Technology has been attributed to many changes taking place in all aspects of life, be it in business, transportation in our homes and even in the food we eat. We are all being forced to adapt with the change or else remain irrelevant in today’s internet age. This era of innovative technology has made organisation think twice about their managerial structures as well as how they relate with their customers.
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The rapid changes in the business environment are characterised by intense globalisation of markets and the steep competition. With these rapidly changing business environments, organisations have been forced to change their management structures.
The competitive global environment is forcing organisations to embrace innovative organisational forms based on information systems in order for them to remain relevant and survive through these changes. To role of information technology is essential in enabling changes in any organisational structure.
Many authors have continually emphasised that the dynamic force and crucial requirement for new organisation solutions is the availability of prevailing information systems (Nolan, Hausman and Bradley, 1993). Though this is widely acknowledged, problems arise when organisations lack an in-depth understanding of the interrelation between the design of the organisation and that of the information systems.
We therefore look to outline the changes that digital technologies are forcing on the structures of many businesses and organisations operating within them. We further identify the opportunities and challenges faced by managers and employees operating within these new organisation forms and discuss them in detail.
New Organisation Forms
In order for organisations to compete and remain relevant in the new competitive world, they have to be more flexible and experiment with new forms of organizing that provide for and inspire innovation, learning and exploration (Griffin and Moorhead, 2008) in favour of the traditional rigid systems.
In the 1950s to 1960s, organisations strived to standardize and specialise in what they were best at, to achieve efficiency in their management. As years passed, the quality of the products became essential as well as approaching the management with the perspective of customer-first.
In the beginning, New Organizational Forms were propagated as a new experimental way of organisations managing transactions (Foss, 2002). Technology has the power to transform business in gaining a competitive edge and promoting change in the structure of the organisation.
The emergence of the Internet has had revolutionary effects on the organisation of many organisations and their transactions. These new organisational forms were seen as ways of managing and organising knowledge resources within the company.
The internet has played a great role in shifting organisations to the new management forms. With the rapid expansions in the computing world, the internet has taken on an economic, social and cultural life of its own.
The rise of the internet has affected the ways people associate with others, the growth in new ways of doing business, how politics are running and many other areas of life. With the internet came the mobile technology and together they have played a great role in shifting the organisations focus on the sellers to the buyers.
There is a wide range of organisation forms but to implement one an organisation should explore its potential to significantly impact on its competitive edge. A peer-to-peer organization form allows products to be distributed freely within the web based platform (Khosrow-Pour, 2003). Originally, only computing products such as free music and videos were shared through the internet.
Now, these forms allow file sharing within and beyond an organisation that is very useful in corporate sharing and telecommunications. When organisations adapt the peer-to-peer form they are able to reduce costs in especially when they hold internal training sessions that are inexpensive.
They also offer a channel for open communication among the workers and across the different business units. Wireless networking has allowed communities to propel this new form of organising.
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Social networking is the new craze on the internet. Organisations are finding different ways of incorporating social networks in management. This form can be referred to as the social-network supported organization (Rouse and Boff, 2005).
Using existing social networks an organisation is able to harness the intricacy of reaching all their customers in a new way. It also provides a way of acquiring new customers and reaching their marketing/ sales goal.
There are those organisations that are implementing the open source form of organization. This is where distribution of resources is heightened through an open development process (Crowston, 1994).
The organisation looks to propagate openness and transparency in its management system. This form of organising is very adaptive and allows the organisation to maximize on its intelligence and experiences of all its workers, customers and suppliers.
Effective and responsive forms of organising should be flexible and adaptable. The adoption of new organisational forms should encompass implementation of information technology and proper management of knowledge workers to achieve the flexibility sought for surviving in the global competitive market and gain the financial benefits.
Opportunities and Challenges
In the past decades, we have seen the appearance of information system in organisations. First, it was the card processing machines that were mostly used in departments such as accounting. They were based on mainframe computers which later transformed to desktop computers, PDA’s and now we have laptops, I pads, tablets and others.
With these changes in technology, good results were recorded in areas where it was practiced and it continually gained ground in various process in transactions, management, forecasting and decision support. Modern technology in recent times is practically practiced in every aspect of an enterprise. All activities in an organisation seem to revolve around information systems.
The organisations have continually enhanced the linkage between its customers, partners and suppliers electronically. The availability of many types of business software offers firms with more efficient knowledge management that ensure the better performance for the firm. Communication within an organisation is enhanced by ICT and its applications, and the organisation is able to manage its resources efficiently.
The continuous link the organisation and its customers, employees and suppliers allow a setting in which unrestricted flow of information in unavoidable which defies the physical distance. Organisations using the internet enjoy lower operating costs and enhanced services.
