Chapter -06

1. Chapter -06 Summary

2. The interaction of organisations culture, structure and politics with IS To make profit from IS project managers need to make complementary changes in the organisation. Robbey and Boudreau’s theory on the impact of IS on an organisation identifies Four forces forces promoting and resisting the change. • Determinism – managers implement technologies for competitiveness or to meet the standards of service people expect. • Culture – members(staff) in an organisation may accept IS according to the culture, and may resist or oppose the same. • Institutions – authoritative rule in an organisation, taken for granted behaviors of the members of organisation limit the acceptance of IS. • Politics – different organisations got different political interests, which affect the acceptance of IS. These are the reasons for having indifferent results from an IS in a company.

3. The impact of culture on IS Culture of an organisation plays an important role in the success or failure of an IS. What is the culture in an organisation? Or what is organisational culture means? In general culture is the different values, that the members of an organisation believe in. There are set of social standards and boundaries as what is important, what is not, how to behave e.t.c. National and organisational cultures we can understand the importance of culture by dividing it into two categories: • Culture at national level. • Culture at organisational level. • Culture at sub-unit level

4. Culture at National level Culture at national level has got five dimensions( views): • power-distance • Uncertainty avoidance • Individualism – collectivism • Masculinity-feminism • Long-term and short-term orientation • Culture at organisational level According to organisational level, an organisation has competing values in two dimensions: • Flexibility and Control • Internal and External focus • Every organization is focusing on internal and external environment. Again every organisation is having flexibility and control.

5. Information Systems & Cultural Types(of organisation) FLEXIBILITY Open systems Human relations CAI(computer aided instruction) Group decision support E-Mail and conferencing Intranets Environmental scanning and filtering Inter-organisational linking Doubt and argument promoting Social Networking ? Extranets INTERNAL INTERNAL EXTERNAL Modelling Forecasting Sensitivity analysis CRM ? Internal monitoring Internal controlling Record keeping Optimising (e.g. typical Enterprise System) Internal process Rational goal ORDER Cooper (1994) and Quinn et al (2003)

6. 1. Open system culture (flexible and external) In an open system culture people focus on the external environment. People focus on external environment for ideas, energy and resources. But, people see it as complex, because it requires entrepreneurial, visionary leadership. Here motivating factors are growth, stimulation, creativity, and variety. For example business development departments in an organisation. 2. Rational goal ( external and control) culture According to rational goal culture people see an organisation as rational (based on reason) and efficiency seeking operation. Here effectiveness or efficiency is based on production and economic goals. According to this cultural type leadership is directive, goal-oriented and functional. Here motivating factors include competition, and achieving targets. For example production department in organisation.

7. 3. Internal process culture ( internal and control) Here members won’t pay attention to the external world. Here the focus is to make a department efficient, stable and controlled. In this culture leaders are conservative( focus on what they do), cautious, emphasizing technical issues. Here motivating factor is security, stability and order. For example public authorities and HR in a company. 4. Human relations culture ( internal and flexible) Members of human relations culture focus on informal and interpersonal relations. Here the main focus is on maintaining the organisation and well-being of the people. In this culture leaders are participative, and supportive. Here motivation comes from attachment to the organisation and members. For example professional service providers such as marketing consultants.

8. So, in an organisation there are people with different cultures, and different people will react to IS differently. For example, take the situation in a bank, where people from open system culture – business development department, will welcome the new idea of online banking., and where as people from internal process culture – IS/ IT department will not accept it happily. Because it would disturb the established operation. • Culture at Sub-unit levels There is cultural difference in different departments of an organisation. This can be categorized as follows: • Integration • Differentiation • Fragmentation • Integration Those who take the integration view, look for ways to support management proposals or decisions. To this group disagreement to management decisions are the result of miscommunication.

9. 2. Differentiation people taking this view will have different opinions or conflicts with others decisions or proposals. 3. Fragmentation People taking this view in an organisation will be uncertain or confused about new policies and its implications. Summary If people find IS supporting their current culture, they would accept it. But, if they believe it is threatening their culture, they are likely to reject it.

