Chapter 3
Learning Objectives
Organizational Strategy and
Information Systems
• 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.
Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258
chen@jepson.gonzaga.edu
Copyright 2010 John Wiley & Sons, Inc.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
2
Who/What Delivers IT Value?
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.
3
Copyright 2010 John Wiley & Sons, Inc.
2
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
IT Value is a function
people ______
process,
of ______,
technology
and _________.
Technology
P
e
o
p
l
e
IT Value is also a
function of
organizational
___________ value.
Process
3
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
MIS and Management Roles
Management Roles
Figurehead
Interpersonal
roles
MIS/IS
Leader
Liaison
Data
Information
Actionable
Results
Monitor
Transformation
Decisions
InformationBased roles
Decisionrelated roles
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Description
Organizational Ware
Very easy role
No major decision making
Or information processing
Most significant; judging,
Promoting, monitoring,
training
“Give-and-take”
relationships
Strategy
HW
Structure
Seeks and receives
Specific information
Transmits information
To employees, managers,etc.
Transmits
information
Spokesperson
To vendors, customer, etc.
Organizational
Ware
Infra-structure
Facilitator
Entrepreneur
Problem
Solver
Resource
Allocator
negotiator
Initiates improvements
Supervises projects
Allocates and approves
Resources
Represents the firm in
Settling disputes
SW
Culture (SOS)
• SOM (Social Operating Mechanism)
• Reward/ assessment
N
5
SOM is a key process to help groups come together6
to plan and take effective action for change.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
1
Real World Example
Learning Objectives
• 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.
• 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
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Organizational Strategy
Real World Example - (Cont.)
• 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.
business diamond and
• Models used: _____________________
• 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.
structures reflect different
• Different organizational _________
organizational ___________
strategies that are used by
organizations to implement their ________
business strategies
and accomplish organizational goals.
__________________
(see chapter 1)
managerial levers
• This chapter builds on the managerial levers model
discussed in chapter 1.
– Three types of managerial levers: organizational, control,
cultural.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure 1.5 The Leavitt Business Diamond
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.
Structure
Tasks
Information
and Control
People
(Source: Hammer et al, 1994)
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
N
12
2
Figure 1.6 Managerial Levers and
Figure 3.3 Organizational Design Variables
What are the
“THREE”
variables in the
“Managerial
Levers” model
that are used by
decision makers?
Strategy
Execution
Organization (Design)
Control
Data
People,
Information, and
Technology
Informal
networks
Values
Source: Cash, et al., 1994
Incentives
and
rewards
• IS in the organizational designs:
– Defines the flow of information throughout the organization.
– Facilitate management control at the organizational and
individual levels.
Decision
rights
Business
processes
Formal
reporting
relationships
IS and Organizational Design
What is the
objective of the
model?
Planning
Performance
measurement
and
evaluation
Culture
Organizational
effectiveness
Give the manager
a set of
frameworks to use
in evaluating
various aspects of
organizational
design.
• 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.
N
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Decision Rights
• _____
Who 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.
INFORMATION SYSTEMS AND
ORGANIZATIONAL DESIGN
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Formal Reporting Relationships and
Organization Structures
Formal Reporting Relationships and Organization
Structures (cont.)
• 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.
• 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
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– IS reduces operating complexities and expenses by
allowing information to be easily shared among different
managerial functions.
17
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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3
Figure 3.2 Hierarchical, Flat and Matrix Organization Structures
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
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20
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Traditional
Figure 3.4 The Networked Organization
Hierarchical
Matrix
Networked
Description
Bureaucratic w/
defined levels of
management
Decision-making
pushed down to
lowest level
Workers assigned to
2 or more supervisors
Characteristics
Division of labor
specialization, unity
of command
Informal roles,
planning and
control; often
sm.,young orgs.
Dual reporting based
on function/purpose
Formal/informal
communication
networks that connect
all
Known for flexibility
and adaptability
Type of
Environment Best
Supported
Stable
Certain
Unstable
Uncertain
Basis of Structuring
Primary function
Unstable
Uncertain
Unstable
Uncertain
Functions and
purpose
Networks
Primary function
Centralized
Centralized
Distributed
Distributed
Mainframe,
centralized data and
processing
Personal computers
Networks
Intranets and Internet
Power Structure
Key Tech.
