for the 21st century.[1]

The concept was pioneered by well-known management thinker and former General Electric chairman Jack Welch, who wanted to break down existing barriers between different parts. While traditional organizational structures have defined vertical and horizontal borders and hierarchies, boundaryless organisations are defined specifically by a lack of structures and an approach to business that is based on the free flow of information and ideas to drive innovation, efficiency and growth in a world that’s constantly changing. Adaptability and flexibility are important criteria of boundaryless organisations. Boundaryless organizations will often make use of the latest technology and tools to facilitate the breaking down of traditional borders, such as virtual collaboration and flexible working. With regard to employees, they may have more responsibility for their own projects and targets and be more able to achieve results in a way that’s appropriate for the project at hand. Because many boundaryless organizations are dispersed across geographic borders, employees may be from different cultures and countries but must work together. Because of this, boundaryless organizations require a strong set of core values and a strong vision.[2] Boundaryless organizational structures are most often used by companies that select the prospector business strategy and operate in a volatile environment.

Boundaryless Organization
source: Edupedia

Many different types of boundaryless organizations exist. One form is the modular organization, in which all nonessential functions are outsourced. The idea behind this format is to retain only the value-generating and strategic functions in-house, while the rest of the operations are outsourced to many suppliers. An example of a company that does this is Toyota. By managing relationships with hundreds of suppliers, Toyota achieves efficiency and quality in its operations. Strategic alliances constitute another form of boundaryless design. In this form, similar to a joint venture, two or more companies find an area of collaboration and combine their efforts to create a partnership that is beneficial for both parties. In the process, the traditional boundaries between two competitors may be broken. As an example, Starbucks formed a highly successful partnership with PepsiCo to market its Frappuccino cold drinks. Starbucks has immediate brand-name recognition in this cold coffee drink, but its desire to capture shelf space in supermarkets required marketing savvy and experience that Starbucks did not possess at the time. By partnering with PepsiCo, Starbucks gained an important head start in the marketing and distribution of this product. Finally, boundaryless organizations may involve eliminating the barriers separating employees; these may be intangible barriers, such as traditional management layers, or actual physical barriers, such as walls between different departments. Structures such as self-managing teams create an environment where employees coordinate their efforts and change their own roles to suit the demands of the situation, as opposed to insisting that something is “not my job” (Dess, G. G., et. al., 1995; Rosenbloom, B., 2003).[3]

  1. Definition - What Does Boundaryless Organization Mean? MBA Knowledge Base
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  3. Understanding Boundaryless Organizations with Examples Granite State College