Discussion/forum post and Journal - W2

CHAPTER 3 ORGANIZATIONAL STRATEGY AND IT

Week 3 Lecture Dr. Mia Simmons

Comparing Cognizant and Tata

■ What is similar about the two firms?

■ Why are they organized differently?

2

Cognizant Tata

Figure 3.3 Organizational design variables.

3

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

4

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

5

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

6

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

7

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

8

9

The networked organization.

10

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

11

New Options

■ Social networks – used for: – Finding experts – Getting to know colleagues – Seeing who has relevant experience for

projects across functions and geography

12

INFORMATION TECHNOLOGY AND MANAGEMENT CONTROL SYSTEMS

13

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

14

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

15

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

16

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 17

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

18

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

19

Layers of Culture 1. Observable artifacts – most visible layer

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

2. Espoused values: explicitly stated preferred values – For example: “we have a good work-life balance”

3. 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

4. Assumptions – deepest layer – unobservable; taken for granted – For example, “respect the customer”

20

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

21

Levels of Culture

22

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

23

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

24

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)

25

Week 3 Deliverables

■ Complete your Week 3 Discussion summary.

26