 Information Technology and Organizational Decision Making Chuck Davies

PREMISE  The Effects of Advanced Technologies on Organizational Design, Intelligence and Decision Making  G.P Huber (1990)

Contents  Traditional vs. Advanced IT  Properties of Advanced IT  Decision Variables  Subunit  Organizational Design  Organizational Memory  Organizational Intelligence

Traditional IT  Operating Systems - Windows 7, XP, Linux  Desktops  “Simple” Applications - Microsoft Office, Notepad, Quick books

Advanced Technology  Basic Characteristics - Data Storage: Hard drive, removable media, tapes - Transmission capacity: WAN,LAN, Wireless - Processing Capacity: CPU power, database processing, memory storage

Organizational Decision Systems

Properties of Advance Technology  Task Relevant  Improve overall user performance  User Support in day-to-day activities

Context of the Properties  Communication It allows the ability to: - Communicate more easily and less expensively across time and location - Communicate more rapidly, with more precision to targeted groups - Record and index more reliably an inexpensively the content of communication - More control in the group participation selectivity in the network

Decision Aiding It facilitates the ability to:  Store and retrieve large amounts of information more quickly and inexpensively  More rapidly and selectively access information created outside the organization  More rapidly and accurately combine and reconfigure information so as to create new information  More compactly store and quickly use the judgment and decision models developed in the minds of experts  More reliably and inexpensively record and retrieve information about content and nature of organizational transactions

Impressions  It is a mistake to view advanced technology as substitutes for traditional technology?  “IT are frequently used as supplements… rather than substitutes”

Impressions cont’d  “For example, is often used to confirm with text what was said in a phone conversation” - Virtual Companies/Enterprises  Image Transmission devices used to digitize ALREADY available images?

Drive for IT Advancement  External Competition: The need to beet competitors with rapid communication  Internal Competition: In highly politicized organizations, project leaders need task achievement, group control and coordination on demand They may have a reputation to keep – Apple, Google

Decision Variables Design Variables (Subunit Level) Participation in decision making (1) Size and heterogeneity of decision units (2) Frequency and duration of meetings (3) Design Variables (Organizational Level) Centralization of decision making (4,5) Number of organizational levels involved in authorization (6) Number of nodes in the information-processing network (7) Design Variables (Organizational Memory) Development and use of computer-resident data bases (8) Development and use of computer-resident in-house expert systems (9) Performance Variables Effectiveness of environmental scanning (10) Quality and timeliness of organizational intelligence (11) Quality of decision (12) Speed of decision making (13,14)

Effect at the Subunit level  Proposition 1  Use of computer-assisted communication technologies leads to a larger variety of people participating as information sources in the making of a decision

Subunit level  Proposition 2  Use of computer-assisted communication and decision- support technologies leads to decreases in the number and variety of members comprising the traditional face-to-face decision unit

Subunit level According to proposition 2 the unit becomes smaller, proposition 1 states it has a larger pool of contributors Conflict?

Conflict Solution  This paradox results from having more experts specializing in certain areas  The beginnings of an Expert System

Subunit level  Proposition 3  Use of computer-assisted communication and decision support technologies results in less of the organization’s time being absorbed by decision-related meetings

Mini-Meeting  DSS can allow analyses that provide information which can resolve disagreements about significant effects of assumptions  Allows progress to continue without adjournment and rescheduling

Mini-Meeting  DSS, , IM, and other technology reduce the number of formal meetings  Using technology such as Google wave, IBM Lotus Domino, etc - virtual meetings

Organizational Level  Do Advancements in IT lead to more centralization or decentralization?

Answer  It decentralizes centralized organizations and centralizes decentralized organizations!

Proposition 4  For a given organization, use of computer-assisted communication and DSS leads to more uniform distribution across organizational levels  Evening the decision making ability of each level

Proposition 5  Broadened use of computer-assisted communication and DSS leads to greater variation across organizations in levels at which the particular type of decision is made Is there a conflict with Prop 2 (smaller groups that are homogeneous)?

Diversity vs. Homogeneity  Prop 2 states the groups will be smaller and more homogeneous  Prop 5 states that the collection of these groups throughout the organization will lead to diversity at different levels as opposed to within the group

Proposition 6 & 7  Reduces the number of levels involved in authorizing proposed organizational actions  GSS actually destroys Hierarchy problems – direct access to relevant managers and stakeholders

Organizational Memory  Prop 8 – Advanced IT leads to a more reliance on databases to store data. Improving organizational memory and transferability. Data bases are long lasting, index able, propriety

Organizational Memory  Prop 9 – easier to use advanced IT encourages the development of in-house expert systems These are the ultimate form of labor capitalization. - Decision Trees - Regression - Neural Networks

Organizational Intelligence Use of Advanced IT ultimately leads to Rapid and efficient DSS. They identify weaknesses and opportunities Decisions are more accurate and timely – An example is Heart attack diagnosis Decision Trees

Questions  Thank You  /end