Day 3 Information Technology: The Design of Organizations and The Design of Work. Professor Duane Truex III

Transcription

1 Day 3 Information Technology: The Design of Organizations and The Design of Work Professor Duane Truex III

2 The Information Systems Strategy Triangle What is the impact of the redesign on work and organizational stakeholders? Business Strategy Organizational Design Strategy Information Strategy How may organizations be redesigned?

3 Today s Learning Objectives Consequences of the information processing view of the firm Review traditional organizational designs Understand how IS allows organizational design change Consider some alternative structures Examine the impact of IS work and on the way work is done Explore: the changing nature or work, IT s impact on different types of workers and the rise of new work environments.

4 Galbraith s Information Processing View of the Firm ( Organizational Design: An information Processing View by J.R. Galbraith, Interfaces v4 1974, pp ) "the greater the uncertainty of the task, the greater the amount of information that must be processed between decision makers during the execution of the task to get a given level of performance". Firms can reduce uncertainty through better planning and coordination, often by rules, hierarchy, or goals. "the critical limiting factor is the ability to handle the non-routine events that cannot be anticipated or planned for". When the "exceptions" become too prevalent, they overwhelm the hierarchy's ability to process them.

5 Design Strategies: Information Processing View of the Firm Variations in organization design arise from strategies increasing planning ability and reduce the number of exceptional events. defines a continuity of organizational to reduce uncertainty: 1. Creation of Slack Resources. These include extending delivery times, adding more money to the budget, and building inventory (all which have inherent costs). If a firm fails to actively create a higher level strategy to address uncertainty, this strategy will occur by default. 2. Creation of Self-Contained Tasks. One strategy at this level is changing from functional to product groups. 3. Investment in Vertical Integration Systems. Condensing the flow of information by building specialized languages and computer systems can help analysis and decision making. 4. Creation of Lateral Relationships. Moving the decision making power down in the firm to where the information exists can reduce uncertainty at the decision level. There are various strategies of increasing complexity to achieve this: 1. Direct contact between managers across groups 2. Liaison personnel between groups. 3. Task Forces 4. Teams 5. Cross-group Managers (project managers, program managers, etc.) 6. Linked Managers (with power over some cross-group resources) 7. Matrix Organization Strategies come at a cost in more "organizational investment" and administrative costs.

6 Organizational Design Variables What factors govern organizational design? Decision rights: authority to initiate, approve, implement and control various types of decisions necessary to plan and run the business. Business processes: the set of ordered tasks needed to complete key objectives of the business Formal reporting relationships: the structure set up to ensure coordination among all units within the organization. Informal networks: mechanism, such as ad hoc groups, which work to coordinate and transfer information outside formal reporting relationships.

7 Organizational Design Control and Cultural Variables Data: the information collected, stored and used by the organization Planning: the processes by which future direction is established, communicated and implemented. Performance measurement and evaluation: the set of measures that are used to assess success in the execution of plans and the processes by which such measures are used to improve the quality of work. Incentives: the monetary and non-monetary devices used to motivate behavior within an organization Values: the set of implicit and explicit beliefs that underlie decisions made and actions taken.

8 INFORMATION TECHNOLOGY AND ORGANIZATIONAL DESIGN Traditional forms and new organizational designs

9 Hierarchical, flat and matrix organizational structures Region Industry Region 1 Region 2 Region 3 Hierarchical Organizational Structure Ind. 1 Ind. 2 Position for Ind. 1 in region 1 Pos. for Ind.2 in region 1 Pos. for Ind.1 in region 2 Pos. for Ind.2 in region 2 Pos. for Ind.1 in region 3 Pos. for Ind.2 in region 3 Ind. 3 Pos. for Ind.3 in region 1 Pos. for Ind.3 in region 2 Pos. for Ind.3 in region 3 Flat Organizational Structure Matrix Organizational Structure

10 In traditional hierarchical organizations Managers must understand standard operating procedures for the org s primary activities Complexity is handled through organization or divisions and subdivisions and then individual jobs Complexity of the environment mimicked in the org. chart (Ashby, 1956) Orgs s assembly lines for decisions (Toffler, 1985) Control systems are in place to see work is done on time, properly and on budget.

11 Three roles IS plays in management control processes 1. IS enables the collection of information that may not be collectable other ways. 2. IS speeds the flow of information from where it is generated to where it is needed. 3. IS facilitates the analysis of information in ways that may not be possible otherwise.

