Organization theory and design: Lecture 18

18

Information Technology and
Knowledge Management

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E-Commerce
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Examples: Virtual libraries, universities, buying and selling houses
E-commerce is a broad term which means any commercial activity
that takes place by digital processes over a computer network
E-commerce and other advances in IT are having a significant
impact on organizational design
Example of virtual teams where people around the globe participate
through computer networks
A growing trend is for companies to limit themselves to only a few
activities that they do extremely well and left outside specialists
handle the rest
This a Network Organization Structure, a company subcontracts
most of its major functions to separate companies and coordinates
their activities from small HQ organization. It is a horizontal structure
Its major strategic advantage is that the organization, no matter how

wall, can be truly global
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Inter-organizational Relationships
Traditional Relationships
1. Suppliers at arm’s length
2. Use of telephones, mail, some EDI for ordering
3. Limited communication with customers and vice versa
Emerging Relationships
1. Interactive electronic relations
2. Electronic ordering, invoicing, payments
3. Direct lines open between customer and manufacturer,
real time information exchange
4. Electronic access to product information, customer
rating, customer service data
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IT Impact on Organizational Design
1. Smaller organizations
2. Decentralized structures
3. Improved internal and external
coordination
4. Additional professional staff and
departments
5. Greater employee participation
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