COMMUNICATION IN ORGANIZATIONS

1. COMMUNICATION IN ORGANIZATIONS Lecture 11a INFORMATION TECHNOLOGY IN ORGANIZATIONS

2. KEY ELEMENT OF AN ORGANIZATION: REVIEW • TWO OR MORE INDIVIDUALS • WHO DEVELOPCOORDINATION AND CONTROLRELATIONSHIPS

3. Coordination-Control Harder as Organization Gets Bigger • GLOBALIZATION • OVEREXTENDED OPERATIONS • TIME STRESSES • UNPREDICTABLE CHANGES • Political, business, economic, social • TURBULENT ENVIRONMENT • Complex and Dynamic: LEADS TO:

4. ORGANIZATIONAL COMPLEXITY • MORE MANAGERIAL LAYERS • ELABORATION OF PROCEDURES AND CONTROLS • HIGH ADMINISTRATIVE OVERHEAD • OVER RELIANCE ON COMMUNICATION BY PAPER

5. More Rules and Managers Not The Answer • As Machine or Divisionalized Machine orgs. expand into other parts of the world and operate in other countries, they can’t help themselves • They extend their bureaucratic report/decide rules to those areas • Local managers can’t decide much without checking with HQ. Lots of local problems that the people at HQ don’t know much about and can’t deal with, but • Local managers have to wait until HQ decides – and suffer with their poor decisions • The org. environment has become far more complex – and if the firm stabilizes the local environment what type of structure do they need?

6. FOUR ENVIRONMENTS AND STRUCTURAL CHANGE 4. 3. THEY DON’T SUDDENLY BECOME PROFESSIONAL BUREAUCRACIES AND LET LOCAL MANAGERS MAKE ALL THE DECISIONS COMPLEX 1. DIVISIONALIZED MACHINE BUREAUCRACY MACHINE BUREAUCRACY 2. SIMPLE DYNAMIC STABLE

7. 3. LAYERS OF CONTROL PATHOLOGIES 2. HIERARCHY AND CONTROL DIV. MACHINE BUREAUCRACY FOUR ENVIRONMENTS AND STRUCTURAL CHANGE 4. COMPLEX 1. SIMPLE DYNAMIC STABLE

8. ORGANIZATIONAL PATHOLOGIES • BRANCH / HEADQUARTERS TENSIONS • DEPERSONALIZATION OF MANAGEMENT • COMMUNICATION PROBLEMS • OMISSION • DISTORTION

9. ORGANIZATIONAL PATHOLOGIES CON’T… • FRAGMENTED UNDERSTANDING • INEFFICIENT TEAMWORK • SUBSERVIENCE TO DOCUMENTS • MIDDLE MANAGEMENT DILEMMAS

10. COMPUTERIZATION WAS SUPPOSED TO HELP • It didn’t – the first systems were centralized at HQ • Controlled by a group of professional operators • Number-driven • Managers could only ask for certain types of reports • Would only get what the computer could give • People would have to line up to get their requests fulfilled • Simply speeded up and extended central control

11. FOUR ENVIRONMENTS AND IT CHANGE 4. 3. CENTRALIZED INTELLIGENCE MAIN FRAMES CONTROL COMPLEX 1. 2. HIERARCHY AND CONTROL MACHINE BUREAUCRACY SIMPLE DYNAMIC STABLE

12. WHAT WE NEEDED WAS INFORMATION TECHNOLOGY THAT WOULD COUNTER THE PATHOLOGIES • SIMPLIFY ORGANIZATIONS • CREATE STRUCTURE AND LOCATION-INDEPENDENT ORGANIZATIONS • FACILITATE COLLABORATIVEORGANIZATIONS • MAKE IT EASIER TO COMMUNICATE THAN NOT TO • REPERSONALIZEMANAGEMENT (KEEN)

13. DEALING WITH PROBLEMS OF OMISSION AND DISTORTION OVER DISTANCE • REDUNDANCY • Send it twice – more time and resources 2. VERIFICATION • Check to see if it’s the “real” message – more time and resources 3. BYPASSING – “Talk to somebody” • Undermine local authority – use “back channel” communication • When done interpersonally – managers talking to other managers - these solutions create “political” problems in organizations • In particular, undermines control in name of coordination

