CSIS 114 Lab 6:Organizational Culture and

Structure

Part 1:Organizational culture

Shared understandings, values & assumptions in an organization

Influences information systemsSiena and IBM example

IBM’s culture

Lifetime employment (up until 1987 !)Social interaction: Kingston Country

ClubConservative dressOur computers are the bestOther companies make computers, too?

Siena’s Culture

Men with brown robes: Franciscan influence.

ROTC.Strong athletic program and alumni

support.Academics: Liberal arts.Students: mostly regional, Irish/Italian.

Culture Characteristics:low or high on scale

Innovation & Risk taking – encouraged?Attention to detail – precision, analysisOutcome orientation (vs process)People orientation - considerationTeam organization – work activitiesAggressiveness - competitivenessStability – status quo

Function of CultureDistinguishes organization from othersConveys sense of identity to membersCommitment to group rather than selfEnhance social system stability –

guidelines for behaviorEncourages conformity (control) -

rewards

Creating and maintaining culture

Stories - historyRitualsLanguage – jargon or slogansMaterial symbols: dress codes, office

space, furnishings, other perks, rewards system

NASA Case

Part 2:Organizational structures

Define organizational structure, and explain how they affect work processes and the implementation of information systems that should empower and support workers.

Organizational Structureinfluences information flow

Lines of communicationFormalInformal : IT makes CEO more

accessible. Relationships make business processes work.

Vertical (control) vs Horizontal (collaborative)

Traditional Organizational Structure

Fig. 2.3

Organizational StructureApproaches

Traditional – hierarchyIndustrial revolution and earlier “command and control”Rote work by unskilled staff

FlatProjectTeamMultidimensional

Example of Traditional Structure

Fig 2.4

“Flat” Organizational Structure

Less middle managersLess up/down (filtering) communication

Empowerment of staff – via ISFaster action and Lower costs

EX: Insurance rep handles entire caseCable TV help desk can make decisions and provide

refunds/extras (up to certain amount) Be careful about becoming too flat: sometimes

managers can see the big picture or resolve longer-term problems.

Project Organizational Structure

Fig 2.5

DELL: Sales force structure changed to accommodate growth

Maintained double-digit sustained growth by market segmentation.

Each group has specific customers that they specialized in.

Each group was close-knit and entrepreneurial.

As sales grew, company split off more specialized groups- see next slide.

La rg e c us to m e rs S m a ll c us to m e rs

M ids izeC o 's

S m a ll c us to m e rs

G o vt&E d

La rg eC o 's

F e dS ta te

&Lo c a l

E ducG lo ba lE nte r.a c c ts

La rg eC o 's

M idC o 's

S m a llC o 's

C o ns -um e rs

1 9 9 4$ 3 .5 B

1 9 9 6$ 7 .8 B

1 9 9 7$ 1 2 B

Team Organizational Structure

Work groups of various sizesTemporary or permanent teamsPeer pressure to performEach member learns all functions of teamTeam can even make budgetary and hire/fire

decisions

Gore’s innovative organization model (makers of Gore-Tex)

Split divisions when they reach > 150 people.

Research indicates that people don’t feel part of community that is too large.EX: Shakers split “families” that are too

large. No managers, just “mentors”

Titles, offices don’t mean a thing.

Multidimensional Organizational Structure

Fig 2.6

Multidimensional (matrix) Organizational Structure

May incorporate several structures at the same time Advantage:

ability to simultaneously stress both traditional corporate areas and important product lines

Two mentorsFlexibility to move people within functional area

Disadvantage:multiple lines of authority

Virtual Organizational Structure:diverse groups act as a single entity.

Employs business units in geographically or organizationally dispersed areasSouthwest airlines: Moms handle reservations at

homeContract out work to specialty shops

Can be permanent or temporary.IS must support&coordinate virtual distributed

organization. [e-mail, scheduling, videoconferencing, etc.] since workers mostly communicate electronically.

Organizational innovation Downsizing - “rightsizing” Vertical Integration

own all phases of production Horizontal Integration (conglomerates)

Going into other lines of business Acquisitions and mergers

Keiretsu: Japan’s answer to conglomerates Can be either vertical or horizontally integrated

Virtual Integration Business Web value chains: act as one company. EX: Dell and its suppliers. CISCO and manufacturers.

Partnerships / Cooperation Outsourcing/off shoring

Downsizing

Downsizing: “rightsizing”cutting the number of employees by layoffs or hiring freeze or reorganization (sell off business units)

Keiretsu Case

Part 3: Outsourcing and offshoring(ch. 14 in O’Brien)

Outsourcing: contracting with outside company (within U.S. or not)American Express hires IBM to manage

servers, databases and helpdesk.Other company may hire foreign nationals

that may reside in U.S.

When to outsource?

When you can cut costs.Limited opportunity to distinguish

competitively through the function.When uninterrupted service is not critical.When technical know-how can be maintained

internally.When existing IS function is ineffective or

inferior. [Stair, p 523]

Offshoring(ch. 14 in O’Brien)

Also known as: Off-shore outsourcing More specific term than outsourcing.Contract out to (or own) offshore company

GE, Texas Instruments have subsidiaries in IndiaMove sophisticated work to another country to

take advantage of lower cost structures (finance, banking, call center, IT services: programming, system management).

Countries with innovative, educated in IT/engineering, English speaking, workers are successful.

Near-shoring to Canada: less cultural differences

Off-Shoring projectionsGartner Inc. predicts that 40% of companies

with revenue of more than $100 million will be trying out or using offshore services by the end of 2004.

Gartner also predicts that one in 20 IT jobs will head offshore by the end of 2004.

Cambridge, Mass.-based Forrester Research Inc. projects that more than 3 million U.S. white-collar jobs will be lost to offshore outsourcing during the next 10 years or so -- a half-million of them in IT.

Off-shoring Case

Pro and Con analysis.