Supporting this
Flat
Figure 3.4 Comparison of Organizational Structures
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
21
Informal Networks
Other Organizational Structures
• Informal relationships exist and can play an important
role in the functioning of an organization.
• Some informal relationships are designed by
management:
• 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
– Working on a project.
– Job rotation program, etc.
• Unintended networks are formed throughout an
organization by:
– Proximity
– Shared interest
– Family ties, etc.
– a newer organizational design is designed to be highly
resources can be
flexible, agile and responsive so that __________
demands .
configured quickly to respond to changing _________
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• Some even cross organizational boundaries.
23
Copyright 2010 John Wiley & Sons, Inc.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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24
4
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.
INFORMATION SYSTEMS
AND
ORGANIZATION
DESIGN/TRANSFORMAITON
25
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
The IT Design Challenge Parallels the
Organization Design Challenge
Dilemma in Organization Design
Complex
26
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Main Frame
Complex
???
Hierarchy
(Control)
Organization
Organization
“Centralized Intelligence”
Mainframe
(Control) 1960s, 1970s
“Networked Intelligence”
(Collaboration/ Distributed) 1990s and beyond
Entrepreneurial
(Autonomy)
Simple
Stable
Certain
Environment
N
27
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
The Emerging Information Age Organization
Information/Knowledge Age
Hierarchy
Complex
Standardization
Learning
Flexibility
Supervision
(compliance)
People
Information
Work
Technology
Simple
Stable
Certain
Environment
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Environment
Dynamic
Uncertain
28
Transitions in Organization
Design
– Promote flexibility, creativity, and learning while
continuing to enable tight control of operating process
(commitment)
• From Autonomy to Collaboration
___________/ Co-opetition
Shared
Organization
Stable
Certain
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• From Control to __________
Learning
Collaboration
Shared
understanding
“Decentralized Intelligence”
Microcomputer
(Autonomy) 1980s
Simple
Dynamic
Uncertain
purpose
– 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.
Autonomy
Entrepreneurial
Dynamic
Uncertain
29
John
Sons, Inc. &Organization,
Dr. Chen, Information
Dr.Wiley
Chen,&Information,
and ControlSystems – Theory and Practices
30
TM -30
TM -30
5
Lessons of the Information Age
Organization Design
The Organization Design Challenge
• _______________:
Hierarchy
centralized intelligence control
Speeds counts, but not at the expense of control.
• _________
• ______________
Empowerment is not anarchy.
• Transforming an organization requires more than
just changing the structure.
– complex organization in stable environment
– mainframe
Entrepreneurial autonomy decentralized intelligence
• _____________:
– simple organization in dynamic environment
– microcomputer
– 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.
Information/K. Age distributed intelligence collaboration
• _______________:
– complex organization in dynamic environment
– networked IT architecture
– flat, fast, flexible and focused on areas of core competency
John
Sons, Inc. &Organization,
Dr. Chen, Information
Dr.Wiley
Chen,&Information,
and ControlSystems – Theory and Practices
31
TM -31
Figure 3.4 Comparison of organizational structures
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
N
32
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Hierarchical
Flat
Matrix
Networked
Description
Bureaucratic w/
defined levels of
management
Decision-making
pushed down to
lowest level
Workers assigned to
2 or more
supervisors
Characteristics
Division of labor
specialization, unity
of command
Dual reporting
based on
function/purpose
Type of
Environment
Best Supported
Stable
Certain
Informal roles,
planning and
control; often
sm.,young orgs.
Unstable
Uncertain
Formal/informal
communication
networks that
connect all
Known for
flexibility and
adaptability
Unstable
Uncertain
Unstable
Uncertain
Basis of
Structuring
Power
Structure
Primary function
Primary function
Functions and
purpose
Networks
Centralized
Centralized
Distributed
Distributed
Key Tech.
Supporting this
Mainframe,
centralized data and
processing
Personal
computers
Networks
Intranets and
Internet
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Social Network
• Computer and information technologies facilitate
____________
collaboration 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
INFORMATION SYSTEMS AND
MANAGEMENT CONTROL
SYSTEMS
IT
– 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 informal
_______ network
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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6
Fig 3.1 Organizational design variables
(Managerial Levers)
INFORMATION SYSTEMS AND
MANAGEMENT CONTROL SYSTEMS
Organizational variables
Decision rights
Monitor
• IT changes the way Managers _______.
