During the past 40-60 years, the fast-paced progress of information technology has propelled most advanced countries towards an information-based, networked economy [CASTELLS-2010] and [BENKLER-2006]. Conventional means of management are no longer effective, or even socially acceptable.
Management methods and organizational models are under constant evolution [BENKLER-2011]. Contemporary knowledge-based companies find ways to profitability by engaging their employees rather than controlling them; and individuals are motivated by social engagement and collaborative relationships [BENKLER-2011]. There is a challenge to describe, specify and implement an effective organizational design representing these new realities.
Organizational design has been approached in many ways:
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with simple approaches about how labor could be divided into tasks and then coordinated [MINTZBERG-1992];
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with elementary organizational structural types, like: simple structure, functional structure, divisional structure, team structure, matrix structure, project structures, autonomous units [MULLINS-2006]);
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with principle-guided organizational design, relating to principles such as: objective, specialization, co-ordination, authority, responsibility, definition, correspondence, span of control, balance, and continuity [MULLINS-2006]);
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with abstract organizational reference models, like the 5-part organization [MINTZBERG-1992];
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with more elaborate and dynamic organizational models, like: the learning organization [ARGYRIS-1978], and [SENGE-2006], McKinsey’s 7-S Model [STANFORD-2007] and the reconfigurable star model organization [GALBRAITH-2001].
Nowadays the actual organizational structures are no longer represented by traditional organizational charts. Even “matrix” structures and “dotted-line” relationships are gross approximations.
Organizations have become decentralized, distributed and networked, and richer organizational descriptive notations have been proposed, like languages based on taxonomies of unit roles and relationships [GOOLD-2002].
*The transition to the information-based, network economy is now ubiquitous and undeniable; and the contemporary general organizational design methods struggle to come to grips with its consequences and impact on organizations.
Valuable insights can be gained by studying the organizational approaches successfully adopted by the industry that produced the information revolution in the first place — that is, those organizations that engage in software development — and then extrapolate those organizational processes to the more general case of knowledge-based organizations.
The transition to the information-based, network economy is now ubiquitous and undeniable; and the contemporary general organizational design methods struggle to come to grips with its consequences and impact on organizations.
Nowadays, knowledge-based organizations encompass the majority of organizations. Even the most resilient and traditional “brick-and-mortar” businesses are forced to become knowledge-based organizations. For instance, consider the impact of large-scale 3D printing on the construction industry (like Contour Crafting), where literally bricks and mortar become software. Or nanoscale technologies, where manufacturing becomes software. And so on.
Software development organizations (like Microsoft, Google, Oracle, Facebook etc.) can be considered as archetypal knowledge-based organizations, because the totality of artifacts produced by a software business are purely immaterial. Software development organizations have been the first to confront the challenges of completely immaterial processes, entirely based on knowledge. They were also the first organizations to experience the impact of information technology (especially the development of computer networks) on their internal work processes and organizational structures
Furthermore, due to its frantic pace of development, the field of software development has also been a testbed for a variety of approaches and methods for managing immaterial knowledge work (typically under the form of software development processes and methodologies, like FDD, Crystal, ASD, XP, Scrum, to name just a few). Numerous alternatives evolved over a relatively short period, with a lot of healthy competition in between them.
The reason why patterns for organizational design of knowledge-based organization is of relevance is found in this precedent, in the field of software development.
If software development organizations can offer any kind of improved organizational approaches, then such approaches should be applicable to the modern, decentralized, distributed, and networked knowledge-based organization, because those organizations are experiencing the same techno-structural impact of information technology that have been experienced first by software development organizations.