ORGANIZATIONAL CHANGE AND INFORMATION TECHNOLOGY: MANAGING ON THE EDGE
OF CYBERSPACE

New information technology will continue to transform the organization
often dramatically. What are the implications for organization
development?

Thanks to technology, the world is going bonkers. And it's going to
get more bonkers-bonkers squared in a few years with bonkers
cubed on the way.

--Tom Peters

The impact of information technology (IT) on how organizations change
and develop has been nothing short of profound. Consider any aspect of
the new technology-from the installation of desktop computers to
automated inventory and customer support, computer-aided
manufacturing, electronic mail, and videoconferencing. Each of these
innovations has forever changed the nature of work, forcing old
organizational structures into new configurations.

To appreciate the impact on organizational structures, take a deeper
look at some of the changes that accompany a new technology. Through
implementing IT, organizations not only increase process efficiency,
they also change the locus of knowledge. In the eyes of many managers,
this equates to changing the locus of power. If implemented in its
most productive fashion, IT provides line employees with the data to
perform their jobs more effectively and make decisions on job changes.
In addition, IT changes the time dimension of many communication and
work processes by providing global communication networks that cross
multiple time zones and by increasing the turnaround time of
production and feedback data. This, in turn, provides employees with
considerably more information on a more frequent basis. Coping and
intellectual skills to handle these changes in information flow are
critical.

Obviously, the introduction of IT is already a complex process, one
that requires careful advance planning and the effective use of
organizational change methods. Moreover, with the advent of IT
applications that promise to revolutionize the workplace even further,
the process will become even more complex-and the need to find
effective organizational change methods more imperative.

To develop a view of how organization development should function as
technology continues to advance, let's first take a snapshot of the
change methods currently being applied in IT implementations along
with some resulting issues. This review leads to a critical question:
Will these change models provide us with truly effective methods for
coping with likely future states? Although we cannot answer that
question definitively, we can survey the new advances in IT that are
likely to impact organizations in the next several decades. By
reviewing the issues these technologies raise, we can define the
critical concepts to be considered in organizational change programs
for IT implementation.

CURRENT ORGANIZATIONAL CHANGE METHODS

Three major change approaches have been used to introduce information
technology into organizations. These can be identified as: (1) a
technical installation model, (2) a systems approach, and (3) gap
analysis (See Exhibit 1). Furthermore, experience suggests that
(regardless of the change method) three supplemental issues are
particularly crucial for successful implementation: The identity of
the change agent, measurement of results, and choices regarding
structure (centralization versus decentralization).

Technical Installation Model

The first of the three change methods, and the one that has been most
widely used, can be described simply as a management-initiated
technical installation. In other words, top management makes a
decision to install IT equipment, usually for the purpose of improving
productivity, and delegates the work to a technical group.
Responsibility for installing the equipment usually falls to the
information systems or MIS department, which approaches it from an
operations (rather than a strategic) level. This, in turn, creates
conflict between MIS and line management-the latter believing they
have a more thorough understanding of the business situation and
therefore should be leading the effort. Often, in this type of
technical installation system, the MIS managers give low priority to
relationships between people and processes, and employee training
appears on the budget as an afterthought.

A Systems Approach

Articles appearing in MIS journals during the past two years reveal a
shift away from the technical installation model. A number of these
articles have urged MIS managers to rely less on technical expertise,
and to put more emphasis on learning the tools of organization
development and becoming change agents. Known as the systems approach,
this model encourages MIS managers to analyze inputs and outputs, and
to concentrate on the relationship between people and processes, on
structure, and on reward issues, as well as on the technical issues.

More specifically, one systems approach advocates use of a managerial
audit for planning IT change. The audit covers five domains:
behavioral (attitudes, values, behavior), technical, process
(decision-making, communications), systems (rules, protocol), and
structure. Each domain has a list of ten key factors that managers
should consider when implementing information technology. Another
systems approach model identifies six key elements of transformation:
vision, organizational design, core competencies, work redesign,
measurement/rewards, and change management. Proponents of this system
recommend that these six components be integrated in a strategic plan
developed by a team of functional departments. This involves building
partnerships across organizational boundaries, and includes the HRD/OD
function in the team planning process.

Gap Analysis

A third change method being used is a form of gap analysis, similar to
Lewin's Unfreeze-Move-Refreeze model. This approach recommends that
top management view IT as a strategic implementation that requires a
vision of the future organization. This is a three-step process:
evaluating the current state of the organization, proposing a vision
of the future, and conducting an analysis of the steps necessary to
achieve the future vision. From this, management can develop and
implement action plans that encompass all aspects of the organization.
Some experts recommend adding a fourth step before embarking upon
implementation: assessing the strengths and weaknesses of the vision
to minimize unwanted side effects.

Implementation Issues

As mentioned earlier, three ancillary issues add complexity to
implementation. These issues relate to the identity of the change
agent, measurement of results, and organizational
structure-specifically, centralization versus decentralization.

The identity of the change agent appears to be different with each
change model. Actually, in the technical installation method, there
may be no change agent per se. This is because traditional MIS
specialists are apt to view themselves as technical experts and
programmers rather than change agents. With more recent use of the
systems approach and gap analysis, however, the change agent can be
the MIS manager, the line manager, the management team, and/or a
steering committee composed of representatives from various
departments. In short, no clear answer appears to be available on the
identity of the change agent(s), even though specific change models
seem to indicate differences in who assumes the role.

