Organization 2.0: Adapting to change in the Web Economy

The Web economic paradigm where the combination of global mobility, local reach, and fluid flows of resources are accomplished via networks, Webs, and constellation of actors, has intensified the rate of business environmental changes.Organization 2.0: Adapting to Change in the Web Economy Ricardo Olympia DMGT 892 Residency July 9 –10, 2010General Statement of the Problem The Web economic paradigm where the combination of global mobility, local reach, and fluid flows of resources are accomplished via networks, Webs, and constellation of actors, has intensified the rate of business environmental changesResearch Questions •Do virtual organizations adapt better than non-virtual organizations to rapid changes in today’s Web economy? •How does ICT contribute to the creation of adaptive organizations?Propositions and Key Literature(Key words: open closed systems, resilience, virtual, agile, adaptability, ICT, turbulent environment) •Proposition 1: Organization is an open system that affects and is affected by its environment. Organization operates in a causal relationship with its environment –Emery & Trist (1965) The Causal Texture of Organizational Environments –Shafritzet al. editors (2005) Classics of Organizational Theory (Katz & Kahn (1966), Thompson (1967), Meyer & Rowan (1977), Pfeffer& Salancik(1978), Caroll& Hannan(2000)) •Proposition 2:Business organizations’ competitive advantage is defined by their response to external forces that are varied and unpredictable –Porter (1998) Competitive advantage: Creating and sustaining superior performance –Christensen (2000). The innovator’s dilemma. Propositions and Key Literature(Continued) •Proposition 3:Business organization leaders’ ability to make timely and correct decisions positively affects the organization chances of surviving changes in its environment –Simon, H.A. (1997). Administrative behavior –Mallak, L. (1998). Putting organizational resilience to work –Simon, A. (2006). Leadership and managing ambivalence •Proposition 4:ICT helps ensure the development of adaptive responses during periods of environmental change. The differences in ICT implementation provide competitive advantage opportunities –Carr, N. G. (2005). The End of Corporate Computing •Proposition 5:The loosely-coupled relationships between virtual organization members creates an agile project-based organization that can respond to changes in the business environment –Orton & Weick(1990) Loosely Coupled Systems: A Reconceptualization –Mintzberg& McHugh (1985) Strategy Formation in an Adhocracy –Lewin, K. (1975). Field Theory in Social ScienceThesis :Virtual organization can reestablish equilibrium relationships with its environment following periods of environmental changesThesis :Virtual organization can reestablish equilibrium relationships with its environment following periods of environmental changesThesis: The combined ICT and core competencies of virtual organization members create competitive advantage that cannot be easily replicated Research Method •Qualitative Approach –Exploratory –Descriptive •Strategy –Case Study of Technology Company (data source: online) –Literature Research –Archival (data source: online)Research Method DiagramFindings •There is no direct evidence confirming that forming virtual partnership alone results in organizational resilience •There is no direct evidence showing that ICT alone creates adaptive organization •There is implied causal relationships between surviving environmental changes and the company’s virtual partnership strategies •Successful companies have mature virtual partnership strategies. Management Implications and Future Research •Physical dispersal creates management control issues •Managing virtual organization requires knowledge management skills •Managing shared identity and mutual trust are particularly challenging in virtual organization •Virtual partnerships creates unique legal challenges for management •Disparate cultures and competencies create management challenge