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Chapter 3
Organizational Strategy and
Information Systems
Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258
[email protected] John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
2 Copyright 2010 John Wiley & Sons, Inc. 2
Learning Objectives
• Understand how the use of information technology impacts an organization.
• Identify the type of organizational structure that tends to be most willing to embrace technological change and sophistication.
• List the advantages and disadvantages of the networked organizational structure.
• Discuss how IT has changed the way managers monitor and evaluate
• Define and explain the concept and importance of virtual organizations.
• Identify the challenges that are faced by virtual teams.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 3 Copyright 2010 John Wiley & Sons, Inc. 3
Real World Examples • Cognizant Technology Solutions grew fast to become
a $1.4 billion revenue company providing IT outsourcing services.
• This quick growth required that they reinvent their organization – move from a cost based to a relationship based structure.
• Managers had to interact with customers and with developers in different locations.
• A tremendous strain was put on managers because they had to work day and night.
• However, some of the units adopted a matrix structure that shared managerial responsibilities.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Who/What Delivers IT Value?
IT Value is a function
of ______, ______
and _________. P
e
o
p
l
e
Process
Technology
organizational
IT Value is also a
function of
___________ value.
people process,
technology
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 5
MIS and Management Roles
Data Information
Interpersonal roles
Information- Based roles
Decision- related roles
Seeks and receives
Specific information
Transmits information
To employees, managers,etc.
Transmits information
To vendors, customer, etc.
Initiates improvements
Supervises projects
Allocates and approves
Resources
Represents the firm in
Settling disputes
Figurehead
Leader
Liaison
Very easy role
No major decision making
Or information processing
Most significant; judging,
Promoting, monitoring,
training “Give-and-take”
relationships
Monitor
Facilitator
Spokesperson
Entrepreneur Problem Solver Resource Allocator negotiator
Transformation Decisions
MIS/IS
Management Roles Description
Actionable
Results
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
6
Organizational Ware
Organizational
Ware
HW
SW
Strategy
Structure
Culture (SOS)
N
Infra-structure
• SOM (Social Operating Mechanism)
• Reward/ assessment
SOM is a key process to help groups come together
to plan and take effective action for change.
2
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Learning Objectives
• Understand how the use of information technology
impacts an organization.
• Identify the type of organizational structure that tends to
be most willing to embrace technological change and
sophistication.
• List the advantages and disadvantages of the networked
organizational structure.
• Discuss how IT has changed the way managers monitor
and evaluate
• Define and explain the concept and importance of
virtual organizations.
• Identify the challenges that are faced by virtual teams. John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Real World Example
• Cognizant Technology Solutions grew fast to become a
$1.4 billion revenue company providing IT outsourcing
services.
• A quick growth required that they reinvent their
organization - move from a cost based to a relationship
based structure.
• Managers had to interact with customers and developers
in different locations.
• A tremendous strain was put on managers because they
had to work day and night.
• Some of the units adopted a matrix structure sharing
managerial responsibilities.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Real World Example - (Cont.)
• Tata Consultancy Services (TCS), the largest
outsourcing company and software exporter in India,
chose a different organization structure designed to
focus on customers and boost revenue growth.
• Added a new layer of leaders to oversee the
businesses and free up the CEO’s time to work on
strategy.
• Different organizational _________ reflect different
organizational ___________ that are used by
organizations to implement their ________ strategies
and accomplish organizational goals.
structures
strategies
business
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 10
Organizational Strategy
• the organization’s design, as well as the managerial
choices it makes to define, set up, coordinate, and
control its work processes
• Optimized organizational design and management
control systems support optimal business processes
which reflect the firm’s values and culture.
• Models used: _____________________
__________________ (see chapter 1)
• This chapter builds on the managerial levers model
discussed in chapter 1.
– Three types of managerial levers: organizational, control,
cultural.
business diamond and
managerial levers
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 11
Key Characteristics
• Includes the organization’s design, as well as the managerial choices that define, set up, coordinate, and control its work processes
• Optimized organizational design and management control systems support optimal business processes which reflect the firm’s values and culture
• This chapter builds on the managerial levers model discussed in chapter 1.