A second issue plaguing IT implementation is one of measurement of
results. For most organizations, implementation of IT has been a
matter of necessity, rather than a free choice. With competitors and
suppliers installing EDI (electronic data interchange systems),
automated phone systems for customers, and global communication
networks, a failure to install competitive systems can mean going out
of business in a matter of months. Faced with the need for rapid
installation and frequent upgrades, many organizations find they have
little time to give to the measurement of IT results. In one recent
study, managers who were questioned about measuring the value of IT
could only respond in general, vague terms. Even though the systems
approach and gap analysis implicitly advocate evaluation, this does
not seem to be occurring in the hectic rush to keep up with the IT
explosion.

Related to this evaluation quandary is another school of thought
suggesting that increased speed-to-market, customization,
communication, and reduction in staffing is not the only value of IT.
Instead, the true value of IT resides in the vast amount of
organizational data it provides. By teaching employees how to analyze,
synthesize, and make decisions based on the data, organizations can
improve their effectiveness by finding new and better ways of doing
work. Shoshana Zuboff, an expert in information technology, refers to
this as using IT to "informate" employees, rather than "automate"
them. By giving employees information-informating them about their
jobs and teaching them how to think about the data, organizations
improve their effectiveness many times over. Informating creates the
true competitive advantage that IT can offer. This, then, is another
area of measurement that needs to be considered.

Finally, IT implementation must confront the issue of centralization
versus decentralization. It seems there is a paradox: It is more
cost-effective for organizations to house responsibility for IT within
the MIS function, but the data IT creates is very specific to
individual departments. Line departments initiate changes and
manipulation of the data, and many believe that ownership of the data
should reside with the line. At the same time, data from different
departments create organizational pictures that need to be analyzed as
a whole.

This debate over ownership of IT data has escalated into a debate of
centralization versus decentralization with no clear resolution in
sight. In fact, the majority of experts on the subject state that IT
makes existing organizational structures obsolete. The traditional
pyramid and matrix hierarchies obstruct the true value of information
technology. A looser, more flowing organization linked by enhanced
communication and relationships, rather than power and control, is
necessary. One consistent conceptualization of the new structure is a
"network." This has also been described as a "switchboard,"
"relational organization," "concentric circles," and a move from
"automation islands" to organization-wide global systems.

Social changes in the 1990s have been identified as simultaneous
"upward integration" and "downward diversification": at the same time
that nation-states seek closer ties on a global basis, subcultures
within each nation strive for increased independence. Ironically,
information technology seems to lend itself to this phenomenon,
producing the decentralization/centralization seesaw occurring in the
corporate world. Ervin Laszlo, an expert in the field, describes this
well in his 1992 article on information technology and social change:
"The intensifying flows of marketing information drive enterprises
towards more differentiated organizational and product modalities,
while the new technologies of information transmission enable them to
relate to one another more intensely and effectively."

It appears that a combination of decentralization and centralization,
with the ability to change as needed, is the most appropriate
structure. Perhaps the ideal organization of the future will resemble
a large fluctuating colony of cells or molecules. The cells will be
able to cluster in groups and then divide into subgroups that can
reproduce themselves and absorb themselves, engaging in (symbolic)
acts of fission and fusion as needed. We will have more to say about
new forms of organizations designed to effectively utilize IT in the
material that follows.

FUTURE INFORMATION TECHNOLOGY APPLICATIONS FOR ORGANIZATIONS

The rapid advances of information technology in the past two decades
have been staggering, but a look into future applications is like
reading a science fiction thriller. Experts predict that many of the
technologies described below will be available and functioning within
organizations in the next five to ten years. A few adventurous
organizations, in fact, are already experimenting with some of these
new tools.

Four categories of information technology will likely impact
organizations in the decades ahead: (1) individual work support, (2)
group work support, (3) advanced organizational automation, and (4)
enhanced global communications. Let's look at each category in turn,
as well as at the issues likely to accompany that technology (see
Exhibit 2).

Individual Work Support

Individual work support technologies help people accomplish daily
tasks more efficiently. The first of these, a high bandwidth portable
computer, will be more powerful than the portables of today. With the
proper clearance code, this computer will connect to any computer
network around the world, at any time and in any place, through an
international, wireless, wide-band communication network. The message
will be linked through satellite relays, fiber optic devices, and
microwave transmissions. This will allow the individual worker to be
completely mobile to work out of a home, car, office, or virtually any
other location and still be in constant touch with whatever data is
needed: customer and supplier statistics, competitor moves, E-mail
communication, and the like.

Precursors of this highly powerful wireless network are the cellular
phones and wireless computer modems of today. Currently, busy
executives can send business data from a portable computer through a
wireless modem using services from such companies as RadioMail and
Aridis, which use radio waves to transmit data. Related to these are
systems such as Motorola's EMBARC (a paging network service) or SkyTel
System (which relies on satellite transmission). By using a wireless
service, rather than a terrestrial network, fast-paced employees need
not take the time to locate a phone jack. Instead, they can send
business data from a portable computer while racing through an airport
to catch a plane, or sitting on a beach or mountain top.

Embedded inside the advanced portable computer and any other personal
computer will be a "knowbot." A knowbot acts as a type of personal
secretary that lives inside the computer and is programmed to perform
functions specifically for the user. For example, a knowbot could sort
E-mail messages into categories determined by the user; read journal
articles, highlight important areas, and file them; and inspect and
understand information from various networks regardless of language or
form. Consider one example of an "early knowbot," the personal data
assistant (PDA), Newton. Developed by Apple, Newton is advertised as a
personal digital assistant that permits people to collect, manage, and
share information. Though not at the level of a true knowbot, Newton
is ample proof that this new technology will become more readily
available in the near future.

