Burris (1998) points out that while some researchers have found a correlation between computerisation and fewer hierarchical levels in the organisation, others question the causal relationship between the two factors siting broader cultural and political influences. The extent and shape of the restructuring of the division of labour are dependant on several factors including the type of technology, managerial policies and the nature of the service or product being produced. Thus, again it is clear that in the type of organisation typified by quadrant three, organisational goals may be a more important determinant of the impacts of IT than IT itself.
This is not the case in the fourth organisational form, where IT is the major determinant of the organisational structure. This type of organisation, with low exertion of managerial control, but high worker empowerment is labelled a Networked Organisation1. Virtual organisations are typified by a reduction in hierarchy, democratisation and increased worker autonomy, qualities that are facilitated directly by the presence of IT. In the Networked Organisation, the organisational structure becomes less formal using teams and task forces to complete tasks. The structure is more organic, integrative, flexible, adaptive and innovative typified by a constantly changing internal structure. The constraints imposed by more bureaucratic management forms are relaxed to allow for creativity and flexibility.
Networked Organisations as they have evolved in the past 10 years have developed new managerial structures to deal with the changing relationship with workers. Total Quality Management (TQM) has emerged as a means to for managers to facilitate a learning environment and worker autonomy necessary to achieve the full gains of IT. However, as worker autonomy can cause principal agent problems within an organisation, and decentralised workers pursing abstract tasks become less visible to peers, and more difficult to supervise, TQM has sought means to ensure that all workers are pursing the goals of the organisation. Thus, the manager in a Networked Organisation is responsible for setting overall goals and imparting these to the employees through the influence of team structures. High tech firms such as HP, Sun, Microsoft and Compaq are often sited as examples of organisations which exhibit these characteristics.
In both the High Level Bureaucracy and the Networked Organisation, management influences workers rather than commanding. In the case of the High Level Bureaucracy, this may be harder to see as the workers were depicted as being constrained by a set of rules. However, as pointed out in the first section of this paper, when workers are empowered by information, instructions are better received as delegations of authority than commands. In this case, management can also be seen to control workers by setting limits whereas in the case of Networked Organisations, management influences workers by establishing broad goals and directions.
Discussion and Implications
The goal of this analysis is not to be deterministic, but to provide a useful structure for thinking about how IT will be utilised in the pursuit of differing goals depending on the level of worker empowerment necessary and the level of managerial control that is desirable. The Panopticon organisation is likely to be typified by large numbers of staff controlled by small numbers of managers. In this type of organisation the goal is likely to be consistent customer service and this required that IT be used as a form of surveillance. The Taylorist organisation is likely to be typified by large numbers of repetitive tasks carried out through mechanical or process automation.
The goal is a consistent product which can be carried out through automation, and IT can facilitate low exertion of managerial control through highly centralised decision-making and control. The High Level Bureaucracy would not have a goal of profit maximisation, but rather would be driven to produce quality results for project specific goals. IT will be used to facilitate these goals in a manner that is highly mitigated by other social factors.
For example, a government department may not choose to use IT in the delivery of certain services because the technology is not accessible to all members of society. Finally, the main goal of a Networked Organisation is to maximise innovation in order to maximise market share, efficiency and profits. IT would be used to facilitate innovation and workers would be allowed the flexibility necessary to explore the best uses of IT to achieve innovative solutions.
This is not to say that all organisations fall into these four organisational forms. Some may straddle two or more quadrants of the Control-Empowerment Matrix. For example, General Motor’s Saturn Car Company produces cars through automated processes, but it incorporates many of the attributes of a networked organisation by virtue of the fact that it empowers its workers to suggest improvements to work processes.
There are two major implications of this theoretic construct. The first is the stratification of the workforce that is predicted to accompany the knowledge-based economy. This line of thinking suggests that IT will generate an economy characterised by a dichotomy between high-paid skilled knowledge workers of the type typified by the High Level Bureaucracy and Networked Organisation forms, and low-paid unskilled workers of the type described in association with the Panopticon and Taylorist organisational forms. Proponents of this line of thinking may characterise the low-paid unskilled workers as being IT illiterate. But what is interesting to note from the present analysis that these workers would not necessarily be set apart by their access to IT, but rather by their access to the access to information and training that results in empowerment.
Secondly, this analysis has implications in relation to the productivity paradox. The productivity paradox is the term applied to, “the apparent absence of robust productivity gains2 in the 1990s … despite the widespread introduction of information technology or computers throughout the economy …” (Sharpe, 1998). There are several hypotheses that seek to explain the productivity paradox including the idea that “IT can only be used effectively when organizations have the appropriate environment” (Sharpe, 1998). Proponents of this view (such as Peters) believe that the productivity gains of IT will only be realised once organisational structures are radically changed to accommodate the technology.
One form of radical change pursued in reference to this advice was the downsizing in the business community since the 1980’s. As Sharpe points out, however, in many cases downsizing did not have a positive result. This serves to underline the point that the analysis presented in this paper highlights. Organisations have different goals and implement IT for different purposes. Therefore, singular solutions to the problem cannot be expected to achieve positive results in all cases. Furthermore, there is not likely to be one singular reason for the productivity paradox, but rather a multitude of factors that contribute to different problems in different organisations.
The goal of this paper was to present a classification of the uses of IT within organisations in relation to the level of managerial control and worker empowerment as mitigated by the goals of the organisational. The Control-Empowerment Matrix provides a conceptualisation of these relationships and demonstrates that the impacts of IT on an organisation will depend on the way in which IT is implemented and employed. Past interpretations of how IT affects organisations have been too simplistic in their attempts to develop singular theories. The Matrix incorporates these various interpretations in a form that is instructive of the how organisations with certain types of goals will incorporate IT. The Matrix is also instructive of overarching affects of IT on society and on organisations in general.
Burkhardt, M. and D. Brass. “Changing Patterns or Patterns of Change: The Effects of a Change in Technology on Social Network Structure and Power.” Administrative Science Quarterly, 35 (1990): 104-127. Burris, B. “Computerization of the Workplace.” Annual Sociological Review, 24 (1998): 141-157.