- What is the right balance between control and freedom, from an IT perspective? As an executive, is it possible to balance the two or is strategic control the best approach? What can we learn from MFC and Otis?
- How should firms balance the centralization/decentralization of decision making? How should IT facilitate decision making?
- When we consider STS, how can we achieve harmony? Which element should move first? Or is there no "right" answer?
I look forward to seeing your thoughts!
If an organization is providing services to the bank, then a total control on who access what information can be easily and conveniently, be implemented using IT! While, at the same time, if an organization is an employee oriented with respect to decision making, feedbacks then exercising freedom amongst its employees is important. From MFC and Otis I, learnt that there is no” perfect” and static approach of running a business. We need to adapt to the changes within and outside of the organization as we grow to be competent, successful and be the best at what we do.
ReplyDeleteCentralization is needed in situation where, we need one person or entity to spear head the operations of the organization; to ensure, in the process of doing business a company doesn’t lose its main mission/ vision. On the other hand de-centralization is needed in situation where the decision making is high dependent on the geographical location of the organization across the globe, the fluctuating needs or demands from various customers or the changing market place. Once, the approach is decided we can implement the approach into reality with the help of IT. For example, with the centralization model we can make sure all applications within the organization are bound to the main process. Enough constraints imposed such that applications cannot operate independently. On the other hand, decentralization is achieved by making these applications more interactive amongst and within themselves, such that enough information presents to make and execute decisions “on the fly”.
Once the motto behind the acquisition is clear, a new business process needs to be set which is compatible to both the LPB’s and MFC. Both of them can function as 2 verticals within the same organizations with not much application interfaces between them. They can also work as horizontals with some common application interfaces and interactions. This depends on which is more profitable and adaptable in the coming years. Only after this can we use IT to implement the best approach.
The main objective in an organization is to coordinate jobs and business to make profit. Achieving long term strategies as well as short term goals is the main objective of an Information System in an organization and IT provides objective technology to accomplish these tasks.
ReplyDeleteI believe that the role of IT as a controlling agent or as a consulting agent is highly dependent on Socio-technical of the firm. In other words, people, organizational structure, tasks, and existing technology in a firm impose the role of IT in a firm. Even in different levels of a company we can have different freedom levels. For example in an industrial firm, the operational employees in the assembly line should follow the instructions that is given to them by the system without putting time on thinking about the procedure, and then they can focus on quality and safety. In the tactical level where knowledge workers and mid-managers are working they can have more freedom to think about the existing difficulties and find a solution for them. IT gives more freedom to these levels, and for the strategic level IT is more a consulting agent which provides enough knowledge for CEO to make a better decision.
Thanks for hearing
There has to be a balance between control and freedom. At the corporate level, executives are naturally going to want to exhibit as much control as they can. However, as we saw with Mrs. Fields, that is not always the best option. Mrs. Fields had an average turn-over ratio of about a year. I would suspect that a lot of that had to do with the extreme amout of control Mrs. Fields had over each store. Managers had almost no freedom to make decisions, and they probably simply got bored and eventually left the company. I think there needs to be a balance between control and freedom of decision. IT, in my opinion, should provide managers with as much information as possible, but leave the decision making up to the personnel. I like that Mrs. Fields went for a flat organization, but she thought that because it was flat she could be involved with everything. She wanted to be involved in all three levels of the organization when, in reality, she should have focused on the strategic side and left operations to lower managers. When it comes to change, I don't think there is any right answer as to what needs to change first. Each company has their own, individual culture, and managers need to find the style that works best for their company. In the end, everything will have to adapt for the change to be successful, so whichever order gets this done for the company is right for them.
ReplyDeleteI definitely agree with you Ben. There has to be a balance between control and freedom. If there is now balance, then a situation like Mrs.Fields arises. No one wants to work in a company that is overbearing. That type of environment will just create un-needed stress and thus the high manager turnover. I think the balance should be determined by the type of company and industry that you are in. You have to find the right fit for your company, not every mix of freedom and control will work. Some place like a grocery store would be best work with more control, since there is customer interaction but only in small spurts (check out and quick customer questions). However, a place with high customer interaction such as a restaurant would need ultimate flexibility. Restaurants that had hand held ordering devices would offer flexibility since waiter/waitress could spend more time around their customers ensuring them a great tip.