To supplement standard computer software, advanced forms of multimedia
will be available. Sun Microsystems, for example, has recently
announced the Sun Tutor, a networked multimedia package that uses
text, voice, and photos to help new Sun users learn how to operate
their computers at their own pace. This is simply one example of how
these systems will combine voice and images to assist in work
processes.

Other forms of advanced multimedia will support what could be
described as "hyperlearning" or immediate learning on the job through
information technology. Already some companies are selling portable
multimedia training tools in the form of CD-ROMs. Using one of these
small silver disks, which can hold 680 megabytes of data more than 470
times what can be stored on the generic 1.44 megabyte floppy disk,
employees can watch videos, see color slides, complete interactive
activities and tests, and receive feedback on results for a training
course.

Experts predict that, within twenty years, virtual reality
applications will be available to assist in both individual and group
processes. This technology will enable a user to do more than merely
see and hear information. For example, an employee could put his or
her hand and arm in a "data-arm" connected to a computer to make a
mechanical adjustment on a simulated piece of equipment illustrated on
the computer screen. The employee would be able to "feel" and "see" a
rusty screw, see the "hand" moving colored wires around, and see the
results of the operation before performing on the actual equipment.
This type of process could focus on the organizational business, and
potentially save thousands of dollars in technical errors and
downtime. Boeing is investigating potential applications of virtual
reality for the design and testing of aircraft. Caterpillar has tested
virtual reality models of its earth movers to improve performance and
driver visibility.

Finally, each employee will have a personal telephone and number. This
device will likely take the form of a wristwatch, or perhaps be
embedded in the portable computer or teleputer. Each person will be
assigned a personal telephone number (beginning with the prefix 700)
for life-just as people now have social security numbers. The
telephone number will follow them wherever they go, and they can be
contacted anytime, anywhere through the wireless personal telephone.
AT&T is currently offering users the option of obtaining a personal
700 number.

Group Work Support

These technologies help groups or teams complete their work more
efficiently. The most common new technology in this category, known as
groupware, usually comes in the form of software that is networked on
a team's computers. Currently, groupware is being used to help teams
make decisions. Each member types issues and answers for a specific
topic into the computer. The computer then tabulates the entries and
displays them for the team to consider.

By using the network software known as Lotus Notes, for example,
employees can have real-time electronic discussions, perform
brainstorming activities, and make decisions on business issues. The
software can also be connected to customer and supplier networks.
Other examples of groupware include VisionQuest, OptionFinder, and
GroupSystems. Companies such as Westinghouse, Hewlett-Packard, Texaco,
and General Electric have already experimented with groupware and
report it to be useful. Some disadvantages, however, have been
discovered; employees with low computer literacy have difficulty
becoming accustomed to the systems. Extroverts are often frustrated
because typed text, rather than actual words, become the new medium
for communication.

Fujitsu, one of the forerunners in the industry, has just designed an
advanced prototype of groupware that moves toward virtual reality.
With this system, employees can be sitting at their computers in
separate offices and collaborate on a 3-D drawing while talking to
each other on a built-in videophone. In the future, this type of
application will save manufacturers and suppliers money and time in
designing parts.

Virtual reality for teamwork will also be available in the future.
Workers can collaborate on many projects with other people around the
world-just by turning on their computers. They will be able to see,
hear, talk, and experience new products through the computer. Indeed,
computerized "simulations" will likely become a common means to
"sample" products and experiences.

Cyberspace is another technology on the horizon. An expert describes
it as "a collective consensual hallucination, a computer-maintained
virtual world in which, through ideas from scientific visualization,
cognitive entities would take on tangible form to facilitate access
and manipulation." Related to virtual reality, cyberspace would go one
step further by incorporating the participant's thoughts into computer
forms. Useful for creative brainstorming and new product idea
generation, this technology may not be for all organizations.

Cyberspace will likely not be available for another twenty to thirty
years, though currently the term "cyberspace" is being used to
describe online computer services such as the Internet. The Internet
is the largest online computer network in the world. It connects
universities, libraries, schools, laboratories, and businesses around
the globe. It offers users electronic mail, access to databases, and a
wide variety of other information resources. Although many companies
have been using electronic mail for years, and individuals can
subscribe to online services at home such as America Online,
CompuServe, and Prodigy, the advent of true international networking
to any location in the world is still not a reality. "Surfing the
Internet" and "wandering through cyberspace" are phrases that have
become more common, however, and companies are closer to being able to
offer employees enhanced communication networks that can span the
globe.

Advanced Organizational Automation

Advanced organizational automation can be defined as those
technologies that increase the efficiency of the organization. They
are usually found in the form of tangible databases and systems, such
as inventory, sales, manufacturing, and customer-support systems. The
early stages of information technology have already transformed many
of these operations into computerized functions. And more advances are
predicted.

Many retailers already use electronic data interchange (EDI) as a link
to their suppliers. Advanced organizations will also have their
manufacturing and inventory functions linked this way, so that as soon
as the system realizes the organization is running low on a part, it
will automatically execute an electronic purchase order signaling the
supplier to ship new parts. EDI acts as an electronic form of
just-in-time inventory replenishment. It also eliminates the need to
maintain high levels of inventory, which is calculated as overhead.
Once implemented and running well, EDI can save a corporation millions
of dollars in reduced overhead costs and potential downtime from part
shortages.

