Chapter Seven
Information Technology
and Knowledge
Management
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
7-1
Evolution of Organizational
Applications of Information
Technology
3. Strategic Weapon
TOP
(strategy, plans,
non-programmed)
INTERNAL
EXTERNAL
• Networking
• Extranets
• Intranets
• E-Commerce
• Enterprise resource • Network
planning
structure
2. Business Resource
MANAGEMENT
LEVEL
1. Operations
• Management Information
systems
• Decision Support Systems
• Executive information
systems
• Transaction
processing systems
• Data warehousing
FIRST-LINE
(operational, past, LOW
programmed)
SYSTEM COMPLEXITY
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
Direction of
Information
System
Evolution
HIGH
7-2
Strategic Advantages from
Information Technology
• Low-Cost
Leadership
• Differentiation
– Operational
efficiency
– Interdepartmenta
l coordination
– Rapid re-supply
– Lock in
customers
– Customer
service
– Product
development,
market niches
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
7-3
Electronic Data Interchange
for International Transactions
Suppliers
Manufacturer’s
Bank’
Customer’s
Bank
MANUFACTURER
Customer
Export Freight
Forwarder
Import
Clearing Agent
Export
Customs
Import
Customs
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
7-4
The Dynamic Network
Organization Structure
Distribution
Manufacturing
Health
Products, Inc.
(Central Hub)
Accounts
Receivable
Marketing
Public
Relations
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
7-5
Key Characteristics of Traditional
vs. Emerging Inter-organizational
Relationships
Traditional Inter-organizational
Relationships
Arm’s-length relationship
Suppliers
Customers
Use of telephone, mail, some
EDI for ordering, invoicing,
payments
Limited communication with
manufacturer
Mix of phone response, mail
hard copy information
Source: Based on Charles V. Callahan and Bruce A. Pasternack,
“Corporate Strategy in the Digital Age,” Strategy & Business, Issue 15,
Second Quarter 1999, 10-14.
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
Emerging Inter-organizational
Relationships
Interactive, electronic
relationship
Electronic ordering, invoicing,
payments
Direct access to manufacturer,
real-time information exchange
Electronic access to product
information, consumer ratings,
customer service data
7-6
Two Approaches to
Knowledge Management
Explicit
Provide high-quality, reliable, and fast
information systems for access of
codified reusable knowledge
Channel individual expertise
to provide creative advice
on strategic problems
People-to-documents
Develop an electronic
document system that
codifies, stores,
disseminates, and allows
reuse of knowledge
Invest heavily in information
technology, with a goal of
connecting people with
reusable codified knowledge
Data warehousing
Knowledge mapping
Electronic libraries
Intranets, networks
Source: Based on Morten T. Hansen, Nitin Nohria, and Thomas Tierney,
“What’s Your Strategy for Managing Knowledge?” Harvard Business
Review, March-April 1999, 106-116.
Tacit
Person-to-person
Knowledge
Management
Strategy
Technology
Mechanisms
©2000
South-Western College Publishing
Cincinnati, Ohio
Daft, Organizational Theory and Design, 7/e
Develop networks for
linking people so that
tacit knowledge can
be shared
Invest moderately in
information technology,
with a goal of facilitating
conversations and the exchange of tacit knowledge
Dialogue
Learning histories and
storytelling
Communities of practice
7-7