CSIS 114 Lab 8:

Organizational Culture and

Structure. Spring, 2006

Part 1:
Organizational culture
Shared understandings, values &
assumptions in an organization
Influences information systems
Siena and IBM example

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 2

IBMs 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

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 3

IBMs culture: now

40 % mobile workforce
30% women
Services to help customer use IT.
Collaboration & innovation
To

respond to problems & opportunities

Personal responsibility & trust

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 4

Sienas Culture
Men with brown robes: Franciscan
influence.
ROTC.
Strong athletic program and alumni
support.
Academics: Liberal arts.
Students: mostly
regional,
Irish/Italian.
Principles
of
Chapter 2

Information Systems,
Fifth Edition

Slide 5

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
Principles of
Stability status quo
Chapter 2

Information Systems,
Fifth Edition

Slide 6

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
Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 7

Creating and maintaining

culture
Stories - history
Rituals
Language jargon or slogans
Material symbols: dress codes, office
space, furnishings, other perks, rewards
system

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 8

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.

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 9

NASA Case:
Read
Fill out worksheet
Discussion

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 10

Part 2:
Organizational structures
Affect information flow, work processes
and the implementation of information
systems that should empower and
support workers.

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 11

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)
Principles of
Chapter 2

Information Systems,
Fifth Edition

Slide 12

Traditional Organizational
Structure
Fig. 2.3

Organizational Structure
Approaches
Traditional hierarchy
Industrial

revolution and earlier

command and control
Rote work by unskilled staff

Flat
Project
Team
Principles of
Multidimensional
Chapter 2

Information Systems,
Fifth Edition

Slide 14

Example of Traditional
Structure
Fig 2.4

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 longerterm problems.

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 16

Project Organizational
Structure
Fig 2.5

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 Principles
groups-ofsee next slide.
Chapter 2

Information Systems,
Fifth Edition

Slide 18

1994
$ 3 .5 B

S m a ll c u s to m e r s

L a r g e c u s to m e r s

1996
$ 7 .8 B

L a rg e
C o 's

M id s iz e
C o 's

G o v t&
Ed

M id
C o 's

S ta te
&
Local

S m a ll
c u s to m e r s

1997
$12 B

G lo b a l
E n te r .
a c c ts
Chapter 2

L a rg e
C o 's

d
E duc
PrinciplesF eof
Information Systems,
Fifth Edition

S m a ll
C o 's

C onsum ers
Slide 19

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

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 20

Gores innovative organization

model (makers of Gore-Tex)
Split divisions when they reach > 150
people.
Research indicates that people dont
feel part of community that is too large.
EX:

Shakers split families that are too

large.

No managers, just mentors

Titles,
Chapter 2

offices
dont of
mean a thing.
Principles
Information Systems,
Fifth Edition

Slide 21

Multidimensional
Organizational Structure
Fig 2.6

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

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 23

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
Chapter 2

Information Systems,
Fifth Edition

Slide 24

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.

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 25

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
Principles of
communicate electronically.
Chapter 2

Information Systems,
Fifth Edition

Slide 26

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: Japans 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
Principles of
Outsourcing/offshoring
Information Systems,
Chapter 2
Fifth Edition

Slide 27

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

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 28

Offshoring
(ch. 14 in OBrien)
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.
of
Near-shoringPrinciples
to Canada: less cultural differences
Information Systems,
Chapter 2
Slide 29
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
of
years or so --Principles
a half-million
of them in IT.
Chapter 2

Information Systems,
Fifth Edition

Slide 30

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,Principles
p 523] of
Chapter 2

Information Systems,
Fifth Edition

Slide 31

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
Principles of
lens.
Chapter 2

Information Systems,
Fifth Edition

Slide 32

P O L IT IC A L

O R G A N IZ A T IO N A L

LEG AL
LEN SES

C U LTU RAL

E N V IR O N M E N T A L

E C O N O M IC

Chapter 2

T E C H N IC A L

Principles of
Information Systems,
Fifth Edition

Slide 33

7 Lenses
Political issues
International
National
Organizational levels

Organizational issues
Management issues
Structural issues
Work flow
Labor issues
Project mgt. etc.

Relates to trade,
political tensions,
competition, etc.
Principles of
Information Systems,
Chapter 2
Fifth Edition

Slide 34

Economic issues
Labor costs
Trade
Taxes
Currency
Other costs

Chapter 2

Technological
Internet
Telecommunications
Software, shareware
Web
E-commerce
collaboration

Principles of
Information Systems,
Fifth Edition

Slide 35

Cultural

Educational

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

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

Slide 37

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.

Chapter 2

Principles of
Information Systems,
Fifth Edition

Slide 38