Impacts of Advance Information Technology on organizational design, intelligence and decision making

By : Sadia Razzaq

Student; MS Project Management at COMSATS Institute of Information Technology, Abbottabad, Pakistan

Table of Contents
Abstract ............................................................................................................................................ 3 1.Executive summary ......................................................................................................................... 4 2.About the theory ............................................................................................................................ 5 2.1. Meaning and characteristics of computer assisted communication technologies and decision aiding technologies ................................................................................................................................................. 6 2.2. Limitations of theory ............................................................................................................................. 7 2.3. Nature of advance information technology........................................................................................... 7 2.4. Mistaken impressions discussed by theory ........................................................................................... 8 2.5. The propositions ................................................................................................................................... 9 2.6. Conclusion and recommendations of theory ...................................................................................... 10 3. Analysis ....................................................................................................................................... 11 3.1.Impact on developed countries ............................................................................................................ 11 3.2. Impact on developing countries .......................................................................................................... 12 3.3.conclusion and recommendations........................................................................................................ 13 Bibliography ................................................................................................................................... 14

Impacts of Advance Information Technology on organizational design, intelligence and decision making
Abstract The present research paper deducted from propositions drawn in Theory of effects of Advance Information Technology on organizational design, intelligence and decision making by George P.Huber (Jan, 1990). Various components of that theory were controversial and in need of empirical investigation. That theoretical paper discusses effects of globally utilized element in a way that it elaborates the benefits of advance information technology on development of organizational design, intelligence and decision making. The theorists consider only impacts of computer assisted technology and decision aiding technologies they do not encompass use of computer assisted production technologies and use of transaction-enacting technologies.

1. Executive summary This theory is developed by George P.Huber (Jan, 1990) through study and analysis of previous organizational researches, communication researches and information system researches. The deep analysis of the writer enables him to set forth fourteen prepositions on impact of advance information technology on organizational design, intelligence and decision making. The theorist consider impacts of only computer assisted communication and decision aiding technologies, he do not consider use of computer assisted production technologies and use of transaction-enacting technologies such as computerized billing system. Because the theorist focuses on those technological changes that effect quantity and timeliness of intelligence and decision making. Besides detailed theoretical analysis several components of theory are controversial and in need of empirical investigation. The theory developed on the basis of four motivations by previous researches 1. Reinvestigate and revise certain components of organizational theory. 2. There has been little synthesis, integration and development in previous empirical findings concerning impact of advance technology, hence there is need of theory development. 3. To integrate previous researches to help researchers more aware of the impact of advance information technology. 4. Due to erratic nature of advance information technology there is need of continuous research. The theory is left controversial and in need of further analysis because preposition in this research article are limited as they developed only on dependent variables. Moreover the theory does not explicitly address use of advance information technology for impression management.1 The research article elaborates nature of advance information technology that includes critical characteristics of advance information technology that might cause them to impact organizational design, intelligence and decision making. Then it discusses some of mistaken impressions about technology and clears them with solid evidence. In the end the theory set forth some prepositions in the form of statements and explains them through auxiliary examples. The research article also discusses basic concepts that build the foundation of these prepositions. In the end the theory gives conclusion about impact of advance information technology of organizational design, intelligence and decision making and suggest for further research. On the basis of limitation and recommendations of this theory, it has been analyzed further and tried to overcome shortcomings discussed. In the further analysis the impact of advance technology discussed separately for developed and developing countries and then conclusion and recommendations drawn on the basis of analysis and discussion.

Impression management refers to practices in professional communication and public relations, where the term is used to describe the process of formation of a companys of organizations public image.

2. About the theory The foundation of this theory considers only effects of computer assisted communication and decision aiding technologies on organizational design, intelligence and decision making. It does not consider use of computer assisted production technologies and use of transaction-enacting technologies such as computerized billing system. The theory focuses on those technological changes that effect quality and timeliness of intelligence and decision making. However, several components of theory are controversial and in need of empirical investigation. This theoretical article developed through considering lots of past research of organizational, communication and information system researchers .these previous researches raise this theoretical article through four motivations. i. First motivation:

The previous research geared reinvestigating and revising certain components of organization theory that includes organizational process, structure and performance. As capabilities and form of communication technologies vary a lot with passage of time. Similarly this theory invites further research.

ii.

