Information Technology Impact in Organizations

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Information Technology Impact in Organizations

  1. 1. Information Technology 1Information Technology Impact in Organizations Edgardo Donovan ITM 603 – Dr. Wenli Wang Module 3 – Case Analysis Monday, May 23, 2011
  2. 2. Information Technology 2 Information Technology Impact in Organizations A large portion of information technology organizational impact studies are eitherdeterministic, opposition oriented, qualitative, or gauge process usability success determinedthrough empirical quantitative methods. Clearly such a wide variety of approaches will havedifferent applications depending on the type of organization, its ecosystem, as well as how itperceives its success utilizing information technology compared to desired future outcomes.Technology alignment studies is the theoretical approach which is adaptive enough to have thegreatest chance of achieving internal/external validity in the widest amount of organizationalcircumstances. There have been a wide variety of research approaches that study the impact ofinformation technologies in organizations. The potential of information technology to transformorganizations has been a persistent theme in both the management and information systemsliteratures since computers were first introduced commercially in the 1950s. During the 1990s, ascomputers became networked within and across organizations, prediction of virtual organizationemerged. More recently, the Internet has spawned still another set of projections for electroniccommerce among boundary-less organizations and intranet systems within them. Programs ofbusiness process reengineering have given way to broader agendas for organizationaltransformation and knowledge management. (Robey 1999, 167). By virtue of the acceleratingrate of technological change over the past two decades there is a great deal of interplay betweencommunication technology and various dimensions of new organizational forms. Changesattendant upon advances in electronic communication and organizational forms can energize
  3. 3. Information Technology 3future research and uncover possibilities for new avenues of study within the technology-organization relationship (DeSanctis 1995, p. 337). As both technologies and organizationsundergo dramatic changes in form and function, organizational researchers are increasinglyturning to concepts of innovation, emergence, and improvisation to help explain the new ways oforganizing and using technology evident in practice. This develops a practice lens to examinehow people interact with a technology in their ongoing practices, enact structures which shapetheir emergent and situated use of that technology (Orlikowsky 2000, p. 404). There are multiplefactors motivating dramatic change within and between organizations today and key dimensionsof intra-organizational/inter-organizational forms that are linked to electronic communicationtechnologies. These include vertical control, horizontal coordination, size of organization andconstituent units, new types of coupling, core product, communication cultures, ownership andcontrol, interorganizational coupling, strategic alliances, and interstitial linking (DeSanctis 1995,p. 337). The past decade has witnessed a quantum leap forward in how organizations operatewith partners. Supply chain relationships are going beyond operational efficiency and are beingstructured to pursue higher-order goals such as understanding new market dynamics, discoveringnew partnering arrangements to provide greater customer value, and learning from partners toachieve long-term competitiveness (Malhotra 2005, p. 146). These interlinked processes thatenable rich information sharing and building information technology infrastructures allow toprocess partners information to create new knowledge (Malhotra 2005, p. 145). Technology despite best intentions does not always lead to more efficient operationsdespite large investments in new equipment, processes, and IT personnel. Academic researchattempts to theorize the conditions that lead to understanding dynamics that may help achieve
  4. 4. Information Technology 4optimal outcomes and vice versa. In contrast to a logic of determination, a logic of oppositionexplains organizational change by identifying forces both promoting and impeding change. Fourspecific theories are considered: organizational politics, organizational culture, institutionaltheory, and organizational learning. Each theory is useful to the problem of explaininginformation technologys role in organizations. Four methodological implication of using thesetheories are also discussed: empirical identification of opposing forces, statement of opposinghypotheses, process research, and employing multiple interpretations (Robey 1999, p. 167). There are different approaches taken to study the impact of information technologies inorganizations. The Malhotra study seeks to provide a foundation for theory building that linksknowledge creation in supply chains to information systems and business process infrastructuresthat support effective inter-organizational partnerships. Cluster analysis is used to uncover anddescribe key supply chain partnership configurations and discuss the implication for research andpractice in the area of partner-enabled knowledge creation in supply chains (Malhotra 1999, p.147). Malhotra using an empirical post positivist methodology mixing both qualitative andquantitative approaches studies the impact of information technology through AbsorptiveCapacity Framework. The latter is a dynamic capability pertaining to knowledge creation andutilization that enhances a firms ability to gain and sustain competitive advantage. It consists inthe acquisition, assimilation, transformation, and exploitation capabilities and is quantifiedthrough the relationships among the following variables measured through a survey: inter-organizational process modularity, joint decision making, standard electronic business interfaces,interpretation systems for inter-organizational activities, breadth of information exchange,
