Using Communication Technology: Creating Knowledge Organizations 0333929500, 9780333929506, 9780333985670

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Using Communication Technology Creating Knowledge Organizations

Bettina S. T. Büchel

USING COMMUNICATION TECHNOLOGY

Also by Bettina S. T. Büchel INTERNATIONAL JOINT VENTURE MANAGEMENT (with Christiane Prange, Clemens Rüling and Gilbert Probst) ORGANIZATIONAL LEARNING: The Competitive Advantage of the Future (with Gilbert Probst)

Using Communication Technology Creating Knowledge Organizations

Bettina S. T. Büchel

© Bettina Büchel 2001 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 0LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted her right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2001 by PALGRAVE Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE is the new global academic imprint of St. Martin’s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN 0–333–92950–0 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Büchel, Bettina S. T. Using communication technology : creating knowledge organizations / Bettina S. T. Büchel. p. cm. Includes bibliographical references and index. ISBN 0–333–92950–0 1. Information technology. 2. Communication—Technological innovations. 3. Knowledge workers. 4. Organization. I. Title. HC79.I55 B83 2000 658.4⬘038—dc21 10 10

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Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham, Wiltshire

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Contents vii ix x xi

List of Tables List of Figures Preface Acknowledgements 1

2

3

Communication Technology and Organizations Communication technology-induced changes in information processing Communication technology Relationship between communication technology and organizations: theoretical perspectives Multiple levels of analysis

8 12

Knowledge Workers’ Choices of Communication Technology Theoretical perspectives on media choice An integrative model of media choice Managerial implications

15 15 32 35

Communication Technology and Organizational Design Features of communication technology The organizational design framework from an informationprocessing perspective Managerial Implications

1 1 5

41 41 42 73

4

Communication Technology and Organizational Learning Organizational learning and information processing Media choice Media choice and organizational learning Knowledge development and communication technology Managerial implications

81 81 83 87 101 103

5

Communication Technology and Success The relative nature of success A framework for measuring communication technology success

114 114

v

117

vi

6

Contents The chain of communication technology measures Managerial implications

132 134

A Dynamic Model of Communication Technology Employment Communication technology as a moderating variable The dynamic model Managerial implications

143 143 144 148

Appendix 1 Assumptions about Organizations Appendix 2 Origins of Information Processing Appendix 3 Interview Results for the Comparative Study of the Impact of Communication Technology on Organizations in Nepal, Thailand and Singapore Appendix 4 A Case Study of Communication Technology Use in Chinese Trademark Agencies Appendix 5 Terminology

153 154

Notes

163

Bibliography

167

Index

182

156 159 162

List of Tables 1.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 3.1 3.2 3.3 3.4 3.5 4.1 4.2 5.1 5.2 5.3 5.4 5.5 5.6 5.7 A.2.1 A.2.2 A.3.1 A.3.2

Characteristics of various communication technologies Key determinants of media choice Media and their features Ranking of ‘old’ and ‘new’ communication media Features of ‘new’ communication technology Task characteristics and key determinants A comparison between rational and social theories of media choice The relationship between recipient availability and richness Social environment characteristics and key determinants A medium’s characteristics and key determinants Knowledge worker’s characteristics and key determinants Communication technology and centralization or decentralization Process gains and losses in group decision-making Communication technology and influence in decision-making Managers’ criteria for centralization versus decentralization The potential of group support systems (GSS) Match between learning processes, learning situation and media choice Enabling and constraining forces for communicationtechnology-based-learning Computer world index – measure of informationtechnology effectiveness An example of potential communication technology ratios Cost–benefit factors Measure of user satisfaction Usage measures in communication technology Impact factors Conditional communication technology success measures Types of uncertainty Types of ambiguity The impact of communication technology on organizational design dimensions in Nepalese organizations The impact of communication technology on organizational design dimensions in Thai organizations vii

8 16 17 18 19 20 22 26 27 28 31 48 64 65 75 78 97 105 119 120 122 128 130 132 135 154 154 156 157

viii

List of Tables

A.3.3 The impact of communication technology on organizational design dimensions in Singaporean organizations A.4.1 Determinants of communication technology usage A.4.2 Companies in the study A.4.3 Hardware and software configuration A.4.4 Networking and database systems implementation

158 159 160 160 161

List of Figures 1.1 1.2 1.3 2.1 2.2 2.3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 5.1 5.2 5.3 6.1 6.2 6.3

The distinction between ‘old’ and ‘new’ communication media Hierarchical relationship between terms Perspectives of communication technology use in organizations Conceptual model of media choice Media selection based on media richness evaluation Task closure scale Organizational information-processing Vertical information-processing perspective Horizontal information-processing perspective The impact of electronic communication on the exchange of information Types of decision-making situations Phases of communication technology penetration Communication technology transformation of organizations Organizational learning processes The trade-off between media richness and media scope Media choice determinants Information acquisition and media choice Information distribution and media high in scope Information interpretation and rich media Information storage and media choice Communication technology potential in knowledge development Theoretical framework for analyzing communication technology success Chain of communication technology measures Types of user involvement in communication technology implementation The introduction of communication technology Communication technology choices by knowledge workers Dynamic model of communication technology and organizations

ix

6 7 13 32 36 37 42 44 56 59 60 69 71 82 86 87 89 91 93 96 112 118 133 137 144 146 148

Preface My interest in the topic originated with the realization that modern communication technologies are having a profound impact on organizational life. Although I previously did not study communication technology in particular, the focus on this topic is less surprising in the light of my overall interest in organizational change. Given the increasing use of communication technologies in organizations, I wanted to investigate the relationship between these modern technologies and their impact on organizations. Even though communication technology can be approached from a number of different disciplines, the theoretical foundation for this book is derived from the information-processing perspective. With this book, I intend to inform people interested in or working within organizations about the influence of modern communication technologies on organizational life via creating knowledge organizations. The underlying assumption is that with the increasing employment of new communication technologies, organizations are undergoing change – some of which can be predicted, while other changes are a result of the dynamics involved in the organizational context. Students or academics interested in the influence of new communication technology will probably enjoy reading the first part of each chapter which summarizes the current empirical findings and the underlying theories. Those that would like to determine the outcome of communication technology employment will prefer the second part of each chapter since it focuses on the managerial implications of the findings. BETTINA S. T. BÜCHEL

x

Acknowledgements Writing this book made me realize that with the support of people writing can become an enjoyable task. I particularly benefited from Mrs Yu, a Burmese research associate at the School of Management, Asian Institute of Technology, who helped me in gathering literature, drawing figures and formatting. I am also grateful for the feedback that I received for earlier drafts of the book, particularly from Raman, a Nepalese doctoral student at the School of Management. He read every chapter several times and looked for inconsistencies and a lack of clarity. With his help, I have tried to simplify the terminology employed throughout the book and included more figures to help the reader making connections between sections. Without the data gathering of two former MBA students – Ramesh Hamal, a Nepalese, and Cheng Wanxiang, a Chinese – I would not have been able to provide empirical substance to the book. Their work enabled me to draw on the experience of organizations in Asia which serve as examples throughout the book. During the process of writing this book, I had my second child, Aline. Being pregnant, I had the time needed to focus on writing without being disturbed by other activities that normally accompany a regular faculty job. Since I had my daughter before finishing this book, I feel, however, that she probably suffered most due to the lack of time that I committed to her after she was born. I also wish to thank those people around me who supported me throughout the writing process, especially my husband – Steffen Raub – and my son, Julian. BETTINA S. T. BÜCHEL

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1 Communication Technology and Organizations Information is the raw material of managerial work. The daily activities of managers involve the processing of information. In order to arrive at decisions within organizations, managers interpret the external environment, co-ordinate internal activities, handle problems, participate in meetings, and send and receive reports (Daft and Macintosh, 1981; Daft and Huber, 1987). These are all informationprocessing activities. The processing of information demands the use of communication media. Since the early 1990s, companies have relied increasingly on new communication technologies to improve their performance (Davenport, 1997). This trend can be observed across various countries and in companies of different sizes. There are two major reasons for this increased emphasis on communication technologies within organizations. The first is that managers spend 70–80 per cent of their time managing information, using a wide range of communication media (Mintzberg, 1973). The time allotted to this task has been validated for both industrialized (Kurke and Aldrich, 1983; Mintinko and Gardner, 1990) and developing countries (Montgomery, 1986). In addition, with the introduction of new communication technologies, the effective and efficient use of the increased number of communication media has become an ever more difficult task. According to Davenport et al. (1992, p. 53) ‘broadening information access and usage and enhancing the quality [of information exchange] are key to improving business performance’. Although this argument sounds convincing, Malhotra (1997) noted that, despite an investment of $1 trillion by US companies, little improvement in the efficiency and effectiveness of information management through the usage of new communication technologies has been realized.