Second motivation:

The researcher decided to take a step towards creating theory of the effects of advance technologies on organizational design, intelligence and decision making because, study of previous researches shows that, Although there are many empirical findings concerning impact of Advance technologies on organizations, there has been little synthesis, integrating and development of theoretical explanation and that it is time for theory development and theory guided research. iii. Third motivation:

This theoretical article prepared for integrating work of organizations, communication and information system researchers to help future researchers in each of these fields, so that they could become more aware o the existence of previous researches to develop further results. iv. Fourth motivation:

This motivation is of practical, administrative importance. Advance technology vary rapidly in sophistication and advancement and organizations adopt is rapidly as well. However, administrators and 5

their advisors will not have experience, as a guide in anticipating and planning for the impacts they may have. In the absence of experience the value of theory is considerable. 2.1. Meaning and characteristics of computer assisted communication technologies and decision aiding technologies Computer assisted technologies It facilitates access to people inside and outside the organization with an case that previously was not possible e.g. electronic mail, image transmission devices, computer conferencing, video conferencing etc. Characteristics: I. II. III. IV. V. Data storage capacity To communicate more easily and less expensively across time and geographic location To communicate more rapidly and with greater precision with target groups To record and index more reliably and inextensible To more selectively control access and participation in a communication event or network Decision aiding technologies technologies that help to incorporate individuals involved in decision making from large geographic areas as well as help to involve subunits e.g. expert systems, decision support systems, online management information system, external information retrieval systems. Characteristics: I. II. III. To share and retrieve large amount of information more quickly and inexpensively. To more rapidly and selectively access information created outside the organization To more rapidly and accurately combine and reconfigure information so as to create new information IV. To more compactly store and quickly use the judgments and decision model, developed in the minds of experts/ decision makers and stored as expert system term or decision models. V. To more reliably and inexpensively record and retriever information about the content and nature of organization transactions.

2.2. Limitations of theory This is not an empirical research, but it is a theoretical paper based on previous researches. Therefore, propositions in this article are limited. Moreover this theory includes only dependent variables i.e. characteristics of organizational intelligence, decision making and timeliness and aspects of organizational design associated with intelligence and decision making. Within these two dependent variables there is a set of large number of dependent variables but only those included that seemed significantly affected by advance technology, that are interest to organizations scientists or administrators and whose variance seems to have increased with the advent of advance technology. Variables that are not discussed in theory, but omission discussed briefly are horizontal integration, specialization, standardization, and distribution of influence on organizational decision. Independent variables included in theory are only the use of computer assisted communication technologies and decision aiding technologies. The theory does not include use of computer assisted production technologies and use of transaction-enacting technologies. Finally, the theory does not explicitly address use of advance information technologies for impression management. Hence selection of variables limited the theory to particular part of globe i.e. developed world. Moreover, it considers such variables which shows only positive impact of advance technology, whereas, there are negative impacts as well and those impacts are neglected by the theory. 2.3. Nature of advance information technology: The following table elaborates critical characteristics of advance information technology that might cause them to impact organizational design, intelligence and decision making. For ease, these characteristics divided into two groups, Basic characteristics (these are about data storage capacity of technology) and properties (include those characteristics that facilitate the ability of the individual organization). Basic characteristics Properties

To store and retrieve large amount of information more To communicate more easily and less quickly and inexpensively. extensively across time and geographic location. To more rapidly and selectively access information To communicate more rapidly and with created outside the organization. 7 greater precision with target groups.

To more rapidly and accurately combine and reconfigure To record and index more reliably and information so as to create new information. inexpensively.

To more compactly store and quickly use the judgments To more selectively control access and and decision models developed in the minds. participation in a communication event or network. To more reliably and inexpensively record and retrieve information about the content and nature of

organizations harm actions.

2.4. Mistaken impressions discussed by theory: The theory discusses some of general mystification about advance information technology that includes: i. Advance information technologies are universally inferior or superior then traditional technologies. ii. iii. Viewing advance information technology solely as substitutes for traditional technologies. Advance information technology could not adopted by highly politicized and power driven organization. The theory clears these mystifications through strong evidences. For the first one the theory says that, the properties of traditional technology just limned by advance information technologies. These properties may be less important than other properties possessed by more traditional technologies. Besides this particular uses of the advance information technologies may have unwanted side effects. Often traditional technologies often score high with respect to acceptability of use, and richness because of its ease of use and understanding. However advance information technologies are useful for organizational effectiveness because of its properties likes time, resources and as well as its data storage broadness along with many other but despite these all it do not overlaps traditional technologies. Similarly for second mystification the theory explains that, advance information technologies are used frequently as supplements and complements to traditional technologies instead as substitute. For third mystification, the theory tell that even power and politics influences organizational design/ intelligence and decision making, but they use advance information technology for advancement of their interests including effectiveness, efficiency and in fulfilling organizational goal.

