The forces of the new economy are potently shaping today’s businesses. Given the rise of a social media, a collaborative economy and a new breed of consumers, people, processes, and relationships inside and outside organizations are continuously being reconfigured. The impact of the three forces on organizations is illustrated in the model below (Barrientos, 2010).
The forces break into the porous walls of the organization and change the way people communicate, complete tasks, and make decisions. People inside the organization are learning new ways of sharing information. They are adopting the art of co-creation and collaboration. As this happens, connections and networks inside the organization are beginning to stand on equality and empowerment and no longer on hierarchies. Likewise, processes are becoming decentralized. The management is fostering more openness and transparency. These changes all equate to a reconfiguration of the organization’s corporate culture.
This model rightly provides a picture of how present organizations are being impacted by the emerging forces of social media, a collaborative economy, and a new breed of customers. Now, let us examine another model that takes into account similar organizational elements.
In 1965, Leavitt proposed a model that illustrates the relationship among the elements of the organization and the environment. The elements identified by Leavitt are social structure, participants, goals, and technology. Let’s look into each of them.
- Social structure refers to the patterned or regularized aspects of the relationships existing among participants in an organization (Leavitt, 1965). It may be separated into two components: Normative structure includes values, norms, and role expectations. Behavioural structure includes the recurrent behaviors of the individuals inside the organization (Davis, 1949).
- Participants are the individuals who, in return for a variety of inducements, make contributions to the organization (Barnard, 1938; Simon, 1976).
- Goals are conceptions of desired ends that participants attempt to achieve through their performance of task activities (Leavitt, 1965).
- Technology comprises the machines and mechanical equipments an organization uses as well as the technical knowledge and skills of the participants (Leavitt, 1965).
The model by Leavitt (1965) shows how the internal elements of the organization exert equal forces upon one other. Likewise, it is depicted how the environment, as an external factor, also influences and shapes what happens within the walls of the organization.
The two models both follow the systems approach in viewing organizations. The study of several organizational elements are contextualized in an open setting which takes into account the influence and impact of forces which lie outside the organization. The similarities between the concepts present in the two models could be summarized in the table below.
Combining the internal elements present in Leavitt’s model and the specific external forces depicted in Barrientos’ model, we could come up with another model to illustrate the connections and interactions among several factors inside and outside the organization’s walls.
The five elements depicted in the model are drawn from Barrientos’ and Leavitt’s illustrations. The interplay among the people, processes, formal structures, informal networks, and goals inside the organization is shown using interconnected lines which suggest a dynamic and multi-directional influence of each organizational element upon one another. The sum of these interactions is the corporate culture.
The model retains the porous organizational wall of Barrientos and Leavitt and takes in the three forces of the new economy. However, for this model, a two-way impact between the external forces and the organizational elements is portrayed. It is acknowledged that though a social media, a collaborative economy and a new breed of consumers are shaping businesses today, elements inside the walls of the organization are also exerting influence on these outside forces. There is a reciprocated influence and impact exchanged among the internal and external organizational elements.
The changes organizations experience in the middle of the Internet Age are way too complex and multifaceted to be perfectly encapsulated in this model. This is but one way by which the phenomenon could be seen and interpreted. There could be several ways to view the reconfiguration of business operations and corporate culture. How about you? How does the change look like in your lenses?