In the past, most business organizations had an organizational design and structure that strongly resembled the military. Steep hierarchies, with a vertical structure, routine tasks, rigid culture, formal systems, and compliantly competitive structure fit the external environment of the times and safeguard their efficiency and effectiveness to operate profitably.
Over the past 40 years, the external environment for business organizations has drastically changed, among other factors, thanks to globalization, the availability of new technologies, and social factors.
Being exposed to these external changes existing business organizations are confronted with the dilemma if they should take these changes into our account in their respective organizational design and structure. Especially considering, that new market participants were profiting from a new organizational design and structure with a horizontal structure, empowered roles, adaptive culture, shared information, and collaborative competitive strategy.
Some examples of these successes of the new market participants are online travel booking platforms (Expedia, Booking.com) vs. traditional travel agencies, digital streaming services (Netflix, Amazon Video) vs. traditional entertainment companies, and finally the success of Elon Musk and Tesla Inc. in disrupting the traditional automotive industry.