Organization Management...

100 Slides Strategic

Apex

Technostructure Support
Staff
Middle
Apex

Operating
Core

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 Key Words...
Organization Model Scientific Management
Motivation Framework Maslows Hierarchy ERG
Theory Intrinsic/Extrinsic Rewards Compensation
Management Job Enrichment Group Performance
Linking Pin Organization Likerts Overlapping
Mintzbergs Coordinating Mechanisms Matrix
Organization Network Organization Change
Management Hierarchical Structures Formal
Organization Role Diagram Job Description
Divisional Structures Project Organization Value
Chain Management Span of Control Task Force
Organization Development Growth Management
Learning Organization Virtual Organization
A Basic Organization Model

Environment

Human Behavior in
Organizational Settings

The Individual Organization Interface

The Organization

Environment
Phases of Scientific Management I

Phase 1: A Task, a Manager, and a Pool of Workers

Manager
Task

Worker Worker Worker Worker

Phase 2: Task Analysis, Breakdown, and Job Specialization by Manager

T1 T3

Manager

T2 T4 Worker Worker Worker Worker

Phases of Scientific Management II

Phase 3: Task Assignment and Training

T1 T3
Worker Worker
Manager

T2 T4
Worker Worker

Phase 4: Continued Supervision, Coordination, and Planning by Manager

Manager

T1 T3
Worker Worker

T2 T4
Worker Worker
The Basic Motivation Framework

1
Need Deficiencies

6
2
Need Deficiencies
Search for Ways
Reassessed by
to Satisfy Needs
the Employee

The Employee

5 3
Rewards or Goal-Directed
Punishments Behaviors

4
Performance
 Maslows Hierarchy of Human Needs

GENERAL EXAMPLES ORGANIZATIONAL EXAMPLES

Achievement Self- Challenging Job

Actualization
Needs

Status Esteem Needs Job Title

Friends in
Friendship Belongingness Needs Work Group

Stability Security Needs Pension Plan

Shelter Physiological Needs Base Salary

 Parallels Among Need Theories of
Motivation
Herzbergs Maslows Alderfers Other
Two-Factor Theory Hierarchy of Needs ERG Theory Key Needs
Achievement
Need for
Work Itself Self-Actualization
Achievement
Responsibility Needs
Motivation Growth
Advancement and Growth
Factors Needs
Need for
Self-Esteem Power
Recognition Esteem Needs
Respect of Others

Supervision Need for

Belongingness Needs Relatedness
Interpersonal Relations Affiliation
Needs

Hygiene Interpersonal Security

Security
Factors Security Needs
Company Policies
Physical Security
Existence
Pay Physiological Needs
Working Conditions Needs
The Individual-Organization Exchange
Process
Time
Effort
Knowledge
contributes Skills to
Creativity
Energy

The The
Employee Organization

for which which rewards

Pay with
Benefits
Vacation
Status
Opportunities for Creativity
Occasions for Social Contributions
The Meaning of Organizational Rewards

Intrinsic and
Extrinsic Rewards

The
Individual

Surface Value Symbolic Value

Attitudes and Behaviors

A Total Compensation Package

Annual Compensation for an Employee

Awards

Perquisites

Incentives

Benefits

Salary
The Historical Development of Job Design

Scientific
High
Management

Job Enlargement
Job Rotation

Specialized
DEGREE OF JOB Craft Jobs Job Enrichment
SPECIALIZATION Job Characteristics Theory
Social Information Processing
Autonomous Work Groups

General
Low Craft Jobs

To 1900s Around 1900 to Late 1940s to Early 1960s

Late 1940s Early 1960s to Present

TIME
Four Factors that Affect Group
Performance

Group
Performance
Likerts Overlapping Work Groups
(The Linking Pin Organization)
Mintzbergs Five Coordinating
Mechanisms
M Manager M
Analyst
A A

O O O O
Operator Operator
(1) MUTUAL ADJUSTMENT (2) DIRECT SUPERVISION

O O

INPUT SKILLS WORK PROCESSES OUTPUTS

(3) (4) (5)

STANDARDIZATION
 A Matrix Design

FUNCTIONAL DEPARTMENTALIZATION
Research and
Marketing Purchasing Production
Development
Department Department Department
Department
Manager Manager Manager Manager

