Management of Information Systems in Organizations

Aims/Objectives

The aim of the paper is to describe and analyze the main strengths of implementation information systems in modern organizations

Introduction: The increasing standardization of information technology, and more specifically its use, is changing the quantity, quality and means of production and distribution of information. This raises substantial questions for the theoretical understanding of organizations, since information is at the core of co-ordination within organizations. Yet it also evokes inquiries into the resulting managerial implications that enhance business success. With an increased number of information technologies available and the expanded complexity within organizations, their management becomes an increasingly difficult task. Managers are faced with a number of obstacles to be overcome. Although the directional impact of new technology within organizations remains open for discussion, information processing activities of organizational members are changing, since access to new technologies is leading to a change in behavior. Given the uncertain influence of communication technology on core managerial activities, the relationship between communication technology and organizations needs to be addressed, since the use of these technologies mediates and contributes to the changing character of organizations

Literature review

Literature review will cover theoretical works about information technologies and peer review articles on the topic under analysis.

Company Background

Tengelmann is a privately owned food retailer based in Muelheim, West Germany.

Research Methods

The research will be based on a case study method.

The increasing standardization of information technology, and more specifically its use, is changing the quantity, quality and means of production and distribution of information. This raises substantial questions for the theoretical understanding of organizations, since information is at the core of co-ordination within organizations. Yet it also evokes inquiries into the resulting managerial implications that enhance business success. With an increased number of information technologies available and the expanded complexity within organizations, their management becomes an increasingly difficult task. Managers are faced with a number of obstacles to be overcome. Tengelmann is a privately owned food retailer based in Muelheim, West Germany. The company was founded in 1867 by Wilhelm Schmitz and is now managed by his great-grandson Erivan Haub. When Schmitz started his business in the late nineteenth century, German merchants were often considered to be of low societal standing (Tengelmann Home Page, 2008).

The literature on the topic covers the new direction in information systems. Although the directional impact of new technology within organizations remains open for discussion, information processing activities of organizational members are changing, since access to new technologies is leading to a change in behavior. Gardiner (2005) and Moore (2001) underline that given the uncertain influence of communication technology on core managerial activities, the relationship between communication technology and organizations needs to be addressed, since the use of these technologies mediates and contributes to the changing character of organizations (Tengelmann Home Pageб 2008).

The case of Tengelmann shows that to preserve the honor and dignity of his own name, Schmitz named his first grocery store after one of his salesmen, Emil Tengelmann. Tengelmann has store operations in West Germany, Austria, the Netherlands, and the United States, and is currently expanding into East Germany. Tengelmann owns a 51% share of three food chains in East Germany and has already invested DM 100 million in East German establishments. Tengelmann abandoned the concept of no-frills discount stores, and refocused on store modernization, upscaling, and acquisitions. Tengelmann has concentrated its activities on a few foreign countries to achieve a large local presence. Tengelmann uses a growth induced intentional approach to its international involvement as it strives to penetrate new markets and thereby consistently enhance its financial performance. The inherent assumption is that information systems specialists can satisfy the demands of technological, political and social concerns when making decisions about the appropriate system to implement (Grant 57). Empirical evidence to support the choice perspective remains limited, primarily because of the difficulty in operationalizing the match between the technological, political and social demands of the organization and the intentions of managers or information systems specialists. Another aspect is the increased connection between people and machines, leading potentially to widespread access of information to people in organizations caused by the rise in communication bandwidth, with more information moving simultaneously to different people in a combination of text, voice and graphics. The integration of various computing technologies allows information to be stored so that organizational members can retrieve the information from the collective database. Failure to consider these features means there is an inadequate understanding of the overall media choice process (Mintzberg et al 82). The narrow focus on the ambiguity of the task tends to be biased against new communication technology. The urgency of the task associated with communication is another important criteria in media choice. Urgent tasks are more likely to lead to a response with media that have a real-time, synchronous response capability. Electronic mail is an example of a medium that qualifies when an urgent response is required. Empirical studies have found that, for urgent tasks, knowledge workers are willing to trade-off rich media, since it is more important to complete the task than to acknowledge the need for social presence (Gardiner, p. 43).

Since the environment and social interactions vary, media selection varies between organizational contexts. Given these variations, communication technology will not only be adopted because of its invariant Over time, as the new system becomes less risky, use by others in the work unit has no significant influence on a person’s later use behavior (Grant, p. 54). The critical mass of users reaches a saturation point where more potential users do not positively influence a person’s own usage. In fact, increased interaction may add costs, such as non-work related interruptions or limited technical resources, for example. Thus a critical mass of users is required initially to realize the benefits of a new medium; later use may in fact add costs. This indicates that the benefits of new communication technology are highest when a network of users exists which primarily uses the medium for work-related matters. Superiors are not as accessible face-to-face as they are via an electronic mail system, but secretaries are accessible in both media (Grant, p. 54). Therefore it follows that electronic mail will probably be used more frequently by lower organizational members to send messages to superiors. By using electronic mail, lower-level organizational members may also have fewer reminders of the status difference than is the case of face-to-face situations (Moore, p. 76).

As time passes, rational choices will develop for new communication technologies, since participants are interdependent, therefore adopting more intimate and socially rational behavior. Knowledge about areas where efficient communication technology is employed will become part of the organizational patterns of use – for example, new communication technologies maybe better suited than short-turn meetings to longitudinal interaction. The benefits of communication technologies have to develop over time when organizational members are working in long-term associations, such as in teams. Individuals have to make use of the technology in order to realize its benefits. In summary, as new communication technologies are adopted, media use patterns will change. Eventually, old communication technologies are likely to be substituted for new communication technologies when the perceived benefits are realized by the users (Pittengrew et al, p. 98).

At Tengelmann, the organizational design dimension, which relates the hierarchical level to the information-processing tasks at hand is the degree of centralization versus decentralization of decision-making. Since decision-making requires the availability of unambiguous information, new communication technology has the potential to shift the level of decision-making by providing access to information. This is one of the design dimensions to be investigated. Another vertical design dimension to be discussed is the hierarchy of authority. New communication technology, by formalizing information-processing within organizations, is the resource that enables managers to report information (Pittengrew et al, p. 76). By enlarging the communication options, new communication technology has the potential to reinforce or undermine the existing authority structure. The influence of new communication technology in changing the role of middle management is the third vertical design aspect to be considered. Since new communication technology represents a capital investment, it has the potential to reduce the number of managers within the organization. Since decision information costs increase as decision-making authority is moved higher in the hierarchy, a possible conclusion appears, that decentralization is the answer to the problem. Yet, as decision information costs decrease, agency costs increase.

Works Cited

1. Gardiner, P. IS Management: A Strategic Planning Approach. Palgrave Macmillanm, 2005.
2. Grant, R. M. Contemporary Strategy Analysis, (3rd edn.). Oxford: Blackwell.
3. Mintzberg, H., Lampel, J. B., Quinn, J. B., Ghoshal, S. 2004, The Strategy Process. Pearson Education, 1998.
4. Moore, J. L. Writers on Strategy and Strategic Management: Theory and Practice at Enterprise, Corporate, Business and Functional Levels. Penguin Books Ltd, 2001
5. Pittengrew, A. M., Thomas, H. Whittington, R. Handbook of Information Systems and Management. Sage Publications, 2005.
6. Tengelmann Home Page. 2008.