The following outlines the different opportunities that information technology in organisation forms offer. The challenges in each area are also identified.
The economic development is being felt worldwide and foreign organisations have been opened up to compete for domestic markets hence globalisation. With the advance in information technology geographical distance is no longer a hindrance for organisations to reach their customers. Companies are faced with the headache of continually being up to per with these technologies.
Electronic ties have become necessary to enhance the close ties between a company and its stakeholders. The world has become one global market, and the challenge is for managers and the workers to reach and maintain their target customers. Embracing the new technologies therefore does not become an option but a vital tool of maintain the organisations target market and its brand above that of its competitors.
Entrepreneurship and innovation
In the traditional methods of organising, organisations concentrated on only the opportunities in which they felt comfortable and had the knowledge to pursue. However, the new forms of organising encourage the employees to explore a variety of opportunities within and without the organisation.
These enhance innovation which is directly accountable for wealth and enhanced competitiveness in globalised market for a company.
Organisations have moved from controlling ways of management and maintaining efficiency efforts to emphasized efforts on abilities of everyone involved to take advantage of opportunities (Argyris, 1999). Innovative systems are among the fundamental driving forces toward a sustainable business environment.
With the internet being available to almost everyone, customers are very informed and knowledgeable. These increases competition among the organisations as customers are able to access diverse products and services using the internet. How appealing a company’s product or services is on the web may contribute positively or negatively to its sales.
There is a paradigm shift for organisations from the manufactures to customers. Companies are now being forced to modify its products to satisfy the needs of their target customer. Customers are now being perceived to be partners and technological designs that fit their wants are being taken into consideration.
For organisations to fully experience the power of information technology in the transformative change, the relationship between the company and its customers are essential. Customers are now using the internet to find the best value products in terms of satisfying their wants and packet friendliness.
The traditional channels of marketing are being affected diversely in that agents, brokers and retail store are increasingly having little or no value to the companies. The need for intermediaries is slowly but surely diminishing in the new technology era. Ignorance of this factor by the managers could greatly affect the brand of the company.
Hence, the managers should ensure that their organisation remain a very significant part of the value chain, to avoid the purpose of the organisation being replaced with digital technologies.
Before the emergence of the internet, customers got information about a company and its products through traditional media, recommendations by friends or experts and employees in retail stores and these directly influenced their purchasing decisions (Foss, 2002).
Among these, Personal recommendations were the most trusted. Now, the internet offers the customer an exceptional chance of getting first-hand information and offering their opinion on a company or its products and services. The customer therefore has a wide range of reviewed information which can work for or against a company.
Transparency and integrity is vital in any form of organisation that adopts an open channel of communication with its customers. The corporate disguise of public relations originally adopted by many organisations is no longer appealing to customers and organisations have to identify ways open communication with its customers to avoid facing negative publicity on the internet.
Reviews from other users are valuable information to customers and companies should focus on social networks or other web based platforms to spread their positive image. Workers should be enhanced to share information on the organisation and its products to catch the eye of existing and new customers.
How managers embrace these viral change will determine whether the internet will be a curse or a blessing to their organisation (Yates and Van Maanen, 2001).
Change is inevitable in all aspects of life and companies must be flexible to implement and effectively manage the unpredictable changes bound to occur in their environment with the revolutionary changes in information technology. A flexible management system will enable a company to deal with rapid reactions of their competitors.
Producing products that encounter the present and future needs of the customers definitely helps a company cut above its competitors. Many organisations are driven to forms of organising that minimise the amount of knowledge that is unutilised and duplication of operation.
The business environment requires flexibility with the rapid technology changed happening. A flexible form of organising is able to provide the necessary platforms for its knowledge workers. Managers are faced with the challenge of ensuring that these platforms remain relevant to the workers.
Online buyers have a variety of options on their hands. Their purchasing decision is affected by various factors mainly the price of the product. Cost reduction has therefore become vital in decisions in management of the implementation of virtual companies which comes with dramatic effects. The company can risk maintain higher prices that the competitors or reduce its workforce to low the prices for the products.
Either way the company stands to lose or gain. The reduced costs are not only reflected on the products but also on the running costs of the organisations, as majority of the managers would concur. The internet has reduced the costs incurred during distribution and search for products for both the buyers and sellers.
Many organisations have always sought third-party contractors to supplement their products and services. Organisations such as Nike have a global network of manufactures that produce their products. Outsourcing is necessary when the domestic labour force of a company cannot be able to produce enough to satisfy the demand maintain an appealing low price.