ReplyDeleteAs for what needs to be changed first, I agree with Ben that every situation is different. There are so many aspects that determine how a company should change. There are geographic, economic, and political reasons that are unique to every company. Mrs.Fields will definitely have a different answer as opposed to say EA Sports.
I want to respond to point 2. "How should firms balance the centralization/decentralization of decision making? How should IT facilitate decision making?" I think when it comes time to make a choice between cetral vs. decentral firms should lean towards more centralization. They should allow IT to have a seat at the big boys table of decision making. IT is happening all the time and all around us and if something ever goes wrong, there is usually a phone call/message sent to someone in IT to fix it or find a way to make it better. Having "control" over these decisions with centralized decision making will probably help most people sleep at night. I think when companies decentralize their decision making it leads to a slight level of uncertainty and some doubt over whether or not they will make the proper choice for your company or business.
ReplyDeleteHmmm, so control and freedom. Let me step outside of my refutation of Mrs Fields Cookies for just a second. This in my opinion is a classic case of why we need good managers (LSU MBAs for sure). The Mrs Fields apparatus, though one of contol provided a winning formula. A tightly controlled mechanism that allowed for IT-driven variation of processes allowed the company to generate a significant profit. It was mentioned that there was a high turnover rate which in my opinion may be due to either the lack of freedom on the job, or simply on people moving on. Either way, I doubt the turnover rate is of significant concern for one reason only. The MIS used by Mrs Fields Cookies had been so fine tuned that if it could mix and bake and carry out other tasks, there would be no need for humans in the stores. The potential of the IT system, using the amazing amount of data collected along with the technical capacity of the system, had been able to turn cookie making into a formula. In this case, the judgment of the individual managers could potentially have been a hinderance to the generation of profits. Not to say humans are incompetent but as Mr Fields said, it was degrading for a human to do a job a computer can do (I might have butchered that but you know what I mean). Control over people and control over operations are not specifically the concern here because tightly controlled operations was sufficient to generate the profit. (more to come in my blog about that)
ReplyDeleteThe key to any IT solution is strategy. So often our knee jerk reaction is to control everything around us, or also we can have the reaction just to let everything go and let others deal with it. With respect to the question of how much control a firm should exert over it's IT system, managers really should make an effort to make IT part of it's business plan. That is what are the goals of the company and how does IT play a part in them. Once this question in answered, it should yield a clearer answer to the control debate. For example, if you have a franchised company where the customer should be expected to expect the exact same experience no matter where they are in the country, tighter controls for IT might be necessary to provide this continuity. On the other hand, the product may need to be adapted and changed based on the market and may call for a more flexible IT system.
ReplyDeleteThers is no perfect way to manage a business. And there is no right answer to how to balance control/freedom, centralization/decentralization. The only way is to adapt itself to all the inside and outside changes as business grows. But IT definitely plays an important role in handling these problems. For example, different levels of a company should have different levels of power and freedom. IT can make this more realistic and feasible.
ReplyDeleteLooking at Mrs. Fields, I would argue that their MIS system and level of control was just fine for what they needed. All they did was make cookies, there really is not much decision making in that, all the MIS system did was provide a guidence in how many to make. In this situation, the amount of IT control was fine. The problem for Mrs. Fields came from their aquisition of the LPB chain which was a whole new entity. Since we now have a new chain with a larger variety of products, I doubt the same level of control could be achieved with the level of success that Mrs. Fields had previously enjoyed.
ReplyDeleteMy point is, the more complex your organization (greater variety of product offerings), the more challenging it will be to control everything with IT. I would guess that is what lead to the failure of the LPB stores within Mrs. Fields, especially since Mrs. Fields was used to total control with their MIS.
Managing a business is always a slippery slope that has to be taken with caution. Many people argue that to get the right answers it has to come from the people that are getting there hands dirty. As we have discussed in class about the Undercover Boss series I completely agree that the upper level management needs to realize what actually goes on in their multilevel business.
