CSIS 114 Lab 8:
Organizational Culture and
Structure. Spring, 2006
Part 1:
Organizational culture
Shared understandings, values &
assumptions in an organization
Influences information systems
Siena and IBM example
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 2
IBM’s culture: then
Lifetime employment (up until 1987 !)
Social interaction: Kingston Country
Club
Conservative dress
Our computers are the best
Other companies make computers, too?
Push the “big iron”
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 3
IBM’s culture: now
40 % mobile workforce
30% women
Services to help customer use IT.
Collaboration & innovation

To respond to problems & opportunities
Personal responsibility & trust
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 4
Siena’s Culture
Men with brown robes: Franciscan
influence.
ROTC.
Strong athletic program and alumni
support.
Academics: Liberal arts.
Students: mostly regional, Irish/Italian.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 5
Culture Characteristics:
low or high on scale
Innovation & Risk taking – encouraged?
Attention to detail – precision, analysis
Outcome orientation (vs process)
People orientation - consideration
Team organization – work activities
Aggressiveness - competitiveness
Stability – status quo
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 6
Function of Culture
Distinguishes organization from others
Conveys sense of identity to members
Commitment to group rather than self
Enhance social system stability –
guidelines for behavior
Encourages conformity (control) rewards
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 7
Creating and maintaining
culture
Stories - history
Rituals
Language – jargon or slogans
Material symbols: dress codes, office
space, furnishings, other perks, rewards
system
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 8
Success story:“The Toyota Way”
“Kaizen” CI as frame of mind.
“Genchi genbutsu” : Go to the source for facts
(not hearsay).
Seek challenge. View problems positively as
opportunities to improve.
Teamwork: company interest first.
Respect for others and their knowledge.

Builds consistency in decision making aligned with
the values of the company.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 9
NASA Case:
Read
Fill out worksheet
Discussion
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 10
Part 2:
Organizational structures
Affect information flow, work processes
and the implementation of information
systems that should empower and
support workers.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 11
Organizational Structure
influences information flow
Lines of communication
Formal
Informal : IT makes CEO more
accessible. Relationships make
business processes work.
Vertical (control) vs Horizontal
(collaborative)
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 12
Traditional Organizational
Structure
Fig. 2.3
Organizational Structure
Approaches
Traditional – hierarchy
Industrial revolution and earlier
 “command and control”
 Rote work by unskilled staff

Flat
Project
Team
Multidimensional
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 14
Example of Traditional
Structure
Fig 2.4
“Flat” Organizational Structure
Less middle managers

Less up/down (filtering) communication
Empowerment of staff – via IS
Faster action and Lower costs
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EX: Insurance rep handles entire case
Cable 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 longerterm problems.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 16
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.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 18
1994
$3.5 B
Small customers
Large customers
1996
$7.8 B
Large
Co's
Midsize
Co's
Govt&
Ed
Mid
Co's
State
&
Local
Small
customers
1997
$12 B
Global
Enter.
accts
Chapter 2
Large
Co's
Fed
Principles of Information Systems,
Fifth Edition
Educ
Small
Co's
Consumers
Slide 19
Team Organizational Structure
Work groups of various sizes
Temporary or permanent teams
 Peer pressure to perform
 Each member learns all functions of team
 Team can even make budgetary and
hire/fire decisions

Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 20
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.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 21
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 mentors
 Flexibility to move people within functional area
Disadvantage:
 multiple lines of authority
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 23
Matrix case: Philips (then)
Dutch electronics mfr.
Had two reporting structures:
To product division
 To each organization HQ for each country

Problem: accountability.
Who is responsible for performance?
 Product division or country HQ ?

Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 24
Philips: now
Worldwide product divisions

Consumer electronics, medical products.
National offices report to worldwide org.
Encourage employees to work across
business units and geographic regions
by using training and incentives.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 25
Virtual Organizational Structure:
diverse teams act as a single entity.
Employs business units in geographically or
organizationally dispersed areas


Southwest airlines: Moms handle reservations at
home
Contract 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.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 26
Organizational innovation
Downsizing - “rightsizing” (layoffs or hiring freeze)
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 / Coopetition
Outsourcing/offshoring
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 27
PART 3: Globalization.
“…is the closer integration of the countries and
peoples of the world which has been brought
about by the enormous reduction of costs of
TRANSPORTATION and COMMUNICATION
and the breaking down of artificial barriers to
the flows of goods, services, capital,
knowledge, and (to a lesser extent) people
across borders.”
-Joseph Stiglitz
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 28
Offshoring
(ch. 14 in O’Brien)
Also known as: Off-shore outsourcing


More specific term than outsourcing.
Contract out to (or own) offshore company

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GE, Texas Instruments have subsidiaries in India
Move 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
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 29
Off-Shoring projections
Gartner 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 24% of IT jobs will
head offshore by the end of 2008.
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.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 30
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]
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 31
Outsourcing: 7 lenses model
An analysis technique used to discover
various facets of a problem.
Forces us to look at many perspectives
(lenses) of a problem, rather than basic
Pro/Con analysis.
Systematic framework that captures the
forces and trends that affect a business
problem. Some items can be in more than
one lens.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 32
POLITICAL
ORGANIZATIONAL
LEGAL
LENSES
CULTURAL
ENVIRONMENTAL
ECONOMIC
Chapter 2
TECHNICAL
Principles of Information Systems,
Fifth Edition
Slide 33
7 Lenses
Political issues
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Organizational issues
International
National
Organizational levels
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Relates to trade,
political tensions,
competition, etc.
Chapter 2
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Management issues
Structural issues
Work flow
Labor issues
Project mgt. etc.
Principles of Information Systems,
Fifth Edition
Slide 34
Economic issues
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Labor costs
Trade
Taxes
Currency
Other costs
Technological
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Chapter 2
Internet
Telecommunications
Software, shareware
Web
E-commerce
collaboration
Principles of Information Systems,
Fifth Edition
Slide 35
Cultural
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Educational
Language
Religion
Values
Demographics
Gender
Way of doing
business
Chapter 2
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Problems with
existing educational
structure.
Future education
needs for future
workforce.
Principles of Information Systems,
Fifth Edition
Slide 36
Legal
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Contracts
Intellectual property
Unions & Labor laws
Environmental
protection laws
Data and privacy
laws
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 37
Finish up…
Read: Jolly technologies and the Delta
airlines cases.
Fill out worksheet, try to identify issues
in the 7 categories.
Discuss.
On-line quiz.
Chapter 2
Principles of Information Systems,
Fifth Edition
Slide 38