COMMUNICATION TECHNOLOGY-INDUCED CHANGES IN INFORMATION PROCESSING With the introduction of new communication technologies the basic economic laws of information processing are changing. The ability to unbundle information from its physical carrier is having an impact on the trade-off between ‘richness’ and ‘reach’ (Evans and Wurster, 1997). Richness refers to the amount of information that can be transferred and its ability in changing human understanding – for example, voice mail is less rich than face-to-face communication, since it does 1

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Using Communication Technology

not allow for visual cues.1 Reach basically refers to the number of people who can exchange information. In the past, communication of rich information required proximity, and the cost of this has limited the size of the audience to which information could be sent (Evans and Wurster, 1997). In particular, communication to a large number of people required compromises in the degree of richness. With the increasing breadth of communication choices, the economics of information exchange have changed, since the boundaries of cost-effectiveness for richness and reach have blurred. With the increasing standardization of communication technologies, however, communication costs are reducing for both richness and reach, thus diluting the economics of the boundary of organizations (Evans and Wurster, 1997). The increasing standardization of communication technology, and more specifically its use, is changing the quantity, quality and means of production and distribution of information. This raises substantial questions for the theoretical understanding of organizations, since information is at the core of co-ordination within organizations (Coombs et al., 1992). Yet it also evokes inquiries into the resulting managerial implications that enhance business success. With an increased number of communication technologies available and the expanded complexity within organizations, their management becomes an increasingly difficult task. Managers are faced with a number of obstacles to be overcome. Information Overload According to a recent survey by Reuters entitled ‘Dying for Information?’2 managers are caught in a dilemma. Half of all managers complained of information overload, increasing already high levels of stress. The ‘Dying for Information?’ survey showed that managers are not capable of dealing with the information that various communication technologies such as fax, voice mail or electronic mail (e-mail) are sending to them. On the one hand, they feel that they cannot operate efficiently without high levels of information, but on the other, the heavy load of often irrelevant information decreases their efficiency and slows down decision-making. This apparent contradiction has often been referred to as the ‘productivity paradox’ (Pinsonneault and Rivard, 1998). According to the survey the findings can be summarized as shown in the following box. Productivity Crisis This study is supplemented by a report prepared by Ernst & Young which mentions the effects of an increasing range of communication technologies on

Communication Technology and Organizations

Information Load











25% of all managers require an enormous amount of information for their job responsibilities (US managers are the heaviest users of information – 31% use enormous amounts of information, whereas in Hong Kong only 9% of managers use enormous amounts of information to carry out job responsibilities). 31% receive enormous amount of unsolicited information (35% and 36% of managers in the UK and US respectively, receive enormous amounts of information whereas just over 10% of managers in Hong Kong or Singapore complain about high levels of unsolicited information). 66% of managers in companies of all sizes and within all departments claim to need very high levels of information to perform their tasks effectively. 49% feel they are often unable to handle the volumes of information received.

Cause of Overload



48% believe the Internet will be a prime cause of information overload over the next two years. 32% of managers think their colleagues are forced to collect information to justify their position on decisions.

Costs to Business








38% waste substantial amounts of time trying to locate the right information (56% of Hong Kong managers agree that they waste their time locating the right information to just 36% in Singapore). 84% are forced to collect information to stay competitive. 48% think important decisions are delayed and the ability to make decisions is affected as a result of having too much information. 47% say collection of information for decision-making distracts from their main job responsibilities. 44% believe the cost of collecting information exceeds its value to business. continued

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Using Communication Technology

Human Cost of Information Overload








41% agree their working environment is extremely stressful on a dayto-day basis due to information overload. 94% do not believe that the situation will improve. 43% of those suffering from information overload believed to suffer from ill health as a direct consequence of the ‘Information Fatigue Syndrome’. 50% take work home or work late as a result of having to deal with too much information. 61% report that their personal relationships have suffered as a result of information overload.

organizations. According to the report, organizations are encountering a productivity crisis as a result of information overload (DeLong, 1995). This crisis is characterized as follows: 

   





Key value-added functions such as sales or manufacturing, can no longer get a quick response from crucial support functions who feel overwhelmed with requests. Employees are too busy responding to requests to share critical competitive or customer information that they routinely acquire while doing their jobs. Strategically important projects or change initiatives quickly lose momentum when employees do not have time to respond. Communication bottlenecks in work processes slow down decision-making, increasing cycle time and costs. Senior managers made more accessible by electronic and voice mail become distracted by seemingly urgent requests from their constituents reducing the time they spend focusing on the future of their businesses. Employees adopt defensive communication behaviours, such as leaving their voice mail boxes full or refusing to read electronic mail, making routine communication difficult. Management’s messages informing employees about the organization’s strategy are lost in the noise of routine daily communications, and subordinates remain unclear about the firm’s business objectives (DeLong, 1995, pp. 1–2).

Two of the most important factors leading to such a communication environment within organizations are the spread of new communication technologies and the exploding information base available through these. Although most organizational members are aware that information is essential within a business

Communication Technology and Organizations

5

context, the appropriate use of new communication technology to manage the business context remains a challenge. Despite the fact that new communication technologies may threaten productivity, there are a number of positive impacts that have to be recognized. Some of the most important positive impacts of new communication technology on organizations are listed below:       

increasingly favourable economics and ease of use; capability of handling numeric, text, image and audio data; greatly expanded user community; horizontally extended information flows; removal of geographic and temporal (time zone) barriers; capability of embedding intelligence within applications; and capability of supporting informal and global information processing tasks as well as formal, local tasks (Zmud, 1990, p. 108).

Although the directional impact of new communication technology within organizations remains open for discussion, information processing activities of organizational members are changing, since access to new technologies is leading to a change in behaviour. Given the uncertain influence of communication technology on core managerial activities, the relationship between communication technology and organizations needs to be addressed, since the use of these technologies mediates and contributes to the changing character of organizations (Coombs et al., 1992).

COMMUNICATION TECHNOLOGY Before exploring the relationship between communication technology and organizations more specifically, the sometimes confusing terminology surrounding the term will be discussed. The number of terms that have been used to describe the recent advance in communication technologies such as voice mail, electronic mail (e-mail) or groupware and so on, is wide. This demands the disentangling of these terms. The broadest term linked to communication technology is communication media. Communication media essentially refer to pipelines, the carrier of messages (Trevino et al., 1990, p. 87). Frequently, communication media have been divided into ‘old’ and ‘new’ media (Rice, 1992; Valacich et al., 1993). Whereas ‘old’ media traditionally refer to media that have been used extensively within organizations in the past – for example, written letters, memos, or the telephone, ‘new’ media are usually computer-mediated. Computer-mediated communication media cover all kinds of human communication involving the transmission of electronic signals

6

Using Communication Technology Communication media

‘Old media’ Non-computer-mediated technology

‘New media’ Computer-mediated technology

video conferencing telephone

e-mail face-to-face

voice mail

fax letter

groupware

Figure 1.1 The distinction between ‘old’ and ‘new’ communication media

between computers (Rudy, 1996, p. 198). Figure 1.1 shows the distinction between old and new communication media. Within the context of computer-mediated technologies, information technology is the largest term, which covers the use of computer-mediated technology in the context of information processing in general. Information technology refers to the application of computer technologies in the acquisition, analysis, application, distribution and storage of information (Zmud, 1990). Communication technology narrows this scope down to the acquisition and distribution of information, basically enabling communication within organizations. While the focus of the book is on communication technologies,3 empirical studies that provide the basis for this volume sometimes focus on the larger term ‘information technology’. Advanced communication technology can generally be considered a subset of the general term ‘communication technology’. It is based on the use of sophisticated information management (generally telecommunication based) to enable multiparty participation in organizational activities (DeSanctis and Poole, 1994). Electronic meeting systems are an example of advanced communication technology, which support groups by integrating the task focus of group support systems (GSS) and the communication focus of computer-mediated communication

Communication Technology and Organizations

7

Computer-mediated technology Information technology Communication technology Advanced communication technology

Figure 1.2 Hierarchical relationship between terms

systems (Nunamaker et al., 1991). Figure 1.2 shows the hierarchical relationship between the various terms and the primary emphasis of the book. Although the classification of various terms used for communication media helps in illuminating the differences, a blurring of distinctions remains between media, channels and features. While channels are the conduits of information or the transmission method of information, many different channels can be combined into a medium (Griffith and Northcraft, 1994, p. 273). A medium is therefore a larger concept, incorporating a constellation of channels. These channels have certain features, which can be either objective or subjective. Objective features of media include the speed of information transmission, the number of synchronity, and so on. Examples of the psycho-social features of media are subscribers within a work group or level of diffusion. Table 1.1 summarizes new communication technologies by providing a brief description, the corresponding channel and the objective features. Given the unique characteristics of new communication technology, it is not surprising to note an increasing interest by management researchers and information systems specialists in the relationship between communication technology and organizations. Although research on the topic has attracted a number of different academic disciplines, among them organizational theory, management science, computer science and sociology, few reliable generalizations can be made about the relationship between these technologies and organizations (Markus and Robey, 1988). One of the reasons may lie in the variation of theoretical perspectives. Another may lie in the often confusing and unclear operationalization of communication technology. A third may result from an underestimation of the importance of the context of communication technology usage. What roles does communication technology play within organizations? In the following section, various theoretical perspectives focusing on the relationship between communication technology and organizations are investigated.