PROJECT DEPARTMENTALIZATION

Alpha Project
E E E E
Project Leader

Beta Project
E E E E
Project Leader

Gamma Project
E E E E
Project Leader
 Basic Communication Process

SENDING

Encoding Transmission Decoding

Noise Receiver/
Source
Responder

Decoding Medium Encoding

FEEDBACK LOOP
(Verification)
Small Group Communication Networks

WHEEL CHAIN

CIRCLE ALL CHANNEL

Four Major Problems in Change
Management

RESISTANCE POWER

People Structure
Organization as
Social System

Information
Tasks
Systems

CONTROL REDEFINITION
 Hierarchy and Decision Making

Decreasing
Increasing
number of Increasing Increasing power in
reward stature decision
people
making
Cellular Structures Placed into
Hierarchical Structures
The Non-Linearity of Power and Decision
Load
Managerial and Organizational Integration Within the Organic Enterprise

Decreasing power;
extreme narrowing A
A Increasing
of
responsibilities responsibility
importance of
decision making;
perceptual
B B requirements

Responsibility

Information
load

Cost of
wrong
decisions

Level B Level A
HIERARCHICAL LEVEL
 Technological Innovation as a Result of
Complex Interactions

EXTERNAL ENVIRONMENT

INNOVATIVE INTERNAL ENVIRONMENT

Project
Project Evaluation
Idea proposal systems Project management Product
Project R&D
Creativity Analysis Innovation
champion Design
Strategic
Production
considerations
Marketing

R&D Dept. Marketing Dept.

THE COMPANY
Knowledge
Scientific
of market
and technological
needs
knowledge
Further Developments of Multidirectional
Communication and Involvement

Strategic
analysis
Marketing
department R&D

Financial
Process
control and
development
analysis

Maintenance
and services Design
Product
planning
 Organizational Effectiveness

Organization
Product
Resource Internal and
inputs activities service
and outputs
processes

System Internal Goal

resource process approach
approach approach
Formal and Informal Organization

Structure
Hierarchy
Task and role definition
Performance
measurement
Coordination and
control
Rules and procedures
Routines
Norms, values
Group / inter-group behavior
Coalitions, alliances, power
Perceptions, mental maps
Organizational culture
Optimum Degree of Formal Organization

Organizational
effectiveness

Degree of formal organization

Contingency Framework for Organization
Design

environment
fit
differentiation organizational
task strategy
effectiveness
integration
member
characteristics

contingency organization outcome

factors design
Organization Chart, Role Diagram, Job
Description

Positions

Processes
Who does
what in which
Position process?
Tasks
Competencies
(action, decision,
Responsibilities information, ...)
Reporting
relationships
...
 Levels of Organization Design

CEO multi-
business

SBU A SBU B SBU C

functional
unit R&D R&D
R&D

Prod. Prod. Sales

Sales single
Sales
business

=> different design issues on different levels

 Functional, Divisional, Multidivisional
Structures
CEO
CEO

Controlling R&D

Logistics Manufacturing Sales Finance

Cement Concrete Chemicals

CEO CEO

Europe North America Asia

Europe North America Asia

Motor Motor Motor Cement

Marine Marine Marine

Concrete
Fire Fire

Chemicals
 Project Structures
CEO
CEO
Project

Unit A Unit B Unit C Project

Unit A Unit B Unit C

CEO

Strategy Finance IT

Project 1

Project 2

Project 3
Mechanistic vs. Mechanic Designs in
Context
Low Uncertainty
1. Mechanistic structure;
formal, centralized
2. Few departments
Stable 3. No integrating roles
4. Little imitation
5. Current operations
orientation
ENVIRONMENTAL
CHANGE High-Moderate Uncertainty
1. Organic structure, teamwork;
participative, decentralized
2. Few departments, boundary
Unstable spanning
3. Few integrating roles
4. Quick to imitate
5. Planning orientation
Simple
ENVIRONMENTAL COMPLEXITY
Low-Moderate Uncertainty
1. Mechanistic structure;
formal, centralized
2. Many departments, some
boundary spanning
3. Few integrating roles
4. Some imitation
5. Some planning
High Uncertainty
1. Organic structure, teamwork;
participative, decentralized
2. Many departments:
differentiated, extensive
boundary spaning
3. Many integrating roles
4. Extensive imitation
5. Extensive planning,
forecasting
Complex
Problems of Traditional Organization
Design

