Strategic change in organizations is a set of tasks each manager must address. Yet, plans for change often go awry.
- What?s important for you to keep in mind when facing the management of organizational change?
- What information must you track so that you account for performance, as work staff seek to change a product, or service?
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Module 10: Use of Technology for Managing What's the benefit of studying this topic?
It's estimated that managers spend many of their work hours exchanging information. The ideas of information
technology and how it impacts organizational effectiveness are now essential to you being successful as a manager
of a work unit. Module 10
Technology for Managing
Many organizations have been transformed by their adaptation to and use of information technology (IT). For many
business and government agency consulting groups, using IT is at the core of their work. Technology has become
a factor in helping all companies compete and understand global market forces. Hardware and software helps
these businesses provide goods and services at speed, convenience and value to consumers, whether those
buyers are in Los Angeles, Rio de Janeiro, Lyons, Milan, Moscow, Jakarta, Sydney or other locations in the world.
At-a-glance Definitions: IT/Information Technology: Hardware and software using electronic applications for management decisions
Management Control System: A system of planning, performance measurement, and evaluation.
Intellectual Capital: The sum of a company's knowledge, understanding, processes, innovations, and
Transaction Processing Systems: Software/computer-based applications which automates and tracks an organization (or work unit's) routine, day to day business tasks.
Decision Support System: Software/computer-based applications that relies on decision models and then
applies those models to data bases for assisting managers.
Data Warehousing: Software/computer-based applications which allow for aggregating all data within a
company/organization so that workers/managers or other users can access data directly to analyze results,
create reports and obtain answers to "what-if" questions.
Business Intelligence: Technological-driven analysis which builds on large amounts of internal and
external data to identify patterns/relationships for management/development strategy and plans.
Executive Dashboard: Software programs summarizing key business information in graphic, easy to grasp
formats to allow managers at-a-glance interpretations of any deviations from expected performance, or shifts
in patterns of performance.
Benchmarking: Designated processes and identified factors which assist workers/managers in continually
measuring products, services, and practices against well-known competitors or organizations recognized for
Six Sigma: A quality-standard software approach that specifies a goal of no more than 3.4 defects per
million parts, and emphasizes the relentless role for producing quality performance as a role of managing.
Balanced Scorecard: A management control system/software application that balances financial measures
against operational activities to provide snapshots of critical success factors
Intranet: a private, internal, company-wide information system that uses operating principles of the Web and
Internet to be accessible to the company's workforce. Technology Development by Generation
Generation-the age you are-- can influence how managers view roles and how you use technology to assist
management functions, but this is rapidly changing. Using popular social groups, you see not only the role that
technology plays in each generation's view but also that each of the generations is in a period of transition for
determining its place in the management structure: The Baby Boomers came of age when computers were big objects, or ?mainframes?, housed in climate
controlled rooms. Computer technology, especially information technology, was of limited use when they
were children. However, many later baby boomers began using computers in their college years and thus are
the first generation to embrace the promise of information technology. For example, Microsoft founder Bill
Gates is a Baby Boomer. Boomers currently dominate senior management; however, they are beginning to transition out and into retirement (the earliest of the Baby Boomers turned 60 several years ago).
Generation X came of age as IT was making the transition from being a tool of "think tanks" to becoming a
part of everyday life, especially personal and professional decision making. The earliest members of
Generation X are facing the decade of the "The Big Four-O" and are a force in middle management. In
addition, they are transitioning into senior management for many sectors, especially government. (In the IT
field itself, they ARE expected to be senior management).
Generation Y and the Millennials do not know of life without technology -- they grew up with it and on
it! Generation Ys are not only comfortable with technology; they are at ease with the pace at which
technology is changing. Millennials often incorporate technology applications even when meeting face to
face, and hold expectations for use of social media as a part of company marketing and innovation. They
expect such change -- one could even argue that they demand it, with a sense of confidence in their
abilities. Members of Generation Y are now in middle management with plans to be senior level, and
Millennials are right behind, eager for professional advancement. Why is this significant? The future of management and leadership is profoundly influenced by the perspectives and
values of those in leadership positions, especially the ability to direct change. How organizational strategy develops
and is implemented in the future will be determined by men and women who grew up with rapid change. How might
these managers see organizational design in the next five years? Will they want flatter, modules of activity with
even more emphasis on team work? Will they hold great confidence in software intelligence for controlling more
aspects of management? Will they use technology to monitor workers behind the scenes and allow them less
Today's Leaders Use More and More Technology:
Managers spend a large percentage of their time gathering and communicating information (see, for example,
Kotter, 1999). Relevant facts are needed to make decisions, coordinate plans, evaluate progress and assure
accountability for meeting performance. Information technology (IT) has become a fundamental tool for effective
information exchange with work units, across them and for larger enterprise planning. Increasingly managers use
technology software applications to carry out their responsibilities.
Information technology is employed in a variety of ways for management purposes. Some of these include: Reducing costs of manufacturing and administration by automating functions Creating new markets, such as using miniaturization for new electronics
Enhancing customer service
Enabling innovation in services, products, or processes that can fuel competitive advantage
Providing customer information to target marketing and product/service development
Internal systems for coordination, control, human resources, etc. Below is a table (Daft, 2013) highlighting manager tasks for using information technology at various levels/sizes of
organization or business.