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Using Communication Technology Table 1.1 Characteristics of various communication technologies Type of communication technology Electronic mail (messaging system) Voice mail (messaging system) Video conferencing system

Groupware

*

Brief description

Ability to distribute written documents using a computer terminal Ability to leave and retrieve voice of synthesized voice messages Ability to transmit voice and images of participants on screen

Supports collaborative interactions among members of a social group

Channel

Objective features

One-to-one One-to-many Text-based

Asynchronous,* independent of time and place

One-to-one One-to-many Voice-based

Asynchronous, independent of time and place

One-to-one One-to-many Many-to-many Voice- and Image-based One-to-one One-to-many Many-to-many Voice- and Text-based

Synchronous, independent of place

Synchronous, independent of time and place

Asynchronous media require record-keeping capabilities and shared accessibility to the records for organizational members (McLeod, 1996).

RELATIONSHIP BETWEEN COMMUNICATION TECHNOLOGY AND ORGANIZATIONS: THEORETICAL PERSPECTIVES Although technology has always been considered as a central variable in the study of organizations, little agreement exists on the definition and measurement of technology, or the role of technology in organizational settings (Orlikowski, 1992). According to Orlikowski (ibid., p. 398): ‘prior conceptualizations of technology have each focused selectively on some aspects of technology, at the expense of others, with the result that the current state of knowledge about technology in organizations is ambiguous and conflicting’. Building on the work of Pfeffer (1982), Markus and Robey (1988) and Orlikowski (1992), three different perspectives are proposed regarding the relationship between communication technology and organizations. These perspectives are: the impact perspective; the choice perspective; and the emergent perspective. From the impact perspective, communication technology is viewed as being a cause for changes within organizations. This is the most frequently

Communication Technology and Organizations

9

encountered perspective. From the choice perspective, the actions of humans determine the technological design of organizations. Within this perspective, information system specialists are responsible for changes in organizations resulting from communication technology implementation. From the emergent perspective, organizations change because of interactions between communication technology and its organizational and human dimensions.

Impact Perspective The impact perspective, the oldest theoretical perspective, argues that communication technology has a major influence on the shape of organizations and the nature of managerial work (Carter, 1984; Leavitt and Whistler, 1958; Pfeffer and Leblebici, 1977). Predictions have been made that organizations using new communication technology will decentralize, will reduce numbers of middle management, will decrease the number of staff departments, and so on. From this perspective, communication technology will have inevitable effects on organizations, since external technological forces will drive internal structures. This deterministic perspective, best characterized by the word ‘impact’, contends that computers are changing the nature of organizations. The underlying premise is that the outcome of communication technology implementation can be predicted. Although the literature on the impact of technology on organizations can be traced back considerably (Woodward, 1965; Perrow, 1967; Thompson, 1967), few generalizable conclusions emerge that might serve as indicators for the impact of communication technology on organizations. If anything, contradictory findings have been found regarding the impact of communication technology on organizations (Markus and Robey, 1988). Communication technology has been found to lead to both centralization and decentralization, or to both the routinization of and the enrichment of work. Since generalizations of this nature have not been confirmed, researchers have proposed that contingencies affect the relationship between communication technology and organizations. As a result, it has been recognized that other variables intervene in the impact of communication technology employment. While this avenue may have led to some promising findings, the majority of authors do not theorize adequately the specificity of the information dimension of communication technology, thereby failing to differentiate communication technology from general technological change (Coombs et al., 1992). By failing to address the importance of the informational aspect of communication technology, the majority of authors do not recognize that communication technology is both mediated by, and contributes to, the social construction of the reality of

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Using Communication Technology

organizations (Coombs et al., 1992, p. 52). If this particular aspect is acknowledged, it may not be difficult to accept that communication technology cannot be treated as being equal to other technological impacts on organizations. Since communication technology is a strategic enabler of one of the most basic tasks within organizations, namely information processing, it has to be viewed as a unique technological tool for organizations. This uniqueness implies that communication technology not only has an impact on organizations, but transcends all organizational activities. Although the technological impact perspective provides insights into the determining aspects of technology, the actions of humans in developing, accepting and changing technology have largely been ignored by this group of researchers.

Choice Perspective While the impact perspective suggests that particular technologies predispose organizations to exhibit certain structures by constraining available options, the choice perspective emphasizes the possibility of making managerial decisions regarding the desired outcome of implementing communication technology. Rather than viewing the organization as being predetermined towards a specific structural outcome, technology is the product of human interaction, design and appropriation. The main stream of research views human actors, particularly information system specialists, as making choices regarding information systems depending on the informational needs of the organization. Communication technology is treated as the dependent variable whereby managers take the decision regarding the information processing needs of the organization and choose the appropriate technology accordingly. Galbraith (1974) and Weick (1979a) proposed two different information environments, characterized by uncertainty and ambiguity, which determine the required response by managers. While an uncertain environment requires the acquisition of information, an ambiguous environment demands the sharing of information. This perspective is supplemented by the normative suggestions of information systems specialists, who decide upon an ‘optimal’ information architecture based on an organizational needs analysis. The inherent assumption is that information systems specialists can satisfy the demands of technological, political and social concerns when making decisions about the appropriate system to implement. Empirical evidence to support the choice perspective remains limited, primarily because of the difficulty in operationalizing the match between the technological, political and social demands of the organization and the intentions of managers or information systems specialists.

Communication Technology and Organizations

11

Emergent Perspective The emergent perspective posits that the use and consequences of communication technology are a result of complex social interactions between the institutional framework and the actions of individuals. Because of the dynamics of organizational settings, the frequently changing preferences of individuals and the adapting organizational context, neither the intentions of managers nor the technological environment within the organization can fully predict the outcome of communication technology employment within organizations. The interplay of time, objectives, given institutional frameworks, individual preferences and choice processes are the central concepts of the emergent perspective. This perspective has been supported by Gasser’s (1986) study of the misalignment between technology and work demands, or Barley’s (1986) investigation of the introduction of medical equipment in hospitals. Both of these studies clearly emphasize the dynamic relationship between actors, context and technology. Rather than ascribing the cause of outcomes to the role of either technology or actors, this perspective adds a third dimension, namely dynamic processes over time. This makes the operationalization of the concept more difficult to investigate empirically. More recently, Orlikowski and Yates (1994) conducted a longitudinal study of the various media that a community uses to communicate. They found that groups initially develop norms about the media to use, but eventually media use varies according to context and over time. Looking at a conferencing system, Yates et al. (1999) found that reinforcement and change in social interaction based on new communication technology was determined by two generic processes – explicit and implicit structuring. These processes refer to the planned and emergent processes, working at the same time. Ngwenyama (1998) studied the introduction of groupware into the organization and concluded that the groupware application enabled and constrained work practices at the same time. These studies suggest that technology does not determine the trajectory of organizational change, but that the implementation of the technology leads to rules for its use, which in turn influence rules of new work practices that become legitimized by a new organizational policy. Essentially, the dynamic relationship between communication technology and organizations is shown. More recently, the emergent perspective has received growing support, because the impact perspective of communication technology has produced contradictory empirical findings. Opposing forces suggested by theories on organizational politics, organizational culture, institutional theory and organizational learning support these contradicting findings, suggesting that the link between communication technology and organizations is inherently more complex than was previously assumed by the impact perspective (Robey and Boudreau, 1999).

