Boundaryless Organization – Meaning, Types, and Characteristics

Boundaryless Organization, as the word implies, is an organization with no boundaries. Normally, a company has a structure and a set of hierarchies. But a boundaryless organization has no or minimal structure and hierarchies. This term belongs to Jack Welch, who developed this concept during his tenure as CEO of General Electric (GE).

We can say that such organizations remove or minimize the vertical, horizontal, and external barriers. Or it is an organization with no boundaries in terms of hierarchy, geography, work functions, and more. And it divides employees and distances a company away from suppliers and customers. This way, they develop an atmosphere where employees, managers, customers, and suppliers can work freely together.

The primary goal of such organizations is to ensure greater flexibility and responsiveness, as well as a smooth flow of information and ideas. Such organizations form self-governing and cross-functional teams around their core activities, thus enabling them to achieve greater integration and coordination.

Need for Boundaryless Organization

Presently, the existence of boundaries separates a company from the outside world and its employees. For example, the external boundaries separate an organization from its suppliers and customers. Internal boundaries, on the other hand, separate management and employees. Such boundaries were necessary for the overall success of an organization.

A company needs a structure to operate efficiently. A corporate structure helps clarify two things in an organization: firstly, it clarifies the role of each member of a company, and secondly, it defines the power and control that each member has.

Although the structure is important for a company, it can also limit its growth. For example, it can act as a barrier between different members of an organization and as a barrier between a company and external stakeholders. Such barriers can make a company less efficient and less attentive to the demands of the users.

A company can overcome these barriers if it is a boundaryless organization. Moreover, the rapidly changing business environment, technology, and globalization also require the elimination of most of the boundaries. All of these requirements have led to a new concept of a Boundaryless Organization.

Although such an organization will have a degree of hierarchy and geographical boundaries that are at the heart of any organization’s success, it aims to break down vertical, horizontal, and external barriers. This way, a company ensures that its employees, customers, and suppliers are able to simply work together in a pre-defined structured manner or by following the established protocol.

Characteristics of Boundaryless Organization

Here we will discuss a few key features of such an organization:

  • Technology remains at the heart of such organizations, and they are trusted to ensure the effective and smooth functioning of such an organization. The use of technology is so much that employees have very little personal communication. Employees communicate primarily through text, email, social media, and other communication methods.
  • Employees of these organizations do not usually show up to work in a specific location. They work on the project with video conferencing and other collaboration software. In this way, these organizations eliminate geographical barriers and problems.
  • In addition, employees of these organizations have flexible working hours. They can work at the most convenient hours for them. Thus, employees can achieve a work-life balance in their own way and according to their needs and preferences.
  • In boundaryless organizations, all employees have some sort of authority and the freedom to make a decision within the given framework. And, as we know, every authority carries a certain responsibility. Therefore, employees are held accountable for their decision and their tasks.
  • Employees apply all modern methods such as JIT (just-in-time) and others.
  • The employees have very little or no supervision. In other words, the constant and deliberate intrusion is not there. Nor will there be anyone there all the time to tell them what to do and what not to do. Of course, there is a very limited type of leadership and supervision by very few.
  • In these organizations, employees act both as managers and as coordinators of their tasks.
boundaryless organization

Types of Boundaryless Organization

The following types of boundaryless organization can be found:

Network Organizations

The focus is on who can do a task in the most efficient and cost-effective way, rather than leaving the decision on the organizational chart. Moreover, all the resources needed to accomplish the task are available throughout the network rather than with one firm.

Virtual Organizations

This creates a collaboration of independent companies that share their expertise, network, and costs. We also call this type of organization a dynamic organization. Every independent company in the network contributes to its field of expertise. Flexibility and adaptability are the main advantages of this type of organization.

Modular Organizations

Such a company focuses only on its core activities. Such companies outsource all non-core activities to a company that specializes in these activities. Normally, the services that a company outsources are data processing, accounting, production, and sales. We can say that modular organizations function like hubs and surround other companies in this company. Such organizations are able to save costs as well as develop new products more quickly. This structure allows the organization to concentrate and use all resources for key objectives/products/services without distraction. And the supporting and secondary activities are managed through outsourcing.

Learning Organizations

Such an organization does not follow a particular pattern. Instead, these organizations develop the ability to adapt to change because all members actively come together to identify and solve problems. In addition, employees regularly update and share new information and participate actively in decision-making.

Furthermore, in such an organization, it is important that all members work together across companies and at different organizational levels and specialist areas. This gives employees and management maximum flexibility to focus and make optimal use of all available resources. However, such flexibility and use of resources are only possible and feasible if core management is prepared to minimize or eliminate the existing formal structure.

In such an organization, employees have the freedom to work and contribute in a way they think is better. Teams play a crucial role because collaboration is at the heart of such an organization. Because of such characteristics, there are no great demands on “bosses.” But there is a need for leadership.

However, one of the key factors for the success of such an organization is that the leader has to ensure that all employees are clearly aware of the vision of the company. In addition, the leader needs to encourage and assist members in troubleshooting to do their best to achieve this vision.

Culturally, employees in a learning organization have full freedom. They can communicate, learn, share or experiment without fear, and others also try to get and support what is good for the organization.

Final Words

Boundaryless organizations are seen as a necessity for companies in the 21st century. Although the concept is gaining in importance, it is evident that companies follow a mixture of such concepts and traditional organizations. They still have a hierarchy and a corporate structure but give employees more freedom in terms of working hours and decision-making.

Sanjay Borad

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

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