Foundation Course – Name
Abstract
Information technologies are the core components of any organizational studies. Since this phenomenon was introduced into organizational processes, it brought numerous advantages. Incorporation of information technologies into existing business environment has become an indispensable necessity of modern reality due to an ability of informational systems to grant a broad spectrum of opportunities and benefits. Maximization of efficiency, improved services, enhanced manufacturing capacities and supply chain lead to the industry’s growth and economic prosperity. This could hardly be possible without the new information and technological determinants, implemented to control and speed up the everyday business routines. Eventually, information systems serve to revolutionize the working manner improving the efficiency of operations. In this extent, the concept of technological and informational determinisms is especially important because the new technologies have a tremendous impact on our lives changing the world around us. In this paper, an attempt will be made to critically analyze the practical implications of contemporary organizations, outline the role of information systems and technologies at large.
Keywords: information system, information technologies, organizational studies
Introduction
Information technologies managed to change the landscape of organizations, transforming the fabric of their operations . The primary purpose of any revolutionizing technologies is to automate the production process and improve the efficiency of service delivery. The automation of any business processes in the organization presupposes accumulation, storage and communication of information within the enterprise with the help of specially designed information systems.
If earlier an organization required extensive paperwork and a group of employees to perform the complicated procedures, today information technologies abolish the overabundant negotiation tasks. Accounting, marketing, sales and other departments do not have to store separately the information pertaining to their departments . Incorporation of information systems helps to bridge these units into one organizational network enabling various specialists working hand in hand, quickly exchanging information and resources.
The effect of information systems on the organization is obvious, being its driving force and serving the interests of the business. The level of the effect depends totally on organizational openness to new technologies while cooperation between the business unit and information system is a complex phenomenon, including multiple factors such as organization’s structure, culture, management style, employees’ qualification and business processes . In order to understand how the information system can change the society or the society can affect the information technologies, it is important to consider the two key concepts: technological and informational determinisms.
Technological Determinism
Technological determinism conveys the idea that technology changes our lives. According to Ogburn, (2010), such technology as the Internet has a miraculous revolutionizing effect on society and economic situation. The social sciences are full of controversial evidence concerning the technological determinism (TD). The recent findings state that TD is socially determined, i.e. both technology and society converge in a unified non-deterministic way because “the effects of any given technology depend mainly on how it is implemented which is in turn socially determined” (Adler, 2006, p. 1).
Since the debates on the issue still occupy the society, TD is actively stimulating the deterministic ideas in their relation to technologies. The concept of determinism is obviously opposing some longstanding doctrines such as “free will” concept, which claims that any social change can be attributed only to the individual’s human will . Technology in modern society is represented as a tool or knowledge manifested through the technological advancements boosting the organizations’ productivity . Technologies may vary in terms of flexibility, complexity and sophistication level. The adherers of the “information society” state that the internet and computer technologies demonstrate significant malleability allowing them to have a deep effect on the social environment . Some theorists point out that the technological determinism emerged as the result of scientific progress leading to the gradual liberation of humanity from the burden excessive labor. The others claim that the path of the technological determinism pushes the humanity to the abyss of dangerous and alienating technological progress. There is also another group of theorists claiming that technological determinism does not affect much any changes in the society, sooner the society unchains the technological advancements .
According to Woodward (1965), technological determinism plays an important role in reshaping the landscape of an organization. His contingency concept underlines an ability of TD to diminish the transaction costs and affect the organizational behavior in terms of personal relations and psychological atmosphere. It is obvious that the culture, ideas and social role of individuals compose the scope of the technological determinism, which impacts, at least in the short-run, the society’s change .
The TD phenomenon is actively researched in contemporary scientific literature. The implications of the TD concept include various underlying theories. Thus, within the framework of an organization theory, the managers are responsible for the decision-making process, while it is usually their choice how the information systems are implemented and how this implementation restructures the company . It is impossible to predict all the consequences of the new technologies implementation due to the multi-dimensional nature of this phenomenon (Figure 1).
Figure 1. Interdependence of organizations and information systems (source Aguilar, 2013)
The figure above outlines the complexity of relations between the organization and information technology. Therefore, any changes that might occur due to the emergence of the technological advancement on the enterprise cannot be predicted while the results of implementation may fail the organization’s expectations . Despite all the threats the new technology might bring to the business processes, none could have imagined 10-15 years ago that instant messengers and e-mail would be the primary communication methods . So the basic question is where the technology comes from?
Adler (2006, p.3), believes that any form of social structure (socialism or capitalism) inevitably stimulates the technological change, “that locates the dynamic of technological change within technology itself”. The technological determinism is closely connected with the technological change and the reciprocal impact, which society, science, and economy exercise on each other. The idea that technological determinism concept develops via the multi-dimensional trajectories arouses debates in scientific circles because the weight of technological determinants is quite vague. Some scholars believe that TD affects the society and the organizational structures in a natural way while its influence is inevitable .
