Engenharia e Desenho Organizacional - ULisboa e Desenho Organizacional: o nexo do impacto das TI,...

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Engenharia e Desenho Engenharia e Desenho Organizacional:Organizacional:

o nexo do impacto das TI, dos o nexo do impacto das TI, dos novos desenhos organizacionais e novos desenhos organizacionais e

do do design sciencedesign science

Rodrigo Magalhães, PhDRodrigo Magalhães, PhD

Apresentação ao CEG - Instituto Superior Técnico

Fevereiro 2008

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The turn to the social among computer The turn to the social among computer scientists and information systems scientists and information systems

designers in the middesigners in the mid--1980s was 1980s was accompanied by an intensification of accompanied by an intensification of

interest among social researchers in the interest among social researchers in the material grounds of socialitymaterial grounds of sociality

(Lucy Suchman, Human(Lucy Suchman, Human--Machine Reconfigurations, 2007:276)Machine Reconfigurations, 2007:276)

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ObjectiveObjective

This presentation is aimed at proposing This presentation is aimed at proposing Organizational Design and Engineering, a new Organizational Design and Engineering, a new research / intervention programme inspired on research / intervention programme inspired on

design science, as the way forward in achieving design science, as the way forward in achieving the levels of agility and change that organizations the levels of agility and change that organizations

require in the Knowledge Economy.require in the Knowledge Economy.

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The return of The return of engineering to engineering to organizations?organizations?

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• First wave of the engineering approach (1920s)

Dominated by Fredrick Taylor's theory of management. Time-and-motion studies (i.e. processes) achieved great success but the approach lacked the human dimension

• Second wave of the engineering approach (1990s)

Reengineering of processes inspired on Michael Hammer’s article of 1989. The ability to reduce costs is the goal. Automated activities are dependent on ERP and other packaged systems. The association with layoffs and unemployment made the BPR movement unpopular.

• Do we have a third wave in the 2010s ?

The return of engineering to organizations?The return of engineering to organizations?

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The return of engineering to organizations?The return of engineering to organizations?

Factors contributing to the arrival of a third wave:

• The ongoing transformative power of IT in organizations

• Advances in computer science and ever improving capabilities of systems engineering

• New ideas on organizational modelling and architecture

Factor still missing for a successful third wave:

• The awareness of the causes for failure of the preceding waves, i.e. organizational design

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The foundations of The foundations of organizational design:organizational design:

strategy, resources and strategy, resources and informationinformation--based assetsbased assets

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The cross-sectional or short term approach:

Attractive industrystructure

Industry relativeposition

The outcome:

The longitudinal or long term approach:

Outline of Porter’s (1991) dynamic theory of strategy (adapted)

Organizational skills (or routines)Drivers

Value for the client

Low cost/ Differentiation

Organizational effectiveness

Competitive Success

StrategyStrategy

Activities/ Value System

Managerial Choice

(e.g. scale, cumulative learning, linkages with

other activities, ability to share other business activities, institutional

factors, etc)

(A category of organizational resources

which arises from performing activities over

time)

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INTERNAL ANALYSIS

Strengths

Weaknesses

EXTERNAL ANALYSIS

Opportunities

Threats

Resource-based models

Environmental models

Models of competitive advantage

The resource-based approach “Sustained competitive advantage is achieved when a value creating strategy is implemented which is not simoultaneously being implemented and which cannot be duplicated by any current or potential competitor”(J. Barney, 1991)

Factors of production Markets

Products

StrategyStrategy

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StrategyStrategy

Resources are the tangible and intangible assets which are tied semi-permanently to the firm and they can be classified under three categories:

physical capital resources (physical technology, a firm’s plant and equipment, its geographic location and its access to raw materials)

human capital resources (the knowledge of individual workers, namely, their skills, experience and contacts)

organizational capital resources (the formal and informal organizational structures as well as the relationships among individuals and groups within and outside the firm)In

sivi

ble

reso

urce

s

Source: J. Barney, 1991

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StrategyStrategy

Invisible Resources are:

• Unattainable with money alone

• Time-consuming to develop

• Capable of multiple simultaneous uses

• Able to yield multiple, simultaneous benefits

Source: Itami and Roehl, 1987

Information and information flows are at the heart of invisible resources

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StrategyStrategy

Environmental (e.g. production skills, customer information, channels for bringing in information