When it comes to competition and survival, EDI has been described as
the "800 pound gorilla." Like other advanced organizational automation
systems, EDI has become an example of a type of information technology
that must be implemented for companies to survive in the future. In
fact, EDI systems have become so advanced that they have expanded into
warehousing and distribution systems. The wireless warehouse is no
longer a manifestation of the future: products are scanned with
computerized bar-code readers as they leave the warehouse, and then
scanned again when sold to customers. This triggers an electronic
signal, which is sent through wireless communication channels back to
the distributor's warehouse, where the product can again be scanned
and shipped to arrive at the retailer's dock with a reduced cycle-time
of only one day. Suppliers that cannot provide this world-class style
of business are soon left in the dust.

Automated customer-response systems will also be more available in the
future. Currently, many companies have taken advantage of voice mail
and automated call answering systems, which steer the customer's call
to the correct department. In the future, a "peopleless system" will
be available to answer customer phone calls and take orders. This
concept will also move into the fast-food industry; customers will be
able to punch in their order on a computer and give the computer
money. The computer will make change and deliver the food. There is
some doubt as to how customers will respond to such an impersonal
system.

Virtual reality sales is another possible technology that could affect
organizations, especially the sales force. One expert says it "will
enable a person to 'sample' a new home or a vacation destination; and
to select a school, a car, or virtually any other purchase that now
requires examination in person all without ever leaving the home."
Already, U.S. retail statistics show that more people are starting to
shop from home instead of driving to stores. This type of trend bodes
ill for retailers that refuse to provide new shopping "options"
through the technology avenues of the future.

Enhanced Global Communications

Enhanced global communications technologies are those that allow
employees in an organization to communicate virtually with anyone else
in the world. Technologists predict that an international highway of
business communications will network any business, university,
research center, library, or home. This network will make the
following information technologies available:

Electronic mail (E-Mail) and voice mail already allow employees to
send text and voice messages to one another via computer terminals or
phones using a network address. The introduction of E-mail has changed
both the corporate culture and communication patterns in organizations
by promoting increased communication between different levels. It also
enhances employees' view of corporate communication flow information
is perceived as more relevant and timely. Use of E-mail and voice mail
will expand in the future, especially in linking organizations,
customers, and suppliers globally.

Group videoconferencing, already in use by some corporations, allows
people at geographically separate sites to communicate over a computer
system. Multiple television monitors are set up in the receiving
sites, so everyone in the room can see and hear everyone at the other
sites. Through group videoconferencing, an organization can link its
sales and production sites in New York, to Tennessee, to Texas, to
California all in one meeting. The cost savings in travel and time
away from the job quickly pays for the initial investment in
equipment. Already such companies as Compaq Computer and Texaco, along
with universities across the nation, are using group videoconferencing
to conduct office meetings and mini-conferences.

One interesting application of videoconferencing is in the field of
medicine. Currently known as "telemedicine," videoconferencing systems
allow physicians to consult with specialists and provide training for
rural doctors and nurses. Special cameras have already been developed
that can scan the inside of a patient's ear, the skin, eye, or any
other part of the body, and "send" the resulting image many miles away
to a specialist's office. Viewing the ear or other body part on the
screen, the specialist can then advise the rural doctor through
two-way audio and two-way video how best to handle the situation.

A videophone has also recently been introduced for business
communications. The phone is equipped with a small computer screen so
that the caller can see the person on the other end, and vice-versa.
Some technology trackers predict that, within twenty years, there will
be 20 million videophone lines in the U.S.

Related to the videophone and group videoconferencing is desktop
videoconferencing. With this new technology, a user can sit at a
personal computer in his or her office and see and hear another user
at a distant site on the computer screen. In addition, software
programs can be illustrated on both screens simultaneously, allowing
the users to discuss and revise a report or any other type of work.
Training can also be offered over this medium, with the instructor's
face appearing on the computer screen to facilitate a class. Some
desktop videoconferencing systems allow multiple users to communicate
at the same time, with the computer screen divided into sections so
each person's face is pictured. PictureTel, Compression Labs, V-Tel,
and Viewpoint Systems are a few of the companies currently selling
desktop videoconferencing systems to corporations in the U.S. and
Europe.

Still in prototype stage is a language speech translator that will
translate any foreign language into the language of the user. This
will eventually be available in a portable unit, as well as an option
available on the videophone and desktop videoconferencing system.
Obviously this will enhance global communications even further and
have a strong impact on international business negotiations and
protocol.

A final and very exciting business communication technology is
referred to as tele-presence. With telepresence, employees will be
able to "beam their images" into a meeting room across the
organization, the nation, or around the world, as a holographic form.
Even though the employee will not physically be there, their 3-D
representatives will make it hard to tell the difference since they
can talk, see, hear, and move as if they were there. This type of
technology will obviously enhance business communications, as well as
save travel and out-of-office time costs. It is predicted that
telepresence is only a decade away, and will be another forerunner to
virtual reality.

Issues of New Technologies

With the advent of these new information technologies come new
concerns. An obvious issue is one that has already beset IT
implementors: control of data. More data will be available, more
communications, more access to databases-but who will control access?
Related to this is the issue of security. What measures will be taken
to protect sensitive data and people's privacy? Ethical issues also
arise from screening incoming phone calls via displays showing the
caller's name and number.

