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departments as well as barriers between the organization and the external
[4]
environment. Many different types of boundaryless organizations exist. One form
is the modular organization, in which all nonessential functions are outsourced. The
idea behind this format is to retain only the value-generating and strategic functions

in-house, while the rest of the operations are outsourced to many suppliers. An
example of a company that does this is Toyota. By managing relationships with
hundreds of suppliers, Toyota achieves efficiency and quality in its
operations. Strategic alliances constitute another form of boundaryless design. In this
form, similar to a joint venture, two or more companies find an area of collaboration
and combine their efforts to create a partnership that is beneficial for both parties. In
the process, the traditional boundaries between two competitors may be broken. As
an example, Starbucks formed a highly successful partnership with PepsiCo to
market its Frappuccino cold drinks. Starbucks has immediate brand-name recognition
in this cold coffee drink, but its desire to capture shelf space in supermarkets required
marketing savvy and experience that Starbucks did not possess at the time. By
partnering with PepsiCo, Starbucks gained an important head start in the marketing
and distribution of this product. Finally, boundaryless organizations may involve
eliminating the barriers separating employees; these may be intangible barriers, such
as traditional management layers, or actual physical barriers, such as walls between
different departments. Structures such as self-managing teams create an environment
where employees coordinate their efforts and change their own roles to suit the
[5]
demands of the situation, as opposed to insisting that something is “not my job.”
Learning Organizations
A learning organization is one whose design actively seeks to acquire
knowledge and change behavior as a result of the newly acquired knowledge. In
learning organizations, experimenting, learning new things, and reflecting on new
knowledge are the norms. At the same time, there are many procedures and systems
in place that facilitate learning at all organization levels.
In learning organizations, experimentation and testing potentially better
operational methods are encouraged. This is true not only in response to
environmental threats but also as a way of identifying future opportunities. 3M is one
company that institutionalized experimenting with new ideas in the form of allowing
each engineer to spend one day a week working on a personal project. At IBM,
learning is encouraged by taking highly successful business managers and putting
them in charge of emerging business opportunities (EBOs). IBM is a company that
has no difficulty coming up with new ideas, as evidenced by the number of patents it
holds. Yet commercializing these ideas has been a problem in the past because of an
emphasis on short-term results. To change this situation, the company began
experimenting with the idea of EBOs. By setting up a structure where failure is
tolerated and risk taking is encouraged, the company took a big step toward
becoming a learning organization.
[6]
Learning organizations are also good at learning from experience—their own
or a competitor’s. To learn from past mistakes, companies conduct a thorough
analysis of them. Some companies choose to conduct formal retrospective meetings
to analyze the challenges encountered and areas for improvement. To learn from

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