• Figure 3.1 summarizes complementary design variables from the managerial levers framework.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 12
Figure 1.5 The Leavitt Business Diamond
Structure
Tasks Information
and Control
People
(Source: Hammer et al, 1994)
N
3
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure 1.6 Managerial Levers and
Figure 3.3 Organizational Design Variables
Source: Cash, et al., 1994
People,
Information, and
Technology
Values
Performance
measurement and
evaluation Incentives
and rewards
Data
Planning
Culture
Control Organization (Design)
Execution
Informal
networks
Formal
reporting relationships
Business
processes
Decision
rights
Organizational
effectiveness Strategy
N
What are the
“THREE”
variables in the
“Managerial
Levers” model
that are used by
decision makers?
What is the
objective of the
model?
Give the manager
a set of
frameworks to use
in evaluating
various aspects of
organizational
design.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
IS and Organizational Design
• IS in the organizational designs:
– Defines the flow of information throughout the organization.
– Facilitate management control at the organizational and
individual levels.
• Culture impacts IS and organizational performance.
• IS in the organization’s physical structure is designed
to facilitate the communication and work processes
necessary to accomplish the organization’s goals.
• The organization structures of Cognizant and TCS,
while very different, reflect and support the goals of
each company.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Decision Rights
• _____ in the organization has the responsibility to
initiate, supply information, approve, implement,
and control various types of decisions.
• Ideally the person with the most information and in
the best position should have these rights. (i.e.
senior leaders).
• Organizational design focus on making sure that
decision rights are properly allocated.
• Zara - decision rights moved to the store managers,
providing for quicker responses to their local
customer base.
Who
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 16
INFORMATION SYSTEMS AND
ORGANIZATIONAL DESIGN
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 17
Formal Reporting Relationships and
Organization Structures
• Organization structure is the way of designing an organization so that decision rights are correctly allocated.
• The structure of reporting relationships typically reflects the flow of communication and decision making throughout the organization.
• Traditional organizations are hierarchical, flat or matrix in design (Fig. 3.2).
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 18
• In hierarchical organizations, middle managers tell subordinates what to do and tell superiors the outcomes. IS supports this hierarchy.
• In flat structured organizations, work is more flexible and employees do whatever is needed. IS allows offloading extra work and supports intra-firm communications.
• In matrix organizations, work is organized into small work groups and integrated regionally and nationally/globally.
– IS reduces operating complexities and expenses by allowing information to be easily shared among different managerial functions.
Formal Reporting Relationships and Organization
Structures (cont.)
4
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 19
Figure 3.2 Hierarchical, Flat and Matrix Organization Structures
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 20
Networked Organizational
Structure
• Made possible by new information systems.
• They feel flat and hierarchical at the same time.
• Decision rights are decentralized in this structure.
• Defined by their ability to promote creativity and flexibility while maintaining operational process control, which is achieved by substituting hierarchical controls with controls based on IS
• Extensive use of communication technologies and networks also makes it easier to coordinate across functional boundaries
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 21
Figure 3.4 The Networked Organization
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 22
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 function
Centralized
Mainframe,
centralized data and
processing
Decision-making
pushed down to
lowest level
Informal roles,
planning and
control; often
sm.,young orgs.
Unstable
Uncertain
Primary function
Centralized
Personal computers
Workers assigned to
2 or more supervisors
Dual reporting based
on function/purpose
Unstable
Uncertain
Functions and
purpose
Distributed
Networks
Formal/informal
communication
networks that connect
all
Known for flexibility
and adaptability
Unstable
Uncertain
Networks
Distributed
Intranets and Internet
Figure 3.4 Comparison of Organizational Structures
Traditional
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Other Organizational Structures
• An organization is seldom a pure form of one of the
four structures described above (i.e., hierarchical,
flat, matrix and networked).
• It is more common to see a hybrid structure in which
different parts of organization use different
structures depending on their information needs and
desired work processes.
• Adaptive or zero time organization
– a newer organizational design is designed to be highly
flexible, agile and responsive so that __________ can be
configured quickly to respond to changing _________ .
23
resources
demands
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 24 Copyright 2010 John Wiley & Sons, Inc. 24
Informal Networks
• Informal relationships exist and can play an important role in the functioning of an organization.