12 New IT-enabled Organizational Forms The networked organization Instead of rigid hierarchies, all parts of the company are connected by formal and informal communications. The T-form organization Flattening by use of IT IT actually does the work formerly done by people

13 The networked organization United States France Mexico Morocco Brazil

14 T-Form Organization In the T-form organization, technology, especially the Internet plays an extensive role Structurally, it feels flat There is unfettered access to information Individuals use electronic means to communicate Work is often coordinated automatically Business processes are designed differently T-form org. networks have links to suppliers T-form orgs. may connect to customers electronically

15 Virtual Organizations IT has made it possible for an individual to work for an organization and live anywhere Virtual organization structure is networked. Extensive collaboration takes place electronically, esp. Managers in a virtual environment monitor results, not progress Forms are electronic, tech. support through a web interface Business processes are also usually through the Web

16 Virtual Organization vs. the Virtual Corporation Virtual organization refers to the extensive use of IS and electronic links to create an extremely flexible organization Virtual corporation refers to a business strategy for allying complementary businesses and allowing them to respond to customers as a single entity (also made possible through the extensive use of IS).

17 Achieving the zero-time organization Instant value alignment: understanding the customer so well that the company anticipates and is therefore ready to provide exactly what the customer wants Instant learning: building learning directly into the company s tasks and processes and making sure the requisite information is readily at hand when it is needed. Instant involvement: using IS to communicate all relevant information to suppliers, customers, and employees. Making sure everyone is prepared to deliver their products, services or information instantly. Instant adaptation: create a culture and structure enabling all workers to act instantly and to make decisions to respond to customers. Instant execution: building business processes so that they have as few people involved as possible (no touch), electronically cross organizational boundaries and reduce cycle times so that processes appear to execute instantly.

18 HOW INFORMATION TECHNOLOGY IS CHANGING THE NATURE OF WORK

19 New Ways to do Traditional Work How does IT change workers day-to-day tasks? IT changes workers communication patterns Workers using mobile devices can send and receive message and tap into databases, affecting sales and service tasks. The cost and time needed to access information is dramatically lower, giving workers new tools. Work has become much more team oriented an effect amplified by the Internet. Q: Is info technology any different than any other technology change? E.g., the steam engine, telephone, radio, automated loom etc.

20 Creating New Types of Work IS/IT use has created many new types of jobs. knowledge managers, systems analysts, database and network administrators, webmasters and web site designers. Can you identify other examples?

21 What does this mean for managers? Sans co-location: How to manage a work force that is no longer in a single location. Distributed outputs: Work is also more team oriented, making it more difficult to assess individual contributions. Who/what supervises: electronic employee monitoring systems, automates the supervisory process, may also hurt morale and undermine attempts to encourage overall contributions to the organization.

22 Changes in employee supervision and evaluation Traditional Approach Newer Approach Supervision Personal. Manager usually present or relies on others to ensure employees are present and productive Electronic, or assessed by deliverable. As long as the employee is producing value, he does not need formal supervision. Evaluation Focus is on process through direct observation. Manager sees how employee performed at work. Subjective (personal) factors are very important. Focus on output or target. As long as these are achieved, performance considered adequate. Subjective factors less important, harder to gage.

23 Summary of IT s effects on employee life Work Has created millions of new jobs, some in entirely new industries. Commodification of some work has allowed for outsourcing. Working Arrangements More work is team-oriented, enabled by communications and collaboration technologies. Geographic constraints of some professions are eliminated, enabling telecommuting. Human Resources New strategies are need to supervise, evaluate and compensate remotely performed, team-oriented work. IT requires new skills workers often lack.

24 IT and WHERE WORK IS BEING DONE

25 Telecommuting Telecommuting is purported to: Lower corporate overhead since workers who are at home don t take up office space lowering facilities costs Give increased flexibility are more productive and express higher levels of job satisfaction 2/3 s of Cisco employees occasionally work from home. The policy has saved the company $1M in expenses, while workers prefer to set their own schedules and work in more comfortable surroundings. Other impacts? Might it allow the further commodification and temping of the work force?

26 ICT and driving factors on work Driver Effect Shift to knowledge-based work Eliminates requirement that certain work be performed in a specific place. New technologies Make remotely performed work practical and cost-effective. Changing demographics and lifestyle preferences Provides workers with geographic and time-shifting flexibility.

27 Advantages and disadvantages of tele-sourced work Employee Advantages Reduced stress, heightened morale and lower absenteeism Potential Problems Harder to evaluate performance Geographic flexibility Employee may become disconnected from company culture Higher personal productivity Telecommuters are more easily replaced by electronic immigrants Housebound individuals can join the workforce High level of self-discipline required

28 THE PRODUCTIVITY PARADOX Q: Does IS/IT Investment Improve Worker Productivity?

29 Wrap Up IT changes work. (Always has always will. Marx gets a big I told you so. ) The less skilled and less educated pay the biggest price Virtualization and networks allow for more distributed work and place demands for collaborative information systems, organizational structures and the adjustment of business models

30 Study questions Who benefits from technology change? Who loses? What is suggested for work design by the increasing trend to anywhere, anytime computing?