2.5. The propositions On the basis of theoretical review, the present theory set forth various propositions along with corollaries that depict effects of advance information technologies on organizational design, intelligence and decision making. These are enlisted below 1. Use of computer-assisted communication technologies leads to a larger number and variety of people participating as information sources in the making of a decision. 2. Use of computer-assisted communication and decisionsupport technologies leads to decrease in the number and variety of members comprising the traditional face-to-face decision unit. 3. Use of computer-assisted communication and decision support technologies results in less of the organizations time being absorbed by decision-related meetings. 4. For a given organization use of computer-assisted communication and decision-support technologies leads to a more uniform distribution, across organizational levels of the probability that a particular organizational level will make a particular decision. Corollaries 4. a): For a highly centralized organization, use of computer-assisted communication and decision-support technologies leads to more decentralizations. 4. b): For a highly decentralized organization, use of computer-assisted communication and decision-support technologies leads to more centralizations 5. For a population of organizations, broadened use of computer-assisted communication and decision-support technologies leads to a greater variation across organizations in the levels at which a particular type of decision is made. 6. Use of computer-assisted communication or decision support technologies reduces the number of organizations levels involved in authorizing proposed organizational actions. 7. Use of computer-assisted information processing and communication technologies leads to fewer intermediate human nodes within the organizational information processing network. 7. a) use of computer-assisted information processing and communication technologies reduces the number of organizational levels involved in processing message. 8. Availability of computer-based activity and transaction-monitoring technologies leads to more frequent development and use of computer-resident data bases as components of organizational measures.

9. Availability of more robust and user-friendly procedures for constructing expert systems leads to more frequent development and use of in-house expert systems as components of organizational memories. 10. Use of computer-assisted information processing and communication technologies leads to more rapid and more accurate identification of problems and opportunities. 11. Use of computer-0assisted information storage and acquisition technologies leads to organizational intelligence that is more accurate, comprehensive, timely, and available. 12. Use of computer-assisted communication and decision-support technologies leads to higher quality decisions. 13. Use of computer-assisted communication and decision-support technologies reduces the time required to authorize proposed organizational actions. 14. Use of computer-assisted communication and decision-support technologies reduces the time required to make decisions. These prepositions developed on the foundation of some of the concepts. As prepositions set forth were not derived from a generally accepted theory instead pieced together from prior research. These propositions developed on the basis of following concepts: 1. Advance information technologies have properties different from more traditional information technology. 2. Advance information technologies leads to more available and more quickly retrieved information. 3. Increased information accessibility leads to the changes in organizational design. 4. Increased information accessibility and those changes in organizational design that increased the speed and effectiveness with which information can be converted into intelligence or intelligence into decisions, leads to organizational, intelligence. 2.6. Conclusion and recommendations of theory: The propositions of this theory are mirror image of whole theoretical study. According to the propositions, intrusion of advance information technology has highly positive impacts on organizational design, intelligence and decision making. Although theory discusses little bit about reduction in human nodes but do not consider high negative impacts of reduction in human nodes. On the basis these propositions the theory gives the following suggestions: 10

1. Researchers should explore more effects of advance information technologies, as with the rapidly occurring advancements in technology, the impacts also vary with chop-shop.. 2. Organizational researchers should believe that information technology fits within the domain of organization theory and that it will have a significant effect on organizational design, intelligence and decision making. 3. Administrators should ask researchers to help them to anticipate the effects of the technologies. This all was about the theory and the discussed limitations, conclusion and recommendations are from the research article. Now the analysis session include study and literary criticism of the group. 3. Analysis Increasing development in information technology leads to various effects on many sectors of economies and, hence born tigers as well as jackals. Since the penetration of advance information technology in whole globe is not enough. However, there is a need to know that could afford it and deal with it. Therefore, those countries that could deal with advance technologies financially as well as technically are becoming or became tigers but those who have no capacity are becoming jackals in international markets. Developed countries are getting all sorts of benefits from advance technologies and they are on edge of understanding technologies. The fourteen propositions elaborated in theory of effects of advance information technology are true for developed countries. However, with the rising more sophisticated technologies, developed countries too sinking in some highly harmful diminutions. That could include technology disasters as held in Japan due to Tsunami 2011. Besides this unemployment is a serious matter that is arising in developed countries due to replacement of men by machine at various levels. Any sort of development have some losses as well but not a single loss discussed by theory of impact of advance information technology. However, whenever we say something about effects it must include negative as well as positive effects. Moreover, the theory shows that its coverage is limited to developed countries. 3.1. Implications to developed countries: Although advance information technologies innovated all the benefits presented propositions of above discussed theory but besides these all there are many challenges internally that are need to overcome. 11