Companies adopting outsourcing are able to cut costs and utilise the most of their workers while maintain a low budget. It is evident that with the accelerated innovations in technology, companies are increasing the products complexity and it has become hard for any one company to create all aspects of such products.
Outsourcing can be looked at in two ways, where on one hand an organisation will benefit from the expertise of the contractors and it is able to scale down on their supply chain. On the other hand the organisation may seem to lose its competitive identity of manufacturing for instance.
As Walsham and Jones (1996) among many other authors may argue, outsourcing does not necessary gain a competitive advantage for the company, but rather it provides innovate, cost-effective, profitable and competent processes. Employers and employees should be fully aware of the rapid advancement in technology to remain relevant.
As much as the strength of a brand is significant to a company, with the internet the customer is well informed and emphasise on the quality of the product is becoming vital.
The use of information technology offers opportunities for advancing the quality of products and services an organisation offers. To really maintain the loyalty of customers, organisations should implement innovative ways of producing high quality products that fulfil all the wants at minimum costs.
Cooperation through IT
Digitization of roles with organisation has become common where computers and networks are replacing human labour. This has encouraged cooperation of different people from different business units working together. Management have encouraged collaboration and coordination especially with the development of social media where external experts are constantly being engaged.
There is always a misconception that organisation information systems that seeks to implement internet based exchanged will replace face-to-face interaction. However the effectiveness of any digitalised organisation will dependent significantly on pre-existing face-to-face interactions as well as social networks, unless the relations are impersonal or unambiguous.
Developing Human Capital
Knowledge is power and in this technology era the most significant and vital asset in any organisation is its human capital. Competition for talent whether financial, technology or human have increasingly intensified. Knowledge workers are the driving force for any industrialized economy and shortage of this skilled labour negatively affects an organisations.
It becoming more evident for managers and their employees that it is no longer about who is running the organisation, but who is being more innovative and continually contributing to the organisation’s strategic decisions. The most innovative human capital will remain to implement the strategic decisions that give the company a competitive edge.
Nowadays, emphasise is being put to human resource managers on ways of managing “Generation Y” or “Next Generation” which is as result of technology and poses a great challenge to rigid organisations.
The managers should give this set of human capital the necessary technology platforms to solve problems systematically. Information technology should not be used to exclude but rather to empower human capital within an organisation and beyond.
Many new organisation forms are based on the rapidly evolving technology world. Technology has largely transformed the business environment affecting the organisational structures of many businesses. In an effort to survive through the changes, organisations have become more adaptable and flexible. Customers have been greatly empowered by the internet triggering the companies to take extra effort in acknowledging them.
Technology has made customers more informed affecting their purchasing decisions. Social networks are the channels for customers to spread their sentiments whether good or bad, and this has increased the transparency of organisations and their products and services. Product development has been refined by technology and more and more complex products are emerging in the market.
Innovation has remained vital among the knowledge works to keep up with the technological advancements and manage fundamental changes within the structure of the organisation. There is great opportunity in organisations collaborating with the generation Y who are willing and have the ability to lead and are always against a status quo position.
Managing knowledge workers effectively gives future organisations and managers great opportunities in this internet era. Information system will continue to evolve and managers and knowledge workers should embrace organizational forms that are flexible and can adapt to new changes effectively without them having to rethink of new strategies.
List of References
Argyris, C., 1999. On Organisational Learning. Oxford, UK: Blackwell Publishing.
Crowston, K., 1994. Electronic Communication and New Organizational Forms: a Coordination Theory Approach. USA: University on Michigan.
Foss, N., 2002. Introduction: New Organisational Forms – Critical Perspectives. International Journal of the Economics of Business, 9(1), pp.1-8.
Foss, N., 2002. New Organisational Forms: Critical Perspectives. London, UK: Routledge.
Griffin, W. R. and Moorhead, G., 2008. Organizational Behaviour: Managing People and Organisations. USA: Cengage Learning.
Khosrow-Pour, M., 2003. Information Technology & Organisations: Trends, Issues, Challenges & Solutions. United States of America: Idea Group Publishing.
Nolan, A. R., Hausman, A. J. and Bradley, P. S., 1993. Globalisation, Technology and Competition: The Fusion of Computers and Telecommunications in the 1990s. Boston: Harvard Business School Press.
Rouse, B. W. and Boff, R. K., 2005. Organisation Simulation. Hoboken: John Wiley & Sons, Inc.
Walsham, G. and Jones, R. M., 1996. Information Technology and Changes in Organisational Work. London, UK: Chapman & Hall.
Yates, J. and Van Maanen, J., 2001. Information Technology and Organisational Transformation. London, UK: Sage Publications Ltd.