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In most companies or organizations, information technology is important for the collection, processing, and management of information. The company depends upon the CIO for the management of information technology policies and implementation of information technology projects.
Besides this, the CIO is responsible for control expenditure in the IT department and performs administrative work that includes ensuring reliable information communication with partners. The CIO oversees all technology projects of a company and is held accountable in case of any technology failures. In the case of Overstock.com, whose CIO admitted to technological failures, the results of his action of transparency could be disastrous to the company.
Information regarding project failures in organizations should remain within an organization and carefully reported outside the company. A culture of openness and transparency regarding vital company information could affect the public image of a company and thus the Overstock.com CIO was wrong to reveal company’s problems to the public.
Culture of Transparency
Companies like Overstock.com rely on information technology such as the internet to deliver their services, invest heavily on information systems projects. The information systems help to manage customer information including processing of customer orders.
The chief information officer’s action of revealing that his company had technological problems with processing customer orders and recommending a major oracle upgrade was a noble step; however, I believe the situation should have been accorded cautious and professional treatment as opposed to public revelation of systems failure.
Proper public relations of a company involve maintaining a good public image of the company to retain customers and attract investors. Organizations employ a variety of public relations tactics to improve its image in the public arena (Raymond & Snow, 1992, p.56).
Managing vital corporate information helps to enhance corporate reputation, improve investor perceptions, and in manage crises such as information project failures. In the current age of stiff competition, information management through proper corporate communications is important to maintain good company reputation in the public arena.
The action by the Overstock.com CIO to reveal technological problems of the company was not good organizational politics. The Chief Information officer oversees the functions of the IT department and is accountable to the Chief executive officer of the company.
Informing the CEO, as his supervisor, of the technology problems experienced in the IT department first before revealing it to the public was the best option for the CIO.
In addition, he should have informed the CEO of his actions to correct the technological failures including the major oracle upgrade before going public. The CEO’s actions could involve necessary corrective measures to overcome the crisis including even a complete overhaul of the non performing system followed by replacement with a new system.
Organizational politics play an important role in creating a democratic working environment in the workplace. However, the organizational structure requires that heads of departments report to the company CEO, who has the overall authority.
The action by the Overstock.com CIO to reveal company information could lead to a conflict. Conflicts in organizations mainly arise because of differences regarding authority in an organization or communication failure between departments (Pratt &Foreman, 2000, p.28); in this case the IT department and the administrative department.
Additionally, conflicts arise due to neglect of company regulations pertaining organizational behavior. In the case of Overstock.com, the IT department headed by the CIO failed to communicate with the administrative department regarding the systems failure before revealing it to the public.
I would advise the Overstock.com CIO to first investigate the factors that contributed to the systems failure and explore measures that can correct this problem to avoid its recurrence in the future.
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In implementation of key technology project, the CIO or the project manager is responsible for monitoring and evaluation of the project progress which is important to ensure that the project development is according to design and time schedule. In addition, project monitoring and evaluation helps the project manager to devise corrective measures in case of unexpected shortfalls in its implementation.
I would also advise the CIO to keep the senior management including the CEO informed of the project progress. As a person who is in charge of a department in an organization, problems experienced within the department should be reported to the administration department (Cheny, 1995, p.167). When playing organizational politics, he should first be aware of CIO job description and the scope of his authority.
The Chief Information Officer of Overstock.com erred in revealing the company’s technological challenges instead of informing the CEO. Notifying the CEO could have been the first action, followed by formation of a task force to investigate the cause of the problem before recommending a solution for the problem.
In my opinion, after the taskforce is through with its work the board of directors of the company who play a role in decision-making of matters affecting the company, could then be notified. The customers and the shareholders of the company should have been the last people to be informed of this problem.
The head of departments in an organization are held responsible for the operations of their respective departments. Technological problems or resource constraints are usually reported to the administrative department. Organizational structure defines the responsibilities and the scope of authority of the workers.
The Overstock.com CIO resorted to public revelation of systems failure of the company instead of reporting this to the CEO to take appropriate action. Revealing such information has the potential of harming the company reputation and affecting profitability and therefore it was a wrong move.
Cheny, G. (1995). Democracy in the workplace: Theory and practice from the Perspective of communication. Journal of Applied Communication Research, 23, 164-167.
Pratt, M., & Foreman, P. (2000). Classifying managerial responses to multiple Organizational identities. Academy of Management Review, 25(2), 23-32.
Raymond, M., & Snow, C. (1992). Causes of Failure in Network Organizations. California Management Review, 12, 54-60.
Schuman, E. (2005). The CIO Who Admitted Too Much. CIO Insight. Retrieved from <https://www.cioinsight.com/c/a/Retail/The-CIO-Who-Admitted-Too-Much>.