Organizing for the Future: Cases on the Transition to Organic Forms

How most organizations are organized today is not coherent with the current market conditions and business environment. Many organizations are still relying on the decade’s old traditional organizational designs (Fassoula, 2004; Rahnema & Van Durme, 2017), although the emergence of these can be traced back to specific eras in history where managers aimed to take advantage of the prevailing market conditions (Miles et al., 2009). However, since then, the world has dramatically changed as a result of technological development, increased knowledge and globalization (Hinrichs, 2009). The business environment of today can therefore be described as dynamic, complex and uncertain, and to be successful under such conditions, organizations must be flexible and innovative (Hinrichs, 2009; Rigby, Sutherland & Takeuchi, 2016). Consequently, the traditional forms of organizing are no longer responding to the market conditions they were designed to match. In uncertain environments, organic organizations with features such as few hierarchical levels and decentralized decision-making are favorable (Burns & Stalker, 1961). Being organic also allows for agility (Holbeche, 2019; Olivia et al., 2019), an organizational capability that enables efficient and effective adaption of resources for value creation that corresponds to the changing environment. Thus, agility is highly desired in today’s volatile business environment and can be connected to higher organizational performance (Tallon & Pinsonneault, 2011; Salo, 2017). New organizational designs are therefore emerging which offer a possibility to become organized in accordance with today, and not only in terms of responsiveness, but also in recognizing the individual contribution of each employee. Nevertheless, engaging in organizational change tends to be difficult. Approximately 70% of the change initiatives that organizations engage in fail (Beer & Nohria, 2000; Rahnema & Van Durme, 2017; Holbeche, 2019), and most literature on change management is not suitable for the new unstable market conditions (Burnes, 1996). Additionally, the large differences between the traditional, hierarchical forms and the new forms imposes an even greater difficulty. Consequently, while a need to change has been recognized, the available literature on how to do so is limited. The purpose of this thesis was to increase the understanding of how to successfully manage the transition from a traditional form of organizing to a newer, organic form. To fulfill this purpose, the transformation processes towards the rather novel Teal-model made by Zordan Srl SB and Credito Emiliano S.p.A were studied following a case study methodology. The 8 findings of the explorative research confirm that both external and internal factors question the appropriateness of traditional forms of organizing in the business environment of today, and by transforming, great results can be achieved connected to economic profits, employee satisfaction, organizational climate and customer satisfaction. Successful ways of how to manage the transition was found in a gradual implementation of change where the process evolves along the transformation. This allows for reflection and a high involvement of employees, which positively affects change resistance. The findings also suggest a creation of an internal guiding group to function as a facilitator during the process. However, the change is not only limited to the organizational design, but the organizational culture and mindset must be changed as well to reflect the new ways of working. Accordingly, the required efforts to succeed are affected by the existing culture and perceptions of power, and the organizational starting point in relation to the desired model. Due to the limited number of studied cases, additional research is needed.