Management and Information Technology

Challenges for the Modern Organization

Peter Ekman, Peter Dahlin

• Publisher: Taylor & Francis
• Year: 2011
• Print ISBN: 9780415888165
• eBook ISBN: 9781136481864
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Information technology has come to play an important role in organizations over the last few decades. Though it began as an entity dealt with by specialists, IT has evolved to become an everyday tool with both operational and strategic impacts. Most modern organizations have adopted different forms of IT, and become dependent on their computer-based information systems and their peripherals for everyday operations. Information technology offers opportunities to increase efficiency, customer value, and competitiveness.

Given the financial investment in IT required by organizations to remain competitive, IT has become a resource that needs to be managed. Management and Information Technology evaluates organizations' utilization of IT including knowledge management and e-learning, accounting, and business relationships. Presenting theories to help the reader understand the varying roles IT can occupy in different organizations, this volume illustrates the ways in which IT has become a key strategic tool.

1 Introduction

Peter Dahlin and Peter Ekman

In different ways and degrees, companies and organizations of today embrace the promises of productivity, knowledge development, and inter-organizational connectivity that contemporary information technology (IT) offers. Whether the motives are internal needs or external demands, the goal is increased efficiency or effectiveness, and whether the argumentation emphasizes added capability or decreased costs, companies have made IT an integral part of today’s business world. This may be manifested in the form of enterprise resource planning (ERP) systems from SAP, knowledge management systems (KMS) from IBM, office packages from Microsoft, or network solutions from Cisco, but organizations likewise face a challenging integration of IT with their established business. By now, many organizations have already passed several cycles of IT implementation, and their current challenges are thus often a matter of migration rather than clean-slate implementations.

Information technology has changed companies as well as industries, and created new arenas for e-commerce, consultancy, outsourcing, and various types of services. The effects have been seen both within and between organizations, and in business-to-consumer as well as business-to-business settings (Leek, Naudé, & Turnbull, 2003). Through its important role for both business strategy and everyday operations, many organizations have continuously invested in IT and become increasingly dependent on it. As a result, they have also steadily increased their IT departments’ resources and assigned chief information officers (CIOs) or chief technology officers (CTOs) when attempting to gain competitive advantages through the use of information technology. It has been put forth that future CIOs need to be recruited from business areas such as marketing or supply-chain managers, so that they can approach the issue with a holistic approach and have an understanding of the fundamental business functions that information technology is thought to support (Groysberg, Kelly, & MacDonald, 2011). These developments have also come to challenge and affect fields of academic research, both as information technology has made its entry into business and management studies, and as former technology-focused research approaches have made room for perspectives that include the whole organization, and even external stake-holders. IT-related issues have attracted the interest of management researchers, and journals such as the Academy of Management Journal, Management Science and Organization Science have published numerous studies on IT. Several professional journals, such as Harvard Business Review and MIT Sloan Management Review, are also presenting current IT trends on a regular basis.

A discipline with a particular interest in the intersection between management and IT is Management Information Systems (MIS), for which IT is a focus, but the business context is a natural foundation. The discipline was manifested in the late ‘70s though the journal MIS Quarterly (Dickson, 1977), and has since been growing to constitute an established domain. The field has been shaped by the idea that IT-related research has been too closely focused on technical issues rather than managerial challenges (Grover & Sabherwal, 1989; Kling & Schacchi, 1982) and that there has been a gap between research and managerial practices (Lee, Gosain, & Im, 1999). There has also been a call for rich empirically grounded research to complement the conceptual or single-variable studies (Hamilton & Ives, 1982). With managerial trends like business process reengineering (Hammer, 1990; Davenport, 1992; Hammer & Champy, 1993) and knowledge management (Hansen, Nohria, & Tjerney, 1999; Nonaka, 1991), where the inclusion of information technology is one central theme, the discipline of MIS has found its role as an integrated approach towards management and IT.