+ =

hierarchical functional operational

boundaries boundaries islands
=> filtering of information
=> functional closure
=> leadership problems
=> coordination problems
Link between Structure and Process

CEO

Procurement Production Sales Administration

Transportation Order documents

Inventory Production
operation
Shipping Billing

Procurement Production
order order

Order

Customer
 Organizational Value Chain

Company infrastructure

Support Human Resource Management

processes
Technology development

Procurement

Entry Operations Marketing Exit Customer

logistics and logistics service
sales

Primary processes
The Development of Organization Design
over Time

large collaboration

coordination
Size of Organization

"?"

delegation
red tape

direction control

creativity
autonomy

small leadership

young mature
Age of Organization
The Five Basic Parts of Organizations

Strategic
Apex

Technostructure Support
Staff
Middle
Apex

Operating
Core
The Flow of Formal Authority
Structures to Deal with Residual
Interdependencies

(a) Hierarchical Structure (b) Line and Staff Structure

(c) Liaison Overlay Structure (d) Matrix Structure

(e.g., Task Force)
 A Continuum of Liaison Devices

Decisional Power with the Market Managers

Decisional Power with the Functional Managers

Pure Liaison Task forces Matrix Liaison Pure

functional positions and structure positions market
structure superimposed standing superimposed structure
on a committees on a
functional superimposed market
structure on a structure
functional
structure

Integrated Integrated
managers managers
superimposed superimposed
on a on a
functional market
structure structure
Span of Control
 Functional Specialization

President

Vice President
Vice President Vice President Vice President Vice President
Industrial
Engineering Manufacturing Marketing Finance
Relations
 Process Specialization

President

Vice President
Vice President Vice President Vice President Vice President
Industrial
Engineering Manufacturing Marketing Finance
Relations

Shaping Stamping Painting Assembly Shipping

Department Department Department Department Department
Manager Manager Manager Manager Manager
 Product Specialization

President

Vice President Vice President Vice President Vice President Vice President
Tricycle Bicycle Motor Scooter Motorcycle Snowmobile
Division Division Division Division Division
 Customer Specialization

President

Senior Vice
President
Marketing

Vice President
Vice President Vice President Vice President
Industrial
Engineering Marketing Finance
Relations

Director Director Director Director

Wholesale Institutional Consumer Government
Marketing Marketing Marketing Marketing
 Geographic Specialization

President

Vice President Vice President Vice President Vice President

Domestic European Latin American Pacific
Division Division Division Division

Director Northeast

Director Midwest

Director Southern

Director Western
 Various Forms of Specialization in a
Single Organization
President

Assistant to President

Executive Vice President Executive Vice President

Vice President Vice President Vice President Vice President Vice President Vice President Vice President Vice President
Vice President
Industrial Domestic International Tricycle Bicycle Motor Scooter Motorcycle Snowmobile
Finance
Relations Marketing Marketing Division Division Division Division Division

Director Institutional Marketing Director Europe Marketing Shaping Department

Director Government Marketing Director Latin America Marketing Stamping Department

Director Wholesale Marketing Director Pacific Marketing Painting Department

Assembly Department

Northeast Midwest Southern Western Shipping Department

 Multiform Organization

Democratic

Specialists
Bureaucratic Traditional
Managers

Matrix Contemporary
 What Type of Intervention?

Strong Taks Force Top-down

Initiatives

RESISTANCE

Weak Participative Buttom-up

Initiatives

Weak Strong

EXTERNAL FORCES
 Typical Improvement Actions

Bureaucracy Elimination
Duplication Elimination
Value-Added

Reduce
1
Automation
Big Picture Simplification
Improvement Innovate Change Process Cycle-Time
Customer/Supplier 4 2 Reduction
Partnership
3
Prevent

Error Proofing
Standardization
Simple Language
Upgrading
 Improvement Agenda

PACE OF CHANGE

Fast Measured

Continuous
Focused
Tactical Improvement
Improvement
DEGREE (TQM)
OF MEASUREMENT
CHANGE

Focused Business Process

Strategic
Restructuring Innovation

ORGANIZATIONAL CHANGE MANAGEMENT

 Assessment Management

CORPORATE STRATEGY

Good Poor

What
Good Change the Top
happened?

