of organizations have become the same task.
CHAPTER 4: THE IMPACT OF INFORMATION TECHNOLOGY ON THE ORGANIZATION 1
CHAPTER SUMMARY
1. Information technology interacts with organizations and can be used to change the structure of the organization and/or its subunits.
2. One desirable impact of IT is when technology contributes to organizational flexibility.
3. Older legacy systems often perform critical tasks for the firm. These systems usually run on mainframe computers and are very large and complex. One management problem is deciding if and when to make massive investments to migrate these systems to up-to-date technology.
4. There are a variety of organization structures; some important considerations in studying organizations are uncertainty, specialization, coordination, and interdependence.
5. There are a number of IT-enabled variables that you can use to design organi zations. They supplement and sometimes replace traditional organization de sign variables.
6. These variables can be used to create the T-Form structure or applied to pro duce a range of structures including virtual organizations, negotiated organiza tions, and vertically integrated conglomerates. The variables may also be used in subunits of traditional firms.
7. It is important to remember that organizations and people play an extremely important role in the development and success of technology.
IMPLICATIONS FOR MANAGEMENT
It
is amazing that a technology barely capable of computing a payroll and process ing orders when introduced in the 1950s can be the basis today for structuring the organization. The evolution of computers and networks has enabled IT design variables for creating new organizational structures. As a manager, you need to constantly search for ways to improve the organization. IT design variables offer opportunities to make major changes in the organization, changes that can im prove both efficiency and effectiveness. Today the tasks of designing technology and the organization have become one and the same.KEY WORDS
Electronic communications Electronic conglomerate
Electronic customer/supplier relationships Electronic linking Electronic workflows Flexibility Mutual dependence Organization Pooled interdependence
1 02 PART TWO: ORGANIZATIONAL ISSUES Production automation Reciprocal interdependence Sequential interdependence Technological leveling Technological matrixing Time and space boundaries Uncertainty
Virtual components Virtual inventory Virtual supplier
RECOMMENDED READING
Galliers, R.; and W. Baets (eds)., Infonnation Technology and Organization Transforma tion. Chichester, U.K.: John Wiley & Sons, 1998. (A collection of mostly European au thors writing about organizational change and technology.)
Lucas, H. C., Jr. The T-Form Organization: Using Technology to Design Organizations for the 21st Century. San Francisco: Jossey-Bass, 1996. (The story of the T-Form
organization. )
Lucas, H. C., Jr.; and J. Baroudi. "The Role of Information Technology in Organization De sign." JMIS, 10, no. 4 (Spring 1994), pp. 9-23. (Presents the IT design variables in detail.) Lucas, H. C., Jr.; and M. Olson. "The Impact of Technology on Organizational Flexibil ity." Journal of Organizational Computing. 4, no. 2 (1994), pp. 155-176. (A paper on which the discussion of organizational flexibility in this chapter is based.)
Malone, T.; R. Benjamin; and J. Yates. "Electronic Markets and Electronic Hierarchies." Communications of the ACM, 30, no. 6 (June 1987), pp. 484-497. (A provocative article on the impact of IT on firm coordination.)
DISCUSSION QUESTIONS
1. What kind of technology is least flexible? Most flexible?
2. The information services department is often considered to provide a support function.
Can a support department really be powerful? Are there different kinds of power in an organization?
3. What kinds of management problems result from a lack of organizational flexibility?
4. Are there any organizations that are completely dependent on information technology for their operations?
5. What kinds of employees are most likely to be replaced by information technology? How does your answer depend on the type of system and the decision levels affected?
6. How would you measure the extent of unemployment created by the implementation of IT? What factors tend to mitigate the problem of increased unemployment if it actually occurs?
7. What signs might indicate the need to restructure or redesign an organization?
8. Is information technology creating more centralization in organizations? How do you define centralization? Why should technology have any effect at all on the degree of centralization?
9. How would you recognize a company that is using IT successfully? What signs would you expect to find?
CHAPTER 4: THE IMPACT OF INFORMATION TECHNOLOGY ON THE ORGANIZATION 1 03
10. How can IT be used to create "virtual" organizations?
11. How should managers introduce organizational changes that employ technology? What
are the risks?
12. What alliances were key for the nationwide floral company described in this chapter? 13. Consider a typical manufacturing organization and describe the dependencies that exist
among departments.
14. Why should users be involved in the design of systems? How much influence should
they have?
15. What are the risks for a small company connecting itself electronically with major
customers?
16. What are the problems with legacy systems? What are their implications for management? 17. How can IT be used to help design an organization?
18. What are the IT -enabled organization design variables? How do they supplement or re place conventional design variables?
19. What tools does the manager have available to influence IT in the organization?
20. As a user, to whom do you think the information services department should report? Should it be responsible to the finance department?
21. Should an organization that invests in developing an electronic market be free to build
biases into the market that favor its own products and services?
22. Early forecasts suggested that middle managers would be reduced in number and stature as a result of information technology. Has this prediction been realized? Why or why not?
23. Does technology have an impact beyond the organization, for example, on stockholders or customers? What kinds of effects occur, and what problems are created for these groups?
24. What is the role of the traditional organization, given the kinds of structures that IT makes possible?
CHAPTER 4 PROJECT