Many relevant lessons can surely be learnt from studying information technology through managerial lenses and theories of business, organizations, and markets. There is a trend for references used in major MIS journals to be predominantly from the management field (Chapman & Brothers, 2005), and some of the top journals in the area, such as MIS Quarterly and Information Systems Research, are today highly ranked also in the wider field of management. Further work is needed, however, to synthesize the management streams in the MIS field to more achieve a more comprehensive understanding (Wu et al., 2006), and better theoretical and methodical distinctiveness is also called for (Avgerou, 2000). Thus, the current state of the MIS discipline is far from a technology issue per se—it is rather a managerial challenge where the nature of the technology needs to be understood. Business and IT strategies must be seen as one (Smaczny, 2001), which makes IT a naturally integrated part of management practice and management research. This also means that Information Technology, and Management Information Systems, are a natural part of research and education at today’s business schools.

The focus of this book is precisely the challenging encounter between management and information technology (IT). It thus deals with how IT has come to influence business, as well as how business has come to influence IT. It contains 13 chapters to follow, by 13 scholars, representing both the business and the information systems disciplines. With its roots in the forefront of the field, each chapter presents a contemporary study of how modern organizations utilize IT and the transformative aspect of information technology. Different theoretical approaches are combined with empirical renderings that provide insight into current practices in various domains, thereby offering an up-to-date selection of topics in the borderland between management and IT.

The volume offers substantiated lessons that hopefully are of interest to both academics and practitioners. To assist the reader, each chapter highlights some recommended reading that enables a deeper quest into the topic of that chapter and also includes a set of questions to inspire further discussion related to it. The structure of the book follows four different themes. The first part deals with organizational implications and challenges that reside within companies undergoing change or trying to uphold an entrepreneurial and learning spirit. The second part elaborates on the inter-organizational implications, i.e. how the modern organization’s external partners influence the utilization of IT. The third part deals with the diffusion of IT and its effects on whole markets and industries. Finally, the chapters in the fourth part provide important input on how you, as a researcher or manager, can understand the meeting between IT and the organization. Each chapter is presented briefly below.

PART 1: ORGANIZATIONAL IMPLICATIONS

The chapter by Eva Lövstål presents how three expanding companies use formal control systems and IT, and discusses the common assumption that entrepreneurship and control are two business entities that are hard to combine. The chapter analyzes how managers in different organizations deal with IT given that computer-based information systems impose a dimension of control—something that can hamper the entrepreneurial drive of the firm. To be able to analyze and understand the effects of IT she proposes a levels of control (LOC) framework that includes different means of control and the codification and diffusion of IT. The result highlights important challenges that managers of entrepreneurial organizations face when they formalize their control forms, but also how IT can support this endeavor.

Chapter 3 by Gunilla Myreteg presents a medium-sized company’s implementation of an enterprise resource planning (ERP) system, and it analyzes the different roles the employees take on when they face a new technology. Inspired by structuration theory, the analysis reveals how management and users interact with each other and with the technology, while striving to find an information system that fits them. The study highlights how the perception of IT can differ between the management and other organizational members, and the conclusions presented are valuable for any manager that is about to impose a new organization-wide technology.

Chapter 4 by Leon Michael Caesarius presents a pharmaceutical company’s implementation of a knowledge management system (KMS) that was developed to share and expand its current knowledge and to obtain new knowledge. The chapter elaborates the need to include actors outside the organization when developing a knowledge management system and how this widened scope makes the venture more challenging. However, such ambitions may also lead to the development of knowledge that was formerly unknown to the company, which may enhance the organization’s future business. The company in this case terminated its KMS project, but the chapter shows how they still gained from this venture, given that they discovered previously unknown and embedded knowledge.

Knowledge also entails the process of learning. Chapter 5 by Stefan Hrastinski discusses different modes of e-learning, i.e. IT-supported learning, and how management and organizations can gain from understanding the differences between different modes of learning. Through analysis of e-learning situations in management courses, the chapter contrasts asynchronous and synchronous e-learning. The results show that both have their advantages: While asynchronous e-learning gives the participants time to process the information offered and hence to increase their knowledge, synchronous e-learning allows for direct interaction which leads to a stronger learning experience and hence increased motivation.

PART 2: INTER-ORGANIZATIONAL IMPLICATIONS

Chapter 6 by Peter Ekman contains two case studies of the utilization of enterprise systems by multinational companies (MNCs). Supported by theories focusing on the inter-organizational aspects of business, including interpersonal interactions and relationships, the chapter shows how production-focused enterprise systems are not very well suited to the specific needs of the companies’ marketers and salesmen. The study reveals a limited use of the enterprise systems in inter-organizational interaction, which is explained by inappropriate alignment of the features of the enterprise system.

