The new corporate architecture

Executive Overview For years the basic questions about how best to organize people and tasks remained the same: “Do we centralize or decentralize? Do we organize by product or function? Where do we stick the international operation?” The answers were seldom satisfactory. Typically, companies were organized by product, by customer, or by territory, and then switched when those structures stopped working. While senior managers felt the impact of such reshuffling, it rarely affected the rank and file who continued to operate in the same functional, vertical organization where all that changed was the boss's name. Today's management challenge is to design more flexible organizations that affect all members. With traditional structures failing, managers must evaluate innovative types of organization to see if these structures can deliver. In this article we examine three such structures—the modular, the virtual, and the barrier-free—which today have become part of the new corporate architecture.