Information flows

Corporate (e.g. corporate image, brand image, influence over distribution or suppliers, marketing know-how

Internal (e.g. Management capability, morale of work force, ability to manage information, corporate culture)

Invisible Resources

Source: Itami and Roehl, 1987

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Organization:Organization:the materialization of the materialization of

strategystrategy

14Source: VAN DER HEIJDEN, Scenarios: the art of strategic conversation (1996:274)

Organization: the relationship with strategyOrganization: the relationship with strategy

1. Strategy1. StrategyCoherent pattern of action which Coherent pattern of action which intervenes in a conscious intervenes in a conscious fashion in the permanent fashion in the permanent evolution of the organization evolution of the organization

3. (Strategic) 3. (Strategic) ConversationConversationA process of learning made up A process of learning made up of perception, conceptualization of perception, conceptualization and actionand action

2. Organization 2. Organization A community based on a A community based on a system of interactions which system of interactions which exist in strategic conversationexist in strategic conversation

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We need an organization theory because some phenomena are more conveniently described in terms of organizations or parts of organizations than in terms of individual human beings who inhabit those parts (...)

Employing a more aggregate level of discourse is not a declaration of anti-reductionism, but simply a recognition that most natural systems do have hierarchical structure, and that itis often possible to say a great deal about aggregate components without specifying the details of activity within these components

Herbert Simon (1997: 230):

Organization: an aggregate level of discourseOrganization: an aggregate level of discourse

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Organizational design:Organizational design:the articulation of the social the articulation of the social and the technical sides of and the technical sides of

organizationorganization

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Classic Organizational DesignClassic Organizational Design

• Chandler (1962) asserts that organizational design includes:

(1) The lines of authority and communicationbetween offices and officers

(2) The information and data that flow through these lines of authority and communication

• Weick (2001) claims that the design of an organization determines the distribution of resources, authority, and information.

• Galbraith (1973) talks about organizations as information-processing networks

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SOCIAL STRUCTURE PHYSICAL

STRUCTURE

TECHNOLOGY

CULTURE

ENVIRONMENT

ORGANIZATION DESIGN

Organization: the conceptual aggregatesOrganization: the conceptual aggregates

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Organizational design dimensions:

• Formalization (the extent to which the organization relies on written rules and procedures to pre-determine the actions of employees

• Centralization (the location of decision-making authority in the hierarchy of the organization)

• Complexity (how many different job titles and levels of authority exist in the organization)


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Organizational design decisions:

• Division of Labour or degree of specialization (how specialized should each job be?)

• Authority or degree of delegation (how much right to take decisions is given to each job?)

• Departamentalization or the basis upon which to group types of jobs (should jobs be grouped by function, by territory, by product, by customer or a mix of the above?)

• Span of Control or the basis upon which to decide on the number of jobs per group (how many jobs can a manger oversee?)


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Traditional relationship between organizational design dimensions and decisions:

1. High specialization2. Delegated authority3. Territorial, customer or product departmentaliz.4. Narrow spans of control

High Complexity

1. High specialization2. Centralized authority3. Functional departmentalization4. Wide spans of control

High Centralization

1. High specialization2. Delegated authority3. Functional departmentalization4. Wide spans of control

High Formalization

DecisionsDimensions

Sour

ce: G

ibso

n, Iv

ance

vich

and

Don

nely

. Org

aniz

atio

ns (1

988)


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Social emergenceSocial emergence

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• In social (and organization) theory the key distinction has been between Action and Structure

• Structure refers to determination or things that constrain action

• Action refers to the free will of individuals to act or to interact

• Organizational frameworks assume one or the other, but most do not assume a dialectic relationship between the two.


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Made up of invisible rules (of signification, legitimation and domination) which exist beyond individuals but which are shaped and reshaped by individuals’ actions

Structure Agents Action(Social System)

Reproduces

Enables

Giddens’ social theory based on the process of structuration

Made up of human agents (individuals and groups) and of their visible relatioships


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Stages of development in social theory:

Dialectic of emergence and social causation.

Mediation of ephemeral and

stable emergents

Bottom-up causation or “emergence”.

People as creative agents

Top down causation. Abstract,

impersonal collective entities.

