CSIS 114 Lab 8: Organizational Culture and Structure. Spring, 2006

1. CSIS 114 Lab 8:Organizational Culture and Structure. Spring, 2006

2. Part 1:Organizational culture • Shared understandings, values & assumptions in an organization • Influences information systems • Siena and IBM example Principles of Information Systems, Fifth Edition

3. IBM’s culture: then • Lifetime employment (up until 1987 !) • Social interaction: Kingston Country Club • Conservative dress • Our computers are the best • Other companies make computers, too? • Push the “big iron” Principles of Information Systems, Fifth Edition

4. IBM’s culture: now • 40 % mobile workforce • 30% women • Services to help customer use IT. • Collaboration & innovation • To respond to problems & opportunities • Personal responsibility & trust Principles of Information Systems, Fifth Edition

5. Siena’s Culture • Men with brown robes: Franciscan influence. • ROTC. • Strong athletic program and alumni support. • Academics: Liberal arts. • Students: mostly regional, Irish/Italian. Principles of Information Systems, Fifth Edition

6. Culture Characteristics:low or high on scale • Innovation & Risk taking – encouraged? • Attention to detail – precision, analysis • Outcome orientation (vs process) • People orientation - consideration • Team organization – work activities • Aggressiveness - competitiveness • Stability – status quo Principles of Information Systems, Fifth Edition

7. Function of Culture • Distinguishes organization from others • Conveys sense of identity to members • Commitment to group rather than self • Enhance social system stability – guidelines for behavior • Encourages conformity (control) - rewards Principles of Information Systems, Fifth Edition

8. Creating and maintaining culture • Stories - history • Rituals • Language – jargon or slogans • Material symbols: dress codes, office space, furnishings, other perks, rewards system Principles of Information Systems, Fifth Edition

9. Success story:“The Toyota Way” • “Kaizen” CI as frame of mind. • “Genchi genbutsu” : Go to the source for facts (not hearsay). • Seek challenge. View problems positively as opportunities to improve. • Teamwork: company interest first. • Respect for others and their knowledge. • Builds consistency in decision making aligned with the values of the company. Principles of Information Systems, Fifth Edition

10. NASA Case: • Read • Fill out worksheet • Discussion Principles of Information Systems, Fifth Edition

11. Part 2:Organizational structures • Affect information flow, work processes and the implementation of information systems that should empower and support workers. Principles of Information Systems, Fifth Edition

12. Organizational Structureinfluences information flow Lines of communication • Formal • Informal : IT makes CEO more accessible. Relationships make business processes work. • Vertical (control) vs Horizontal (collaborative) Principles of Information Systems, Fifth Edition

13. Traditional Organizational Structure • Fig. 2.3

14. Organizational StructureApproaches • Traditional – hierarchy • Industrial revolution and earlier • “command and control” • Rote work by unskilled staff • Flat • Project • Team • Multidimensional Principles of Information Systems, Fifth Edition

15. Example of Traditional Structure • Fig 2.4

16. “Flat” Organizational Structure • Less middle managers • Less up/down (filtering) communication • Empowerment of staff – via IS • Faster action and Lower costs • EX: Insurance rep handles entire case • Cable TV help desk can make decisions and provide refunds/extras (up to certain amount) • Be careful about becoming too flat: sometimes managers can see the big picture or resolve longer-term problems. Principles of Information Systems, Fifth Edition

17. Project Organizational Structure • Fig 2.5

18. DELL: Sales force structure changed to accommodate growth • Maintained double-digit sustained growth by market segmentation. • Each group has specific customers that they specialized in. • Each group was close-knit and entrepreneurial. • As sales grew, company split off more specialized groups- see next slide. Principles of Information Systems, Fifth Edition

19. Principles of Information Systems, Fifth Edition

20. Team Organizational Structure • Work groups of various sizes • Temporary or permanent teams • Peer pressure to perform • Each member learns all functions of team • Team can even make budgetary and hire/fire decisions Principles of Information Systems, Fifth Edition

21. Gore’s innovative organization model (makers of Gore-Tex) • Split divisions when they reach > 150 people. • Research indicates that people don’t feel part of community that is too large. • EX: Shakers split “families” that are too large. • No managers, just “mentors” • Titles, offices don’t mean a thing. Principles of Information Systems, Fifth Edition

