SIKS course Organization and Information Ronald Batenburg Utrecht

SIKS course Organization and Information Ronald Batenburg Utrecht University Institute of Information and Computing Sciences ronald@cs. uu. nl www. cs. uu. nl/people/ronald September 25, 2006 SIKS Course Information and Organization

Case Example The EURONEXT Organization Board Cash Stock Handling (Paris) Clearing IT Transaction Control (Amsterdam) ITcontrol Joint Venture with ATOS Origin September 25, 2006 SIKS Course Information and Organization Derivats Option Handling Outsourced to London

Key issues in structuring organizations ‘What Formal ‘How’ Labor Division Coordination Communicatio n Job Descriptions Management layers Protocols ‘Flexibility’ ‘Status’ ‘Culture’ Differentiation Centralization Formalization Informal September 25, 2006 SIKS Course Information and Organization

Basic perspectives on organization structures § § § Taylor Weber Mintzberg Womack & Jones Hammer and Champy September 25, 2006 SIKS Course Information and Organization

Taylor • • Maximal division of labor Specialization Productivity push Top-down control September 25, 2006 SIKS Course Information and Organization

Weber Organization structures are based on power and influence relations, based on: § Charisma § Tradition § Rationality – – – – – Personal not functional freedom Hierarchy Task description Contract Personnel selection Salary Promotion Control Documentation September 25, 2006 SIKS Course Information and Organization

Basic Organization Structure: functional structure Board Marketing September 25, 2006 Manufacturing SIKS Course Information and Organization Maintenance

Basic Organization Structure: divisional structure Board Quality Control Finance HRM Division A September 25, 2006 Division B SIKS Course Information and Organization Division C

Structuring Divisions • By • By Function or Process Product Customer Region or Country time … September 25, 2006 SIKS Course Information and Organization

Henry Mintzberg (Canada, 1939) § The Structuring of Organizations (1979) § Structures in five: designing effective organizations (1983) September 25, 2006 SIKS Course Information and Organization

Mintzbergs’ typology September 25, 2006 SIKS Course Information and Organization

‘Adhocracy’ September 25, 2006 SIKS Course Information and Organization

‘Simple Structure’ September 25, 2006 SIKS Course Information and Organization

‘Machine Bureaucracy’ September 25, 2006 SIKS Course Information and Organization

‘Professional Bureaucracy’ September 25, 2006 SIKS Course Information and Organization

Mintzbergs’ typology September 25, 2006 SIKS Course Information and Organization

Simple Structure Machine Professional Bureaucracy Adhocracy Labor Division Functional Project/ Teams Differentiation Small Large Variable Hierarchy Director/ Founder Technostructure Professionals Experts Centralization High Low Communication Informal Control Content Intensive Formalization Low High Low September 25, 2006 SIKS Course Information and Organization

Mintzberg environment-structure September 25, 2006 SIKS Course Information and Organization

Lean Production: the story of Toyota § Womack, Jones & Roos The Machine that Changed the World (1990) § Lean production or agile manufacturing is: – – Superior September 25, 2006 product design production processes SCM organization SIKS Course Information and Organization

Toyota, history 1937 1949 1950 - ‘Autonomation’ weaving car manufacturing protection law shortages line lay-out along products small series defect tracing down the line U-shaped working cell SOPs to standardize skills, enable multi-skilled workers push pull production schemes (‘kanban’) supply demand stock control (TQM, 0 -defects) increase production leveling minimizing internal adjustment times externalize quality and stock control (JIT) ‘culture’: multi-skill, flexible, part-time life-time, teams September 25, 2006 SIKS Course Information and Organization

The U-shaped working cell 1 2 3 4 5 6 10 September 25, 2006 9 8 SIKS Course Information and Organization 7 21

Line layout by products A B C D I II III September 25, 2006 SIKS Course Information and Organization 22

Production leveling Production structure Governance structure Macro Micro September 25, 2006 SIKS Course Information and Organization

Toyota’s Success September 25, 2006 SIKS Course Information and Organization 24

Business Process Redesign § Hammer and Champy: Reengineering the corporation (1993) – Organize processes according to results not tasks – Integrate tasks into parallel positions – Let employees take their own decisions as much as possible – Create case managers as one single point of service to customers – Centralize data entry at one focal point – Treat all information from one base only - but make it accessible at different places and at different times September 25, 2006 SIKS Course Information and Organization

A CASE STUDY AND AN ASSIGNMENT September 25, 2006 SIKS Course Information and Organization

Case: the Insurance Company (I) Board Capital Damage Com. Ind. Insurance Experts Mortgage Com. Ind. Vehicle Com. Ind. Intermediary September 25, 2006 SIKS Course Information and Organization Travel Com. Ind.

Example: the mortgage process September 25, 2006 SIKS Course Information and Organization

Problems § Narrowed, internal product-focus § ‘Silos’ instead of synergy § Intermediaries deal with several divisions and inflexibility § End-customers deal with long waiting times and non-regional services September 25, 2006 SIKS Course Information and Organization

Case Assignments Assignment 1: Define and classify the problems in terms of the key issues on slides 3 Assignment 2: Apply a traditional perspective (Taylor, Weber, Mintzberg): how to change the current organization structure of the insurance company to overcome the problems? Assignment 3: Apply a new perspective (BPR, socio-technical design): how to change the current organization structure of the insurance company to overcome the problems? Assignment 4: How does IT contribute to each these three developments? September 25, 2006 SIKS Course Information and Organization

Potential Improvements for the Insurance Company Board Individuals Prior Structuration: Customers, not functions Companies Region Region Team Team Intermediary September 25, 2006 SIKS Course Information and Organization Second structuration: Regions not products Third structuration: Teams, not single specialis IT ? ?