FREE online courses on Information Technology - Chapter 3 THE IMPACT OF
INFORMATION TECHNOLOGY - MODERN ORGANIZATION
Unfortunately, we cannot point to one unified picture that
has emerged from various approaches to the study of organizations. We still are
confronted with many different ideas about organizations and the way they
operate.
A number of writers studied organizations from the standpoint
of their structure to understand how to design better organizations. These
approaches help us to understand how information is used in the organization and
to appreciate what kinds of changes might be created by the introduction of new
information systems.
Uncertainty one of the major factors influencing
organizations is uncertainty. Many authors suggest that managers try to
eliminate or reduce uncertainty. An organization and its manager confront many
different types of uncertainty. There are frequently technical uncertainties
about whether a new product can be manufactured or whether or not it will work.
Market uncertainties exist when the firm does not know how a product will be
received, potential demand, response from competitors, and so on. The internal
management of an organization also creates uncertainty. Key personnel may leave
or individuals may not adequately perform their assigned tasks. Thus, the
organization and its managers face many different types and degrees of
uncertainty.
The importance of uncertainty is seen by examining
organizations that face differing environments. Consider a chip manufacturer
like Intel confronted with the dynamic environment of technological change
versus the staid, conservative atmosphere of a regulated utility facing
virtually no uncertainty. There is some evidence that uncertainty is most
effectively handled by decentralizing decision making to a level in the
organization with information to resolve it.
Another major consideration in organizational design is
specialization. Are specialized skills or conditions required for some task?
Consider the activity of running a complicated machine tool versus sweeping the
building; certainly, the former requires a specialist. From our standpoint, the
information services department is highly specialized and requires a level of
technological proficiency on the part of its staff.
The last factor we shall consider in organizational structure
is interdependence; that is, how do the different departments or subunits within
the organization depend on others? Thompson (1967) has described three types of
mutual dependence. Pooled interdependence occurs when two organizations
depend on each other because they are all components of a larger organization;
one unit does not depend directly on another. For example, the different
divisions of a conglomerate exhibit pooled interdependence.
Sequential
interdependence occurs when the output of one unit is the input to another.
For example, the painting and finishing department depends on outputs from
component assembly. We can view each succeeding station on an assembly line as
example of sequential interdependence.
Reciprocal
interdependence occurs when the output of one unit becomes the input for the
other. For example, a student depends on the professors to explain concepts in
class so that she can do her assignment and the professor depends on students to
prepare for class.
Interdependence is an important consideration in
organizational design. The type of interdependence affects the amount of power
one unit has in the example, through the development of a new information
system), various interdependencies must be coordinated. The easiest type of
interdependence to handle is pooled, the next hardest is sequential, and the
most difficult is reciprocal.
Mintzberg's Model
Mintzberg (1979) has developed an elegant theory of how
organizations are structured. First, he conceptualizes the organizations as
consisting of five major components.
a)
Operating Core
b)
Strategic apex
c)
Middle line
d)
Technostructure
e)
Support Staff
The operating core
carries out the basic work of the organization; in a manufacturing organization
it produces the product. It also handles all the support tasks necessary for
production.
At the next level in the organization is an administrative
components that consists of three groups. At the top is the strategic apex, senior-level executives
responsible for all the operations of the firm. Below the strategic apex, is the
middle line, which links the top group to the operating core. At the left of
the middle line is the technostructure, where analysts
standardize the work of others. For example, we would find operations research
analysts in the technostructure.
The last group is the
support staff on the right of the figure. This group supports the
functioning of the operating core through indirect activities, for example, the
research and development organization, legal counsel, and similar groups.
Using some of the coordination considerations discussed
earlier in this chapter and further analysis, Mintzberg scheme (he does not
discuss this activity in depth). For many organizations, basic information
processing systems really belong in the operating core; the firm needs these
systems to function effectively. The systems analysis and design activity,
however, probably fits best in the technostructure because this group
concentrates on improving the work of others. System designers must develop a
system, which is a form of research and development, and then in many cases must
successfully transfer it to the operating core.
In other instances, a system is designed for middle
management, the strategic apex, or even the support staff. The analyst's job
then involves a great deal of boundary-spanning activity to integrate activities
across a number of organizational boundaries. In fact, many systems are likely
to involve information that flows across major organizational subunits.