IMPLEMENTATION
SKILLS

Support the Why are they still

Poor
management alive?
 The Initial Decision Matrix

STRATEGIC RELEVANCE

High Low

Positive Keep as is Sell

PROFITABILITY

Negative Restructure Close

Dispose of
 Organizational Practices in the Five
Phases of Growth

CATEGORY PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5

Management Make and Efficiency of Expansion of Consolidation Problem solving

Focus sell operations market of organization and innovation

Organizational Informal Centralized and Decentralized Line staff and Matrix of teams
Structure functional and geographical product groups

Top-Management Individualistic and Directive Delegative Watchdog Participative

Style entrepreneurial

Control Market results Standards and Reports and Plans and invest- Mutual goal
System cost centers profit centers ment centers setting

Management Ownership Salary and merit Individual bonus Profit sharing and Team bonus
Reward Emphasis increases stock options
Imaginary Organization and Relationship
Marketing - Two Perspectives

Imaginary Relationship
Organization Marketing

Delivery
Systems

PARTNER IO- CUSTOMER

BASE Leader BASE

Core Market
Compe- Communication Customers
tence
Transactions Relations

LEARNING ORGANIZATION
Imaginary Organizations and Some
Related Concepts

LEARNING ORGANIZATIONS
THE CLIENT-DRIVEN FIRM
CONTINUOUS IMPROVEMENT

Learning

CORE VS. NETWORKS,

PERIPHERY RELATIONSHIP
Transactions Imaginary Relations MARKETING,
MARKETS VS. Organizations VALUE
HIERARCHY CONSTELLATION

Organizations
as Processes

CORE SYSTEMS
SERVICE DELIVERY
PARTNERSHIP
Role of Virtual Organizing and Knowledge
Management in Business Networking

BUSINESS NETWORKING STRATEGIES

Electronic Supply Relation-

Commerce Chain Mgmt ship Mgmt

Customer Interaction

DIMENSIONS
OF VIRTUAL Asset Configuration
ORGANIZING

Knowledge Leverage
Business Engineering Model Applied to
Business Networking

Business unit Business unit

Strategy level
Cooperation strategy
Business network

Process level Business process Business process

Transactions and
coordination techniques
Process network

Information system Information system

IS level
Communication
IS network link
 Major Strategy Decision

ORGANIZATIONAL RESOURCE DECISION

Virtual
Outsourcing Insourcing
Organization

Electronic Content
eProcurement
Commerce Management
for C goods
for Z catalogs

Supply Chain SCM for

NETWORKING
DECISION Management X parts with
Y partners

Relationship
Management
Virtual Organizations and Virtual Cultures

E-Market Culture

E-Business Culture

Virtual Organization Culture

 Models of Virtuality

The Virtual Face Star-alliance Model

Co-alliance Model Value-alliance Model

 Virtual Alliance Models

Autonomy/Substitutability or virtual links

Low High

virtuality

Interdependence/
star
Strength of
Organizational
Links
colocation
culture
synchronicity
shared risks

High satelite

Virtual- co- star- value market virtual

Face alliance alliance broker
Virtual Organizational Change Model
(VOCM)

Electronic Market Ecosystems

e-Business Strategy

Structual
ICT
Alliances

Virtual
Culture

Knowledge
Management
The Cycle of Knowledge Creation

(4) The new employee (1) An employee comes up

discusses the process with & posts an idea to
with a colleague over improve response to
coffee and it provokes service calls
a further improvement idea

Conversation Codification
TACIT
KNOWLEDGE
Learning &
Re-Use &
EXPLICIT
KNOWLEDGE

Internalization Combination

(3) A new Call Center (2) The idea gets built

employee uses the into the companys
process and gets automated Call
complimented by the Response System
customer processes
Knowledge Management Life Cycle

CREATE

EVOLVE Class II ORGANIZE

Expanded View
(performative)

Class I
Localized View
APPLY FORMALIZE
(supportive)