The issue of automate or informate has also not been resolved. Will
the technologies be used just to increase speed of business practices
and reduce staff, or will people be retrained to use the data and
improve processes? Some experts warn that how well the information
technology is used is a function of organizational learning. Have
organizations learned that IT is not only for automation, but for
informing "smart" employees who synthesize the data for improved
organizational efficiency?

Another major issue that concerns some experts is the psychological
side effects of interacting through a machine all day. In the
organization of the future, it may not be necessary to meet
face-to-face every day, to shake hands, to touch people. Instead all
of this can be done via videophone, videoconferencing, telepresence,
networked portable computer, or virtual reality. What are the
psychological consequences of this? It does seem that organizations
are poised to relearn some of the harsh lessons from socio-technical
systems theory. The imposition of new technology, which ignores the
impacts of such changes on the social fabric of the organization, may
come at great cost and prove to be less effective than anticipated.

In some of her earlier work with employees who experienced the impact
of having their manual tasks replaced by a computer, Shoshana Zuboff
found that workers complained they were no longer in touch with their
work. They were "floating in space," with their work "lost behind the
screen." Other people who have been working with computers longer
report that they feel more productive, but less personally fulfilled.
Will organizations have to plan and hold social functions after and
during work hours to enable their employees to see and touch "real
people"?

Final issues concern the implementation of the technology itself.
Because it is so complex and organizations have not experienced it
before (and thus cannot be aware of all the side effects), "it is
reasonable to expect one or two application Chernobyls." Related to
this is the continual need to update and revise older equipment. It is
difficult to predict what the equipment standards of the future will
be; IT purchased today may need to be upgraded for the future. The
cost of this could be quite high.

CRITICAL CONCEPTS FOR FUTURE CHANGE EFFORTS

Without doubt, organizations will be affected dramatically by the many
changes that will take place. How these changes will manifest
themselves, and what additional organizational change techniques will
be necessary to facilitate IT change, are difficult to determine. On
the basis of past IT introduction, however, the organizational change
methods used, and the resulting structural changes and enhanced
communication patterns, several concepts emerge as critical for future
IT change efforts.

Before outlining the concepts, however, it is helpful to recognize
three key points that will affect the majority of organizations in the
future, regardless of size. The first of these is that massive
technological changes are developing at a speed faster than during any
other time in history. Tom Peters describes this rate of change in his
usual colorful way the "bonkers cubed" projection cited at the
beginning of this article.

The second point is that IT changes will affect organizations at
different rates. Some corporations are already experimenting with
prototypes, while others have still not installed computer networks or
E-mail to link them to the rest of the world. The varying rates of
technical installation will have an impact on the change model
employed in specific situations.

A final point has to do with the prior technology experience of the
employees within the organizations. Those companies that have been
making use of IT for some period of time will have already dealt with
the change pains resulting from implementation. Many of their
employees will have traversed the learning curve and will feel
comfortable with computers and other technologies. In fact, in a
recent survey of business employees, 94 percent of the respondents
identified their computer as indispensable or at least worthwhile. In
addition, if employees do not perceive technology as a threat to their
jobs, many may react positively toward new technologies that increase
their global communication capacity and provide electronic methods of
teamwork, virtual reality sensations, and more autonomy and
decision-making if IT is used for "informating" purposes. Middle
managers, on the other hand, may continue to feel threatened and/or
push for the technology to be used in an "automate" fashion to reduce
employee control and power.

From these points and the information covered earlier, four key
concepts emerge as critical to future organizational change programs
for IT. These are:

° A flexible customized change model

° Less stress on structure, more emphasis on
communication/rewards/policies

° Conceptualized networks

° OD technology tools

A Flexible Customized Change Model

IT implementations of the future should be based on flexible
organizational change models that can be adapted to different
organizational settings. Just as organizations are being asked to
provide customized service to customers, OD specialists need to use a
customized approach for organizational change. But as a result of the
varying rate of IT implementation and differences in employee
perceptions and experiences across industries, the standard change
models of the past will not work.

Change management books are filled with descriptions of different
intervention procedure theories, several of which refer to technical
changes within organizations. Each advocates different activities for
diagnosis, education, action, and evaluation-yet applying any one of
these models at random to a specific IT implementation is
inappropriate. Many experts caution against using "cookie cutter"
organization models for implementing IT. There may be cases, however,
when after analyzing the specific situation at an organization, the OD
consultant may determine that some or all elements of a traditional
model may be useful if customized to fit the organization in question.

There is another reason to avoid the "cookie cutter" models of the
past: the impact of information technology is quite different from the
impact brought by traditional technological innovations introduced
through organizational change methods. IT not only modifies technical
areas, but also affects communication channels, decision making, and
the balance of power within an organization through redistributing
information. Because of this, IT organizational change must be
examined from a socio-technical basis and be customized to fit the
social network of the specific organization into which it is being
introduced.

With this in mind, it is clear that companies need a simple yet
flexible model that can be altered to deal with the complexities found
in modern organizations. One appropriate framework is an enhanced
version of gap analysis. With this adaptive model, the OD specialist
(working in partnership with a team of employees and managers who will
be affected by the change) will first assess the current level of IT
readiness. The team would have full support from upper management,
and/or upper management would be included on the team. The assessment
would involve an inventory of IT implementations that may have
occurred in the past, how they are currently working, and
employee/manager perceptions of IT, including an historical look at
past successes and failures. In addition, a diagram of how the
information flows within the current situation and how it is used
(informate or automate) is necessary. Finally, an analysis of the type
of IT to be implemented and an assessment of "employee readiness" to
adopt the newer technology should be conducted.

