Comparison between old type of organization vs new type of organization
Organizational structural difference
Old type of organization structure was made so that authority is in the hand of one person or usually called as centralized system. The advantages of this system is that it is inexpensive to maintain but the disadvantages is that everyone is controlled by their superior so an idea will be hard to realized as everything has its way before it can be agreed, so the organization will likely hard to grow as the system will make sure that everyone doing the same exact work everyday.
As the new type of organization arise, old and new company began to use the new system as they see that it is time to change the way as the whole business world changes too. The new type of organization made sure that everyone can share their idea everyday and the barriers that usually stand between the ...view middle of the document...
Raises and bonuses are based on peer reviews. If a team member decides one day to do something different, he or she simply moves their stuff and gets going. The company proudly proclaims that it has been boss free since 1996.
Valve founder, Gabe Newell’s reasoning behind Valve’s structure was: “What matters is being first and bootstrapping your product into a positive feedback spiral with a constant stream of creative innovation. Hierarchical management doesn’t help with that, because it bottlenecks innovation through the people at the top of the hierarchy, and there’s no reason to expect that those people would be particularly creative about coming up with new products that are dramatically different from existing ones – quite the opposite, in fact.”
So, that being said as valve still become a company that create many innovation in gaming world, also getting all the free creative idea from all their employees without any procedure before it can reach to the superior desk. This lead valve to become a company that has a per employee profitability that the company claims tops Google, Microsoft and many other high-flying tech companies.
As the valve company uses the “zero governance” policy to make every employee actively participating and sharing their idea of creativity, some company who still uses the way of old type of organization also can be seen.
Whether if it’s the new type or the old type of organization, it’s not as simple as to choose between the gold or the mud, everything must be decided whether the company can actually use and implemented which type of organization because there’s always the advantages and the disadvantages between the two of it.
Flat is the new up: Why are companies using organizational structures that are thousands of years old? , Dave Kashen, https://gigaom.com/2013/04/27/flat-is-the-new-up-why-are-companies-using-organizational-structures-that-are-thousands-of-years-old/
Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition. Copyright © 2009 Pearson Education Canada. 9-4.