Structure

Abstract

In the 1990s, large-scale companies in the West began making a series of organisational changes designed to enhance their efficiency and responsiveness to turbulent environmental conditions. The emergence of a more highly competitive global market, accelerating technological change and growing consumer preferences for low-cost, high-quality products and services with flexible option packages all called for modifications in the way companies organised their operations. Thus, major enterprises have been flattening their hierarchies in order to accelerate upward and downward communication. (For example, before IBM restructured, delays in obtaining approval for new products enabled competitors to beat it to the market; Economist, 17 November, 1990.) Many large firms have strengthened their core capabilities by developing more focused learning processes using flexible management teams that pursue project-based objectives. Big business has also divested itself of previously sheltered internal units so that they face a market test. Further, large companies have improved efficiency by transforming wholly-owned support units into quasi-independent entities that contract with the parent firm and outside enterprises. Finally, many firms began developing cooperative links with other organisations in order to harness complementary resources and joint-learning capabilities. By mobilising history and theory we can develop a better understanding of the causes and logic behind these structural changes.