Tutorial 4

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Tutorial 4: Organizational Impacts of Information System Use

PURPOSE
The purpose of this assignment is to strengthen students’ understanding of the
organizational impact on information system use.

Question 1:

Define TWO (2) features of a flat organization structure and TWO (2) features of a networked
organization structure, and list THREE (3) disadvantages for each structure.

Flat Organization Structure:


1. Decentralized Decision-Making: In a flat organization structure, decision-making
authority is delegated to lower levels of the organization. This means that employees
have more autonomy and are empowered to make decisions relevant to their work
without needing constant approval from higher-level managers.
2. Fewer Hierarchical Levels: Flat organizations typically have fewer hierarchical levels
compared to traditional organizational structures. This leads to a shorter chain of
command, faster communication, and a more agile decision-making process.
Disadvantages of a Flat Organization Structure:
1. Lack of Clear Authority and Accountability: With decentralized decision-making, it
can be challenging to determine who is responsible for specific outcomes or
decisions. This can lead to confusion and a lack of clear accountability within the
organization.
2. Potential for Overworked Managers: In a flat organization, managers often have
broader responsibilities and oversee larger teams. This can result in increased
workload and potential burnout for managers who may find it difficult to handle
their expanded roles effectively.
Networked Organization Structure:
1. Collaboration and Flexibility: Networked organizations are characterized by strong
collaboration and flexibility. They focus on building connections and relationships
with external partners, suppliers, and customers. This allows for the pooling of
resources, expertise, and ideas from different sources, promoting innovation and
adaptability.
2. Scalability and Adaptability: Networked organizations can quickly scale their
operations and adapt to changing market conditions. By leveraging external
partnerships and resources, they can easily access additional capabilities, expand
into new markets, and respond to customer demands more effectively.
Disadvantages of a Networked Organization Structure:
1. Reliance on External Relationships: Networked organizations heavily rely on external
partnerships and relationships. This dependence can pose risks, as the organization's
performance may be affected by the actions or decisions of external entities over
which it has limited control.
2. Complexity in Coordination: As a networked organization involves multiple
interconnected entities, coordinating activities, aligning goals, and maintaining
effective communication can be complex. It requires robust coordination
mechanisms and effective management of relationships to ensure seamless
collaboration among different network partners.
3. Loss of Direct Control: Networked organizations may have less direct control over
various aspects of their operations due to their reliance on external partners. This
loss of control can lead to challenges in managing quality, consistency, and overall
organizational direction.

Question 2:

Assuming that you are the Information System analyst in the IS department of an
organization. Top management of the organization assigned you a task to provide a report
about the organizational impact of information system use. Your report should discuss the
following criteria:

1. The variables of the organizational design.


Five elements create an organizational design: Decision rights, Business processes,
Formal reporting, relationships, and Informal networks.
a) Decision Rights: Decision rights refer to the allocation of authority and
responsibility within an organization. With the use of information systems,
decision rights can be influenced by the availability of real-time data,
advanced analytics, and decision support systems. Information systems
enable efficient decision-making by providing accurate and timely information
to decision-makers at various levels within the organization.

b) Business Processes: Information systems play a significant role in shaping


and improving business processes. They facilitate automation, streamlining
workflows, and ensuring consistency and efficiency in operations. By
integrating information systems with organizational processes, tasks can be
executed faster, errors reduced, and overall productivity increased.

c) Formal Reporting Relationships: Information systems affect formal reporting


relationships by providing timely and accurate data for reporting purposes.
Through dashboards, data visualization tools, and reporting functionalities,
information systems enable managers and executives to access relevant
information and make informed decisions. This improves communication
channels and enhances the effectiveness of reporting relationships.

d) Relationships: Information systems impact relationships within an


organization by enabling effective collaboration and communication. With
technologies such as email, instant messaging, video conferencing, and
collaborative platforms, employees can connect and share information easily
across different departments, teams, and hierarchical levels. Information
systems also support virtual teams and remote work arrangements, fostering
collaboration irrespective of geographical boundaries.

e) Informal Networks: Information systems can strengthen informal networks by


providing platforms for knowledge sharing, communities of practice, and social
collaboration. Through intranets, social media tools, and knowledge management
systems, employees can share ideas, expertise, and best practices, fostering a
culture of learning and innovation within the organization.

2. The most suitable types of organizational structure that can be applied in the

organization to embrace technological change and sophistication. Discuss in detail


about the chosen structure. How does Information Technology play an important
role in planning?
The networked organization structure is characterized by a decentralized and flexible
approach to operations. It focuses on building and leveraging networks of
relationships with external partners, suppliers, customers, and other stakeholders.
Information technology plays a crucial role in planning and supporting this structure in
the following ways:

Facilitating Communication and Collaboration: Information technology provides the


necessary tools and platforms for seamless communication and collaboration across
the network. Technologies such as email, instant messaging, video conferencing,
and collaborative workspaces enable real-time communication and information
sharing, regardless of geographical locations. This enhances collaboration among
network partners and supports effective planning and decision-making.

