12 Part 1: Introduction to Organizations

Today’s customers also want products and services tailored to their exact needs.
Companies that relied on mass production and distribution techniques must be
prepared with new computer-aided systems that can produce one-of-a-kind varia-
tions and streamlined distribution systems that deliver products directly from the
manufacturer to the consumer. Another shift brought about by technology is that
the financial basis of today’s economy is increasingly information, not machines
and factories. Of concern to organizational leaders is that the primary factor of
production becomes knowledge, to which managers must respond by increasing the
power of employees. Employees, not production machinery, have the power and
knowledge needed to keep the company competitive.
Considering the turmoil and flux inherent in today’s world, the mindset
needed by organizational leaders is to expect the unexpected and be ready for
rapid change and potential crises through nimble organizational designs. Crisis
management has moved to the forefront in light of terrorist attacks; a tough
economy, rocky stock markets, and weakening consumer confidence; widespread
ethical scandals; and, in general, an environment that may shift dramatically at a
moment’s notice.

The Digital Workplace. Some traditional managers feel particularly awkward in

today’s technology-driven workplace. Organizations have been engulfed by infor-
mation technology that affects how organizations are designed and managed. In
today’s workplace, many employees perform much of their work on computers
and may work in virtual teams, connected electronically to colleagues around the
world. In addition, organizations are becoming enmeshed in electronic networks.
The world of e-business is booming as more and more business takes place by dig-
ital processes over a computer network rather than in physical space. Some compa-
nies have taken e-business to very high levels to achieve amazing performance. Dell
Computer pioneered the use of end-to-end digital supply-chain networks to keep in
touch with customers, take orders, buy components from suppliers, coordinate with
manufacturing partners, and ship customized products directly to consumers. This
trend toward disintermediation—eliminating the middleperson—is affecting every
industry, prompting a group of consultants at a Harvard University conference to
conclude that businesses today must either “Dell or Be Delled.”23 These advances
mean that organizational leaders not only need to be technologically savvy but also
are responsible for managing a web of relationships that reaches far beyond the
boundaries of the physical organization, building flexible e-links between a com-
pany and its employees, suppliers, contract partners, and customers.24

Diversity. Diversity is a fact of life that no organization can afford to ignore. As

organizations increasingly operate on a global playing field, the workforce—as well
as the customer base—is changing dramatically. Many of today’s leading organiza-
tions have an international face. Look at the makeup of the international consulting
firm McKinsey & Co. In the 1970s, most consultants were American, but by the
turn of the century, McKinsey’s chief partner was from India; only 40 percent of
consultants were American; and the firm’s international consultants came from
40 different countries. 25 Now, McKinsey consultants represent more than
100 nationalities and speak over 120 languages.26
The demographics of the Canadian population and workforce are also shifting.
In 2005, Statistics Canada developed a demographic projection of the Canadian
population in 2017. The study projects that (1) Canada will have a population of

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