14. I.T. APPROACH TO PROBLEMS OF OMISSION AND DISTORTION BUT CONTEMPORARY INFORMATION TECHNOLOGY(IT) HANDLES THIS A COMMON NETWORK OF DATABASES, ACCESSIBLE BY ALL, FROM ANYWHERE AND ANYPLACE IN THE COMPANY CAN DEAL WITH THIS • MANAGERS AND EMPLOYEES CAN ACCESS COMMON DATABASES TO SOLVE PROBLEMS INSTANTLY • NO ONE HAS TO ASK ANYBODY IF THE SOLUTION IS SUGGESTED BY THE DATA IN THE SYSTEM • EVERYBODY CAN SEE EVERYBODY ELSE’S CHOICES

15. Summary: The Four Environments and IT Changes 4. 3. CENTRALIZED INTELLIGENCE MAIN FRAMES CONTROL NETWORKED INTELLIGENCE COLLABORATION COMPLEX 1. 2. DECENTRALIZED INTELLIGENCE PC access to Databases AUTONOMY HIERARCHY AND CONTROL DIV. MACHINE BUREAUCRACY SIMPLE DYNAMIC STABLE

16. INFORMATION TECHNOLOGY (IT) • CREATES A “LEGITIMATE” FORM OFBYPASSING • TELECONFERENCING, E-MAIL, INSTANT MESSAGING, FAXES • AUDIO AND VIDEO COMPUTER CONFERENCING • GROUP DECISION-MAKING SUPPORT SYSTEMS • EXPERT SYSTEMS (D-BASE) • INTERNET AND THE WORLD WIDE WEB (READINGS: p. 357) • FLATTENS ORGANIZATIONS • CONNECTS HIGH OFFICIALS WITH LOW LEVELS • MAKES IT EASY TO RECOMMEND UPWARDS • HIERARCHY TO ADHOCRACY • ALL THIS WORKS BECAUSE OF A CHANGE IN HOW WE FORMAT AND DELIVER INFORMATION – NEXT LECTURE.

18. COMMUNICATION IN ORGANIZATIONS Lecture 11b INFORMATION TECHNOLOGY IN ORGANIZATIONS

19. INFORMATION TECHNOLOGY • TRADITIONAL MANAGEMENT INFORMATION SYSTEMS • HARD INFORMATION - NUMBERS DRIVEN • HERARCHICAL • INFORMATION TECHNOLOGY PERMITS “SOFT” INFOTO FLOW • DOCUMENT DRIVEN • AND / OR PERSON DRIVEN • NETWORK CENTERED

20. PRES. Mgr. Sales Mgr. Finance Mgr. Mfg. Super Super Super Super Super Super FORMAL ORGANIZATION INFORMATION FLOW

21. PRES. Mgr. Sales Mgr. Finance Mgr. Mfg. Super Super Super Super Super Super INFORMAL ORGANIZATION NETWORK INFORMATION FLOW

22. EXAMPLES OF BENEFICIAL USES OF I.T.: • COORDINATION VS. CONTROL • AIRLINE RESERVATION SYSTEM: • REDUCES COORDINATION COSTS • ACCESS TO RAPIDLY CHANGING FARES, DEALS, FLIGHT CHOICES • AIRLINES MAKE MONEY OFF THEIR SERVICE - SELL IT TO INDUSTRY

23. EXAMPLES OF BENEFICIAL USES OF I.T.: • FRITO LAY: • EACH SALES PERSON HAS PERSONAL COMPUTER • CONSTANTLY UPDATED INFO ON SALES • DECISIONS MADE BY AREA HEADS, NOT CORPORATE HEADQUARTERS

24. EXAMPLES OF BENEFICIAL USES OF I.T. CON’T INTERNATIONAL COMPUTER SYSTEMS - SALES AND SERVICE DATA BASE: • EASILY ACCESSED • TIME AND EFFORT TO RESPOND IS LOW 2. NEUTRAL WAY - NO PERSONAL RISK • FEWER THAN 15% OF REPLIERS KNOW ASKERS 3. ANSWERS ARCHIVED FOR FUTURE ACCESS • DON’T LOSE VALUABLE INFO

25. EXAMPLES OF BENEFICIAL USES OF I.T. CON’T THE VIRTUAL ORGANIZATION • MARKET VS. HIERARCHY • MARKET CHEAPER IF YOU CAN KEEP COORDINATION COSTS LOW • AN OFFICE, A FEW STAFF AND AN I.T. SYSTEM 1. INPUT PROCESSES: COORDINATED DESIGNERS, SUPPLIERS ALL ON CONTRACT 2. THROUGHPUT: (TRANSFORMATION) PROCESSES COORDINATED BY I.T. • MANUFACTURING IS CONTRACTED 3. OUTPUT PROCESSES: COORDINATED BY I.T. • SHIPPING, DISTRIBUTION, SALES BY CONTRACT