Informational Determinism
Information determinism represents the doctrine stating that all events in the technological era are necessitated by the modern realia and therefore inevitable . This concept focuses on the information access, which leads to expected outcomes, while the reasons, conditions, and procedures are relatively insignificant. Sometimes the concept of information determinism is used as a utopian phenomenon in the scientific society describing the future events emerging as a result of internet development, global processes, and abstract notions . The deterministic perception of the information rarely causes significant transformations of the society or organizational structure. However, Earman (2015, p.2) posed a logic questions that “if an “information deterministic” perspective dominates current policy, and such a perspective obscures politics, complications, and fresh possibilities, what are alternatives to it?” In fact, there are several theoretical concepts attempting to explain the way the information determinism still affects both the social environment and the business processes.
In this context, the analyzed issue of revolutionizing influences of information technologies comes along with the assumptions of transaction cost theory. According to Coase, (1997), companies and consumers are always striving to reduce the transaction and production costs minimizing expenses on insurance, contract compliance, product quality, etc. (Figure 2).
Figure 2. Transaction cost theory: influence of information systems on the working process (source Aguilar, 2013)
The process of cost reduction is traditionally achieved via vertical integration, i.e. business grow, hiring more people, developing the network of own distributors and suppliers. A good example is Ford, Volvo and General Motors (GM) . However, the majority of market agents prefer to lower the transaction costs by using efficient information network technologies, which ease the task of outsourcing or attracting of external suppliers/distributors instead of using internal potential. For instance, Daimler AG adopted the cost reduction strategy cooperating with external agents supplying more than 70% of all the required products .
This cooperation became possible due to the implementation of the newest information system technologies. Likewise, information technologies allowed such companies as Cisco Systems or Dell to use outsourcing opportunities buying necessary products from external manufacturers instead of producing these parts themselves. Another good case of efficient information technology use is the Eastman Chemical Corporation, which managed to generate $3,4 billion in 1994 having 24,000 full-time employees while the result of 2007 composed $7,1 with only 12,000 employees. The successful implementation of revolutionizing technological advancements resulted in an extremely profitable reduction of managerial, production and market costs .
Another theoretical assumption underlying the informational determinism concept concerns the significant impact of informational systems on the way we work. This concept is closely connected with the agency theory. According to Ogburn (2010), the core idea behind the concept is that the business owner hires external economic agents to perform the work. However, external economic agents are rent-seeking and self-interested individuals requiring continuous supervision. Thus, when the business grows, agency and supervision costs increase demanding additional financial resources spent on managing employees (Figure 3).
Figure 3. Agency theory: influence of information systems on the working process (source Aguilar, 2013)
It means that information systems wisely implemented on the business unit may help to significantly reduce the agency costs of obtaining and analyzing valuable information as well as ease the task supervising over a large number of employees . Reduction of agency costs immediately results in revenues increase and cutting down of surplus staff members. Since the issue of information systems influencing the working process is multi-dimensional, the organizational changes are often explained by the sociology of complex organizations. From this viewpoint, the examples of bureaucratic companies being established in the pre-Internet era, are often slow, uncompetitive and economically inefficient than those emerging later. The adherers of behavioral approach call this a downsizing phenomenon when less efficient large organization shrink in a number of hierarchy levels and employees if the informational determinant becomes dominating .
The emergence of information systems made the slow companies flatter the vertical hierarchies broadening the information distribution. Anyway, the behavioral approach to informational determinism presupposes that decrease of management costs as a share of the company’s revenues leads to increase of business efficiency . Similarly, postindustrial concepts of the informational determinism’s role in the working process resemble the behavioral approach. They state that historical and sociological evolvement of IT technologies flatten the company’s hierarchies changing the traditional views on the working process. Information systems allowed employees to rely more on competence and knowledge while the decision-making process tends to become more decentralized.
The case study of Accenture Consulting company proved that information determinant may significantly ease operational activities. Accenture has no headquarters, no formal divisions, and no single working places. All of the 130,000 employees freely move from one place to another participating in projects worldwide. However, such successful examples are rare because quite often the companies face the challenge of the organizational resistance. For this reason, it makes sense to mention that the implementation of informational determinism approach fails due to organizational, mental and political resistance rather than to the technological failures. Thus, Aguilar, (2013) outlined a number of criteria, which make it possible for the information determinants to revolutionize the working process:
The organizational environment should be functioning;
The company should have a clear structure in terms of hierarchy, routines, etc.;
The cultural and political elements should not resist the establishment of new technologies;
The leadership style should allow decentralization of the decision-making process;
The employee groups should be interested in implementation of the information systems;
The type of the information systems should be aimed to ease the processes rather than complicate them.
Conclusion
The framework idea whether the technology and information change society or society change the technology and information remain open. Numerous discussions, however, cannot deny the fact that both deterministic concepts have the power to influence the society, organizational structure, and the working processes by transforming the environment to which the humanity has to adapt. Obviously, these transformations deal with the material world while the humanity following these changes adjusts to the new realia by reshaping the institutional/organizational structures, thinking patterns and traditions. A good example is how the technological and informational deterministic concepts change the society during the wartime by introducing unprecedented inventions. This phenomenon shows how these innovative technologies transform the peacetime world of today. Here we come to the fundamental key issue of our analysis stating that all the informational and technological determinants do affect the society, organizations and working procedures if two conditions are met: the outcome of these inventions are manufactured by a significant number of plants and used by the vast majority of consumers.
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