Business Structures Evolvement and Insight on the Transformation of Organizations in the Future - Essay Example

Humans have evolved over time and the societies in which they lived transformed with their evolution. An important entity that structured society during this process are organizations. Organizations are defined as a number of persons or groups united for a particular purpose (Webster’s II, 1984). A business is a form of organization which generates economic activity within a society. Enterprises have changed over the years and will continue to evolve. This paper analyses business structures and provides insight on the transformation of organizations into the future. During the 20th century businesses were organized in a bureaucratic format which provided the owners or managers a high level of control over the operations. At the time the organizational structure serve its purpose and enabled a lot of corporations to grow and manage large amount of human resources. Manufacturing operations were the catalyst of the industrial revolution. There was plenty of manual labor involved, thus an effective manner to manage these workers was to directly supervise their work. Companies produced within their industries and the supply chain of its operations was national. The way these businesses operated changed and manager had to realize adjustments, but in reality the changes were not significant and manifested themselves in long intervals of time. At the turn of the century business practices were highly influenced by the globalization movement and with the start of the information age. Globalization changed the way companies realized business since it brought new factors into the equation. The long distances between different installations created the need for better communication. Companies had to deal with new cultural factors and different time zones. To be effective businesses realized they needed to be able to transfer information faster. Flexibility within the decision making process was necessary to enable the new organizations to function properly. The information age brought vast amounts of knowledge to everyone. Economies worldwide changed and new business opportunities were available. The digital revolution transformed economic activity so much that currently over 50% of the gross domestic product of industrialized nation is knowledge based (Harman, 2006). Countries such as India have economic platforms in which its sustainability is based on providing consulting services in information technology and business processes. Such a platform was created to take advantage of the business tendency of outsourcing functions to reduced cost and streamline operations. Major technological advances allowed information to be transferred instantly. The internet interconnected the world and facilitated communication among people. Companies are now using mediums such as electronic boards, emails, teleconferencing to enhance communication between its employees, vendors and clients. Electronic devices such as cellular phones, laptop computers and PDAs allowed workers to share information with the help of wireless and satellite technology. A tendency that changed the way many companies operated is Just-in-time management. The method changed so many things in the business world because it required companies to change its operations to be able to build products without the need high inventory. The components and raw materials necessary for production lines would not be purchased in bulk amounts and stored in large areas. Management had to learn to be efficient in its utilization of materials and closer relationships with suppliers were created to allow the just-in-time arrival of the necessary materials. Workers were required to make decision at a faster pace since delay in the decision making process could have serious consequences in the operations of a company There are many industries today that will not be the same in the near future. One traditional industry which has operated for centuries that is currently going through major changes is the banking industries. In the past people needed to enter the physical facilities on the bank for all their banking needs. ATM machines automated many banking functions. The internet allowed clients to entered their accounts and view their accounts and perform actions such as making payments. There are new types of banks which emerged that have impacted the industry and created new types of currencies. PayPal is a 100% virtual bank that created an electronic currency which could be referred to as PayPal money. Paypal is interconnected to the entire banking system and allows people to link their regular banking accounts to the PayPal account and transfer money among accounts. One of the greatest benefits of utilizing virtual money such as PayPal is that users can send their money to any person in the world instantly free of charge. As of June of 2007 there are over 100 million PayPal accounts worldwide (Paypal, 2007). Virtual banks such as PayPal are the wave of the future. Ecommerce is on the rise and customers want to be able to utilize their funds to purchase merchandise online. Businesses are created to serve the needs of its clients. Focusing on the customers has always been important, but the companies of the future will be absolutely control by its customers instead of management (Harman, 2007). There is evidence on a lot of organizations that they are already been controlled by its customers. Customer relationship management (CRM) is a system that stores and analyzes information. They provide companies with the information they need to make business decision based on the desires of its customer base. The customers started to gain control over the types of products and services companies provide with the proliferation of businesses worldwide. The intense competition forced many companies to change their perspective to retain customers and obtain new clients. The jobs people will perform in the companies of the future are not going to follow the traditional path. An emerging trend that will influence a lot the job market in the future is telecommuting. Telecommuting is realizing work in your home or in any place outside of a company. Telecommuting allows workers to perform job duties at different hours of the day and provides company with considerable saving since they don’t need space to accommodate their employees. The Futurist journal estimates that by the year 2015 more than a 100 million people with be telecommuters (Wiley). Educational organizations are changing and in the future a lot of people will study in different settings. Online universities already exist and they are becoming very popular. People are realizing they don’t need a physical room with a professor in front in order to learn. Online classes allow people to learn out the convenience of their home and to enter a virtual class at any time of the day. People want more time for themselves and eliminating typical classroom schedules and commuting time is a way to obtain it. The flexibility of these schools allows people working full time to study full time. Since organizations are rapidly becoming knowledge-based people need to continue their formal education to stay competitive in the job market. Individual are not the only ones that are need of constant learning to progress. Organizations need to learn new things to adapt to changes in the environment. There are three organizational structures that provide flexibility and adaptability to companies. These structures are the best suited formats for the businesses of the future. They are matrix organization, project organization and organic networks. A matrix organization is a company in which the functional departments work among in each other in different company projects. Business teams are created with a dual focus which combines functional skill and resources with an orientation driven by the key tasks they’ve been assigned (Morgan, 1992). An organization based on project teams allows people to work on particular projects. In this type of organization the functional departments do not control the flow of work and the success of the employee depends on his ability to adapt to the various projects going on simultaneously. An organic network is an organization without a physical presence which functions as various interconnected contracts managed by a team (Morgan, 1992). An example of an organic team could a trade show. A company is created to administer the trade show. Various contracts are signed with different companies for rental space, preparation of the area, cleaning, accounting, marketing, sales and all the other activities involved in the trade show. The business world is changing and more change is coming in the future. In order to succeed companies must be able to quickly adapt to their surroundings. The internet accelerated and expanded global knowledge. Professionals in all fields must seek continuous education to improve themselves and keep up with the business world. New industries are going to appear and other will disappear. The new organizations will change the way people work and influence our entire society. Our world is connecting itself and soon everyone will notice that the distance that separated different countries no longer exists. References Harman, K. (2007). Contemporary Organization Theory. 1-19. Morgan, G. (1992). ‘Changing Organizational Landscapes’ in Educational Leadership: Challenge and Change. 29-40. Paypal.com (2007). Retrieved June 27, 2007 from http://www.paypal.com Webster’s II (1984). New Riverside Dictionary. Howard Webber Publishing. Wiley.com. The Big Picture. Retrieved June 27, 2007 from http://media.wiley.com/product_data/excerpt/08/04700493/0470049308.pdf Read More