The Changing Nature Of Organizations In The Digital Age

In this essay, you are required to address the two following questions:

1. Do you believe there has been a fundamental shift in the nature of organisations, to the point that the traditional principles of bureaucracy and hierarchy are no longer relevant?

2. In light of your response to the first question, discuss the implications of this ‘fundamental shift’ (whether real, or so-called) upon: (i) organisational culture (i.e. particularly that variant that sees it as a ‘social glue’ that can provide integration), OR (ii) managerial control (i.e. systems of integration, which ensure that work is supplied). 

The Impact of Technology on Organizational Structure, Culture, and Control

The growth of technology and media has affected organizations in diverse sectors. It has transformed the way of doing business and the type of the offered products and services. The changing economic landscape has resulted in organizations that have evolved as corporate islands and involved in complex supply chains. The networked organizations involved collaborative production and diversity of skills. For example, small business and self-employed provide specialist input in larger corporations. The organization's reliance on technology is used as a source for creating competitive advantage in different sectors. This represents the contemporary networked organizations that exploded all over the globe. The traditional organization used to be large, hierarchical, inflexible, process-based and moving business slowly. The evolving nature of organizations as a result of the changing economy has affected the nature of work and workers as well. Organizations are becoming flat and agile staffed by workers who are more independent, task-oriented, have increasing work control systems and less driven by the hierarchy. The traditional relationship of the employer-employee is also evolving, it could be described by agility, as it involves mobility of workers away from the office and within the office, as employees share resources and space (Harris, 2016; Gil-Garcia, Pardo, & Sayogo, 2016).

The inter-organizational collaboration is facilitated by IT, interactions take place through the digital platforms that enable information sharing. These interactions take place in a virtual realm as well as in the physical world. In addition, they could take the form of textual expressions that could be analyzed with social network tools as they represent social relations rather than the relation of cultural ideational relation to reveal the importance of shaping ideas by the social structure (Ferguson, Groenewegen, Moser, Borgatti, & Mohr, 2017). Castells (2010), has discussed the changing nature of organizations upon behaviors, policies, and practices associated with the organizational structure, culture, and control. His arguments are discussed in the following section, then the cultural implications built on these thoughts are to be analyzed.

According to Castells (2010), the rise up of the technological revolution arranged around the information technology has reshaped the society. Economies around the world have become globally interdependent representing a new type of relationship between the economy and society. The organizations today depend on their capacity to generate, process and adopt knowledge-based information. They operate globally because their core activities represented in production and consumption are directly organized on a global scale of business or through a network that take place among the economic agents. These organizations are networked as the competition takes place globally. There is a relationship between technology advance and organizational change. Technology has an impact on the organizational structure which affects the productivity. Higher productivity levels that have resulted from the use of technology are due to the employment of the customer-focused business strategy and the flat organizational structure that rejects the vertical organizational structure and eliminates bureaucracy. These organizations conduct organizational changes, provided training to the employees, extensively use IT and encouraged organizational learning.

The Rise of Networked Organizations and Their Reliance on IT

In addition, Castells (2010), noted that here are different types of organizational transformation in the informational economy era. The network of subcontracting linked with large organizations represents a trend that differs from the horizontal networks of the small and medium organizations. Also, the web-like organizational structure that results from the strategic agreements that take place between large organizations is different from the other types. All of these trends are different from the vertical and bureaucratic large organizations involved in the process of standardization and mass production. The major organizational changes that took place over more than the last two decades are not the newest or the best way of production, but they represent the organizational change from the crisis of the vertical organization and the oligopolistic control over markets. Different models have emerged as a result of this crisis, these models represent the new forms of organizations that emerged due to the informational economy that is mainly based on networks. The new network organizations are capable of expanding all over the global economy as they are heavily reliant on the information provided through technology.

According to Castells (2010), the assumptions of Cisco business model are as follows:

• The relationships that the organization establishes with its main constituencies can be a source of competitiveness.
• Information sharing pattern with constituencies decides the strength of this relationship.
• The business relationships and organizational communications take the shape of the network that assists in opening the organizational information to its main constituencies in a manner that leverages the competitive advantage of the network.