DISTRIBUTE
Knowledge Management

Organization

Process Technology

Knowledge Management
Choosing Pilot Groups

High Willing to
Visibility Share Info

Pilot Group

Group
Big Impact Works with
on Revenue Current
Info
 KWorld

Consultants Scheduling
(The Right (The Right
People) Time)
KWorld

Knowledge Base
(The Right Problem)
Consultant Network

Best
Skills Practices

Solutions

Availability
A Typical Knowledge-Management
Platform

Knowledge Knowledge Portal

Desktop Knowledge Tools

Search and Deliver

Data
Warehousing
Knowledge Document and
Collaboration
Services Management Business
Intelligence
(Data Analysis)

Tracking and Workflow

Business Logic Security Replication
System Communication Directory Administration
Pre-requisites

Communities,
Teams and Experts

Portals and Search

Content Management
(Publish&Metadata)
Complete Intranet
KM Enabling Modules

Real Time
Messaging and Collaboration Collaboration

Data Analysis
(Data Warehousing
and Business Intelligence)
Knowledge-Management Modules
 Graph of Evolving Technology and
Knowledge Management Over Time
The KM-Enabled Enterprise

Knowledge
management
Content management
Application Sophisticated Communities,
Integration Teams and Experts
Comprehensive
Portals and Search
Publishing and Workflow and
Data Analysis
Approval Tracking (Real Time Collaboration)

LEVEL OF Subscription Document Data Warehouse,

INTEGRATION and Notification Management Complete Catalog Services
Real Time
Collaboration
Basic Intranet
Search Meta
Complete
Platform Directory
Intranet Metadata
Integration
Messaging
and Collaboration
Pragmatic Visionary
INFRASTRUCTURE OVER TIME
 Graph of Technology and its
Effectiveness

The KM-Enabled Enterprise

Knowledge
management
Content management
Communities,
Teams and Experts
Portals and Search
Data Analysis
(Real Time Collaboration)

LEVEL OF
INTEGRATION
User Usability
Ratio

Messaging
Integration

EFFECTIVENESS OF THE KM SYSTEM

The Five Cs that Differentiate Data from
Information

Condensation Contextualization Categorization

Calculation Correction

Data
Data Information
 The Basic Elements of Knowledge
Utilization and Typical Technology Tools
Databases and
Acquisition Capture Tools

Elements of knowledge
utilization and basic
technology
Sharing
Databases support
Sharing Tools
Browser
Utilization Collaborative Tools
Web Pages Communications
Document Links
Distribution Systems Networks
Collaborative Tools Intranets
The Four Levels of Knowledge, Levels of
Leverage Derived, and Possibilities of
Technology Support

Desirable Care-Why

Know-Why

KNOWLEDGE Knowledge management

STAGE system supported
Know-How

Know-What
Current State of Most Companies

Initial Desirable

LEVEL OF KNOWLEDGE LEVERAGIBILITY

The Framework of Technologies Required
to Support Knowledge Management and
their Functionality
Transparent Web
Capture tools Conferencing
Workflow
e.g., Expertise
Document
Crosspads Pointers
Management Telephones

Routing Informal Dialog

Publishing Electronic Informal
Control Capture Conversation
Conversation Conversation
Distribution Making

Project
Activity Knowledge Management Technologies Watercoolers
Management Conversation

Distribution Operational Problem

Data Knowledge Brainstorming
Connectivity Tacit Knowledge
Solving
Collaboration Discover Validation
Publishing Capture Decision
Cleansing
Support
Systems
Intranets
Case-based
Data Digital Reasoning
GroupWare
Warehouse Whiteboards

Informal Capture
Data Mining Independent Thought
Document Exchange Mind Maps
Data Cleansing Visual Thinking Tools
Collaboration
Validating
Connecting Islands of Data with a
Knowledge Server

File Servers
Intranet

Centralized
Exchange
Servers
Knowledge
Server
Public Sites
& Information
Services

Notes-type
Discussion
Databases
Telecommuters
Nonakas SECI Model and the Places
where IT Support Fit in

Socialization Externalization

Tacit >> Explicit

Face-to-Face Communications
Video Conferencing Tools
Tacit >> Tacit
Web Cams
Virtual Reality Tools
Process Capture Tools
Traceability
Reflective Peer-to-Peer networks
Expert Systems
Discussion Platforms

