The Boundaryless Corporation

Some years ago Jack Welch, the chairman of General Electric, came up with the idea of ‘boundaryless organisation’. He wanted to eliminate both internal and external boundaries, turning the corporation into a network with no defined edge. On the face of it this sounds like an idea a radical political group might come up with. I found an excellent advert for the idea:


The problem with this, as with most corporate organisational theory is that it is not in itself a particularly rigorous or meaningful idea, more of a cover for the ideologies of corporate life. Corporate ideology is interesting because on the one hand it is so manifestly stupid, on the other hand it is so manifestly useful. For instance, why do corporations so routinely re-organise themselves? On the surface it hardly seems efficient. But a textbook on corporate organisation I read recently stated why it happens in very plain terms: corporate re-organisation is a way to gain more control over the workers and other resources. It just came out and said that. Corporate organisation textbooks are well worth a read.

So Nike is a boundaryless corporation: it is a network of different organisations and workers in different countries. Nike does not make trainers, it only markets them. Now we can begin to see the reason for the elimination of solid corporate boundaries – to ensure that most of your ties to most of your productive teams can be cut instantly at any time, with the minimum of loss to yourself. To shift capital investment onto others. To reduce risk by reducing responsibilities.

I’ve been thinking about the edges of organisations: hard boundaries, no boundaries, and perhaps the most interesting: porous or graded boundaries. I’m not sure I’m going to find much help in corporate organisation textbooks.

3 Comments

  1. Tim

    What about the example of cross-ownership though the stock market and other mechanisms? Board membership etc? I think the way that organisations are structured is often an artifact of the regulatory system.

    Reply
      1. preorg

        That’s a good site, and their info source littlesis.org too – would be good to have something similar in this country.

        Reply

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