Cisco Systems is a highly reputed company in the internet service industry, it has dramatically expanded its business. This expansion encouraged it to apply the networking logic it used to sell to its customers on itself. It has organized all of its relationships with the customers, partners, suppliers, employees, engineering, design and software. The core of Cisco Systems operations was its website, customers can find their needs of product lines through it.

Cisco Systems represents the IT revolution based on organizational networking and energized by the information networks. This system is the best model of the networking organization that could be applied to other sectors, not only to the internet economy or the information technology industry. It has rapidly expanded to other industries as the agricultural machinery sector, grocery shopping, the automobile production and sales, business consulting services and higher education in the 1990s. The network is made up of organizations and subjects that could be modified to support the environment and the market structures and creates networks. These networks that represent the ethical foundation of the network organization are made up of different cultures, values and projects allowing for cultural transformation of the network units. This culture is a virtual culture that stems from the virtual experiences articulated by the computer networks in cyberspace. The network organization can live within the virtual culture (Castells, 2010).

The Changing Nature of Work and Workers in the Digital Age

Another important issue is the employment structure that was traditionally dominated by labor productivity and the role it plays in the existence of technology. Technology and innovation have allowed workers to enhance their performance and increase production. The workers have shifted from direct to indirect production, from fabrication to customer services and from limited economic activities to a diverse range of universe activities.  The organizational models have changed to adapt to the changing conditions of uncertain fast changing economy and advances in technology. The major change has been the transformation from the vertical bureaucracies to the horizontal structure. The latest has certain characteristics represented in the organization around the process, flat hierarchy, performance management by customer satisfaction, team management, reward based on performance, creating and maintain strong relationships with the customers and suppliers, information sharing and employee training and development at all levels. The lean production model has led the organizations to become more effective rather than thriftier. The strategy of networking added flexibility to the organization. Network flexibility requires the organization to first become a network, then to dynamize the elements of its internal structure. These factors are essential to shape the horizontal organization model. Other characteristics are represented in extended decentralization and increasing autonomy of its units and create competition among them (Castells, 2010).

Castells (2010), argues that the global competition has resulted in a cross-border structure that links the small and medium enterprises with the large corporations creating this network that could innovate and adapt to the environmental changes. Accordingly, the actual business units are the projects rather than individual formal companies. This cross-border networked structure assists the small and medium businesses to connect. The business projects take place in the fields of activity that form product lines and organizational tasks. Information circulate through the networks, including networks within and between companies, personal networks and computer networks. Technology is an enabler to such processes that act as a resource that creates capabilities that allow the organization to compete effectively.

The fundamental shift from the traditional organizational structure of the organizational networks involve structural and relational properties. The structural properties refer to the size, design and consensus of goals between the network members. It is important to know how the networks are governed internally. The increase in the network size results in a decrease in goal consensus. The organizational culture is considered among the organizational network relational properties (Koch, Galaskiewicz, & Pierson, 2015).

Organizational culture exists within organizations that could be identified and analyzed by using appropriate techniques. It could also be linked to different organizational outcomes, including the organizational performance. Martin (2002), as cited in Whelan (2015), argues that a considerable debate takes place regarding the levels of cultural sharing. The first perspective considers is the integration perspective that relates culture to the values, beliefs and attitudes shared by most of the employees. The second perspective is the differentiation perspective, it assumes that there is not integrated culture as people have varying beliefs and values. The third perspective is the fragmentation perspective, which assumes that cultures are characterized by ambiguity and diversity. Schein (2010), as cited Whelan (2015), argues that different cultural perspectives take place in different organizations. The interpretive pattern refers to the relationship between the practice and the organizational culture. According to the practice theory, the social order is ensured and the shared meanings are speeded within organizations in relation to practice. Organizations that are characterized by official hierarchy, also involve a horizontal aspect with employee interaction that deals on equality basis. They influence each other based on ideas that reflect their level of knowledge and not associated with the formal position of the employees. The horizontalization marginalizes the formal hierarchy, but verticalization and horizontalization could exist in a tense in the same organization. Culture involves equality between managers and employees in some aspects within the horizontal organization (Lundholm, Rennstam, & Alvesson, 2012).