I I G
I
I I I
S E
Internalization I C Combination

Explicit >> Explicit

Collective Knowledge Networks Systematic Knowledge Tools
Explicit >> Tacit

Notes Databases / Org Memory Collaborative Computing Tools

Pattern Recognition Intranets, Groupware
Neural Networks Discussion Lists
Web Forums
Best Practice Databases
C
G
I C G
G

Legend
C: Companys Knowledge
G: Group or Team Knowledge
I: Individual Employees Knowledge
Customer Valuation, Interactivity, and the
Need for Relationship Management

Differential High

Frequency
CRM
Marketing

Customer Interactivity
Valuation

Mass Niche
Marketing Marketing

Consistent Customer Needs Differential

Consistency of Interaction Across all
Channels is Key

Retention
Sales and Customer
and Loyalty
Marketing Support
Fulfillment Incentives
Cross-selling Pre-sales
Offers
Up-selling Post-sales
Rewards

Consistent Interaction

Brick-and-
Web Telephone Catalog Mortar Store
The Evolution of Knowledge-Oriented
Business Processes

High

Knowledge-oriented
Business Processes

PROCESS Activity-oriented
COMPLEXITY Business Processes

Transaction-oriented
Business Processes

Low

High
KNOWLEDGE INTENSITY
New Approaches to Customer Knowledge
Management

High
KCRM

Interactive
Marketing

Data Mining

Database
Interactivity
Marketing

Loyalty/Reward
Basket Analysis
Programs

Low Customer-specific Knowledge High

The KCRM Strategic Framework

Interpretation barrier
Environment Strategic Context

Expression barrier
Product/Services
Market Trends Market Opportunities
Competitive Threats Impacts Customer Segments
Regulatory Controls Value Proposition
Alliances
Interpretation barrier Expression barrier

Impacts Drives
Impacts Influences Enables

Implementation barrier
Specification barrier Implementation barrier
Specification barrier

Enables
KCRM Strategy KCRM Technology
E-Business Strategy E-Business Infrastructure
Competitive Differentiation KCRM Architecture
Aligns
Knowledge Interaction Channels
Digital Capital Integration
Adaptability
Stages of the Customer Relationship
Management Process and Knowledge
Intensity
Advanced

Needs Prediction
Automatic
Community Replenishment
Building

Differentiated Clicks-&-Mortar
Customer Integration
Service
Detailed
Customer Personalized
KCRM Recommendations
Profiling
Level
Seamless Partner
Profiling of Data
Integration

Recognize
Returning
Customers

Registration Customizable Web

Enticements Experience

Basic
Stage Identify Differentiate Interact Customize
 Responding to Uncertainty The
Organization Design Options

Uncertainty and change

Creates a need to cope
with more information

Create slack Environmental Create self- Invest in vertical Create lateral

resources management containted tasks information relations
Allow more Vertical Change from systems Move decision-
time integration functional task Plan much more making down
Allow more Marketing design to group frequently and across
resources Co-operation with all necessary funcional
resources boundaries

Increase capacity
Reduce need for information processing to process information

The scope of transformation

Levitts Diamond: The Interaction of
Social Forces in an Organization

Task

Structure People

Technology
Organization Design Parameters
Strategy and goals

Structure
Factors:
Division of labour
Departmentalization
Horizontal and vertical
distribution of power
Information and
decision making
Task
Factors:
Factors:
Scope of database
Diversity
Formalization of
Difficulty
process
Variability
Frequency
Decision mechanism

Reward systems People

Factors: Factors:
Compensation Selection
Promotion Training and
Leadership style development
Job design Promotion
 Matching Management Style and
Organizational Model

Pseudo- Effective
Entrepreneurial
entrepreneurial entrepreneurial

MANAGEMENT
STYLE

Efficient Unstructured
Conservative
bureaucratic unadventurous

Mechanistic Organic

ORGANIZATIONAL MODEL
Thorn A Realigned Strategy

Business strategy
From an emphasis on
administration and cost
reduction
To an emphasis on
marketing, service and
growth

Systems strategy
From an emphasis on Organization strategy
control, administration From a centralized,
and cash accounting mechanistic orientation
To an emphasis on To a more decentralized,
decentralization, organic and committed
commitment and added orientation
value business activity
Using CSFs to Generate the Business
Vision
Business objectives