Operational/Product or Customer Mid-level Decision making/Control
Executive Level Informational
Service Information Technology, Technology Software, more easily Software applied in multi-nationals
easily seen in smaller
recognized in mid-sized
for internal strategy AND to track
organization, or a "line" unit
Data warehousing, from which
managers create reports for
Options for data mining. Decision Support for tasks related to
production and scheduling/staffing,
including reward systems/reports on
Management Control has specific
software for assisting managers in
establishing targets, tracking
outcomes compared to targets and
variance reports so that managers
can take corrective action.
Benchmarking (Six Sigma is one
method) software which tracks
agreed to measurements/goals of
production, customer service, and
practices, compared to established
department or unit goals.
Financial reports- profit/loss of unit,
often weekly. Balanced Scorecard Approach
software/interpretation of data for
understanding financial measures of
operations/compared to strategic plan
and factors for achieving critical
success-data provides Financial
performance, Customer service,
Internal Process performance
information, Options for
Executive Dashboard--presentation of
performance indicators in graph
formats-for instance sales in relation
to targets across units.
Benchmarking software to tracks
goals/performance compared to
Knowledge management-enterprise resource planning.
(Daft, 2013). See web links listed in the last section of this web page for more ideas about tech advances. A 2013 research report from the global consulting firm, McKinsey & Company, identified ten trends in business that
are enabled by IT (Bughin et al., 2013):
1. The ?social matrix?: Tapping the power of interorganizational and organization-customer connections to
solve problems among diverse experts. Productivity is being boosted, teams with distinct knowledge are
assembled, connections with business partners strengthened, and user experiences tapped to boost
2. Big data as a competitive tool: Data and analytics are deployed to competitive advantage. For example,
wireless communication, cloud storage, and visualization of data are current uses of information. Businesses
are segmenting customers into ?microsegments?. A leadership issue that McKinsey highlights is that of
creating an organizational culture that promotes experimenting with these data.
3. Managing operations: As micro-sensors grow in number, they enable lower costs. For example, FedEx has
a ?SenseAware? program where a small global positioning device (GPS) along with sensors to monitor light,
pressure, temperature, etc. is included in a package, enabling a firm to better monitor and then control its
supply chain. Ingestible sensors used in medicine are another example of such uses.
4. Offering more services: Using slack physical resources to sell a service and monetize underused capacity, for example selling time on idle trucks to other organizations that need them. Cloud computing enables the
tracking and information flow for these opportunities.
5. Making knowledge work more productive: Computers now can asses the context of language and make
sense of patterns of information allowing information processing to occur at speeds faster than a human can
do it. McKinsey notes that this may shift jobs from knowledge workers to machines, requiring that the
structure and culture of some companies may transition.
6. Tapping emerging markets: As global populations come up to speed with mobile computing, they will be
more included financially and will present new business opportunities.
7. Mingling of the digital with the physical: Wearable technology (e.g., Google?s eyeglasses, wristwatch
computing) and other experiences (e.g., store displays, dressing rooms) transform the consumer experience.
This is also happening n manufacturing, for example, where Boeing employs glasses that offer virtual reality
that boosts productivity. McKinsey recommends that executives search for ways that they use such
interactive technologies to collect feedback and design products.
8. ?Free? services challenge tradition pricing: There is an ongoing battle between free (e.g., Craigslist) and
traditional services. While this stresses the free services to continually innovate, it also forces traditional
competitors to do the same as they search for revenues. There also is a demand for personalized services
and products. This may require alterations in systems set up for mass production. Innovation is the new
normal in an age of instant gratification.
9. Digital commerce is changing the game: Easy online transactions are revolutionizing commerce and
lowering barriers to entry for upstart competitors.
10. Government, education, and health care transformation: These sectors account for ?a third of global
GDP? and will benefit from productivity benefits from IT, big data analytics, and other innovations. This is
expected to lead to lower costs and better services.
Impact of Technology on Organizational Structures
Based on the trends identified above, Bughin et al. (2013) suggest that several key issues must be addressed by
managers. A core competency will need to be the ability to respond. Of great significance, organizations must
Decentralization: The trends strongly indicate that decentralization of organizational structures is needed. At the
heart of innovation is empowering knowledgeable workers to apply the information they learn to solve problems and
innovate new processes, products, and services. Simultaneously, relationships must change. These include not only those between organizations and their customers but also those between managers and staff and those with
supply chain partners.
Horizontal communication, improved interorganizational relations, new design: Your reading, Considering
Technology, notes that virtual organizations have come about as the result of information technology.
Communication and Internet capabilities enable a relatively small organizaiton to operate on a global scale, not only
with remote staff and teams but also with other partner organizations. Similarly, a network design is enabled and
facilitated by recent telecommunications advances. Information technology also supports more efficient supply
Increased horizontal coordination: At the work unit level, individuals and teams are better equipped to manage
communications, scheduling, reporting, etc. with information technology.
Management of Technology
Your reading, The Challenge of Technology, outlines some of the key issues that are important today to manage
technology itself. You may see parallels between these and the ten trends that McKinsey?s research uncovered. A
key part of management today is the ability to stay on top of the curve of efficiency and innovation vis a vis the
competition. This requires attention to process, organization, information, and implementation. It involves not only
staying abreast of forthcoming changes but also retraining staff and investing in R&D to keep pace. This is
consistent with the need for more decentralized organization structures to meet the challenges of unrelenting
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