• Some informal relationships are designed by management: – Working on a project.
– Job rotation program, etc.
• Unintended networks are formed throughout an organization by: – Proximity
– Shared interest
– Family ties, etc.
• Some even cross organizational boundaries.
5
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 25
INFORMATION SYSTEMS
AND
ORGANIZATION
DESIGN/TRANSFORMAITON
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 26
What is Organization
Transformation?
• Organization transformation is a comprehensive organization-wide change initiative that results in change in the “deep structure” of the firm, radically altering strategy, structure, systems, processes, human resource requirements, and core values and beliefs.
• With the overall change initiative resulted in radical change, the implementation process proceeded through overlapping episodes of incremental and radical change consistent with the change process.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 27
Dilemma in Organization Design
Complex
Simple
Organization
Stable
Certain
Environment Dynamic
Uncertain
???
Hierarchy
(Control)
Entrepreneurial
(Autonomy)
N
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 28
The IT Design Challenge Parallels the
Organization Design Challenge
Complex
Simple
Organization
Environment Stable
Certain
Dynamic
Uncertain
“Centralized Intelligence”
Mainframe
(Control) 1960s, 1970s
“Decentralized Intelligence”
Microcomputer
(Autonomy) 1980s
Main Frame
“Networked Intelligence”
(Collaboration/ Distributed) 1990s and beyond
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 29
The Emerging Information Age Organization
Complex
Simple
Organization
Environment Stable
Certain
Dynamic
Uncertain
Hierarchy
Autonomy
Entrepreneurial
Collaboration (commitment)
Learning Flexibility
Standardization
Information/Knowledge Age
Supervision (compliance)
Work Technology
Shared understanding
Shared
purpose
Information
People
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 30
Transitions in Organization
Design
• From Control to __________ – Promote flexibility, creativity, and learning while
continuing to enable tight control of operating process
• From Autonomy to ___________
– Line mangers are empowered to make decisions
– Timely, quality distributed information and new communication technologies (e.g., video conferencing) are important factors that are enabling dramatic changes in organization redesign.
TM -30 Dr. Chen, Information, Organization, and Control TM -30
Learning
Collaboration / Co-opetition
6
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 31
The Organization Design Challenge
• _______________: centralized intelligence control
– complex organization in stable environment
– mainframe
• _____________: autonomy decentralized intelligence
– simple organization in dynamic environment
– microcomputer
• _______________: distributed intelligence collaboration
– complex organization in dynamic environment
– networked IT architecture
– flat, fast, flexible and focused on areas of core competency
Dr. Chen, Information, Organization, and Control TM -31
Hierarchy
Entrepreneurial
Information/K. Age
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 32
Lessons of the Information Age
Organization Design
• _________ counts, but not at the expense of control.
• ______________ is not anarchy.
• Transforming an organization requires more than just changing the structure.
– Maximizing flexibility, innovation, and control.
– Maximizing independence and interdependence: collaboration, the missing organization design criterion.
– Organization transformation needs a comprehensive organization-wide change initiative that results in change in the “deep structure” of the firm, radically altering strategy, structure, systems, processes, human resource requirements, and core values and beliefs.
N
Speeds
Empowerment
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Formal Reporting Relationships and
Organization Structures
• Organization structure is the way of designing an
organization so that decision rights are correctly
allocated.
• The structure of reporting relationships typically
reflects the flow of communication and decision
making throughout the organization.
• Traditional organizations are hierarchical, flat or matrix.
(Fig. 3.4).
• The networked structure is a newer organizational form.
• Social networks and virtual communities.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure 3.4 Comparison of organizational structures
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 function
Centralized
Mainframe,
centralized data and
processing
Decision-making
pushed down to
lowest level
Informal roles,
planning and
control; often
sm.,young orgs.
Unstable
Uncertain
Primary function
Centralized
Personal
computers
Workers assigned to
2 or more
supervisors
Dual reporting
based on
function/purpose
Unstable
Uncertain
Functions and
purpose
Distributed
Networks
Formal/informal
communication
networks that
connect all
Known for
flexibility and
adaptability
Unstable
Uncertain
Networks
Distributed
Intranets and
Internet
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Social Network
• Computer and information technologies facilitate
____________ across distances, social networks
and virtual communities are formed.
