Discussion: Technology‐supported Structures

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Discussion: Technology‐supported Structures

Discussion: Technology‐supported Structures

Networked organizational structures are those that rely on highly decentralized decision rights and utilize distrib- uted information and communication systems to replace inflexible hierarchical controls with controls based in IS. Networked organizations are defined by their ability to promote creativity and flexibility while maintaining opera- tional process control. Because networked structures are distributed, many employees throughout the organization can share their knowledge and experience and participate in making key organizational decisions. IS are fundamental to process design; they improve process efficiency, effectiveness, and flexibility. As part of the execution of these processes, data are gathered and stored in centralized data warehouses for use in analysis and decision making. In theory at least, decision making is more timely and accurate because data are collected and stored instantly. The extensive use of communication technologies and networks also renders it easier to coordinate across functional boundaries. In short, the networked organization is one in which IT ties together people, processes, and units.

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The organization feels flat when IT is used primarily as a communication vehicle. Traditional hierarchical lines of authority are used for tasks other than communication when everyone can communicate with everyone else, at

5 Cognizant Computer Goods Technology, “Creating a Culture of Innovation: 10 Steps to Transform the Consumer Goods Enterprise” (October 2009), 6, http://www.cognizant.com/InsightsWhitepapers/Cognizant_Innovation.pdf (accessed August 20, 2015). 6 L. M. Applegate, J. I. Cash, and D. Q. Mills, “Information Technology and Tomorrow’s Manager,” Harvard Business Review (November–December 1988), 128–36.

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62 Organizational Strategy and Information Systems

least in theory. The term used is technological leveling because the technology enables individuals from all parts of the organization to reach all of its other parts.

Portions of Zara’s organizational structure appear networked. Being networked enables the store managers to use technology to communicate directly with designers. Zara uses the technology‐supported structure to coordinate the actions and decisions of tens of thousands of its employees so that they can focus their attention on the same goal of making and selling clothes that people want to buy.


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