Raise earnings per share

Increase market share
Improve productivity
Development new businesses
Develop internationally

Critical success factors

Improve
Create Develop Concentrate Develop a Maintain
Automate product
new new on profitable group image company-
production quality/
markets products activities world-wide wide control
reliability

Information systems contributions

Develop
Enhance
Develop Install Build profit Investigate Develop
financial
customer new flexible analysis DSS electronic an online
control
intelligence products/ manufacturing (Decision links with diagnostic
reporting
systems services systems Support customers service
system
System)
Positioning an Organizations Approach to
Strategic Systems Planning

High

Beware Attack
POTENTIAL
SYSTEMS
CONTRIBUTION
TO TOTAL VALUE
ADDED

Explore
Safe
benefits

Low

Low High

EXISTING SYSTEMS SCALE/EXPERIENCE

The IT Strategic Grid Distinguishes Levels
of System Criticality

Factory Strategic
High
IT is crucial to current IT has been critical
business operations, but for business success
is not key to the in the past and will
organizations strategic remain so for the
development future
BUSINESS
IMPACT OF
EXISTING
SYSTEMS Support Turnaround
IT is not critical to the IT has not been critical
business, either in the to the business so far,
past or for the future but is vital for the future
Low if the organization is to
achieve its strategic
objectives

Low High
BUSINESS IMPACT OF
APPLICATION DEVELOPMENT PORTFOLIO
 Technology Impact on Competitive
Forces

Rivals
High
Suppliers

IMPACT OF
IT ON
COMPETITIVE Buyers
FORCES

Entrants
Substitutes
Low High
RELATIVE IMPORTANCE OF
COMPETITIVE FORCES
The Interaction of Strategic Elements in
an Organization

Technological
Technology environment

Organization
People: individuals
structure and Processes
and roles
culture

Socio-economic Strategy
environment
 The Potential Impact of IT on
Transformation

High Stage 4
Business
re-engineering

Stage 3
Process
POTENTIAL redesign
BUSINESS
IMPACT
Stage 2
Cross-functional
integration

Stage 1
Functional
improvements

Low
High
DEGREE OF BUSINESS REDESIGN
 The Emphasis of IT Management Has to
Change

Emphasis on management Emphasis on management

of computers: of data resources:

Centralized computing Distributed computing

Proprietary applications Standardization (open systems)
EXPLOITATION OF Minimal connectivity High connectivity
IT FOR BUSINESS Technology push User pull
BENEFIT

First S-curve Second S-curve

TIME
Traditional Approaches to System Design
are Technically Focused

Open

Technical
DESIGN DEGREES design
OF FREEDOM process
Organizational
learning

Closed

Feasibility Design Implementation

TIME
 Traditional Approaches to System Design
Allow Little Scope for User Input

Technical
Open design
Window for
user process
contributions
to design

DESIGN DEGREES
OF FREEDOM
Organizational
learning

Closed

Feasibility Design Implementation

TIME
Assessing the Business and Technical
Contribution of Applications

High
Maintain
Renew and enhance
Systems in this category may have These systems are critical to the
suffered from a lack of maintenance business and are technically
and the organization might suffer if successful they must be
it were to fail maintained and enhanced to ensure
their continued success
BUSINESS
VALUE
(USERS) Reassess
Such systems might be outmoded in
business terms, hence they can be
Divest divested, or they may have been
Systems may be outdated or not developed in advance of the
necessary but consumers scarce business need or capability, hence
resources a need for user training. Before
action is taken on the system,
reassessment to determine the
Low business value is necessary

Low High
TECHNICAL QUALITY
(PROVIDERS)
 The IS Responsibility Matrix

High
Specialist Hybrid
dominance Users need to be in control of the
Operational efficiency is primary systems strategy, while specialists
objective control systems development

MATURITY
OF THE
TECHNOLOGY
Risk User
dominance dominance
High technical risk with limited With a high technical risk and a
business potential suggests the high strategic impact, applications
application should not should be under user control,
be developed with a major emphasis on effective
exploitation
Low

Low High
STRATEGIC IMPACT OF
FUTURE SYSTEM APPLICATIONS
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