• Useful in getting a job done, even if not all of the
members of the network belong to the same
organization. (i.e. LinkedIn)
• Social network is
– an ____-enabled network that links individuals together
in ways that enables them to find experts, get to know
colleagues, and see who has relevant experience for
projects across traditional organization lines.
– a form of _______ network
collaboration
IT
informal
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 36
INFORMATION SYSTEMS AND
MANAGEMENT CONTROL
SYSTEMS
7
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
INFORMATION SYSTEMS AND
MANAGEMENT CONTROL SYSTEMS
• IT changes the way Managers _______.
• IT changes the way Managers Evaluate.
• IT changes the way Managers Provide
Feedback.
• IT changes the way Managers _________
and _______.
• IT changes the way Managers Control
Processes. 37
Monitor
Compensate
Reward
Fig 3.1 Organizational design variables
(Managerial Levers)
Organizational variables
Decision rights
Business Processes
Formal reporting relationships
Informal networks
Authority to initiate, approve, implement, and control various types of
decisions necessary to plan and run the business.
The set of ordered tasks needed to complete key objectives of the business.
The structure set up to ensure coordination among all units within the organization.
Mechanism, such as ad hoc groups, which work to coordinate and transfer information outside the formal reporting relationship.
Control variables Data
Planning
Performance measurement and evaluation
Incentives
The information collected, stored, and used by the organization.
The processes by which future direction is established, communicated, and implemented.
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.
The monetary and nonmonetary devices used to motivate behavior within an organization.
Cultural variables
Values
The set of implicit and explicit beliefs that underlie decisions made and actions taken.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 39
Organizational Characteristics of Information
Age Organizations
Dimension Characteristics
Organizational
Structure
Companies have benefits of small and large scale
simultaneously.
Lg. organizations adopt flexible/dynamic structure
Centralized/decentralized control blur
Focus on projects/process vs. tasks/procedures
Human Resources Workers better trained, autonomous, transient
Work environment exciting, engaging
Management shared, rotated, even part-time
Job descriptions tied to defined tasks non-existent
Compensation tied directly to contribution
Management Processes Decision-making is well understood
Control separated from reporting relationships
Computers support creativity at all levels
IS retain corp. history, experience, expertise John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
40
INFORMATION SYSTEMS AND
MANAGEMENT CONTROL
SYSTEMS
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 41
Management Control
• IT profoundly affects the way managers control their organizations.
• People and processes are monitored in ways that were not possible only a decade ago.
• Managers need to control work done at the process level.
• The organizational structure will determine the level of control that a manager must exercise.
• IS plays three important roles in management control processes:
– Data collection, Evaluation, and Communication.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 42
IT Changes the Way Managers….
• Monitor: IS makes possible new ways to track
performance and behavior
• Evaluate: models are easily built, making it easier
to understand progress and performance
• Provide Feedback: IS makes rapid feedback
possible (e.g., through electronic forms)
• Compensate & Reward: team-based efforts can
be evaluated and complex formulas used
• Control Processes:IS also used extensively in
industrial processes, and makes it easier to collect,
analyze and move information
8
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 43 Copyright 2010 John Wiley & Sons, Inc. 43
Planning and Information Technology
• Information technology can play a role in planning
in three ways:
– IS can provide the necessary data to develop the
strategic plan
– Some IS actually automate the planning process
– IS can lie at the heart of a strategic initiative and can be
used to gain strategic advantage
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 44
Data Collection and IT
• Monitoring work can take on a completely new meaning with the use of information technologies.
• IS make it possible to collect such data as: – number of keystrokes
– precise time spent on a task
– exactly who was contacted
– specific data that passed through the process
• Organizational design challenge in data collection is to: – embed monitoring tasks within everyday work
– reduce the negative impacts to workers being monitored.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Monitoring and Performance Software
• Software collecting monitoring _____ directly from
work tasks, or embedding the creation and storage of
performance information into software used to perform
work is more reliable.
• Monitor “cyberslacking” and “cyberslouching.”
• Monitoring is ethical and in the best interest of business.