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MULTIPLE LEVELS OF ANALYSIS Independent of the theoretical perspective, it has been stated that communication technology leads to changes in information processing which are influencing both individuals and organizations over time (Robey and Boudreau, 1999). Communication technologies are, strictly, neither micro nor macro in character. Since communication technology is a phenomenon that operates at multiple levels, a mixed-level analysis (Rousseau, 1985, p. 14) can help to specify the relationship across levels. Within this context, the goal of this book is to approach communication technology from different levels of analysis. From an individual perspective, knowledge worker’s criteria in choosing various communication media are discussed. From an organizational perspective, the relationship between communication technology and structural characteristics of organizations is studied. From a process perspective, the contribution of communication media to organizational learning is investigated. Finally, the outcome of communication technology employment is analysed. Figure 1.3 presents the different perspectives of communication technology use in organizations. The goal of the book is to study the relationship between communication technology and organizations at multiple levels of analysis in order to determine the influence of communication technology within and upon organizations. As Figure 1.3 shows, this book is organized into six chapters, starting with the introduction of the theoretical relationship between organizations and communication technology. The second chapter concentrates on individual actors and their communication media choices based on the available technology within the organization. The goal is to highlight the choice criteria of knowledge workers. The managerial implications focus on how individuals should make effective communication technology choices and what they need in terms of support to use communication technology effectively. The fourth chapter emphasizes the implications of managerial choices on organizational design dimensions, particularly the degree of centralization, the authority structure, the role of middle managers, the degree of participation of organizational members in decision-making, and the crossing of organizational boundaries. The goal is to identify emerging organizational design patterns resulting from the introduction of communication technology into organizations. The managerial implications show how organizations can make use of communication technology to direct the impact of the technology on their design dimensions. The fifth chapter takes a dynamic perspective and looks at the evolving relationship between communication technology and organizational processes. The goal is to point out the need to match communication technology choices with organizational learning tasks. The managerial implications indicate how

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Communication Technology and Organizations Communication Technology and Organizations

‘Old’

‘New’

Chapter 1 Knowledge Workers’ Choices of Communication Technology Chapter 2 Communication Technology and Organizational Design

Communication Technology and Success

Chapter 3 Communication Technology and Organizational Learning

Chapter 5

Chapter 4

A Dynamic Model of Communication Technology and Organizations Chapter 6

Figure 1.3 Perspectives of communication technology use in organizations

communication technology can be used as a tool in becoming a learning organization. The conditions that facilitate and constrain using communication technology and strategies to overcome these constraints are mentioned. The sixth chapter focuses on the organizational outcome of using communication technology. Outcomes are investigated from both individual and organizational perspectives. The managerial implications concentrate on the type of success measures to be employed in different types of situation, and the strategies

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Using Communication Technology

various stakeholders need to use to make the employment of communication technology successful. The last chapter integrates the different levels of analysis portrayed earlier to build a dynamic model of communication technology employment in organizations. Based on this model, a process-view of communication technology employment is proposed for management to consider before and during communication technology implementation. The foundation for each chapter is previous empirical and theoretical work in the field of organizational theory, management science and computer science. First, the theoretical work is portrayed, supplemented by empirical findings. This is followed by managerial implications.

2 Knowledge Workers’ Choices of Communication Technology Although Mintzberg (1973) showed that managers spend the majority of their time communicating, he did not provide a detailed analysis of the type of media that were used to send and receive information. Since Mintzberg’s publication, communication technologies have entered organizational life, offering new media choices to knowledge workers. In today’s corporate environment, knowledge workers (defined as workers who have to make substantial use of information within their work context (Davis et al., 1993)) use electronic mail (e-mail), voice mail and teleconferencing, in addition to the traditional communication media such as telephone or face-to-face communication, to send and receive information. Given the increasing availability of new communication media and the resulting complexity associated with media choice, there is a need for effective communication technology choice within organizations. It is proposed that improved understanding of the determinants of media choice enables more informed decisions about the choice of communication technology within organizations. For this purpose, both old and new communication media are investigated within this chapter. THEORETICAL PERSPECTIVES ON MEDIA CHOICE With the growing literature on media choice, the number of determinants offered by various theoretical approaches seems to increase. The current debate on approaches includes media richness (Daft and Lengel, 1986; Daft et al., 1987); social influences (Fulk, 1993; Schmitz and Fulk, 1991); media symbolism (Trevino et al., 1990; Daft et al., 1987); situational factors (Rice, 1992; Straub and Karahanna, 1998); social presence (Short et al., 1976); critical mass (Markus, 1987); and communication genres (Yates and Orlikowski, 1992). Given these different theoretical perspectives about communication media determinants, the question arises about commonalities between the various approaches. All the theories discuss different sets of criteria for determining media choice within organizations, and these determinants can be classified into four conceptually different groups. The first group focuses on task characteristics as primary factors explaining media choice. Theoretical approaches, which focus on the nature of the task, are media richness and situational theory.1 The second group addresses the social environment as the main determinant of media 15

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Using Communication Technology Table 2.1 Key determinants of media choice Class of media choice determinants

Key determinants

Theoretical perspectives

Task characteristics Social environment characteristics

Task ambiguity, task urgency

Media richness theory, situational theory Social influence theory, situational theory, critical mass theory

Medium’s characteristics Knowledge workers’ characteristics

Recipient availability, proximity, organizational position, number of organizational members using a medium, relational media attitudes and use behaviour Social presence of medium, accessibility of medium Job category, managerial role, media experience, individual traits, message intention

Social presence theory, situational theory Media symbolism theory, personal traits theory

choice. Social influence theorists, theorists focusing on situational factors, and critical mass theorists have contributed to this stream of research. The third group highlights the characteristics of a medium as the main determinant for media choice. The theoretical origins stem from social presence and situational theory. Finally, the fourth group maintains that a knowledge worker’s characteristics determine media choice. Within this perspective, media symbolism and personal trait factors seem to dominate the causal explanations for media choice. Table 2.1 provides an overview of the four groups, the key determinants investigated by each group and the theoretical perspectives that have given rise to the key determinants. The groups will be portrayed in more detail throughout this chapter. Task Characteristics Researchers have proposed that knowledge workers choose the medium that best fulfils the requirements of the task to be accomplished (Daft and Lengel, 1986; Sproull and Kiesler, 1986; Zmud, 1990; Steinfield, 1986; Picot et al., 1982; Daft et al., 1987). One of the early contributions to this field stems from media richness theory. Ambiguity of the Task Lengel (1983) introduced the media richness concept, suggesting that media vary in the richness of information processed. The term ‘richness’ refers to the

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ability of media to change human understanding by clarifying ambiguous issues. Ambiguity is the key to understanding the amount and kind of interaction, and the communication medium most appropriate for delivering a message (Trevino et al., 1990; Daft and Macintosh, 1981). Tasks with a high degree of ambiguity require organizational members to choose media that are rich in order to process all relevant information. Therefore, two-way interaction that uses immediate feedback is necessary to arrive at a shared definition of the situation. Daft and Lengel (1984) classified media according to a richness hierarchy. If the media through which communication occurs provide little new understanding, it is considered to be low in richness. Conversely, if the medium through which communication occurs provides substantial new understanding, it is considered to be high in richness. According to Daft and Lengel (1984), the richness of a medium is defined by (i) the ability to provide rapid feedback; (ii) the ability to communicate multiple cues; (iii) the ability to convey personal feelings; and (iv) the ability to use natural language. Based on these four features, the authors developed a scale whereby face-to-face communication is the richest medium, followed by telephone, personal written text (letters or memos), formal written text (documents or bulletins), and formal numeric text (data). In general, oral media are believed to be richer than written media, since they provide for immediate feedback and convey multiple cues. Table 2.2 shows the various media originally classified by Daft and Lengel (1984). Media richness theory posits that appropriate media choice demands the matching of the medium based on its salient features with the ambiguity of the task in order to lead to the most effective outcome (Daft and Lengel, 1986). Table 2.2 Media and their features

Medium High degree of richness

Low degree of richness

Feedback

Face-to-face communication Telephone Voice mail

Immediate Fast Moderate

Electronic mail Formal letter Numeric output

Moderate Slow Slow

Media features Channel Source Visual, audio Audio Limited audio Text Text Text

Source: Adapted from Daft and Lengel (1984).

Personal

Language

Personal Personal

Body, natural Natural Natural

Personal Impersonal Impersonal

Natural Natural Numeric

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In support of the theory, Daft et al. (1987) demonstrated that managers who match medium to message content are rated as being better performers. Additional support has been provided by a meta-analysis of empirical research conducted in 1998, which shows twice as many supportive as non-supportive studies of media richness theory (Straub and Karahanna, 1998). Although empirical support for media richness theory has been growing (Steinfield and Fulk, 1987; Trevino et al., 1987; Schmitz and Fulk, 1991; Markus, 1994; Dennis and Kinney, 1998; Straub and Karahanna, 1998), new communication technologies have challenged the original scale (see Table 2.2) developed by Daft and Lengel. With the introduction of media such as electronic mail, teleconferencing and voice mail, new technologies have entered organizational life that exhibit properties which go beyond the four features originally mentioned by Daft and Lengel (1984). Zmud et al. (1990) developed a ranking of communication media which includes both the traditional media and new communication technology. Table 2.3 summarizes the ranking of both old and new communication media based on media richness theory. In particular, the ‘relatively low’ ranking of electronic mail in the richness scale, falling somewhere between the telephone and fax, has been challenged (Fulk et al., 1987; Markus, 1994; Saunders and Jones, 1990). Markus (1994) found that electronic and voice mail are used more frequently and for different purposes than were proposed originally by Daft and Lengel (1984). According to Markus (1994) electronic mail is used as a primary medium for internal work-related communication and is particularly important under situations of time pressure. Table 2.3 Ranking of ‘old’ and ‘new’ communication media Communication channel

Score*

Face-to-face meetings Telephone Videoconferencing Decision support systems Memos Electronic mail Fax

1.00 0.94 0.79 0.55 0.27 0.13 0.11

Note: *A score close to one means a high degree of richness. Source: Adapted from Zmud et al. (1990).