The second step is to develop a vision of how the new IT will affect
the organization. This includes determining the objectives and goals
of the organization, and linking these to the new IT and the reason
for change. A second diagram of how information will flow within the
new IT system is also necessary. For example, if the company had
previously installed a local area network with internal E-mail, then
plans to link the network to their customers and suppliers, what would
the new information flow look like? How would employees react to it?
Who would be allowed to use it? How would the resulting information be
used? What types of new decisions may occur from the information?
These types of questions need to be considered when diagramming the
new information flow and envisioning the future.

The third step is an in-depth discussion within the team to determine
the strengths and weaknesses of the proposed IT change. Team members
would be encouraged to candidly discuss how they believed the change
would affect technical goals, the social system, communication,
rewards, and policies. Information from the first two steps would be
integrated into the discussion. At this point a go/no go decision
would be made to proceed with the IT implementation, and/or necessary
revisions to the implementation process.

If the decision is affirmative, the final step would be to create the
reward and policy system to support the IT implementation. This would
involve bringing new members to the team who specialized in this area.
Once this was finalized, the implementation process would begin. The
complete team would be responsible for communication, training,
problem solving, implementation, and evaluation.

This type of simple IT change model can be adapted to any size
organization, regardless of IT maturity level. It can, in fact, be
customized to the needs of the company. Most important, it takes into
consideration the past history of the organization with regard to
former experiences and expectations of IT implementation.

Less Stress on Structure More Emphasis on Communication, Rewards, and
Policies

A second major concept involves less emphasis on organizational
structure, and more on communication flow, relationships, and
rewards/policies. Organization structure can be defined as "the way an
organization divides labor or differentiates its parts horizontally
into departments and groups, and vertically into managerial
hierarchies."

More and more, experts are insisting that, with the ability of IT to
extend lines of communication around the world so that business can
occur across time zones and distances, traditional organization
structure is obsolete. Some experts even suggest that the established
assumption of linking structure to business strategy is archaic. The
once-popular pyramid structure in which communication flows down from
the top will handicap modern corporations with its slow speed,
distorted messages, and resulting poor response time. Furthermore, the
traditional grouping of functions into separate departments hinders
collaboration and process time. Competition dictates immediate market
information flow to the employees who can make the changes. Without
this fast turnaround time, the organization will lose business to
faster competitors.

In addition, information technology itself makes light of structure by
providing freedom of access to different levels within the
organization. The introduction of E-mail has been shown to quickly
erode hierarchical barriers to communication. Now, with easy access to
customers and suppliers, the "smart employee" can make immediate
decisions that have a positive impact on productivity and
profitability.

Instead of concentrating on structure, OD specialists need to teach
organizations to emphasize communication flow, rewards, and policies.
Diagramming communication flow and clearing barriers to communication
should be linked to business strategy-not just reshuffling structure.
Furthermore, maintenance of the system should be supported by
appropriate reward and policy systems. If organizations will need to
rely on employees who have knowledge, who can synthesize information,
and who can make fast decisions to meet customer needs, the
organization must install support systems to reward them for this.
Such support systems include training, performance, benefits, and
communication policies.

In the future-especially in service industries-many employees will be
able to work from their homes or on flexible schedules. Information
technology will make much of this possible. Establishing clear
communication policies and incentives will enable this system to work
more efficiently. Policies that protect employees from technologies
that invade privacy, such as electronic monitoring, are needed. New
types of performance appraisal systems will be needed in this
environment as well. Balancing the legitimate need for performance
assessment with the privacy rights of employees will be an interesting
challenge.

The payoff to organizations can be large savings in overhead costs
resulting from a reduced need for office space and utilities. IT will
allow businesses to contact employees at any time in any location, and
even group meetings can be held via technological means.

One corporation in California has actually organized its processes so
that it can conduct business without office buildings. Suppliers build
products according to the company's specifications and stamp them with
its logo through an OEM (original-equipment manufacturer) agreement.
The corporation conducts all marketing and sales through an
independent sales force that is dispersed around the world.
Communication between sales, marketing, and administration occurs via
phone, fax, and videoconferencing. Orders are taken from customers
over the phone, fax, or in person. The supplier drop-ships the product
to the customer, and an outside accounting service handles invoicing.
An external personnel service handles benefits and paychecks for
employees.

Conceptualized Networks

The successful organization of the future will probably resemble a
network. It will be less concrete and more conceptual. Employees will
be located in different settings, while customers and suppliers will
be positioned around the globe. Diagramming these relationships and
communication flows each time new IT changes are recommended will
become one of the new processes of the OD consultant.

A network organization can be described as one that "extends beyond
the boundaries of any single organization and involves linking
organizations to facilitate task interaction.... The network
organization is highly flexible. Its components can be assembled and
reassembled to meet changing conditions." With this in mind, fewer
levels of management will be necessary, since IT will enable
information to flow freely to where it is needed. In fact, some
experts suggest that the best example of a successful
information-based company of the future will have no middle managers.
Information will flow freely between teams of knowledge employees and
top management who will determine strategy. The teams can be organized
into "mini-businesses" in which all functions will be represented. For
example, a team concerned with the business process of producing "X"
product may have permanent members from manufacturing, marketing,
distribution, accounting, and so on.

Other experts describe a type of network organization that operates in
concentric circles around a database. All circles will have access to
the database, which holds pertinent customer and supplier information.
Daily operations workers will be closest to the database, since they
are required to respond most quickly to customer needs. Management and
support functions will reside in the outer rings, where they will be
concerned with strategy, technical development, training, and social
system development.