  5. 5. Information Technology 5quality of information exchange, privileged information exchange, and coordination informationexchange (Malhotra 151). Theories implying a logic of opposition and the empirical methods associated with themaccount for contradictory empirical findings in a different way than deterministic theories andmethods. Theories using a logic of opposition may be more interesting because they deny ratherthan affirm the common assumption of a consistent relationship between technology andorganization (Robey 1999, p. 168). The Logic of Opposition draws from the following theories:organizational politics (groups with incompatible interests engage in political activity usinginformation technology as a resource from which organizational changes emerge), organizationalculture (information technologies are produced and interpreted as cultural artifacts that maysymbolize a variety of beliefs, values, and assumptions), institutional theory (patterns andpractices sustain an organizations legitimacy and are unlikely to change whereby informationtechnologies may be adapted to institutional practices or used to reform them), andorganizational learning (existing organizational memory may impair new learning so informationtechnologies both enable and disable organizational learning) (Robey 1999, p. 173). Orlikowski uses mainly a qualitative approach. Theory is divided to include technologyartifacts: electronic communication, text editing, document management customization,integration replication, security, and application development. He shows how technologies forprocesses and how they influence surrounding structures through different types of enactment:inertia, application, change, interest in using technology, interpretive conditions, technologicalconditions, technology in practice, processual consequences, technological consequences, andstructural consequences (Orlikowski 2000, p. 422).
  6. 6. Information Technology 6 Strategic information technology alignment studies would complement theaforementioned array of research in that the focus centers around people, structures, andprocesses already present in terms in how the reconcile with desired processes or outcomes. Alarge portion of information technology organizational impact studies are either deterministic,opposition oriented, qualitative, or gauge process usability success determined through empiricalquantitative methods. Clearly such a wide variety of approaches will have different applicationsdepending on the type of organization, its ecosystem, as well as how it perceives its successutilizing information technology compared to desired unfulfilled outcomes. Technologyalignment studies is the only theoretical approach which is adaptive enough to have the greatestchance of achieving internal/external validity in the widest amount of organizationalcircumstances. Companies align a portion of their processes with technologies they feel will render theiroperations more efficient. There is always the potential that new aligned practices willsynchronize with traditional operations thereby carving out a niche as one of the multipleoperational tools. The potential for ultimate convergence with standard practices is the goal. ISliterature repeatedly outlines the fundamental importance of alignment for organizationaleffectiveness. Strategic alignment provides a logical framework for analyzing strategic choices inenough detail to ensure successful implementation of business, technology, and infrastructuredirection (Luftman 1993, p. 205). In 1997 Yolanda Chan provided a theoretical model on howorganizations can align their IT strategies to better achieve organizational goals. Despite thearguably nebulous definition of what information systems strategic alignment universally means,
  7. 7. Information Technology 7Chan defines it as the fit between business strategic orientation and information systems (IS)strategic orientation (Chan 2006, p. 125). She provides greater detail in stating that informationsystems and technologies are used to leverage unique business competences, merge companies,restructure industries, and facilitate global competition. The relation of information systems (IS)to company strategy and the attainment of competitive advantage has been the focus of muchdiscussion (Chan 2006, p. 125). Studies have also demonstrated that IS alignment and performance are correlated. Twowell received views are that IS alignment is “the degree to which the information technologymission, objectives, and plans support and are supported by the business mission, objectives, andplans,” and that IS alignment involves “fit” and “integration” among business strategy, ITstrategy, business infrastructure, and IT infrastructure (Chan 2006, p. 98). At one end of thespectrum is the perspective that organizations are rigid corporate entities devoid of personalitythat can be engineered. At the other end of the spectrum is the view that organizations areprimarily social systems of interrelated elements where a change in one element affects allothers. One precondition for successful alignment of the informal structure may be a positivecompany culture (Chan 2006, p. 108). Therefore, studies involving IT alignment should centeron organizational culture dynamics and whether an organization has the ability to foster adynamic symbiosis between IT processes and evolving organizational strategy.
  8. 8. Information Technology 8 BibliographyChan, Yolande E., Rajiv Sabherwal, and Jason Thatcher. (2006). Antecedents of strategic ISalignment: an empirical investigation. IEEE Transactions on Engineering Management 53, no. 1(February 2006): 27- 47.DeSanctis, G. & J. Fulk (1995). Electronic communication and changing organizational forms,Organization Science, Jul/Aug 1995, 6, 4.Luftman, J. N., Lewis, P. R., and Oldach, S. H. (1993). Transforming the enterprise: Thealignment of business and information technology strategies. IBM Systems Journal, 32(1Luftman, J., Kempaiah, R. (2007). An update on business-IT alignment: A line has been drawn.MIS Quarterly Executive, 6(2), 165-177.Malhotra, A., S. Gosain, O. A. El Sawy (2005). Absorptive capacity configurations in supplychains: gearing for partner enabled market knowledge creation. MIS Quarterly, March 2005,pp.145-187.Orlikowski, W. (2000). Using technology and constituting structures: A practice lens forstudying technology in organizations, Organization Science, Jul/Aug 2000; 11, 4; pg. 404.Robey, D. (1999). Accounting for the contradictory organizational consequences of informationtechnology: Theoretical directions and methodological implications, Information SystemsResearch, Jun 1999; 10, 2.

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