The knowledge workers in creative industry are controlled by culture more than structure. The post-bureaucratic organizations involve a method of circulation. The employees are circulated through projects, liberated from bureaucracy and perform on multitasking basis, mobile, innovative and able to cooperate with other employees with a different culture. Moreover, they can communicate and relate people to each other. Job uncertainty helps in social capital accumulation and network expansion to secure employability in different fields of work (Clegg, 2012). Organizations use the social media platforms as a means of internal and external communication, for example, Starbucks, Dell and Walmart use the social media to promote their products and services and recruit employees. SMS is used in organizations such as IBM to facilitate collaboration and enhance communication. IT incorporation into organizational processes and structure. The theory of IT cultural conflict, argues that IT is not culturally neutral, which creates culture conflict. People respond to technology in various ways according to their work values (Koch, Leidner, & Gonzalez, 2013). The technological tools could be used to integrate different projects, it acts as a cross-project consulting to be used by managers to select employees and it could be used to exchange information related to a particular domain (Padhye, Mukherjee, & Sinha, 2014).

A different approach is required by the network management compared to the traditional way of management to deal with. It focuses on the goal-seeking behavior and the cost-benefit collaborative arguments to achieve the specified goals. The collaborative network management allows for effective and efficient response to changes in the environment (Weare, Lichterman, & Esparza, 2014). The network managers do not manage through many hierarchical layers rather they focus on the horizontal steering (Groeneveld & Dool, 2016).

Considering that culture exists on different levels, according to Schein (2004), as cited in Freiling & Fichtner (2010), the culture surface is in the upper level, values in the middle level and cultural roots in the deepest layer. Schein also defines culture as the paradigm of shared assumptions known by a group of people as it introduces a solution to its external problems of adaptation and internal integration, its validation allows it to be learned by new members as a method of thinking, feeling and perceiving problems. This definition represents the social glue of the organizational culture that takes place between the employees and the organization. This means that certain type of culture is necessary to make the best use a certain knowledge, creativity and skills. The organizational culture acts as a glue between the employees and organization in order to attain goals. It fosters collaboration between employees and teams to create competitiveness through learning and competence creation. In addition, the social capital established through the social networks internally and externally perform as a social glue that allows cooperation and shared benefits that strengthens the organizational culture (Powley, 2012; Bellot, 2011).

Tichy (1982), as cited in Ojo (2009) assumes that organizational culture is a normative glue that holds the organization parts together. It gathers people around it and makes them realize that they are an integral part of the workplace. The employees are influenced to internalize the organizational culture that helps them to fulfil their desire of having a social identity. The social glue is useful in attracting and retaining employees at different levels. It is important to realize that the social glue has a normative effect. The decision of organizations to stay within a networked organization or the networked employee's decision to stay within the same organization is derived from generic social norms. The acceptance to be involved in a network requires showing loyalty especially when it is needed. Loyalty is a norm that could be derived from moral reasons about people who are required to help others in the network or act according to most of them. It also assists in transforming the perceived "I" and "you" to "we", as every employee feels that he belongs to the organization as an in an integral part of it. The cultural relational properties involve informal social networks between organizations. Trust between the organizations in the same network acts as a social glue. The extent of the acceptance of cultural aspects among the networked organizations plays the role of social glue that allows for cooperative interactions (Lu & Fan, 2017; Whelan, 2016; Copp, 2015).

In summary, economies around the world have become globally interdependent representing a new type of relationship between the economy and society. The organizations today depend on their capacity to generate, process and adopt knowledge-based information. There is a relationship between technology advance and organizational change. The organizational models have changed to adapt to the changing conditions of uncertain fast changing economy and advances in technology. The major change has been the transformation from the vertical bureaucracies to the horizontal structure. New organizations are based on networks, they are capable of expanding all over the global economy as they are heavily reliant on the information provided through technology. These networks that represent the ethical foundation of the network organization are made up of different cultures, values and projects allowing for cultural transformation of the network units. Information circulate through the networks, including networks within and between companies, personal networks and computer networks. Technology is an enabler to such processes that act as a resource that creates capabilities that allow the organization to compete effectively. Organizational culture exists within organizations that could be identified and analyzed by using appropriate techniques. The horizontalization marginalizes the formal hierarchy, but verticalization and horizontalization could exist in a tense in the same organization. Culture involves equality between managers and employees in some aspects within the horizontal organization. The organizational culture acts as a glue between the employees and organization in order to attain goals. It fosters collaboration between employees and teams to create competitiveness through learning and competence creation.

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