The Effects of Information Technology on Management and Organization.

Abstract

Rapid and extensive progress is being made in the devel opment of a new kind of technology -the processing of business information.This technology, commonly known as information technology, has moved into the area of management to affect jobs and organization.As a result, there is a growing con cern and interest whether information technology will rev olutionize the practice of management.In the few short years since the inception of infor mation technology into business organizations, numerous prognostications have been made proclaiming a revolutionary impact on management organization and processes.Conse quently, this study undertakes an analysis and evaluation of the changes experienced by a selected company, which is a leader in its field, in order to judge these predictions.The hypothesis tested is that the effects of information technology on management have been an evolutionary process rather than the predicted revolutionary impact.As a part of the analysis of information technology's effects on management, company operations employing various components of information technology, i.e., electronic-dataprocessing and management science techniques, were studied in order to gain a perspective of the corporate and departmental organization changes occurring since the introduction of information technology.Managerial functions of decision making, planning, and controlling were subjected to the same type analysis as were the scope and nature of the managerial jobs concerned.These functions and jobs were evaluated at all levels of management within the organization.The findings of the investigation reveal that information technology is not creating a structural revolution within the selected company, nor has its impact on middle management been as revolutionary as predicted.The organizational a l terations which can be attributed to this phenomenon occurred at the departmental level and were of a minor nature.Al though automatic decision making, generally of a routine nature, has penetrated the area of middle management, there has not been the widespread elimination of middle managers nor the relegation of them to positions of minor importance.Middle and supervisory management functions of decision making, planning, and controlling have been improved but not revolutionised.Top management's functions and duties have been generally unaffected by information technology.Moreover, it is unlikely that upper management will be affected directly for many years since information technology can touch only the fringe of the problems faced by these managers.The major effect at this level has been an indirect one in that decision making, planning, and controlling have been improved by the speed, accuracy, and conciseness of information at lower organisational xi levels.These improvements furnish a more precise base upon which top management decisions can be made.Centralization of decision making in top management has not occurred.As a result of the evidence of this investigation, the conclusion is reached that the changes occurring within the company have been evolutionary rather than revolutionary.In most instances the findings of this study have been contra dictory to the predictions found in the literature.The ability to compile large amounts of information quickly and to process it in various fashions can have only a minor im pact on personnel involved and the organization in which it is used.Although many improvements have occurred because of information technology, they do not constitute a revolution in overthrowing managerial processes and practices at this company.The computer was initially used in scientific and technological fields where it solved xiii mathematical problems that required thousands of man-hours to solve manually.Clerical work was the next wide-spread appli cation for the computer.In some instances, it is performing relatively simple office tasks, such as billing customers or figuring payrolls.More recently, computers have moved into industry to con trol manufacturing processes and intc the area of management to affect jobs, organizations, and philosophies.As a result, there is a growing concern in management, particularly middle and supervisory management, over infor mation technology.Many managers are now discovering that their jobs, functions, and organizations are slowly adjusting to this new technology.Because of the growing interest in information tech nology's effects on management, numerous articles have been written proclaiming a revolutionary impact on management functions, job contents, and organization structures.An attempt is made in this study to delve behind these gen eralizations and to analyze in depth information technology's effects on the management of one company.Purpose of the Study This study was undertaken to test the hypothesis that the effect of information technology on management and organization has been an evolutionary process rather than the revolutionary impact as predicted by many writers.The general thesis of this study is that many predictions of authorities on information technology are generalizations which will not apply with equal validity to every organization.Therefore, through research conducted at one company, this in vestigation is directed toward gaining a perspective of the effects of information technology upon management.Scope and Nature of the Presentation The evaluation of information technology's impact on management is a difficult and complex task.Edith Goodman stated that it: . . . is as difficult as picking a single col ored thread from a complex plaid.Interwoven like various colored threads through the fabric are such factors as a rapidly changing economy, manage me n t 's attitude toward the computer, the purpose for which the computer is used, technology employed and many others.As difficult as this task may appear, an attempt was made to determine what has happened to date in one company.An examination of the literature in this area revealed sev eral industries that have made the most progress with infor mation technology.From these industries, one company was selected on the basis of its willingness to cooperate in an investigation of this kind.Its experiences with information technology will be analyzed in depth.Personal consultations ■^Edith Harwith Goodman, ' ' The Effects of Computers on Corporate Management," Data Processing for Management.V, No. 1 (January, 19637, 11• xv with key management personnel provided the primary source of data, although some secondary resources were utilized.Con versations, however, with other businessmen and computer manufacturers supplied numerous insights into the problem.This investigation is not an effort to get a compre hensive view, all experiences considered, but to see what is happening in one company selected for detailed study.To provide a general background, the investigation went into a wide variety of activities involving computers.However, it did not cover the specific and technical aspects of computer operation, nor the details of programming and coding.The major emphasis is placed on certain management functions and organizational aspects which would seem to be affected by this technology.When possible, ' 'before" and "after" analyses were made.In many instances, however, this type analysis was difficult to do since many of the changes evolved so gradually that management was unaware of the ex tent of the changes.An effort was made to examine the scope and job content of certain operating management jobs.Organ izational structures were also examined to determine whether certain management positions have been eliminated or combined due to the influence of information technology.xvi

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 12 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.