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In contrast to media richness theory, Dennis and Kinney (1998) found that, for video communication, matching media richness to task ambiguity did not improve performance. Use of media providing fewer cues led to slower decisions, more so for the less ambiguous tasks. This shows that new media – specifically electronic mail – have been used for purposes beyond the traditional explanation of media richness. Fulk and DeSanctis (1995, p. 338) mention a number of features of new communication technologies which offer important advancements for organizations beyond those mentioned by Daft and Lengel, potentially explaining the inability of media richness theory to explain fully media choice of new communication technologies. The first is the increased speed of communication, which leads to high volumes of information moving between people. In addition, the increased use of communication technology reduces the costs of communication, since the technologies are frequently less time-consuming. Another aspect is the increased connection between people and machines, leading potentially to widespread access of information to people in organizations caused by the rise in communication bandwidth, with more information moving simultaneously to different people in a combination of text, voice and graphics. The integration of various computing technologies allows information to be stored so that organizational members can retrieve the information from the collective database. These characteristics of new communication technology can be collapsed into four additional criteria for media choice: reach, recordability, memory and concurrence, as detailed in Table 2.4. Failure to consider these features means there is an inadequate understanding of the overall media choice process. The narrow focus on the ambiguity of the task tends to be biased against new communication technology. This could explain some of the conflicting results in empirical studies on media richness, Table 2.4 Features of ‘new’ communication technology Additional media features Reach Recordability Memory Concurrency

Description Ability to address multiple people simultaneously Ability to document and modify communication flow Ability to search previous messages and thereby keep a thread Ability to send and receive from more than one person simultaneously

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particularly the low ranking of electronic mail in the media richness scale (Markus, 1994). The richness concept does not seem to cover the features possessed by new communication technologies. The above-mentioned qualities go beyond ‘richness’ and the notion of communication task ambiguity. While media richness theory focuses on ambiguity, it can be argued that a communication task can possess many other task characteristics. Urgency The urgency of the task associated with communication is another important criteria in media choice. Urgent tasks are more likely to lead to a response with media that have a real-time, synchronous response capability. Electronic mail is an example of a medium that qualifies when an urgent response is required. Empirical studies have found that, for urgent tasks, knowledge workers are willing to trade-off rich media, since it is more important to complete the task than to acknowledge the need for social presence (Yu, 1997; Straub and Karahanna, 1998). In these situations, new communication technologies are expected to rank higher than old communication media. Table 2.5 summarizes media choice based on the characteristics of the task. Table 2.5 Task characteristics and key determinants Class of media choice determinants

Key determinants

Brief description

Selected literature

Task characteristics

Ambiguity

Extent to which a task is ambiguous

Task urgency

Urgency of a message to be communicated

Daft and Lengel (1986); Sproull and Kiesler (1986); Zmud et al. (1990) Steinfield (1986); Picot et al. (1982)

CASE STUDY 1:

HEWLETT-PACKARD EUROPE

In an attempt to substantiate the findings of researchers focusing on task characteristics, a study was undertaken to explore the relationship between the nature of the task and the use of communication media by knowledge workers. The nature of the task involved an investigation of information continued

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acquisition, information distribution, awareness creation and information synthesis. The communication media available within the studied organization, Hewlett-Packard Europe, were face-to-face meetings, teleconference, telephone, voice mail, fax, electronic mail, personal letter, and general written information. In situations of high ambiguity, knowledge workers preferred to use rich media to acquire information, distribute information, create awareness about information in the organization, or synthesize information. For information acquisition and distribution, the preferred medium was the telephone. Electronic mail was, however, viewed as the medium of second choice for information distribution. Creating awareness in the organization was achieved through face-to-face meetings, telephone, voice mail and electronic mail. For information synthesis, knowledge workers showed the clearest preference for rich media. In situations of high uncertainty, knowledge workers used new communication technology, particularly voice mail and electronic mail, for information distribution and the creation of awareness within the organization. For information acquisition and synthesis, knowledge workers preferred to use traditional rich media, particularly face-to-face meetings and telephone. In situations of high task urgency, knowledge workers generally preferred to use rich media when possible, yet when the communication partner was not available voice mail and electronic mail would be used in order to complete the task. With the exception of using rich media to distribute information, these findings generally confirm the theoretical findings on task determinants of media choice. The uniqueness of this research lies in the investigation of a multitude of media for different information-processing tasks.

Social Environment Characteristics The inability of media richness theory to explain the confounding empirical evidence has led to the search for broader collective variables. Alternative explanations for media selection are not based on rational choice alone but are a ‘collective behavioral response to a socially-constructed definition of the medium’s appropriateness’ (Markus, 1994, p. 522). Rather than viewing richness as a cause for choice, it is perceived as an outcome of social behaviour within organizations. The most comprehensive theory in this regard is the social influence model of technology use (Fulk et al., 1987; Fulk et al., 1990). It posits that an individual’s media perception is not just a function of objective (rational)

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choice, but is partly a social construction. Since communication arises in social contexts, perceptions and social behaviour towards media influence the choice of knowledge workers (Rice and Shook, 1990; Webster and Trevino, 1995). Perceptions of media attributes are socially constructed through information exchange. This construction may result from, and result in, behavioural patterns of use, co-worker influences, organizational norms, or culture of media use. For example, if a particular organization has established a tradition of using electronic mail to discuss research and development (R&D) related problems, it becomes a norm based on repeated patterns of use. Since the environment and social interactions vary between organizations, media selection varies between organizational contexts. Given these variations, communication technology will not only be adopted because of its invariant features – for example, speed of communication – but also because of individual Table 2.6 A comparison between rational and social theories of media choice Rational/individualistic theories

Social/collective theories

Media characteristics

Media features are salient (e.g. electronic mail is a medium low in richness and should therefore not be used to overcome conflicts)

Features are still relevant; but importance declines relative to social forces Not all features are salient (e.g. in some organizations electronic mail is used to overcome work-related conflicts)

Choice-making

People analyze the media features objectively An objectively rational process that is based on salient and invariant media features Media choice is efficiencymotivated

Media selection is a subjectively rational process Individuals develop socially acceptable attitudes and behaviours that are justifiable with social norms Media choice may or may not be efficient

Social context

Social context only plays a role when higher efficiency can be achieved through its consideration

Social context plays a significant role Social cues influence the individual’s interpretation of the objective requirements of the communication task Social norms are established which inhibit media use

Sources: Based on Fulk et al. (1990, p. 125) and Yu (1997).

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attitudes or group norms towards communication technologies. Table 2.6 summarizes the key differences between rational-individualistic (media richness theory) and social-collective theories of media choice (social influence theory). There are a number of variables influencing media choice from a social influence perspective, a social-collective theory. Among the most important variables are proximity between organizational members, universal access to media, maturity of communication technology infrastructure, position in the hierarchy, recipient availability, and attitude and behaviour of salient co-workers. Proximity Proximity refers to the distance between two communication partners. According to Feldman (1987, p. 88) communication technology such as electronic mail provides a new intraorganizational mechanism for signalling a person’s interest and discovering the interest of others, sharing that interest and making it easier for people to broadcast their problems. Thus, the greater the distance between communication partners, the higher the proportion of messages that would not have been sent without electronic mail. These messages are likely to be lost through distribution losses, since the capability of reaching multiple people simultaneously is an obvious advantage of electronic mail. Rice et al. (1989) found that the use of electronic mail was associated with the substitution of old media for electronic mail, higher work effectiveness and increased communication flows. This shows that new communication technologies seem to have achieved a valid place within organizational communication. Universal Access Since the benefits of a medium increase as the relative costs of adoption decrease, media choice is also determined by the ability to reach all members through a medium of universal access. Universal access is important for two reasons. If a medium is only used by a small community, and others make use of other media, the organization would be split into subgroups, thus increasing the difficulties of distributing information. It is only when universal access has been achieved that users derive benefits that would not be available if only a small group of people used a medium. Thus use of communication technology is based on reciprocity: the outputs of one user are the inputs of another. Individuals contribute to the collective outcome of universal access through their readiness to reciprocate communication. Second, the use of communication technology by members of an organization creates a public good that is independent of the efforts of individuals (Markus, 1987), but in order to create this public good, a critical mass of users is necessary. According to Rice et al. (1994), critical mass effects seem to be specifically relevant at the local work unit level rather than at the organizational level, since the groups with which individuals interact most frequently determine the individual benefits derived from the media.

