Today, to compete with the rest of the world, companies need to focus on doing what they are good at. This means that a careful assessment of the competencies of a company is required so as to strategically shift tasks and services previously performed in-house to outside vendors who are in turn specialists in their own right. Today's competitive pressures demand both efficiency and effectiveness. As a consequence, successful outsourcing is one of the major factors to gain competitive advantage. This has led many companies to adopt strategic outsourcing, a partnering approach with the vendors.
An
organization's structure is often regarded as a `given' rather than something
that has been created and can be recreated. The idea of `structure' when applied
to organizations implies some sense of order and regularity. Formal organizations
typically have design features such as reporting lines, levels of authority, channels
of communication, scope for discretion and responsibility and so on. Nevertheless,
structures are important because they can underpin and support effective organizational
processes, or conversely, they can impede and subvert these processes. Organizations
exist, and still have structures, because they can marshal tangible and intangible
assets. Originally, large and hierarchical structured companies dominated the
global economy for three-quarters of this century. Focus was only on efficiently
produced goods through mass production, coordinated through central planning and
control mechanisms. These companies used to their advantage the scale of manufacturing
along with experience to expand into the overseas markets served by less efficient
competitors. In such firms, the fundamental role of management was to plan, organize
and control resources that are held in-house. This structure was appropriate when
the markets were stable. |