Another type of network organization may look similar to a spider's
web, with the customer, supplier, and other external entities placed
in the middle. From here, three levels of the web expand outward. The
first level is composed of teams of knowledge employees who gather
information from the middle and use it to make appropriate decisions
concerning customer satisfaction. The second level is composed of
support managers who act as "barrier-busters" between teams if
necessary, and who also provide support functions such as training and
technical development. The third level is made up of top managers who
listen to information from the first and second levels and then make
strategic decisions. All levels of the web, however, have immediate
access to the center.

These are just a few examples of network organizations of the future.
OD specialists need to begin thinking in these terms as they begin to
diagram organizations and communication flow patterns. The use of
information technology within the corporation will be the trailblazer
and highlight much of the pattern of the communication flow.

OD Technology Tools

Just as information technology is seeping into all aspects of
organizational life, it needs to penetrate the field of organization
development as well. OD practitioners need to learn technology-related
skills involving IT in order to assist in the change process. It is
especially important for the OD specialist to be aware of the many
nuances of information technology, since IT has a much broader impact
than the traditional techno-structural intervention. IT alters
organizational patterns of power and communication flow; it requires
changes in rewards and policies and it "crashes existing structures."
One expert even goes so far as to say that IT is a new "member" of the
client group within an organization.

By learning about and using information technology in their own
professional lives, OD specialists will reap several benefits. To
begin, they will experience what their client organizations are
experiencing in terms of individual change when using IT. This will
allow them to be more empathic and responsive. They will also come
face to face with the automate/informate issue. This will enable them
to be better "teachers" so that organizations, employees, and managers
may learn how to be "learning beings who informate instead of
automate." In addition, IT tools developed for the OD profession will
enable practitioners to increase their own efficiency and
effectiveness when performing interventions.

Examples of potential OD IT tools may be software packages that
contain a multitude of OD intervention models with a decision tree to
program in specific organizational coordinates. This could allow for
electronic customization of change processes and provide early warning
signs of organizational challenges. It could also speed up
intervention evaluation, assist with process evaluation, and serve as
a database of multiple interventions to analyze in the future.

Related to this is the use of OD groupware to conduct team sessions
and assessments. Organizational "health checks" could be carried out
in this manner. Already, some internal OD specialists and managers are
scanning public electronic bulletin boards within corporations to
"tap" into employee perceptions of new company policies and other
issues. Employees have responded favorably to the system, because
their names are kept confidential but they can communicate their
concerns.

Other OD IT tools may include computer-based training packages. More
and more employees are requesting just-in-time interactive training at
their desktop computer. In addition, software simulation tools could
be developed to diagram organizational communication flow. Similar
tools are already available for information management network
managers. OD professionals could use this type of tool to visually
diagram an organization's network and use the drawings to assist in
team decision making for IT change processes.

CONCLUDING COMMENTS

Information technology has made a tremendous mark, specifically on the
way organizations conduct business. Because of the rapid advances in
this field, corporations are being forced to restructure, respond, and
renew their investments in IT. But this is only the beginning. The
future information technologies outlined in this paper are just a
snapshot of what is anticipated in the next ten to 20 years. Already
organizations have implemented many of these technologies, and if the
current rate of technology development continues, these changes and
more could revolutionize the way the world does business.

The four concepts for organizational information technology change
programs presented in this paper are a preview to the new type of
contemplation that must occur to deal with the changes ahead.
Fortunately, the field of OD has always prided itself on its ability
to deal with innovation and challenge. Experimentation with these
concepts and development of future concepts for IT change processes is
essential.

In a complex, information-loaded society there are advantages and
disadvantages to the way information is used. Just as organizations
are torn between centralization and decentralization, people will
still want to control data or share data for a multitude of reasons.
In a world that is more and more able to communicate across language
barriers and time zones, these issues will only grow in importance.
Adoption of simple and flexible methods in organizational development
processes and human resource policies is necessary for allowing the
employees of today to become the "smart employees" of tomorrow, which
will in turn, promote organizational flexibility and success.

Exhibit 1

Common Change Methods for Information Technology (IT)

The information appears in the following order: Technical
Installation; Systems Approach; Gap Analysis

Description:

Top management makes decision to install IT. Delegates work to MIS
department; Management analyzes inputs and outputs of organizational
system; involves employees; and considers rewards, structure, and
human processual elements; Management evaluates current state of
organization; develops vision for future; and determines steps to
accomplish vision.

Issues

1) Identity of change agent; 2) Measurement of results; 3) Structure:
Centralization versus decentralization

Exhibit 2

Information Technology of the Future

Individual Work Support:

High bandwidth portable computer
Knowbot
Advanced forms of multimedia
Virtual reality*
Personal telephone & number

Group Work Support:

Groupware*
Cyberspace
Virtual reality for teams

Advanced Organizational Automation:

Electronic data interchange (EDI)*
Virtual reality sales
Automated customer response systems*

Enhanced Global Communications:

Language speech translator
E-Mail & Voice Mail*
Videophone & desktop videoconferencing
Videoconferencing*
Telepresence
International highway of business communications