ReplyDeleteAlthough feedback from within the organization is a key element to success, I believe that there is a certain way to approach individual situation. There are many answers that can be found from within, but there has to be a strategic ability of extracting these key thoughts and suggestions.
I would like to respond to point 1, "What is the right balance between control and freedom, from an IT perspective?" I believe that in order to operate a successful business a large amount of responsibility must be taken out of the everyday worker's decision making process. A prime example is McDonalds. Everything is uniform policy for the exact amount of heat,time, and when to flip the fries. Also, they have an exact amount of ice already loaded and ready to drop down from the ice maker in order to insure that each cup has a large portion of ice. This process saves on the costs of soft drink syrup purchases. A successful business must be able to adapt and form its operating activities into a clear cut exact science. McDonald's has done this with thier products and has taken out a part of the decision making process. After that being said, I believe an organization must not allow it's controlling policies to eliminate innovation.
ReplyDeleteThe level of IT control can be varied based on the performance of the firm. In other words the fulfilled tasks in the firm can clarify that how much a firm has been successful in that specific task and a firm can be dynamically corrected to obtain the best performance. For example in the case of Mrs. Fields' cookies if she hire a local chef who is expert in making local cookies and he/she is familiar with the local taste and if she let him/her to apply some modifications on the cookies, she might obtain more successes in the international branches.
ReplyDeleteThe case studies of Mrs. Fields' cookies and OTIS line, showed that both Control and Freedom can work in an Organization depending on the Sociotechnical view of the company. Instead of trying to strike a balance between both the approaches, I think companies should decide which one to take according to their STS and stick with it without over-complicating things. I think there is no right way to find the balance between control and freedom and trying to achieve which would result in a futile pursuit. Companies when deciding on technologies should always keep in mind the Golden rule: there is no such thing as a technology project, there are only business projects about technology.
ReplyDeleteMFC and Otis are the extreme examples of the centralization or the decentralization. At the beginning, both of these two companies run well. But along with the company extension and development, existed system cannot marry the current situation.
ReplyDeleteTo find a way that can fit the companies own enterprise is the most efficient system. The companies firstly should find what they really want, what their strategies are and what will bring obviously revenues after installation or changing the IS. Depending on the companies’ strategies, either decentralization or centralization may be the good choice. Again, the main point is what the company really needs.
Act According to Actual Circumstances!
As we have talked so much about globalization in our past lectures, and how IT have enabled many organizations to go global – across boundaries, but we have also learnt that going global isn’t enough for a business to be successful, they also need to know the local taste – “Go Global, Act Local”; as we can say. We learnt about this also with some really good examples – like ‘Exxon’ is called ‘Esson’ in Europe, and the extension of Wal-Mart in Germany. Hence, in such situations, decentralization is required, where the same organization could act as different entities, depending on the geographic locations. This is the situation, where we need to have some level of “Freedom”, in various factors, including decision-making.
ReplyDeleteFrom the management point of view, if a manager is given the title but not any power of decision-making or planning (like in MFC case); then he doesn’t see any opportunities for his growth, and hence, is more likely to look for opportunities in other organizations. Hence, if given a title, responsibilities and authorities should be given along with it.
IT does play a very important role in various operations in an organization. The availability of different kinds of systems like, Knowledge Management Systems (KMS), Management Information Systems (MIS), Decision Support Systems (DSS), Group Decision Support Systems (GDSS), Executive Support System (ESSS) and so on and so forth; has always helped managers to manage the organization better and achieve their short-term and long-term goals.
Reading the case study for Mrs. Fields really made me aware of just how much control upper management can have, especially when it uses technology to make it happen. While I do agree that the appropriate amount of control in a company depends on its industry, I also think it depends on which individual aspect of the of the company is being discussed. For example, the daily operations of when to bake cookies and how much fits with something that could be made better and more efficient with technology. Mrs. Fields also used it for interviewing though. Prospective employees would answer questions on computer and the manager would enter information from the face to face interview, and the computer would match answers WITH CURRENT EMPLOYEES and make a recommendation based on a good match. This oversteps the bounds of what a computer should be asked to do. Hiring should be left up to managers almost exclusively; only they know their store and its culture, and sometimes they don't want people just like your current employees.
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