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According to Rice et al. (1994), a critical mass of users is particularly relevant in situations of early adoption of a new communication technology, since the use of the system depends on the existence of a network. Over time, as the new system becomes less risky, use by others in the work unit has no significant influence on a person’s later use behaviour. The critical mass of users reaches a saturation point where more potential users do not positively influence a person’s own usage. In fact, increased interaction may add costs, such as non-work related interruptions or limited technical resources, for example. Thus a critical mass of users is required initially to realize the benefits of a new medium; later use may in fact add costs. This indicates that the benefits of new communication technology are highest when a network of users exists which primarily uses the medium for work-related matters. Maturity of Communication Technology Infrastructure The notion of critical mass is related to the degree of communication technology infrastructure maturity within organizations. Given that information or communication technology maturity evolves in stages (Nolan, 1973), it is arguable that communication media choice is likely to vary along with it. The greater the extent to which communication technology has permeated the organization’s infrastructure and culture, the higher the impact on knowledge workers’ choice of these technologies. This intuitive argument is consistent with current media choice theories, which argue that social norms of communication technology use develop over time, benefits associated with these technologies become more apparent over time, and knowledge workers’ expertise in using communication technology increases. Organizational Position in the Hierarchy According to Sproull and Kiesler (1986), organizational position in the hierarchy also affects media choice. For example, knowledge workers prefer to use electronic mail to send messages to superiors rather than to subordinates. This could possibly be explained by two factors: access to superiors; and status difference within the organization. Superiors are not as accessible face-to-face as they are via an electronic mail system, but secretaries are accessible in both media. Therefore it follows that electronic mail will probably be used more frequently by lower organizational members to send messages to superiors. By using electronic mail, lower-level organizational members may also have fewer reminders of the status difference than is the case of face-to-face situations. The existence of a significant effect of hierarchical position on media choice was confirmed empirically by Zmud et al. (1990) and Fulk et al. (1990). This suggests that electronic mail is particularly useful when sending potentially conflictual messages to a superior.

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Relational Attitudes and Behaviour Other important determinants of media use are relational attitudes and behaviour. These determinants were first introduced by Fulk et al. (1987). Originating from the social information processing perspective and introduced into the media choice debate, the theory proposes that social relationships influence perceived media characteristics, perceived communication task requirements, attitudes towards communication, and media use (ibid.). Essentially, the authors suggest that while communication requirements may differ, similar patterns of media attitudes and use will develop within groups and different patterns across groups. From this perspective, social effects on individual attitudes and behaviour explain internalized, co-ordinated behaviour within work groups (Fulk et al., 1990) and patterns of communication use. Fulk (1993) has tested this theory empirically and found support for the general proposition that social influences, particularly for those individuals who exhibit high attraction towards their work group, are significant explanatory variables for individual attitudes and behaviour towards media. In a similar study, Markus (1994) found that sponsoring the use of electronic mail, socializing organizational members to use electronic mail, and ensuring that electronic mail is used regularly shapes media use. This means that one’s work group or supervisor has an important influence on media choice. Recipient Availability Another important criteria influencing media choice is recipient availability. Recipient availability refers to the extent to which a recipient of a message is perceived to be immediately available to receive a message. According to Straub and Karahanna (1998) recipient availability is a key construct explaining media choice, since new communication technology can make recipient availability a less significant problem by extending the communication choices within the organization. This has led the authors to provide an additional explanation to media choice, referred to as the ‘task closure’ model. The task closure model suggests that knowledge workers are motivated to close a communication episode. This motivation influences the choice of media for task accomplishment. Task closure refers to the completion of the transmission of information to the recipient and depends on the type of medium selected. Face-to-face communication and telephone would probably be ranked lower on a task closure measure than electronic mail, since both depend on the availability of the recipient; while electronic mail would be rated high on task closure, since the closure of the task is controlled by the message sender. According to Straub and Karahanna (1998, p. 172) ‘task closure does not mean that future communiqués in the same task domains will not be needed. It simply means that for one

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Using Communication Technology Table 2.7 The relationship between recipient availability and richness Availability of recipient High

Low

i.e., where it is easy or feasible to contact the other person  on the same floor  in same city  during office hours/in the office

i.e., where it is not easy or feasible to contact the other person  not in the office  outside office hours  in different country

High

Low Explanatory power of richness

Source: Adapted from Yu (1997).

segment of the task sequence, individuals feel they have discharged their responsibility to communicate and are not left with a sense of incompleteness.’ According to the authors, closing a task is not merely a sufficient, second-order motivation for selection, but fulfils a basic need of a knowledge worker. In cases where the recipient is not available, the communication task is incomplete. According to Yu (1997), media richness explains media choice in situations where it is easy or feasible to contact the other person(s) – recipient available – for example where the other person is in the same floor or in the same city. As the ease of contact decreases – recipient unavailable – the ability of media richness to explain media choice decreases (Yu, 1997). In situations where the other person is not in their office or it is not during their working hours, media richness is unable to explain the media choice made. Here, the task closure model provides an alternative explanation for media richness theory. Table 2.7 summarizes the findings by Yu (1997). These findings are consistent with Straub and Karahanna’s model of task closure, suggesting that if the task is less sensitive there is insufficient justification to prefer communication media that cannot close the communication sequence because alternative, asynchronous media – for example, electronic mail – are accessible and appropriate. Table 2.8 summarizes the key determinants of media choice from a social environment perspective.

A Medium’s Characteristics A third group of researchers suggests that the characteristics inherent in a medium determine a knowledge worker’s media choice. Two variables describe

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Choices of Communication Technology Table 2.8 Social environment characteristics and key determinants Class of media choice determinants Social environment characteristics

Key determinants

Brief description

Proximity

Physical proximity of sender and receiver

Number of organizational members using a medium Organizational position Media attitudes and use behaviour

Existence of a critical mass of users

Recipient availability

Location of sender and receiver in hierarchy Extent of overlap of attitude and behaviour of co-workers

Extent to which a recipient of a message is perceived to be available immediately to take a message

Selected literature Rice and Aydin (1991); Reinsch and Beswick (1990) Markus (1987); Rudy (1996)

Sproull and Kiesler (1986) Fulk et al. (1987); Rice and Aydin (1991); Fulk (1993); Orlikowski and Yates (1994); Orlikowski et al. (1995) Reinsch and Beswick (1990); Straub and Karahanna (1998); Sarbaugh-Thompson and Feldman (1998)

the characteristics of a medium – (i) social presence: the extent to which the medium enables a communicator to experience communication partners as psychologically present by the receiver; and (ii) medium accessibility: the extent to which the medium is perceived to be accessible for use. Social Presence Social presence theory was developed in parallel with media richness theory, suggesting that knowledge workers assess the social presence of a task and match it to the social presence of the medium (Short et al., 1976). Social presence is defined as the extent to which an individual psychologically perceives other people to be physically present when interacting with them. The theory suggests that media differ in the amount of social presence. Choosing a medium is a result of the assessed need for social presence. The classification of media on a social presence scale is similar to the media richness theory. Yet, while

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media richness focuses on the type of task, social presence theory postulates that it is the medium’s characteristics that determine media choice. Both theoretical explanations make similar predictions regarding media choice, yet empirical studies have shown that they provide an incomplete picture of media choice. As a result, these theories have been supplemented by further determinants. Medium Accessibility Accessibility has been recognized as another important determinant in media choice. By accessibility, the information provided through the medium is perceived to be the choice criterion (Allen, 1977).2 This idea was extended by information specialists interested in determining the objective characteristics of information, such as the quality of information (Kraemer et al., 1993); the accuracy of information (Zmud et al., 1990); or the comprehensiveness and timeliness of information (Swanson, 1987). According to Swanson (1987) accessibility is a cost and quality is a benefit of information gathering, whereby quality is traded off against the minimization of costs. This suggests that accessibility of information resulting from the costs imposed by a medium is an important variable determining media choice (Culnan, 1984; Swanson, 1987; Rice and Shook, 1990). Based on these findings, one can conclude that the accessibility of a medium is important, since information can only be distributed at minimal cost if an appropriate channel is available for use. Table 2.9 summarizes the key determinants of media choice based on a medium’s characteristics. Knowledge Workers’ Characteristics The last group of researchers proposes that characteristics inherent in the knowledge worker affect an individual’s choice of a medium. Among the most frequently mentioned characteristics affecting media choice are: job category of a knowledge Table 2.9 A medium’s characteristics and key determinants Class of media choice determinants