People as “judgmental dopes”

Emphasis

Emergence Paradigm

Interaction Paradigm

Structure Paradigm

Structure Paradigm1950s - 1960s

Emergence Paradigm

1990s -

Interaction Paradigm1960s - 1990s

Source: Sawyer, 2005


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The emergence paradigm

IndividualIntention, agency, memory, personality

InteractionDiscourse patterns, colaboration, negotiation

Ephemeral emergentsContext, interactional frame, participation structure, relative role

Stable emergentsSub-cultures, conversational routines, shared social practices, collective

memory

Social structureWritten texts (procedures, laws, regulations), material systems and

infrastructures (urban design, communication and transport networks)

Sou

rce:

Saw

yer (

2005

)


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Context: a construct linking individual action with higher levels of structure

Context - a strip of time-space within which a gathering or an interaction takes place and where knowledge is created,

shared and exploited


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IT infrastructure and IT infrastructure and organizational designorganizational design

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The transformative power of IT in organizationsThe transformative power of IT in organizations

IT Infrastructure

Real-Time Orga-nizations

“On request”application

portfolio

Processing of business

processes

Business & IT Strategy

Strategy, Processes, Applications

1980s 1990s 2010s 20--s

Consolidation and

Standardization

“On request”infrastructure

Dynamically provisioned

infrastructure

Source: Kuhlin and Thielmann (Ed), 2005

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Eras of Organizational Design

IT infrastructure and organizational designIT infrastructure and organizational design

Era 1 – Self-contained designs

Era 2 – Horizontal designs with team and process-based emphasis

Era 3 – Organizational boundaries open up

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Era 3 Organizational Design

Hollow organizationOutsourcing internal processes that support the organization’s mission

Modular organizationAssembling decomposable product modules provided by internal or external sub-contractors

Virtual organizationCreating a company-outside-a-company to respond to an exceptional opportunity, often temporary


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Definition of enterprise architecture:

The organizing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the company’s operating model

Era 3 of Organizational Design require sophisticated models known as Enterprise Architectures


Source: Ross, Weill & Robertson (2006)

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1980s 1990s 2010s 20--s

2. Standardized technology

3. Optimized

core architecture

4. Business

modularity architecture

Enterprise Architecture: stages of architecture maturity


1970s

1. Business

silos

Source: Ross, Weill & Robertson (2006)

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Strategic agilityStrategic implications

Defining, sourcing and funding business modules

Key IT governance issues

IT, business and industry leadersWho defines applications

Management of re-usable business processes

Key management capability

Speed to market. Strategic agilityBusiness objectives

Plug-and-play business process modules

IT Capability

Stage 4 of EA - Business modularity architecture


Sou

rce:

Ros

s, W

eill

& R

ober

tson

(200

6)

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IT engagement model

Foundation for execution

• Core business processes

• IT infrastructure

Strategic initiative Strategic initiative Strategic initiative

Operating modelDefines integration and standardization requirements

EnterpriseArchitecture

Strategy establishes

priorities

Foundation for execution provides oportunities for strategic learning

Defines core capabilities Updates and evolves architecture


Sou

rce:

Ros

s, W

eill

& R

ober

tson

(200

6)

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SOCIAL STRUCTURE PHYSICAL

STRUCTURE

TECHNOLOGY

CULTURE ENVIRONMENT

ORGANIZATION DESIGN

EA adress only one part of the organizational problem

EA


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Proposals for a Proposals for a research programme research programme

in ODEin ODE

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• In The Sciences of the Artificial, Herbert Simon (1996:113) has proposed the “science of design is not only possible but has been emerging since the mid-1970s”

• The “science of design” should be an interdisciplinary study providing a common ground of intellectual endevour across arts, sciences and technology

• The “science of design” should be accessible to those involved in the creative activity of making the artificial world

ODE is a design scienceODE is a design science

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• Organizations have a hybrid nature:

• They are artefacts, created by conscious design by their founders and subsequently changed by their managers

• But they are also natural systems developing naturally through social interaction between internal and external stakeholders

• The core mission of design science is to develop knowledge that can be used by professionals in the fieldto design solutions to their field problems

• Hence, organizations should be guided by design science


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• A well designed map is crucial for the success of an expedition to the South Pole, but success is not guaranteed

• The quality of the people involved, the resources and the leadership will also play a part ...