22. Multidimensional Organizational Structure • Fig 2.6

23. Multidimensional (matrix) Organizational Structure • May incorporate several structures at the same time • Advantage: • ability to simultaneously stress both traditional corporate areas and important product lines • Two mentors • Flexibility to move people within functional area • Disadvantage: • multiple lines of authority Principles of Information Systems, Fifth Edition

24. Matrix case: Philips (then) • Dutch electronics mfr. • Had two reporting structures: • To product division • To each organization HQ for each country • Problem: accountability. • Who is responsible for performance? • Product division or country HQ ? Principles of Information Systems, Fifth Edition

25. Philips: now • Worldwide product divisions • Consumer electronics, medical products. • National offices report to worldwide org. • Encourage employees to work across business units and geographic regions by using training and incentives. Principles of Information Systems, Fifth Edition

26. Virtual Organizational Structure:diverse teams act as a single entity. • Employs business units in geographically or organizationally dispersed areas • Southwest airlines: Moms handle reservations at home • Contract out work to specialty shops • Can be permanent or temporary. • IS must support&coordinate virtual distributed organization. [e-mail, scheduling, videoconferencing, etc.] since workers mostly communicate electronically. Principles of Information Systems, Fifth Edition

27. Organizational innovation • Downsizing - “rightsizing” (layoffs or hiring freeze) • Vertical Integration • own all phases of production • Horizontal Integration (conglomerates) • Going into other lines of business • Acquisitions and mergers • Keiretsu: Japan’s answer to conglomerates • Can be either vertical or horizontally integrated • Virtual Integration • Business Web value chains: act as one company. • EX: Dell and its suppliers. CISCO and manufacturers. • Partnerships / Coopetition • Outsourcing/offshoring Principles of Information Systems, Fifth Edition

28. PART 3: Globalization.“…is the closer integration of the countries and peoples of the world which has been brought about by the enormous reduction of costs of TRANSPORTATION and COMMUNICATION and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders.”-Joseph Stiglitz Principles of Information Systems, Fifth Edition

29. Offshoring(ch. 14 in O’Brien) • Also known as: Off-shore outsourcing • More specific term than outsourcing. • Contract out to (or own) offshore company • GE, Texas Instruments have subsidiaries in India • Move sophisticated work to another country to take advantage of lower cost structures (finance, banking, call center, IT services: programming, system management). • Countries with innovative, educated in IT/engineering, English speaking, workers are successful. • Near-shoring to Canada: less cultural differences Principles of Information Systems, Fifth Edition

30. Off-Shoring projections • Gartner Inc. predicts that 40% of companies with revenue of more than $100 million will be trying out or using offshore services by the end of 2004. • Gartner also predicts that 24% of IT jobs will head offshore by the end of 2008. • Forrester Research Inc. projects that more than 3 million U.S. white-collar jobs will be lost to offshore outsourcing during the next 10 years or so -- a half-million of them in IT. Principles of Information Systems, Fifth Edition

31. When to outsource? • When you can cut costs. • Limited opportunity to distinguish competitively through the function. • When uninterrupted service is not critical. • When technical know-how can be maintained internally. • When existing IS function is ineffective or inferior. [Stair, p 523] Principles of Information Systems, Fifth Edition

32. Outsourcing: 7 lenses model • An analysis technique used to discover various facets of a problem. • Forces us to look at many perspectives (lenses) of a problem, rather than basic Pro/Con analysis. • Systematic framework that captures the forces and trends that affect a business problem. Some items can be in more than one lens. Principles of Information Systems, Fifth Edition

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34. Political issues International National Organizational levels Relates to trade, political tensions, competition, etc. Organizational issues Management issues Structural issues Work flow Labor issues Project mgt. etc. 7 Lenses Principles of Information Systems, Fifth Edition

35. Economic issues Labor costs Trade Taxes Currency Other costs Technological Internet Telecommunications Software, shareware Web E-commerce collaboration Principles of Information Systems, Fifth Edition

36. Cultural Language Religion Values Demographics Gender Way of doing business Educational Problems with existing educational structure. Future education needs for future workforce. Principles of Information Systems, Fifth Edition

37. Legal Contracts Intellectual property Unions & Labor laws Environmental protection laws Data and privacy laws Principles of Information Systems, Fifth Edition

38. Finish up… • Read: Jolly technologies and the Delta airlines cases. • Fill out worksheet, try to identify issues in the 7 categories. • Discuss. • On-line quiz. Principles of Information Systems, Fifth Edition