Enabling Information Exchange: Information technology enables the efficient


exchange of data and information across the networked organization. Advanced
information systems, such as enterprise resource planning (ERP) systems, customer
relationship management (CRM) systems, and supply chain management (SCM)
systems, allow for real-time data sharing, visibility into operations, and streamlined
information flows. This facilitates better planning by providing accurate and timely
information for decision-making.

Supporting Agile Operations: Information technology plays a crucial role in supporting


agility within a networked organization. Cloud computing, mobile technology, and
digital platforms enable remote access to data and systems, allowing employees and
partners to work flexibly from different locations. This flexibility promotes quick
decision-making, rapid response to market changes, and faster execution of plans.

Enhancing Data Analysis and Insights: Information technology provides advanced


analytics capabilities that support data analysis and insights generation. Big data
analytics, machine learning, and artificial intelligence enable organizations to extract
valuable insights from large volumes of data. These insights help in understanding
customer behavior, market trends, and operational performance, leading to more
informed planning and strategy development.

Strengthening Collaboration with External Partners: Information technology enables


seamless integration and collaboration with external partners in a networked
organization. Technologies like electronic data interchange (EDI), application
programming interfaces (APIs), and web-based portals facilitate the exchange of
data, documents, and information with suppliers, customers, and other stakeholders.
This strengthens relationships, improves coordination, and supports joint planning
efforts.

The networked organization structure promotes agility, innovation, and collaboration


through the effective use of information technology. It allows organizations to tap into
external expertise, resources, and capabilities while adapting quickly to technological
advancements and market changes. By leveraging information technology for
planning, a networked organization can harness the power of digital tools and data-
driven insights to drive growth and success in a rapidly evolving business landscape.

Question 3:

Sun Microsystems has been considered as a highly decentralized organization comprised of


independently operating companies. Sun positions information systems as a top priority,
trying to achieve faster and better communication. With several "SunTeams," members
operate across time, space, and organizations to address critical business issues. Sun
managers identify key customer issues and then form teams with the critical skills and
knowledge needed to address the issue. This team might include salespeople, marketing
personnel, finance, and operations from various places around the globe; customers and
suppliers may become episodic members as necessary. Weekly meetings may take place via
conference calls. Critical to the team's success is the selection of talent from the
organization, defining a clear purpose for the team's efforts, and establishing
communication links among the team members.

Sun has been working on the further development of technologies such as EDI
(Electronic Data Interchange) and RFID (Radio Frequency Identification technology). Both
EDI and RFID will impact information exchange globally and across numerous industries.
These technologies also will create a virtual environment in and across the organization in
the world.

Discussion Questions:

1. Explain the concept and characteristics of virtual organization.


A virtual organization is a networked structure that operates across geographical
locations and organizational boundaries, enabled by information and communication
technologies. It leverages technology to create a virtual environment where
individuals and teams collaborate and coordinate their activities, regardless of
physical proximity.
The key characteristics of a virtual organization include:

a) Geographical Dispersion: Virtual organizations are composed of individuals and


teams spread across different geographic locations, often connected through digital
platforms and communication technologies.

b) Networked Structure: Virtual organizations rely on networks of relationships and


partnerships, both within and outside the organization. These networks enable
collaboration, knowledge sharing, and resource pooling among different entities.

c) Information Technology Dependence: Information and communication


technologies form the backbone of virtual organizations. Technologies such as email,
video conferencing, collaborative platforms, and project management tools facilitate
communication, coordination, and information exchange.

d) Flexibility and Agility: Virtual organizations are designed to be flexible and


adaptable, allowing them to respond quickly to changing market conditions and
customer demands. They can easily scale their operations, access global talent pools,
and form cross-functional teams to address specific business issues.

2. Define ‘Virtual Teams’. Identify the key features of successful virtual teams and
challenges that are faced by virtual teams.

Virtual teams are groups of individuals who collaborate and work together across
geographical locations and organizational boundaries, relying heavily on technology-
mediated communication.

a) Communication Barriers: Virtual teams face communication challenges due to


differences in time zones, language barriers, and reliance on technology.
Miscommunication and information gaps can occur, leading to misunderstandings
and decreased team performance.
b) Lack of Social Interaction: Virtual teams miss out on the social interactions and
informal conversations that occur naturally in traditional face-to-face settings.
Building relationships and establishing trust can be more challenging in virtual
environments.

c) Coordination and Collaboration: Coordinating activities and collaborating across


different time zones and cultural contexts can be complex for virtual teams. They
must establish effective coordination mechanisms, set clear expectations, and
ensure that everyone has access to the necessary information and resources.

d) Technology Reliability: Virtual teams heavily rely on technology for communication


and collaboration. Technical issues, such as connectivity problems or software
glitches, can disrupt team productivity and cause delays.

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