26. IT USE: CONDITIONS FOR SUCCESSFUL USE • NATURE OF COMMUNICATION TASK • UNABMIGUOUS: ONE OR FEW MEANINGS, COMPLEMENTARY INTERPRETATIONS OF AN ISSUE • AMBIGUOUS: MULTIPLE, CONFLICTING INTERPRETATIONS OF AN ISSUE

27. IT USE: CONDITIONS FOR SUCCESSFUL USE • THE INFORMATION CARRYING CAPACITY OF MEDIA • RICH • INSTANT FEEDBACK, MULTIPLE CUES, NATURAL LANGUAGE, PERSONAL FOCUS • LEAN • DELAYED FEEDBACK, FEW CUES, TEXT OR NUMBERS ONLY, IMPERSONAL

28. MUTUAL ADJUSTMENT IT: CONDITIONS FOR SUCCESSFUL USE UNAMBIGUOUS TASK AMBIGUOUS TASK COMMUNICATION FAILURE RICH MEDIA USED FOR ROUTINE TASKS - OVERLOAD EXCESS CUES - CONFUSION, SURPLUS MEANING EFFECTIVE COMMUNICATION MEDIA CAPACITY MATCHES TASKEG: FACE-TO-FACE TALK RICH MEDIA COMMUNICATION FAILURE DATA STARVATION. TOO FEW CUES TO CAPTURE MESSAGE COMPLEXITY EFFECTIVE COMMUNICATION MEDIA CAPACITY MATCHES TASKEG: E-MAIL OR MEMO LEAN MEDIA KIT p. 200

29. WHEN ORG. CHANGE WITH I.T. CAN’T SUCCEED 1. IN “CRISIS” OR “PRESSURE” SITUATIONS • FEW SYSTEMS PROVIDE “RICH” ENOUGH INFORMATION FOR DIFFICULT MORAL/ETHICAL DECISIONS • FACE TO FACE STILL BETTER 2. WHEN ORGANIZATION LEADERS DON’T UNDERSTAND CHANGES REQUIRED • PRIMARY FOCUS ON TOP-DOWN USE • NO MONEY OF COMMITMENT TO MULTI-LEVEL SYSTEM

30. WHEN ORG. CHANGE WITH I.T. CAN’T SUCCEED 3. AUTOMATE THE WRONG PROCESSES • MOST SHOULD BE RE-DESIGNED AND REPLACED • THEY WERE BUILT UP OUT OF PAPER-PEOPLE CONTROLS • REENGINEERING FROM CLEAN PAGE • SPEED UP A POOR PROCESS • OVERWHELMED STRATEGIC APEX WITH DATA • OVERWHELMED MIDDLE MANAGEMENT WITH COLLECTING IT

31. WHEN ORG. CHANGE WITH I.T. CAN’T SUCCEED 4. WHEN I.T. SEEN AS A “SILVER BULLET” • WHEN I.T.FOLKS THINK THAT THE CHANGE IS IN THE INFORMATION TECHNOLOGY (IT) ITSELF - “JUST GIVE THEM THE TOOLS AND THEY WILL CHANGE” - WRONG • FAKE EMPOWERMENT • PEOPLE AREN’T EMPOWERED BY I.T. • PEOPLE MAKE IT WORK NOT THE OTHER WAY AROUND • THEY ARE EMPOWERED ABOUT I.T. • WHEN THEY THOROUGHLY UNDERSTANDI.T. • WHEN THEY FEEL ACCOUNTABLE FOR IMPLEMENTING AND USINGI.T. • REAL EMPOWERMENT ABOUT I.T. IS HARD • IT’S COMPLEX • FRAMED IN INCOMPREHENSIBLE JARGON • DROPPED ON PEOPLE IN THE MIDST OF BUSINESS AS USUAL

32. WHEN ORG. CHANGE WITH I.T. CAN SUCCEED Don’t automate work, obliterate it. • Hammer and Champy • Original Design: The processing of a new policy at a UK insurance company involved ten handoffs and took at least 40 days to complete. • Redesign: A case-manager approach was implemented so that only one handoff occurred, and the policy was processed in less than seven days. • Each person was able to access all needed information and assemble the policy properly on their desktops • The handoff was for quick review for quality • Effective redesign: requires more than I.T. (computing) technology • Requires • Change in roles and responsibilities; measurements and incentives; organizational structure; development of shared values and new skills. • An organization-wide I.T. change project will fail without the full, active commitment and involvement of senior executives supporting not only the technology but necessary “people focused” changes • EUGENE A. HALL, JAMES ROSENTHAL, AND JUDY WADE The McKinsey Quarterly, 1994 Number 2, pp. 107–128