• Employees must be informed about monitoring software.
• __________ increase in productivity derived from
monitoring information.
• Balance employees’ right to privacy against the needs of
the business to have surveillance mechanisms in place.
Reward
data
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 46
Performance Measurement, Evaluation and IT
• IS make it possible to evaluate data against reams of standard or historical data.
• Managers can more easily understand work progress and performance.
• However, analysis paralysis (too much data/information) can cause managers to become overwhelmed.
• How the information is used is important to performance measurement.
• How feedback is communicated in the organization plays a role in affecting behavior.
• Key is making sure that the information is handled discreetly and appropriately.
___________ activities in the Value Chain. Supporting
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
(Value)
N
Figure I.6 Business Level: The Value Chain
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Incentives and Rewards and IT
• Enables organizations to encourage good performance.
• Done properly, can make employees feel good without
paying them more money.
• Organizations use their Web sites to recognize high
performers.
– Using electronic badges that are displayed on the social
network to identify the award recipients.
– Reward with allocation of new technology.
• IS makes it easy to design complex reward systems (shared
or team based).
• Managers must consider both the ________ and qualitative
data in assigning compensation and rewards.
metrics
9
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 49
INFORMATION SYSTEMS
AND
CULTURE
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 50
CULTURE
• Culture is the third managerial lever.
• Plays an increasingly important role in IS
development and use.
• It is defined as a shared “set of _______ and
_______about what is desirable and undesirable in a
community of people” (also see TAM model in
chapter 4).
• Culture is not static but always changing.
• Different levels of culture.
• Culture should be considered as the most important
organizational ________ resources for improving its
competitive advantage as it is non- ___________
values
beliefs
strategic
imitatable.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Levels of Culture and IT
• Culture can be found in countries, organizations, or even
within organizations.
• IS development and use can be impacted by culture at all
levels within the organization.
• Both national and organizational cultures can affect the
IT issues and vice versa.
• Differences in national culture may affect IT in a variety of
ways: impacting IS development, technology adoption and
diffusion, system use and outcomes, and management and
strategy.
• Figure 3.5 and describe the model for the impact culture of
on IT issues. John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure 3.5 Levels of culture.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 53
CULTURE
• Cultural differences have not totally disappeared.
• Convergence is a challenge for an organization that
employs people from a variety of countries and
cultures.
• Having an understanding and appreciation for cultural
values, practices and subtleties can help in smoothing
the challenges.
• Effective communication means listening, framing the
message in a way that is understandable to the receiver
and responding to feedback.
• National culture differences may affect system
development and use.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 54
CULTURE
• Hofstede is one of the best known researchers in the
values across national cultures.
• Awareness of the Hofstede or GLOBE dimensions
may help improve communications and reduce
conflict.
• The GLOBE (Global Leadership and organizational
Behavior Effectiveness) research program was a team
of 150 researchers who have collected data on cultural
vales and practices and leaderships attributes from
over 18,000 manages in 62 countries.
• The GLOBE dimensions and their relationship to
Hofstede’s dimensions are found in Figure 3.5.
10
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Organizational Culture and
Information Technology Management
• Differences in culture result in differences in the use
and outcomes of IT.
• At the organizational level, cultural values are often
related to satisfied users, successful IS
implementations, or knowledge management success.
• Culture affects planning, governance, and perceptions
of service quality at the national and organizational
levels
– Having planning cultures at the top levels, signal that
strategic systems investment is important.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure 3.6 – National cultural dimensions
GLOBE DIMENSIONS
DESCRIPTION RELATIONSHIP TO HOFSTEDE DIMENSION
UNCERTAINTY
AVOIDANCE
EXTENT TO WHICH MEMBERS OF AN ORGANIZATION OR
SOCIETY STRIVE TO AVOID UNCERTAINTY BY RELIANCE ON
SOCIALNORMS, RITUALS, AND BUREAUCRATIC PRACTICES
TO ALLEVIATE THE UNPREDICTABILITY OF FUTURE
EVENTS.
SAME AS UNCERTAINTY
POWER DISTANCE DEGREE TO WHICH MEMBERS OF AN ORGANIZATION OR
SOCIETY EXPECT AND AGREE THAT POWER SHOULD BE
EQUALLY SHARED.
