Chapter Seven

1. Chapter Seven Information Technology and Knowledge Management ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e

2. Evolution of Organizational Applications of Information Technology 3. Strategic Weapon TOP (strategy, plans, non-programmed) INTERNAL EXTERNAL • Networking • Intranets • Enterprise resource • planning • Extranets • E-Commerce • Network • structure 2. Business Resource • Management Information • systems • Decision Support Systems • Executive information • systems MANAGEMENT LEVEL Direction of Information System Evolution 1. Operations • Transaction • processing systems • Data warehousing FIRST-LINE (operational, past, programmed) LOW SYSTEM COMPLEXITY HIGH

3. Low-Cost Leadership Operational efficiency Interdepartmental coordination Rapid re-supply Differentiation Lock in customers Customer service Product development, market niches Strategic Advantages from Information Technology

4. Electronic Data Interchange for International Transactions Manufacturer’s Bank’ Customer’s Bank Suppliers MANUFACTURER Customer Export Freight Forwarder Import Clearing Agent Export Customs Import Customs

5. The Dynamic Network Organization Structure Distribution Manufacturing Health Products, Inc. (Central Hub) Marketing Accounts Receivable Public Relations

6. Key Characteristics of Traditional vs. Emerging Inter-organizational Relationships Traditional Inter-organizational Relationships Emerging Inter-organizational Relationships Arm’s-length relationship Use of telephone, mail, some EDI for ordering, invoicing, payments Interactive, electronic relationship Electronic ordering, invoicing, payments Suppliers Limited communication with manufacturer Mix of phone response, mail hard copy information Direct access to manufacturer, real-time information exchange Electronic access to product information, consumer ratings, customer service data Customers Source: Based on Charles V. Callahan and Bruce A. Pasternack, “Corporate Strategy in the Digital Age,” Strategy & Business, Issue 15, Second Quarter 1999, 10-14.

7. Mechanisms Technology Two Approaches to Knowledge Management Explicit Provide high-quality, reliable, and fast information systems for access of codified reusable knowledge Tacit Channel individual expertise to provide creative advice on strategic problems People-to-documents Develop an electronic document system that codifies, stores, disseminates, and allows reuse of knowledge Invest heavily in information technology, with a goal of connecting people with reusable codified knowledge Data warehousing Knowledge mapping Electronic libraries Intranets, networks Person-to-person Develop networks for linking people so that tacit knowledge can be shared Invest moderately in information technology, with a goal of facilitating conversations and the ex- change of tacit knowledge Dialogue Learning histories and storytelling Communities of practice Knowledge Management Strategy Source: Based on Morten T. Hansen, Nitin Nohria, and Thomas Tierney, “What’s Your Strategy for Managing Knowledge?” Harvard Business Review, March-April 1999, 106-116.