Information Technology and Organizational Transformation: Solving the Management Puzzle

Citation

Bahli, B. (2004), "Information Technology and Organizational Transformation: Solving the Management Puzzle", Journal of Small Business and Enterprise Development, Vol. 11 No. 3, pp. 416-418. https://doi.org/10.1108/14626000410551681

This book written originally from a research project at CIRANO and HEC Montreal on new organizational forms presents very effectively the management puzzle framed by social, technical, and business environment forces and built upon four fundamental puzzle pieces: strategy, structure, information technology, and leadership. The premise of the book is that “managers do have an influence on these four pieces of the puzzle to transform their organization”. The book is recommended as a Guide for all managers who have to deal with a complex environment as to best organize their firm and, to best use information technology. The role of information technology in transforming each piece of the puzzle is discussed through the lenses of a framework within which managers can analyse their firm's environment and characteristics, and reflect on the most appropriate way for them to put the puzzle together.

The book has four parts. Part 1, comprising one chapter, describes the management puzzle's frames as it is framed by social, technical, and business changes. Part 2 has four chapters focusing on the puzzle pieces: strategy, structure, information technology (IT) and the leadership piece. Part 3 has three chapters each illustrates how the puzzle pieces can be put together successfully. Part 4 comprises four chapters discusses four ways that create the execution capabilities of the organization's managers: people management, IT management, knowledge management, and change management.

Part 1 begins by presenting the puzzle frames: the business frame, the technology frame and the social frame.

The business frame emphasizes the fact that businesses operate in a changing environment and often face a number of unpredictable changes occurring simultaneously shaped by uncertainty about how customers, competition, workforce, business networks and intellectual capital are changing. Dealing with change in these areas means companies will have to develop considerable flexibility to respond quickly to changing competitive conditions.

The technology frame shows that key trends in technology will frame how businesses will be managed in the future. First, the connectivity in terms of wireless computing, telecommunications networks and the Internet are three trends occurring in the actual business environment. Second the convergence of multimedia technology combining voice, data, text and image communication and open systems with more portable software across a variety of platform. Third, ubiquity characterized by embedded technology (microprocessors and sensors in materials and physical devices). Finally, software such as Groupware, integrated systems and virtual reality will have an impact on organizations in the immediate future.

The social frame discusses the changes that will profoundly affect an organization's customer, product, and service base. Four dimensions are identified here. First, the demographic edge where people in industrial countries are living longer and many of them will resist retirement or return to the workforce to supplement their income. Training program and management techniques will have to be adapted to deal with older workers’ need. Second, the diversity edge where women and minorities are increasingly entering the job market. Cultural differences as well as work expectations and communication styles need to be considered and sensitive to the needs and perspectives of the workforce. Third, the international edge where managers need to scrutinize the international environment such as wars, disease, etc because these issues will have an impact on business. Globalisation is a challenge to businesses that will need to learn how coordinate operations across many different countries. Finally, the individual edge where the lines separating office from home and company from individual become blurred and employees linked through virtual communities brings new challenges for people management.

The book draws from the latest research in industrial organization, strategy, information technology, organizational theory, and leadership. It examines the individual puzzle pieces that have to be put together: strategy, structure, information technology, and leadership:

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  The strategy piece. Two broad approaches to strategy formulation and implementation: strategy as positioning (exemplified in Porter's analysis), strategy as capabilities (focus on the core capabilities that are unique to the organization, hard to replace, and central to the organization's mission) and strategy as governance (an organization as an institutional method for organizing transactions). Companies must design an internal business strategy, which complements external strategy and, hence, forms a focused and integrated system.

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  The structure piece. Design organizations which will increase speed effectively, balance flexibility and integration, provide for equal autonomy and control, promote learning and innovation while executing the organization's work and strategic priorities successfully is not an easy task. Beyond what an organization structure looks like, managers need to consider designing ways to promote complementary behaviours and the coordination required to ensure that all parts of the organization are able to work together effectively.

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  The information technology piece. The changes taking place today in enterprise strategy, structure, and processes all require enabling technology. Building a complete picture of an organization now involves a thorough understanding of IT and its potential, and the impact and influence its different dimensions can have on the other aspects of the enterprise. As a result, IT will never again be an afterthought that is applied after the enterprise's strategy is formed and its processes and structures designed. IT is now an integral piece of the management puzzle, which business leaders ignore at their peril.

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  The leadership piece. One of the biggest challenges facing leaders will be maintaining appropriate balance. In many ways, leadership will be about living a paradox. The need for continual change will have to be balanced with the natural desire for equilibrium and stability. The desire for immediate short‐term numbers must be balanced with doing the right things for the future. And the requirement for quick and visible results must be balanced against people's resistance to change.

The third part of the book presents the cases of three firms, Oticon, Li & Fung and Progressive Insurance, that were equally successful in putting these pieces together, while choosing pieces with dramatically different forms and adjusting them in radically different ways. Chapter 6 illustrates how strategy and IT were codetermined and influenced each other at Progressive Insurance. Leadership abilities were of the utmost importance in transforming this organization into a powerful competitor in the industry. Chapter 7 presents Oticon where traditional hierarchy of organization functions collapsed. The new structure called “the spaghetti structure” was realized by Oticon's CEO using IT piece to make the necessary adjustment between structure and strategy. Chapter 8 presents Li and Fung where IT plays an important role in enabling the coordination of geographically decentralized activities.

Part 4 of this book presents what the authors called “the management challenges”. Four factors are discussed: people management, IT management, knowledge management, and change management. First, it looks at managing the workforce, the need to deal with a wide variety of types of workers, relationship management both inside and outside the firm. Then, chapters 10 and 11 discuss the management of the technology and knowledge that must be put into place to support organizational strategy and operations. Finally, chapter 12 explores the concept of change management and how to control and drive organizational transformation.

This book provides the manager with an integrated conceptual but pragmatic framework to analyse their situation illustrated with in‐depth case studies. In a changing business environment, the developed framework in this book will certainly enable managers to “put the puzzle together”.