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

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

3. Chapter 2Slide 3 Principles of Information Systems, Fifth Edition 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”

4. Chapter 2Slide 4 Principles of Information Systems, Fifth Edition 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

5. Chapter 2Slide 5 Principles of Information Systems, Fifth Edition Siena’s Culture Men with brown robes: Franciscan influence. ROTC. Strong athletic program and alumni support. Academics: Liberal arts. Students: mostly regional, Irish/Italian.

6. Chapter 2Slide 6 Principles of Information Systems, Fifth Edition 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

7. Chapter 2Slide 7 Principles of Information Systems, Fifth Edition 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

8. Chapter 2Slide 8 Principles of Information Systems, Fifth Edition Creating and maintaining culture Stories - history Rituals Language – jargon or slogans Material symbols: dress codes, office space, furnishings, other perks, rewards system

9. Chapter 2Slide 9 Principles of Information Systems, Fifth Edition 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.

10. Chapter 2Slide 10 Principles of Information Systems, Fifth Edition NASA Case: Read Fill out worksheet Discussion

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

12. Chapter 2Slide 12 Principles of Information Systems, Fifth Edition Organizational Structure influences information flow Lines of communication Formal Informal : IT makes CEO more accessible. Relationships make business processes work. Vertical (control) vs Horizontal (collaborative)

13. Traditional Organizational Structure Fig. 2.3

14. Chapter 2Slide 14 Principles of Information Systems, Fifth Edition Organizational Structure Approaches Traditional – hierarchy Industrial revolution and earlier “command and control” Rote work by unskilled staff Flat Project Team Multidimensional

15. Example of Traditional Structure Fig 2.4

16. Chapter 2Slide 16 Principles of Information Systems, Fifth Edition “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.

17. Project Organizational Structure Fig 2.5

18. Chapter 2Slide 18 Principles of Information Systems, Fifth Edition 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.

19. Chapter 2Slide 19 Principles of Information Systems, Fifth Edition

20. Chapter 2Slide 20 Principles of Information Systems, Fifth Edition 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

21. Chapter 2Slide 21 Principles of Information Systems, Fifth Edition 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.

22. Multidimensional Organizational Structure Fig 2.6

23. Chapter 2Slide 23 Principles of Information Systems, Fifth Edition 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

24. Chapter 2Slide 24 Principles of Information Systems, Fifth Edition 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 ?

25. Chapter 2Slide 25 Principles of Information Systems, Fifth Edition 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.

26. Chapter 2Slide 26 Principles of Information Systems, Fifth Edition 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.

27. Chapter 2Slide 27 Principles of Information Systems, Fifth Edition 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

28. Chapter 2Slide 28 Principles of Information Systems, Fifth Edition 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

29. Chapter 2Slide 29 Principles of Information Systems, Fifth Edition 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

30. Chapter 2Slide 30 Principles of Information Systems, Fifth Edition 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.

31. Chapter 2Slide 31 Principles of Information Systems, Fifth Edition 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]

32. Chapter 2Slide 32 Principles of Information Systems, Fifth Edition 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.

33. Chapter 2Slide 33 Principles of Information Systems, Fifth Edition

34. Chapter 2Slide 34 Principles of Information Systems, Fifth Edition 7 Lenses 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.

35. Chapter 2Slide 35 Principles of Information Systems, Fifth Edition Economic issues Labor costs Trade Taxes Currency Other costs Technological Internet Telecommunications Software, shareware Web E-commerce collaboration

36. Chapter 2Slide 36 Principles of Information Systems, Fifth Edition Cultural Language Religion Values Demographics Gender Way of doing business Educational Problems with existing educational structure. Future education needs for future workforce.

37. Chapter 2Slide 37 Principles of Information Systems, Fifth Edition Legal Contracts Intellectual property Unions & Labor laws Environmental protection laws Data and privacy laws

38. Chapter 2Slide 38 Principles of Information Systems, Fifth Edition 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.