10. How structure of an organisation affects the success or failure of an IS? Common structures in an organisation We can understand the structure of an organisation by understanding the way decision is made in an organisation. There are two types as follows: • Centralisation • Decentralisation ( local-decision making) • Centralisation People at the top of the organisation( managers, CEOs) make most decisions, and the middle and lower level follows the same. It enables the people to respond consistently and avoids duplication. But the disadvantage is that while taking decisions the local conditions may not be taken into account.

11. b. Decentralisation or Local-Decision making Many decisions are made by the middle or lower levels. This method enables to understand the local situation while taking decisions. But, it may cause inefficiency in an organisation. Again, different practices may be exist in different parts of an organisation. Summary IS can support both centralised and decentralised decision practices. Read the case study of Kiwi-Fit on page 166 and 167. Managers can use computer based IS to increase central control and to increase decentralised control. Structure to support IS IS give people the opportunity to develop new business lines. For example online businesses. Again, IS gives opportunity to create new structures in the organisation. For example when starting an online business, it gives the opportunity to the managers to decide if to integrate the same with existing business or start a separate process. For example The New York Times newspaper has got a separate operation eventually for their digital edition. ( read the case study – The New York Times Digital – page 170)

12. Managers make the decision to integrate/link the business or separate based on the four dimensions such as; • Brand, management, operations and equity(share). IS enables New Structures IS developments making it possible for an organisation to change the organisation structure in the supply chain. IS helps to coordinate activities in physically separated locations. So, IS enable companies to enjoy freedom over; • The way they deal with customers(face-to-face or remotely) • To decide whether the company should have own resources or outsource. • Management of knowledge( using experts in other organisations as well as their own)

13. This development has created the new concept- Virtual Organisation. It means that IS makes it possible for companies to deliver goods and services with very little physical presence. According to experts the’ virtualness’ of an organisation depends on three measures; • customer interaction • Asset configuration • Knowledge leverage • Customer Interaction Customer interaction capability of IS is measured as how IS makes it easier for customers to experience products and services remotely with some amount of customisation( to make according to customer preferences) . IS when computerized or connected with television offers more possibilities for customers to view alternative( options), select their options and transact electronically.

14. 2. Asset configuration Asset configuration is the ability of IS based on how a firm coordinates resources and activities within the network. It is extended to supplier activities of IS. IS helps organisations to access a wide range of suppliers and customers by the help of internet. 3. Knowledge Leverage This means gaining access to different sources of expertise. IS allows the staff to access information generated elsewhere. For example, groupware tools.(helps to share information) Again, IS helps to share information throughout the organisation. IS makes it possible for a company to get expertise from customers and suppliers. According to Andal – Anclion IS can help an organisation to decide what type of relationship they want to have with an organisation such as;

15. 1. Disintermediation – avoiding all intermediaries( distributors) and deal directly with suppliers and customers. For example EasyJet airlines sells tickets only over internet. 2. Remediation – IS can help a company to work closely with intermediaries. 3. Network – based mediation Companies can use networks to make alliances and partnerships. For example Nokia has extensive partners with manufacturing and logistics expertise. The political aspect affecting IS The distribution of power in an organisation has got huge impact on the success or failure of an IS project. Power is an important factor in the organisation to achieve personal goals and rewards. People in an organisation can use IS to threaten, strengthen the distribution of power in an organisation. What is meant by the power in an organisation? • Power is the capacity of individuals to exert their will over others. • This power comes from coercion(use of force to make others follow), reward, expertise, technical expertise and referent.

16. Base of powers in an organisation A persons’ power in an organisation comes from their position in the organisation such as; • Coercive – the authority to give instructions with the threat of sanctions or punishment. • Reward – ability to use financial resources of an organisation to gain others support. • Administrative expertise – the holder of this power creates the organisational policies, therefore having the power over others. • Technical expertise – the people who got information has got the power, because they have the information as what happens around. • Referent – power of people to influence others, by showing that the proposal is according to values and culture of an organisation.

17. The impact of IS on an organisation regarding the power is as follows; • A. will IS affect their power? • Will it increase the power? • Will it decrease the existing power?