Example:

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ODE’s research model: a combination of explanatory and design sciences techniques in the same project

Technological ruleCausal modelTypical research output

Design sciences (Medicine, Engineering)

Explanatory sciences (Physics, Biology, Economics,

Sociology

Technological rule 1

Technological rule 2Causal model 1

Causal model 2


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“Since OE is intended to create and keep alignment between (models of) business strategy, business processes and business support systems, OE is a design science, method-oriented approach to information systems research”

Braun, Wortmann, Hafner, Winter, 2005

St Gallen’s approach to OE: emphasis on alignment


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“Organizational engineering aggregates multi-disciplinary concepts, methods and technology to model, develop and analyse various aspects of changing organizations”

Tribolet & Sousa, 2004

IST/CEO’s approach to OE: emphasis on change


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Since alignment between business functions and systems is dynamic it cannot depend on abstract linkages between abstract models.

If alignment is considered as a process then human intervention has to be considered

If alignment depends on human intervention, then any conditions that enhance or inhibit such intervention must also be considered

Emergent contexts enhance or inhibit the activity of organizational actors

Alignment needs people

Our proposed approach to O(D)EOur proposed approach to O(D)E

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The key requirements of design science are rigour and relevance

In order to be relevant O(D)E needs to offer support to the imperatives of new organizational design: integration, agilityand change.

While engineering can offer rigour in modelling, human-centered design can offer relevance in implementation

Hence, ODE should be not only about alignment-on-paperbut also about alignment-on-the-ground (through supportive organizational design).

Organizational change needs design


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Dealing with real outcomes (the basic model)

Technological rule

Interactions between people shaped or

mediated by technological rules

OrganizationalContext(s)

Constrain or EnableBuild or

Shape

Predicted Outcome

Real Organizational

Outcome

Recom

mended

design


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Designs are small structures that are amplified

Designs are large structures that are stabilized

Designs are relatively transientDesigns are relatively permanent

Traditional assumptionsemphasizing structure

and organization

Alternative assumptionsemphasizing action

and organizing

A design is constructed at a single point in time

Designing is continuously reconstructed

Designs produce order through intention

Designs produce order through attention

Design creates planned change

Design codifies unplanned change after the fact

Our proposed approach to ODE: Our proposed approach to ODE: ttowards a new theory of organizationalowards a new theory of organizational design?design?

Sou

rce:

Wei

ck (2

001)

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Some references

ANAND, N.; DAFT, R. L. (2007). What is the Right Organization Design. Organizational Dynamics, 36 (4): 329-344

ANDERSEN, J. A. (2002). Organizational Design: two lessons to learn before reorganization, 5 (3/4): 343-358

BRAUN, C.; WORTMANN, F.; HAFNER, M.; WINTER, R. (2005). Method Cosntruction: a core approach to organizational engineering. Symposium on Applied Computing, Proceedings of the 2005 ACM symposium on Applied computing, Santa Fe, New Mexico

CROSS, N. (2001). Designerly Ways of Knowing: design discipline versus design science. Design Issues, 17 (3): 49-55

HEVNER, A. R.; MARCH, S. L.; PARK, J. (2004). Design Science in Information Systems Research. MIS Quarterly, 28 (1): 75-105

KUHLIN, B.; THIELMAN, H (Ed) (2005). The Practical Real-Time Enterprise: facts and perspectives. Springer: New York

McGRATH, R. G. (2006). Beyond Contingency: from structure to structuring in the design of the contemporary organization. In S. R. Clegg, C. Hardy, T. B. Lawrence and W. R. Nord, The Sage Handbook of Organization Studies. Sage: London

SAWYER, R. K. (2005). Social Emergence: societies as complex systems. Cambridge University Press: Cambridge

TRIBOLET, J; SOUSA, P. (2004). Editorial Message: Special Track on Organizational Engineering. ACM Symposium on Applied Computing, Nicosia, Cyprus; 14-17 March 2004: 1337-1338

Van AKEN, J. E. (2005) Management Research as Design Science: articulating the research products of Mode 2 knowledge production in management. British Journal of Management, 16: 19-36

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Overall aim?Enhancing organizational agility and change through the exploration of organizational design and of all aspects of IT infrastructure

APPENDIX: proposal for a research programme in ODEAPPENDIX: proposal for a research programme in ODE

Why?ODE appers as the result of the radical change in organizational forms and the need to uncover the principles behind such change and behind the new designs themselves

How?Combining engineering modelling techniques (tasks, interaction, processes, etc) with social science empirical methods (observations, surveys, case studies, etc)

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