Information Technology and Organizational Decision Making

Information Technology and Organizational Decision Making Chuck Davies

PREMISE • The Effects of Advanced Technologies on Organizational Design, Intelligence and Decision Making • G.P Huber (1990)

Contents • Traditional vs. Advanced IT • Properties of Advanced IT • Decision Variables • Subunit • Organizational Design • Organizational Memory • Organizational Intelligence

Traditional IT • Operating Systems • Windows 7, XP, Linux • Desktops • “Simple” Applications - Microsoft Office, Notepad, Quick books

Advanced Technology • Basic Characteristics • Data Storage: Hard drive, removable media, tapes • Transmission capacity: WAN,LAN, Wireless • Processing Capacity: CPU power, database processing, memory storage

Organizational Decision Systems

Properties of Advance Technology • Task Relevant • Improve overall user performance • User Support in day-to-day activities

Context of the Properties • Communication It allows the ability to: • Communicate more easily and less expensively across time and location • Communicate more rapidly, with more precision to targeted groups • Record and index more reliably an inexpensively the content of communication • More control in the group participation selectivity in the network

Decision Aiding It facilitates the ability to: • Store and retrieve large amounts of information more quickly and inexpensively • More rapidly and selectively access information created outside the organization • More rapidly and accurately combine and reconfigure information so as to create new information • More compactly store and quickly use the judgment and decision models developed in the minds of experts • More reliably and inexpensively record and retrieve information about content and nature of organizational transactions

Impressions • It is a mistake to view advanced technology as substitutes for traditional technology? • “IT are frequently used as supplements… rather than substitutes”

Impressions cont’d • “For example, e-mail is often used to confirm with text what was said in a phone conversation” - Virtual Companies/Enterprises • Image Transmission devices used to digitize ALREADY available images?

Drive for IT Advancement • External Competition: The need to beet competitors with rapid communication • Internal Competition: In highly politicized organizations, project leaders need task achievement, group control and coordination on demand They may have a reputation to keep – Apple, Google

Decision Variables

Effect at the Subunit level • Proposition 1 • Use of computer-assisted communication technologies leads to a larger variety of people participating as information sources in the making of a decision

Subunit level • Proposition 2 • Use of computer-assisted communication and decision-support technologies leads to decreases in the number and variety of members comprising the traditional face-to-face decision unit

Subunit level According to proposition 2 the unit becomes smaller, proposition 1 states it has a larger pool of contributors Conflict?

Conflict Solution • This paradox results from having more experts specializing in certain areas • The beginnings of an Expert System

Subunit level • Proposition 3 • Use of computer-assisted communication and decision support technologies results in less of the organization’s time being absorbed by decision-related meetings

Mini-Meeting • DSS can allow analyses that provide information which can resolve disagreements about significant effects of assumptions • Allows progress to continue without adjournment and rescheduling

Mini-Meeting • DSS, email, IM, and other technology reduce the number of formal meetings • Using technology such as Google wave, IBM Lotus Domino, etc - virtual meetings

Organizational Level • Do Advancements in IT lead to more centralization or decentralization?

Answer • It decentralizes centralized organizations and centralizes decentralized organizations!

Proposition 4 • For a given organization, use of computer-assisted communication and DSS leads to more uniform distribution across organizational levels • Evening the decision making ability of each level

Proposition 5 • Broadened use of computer-assisted communication and DSS leads to greater variation across organizations in levels at which the particular type of decision is made Is there a conflict with Prop 2 (smaller groups that are homogeneous)?

Diversity vs. Homogeneity • Prop 2 states the groups will be smaller and more homogeneous • Prop 5 states that the collection of these groups throughout the organization will lead to diversity at different levels as opposed to within the group

Proposition 6 & 7 • Reduces the number of levels involved in authorizing proposed organizational actions • GSS actually destroys Hierarchy problems – direct access to relevant managers and stakeholders

Organizational Memory • Prop 8 – Advanced IT leads to a more reliance on databases to store data. Improving organizational memory and transferability. Data bases are long lasting, index able, propriety

Organizational Memory • Prop 9 – easier to use advanced IT encourages the development of in-house expert systems These are the ultimate form of labor capitalization. • Decision Trees • Regression • Neural Networks

Organizational Intelligence Use of Advanced IT ultimately leads to Rapid and efficient DSS. They identify weaknesses and opportunities Decisions are more accurate and timely – An example is Heart attack diagnosis Decision Trees

Questions • Thank You • /end

Information Technology and Organizational Decision Making