4) Focusing on the findings of the blogs stated under point 3 and underpining the results of the web 2.0 research of  Mc Kinsey I found a few companies which are in the process of flattening their hierarchies to create on the one hand a higher motivation and co-determination among the employees but the main target is to originate an environment for idea creation.

The companies chosen execute the process under help of implementation of web 2.0 with idea creation and decision making from bottom-top and outside in. More information can be read under

Ericsson

http://www.managementexchange.com/sites/default/files/Collaborative-idea-management-at-Ericsson.pdf

 

Experian

http://www.youtube.com/watch?feature=player_embedded&v=BQZnip2y2VA

W.L. Gore

http://www.managementexchange.com/story/innovation-democracy-wl-gores-original-management-model

The small number of companies chosen among many and the finding of Mc Kinsey’s study demonstrate impressionably that web 2.0 is going to change hierarchies in the near future.

3) Social media and its influence on corporate hierarchies

Several social media provider are in the market courting for the clients and various opinions are circulating discussing whether and to which extent social media has an influence on corporate hierarchies.

In accordance with the content of my blog I wish to draw your attention to the recent developped social media microblogging portal called Yammer.

Yammer is similar to Twitter connecting colleagues of the same company by using the login of the company address. More information and virtual shows on www.yammer.com

Objectives and possible contents of the microblogging portal are an improvement of information flow and knowledge to prevent misunderstandings which can be reached by questioning the team and informing about projects the department is working on. Additionally, the line manager is always informed on the projects his team is working on.

There arises the question if such a portal is going to increase the information explosion ? Does / Should a line manager  have the time to read all short message news of the team ? Or won’t it be jsut another portal for self-portrayal ?

I picked a few opinions to be presented in the following.

The first one chosen is the blog written by Benito Castro about the non-abolish of hierarchies by social media underpined by the statements that blogs are going to increase the information explosion but the same moment generating a communal spirit.

In contrary to the blog of Benito Castro a survey issued by Mc Kinsey among 3249 companies showed that already two-thirds of them used web 2.0 with an increasing percentage of 40% using social networks and 38% using blogs.

Much more interesting is that already 3% of the participiants are working fully networked including employees, customers and business partners. The incredible findings can be read under http://www.mckinseyquartely.com/organization/strategic_organization/The_rise_of_the_networked_enterprise_web_20_finds_its_payday_2716

The study which is one among several shows that things are start rolling showing already first positive results with the profit of the company by social media although I have not found a study explaing the influence on corporate hierarcheis by social media.

But under consideration of the findings of the Mc Kinsey study within internal purposes an influence can be assumed by the results of « increasing employee satisfaction 41%, increasing speed of access to internal experts 52%, reducing communication costs 60% ».

(http://en.wikipedia.org/wiki/yammer; 20.12.2011, http://www.golem.de/0809/62376.html, 20.12.2011 ; http://andrewmcafee.org/2011/09/mcafee-dreamforce-enterprise-2-0-context, 20.12.2011 ; http://www.mckinseyquartely.com/organization/strategic_organization/The_rise_of_the_networked_enterprise_web_20_finds_its_payday_2716, 20.12.2011)

A much greater role than the organizational structure itself plays the culture and behaviour of the management within corporate hierarchies as besides the predefined corporate identity the behaviour of each individual employee forms the culture of a company.

The literature is distinguishing between conceptual, quantitative and qualitative models which should be explained in detail in the following:

Conceptual model:

Within the conceptual models, the most referred to is the 3 levels of culture model of Schein as per below image.

 

Source : http://www.deltaknowledge.net/2009/05/creating-knowledge-cultures-post-9.html

Quantitative model

The quantitative model is driven by the strength of the culture within a company explained by the criteria established by Georg Schreyögg :

• « Scope and clarity of the explained objective,
• Prevalence rate of the employees who are led by the corporate culture,
• Prevalence rate of the employees who are acting by the corporate culture. »

Qualitative model

In the context of qualitative models within the culture of a company various opinions have been developped beginning with Deal/Kennedy in 1982 leading to Frey/Schuster in 1996.

The below image of Deal/Kennedy’s model is based on the risk of a decision and the delay in feedback generating the cultures listed below.

Meanwhile, Frey/Schuster developped in 1996 the following cultures within a company : learning culture, problem solving culture, constructive conflict solving culture, creative chaos-culture, comfort zone culture, moral courage culture.

(http://www.daswirtschatslexikon.com/d/unternehmenskultur/unternehmenskultur.htm)

Source : http://openlearn.open.ac.uk/file.php/4417/!via/oucontent/course/6786/b716_2_figure17.jpg

2) Importance / risks of corporate hierarchies

Corporate hierarchies are important as they are ensuring control and the visible chain of  command for each employee.

Difficulties may arise when the following coefficients of hierarchy / culture and mangerial behaviour coming together in one company :

a)    vertical structure of hierarchies

b)    process culture as per Deal/Kennedy with low risk and slow feedback culture

c)    one way communication top – bottom

The mentioned criteria guarantee a non-creative environment with less encourage of the participants. One of the possible advantages is the fast coordination by commanding.

(http://www.ehow.co.uk/print/info_8623691_importance-hierarchy-workplace.html, 20.12.2011, http://www.daswirtschaftslexikon.com/d/unternehmenskultur/unternehmenskultur.htm, 20.12.2011, http://www.slidshare.net/frankcalberg/organization-rethinking, 20.12.2011)

Meanwhile a vertical corporate hierarchy helps employees to understand the flow of authority it also leads to decisional restriction showing the following negative effext (Schreyögg, Georg) :

·         « thinking in stereotypes,

·         Non-thinking in alternatives,

·         Enforcement of artificial conformities,

·         Restriction of creative problem solving,

·         Searching of samples of sucess in the past,

·         Blocking of new samples of orientation,

·         Ignoring of discrepant feedback mechanism. »

How important is a stong vertical hierarchy with top-bottom commands for you ?