Key determinants

Brief description

Selected literature

Medium’s characteristics

Social presence of medium

Extent to which the medium is perceived to be socially present

Short et al. (1976) Rice et al. (1989) Straub (1994)

Information accessibility through a medium

Extent to which the medium is perceived to provide information

Culnan (1984) Swanson (1987)

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worker (Sproull and Kiesler, 1986); managerial role (McLeod and Jones, 1987); media experience (Rice and Love, 1987; Carlson and Zmud, 1999); and a knowledge worker’s message intention (Trevino et al., 1990; Daft et al., 1987). Job Category Job category refers to the type or level of job a knowledge worker exercises. In an empirical study investigating media choice by managerial hierarchy, Markus (1994) found that higher-level knowledge workers were more media-sensitive than lower-level knowledge workers; that is, they were better able to match the appropriate medium for a given task. Higher-level knowledge workers specifically showed greater sensitivity for content reasons, over situational and symbolic reasons, yet the actual behaviour of media use was inconsistent with their perceptions. Higher-level knowledge workers used electronic mail more intensively than is predicted by media richness theory. Thus, higher-level knowledge workers thought that they were sensitive to the ambiguity of the task, yet in reality they used media considered to be low in richness to complete both unambiguous and ambiguous tasks. This seems to indicate that there is a difference between perception and actual use by higher-level knowledge workers. Managerial Role Extending Mintzberg’s study on the nature of managerial work, McLeod and Jones (1987) proposed that media used by knowledge workers varied with the type of role they were occupying. Based on Mintzberg’s classification of managerial roles into four categories – handling disturbances; making entrepreneurial improvements; resource allocator; and negotiator – the authors found that letters and the telephone were used most frequently for handling disturbances and making entrepreneurial improvements. In addition, memos, non-computer reports and unscheduled meetings also provided support in handling disturbances, and periodicals and scheduled meetings for making improvements. In the role of resource allocator and negotiator, managers did not show any preference for a particular medium. These findings indicate that managers made use of various media for the different roles. This means that if a manager ‘is to have full information support while performing the various decisional roles, the information system must be flexible enough to provide a wide mixture of media’ (McLeod and Jones, 1987, p. 95). No specific media were found to be better suited for particular managerial roles. Media Expertise According to Schmitz and Fulk (1991), expertise in using communication technology facilitates use. Thus, media expertise influences media choice. If a knowledge worker lacks media-related skills, the richness of a medium is irrelevant,

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as the user does not have the skills to access and use it. At the same time, the costs for the inexperienced user of communication technology are higher, since it takes time to learn how to use new communication technology effectively, and therefore, the likelihood of using new communication technologies decreases. Investigating the use of voice mail, Reinsch and Beswick (1990) showed that low access and delay costs enhance the probability of a knowledge worker using voice mail, and high access and error costs reduce it. Media experience and knowledge not only have an effect on use, but also on perceived media attitudes (Fulk et al., 1987). For example, the more experienced a knowledge worker is with a medium, the more likely it is that he or she will have a positive attitude towards that medium and therefore use it. So, media experience reflects an individual’s attitude towards a medium, thereby explaining some of the differences in media use between knowledge workers. Individual Traits Researchers have also considered the relationship between individual traits and media choice (Trevino et al., 1990; Russ et al., 1990; Carlson and Davis, 1998). From this perspective, a knowledge worker’s own personality influences the type of medium chosen to communicate within an organization. Individual differences between knowledge workers can be related to their cognitive style, orientation towards others versus self, or introversion versus extroversion. In an empirical study, Russ et al. (1990) found that educational level, sender versus receiver orientation, or introversion versus extroversion had no significant effect on media choice. A slightly different picture emerges from Trevino et al.’s (1990) findings, however. The authors found that a judgemental attitude, a variable representing an individual’s cognitive style, influenced media choice under conditions of low ambiguity. This means that when task demands are weaker, individual preferences appear to emerge, suggesting that media choice is more strongly influenced by the type of task than by individual differences. Distinguishing between ‘self-orientation’ and ‘others-orientation’, Carlson and Davis (1998) found that directors are more often self-orientated, choosing media based on access and ease of use, while knowledge workers are more often others-orientated, making choices based on media richness and social presence. The authors conclude that media accessibility seems to be the default variable of media choice, which is overridden at times by the presence of other needs, such as the need to communicate rich information, to build relationships, or to interpret situations. Intention of the Message Another important criteria influencing media choice is a knowledge worker’s message intention. Message intention refers to the signal a knowledge worker wants to deliver with the message. In order to create common understanding

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between organizational members, organizations use symbolic signals to define their environment, understand events and make decisions (Blumer, 1969). As organizational members interact through communication over time, they negotiate a social order using different types of symbols. Symbol creation behaviour occurs in ill-defined situations, because shared meanings do not exist (Trevino et al., 1987). In these situations, it is the role of symbols to reduce ambiguity so that those involved arrive at a shared perception of events. Yu (1997) found that where the task or matter involved is sensitive to the knowledge worker, he or she would choose to talk face-to-face and one-to-one. Electronic mail was not regarded as an appropriate medium for such situations. Thus, while symbolic reasons were found to play a role in media choice, Trevino et al. (1987) suggest that content reasons take priority over symbolic reasons. Thus, a knowledge worker who must communicate with a manager in another country is likely to be restricted to telephone or electronic mail if time pressure exists, but face-to-face would be his or her preferred choice in a situation of closer proximity. Table 2.10 Table 2.10 Class of media choice determinants Knowledge workers’ characteristics

Knowledge worker’s characteristics and key determinants Key determinants

Brief description

Selected literature

Job category

Type of job employee exercised

Sproull and Kiesler (1986); Rice et al. (1989)

Managerial role

Type of activity a manager performs

McLeod and Jones (1987)

Media experience

Knowledge about media usage

Rice and Love (1987); Fulk et al. (1987); Schmitz and Fulk (1991); Carlson and Zmud (1999)

Individual traits

Personality of individual knowledge worker

Trevino, Daft and Lengel (1990); Russ, Daft and Lengel (1990); Carlson and Davis (1998)

Message intention

Knowledge workers’ intended signal with message

Trevino, Daft and Lengel (1990); Daft, Lengel and Trevino (1987); Rudy (1996)

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summarizes the key determinants of media choice from the perspective of a knowledge worker’s characteristics.

AN INTEGRATIVE MODEL OF MEDIA CHOICE As the various perspectives of media choice show, media selection is a result of many variables working simultaneously to explain the complexity inherent in media choice. The selection process is determined by context-independent factors3 such as (i) the nature of the task; (ii) the characteristics of the medium; and (iii) the characteristics of the knowledge worker. In addition, context-dependent factors4 influence media choice. Integrating the work of various groups of researchers leads to Figure 2.1. This figure shows the three context-dependent factors as well as the context-independent factors influencing media choice. Although these factors explain media selection across organizational members and work settings, the question of when certain determinants are more important than others remains open. The following section explains the importance of different characteristics over time. Because of the social nature of the workplace, it has been argued that ‘established’ media-use patterns persist over time, even when more efficient communication technologies become available (Fulk et al., 1987; Fulk, 1993). Individuals in social contexts produce patterns of shared cognition and behaviour through social and symbolic processes that arise from forces well beyond the demands

Context-dependent factors

1

4

Media choice

Characteristics of task

Context-independent factors

2 Characteristics of medium

Figure 2.1 Conceptual model of media choice

Characteristics of knowledge workers 3

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of context-independent influences on information processing (Fulk, 1993). Conformity to work groups within organizations leads to the incorporation of group meanings and attitudes into individual’s constructions of reality. Therefore, knowledge workers’ media choices are influenced by social forces, which persist over time. While social influences may determine media choice in the short run, rational choices are likely to dominate in the long run (Walther, 1995; Bozeman, 1993; Markus, 1987). Over time, individuals will probably make rational choices, which then become part of the social norms within organizations. Only when the level of objective cognitive processing toward ambiguity reduction is not maximized for the sake of symbolic attributes of a medium, are rational media choices suspended momentarily (Bozeman, 1993). As time passes, rational choices will develop for new communication technologies, since participants are interdependent, therefore adopting more intimate and socially rational behaviour (Walther, 1995). Knowledge about areas where efficient communication technology is employed will become part of the organizational patterns of use – for example, new communication technologies may be better suited than short-turn meetings to longitudinal interaction. The benefits of communication technologies have to develop over time when organizational members are working in long-term associations, such as in teams. Individuals have to make use of the technology in order to realize its benefits (Orlikowski et al., 1995). In summary, as new communication technologies are adopted, media use patterns will change. Eventually, old communication technologies are likely to be substituted for new communication technologies when the perceived benefits are realized by the users. Although Rice and Bair (1984) and Markus (1994) support this substitution process over time, evidence also suggests that ‘established’ communication media are not being substituted totally. The influence of social norms within organizations explains those additional situations in which new and more efficient communication technologies continue to be underutilized. New communication technologies, such as electronic mail, videoconferencing or voice mail, will only be adopted if the organizational context of use is supportive. If, for example, key knowledge workers within organizations do not readily use electronic mail, then the introduction of this medium is likely to take a longer period of time. If, however, key knowledge workers champion the use of electronic mail, then this medium is likely to be substituted quickly for other communication media. In addition, a critical mass of users has to exist before a medium becomes effective. Electronic mail, for example, a universal access medium, requires that everyone in the organization agrees to use this medium on a regular basis (Markus, 1994). Thus context-dependent factors explain situations in which rational choices of media are foregone.

