Organizational Impacts of ISDescribe the characteristics, advantages and

disadvantages of organizational structuresDescribe the impact of IS on organizational

structureDescribe the impact of IS on control activitiesDistinguish between virtual organizations and

corporationsDescribe the stages in the development of

interorganizational relationshipsDefine virtual teams

Hierarchical Structure (Centralized)Traditional, top-downGood for stable environmentsGood for communication and

coordination within the functionDecisions made at topGeared toward efficiency

Flat Structure (Decentralized)Based on product, location, etc.Better than hierarchical structure in

more dynamic environmentsGood for training general managersFaster decision making than with

hierarchical structureDecisions are made at the level where

problems occur

Matrix StructureTwo or more supervisors (one for each

dimension: for example, functional and project)

Hybrid model that emerged about 40 years ago

Geared for one-time projectsIS reduces technical complexityStill - coordination is challenging, especially

in dynamic environments

Network StructureVery fluid - evolve based on needExtremely flexible and adaptiveGood for creativityIS improve process efficiency,

effectiveness and flexibility IT facilitates communications

T-FormTechnology-based organizationFeels 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. jobElectronic links with partners, customersAccess to information is increased

What is the impact of IT on organization structure?

Leavitt & Whisler’s Predictions1958 1980’sBell- shaped curveNo middle managersRecentralized organizationsDP is king: Programmers hold high-level

staff jobs Top management will become more

abstract and focus on the horizon

Impact of IT on Control ActivitiesMonitoringEvaluatingProviding FeedbackCompensatingRewarding

VirtualnessCorporationsOrganizations Teams

Virtual CorporationsTemporary network of companies that

come together quickly to exploit fast-changing opportunities

Involves interorganizational linkagesRequires low-cost information storage

and processingOften built on core competenciesAppears as one entity

Virtual Corporations

ManufacturerSuppliers

Distributors

Retailers

Customers

Information-Enabled AlliancesJoint Marketing PartnershipsIntra-Industry PartnershipsCustomer-Supplier PartnershipsIT Vendor-Driven Partnerships

Joint marketing partnerships

IBM + Sears = ProdigyCombined 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

Intra-industry partnershipsOften small or mid-sized competitors18 mid-sized paper companies with

global electronic information systemInsurance Value-Added Network

Services (IVANS)Some are led by government

(TradeNet)

Customer-Supplier PartnershipsEngineering

compress product development time automate design process

Inventory management just-in-time access to production scheduling databases

Built on trustBuilt on accessing and sharing ISs

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

IT Vendor- Driven PartnershipsEDS and software applicationsAllows IT vendor to bring

technology to a new marketResearch alliance with major

customer (beta site)

Information Processing Serves as DynamoProvides information about marketPromotes quick responseAllows coordination and controlCan be used to add value to

products and servicesEliminates some manual workEnriches relationships (relational)

Developing Cooperative IOAsRing & Van de Ven, 1994, Academy of

Management ReviewCooperative 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

Negotiating Stage of IOA DevelopmentParties develop joint expectations about

motivations and investmentsFormal bargaining and selectionUnderneath - psychological sensemakingIndividual choices, values, expectations

must be congruentMay emerge from preexisting friendship

ties, need for resources, institutional mandate, brokered deals, etc.

Commitment Stage of IOA DevelopmentTerms and governance structures

are establishedFormal contracts or informally

understood psychological contractsTrust + Legal agreement

Executions Stage of IOA DevelopmentCommitments are carried into effectInitially formally designated role behavior

reduces uncertaintyIncreasing reliance on interpersonal

relationshipsPsychological contracts increasingly

substitute for formal legal contractsAssessments are made about efficiency and

effectiveness of IOA

Turnover in IOAsReplacements may not have prior

relationshipSome flexibility is lost as new “agents”

rely on formal agreement and role designations

Clock restarted on psychological contracts

Trust must be developed interpersonally

Virtual OrganizationsOrganizations in which IT enables

employees to work for an organization and live anywhere

Often uses network structureManagement, support and business

processes are designed to support virtual work relationships

Virtual Teams- DefinedGeographically 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 membershipface-to-face vs. electronic mediumgeographically dispersedshort-term vs. long-term

Virtual Teams - Some IssuesTechnology supportCultural DifferencesSwift TrustRotating LeadershipReward SystemOrganizational memory