Assignment 3 - Case Study

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Chapter 3 Organizational Strategy and IT

Comparing Cognizant and Tata

What is similar about the two firms?

Why are they organized differently?

Cognizant

Tata

Both are IT consulting firms but have different business strategies.

Cognizant’s strategy: Complex relationship-based solutions; goal was “extremely close partnerships;” needed to be responsive enough to customers. Main problem: lack of necessary information flows between software engineers and client customer service managers. Adopted a matrix structure to allow functional managers to interact with business managers

Tata’s Focus: customer and revenue growth; Goal was to be nimble; adopted decentralized structure heavy on markets and strategic initiatives

Figure 3.3 Organizational design variables.

Variable	Description
Organizational variables
Decision rights		Authority to initiate, approve, implement, and control decisions necessary to plan and run the business
Business processes		Ordered tasks to complete key business objectives
Formal reporting relationships		Structure set up to coordinate organizational units
Informal networks		Mechanism, such as ad hoc groups, to coordinate and transfer information outside formal reporting relationships.
Control variables
Data		Facts collected, stored, and used by the organization
Planning		Processes by which future direction is established, communicated, and implemented
Performance measurement and evaluation		Measures to assess successful execution of plans then using the measures to improve the quality of work
Incentives		Monetary and non-monetary devices to motivate behavior
Cultural variables
Values		Implicit and explicit beliefs that underlie decisions and actions
Locus		The span of culture: local, national, regional, etc.

Organizational Design

Different designs accomplish different goals

Decision rights will differ according to the design

Different reporting relationships and organizational structure will allocate decision rights in different ways

Four major organizational designs are:

Hierarchical

Flat

Matrix

Networked

Hierarchical Organizational Structure

Orders go down and information goes up

IT provides communication/memory in both directions

Also known as a bureaucracy

First observed by Max Weber in the Catholic Church and German army and applied to early factories and offices

Features include

Unity of command (one boss for each person)

Span of control (measures the number of subordinates for each boss)

Clear lines of authority and reporting duties

Flat Organizational Structure

Also known as horizontal organizational structure

Features:

Decentralized decision making

Less well-defined chain of command

Less clear decision rights

Few middle managers

IT glues together the organization

IT allows rapid response; supports internal communications

Matrix Organization

Assigns employees to two or more supervisors to integrate multiple dimensions of a firm

Features:

Work is organized into small work teams

Allows organizations to concentrate on functions and purpose

IT reduces operating complexity and expense by allowing information to be easily shared among different managerial functions

Shortcomings:

Sometimes frustrating and confusing

Require frequent meetings

Information overload

Networked Organizational Structure

Feel flat yet hierarchical

Work well in dynamic, unstable environments

Features:

Highly decentralized decision rights

Information systems replace hierarchical controls

Formal and informal communication networks connect everyone

Promote creativity and flexibility while maintaining operational process control

Extensive use of communication technologies and networks:

Allows coordination across functional boundaries

Enables quick and more accurate decision making

The networked organization.

	Hierarchical	Flat	Matrix	Networked
Description Characteristics Type of Environment Best Supported Basis of Structuring Power Structure Key Tech. Supporting this	Bureaucratic w/ defined levels of management Division of labor specialization, unity of command Stable Certain Primary functional Centralized Mainframe, centralized data and processing	Decision-making pushed down to lowest level Informal roles; often small, young organizations Dynamic Uncertain Very loose Decentralized PCs	Workers assigned to 2 or more supervisors Dual reporting based on function/purpose Dynamic Uncertain Functions and purpose Distributed Networks	Formal/informal communication networks that connect all Known for flexibility and adaptability Dynamic Uncertain Networks Distributed Intranets and Internet

Comparison of Organizational Structures

Emerging Organizational Forms

Hybrid structure (differs throughout the organization)

New forms are beginning to emerge:

Adaptive Organization

Zero-Time Organization

Elastic Enterprise

What is common among those?

