MGMT628 Assignment No. 2 Spring 2012 solution

Before the industrial revolution, most organizations were related to agriculture or craft work. Communication was primarily face-to-face. Organizations were small, with simple structures and fuzzy boundaries, and were generally not interested in growing larger. In industrial age, many things were changed. Growth became primary criteria of success. Organizations became large and complex, and boundaries between functional departments and between organizations were distinct. Environment was relatively stable, and technologies tended to be mass-production manufacturing processes. The primary forms of capital were money, buildings and machines. Internal structures became more complex, vertical and bureaucratic. Leadership was based on solid management principles to maximize productivity and tended to be autocratic. Managers did all the planning and “thought work” while employees did the manual labor in exchange for wages and other compensation.

Now the environment of today is unstable. With international competition, e-commerce, and other challenges, the environment for all organizations is unpredictable, characterized by complexity and surprise. Managers can’t predict and control in traditional ways. To cope, organizations need a shift to a newer paradigm – one that is not based on the mechanical assumption of the industrial era but on the concepts of a living, biological system. Many organizations are shifting to flexible and decentralize structures that emphasize horizontal collaboration. In addition, boundaries between organizations are becoming diffuse, as even competitors form partnerships to compete globally. The primary form of capital is not  buildings or production machinery but information and knowledge. As a dramatic example, consider the ‘market value’ of companies whose product is information technology (for example, Yahoo or Google) that can often be one hundred to two hundred times greater than their fixed asset value; whereas in traditional companies, the market value and asset value are same.

Following are some of the Organizational Design Characteristics. You are required to analyze the given information, as well as consult books, and compare and contrast Old and New Paradigms with reference to these characteristics.