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Organizational Impacts of IS

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

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Organizational Impacts of IS

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  1. 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

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. What is the impact of IT on organization structure?

  8. Leavitt & Whisler’s Predictions • 1958 1980’s • 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

  9. Impact of IT on Control Activities • Monitoring • Evaluating • Providing Feedback • Compensating • Rewarding

  10. Virtualness • Corporations • Organizations • Teams

  11. 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

  12. Virtual Corporations Distributors Manufacturer Suppliers Retailers Customers

  13. Information-Enabled Alliances • Joint Marketing Partnerships • Intra-Industry Partnerships • Customer-Supplier Partnerships • IT Vendor-Driven Partnerships

  14. 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

  15. 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)

  16. 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

  17. Examples • Chrysler’s 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

  18. 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)

  19. 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)

  20. 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

  21. 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.

  22. Commitment Stage of IOA Development • Terms and governance structures are established • Formal contracts or informally understood psychological contracts • Trust + Legal agreement

  23. 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

  24. 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

  25. 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

  26. 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

  27. Virtual Teams - Some Issues • Technology support • Cultural Differences • Swift Trust • Rotating Leadership • Reward System • Organizational memory

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