Customer Reviews

Designing Complex Organizations

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"Competing with Flexible Lateral Organizations" is one of Galbraiths classic books on organization. This book is specialized on lateral organizations, or organizations that happen next to the hierarchical organization. In the world of fast cycle time and cross-functional integration, lateral communication is key to business success. Jay Galbraiths book is thin (150 pages) and readable, though slightly dry at times.

The first chapter of the book looks at the definition of lateral organization and also explores how lateral organizations can increase the organizational capability (he re-uses his Star Model from earlier work). The next chapter then explores the different needs for lateral coordination: Functional coordination within a business unit, cross-business unit coordination and international coordination.

The third chapter explorer three types of lateral organization, from informal becoming gradually more formal. This chapter also takes the first (informal lateral organizations) and explores them and how management can support creating these.

The next two chapters describe the more formal lateral organization of lateral groups and integrators. Obviously, in the integrator chapter, the author also touches on the issue of matrix organization and creates a rather interesting graph related to authority, formality and integration across units.

Chapter six is a little odd in the book. It takes a step away from the earlier discussions and talks about "distributed organizations." Whereas the earlier chapters were still somewhat within the traditional organizational design concepts, the distributed organizations tries to change the system and that way creates even more focus on lateral organizations. The author gives the example of the Swedish SKF organization which distributed much of the previous headquarter functions. This reminds me of the work done by Richard Semler in Semco in Brazil, it seems somewhat similar.

Chapter seven provides two case studies and chapter eight provides a summary of the ideas provided in this book.

I found competing with flexible lateral organizations an interesting book. It structures the thought around different types of organizations well, though... I did consider the book somewhat dated. The author does have a few key assumptions (e.g. related to strategy and management responsibilities) which gets challenged in modern management theories (e.g. Future of Management by Hamel). Still, I enjoyed the book a lot and consider it worth four stars... however, I would not recommend it. If you are interested in lateral organizations and modern organization, I suggest to look in somewhat newer material and perhaps also in the Community of Practice literature which provides an interesting alternative to lateral organizations.