Organizational Impacts of IS

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Organizational Impacts of IS

• Describe the characteristics, advantages and
  disadvantages of organizational structures
• Describe the impact of IS on organizational
  structure
• Describe the impact of IS on control activities
• Distinguish between virtual organizations and
  corporations
• Describe the stages in the development of
  interorganizational relationships
• Define virtual teams

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Hierarchical Structure (Centralized)

• Traditional, top-down
• Good for stable environments
• Good for communication and coordination within
  the function
• Decisions made at top
• Geared toward efficiency

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Flat Structure (Decentralized)

• Based on product, location, etc.
• Better than hierarchical structure in more
  dynamic environments
• Good for training general managers
• Faster decision making than with hierarchical
  structure
• Decisions are made at the level where problems
  occur

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Matrix Structure

• Two or more supervisors (one for each dimension
  for example, functional and project)
• Hybrid model that emerged about 40 years ago
• Geared for one-time projects
• IS reduces technical complexity
• Still - coordination is challenging, especially
  in dynamic environments

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Network Structure

• Very fluid - evolve based on need
• Extremely flexible and adaptive
• Good for creativity
• IS improve process efficiency, effectiveness and
  flexibility
• IT facilitates communications

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T-Form

• Technology-based organization
• Feels flat technology allows individuals from
  all parts of the organization to reach all other
  parts of the organization
• Technologies (i.e., email, voice mail, Notes)
  make it easy to communicate
• Work vs. job
• Electronic links with partners, customers
• Access to information is increased

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What is the impact of IT on organization
structure?
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Leavitt Whislers Predictions

• 1958 1980s
• Bell- shaped curve
• No middle managers
• Recentralized organizations
• DP is king Programmers hold high-level staff
  jobs
• Top management will become more abstract and
  focus on the horizon

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Impact of IT on Control Activities

• Monitoring
• Evaluating
• Providing Feedback
• Compensating
• Rewarding

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Virtualness

• Corporations
• Organizations
• Teams

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Virtual Corporations

• Temporary network of companies that come together
  quickly to exploit fast-changing opportunities
• Involves interorganizational linkages
• Requires low-cost information storage and
  processing
• Often built on core competencies
• Appears as one entity

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Virtual Corporations
Distributors
Manufacturer
Suppliers
Retailers
Customers
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Information-Enabled Alliances

• Joint Marketing Partnerships
• Intra-Industry Partnerships
• Customer-Supplier Partnerships
• IT Vendor-Driven Partnerships

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Joint marketing partnerships

• IBM Sears Prodigy
• Combined marketing programs with airlines,
  hotels, car rental companies, and bank credit
  cards
• Participant companies gain access to
• new customers and territories
• economies of scale through cost sharing

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Intra-industry partnerships

• Often small or mid-sized competitors
• 18 mid-sized paper companies with global
  electronic information system
• Insurance Value-Added Network Services (IVANS)
• Some are led by government (TradeNet)

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Customer-Supplier Partnerships

• Engineering
• compress product development time
• automate design process
• Inventory management
• just-in-time
• access to production scheduling databases
• Built on trust
• Built on accessing and sharing ISs

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Examples

• Chryslers Viper
• Chrysler worked with suppliers
• 90 of parts came from suppliers (vs. typical
  70)
• Xerox
• from 5000 suppliers to 400
• multiple player joint ventures
• defects down
• common future and mutual support

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IT Vendor- Driven Partnerships

• EDS and software applications
• Allows IT vendor to bring technology to a new
  market
• Research alliance with major customer (beta site)

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Information Processing Serves as Dynamo

• Provides information about market
• Promotes quick response
• Allows coordination and control
• Can be used to add value to products and services
• Eliminates some manual work
• Enriches relationships (relational)

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Developing Cooperative IOAs

• Ring Van de Ven, 1994, Academy of Management
  Review
• Cooperative IOAs are socially contrived
  mechanisms for collective action which are
  continually shaped and restructured by actions
  and symbolic interpretations of the parties
  involved
• Repetitive sequence of negotiations, commitments
  and executions

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Negotiating Stage of IOA Development

• Parties develop joint expectations about
  motivations and investments
• Formal bargaining and selection
• Underneath - psychological sensemaking
• Individual choices, values, expectations must be
  congruent
• May emerge from preexisting friendship ties, need
  for resources, institutional mandate, brokered
  deals, etc.

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Commitment Stage of IOA Development

• Terms and governance structures are established
• Formal contracts or informally understood
  psychological contracts
• Trust Legal agreement

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Executions Stage of IOA Development

• Commitments are carried into effect
• Initially formally designated role behavior
  reduces uncertainty
• Increasing reliance on interpersonal
  relationships
• Psychological contracts increasingly substitute
  for formal legal contracts
• Assessments are made about efficiency and
  effectiveness of IOA

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Turnover in IOAs

• Replacements may not have prior relationship
• Some flexibility is lost as new agents rely on
  formal agreement and role designations
• Clock restarted on psychological contracts
• Trust must be developed interpersonally

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Virtual Organizations

• Organizations in which IT enables employees to
  work for an organization and live anywhere
• Often uses network structure
• Management, support and business processes are
  designed to support virtual work relationships

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Virtual Teams- Defined

• Geographically and/or organizationally dispersed
  coworkers that are assembled using a combination
  of telecommunications and information
  technologies to accomplish an organizational task
  (Townsend, DeMarie Hendrikson, 1998)
• fluid membership
• face-to-face vs. electronic medium
• geographically dispersed
• short-term vs. long-term

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Virtual Teams - Some Issues

• Technology support
• Cultural Differences
• Swift Trust
• Rotating Leadership
• Reward System
• Organizational memory