• IT changes the way Managers Evaluate.
• IT changes the way Managers Provide
Feedback.
Compensate
• IT changes the way Managers _________
Reward
and _______.
• IT changes the way Managers Control
Processes.
Business Processes
Formal reporting relationships
Informal networks
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
The information collected, stored, and used by the organization.
Planning
Performance measurement
and evaluation
Incentives
Cultural variables
Values
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Authority to initiate, approve, implement, and control various types of
decisions necessary to plan and run the business.
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.
The set of implicit and explicit beliefs that underlie decisions made and
actions taken.
37
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
INFORMATION SYSTEMS AND
MANAGEMENT CONTROL
SYSTEMS
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
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40
IT Changes the Way Managers….
Management Control
• 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
• 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
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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7
Planning and Information Technology
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:
• 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
• Organizational design challenge in data collection is
to:
– embed monitoring tasks within everyday work
– reduce the negative impacts to workers being monitored.
43
Copyright 2010 John Wiley & Sons, Inc.
number of keystrokes
precise time spent on a task
exactly who was contacted
specific data that passed through the process
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Monitoring and Performance Software
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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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.
data directly from
• Software collecting monitoring _____
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.
Reward increase in productivity derived from
• __________
monitoring information.
• Balance employees’ right to privacy against the needs of
the business to have surveillance mechanisms in place.
Supporting activities in the Value Chain.
___________
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Figure I.6 Business Level: The Value Chain
46
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.
(Value)
• IS makes it easy to design complex reward systems (shared
or team based).
metrics and qualitative
• Managers must consider both the ________
data in assigning compensation and rewards.
N
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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CULTURE
INFORMATION SYSTEMS
AND
CULTURE
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
49
• Culture is the third managerial lever.
• Plays an increasingly important role in IS
development and use.
• It is defined as a shared “set of _______
values and
_______about
what is desirable and undesirable in a
beliefs
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
strategic resources for improving its
organizational ________
imitatable.
competitive advantage as it is non- ___________
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
50
Figure 3.5 Levels of culture.
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
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
CULTURE
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.
• 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.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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9
Figure 3.6 – National cultural dimensions
Organizational Culture and
Information Technology Management
GLOBE
DIMENSIONS
UNCERTAINTY
AVOIDANCE
• 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
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
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
HUMANE
ORIENTATION
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
RELATIONSHIP TO
HOFSTEDE DIMENSION
SAME AS UNCERTAINTY
POWER DISTANCE
GENERAL
EGALITARIANSIM
– Having planning cultures at the top levels, signal that
strategic systems investment is important.
DESCRIPTION
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.
EXTENT TO WHICH AN ORGANIZATION OR SOCIETY
ENCOURAGES AND REWARDS GROUP MEMBERS FOR
PERFORMANCE IMPROVEMENT AND EXCELLENCE
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
IT
Awareness of Cultural Differences
IT
_________
Management
• Effective communication means listening, framing the
message in a way that is understandable to the receiver, and
responding to feedback.
cross
• 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.
General
_________
Management
IT
Vision/
Business
Vision
Strategic
Vectors
IT
Strategy
Technology
Concepts
• Standards
• Protocols
• Performance
• Compatibility
• Guidelines
Key Issues
• Operating System
• Data Bases
• Applications
• Communications
• Processors
Technology
Selection
• Hardware
• Software
Fig. 3-(Extra): IT Architecture and Strategic Business Vision
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
DQ #4 Mary Kay, Inc.
Break
• 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).
• 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?
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
Business
Strategy
Technologists
____________
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• 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 paperbased 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.
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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• 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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• 2. What are the similarities and dissimilarities
between the cultures, values and beliefs of
Southwest and AirTran airlines?
• 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.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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Case Study 3-1: The Merger of Airtran by
Southwest Airlines: Will the Organizational
Culture Merge?
• 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.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
• 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.
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John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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• 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?
4. What would you recommend managers do to
ensure a smooth integration of the information
systems, given the culture differences?
• 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.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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• 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.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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SUMMARY
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
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