BUS272 TB

game. When those rules are “up for grabs,” power struggles between functional and
product managers result. For individuals who desire security and absence of ambiguity,
this work climate can be stressful. Reporting to more than one manager introduces role
conflict, and unclear expectations introduce role ambiguity. The comfort of bureaucracy’s
predictability is replaced by insecurity and stress.
Chapter 13 Organizational Structure 467
N e w D e s i g n O p t i o n s
David Marshall, director of Revitalization Saint-Pierre, says that one of the best things about
having committees dominated by Saint-Pierre residents is the ease with which the agency can
identify service gaps and respond to evolving needs. 22 “Having the people who actually use
our services deciding where to focus our attention helps keep us relevant,” he explains. “It
also fosters creativity and innovation.” For example, in 2003, access to affordable, fresh food
was identified as an issue, resulting in the creation of a general store and community kitchen.
Soon, members of the food security committee noticed that some residents still could not afford
adequate nutrition. The committee created a policy giving people the opportunity to exchange
work hours worked in the store for fresh, healthy food.
In 2013, the food security committee identified four other Montreal neighbourhoods that
lacked access to high quality, affordable food. A mobile store was developed for summer 2014,
and it was a resounding success. In what situations could new forms of organization be effective?
Senior managers in a number of organizations have been developing new structural
options with fewer layers of hierarchy and more emphasis on opening the boundaries
of the organization. 23 In this section, we describe two such designs: the virtual organization
and the boundaryless organization . We also discuss how efforts to reduce bureaucracy
and increase strategic focus have made downsizing routine.
The Virtual Organization
Why own when you can rent? That question captures the essence of the virtual organization
(also sometimes called the network organization or modular organization ). 24
The virtual organization can take several different forms, depending on its degree of
centralization. In some instances, a small, core organization outsources major business
functions. In this case, the core organization would have more of the control. In
more extreme forms, the virtual organization “is a continually evolving network of
independent companies—suppliers, customers, even competitors—linked together to
share skills, costs, and access to one another’s markets.” 25 In this case, participants give
up some of their control and act more interdependently. Thus, virtual organizations
may not have a central office, an organizational chart, or a hierarchy. Typically, the
organizations come together to exploit specific opportunities or attain specific strategic
objectives.
The prototype of the virtual structure is today’s movie-making organization. In
Hollywood’s golden era, movies were made by huge, vertically integrated corporations.
Studios such as MGM, Warner Brothers, and 20th Century Fox owned large movie lots
and employed thousands of full-time specialists—set designers, camera people, film
editors, directors, and even actors. Today, most movies are made by a collection of individuals
and small companies who come together and make films project by project. 26
This structural form allows each project to be staffed with the talent best suited to its
demands rather than just the people employed by the studio. It minimizes bureaucratic
overhead because there is no lasting organization to maintain. As well, it lessens longterm
risks and their costs because there is no long term—a team is assembled for a finite
period and then disbanded.
About one in nine Canadian companies engages in some sort of alliance. These
alliances take many forms, ranging from precompetitive consortia to coproduction,
4
Describe the characteristics
of a virtual
organization.
virtual organization A continually
evolving network of independent
companies—suppliers, customers,
even competitors—linked together to
share skills, costs, and access to one
another’s markets.