SAME AS POWER DISTANCE
COLLECTIVISM I:
SOCIETAL
COLLECTIVSIM
DEGREE TO WHICH ORGANIZATIONAL AND SOCIETAL
INSTITUTIONAL PRACTICES ENCOURAGE AND REWARD
COLLECTIVE DISTRIBUTION OF RESOURCES AND
COLLECTIVE ACTION.
SAMES AS INDIVIDUALISM/
COLLECTIVISM
COLLECTIVISM II:
IN-GROUP
COLLECTIVISM
DEGREE TO WHICH INDIVIDUALS EXPRESS PRIDE,
LOYALTY AND COHESIVENESS IN THEIR ORGANIZATIONS
OR FAMILIES
TYPE OF COLLECTIVISM FOCUSED ON
SMALL IN-GROUPS
GENERAL
EGALITARIANSIM
EXTENT TO WHICH AN ORGANIZATION OR SOCIETY
MINIMIZES GENDER ROLE DIFFERENCES AND GENDER
DISCRIMINATION
MODIFIED VERSION OF
MASCULINITY/FEMINITY
ASSERTIVENESS DEGREE TO WHICH INDIVIDUALS IN ORGANIZATIONS OR
SOCIETIES ARE ASSERTIVE, CONFRONTATIONAL AND
AGGRESSIVE IN SOCIAL RELATIONSHIPS
MODIFIED VERSION OF
MASCULINITY/FEMINITY
FUTURE
ORIENTATION
DEGREE TO WHICH INDIVIDUALS IN ORGANIZATIONS OR
SOCIEITES ENGAGE IN FUTURE-ORIENTED BEHAVIORS
SUCH AS PLANNING, INVESTING IN THE FUTURE, AND
DELAYING GRATIFICATION
SIMILAR TO CONFUCIAN WORK
DYNAMISM BY HOFSTEDE AND BOND
(1988)
PERFORMANCE
ORIENTATION
EXTENT TO WHICH AN ORGANIZATION OR SOCIETY
ENCOURAGES AND REWARDS GROUP MEMBERS FOR
PERFORMANCE IMPROVEMENT AND EXCELLENCE
HUMANE
ORIENTATION
DEGREE TO WHICH INDIVIDUALS IN ORGANIZATIONS OR
SOCIETIES ENCOURAGE AND REWARD INDIVIDUALS FOR
BEING FAIR, ALTRUISTC, FRIENDLY, GENEROUS, CARING
AND KIND TO OTHERS.
SIMILAR TO KIND HEAREDNESS BY
HOFSTEDE AND BOND (1988)
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Awareness of Cultural Differences
• Effective communication means listening, framing the
message in a way that is understandable to the receiver, and
responding to feedback.
• Effective _____-cultural communication involves all of
these plus searching for an integrated solution that can be
accepted and implemented by members of diverse cultures.
• Communication in meetings is also subject to cultural
differences.
• Knowing that a society tends to score high or low on certain
dimensions helps a manager anticipate how a person from that
society might react.
• Without awareness of cultural differences, it is unlikely that
IS will be developed or used effectively.
cross
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
IT
Vision/
IT
Strategy
Strategic
Vectors
Business
Strategy Business
Vision
Technology
Concepts
• Standards
• Protocols
• Performance
• Compatibility
• Guidelines
Key Issues
• Operating System
• Data Bases
• Applications
• Communications
• Processors
_________
Management
_________
Management
IT
____________
Technology
Selection
• Hardware
• Software
Fig. 3-(Extra): IT Architecture and Strategic Business Vision
General
IT Technologists
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Break
• Read end of chapter case on p.96 (#4 –
Mary Kay, Inc.)
• Or
• Read Case Study 3-1: The Merger of
Airtran by Southwest Airlines: Will the
Organizational Culture Merge?
59 John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
DQ #4 Mary Kay, Inc. • a. How would organizational strategy need to change to
respond to Mary Kay’s new business strategy?
• Ans: Organizational changes would need to be consistent with a
revised organizational strategy. If no organizational changes were
made, we’d expect the systems to be rejected by many of the
workers. Managers would expect IBCs to use the systems, but
IBCs are independent agents, so they would most likely delay in
using the systems unless motivated to do otherwise.
