How Is Technology Affecting the Nature of Organisations?

by A A about a year ago in future

Short Discussion: Benefits vs. Drawbacks

How Is Technology Affecting the Nature of Organisations?

1. Advantages

Did technology have an impact on the nature of organisations? If so, how did it do so? According to the IBM research, which included interviewing 765 CEOs, nearly 80 percent of them rated business and technology integration of great importance (Palmisano, 2006: p.32).

1.1. Decentralisation

Decentralisation is the process by which workload is dispersed from a higher authority to regional subordinates (Oxford Dictionary, 2014). As Mintzberg (1975) argued, CEO’s had more work to be done than the contemporary models suggest. This is due to information gained by verbal communication with business associates, meaning that top executives were the only people in a position to carry out the task at hand (Mintzberg, 1975: p.4). Figure 1 highlights the decentralised structure within the organisation of Apple and all its managers (Apple’s Business’ Structure, 2014). The diagram shows the elaborated structure of workers in the firm, showing how the company approached a more decentralised structure.

Figure 1: Diagram Showing the Decentralised Structure of Apple (Apple's Business' Structure, 2014)

1.2. Telecommunications

Due to technological advancements, such as telecommunications, verbal information can be recorded and delegated down the chains to other subordinates. This is also another reason why decentralisation took place. Mr. Wong agrees by stating: “Decentralization will continue because of cost pressures but also because many developed economies are allowing for flexible working” (Wong, 2012, as The Economist, 2012: p. 22).

1.3. Virtual Teamwork

Working through advanced computer and telecommunications technologies allows for decreasing geographical dispersion of essential employees. Firms are now choosing their employers from all over the world, thus enabling a company to pick an individual from a much larger audience. This technological advancement is becoming more popular within organisations as it shows greater efficiency within a firm (Townsend, et. al., 1998: p. 19).

2. Disadvantages

To every story, as well as advantages there are also disadvantages. In this case, there are also several key disadvantages: cost of technology, competitiveness of technology, and counterarguments of decentralisation.

2.1. Cost of Technology

Most organisations will want to adopt new technological advancements in order to maintain or gain competitive advantage. However, not all organisations have the necessary requirements and infrastructure in place to utilise these new technologies. There is an issue in regards to the cost of technology. Some businesses, especially infant firms, cannot afford to upgrade their technology. In Sims’ (1993) article, Wang (1986) said, “While the computer revolution has produced an enormous industry, few of its commercial pioneers shared in this success” (Wang, 1986, as quoted by Sims, 1993: p. 59).

2.2. Competitiveness in Technology

If firms are not able to keep up with technological advancements, they will not be able to match competition. Therefore, such changes could lead to the temporary shut down or permanent exit of some organisations.

2.3. Counterargument of Decentralisation

Decentralisation is a topic highly discussed by Dopson and Stewart (1990), who comment how the role of middle management is most likely going to disappear due to technological advancements (Dopson and Stewart, 1990: p.4). This contradicts Mintzberg’s view (1975) of how an organisation will be more focused on top managers rather than spreading the work to subordinates.

3. Conclusion

There are several conclusions that can be made from this short technology-based discussion.

3.1. A More Democratic System

From all the changes outlined above, it can be understood that teleworking has increased in today’s organisations (Rogers, 2014). This is due to fast-moving advancements in online-based resources. There will be a noticeable change in ten years time, as more managers are now starting to work at home rather than coming to offices. Skype, videoconferences, and internal portals within the organisation will allow communication to become more democratic, and keep everyone, from different roles, updated with the latest news.

An example of a portal used by an organisation is “QMPlus” used by students and professors from Queen Mary University of London to better connect, share work, read information, or upload assignments. A similar example is the new “Facebook at Work” feature that Facebook is secretly working to expand communication through social networks (Kuchler from the Financial Times, 2014).

In conclusion, while there are changes technology creates on organisations, the real question is whether they are positive or negative. Even though the costs of technology and the competitiveness within a firm could be a burden, it is believed that the advantages outweigh the disadvantages. In regards to the topic of decentralisation, this work agrees with Mintzberg’s view, being that decentralisation will take place even further, rather than Dopson and Stewart’s counterargument. Technology is therefore a friend rather than a foe.

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