(Erik Brynijolfson, Lorin M. Hitt, 1998). These challenges include insecurity related with digital stored information, sudden breakdown of machines and other technology diseases. Such accidents could give huge economical breakage that could ultimately hinder organizational design, intelligence and decisionsupport systems. As increasing penetration of advance information technology replaces men by machine and hence increases unemployment this in turn increases external pressure of riots and other reactions that disturbed the organizational capabilities discussed in above theory. It has been estimated that IT has eliminated almost a third of the USA middle management jobs or about two million managers. A reduction of over 60% of the middle management workforce has been forecasted for the next decade in the US. (Alain Pinsonneault, Kenneth L.Kraemer, 2000). Besides all benefits of technology, there are side effects as well, although some are visible and many are invisible. Increasing use of sophisticated technology makes the work more complex to single or little more individuals dealing with particular technology, however the output of such technologies makes things more approachable and clear to beneficiaries (Schwartz, 2007). 3.2. Implications to developing countries: One could not denied from positive influences of technology that included blowing economy by opening new opportunities for the exploitation of economies by using labour and equipment effectively. This is possible by making organizations more stable through proper, limited and less use of time, money and resources by using technology for decision making process, improving financial outcomes, communication processes and learning/training processes. (Jennifer L.Blaskovich, Brian P.McAllister, 2007). Developing countries constantly applying advace information technologies to increase the productivity, quality, and efficiency of finance, banking, business management, and public administration but they have many hindraces that do not allow them to seek maximum benefits of information technology. These are following: (Kenaroglu) 1. Lack of skilled labour is one of basic riddle in using advance information technologies effectively by developing countries.

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2. As developing countries adopt any particular technology in the meanwhile developed countries move towards more sophisticated technologies this results in continues technology gap in developed and developing world. 3. Advance sophisticated softwares are often expensive and complicated to deal with and hence developing countries could not afford them both due to lack of money as well as lack of skilled labour. 4. Advance information technology not only needs skilled labour but it needs many organizational changes that include staffing and management arrangements, that is too much difficult in developing countries because of corruption and power game. 5. Developing countries also suffer with huge brain drain because of low labor cost and hence they continuously ill with lack of labour unless any effective policy do not designed. 6. Most of new technologies require new skills of design; maintenance and management, as well as complementary infrastructural facilities, deficiencies in these factors prevent the widespread adaptation of information technology in developing countries. 3.4. Conclusion and recommendations On the basis of whole theoretical research it is concluded that although advance technology have various benefits but it have some side effects as well and it is important to view and study keenly such side effects to save oneself from major losses. Moreover technology is beneficial if it could be adopted and particular required changes could be made accordingly. Various recommendations on the basis of this study are illustrated below: 1. Organizational, communication and technology researchers should aware organizations about sudden losses by technology and should work for it. 2. Increasing unemployment should be overcome by introducing new opportunities to save organizations from external pressure. 3. Developing countries should skill their labour force with advance trainings. 4. Labour force should be motivated within country by increasing labor cost through effective policies. 5. Labour should be skilled enough to meet in international competitive markets.

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Bibliography
Alain Pinsonneault, Kenneth L.Kraemer. (2000). The Impact of Information Technology on Middle Managers. USA: Center for Research on Information Technology ( CRITO). Erik Brynijolfson, Lorin M. Hitt. (1998). Information Technology and organisational design: Evidence from micro data. Sloan School of Management. Jennifer L.Blaskovich, Brian P.McAllister. (2007). Organizational Reasons for Decision Aid Implementation. Review of Business information Systems-third quarter , 53-58. Kenaroglu, B. Implications of informaqtion technology in developing countries and its impact in organizational change. Ankara: Turkish Aeroplane Industry (TAI). Schwartz, D. G. (2007). Integrating knowledge transfer and computer-mediated communication: categorising barriers and possible responses. Israel: Graduate School of Business Administration, Bar-Ilan University.

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