* Already in use in certain corporations

Selected Bibliography

For more on the impact of information technology on organizations see
Benjamin, R.I. & Blunt, J., "Critical Information Technology
Issues: The Next Ten Years," Sloan Management Review, 1992,
Vol. 33; Murray R.J. & Trefts, D.E., "Building the Business of
the Future: The Information Technology Imperative," Information
Systems Management, Fall 1992; Fried, L., "Advanced Information
Technology Use: A Survey of Multinational Corporations,"
Information System Management, Spring 1993, Vol. 43; Porter,
Michael E. & Millar, Victor, "How Information Gives You
Competitive Advantage," In Harvard Business Review (eds),
Revolution in Real Time: Managing Information Technology in the
1990's (Boston, MA: Harvard Business School Press, 1991);
Zuboff, Shoshana, "Automate/Informate: The Two Faces of
Intelligent Technology," Organizational Dynamics, 1985, Vol.
14, No. 2; Rossetti, D.K. & DeZoort, F.A., "Organizational
Adaptation to Technology Innovation," SAM Advanced Management
Journal, Winter 1988, Vol. 53, No. 1.

Comprehensive books on the subject include Zuboff, Shoshana, In the
Age of the Smart Machine (NY: Basic Books, Inc., 1988); Keen,
Peter G.W., Shaping the Future: Business Design Through
Information Technology (MA: Harvard Business School Press,
1991); Davenport, Thomas H., Process Innovation: Reengineering
Work through Information Technology (MA: Harvard Business
School Press, 1993).

For more on change management methods which have been used to
introduce information technology see Barry, B., "Information
Technology and Organizational Development," Research in
Organizational Change and Development, 1989, Vol. 3, pp.
213-231; Benjamin, R.I. & Morton, M.S., "Information
Technology, Integration, and Organizational Change,"
Interfaces, May-June 1988, Vol. 18, No.3; Boynton, A.C.,
Jacobs, G.C., & Zmud, R.W., "Whose Responsibility Is
Information Technology Management?" Sloan Management Review,
1992, Vol. 33; Sankar, Y., "Implementing Information
Technology: A Managerial Audit for Planning Change," Journal of
Systems Management, 1991, Vol. 42, No. 11; Rockart, J.F. &
Hofman, J.D., "Systems Delivery: Evolving New Strategies,"
Sloan Management Review, 1992, Vol. 33; James, P.H., "Education
and Training: Key to a Competitive Information System
Strategy," Information Systems Management, Spring 1992; Murray
R.J. & Trefts, D.E., "Building the Business of the Future: The
Information Technology Imperative," Information Systems
Management, Fall 1992.

On the new organizational structures with information technology see
Bloomfield, B.P. & Combs, R., "Information Technology, Control
and Power: The Centralization and Decentralization Debate
Revisited," Journal of Management Studies, 1992, Vol. 29, No.
4; Drucker, Peter, "The Coming of the New Organization," In
Harvard Business Review (eds), Revolution in Real Time:
Managing Information Technology in the 1990's (Boston, MA:
Harvard Business School Press, 1991); Drucker, Peter,
"According to Peter Drucker," Forbes ASAP Technology
Supplement, March 29, 1993, pp. 90-95; Keen, Peter G.W.,
"Business Design Through Information Technology," Planning
Review, 1991, Vol. 19, No. 3; Zuboff, Shoshana, In the Age of
the Smart Machine (NY: Basic Books, Inc, 1988); Kaestle, P., "A
New Rationale for Organizational Structure," Planning Review,
1990, Vol. 18, No. 4; Laszlo, E., "Information Technology and
Social Change: An Evolutionary Systems Analysis," Behavioral
Science, 1992, Vol. 37, pp. 237-249.

On the new technologies of the future see Dede, C.J., "Emerging
Technologies: Impacts on Distance Learning," The Annals of the
American Academy of Political and Social Science, March 1991,
Vol. 514; Mayo, J.S., "Communications after 2000 AD," Vital
Speeches, 1992, Vol. 58, pp. 599-603; Hargadon, T., "Networked
Media Sends a Message," Newmedia, November 1992, pp. 27-29;
Fitzgerald, Jerry, Business Data Communications: Basic
Concepts, Security and Design, 4th edition (NY: John Wiley &
Sons, Inc., 1993), and any of the 1993 issues of the Forbes
ASAP Technology Supplement.

PHOTOS: LIZ THACH and RICHARD W. WOODMAN

~~~~~~~~

By Liz Thach and Richard W. Woodman

Liz Thach is an instructional designer with Amoco in Houston, TX. Her
current postion involves instructions systems design for strategic
corporate initiatives. Formerly, Liz worked at Compaq Computer
Corporation and Texas Instruments as a corporate trainer and manager
in professional, technical, and quality training. Her research
interests include information technology, distance learning,
organizational development, and training/instructional design. She
holds a doctorate in education and human resource develoment from
Texas A&M University

Richard W. Woodman (Ph.D., Purdue University) is the Clayton Professor
of Business Administration and Head of the Department of Management at
Texas A&M University. His research interests focus on organizational
change and organizational creativity. The Academy of Management
Journal, Academy of Management Review, Journal of Applied Behavioral
Science, Journal of Applied Psychology, Journal of Management, and
Psychological Bulletin are some of the journals where his publications
can be found. Dr. Woodman is currently on the editorial boards of the
Academy of Management Review, Applied Behavioral Science Review,
Journal of Management, and Journal of Organizational Change
Management. He is co-editor of the JAI Press annual series, Research
in Organizational Change and Development and his co-authored text,
Organizational Behavior, is in its sixth edition. Dr. Woodman is
currently serving as division chair of the Organization Development
and Change Division of the Academy of Management.
_________________

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