Difference Between Old and New Organization Type

Comparison between old type of organization vs new type of organization

Organizational structural difference

Old type of organization structure was made so that authority is in the hand of one person or usually called as centralized system. The advantages of this system is that it is inexpensive to maintain but the disadvantages is that everyone is controlled by their superior so an idea will be hard to realized as everything has its way before it can be agreed, so the organization will likely hard to grow as the system will make sure that everyone doing the same exact work everyday.

As the new type of organization arise, old and new company began to use the new system as they see that it is time to change the way as the whole business world changes too. The new type of organization made sure that everyone can share their idea everyday and the barriers that usually stand between the employee and the superior become reduced. Somehow, the decision making will also be faster, but yet again there’s will still be disadvantage like no clear chain of command between everyone and there will be lack of control either.

A study case of this new type of organization can be seen in a company named valve, a game development company that has 300 employees but no formal management nor hierarchy at all.

At Valve, no one tells employees what to do (or what not to do) and there are no reviews, no job titles or promotions. Leadership of any project is determined in an organic way by whoever steps up. Raises and bonuses are based on peer reviews. If a team member decides one day to do something different, he or she simply moves their stuff and gets going. The company proudly proclaims that it has been boss free since 1996.

Valve founder, Gabe Newell’s reasoning behind Valve’s structure was: “What matters is being first and bootstrapping your product into a positive feedback spiral with a constant stream of creative innovation. Hierarchical management doesn’t help with that,...