Flaws of Traditional Hierarchical Organizations in Fast-Changing Markets

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The interviewee discusses the limitations of traditional hierarchical organizations in responding to rapid changes in fast-moving markets. They highlight the explosive growth and market success of companies like Alibaba, Amazon, and Tencent, which are not hierarchically driven. The chapter explores the concept of ecosystems in market-oriented companies and the importance of understanding the relationships between different elements.

What can we learn from fast-moving companies—like Amazon, Google, and Alibaba—about how to organize to promote strategic growth?

University of Michigan business professor Dave Ulrich went inside these companies to study how their internal structure keeps them nimble, innovative, and market-oriented.

“That mental model of what an organization is, it’s about power, it’s about control, it’s about clarifying decision rights,” he tells IdeaCast host Curt Nickisch. “I think that mental model of an organization as a control system has basically got to shift.”

In this episode, Ulrich outlines three key capabilities that these newer companies have developed: monitoring the marketplace, sharing that intelligence company-wide, and innovation.

Key episode topics include: strategy, innovation, business management, market intelligence, Google, Alibaba, technology, uncertainty, flux, agile.

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· Listen to the full HBR IdeaCast episode: How Companies Like Google and Alibaba Respond to Fast-Moving Markets (2019)

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