1. Organizational Structures for the Networked Business
Ken Peffers
UNLV
October 2004

2. Ford Motor Co, 1910
General Motors Corp, 1925
Division Structure

4. Organizational Structures
Ford Motor Company, 1910
Hierarchy
Manage complexity by minimizing it
Detailed work descriptions
General Motors
Division Structure
Separate Strategic from day to day management
Matrix Organization
Overwhelming information overload
Redundancy

9. Why isn’t there just one big company that controls all of the business in the world?

14. Categories of Benefits Goals and Measures
Table 4-2: The IT Business Value Scorecard
Categories of Benefits
Goals and Measures
Internal
External
Type I: Benefits from Investments in a Networked IT Infrastructure
Functionality and Flexibility
Improve infrastructure performance; increase the functionality and range of strategic options that can be pursued
Sample Measures: Decrease the cost and/or improve the performance of internal IT operations; enable new IT applications to be created at lower cost, in less time, and with less risk; expand the range of internal IT initiatives
Create an efficient, flexible online/offline platform for doing business with customers, suppliers, and partners
Sample Measures: Decrease the cost and/or improve the performance of doing business online; decrease the time, cost and risk of launching new online business initiatives; expand the reach of existing IT enabled businesses and the range of business opportunities that can be pursued.
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information and Strategy Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.

15. Categories of Benefits
Goals and Measures
Internal
External
Type II: Benefits from Doing Business on a Networked IT Infrastructure
Commerce
Improve internal operating efficiency and quality
Sample Measures: Internal process performance and work flow improvements; cost savings or cost avoidance; increased quality; decreased cycle time
Streamline and integrate channels to market, create new channels, and integrate multiple online/offline channels
Sample Measures: Supply chain or distribution channel performance improvements; cost savings or cost avoidance for the organization and its customers, suppliers, or partners; decrease time to market or just-in-time order replenishment; enable new channels to market and/or extend the reach and range of existing channels
Content / Knowledge
Improve the performance of knowledge workers and enhance organizational learning
Sample Measures: Enable individuals to achieve and exceed personal performance goals; increase the speed and effectiveness of decision making; increase the ability of the organization to respond quickly and effectively to threats and opportunities
Improve the performance of knowledge workers in customer, supplier, and partner organizations; add “information value” to existing products and services; create new information-based products and services
Sample Measures: Provide information to customers, suppliers, and partners that enables better decision-making; charge a price premium for products and services based on information value-added; launch new information-based products and services; increase revenue per users and add new revenue streams

16. Categories of Benefits
Goals and Measures
Internal
External
Type II: Benefits from Doing Business on a Networked IT Infrastructure
Community
Attract and retain top talent; increase satisfaction, engagement, and loyalty; create a culture of involvement, motivation, trust, and shared purpose
Sample Measures: Length of time to fill key positions; attrition rate, trends in hiring and retaining top talent (over time, by industry, by region)
Attract and retain high quality customers, suppliers, partners, and investors; increase external stakeholders satisfaction, engagement, and loyalty
Sample Measures: Customer, supplier, partner satisfaction and lifetime value; average revenues per customer and trend over time; level of personalization available and % that use it; churn rate

17. Table 4-3: Comparing the Three Eras of IT Evolution
Since it was first introduced in organizations, IT has progressed through three eras. During the Mainframe Era, IT was primarily used to automate back office activities. During the Microcomputer Era, IT savvy individuals used personal computers, spreadsheets, and word processing to support decision making and individual work. The Network Era began with early client-server technologies where attempts were made to integrate the islands of automation that arisen during the first two eras and, in the process, to streamline and integrate core IT-enabled business processes. The commercialization of the Internet, browsers, and the World Wide Web, enabled full realization of anywhere, anytime, anyplace computing that is transforming global business, society, and policy. As technology evolved, so too did the benefits and impacts. Yet, the benefits of earlier eras did not go away when we transitioned to a new era. Instead, new opportunities emerged.
Timeframe
Mainframe Era 1950s to 1970s
Microcomputer Era 1980s & Early 1990s
Network Era 1990s to present
Dominant Technology
Mainframe, stand-alone applications, databases
Stand-alone microcomputer and end-user tools (e.g., word processing, spreadsheets)
Client-server, Internet, browser and hypertext
“Data Management”
“Information Management”
“Knowledge Management”
Organization Metaphor
Hierarchy
Entrepreneurial Organization
Networked Business Community
“Centralized Intelligence”
“Decentralized Intelligence”
“Shared Intelligence”
Primary IT Role
Automate back-office activities
Provide information and tools to improve decision making and knowledge worker performance
Transform organizations and markets to create business value
Typical User
IT specialists
IT literate business analysts
Everyone
Location of Use
Computer room
Desktop
Everywhere
Planning Process
Yearly budgeting
Individual expense
Business development and strategic planning
Justification
Cost savings
Increased decision quality and personal performance
Business value
Implementation
Independent projects
Ad-hoc
Strategic initiatives
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information and Strategy Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.