Chapter 7 by Cecilia Lindh elaborates on how IT becomes an integrated part of inter-organizational business relationships, based on the analysis of survey data covering 353 companies’ use of IT in their business relationships. The chapter presents how business relationships include elements of both exchange and behavior and that the involved companies’ joint activities open up for the inclusion of IT in their future business. It also shows that the integration of IT in business relationships correlates with the strength of these relationships. Thus, the managerial implication is that a company’s integration of IT is an indicator of how strong the company’s business relationships are, as the two goes hand in hand.

Chapter 8 by Lars Frimanson presents case studies of how two companies use internal accounting information systems (e.g. balanced scorecard and customer accounting practices) for inter-organizational coordination. Following the managerial trend of including more than merely financial data in company accounting systems, the analysis shows how such internal accounting information systems influence not only internal but also externally focused managerial decision-making to achieve inter-organizational coordination.

PART 3: INDUSTRY AND MARKET DYNAMICS

In Chapter 9, Peter Dahlin describes the emergence and development of business areas in tandem with technological development. Through an empirical study of mergers and acquisitions during 1994–2003, it presents a number of illustrative examples of how the IT sector was combined with other industries to form new business areas. The chapter discusses the expansion of the scope of a business sector on both a firm level, where a company strives to increase its set of products, resources, technology, and knowledge, and on a market level, where the expansion is about increasing business exchanges and expanding the business network.

Turning to economic factors of IT in , Maria Kollberg Thomassen presents the results of a study where she investigates the role of IT in the logging industry over several decades. A conclusion from this chapter is that managers need to incorporate more than short-term return on investments when measuring and evaluating the effects of IT investments. By elevating the perspective beyond the own organization, managers may assess the impact of IT investments from an industry perspective and also include how customers and suppliers are affected.

This is followed by Mathias Cöster’s study, presented in Chapter 11, on how IT has affected the graphic industry. Cöster presents theories of economic development and applies these in an empirical study depicting the industry. The study describes how IT has had a major impact on the graphic industry’s internal processes and on industry markets. One managerial implication is that the movement towards more IT-based production processes has forced the industry to make tacit knowledge explicit—i.e. what used to be based on the employees’ craftsmanship is now handled by computer-based information systems that have embedded this formerly tacit knowledge in its functionality.

Pontus Fryk presents a longitudinal case study of digitization in health care in Chapter 12. His study shows that companies may benefit from approaching the process in terms of digitization, consolidation, and optimization, paying careful attention to the sequence. The study also illuminates the nature of the health care industry as a system constituted by complex organizations with multiple layers of actors—all of them with different needs and cultures. This diversity shapes the conditions for management and IT strategy development.

PART 4: RESEARCH AND METHODOLOGICAL CONSIDERATIONS

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Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• Tables
• Figures
• Foreword
• 1. Introduction
• 2. Balancing Between Entrepreneurship and Control Through the Use of Management Control Systems and Information Technology
• 3. The Challenge of Differing Actor Groups within an Enterprise Resource Planning Project
• 4. Expanding the Knowledge Structure of Firms: An Illustration of How Organizations Experiment With Information Technology to Harness the Knowledge of the Masses
• 5. Management of Asynchronous and Synchronous E-Learning
• 6. The Limitations of Enterprise Systems for Marketers and Salesmen
• 7. Integration of Information Technology in Business Relationships: A Managerial Issue
• 8. Internal Accounting Information Systems and Inter-Organizational Coordination: Episodes Involving Balanced Scorecard and Differential Customer Accounting
• 9. Expansion of IT Business Through Cross-Industry Mergers and Acquisitions
• 10. Measuring the Impact of IT in the Swedish Logging Industry
• 11. IT Innovation Influence and Industrial Transformation: The Case of the Swedish Graphic Industry
• 12. The Do’s and Don’ts of Digitization: IT and Organization in Health Care
• 13. Technology Acceptance Research: Reflections on the Use of a Theory
• 14. Developing Patterns of Explanations: Methodological Considerations When Analyzing Qualitative Data
• Contributors
• Index