3. HIERARCHICAL BUSINESS A hierarchical organization is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. Members chiefly communicate with their immediate superior and with their immediate subordinates. Reduce the communication overhead by limiting information flow (POSITIVE & NEGATIVE).
5. Self- Organization Self-organization is the process where a structure or pattern appears in a system without a central authority or external element imposing it through planning. It’s a bottom-up approach and feed back oriented. This globally coherent pattern appears from the local interaction of the elements that make up the system. As a result the organization is achieved in a way that is parallel and distributed.
6. Self- Organization Examples: eBay and the stock exchange. Here not a retail owner but the market participants decide what is to be sold and bought, what the price will be and many more things. The earliest examples of self-organizing commercial systems are town markets.
7. Advantages Self-organizing systems have forever produced integrated outcomes in nature (ecosystems) and in human societies (language). But in the Internet age, self-organizing systems go beyond market exchange to produce complex, sophisticated, highly competitive products. They are computer operating systems (Linux), scientific blueprints (the human genome), and vast multimedia social entertainments (online games).
8. Advantages The Linux team- by reframing the operating system production game from hierarchical to self-organizing, gained a unique advantage and, now, a robust partnership with IBM. The music industry. In 1998, file sharers shifted music distribution from a hierarchy (traditional retail) to a self-organizing exchange. Six years later, the business is still reeling.
10. Hybrid Business The type of business entity which is directly controlled, hierarchical production or distribution system with features of chaotic self-organization. It is customer Centric.
11. Hybrid Organisation Herrah’s Casino and Hotel Operator Business- treating its VIP Customers. British Petroleum – environmental performance objectives.
13. Conclusion Hierarchical business – control by an individual. Self-organizing may seem risky and is difficult to predict. Hybrid Is even better than the two -Satisfying Customer Needs.
The advantages of hierarchies are: Helps create a clear communication line between the top and bottom of the business – this improves co-ordination and motivation since employees know what is expected of them and when. Hierarchies create departments and departments form teams. There are motivational advantages of working in teams.The disadvantages of hierarchies are: The formation of departments can mean that:- Departments work for themselves and not the greater good of the business.- Departments do not see the whole picture in making decisions. Hierarchies can be inflexible and difficult to adjust, especially when businesses need to adapt to changing markets – remember employees do not tend to react well to change.
Parallel(all the elements act at a same time).Distributed?(no element is a central so-ordinator)
that, with their haggling merchants, date back to the dawn of commerce itself.