Flexible, agile, responsive configurations over time

React to changing needs

Use of IT and networks to enable these configurations

New Options

Social networks – used for:

Finding experts

Getting to know colleagues

Seeing who has relevant experience for projects across functions and geography

INFORMATION TECHNOLOGY AND MANAGEMENT CONTROL SYSTEMS

IT Changes Management Functions

IT changes the way managers:

Monitor: new ways to track performance and behavior

Evaluate: easier to understand progress and performance

Provide Feedback: rapid feedback possible

Compensate & Reward: team-based efforts can be evaluated and complex formulas used

Control Processes: easier to

Collect data

Analyze

Communicate results

Management Control

IS profoundly affect control

People & processes are monitored in ways that were not possible only a decade ago.

IS play important roles in management control processes

Data collection

Evaluation

Communication

IS play important roles in planning

Can provide the necessary data

Can evaluate scenarios

Can provide analysis and simulation tools

IS and Culture

Culture is a shared set of values and beliefs”

It may be held by a group, organization, profession, industry, and/or nation.

AKA “collective programming of the mind”

Culture has:

Observable artifacts

Espoused values

Assumptions

Data and Information Systems

IS can streamline data collection through monitoring

IS can provide analysis tools for that data

Types of data include

Keystrokes

How long each task takes

Who is contacted during the task

Specific data passing through the process

Large data stores can be created

Behavioral issues can result

Stress from monitoring, especially if it seems not to fit the task

Deliberate delaying, distorting or falsifying collected data

Employees should know what is collected and how it is used

Performance Measurement, Evaluation, and IS

Analytics tools have proliferated, perhaps leading to information overload

Often it is less threatening/more welcomed to provide feedback for performance improvement than for rewards/compensation

Incentives and goals need to be carefully administered

Reward for short call duration? You’ll get short calls and perhaps unhappy customers

Reward for customer satisfaction? You’ll get happier customers but perhaps calls that are significantly longer than necessary

Be careful with incentives; you will get what you reward

IS can easily apply complex formulas and track performance

Multi-dimensional goals (e.g., 50% on efficiency + 50% on satisfaction)

If most work is done on teams, team performance needs to be added

Impacts of Culture on IT

Culture is a “collective programming of the mind” involving “shared values and beliefs”

Culture can:

Color the development of IS

Affect technology adoption/diffusion

Influence system use and outcomes

Impact management practices

Layers of Culture

Observable artifacts – most visible layer

For example, dress, acronyms, awards, stories, rituals

Espoused values: explicitly stated preferred values

For example: “we have a good work-life balance”

Enacted values: reflected in actual behavior, sometimes inconsistent with espoused values

For example “we have a good work-life balance” but require 12-hour work days plus weekends

Assumptions – deepest layer – unobservable; taken for granted

For example, “respect the customer”

Levels of Culture and IT

In business, culture is often applied at the following levels:

Nations

Organizations

Work groups

Sometimes IS developers and clients can have a clash in culture

Clients might want fast turnaround and convenience

Developers might want slower, more deliberate approach, for stability and control

Levels of Culture

From Leidner and Kayworth, 2006

NATIONAL CULTURE: GLOBE Cultural Dimensions

Uncertainty avoidance

Power distance

Societal collectivism

In-group collectivism

General egalitarianism

Assertiveness

Future orientation

Performance orientation

Humane orientation

How are IT and Culture Linked?

IT supports cross-cultural communication

People need to be aware of cultural differences when communicating

This awareness will lead to:

Better listening and understanding (correctly framed messages)

Searching for a solution that will be accepted widely

Reduced conflict

Application to IS Training Investments

Peretz & Rosenblatt found that cultural dimensions impact training.

Higher training investments were found by firms in countries with:

Low power distance (Germanic countries, Anglo-American countries, Netherlands, Israel)

Future orientation (some Asian countries)

High uncertainty avoidance (some Hispanic countries, Japan, South Korea, Israel, Russia)

Lower investments were found in firms from countries with

High power distance (some Asian, Latin American, and Middle Eastern countries)

Why? Perhaps to maintain power differences

Short-term orientation (some Anglo-American countries)

Low uncertainty avoidance (the UK, Ireland, Hong Kong, and Singapore)

Summary

After you have listened to this lecture and read Chapter 3 of your text

Go to Discussion Board 4 and answer the discussion prompt

Finally complete Quiz 3