Read the text on the opposite page about how businesses will be organised. the future and answer these questions.
1,1 1. Which of these statements gives the best summary of the ideas in the isle?
a) New communications technologies enable information to be shared instantly across the world.
b) In the future most people will be self-employed or will work as freelancers.
c) Companies are having to restructure due to developments in electronic communications.
2. What exactly do the authors mean by the term 'e-lance economy'?
a) Most work inside large companies will be done using e-mail and com-
puters.
b)In the future tasks will be done by individuals and small companies linked to the Internet.
c) Business between companies will increasingly be done through the Internet.
Understanding details
Mark these statements T (true) or F (false) according to the information in e text. Find the part of the text that gives the correct information.
1. Big corporations will soon go out of business. F
2. There is a move towards decentralization of decision-making in many,,,iipanies.
3. Many companies are now experiencing cash flow and similar financial f0blems.
P 4. No more than 10 per cent of workers in the US work for the top 500 c(,itipanies.
5. ABB and BP Amoco have sold many parts of their businesses.
6. Large organisations can save money by centralising all transactions.
7. Computer companies have decentralised their decision-making process.
8. It is possible that the shape and structure of companies will be very different in the future.
D How the text is organised
These phrases summarise the purpose of each paragraph. Match each Mase to the correct paragraph.
I1 a) illustrate the decline of big companies paragraph I
b) give a prediction about the future
c) give examples of changes in the way big companies are organised
d) introduce the idea that big companies are starting to change and even decline summary
e) describe the new way of working
f) explain why these changes are taking place
g) describe the old way of working
The e-lance economy
Summary
Despite the wave of big mergers and acquisitions over the past few years, the days of the big corporation - as we know it - are numbered. While the cash flows that they control are growing, the direct power that they exercise over actual business processes is declining. Because modern communications technology makes decentralized organizations possible, control is being passed down the line to workers at many different levels, or outsourced to external companies. In fact, we are moving towards what can be called an 'e-lance economy', which will be characterized by shifting coalitions of freelancers and small firms using the Internet for much of their work.
Twenty-five years ago, one in five US workers was employed by one of the top 500 companies. Today, the ratio has dropped to fewer than one in ten. Large companies are far less vertically integrated than they were in the past and rely more and more on outside suppliers to produce components and provide services, with a consequent reduction in the size of their workforce.
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At the same time, decisions within large corporations are increasingly being pushed to lower levels. Workers are rewarded not for carrying out orders efficiently, but for working out what needs to be done and doing it. Many large industrial companies - ABB and BP Amoco are among the most prominent -have broken themselves up into numerous independent units that transact business with one another almost as if they were separate companies.
What underlies this trend? The answer lies in the basic economics of organizations. Business organizations are, in essence, mechanisms for co-ordination, and the form they take is strongly affected by the co-ordination technologies available. When it is cheaper to conduct transactions internally, with other parts of the same company, organizations grow larger, but when it is cheaper to conduct them externally, with independent entities in the open market, organizations stay small or shrink.
The co-ordination technologies of the industrial era - the train and the telegraph, the car and the telephone, the mainframe computer and the fax machine - made transactions within the company not only possible but adventurous.
Companies were able to manage large organizations centrally, which provided them with economies of scale in manufacturing, marketing, distribution and other activities. Big was good.
But with the introduction of powerful personal computers and electronic networks - the co-ordination technologies of the 21s century - the economic equation changes. Because information can be shared instantly and inexpensively among many people in many locations, the value of centralized decision- making and bureaucracy decreases. Individuals can manage themselves, coordinating their efforts through electronic links with other independent parties.
Small becomes good. In the future, as communications technologies advance and networks become more efficient, the shift to e-lancing promises to accelerate. Should this happen, the dominant business organization of the future may not be a stable, permanent corporation but rather a flexible network of individuals and small groups that might sometimes exist for no more than a day or two. We will enter the age of the temporary company.