• Thus the reward and compensation systems would need to be
adjusted to accommodate the new system. And unless business
processes were also changed to accommodate the new systems, we
would expect problems to occur that make it difficult for the new
systems to be used (information entered into the system might be
just printed out, if the processes are expecting paper-based forms
rather than screen shots).
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• a. How would organizational strategy need to change to
respond to Mary Kay’s new business strategy? (cont.)
• You might also want to explore business process that would
have to change to accommodate the new systems. The paper-
based ordering system would have to be removed, if
managers wanted IBCs to only use the new system, since
running the older system discourages IBCs from using the
new system.
• Fulfillment and reconciliation processes would be different
with the use of mymk.com, since the order information was
entered earlier into the system. If customers of IBCs place
orders automatically, IBCs lose control over what is ordered,
and will have to build new ways to keep track of their sales.
If fulfillment processes are done using paper pick lists, then
the process either needs to be redesigned to use electronic
lists (shown on the screen or such) or to print out paper lists.
61 John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• b. What changes would you suggest Mary Kay, Inc. managers
make in their management systems in order to realize the intended
benefits of the new systems? Specifically, what types of changes
would you expect to make in the evaluation systems, the reward
systems, and the feedback systems?
• Ans: Evaluation systems would include a component of how well
the systems were used by the Independent Beauty Consultants
(IBCs). There would need to be an evaluation of the frequency
and effectiveness of the use of the systems. That may translate into
the reward systems, where IBCs are compensated for their use of
the systems (direct bonuses, etc) or where they find that using the
systems gives them advantages they didn’t get otherwise (faster
orders, better book keeping, etc). IBCs might need incentive
packages to encourage them to buy computers if they don’t have
one already (such as discounts from a preferred vendor ).
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• b. (cont.)
• Support processes would be needed to help IBCs learn
how to use the systems effectively, and to help them
identify new ways to do their business better. The results
of the evaluation process would have to be used to provide
feedback to the employees. Possibly, in discussing an
employees performance, it may be helpful to share with
them average performance levels of other employees.
63 John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Case Study 3-1: The Merger of Airtran by
Southwest Airlines: Will the Organizational
Culture Merge?
• This case study allows the students to
explore real world cultural issues related to
the merger of two companies that basically
offer the same services, but have two very
different organizational structures and
cultures.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• 1. Discuss the layers of culture that are evident in
this case.
• Ans: The organizational values of both airlines are
discussed. This includes the employees’ foundational
values regarding their work processes.
• It also includes the expectations of customers. Each
firm has built a reputation based on its values, so the
assimilation of those divergent cultures can create
some friction and confusion.
65 John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• 2. What are the similarities and dissimilarities
between the cultures, values and beliefs of
Southwest and AirTran airlines?
• Ans: Both airlines include “fun” in their value
statements. They both want customers to have a
pleasant experience.
• Southwest Airlines takes it a step further,
emphasizing the “over the top” experience the
company is noted for providing. AirTran includes
safety and more serious notions as part of its value
and belief statement. They want to have fun, but
there are other things that are more important. 66
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• 3. What problems could arise due to the different perspectives
of both airlines towards online reservation systems? What do
you recommend the managers do to solve these problems?
• Ans: Depending on familiarity with the reservation systems,
preference might be given to one system over the others. This
could disadvantage some customers if they elected to use the
other online system.
• The outcome could be confusion and frustration for customers.
Managers need to ensure that all employees are trained properly.
They should also actively monitor the reservation process to
check for any disruptions. They might even try pairing
employees from the two airlines to work together, thereby
overcoming any confusion in processing the reservations.
67 John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
4. What would you recommend managers do to
ensure a smooth integration of the information
systems, given the culture differences?
• Ans: The information systems should focus on
efficiency and effectiveness standards. Ease of use
would be important when designing the user
interface.
• Retain familiar features, as much as possible, and
require the least amount of business process change.
Open and constant communication is imperative for
a smooth transition. Assess the results at regular
intervals, and make changes as required. 68
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 69
SUMMARY