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Context-dependent approaches and context-independent approaches of media choice complement each other in explaining the adoption of new communication technology. Investigating video telephone systems, Kraut et al. (1998) found that context-independent approaches mainly explained individual differences in the use of video telephone systems, yet social influences explained the variation of the system’s use over time and the domination of one video telephone system over another. From a context-independent perspective, other people and their use influence an individual’s behaviour by changing the benefits and costs associated with using the communication technology. More people using a communication technology increases the utility of a system by expanding the number of people with whom it is possible to communicate. At the same time, an increased number of users has the negative effect of interruptions, thus decreasing the utility of the communication technology. With each user, not only the utility of the communication system changes but the associated norms surrounding the technology may also change. According to Kraut et al. (1998) each new subscriber is a potential source of influence, thereby changing the legitimacy of use of the new communication technology. Essentially, the authors demonstrate that media use is influenced by changing the objective value of the communication technology and by generating norms defining the appropriate use. Since traditional media have already established their legitimacy about appropriate use, social explanations are less important (Webster and Trevino, 1995) for traditional media and more important for new communication technology. This explains the importance of the social context during early phases of communication technology adoption. Markus (1994) has argued that social definitions of media choice converge over time: media use based on a medium’s features and social perceptions within a given social context will unite, since the most effective communication media will socially dominate within an organization. Essentially, this means that both social influences and context-independent determinants will jointly determine media choice. Context-dependent determinants are more important during the early adoption of a new communication technology, while context-independent factors – the nature of the task, the medium’s and knowledge workers’ characteristics – explain media choice in the long run. In summary, it can be argued that context-independent approaches of media choice are especially strong in explaining individual differences. Social influence (context-dependent) approaches provide better explanatory variables (i) for the adoption of new communication technology; (ii) for situations in which one type of communication media dominates another; and (iii) for situations in which context-independent approaches fail to reveal the complete picture. Thus, social influence (context-dependent) determinants define the boundaries within which media are chosen.

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MANAGERIAL IMPLICATIONS Following the identification of determinants of media choice, managerial implications are provided to help knowledge workers in their choice of communication systems within organizational settings. General guidelines can be offered to help knowledge workers improve their awareness of media choice criteria. Ultimately, media choice and use should be aligned to reflect the most effective choice of a medium within a given organizational context. Task Implications From the task perspective, knowledge workers have to analyze the situation and make an appropriate media choice based on their task needs. Within this context, the richness of the medium, the need for social presence, and the desire to bring a task to closure are analytical tools that help knowledge workers in their choice process. Richness and Social Presence One basic message to knowledge workers is to match the richness of the medium to the ambiguity of the message associated with a task. This will result in more effective communication. Knowledge workers should be aware of the interactivity of the channel and match it to the extent of interactive exchange required (Zack, 1993). To assess the interactivity of the channel, organizational members can use the social presence or richness measure of a medium. This measure provides a ranking regarding the degree of interactivity of a medium. To assess the extent of interactive exchange required, knowledge workers need to evaluate the degree of ambiguity of the task. Based on these two assessments, knowledge workers need to match the task with the appropriate medium. For example, when the task is ambiguous, the use of rich media such as face-to-face communication is appropriate. This richness-matching idea has been summarized in the media selection framework developed by Lengel and Daft (1988), see Figure 2.2. Each situation poses a richness demand determined by the degree of ambiguity associated with a management problem. Effective communication is a result of the capacity of the knowledge worker in matching the richness of the medium to the type of management problem at hand. Successful communication is a result of matching unambiguous problems with lean media, and ambiguous problems with rich media. This media selection framework has resulted in a set of rules that help knowledge workers sharpen their media selection skills. These rules include sending ambiguous, difficult messages through rich media – preferably face-to-face, and

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Using Communication Technology Degree of ambiguity of management problem Low Rich

Communication Failure Data glut. Rich media used for unambiguous messages. Excess cues cause confusion and surplus meaning.

High Effective Communication Communication success because rich media match ambiguous messages.

Media richness Effective Communication Communication success because media low in richness match unambiguous messages. Lean

Communication Failure Data starvation. Lean media used for ambiguous messages. Too few cues to capture message complexity.

Figure 2.2 Media selection based on media richness evaluation Source: Adapted from Lengel and Daft (1988).

sending non-ambiguous, simple messages through lean media; using rich media to extend a presence within the organization as well as for implementing a strategy. Task Closure While the degree of ambiguity of the task and the degree of social presence of the medium are important requirements, recipient availability has recently been added as another determinant not to be underestimated. Recipient availability has been translated into the task closure model of media choice (Straub and Karahanna, 1998). Since knowledge workers are highly motivated to complete a communication sequence and move on to new work, completing the transmission of information to the recipient is viewed as an important decision criteria for media choice. If the task closure model is applied to the ranking of media, then electronic mail, for example, should receive a high rating on its ability to complete a task, while face-to-face meetings receive a lower rating. Figure 2.3 summarizes the ratings for different communication media based on the concept of recipient availability. Based on the rating of communication media on their ability to close a task rapidly, knowledge workers can assess both the urgency of finishing a task and decide on the appropriate medium in a given situation. The ability to control the

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High Electronic mail Voice mail Ability to close task rapidly

Fax Telephone Face-to-face meetings

Low Figure 2.3 Task closure scale

communication act by closing the task enables a communicator to minimize job interruptions, thereby reducing the fragmentation of work. This may also lead to less stress and frustration on the part of knowledge workers. Since the ability to bring a task to closure is not merely a sufficient, but also a basic need of a message sender in an urgent situation, knowledge workers need to consider the time dimension of the task at hand. In situations where the message is less urgent, media richness is likely to be an equally important determinant of media choice. Thus knowledge workers have to be able to consider simultaneously both ambiguity and the urgency of finishing a task. In addition, knowledge workers must be aware of the multitude of communication options available. It is not only important to match the task to the appropriate medium, but it has also been suggested that the use of multiple media is a form of redundancy insurance, increasing the chances that information that is needed or expected arrives (Sitkin et al., 1992). Using several options for communication helps to protect people against blame by ensuring that the message is received at the other end (Reinsch and Beswick, 1990). Knowledge workers located lower in the organizational hierarchy are probably going to make more use of several channels for this purpose, as they have to protect themselves against blame. Social Influence Implications Although richness and task closure are important rational determinants of media choice, the social environment is equally relevant in the organizational context of usage. In order to communicate effectively, knowledge workers have to consider the social context when choosing between different communication media. One dimension of the social context is the number of users of particular media.

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Knowledge workers have to diagnose their existing social context to identify the number of users of particular communication technologies. The accessibility of a medium and the existence of a critical mass of users within an organization will determine the likelihood that information is in fact transmitted to the receiver. By having a reference point regarding the number of users, the efficiency of sending a message with a particular medium can be determined. In addition to the number of users, the purpose of usage has to be assessed in order to decide whether the spirit of the technology fits the social context of the organization and the group (Zack and McKenney, 1995). If, for example, electronic mail is perceived as an informal communication medium, then sending a symbolic message through this medium leads to a misfit between technology use and message intent. In addition, effective communication through computer-mediated channels is a managerial skill that takes time to develop (Carlson and Zmud, 1999). The amount of time it takes to build the knowledge base necessary to communicate richly through computer-mediated channels depends on an individual’s experience with these channels. Knowledge workers have to go through a learning process before becoming proficient at using a channel for communication. A critical mass of users needs to have developed the knowledge base necessary to communicate richly before a particular channel can be used effectively within the organization. This knowledge base is likely to be a result of ‘communication training to support new users and ongoing support as evolving technical capabilities and user knowledge bases expand the communication possibilities of existing channels’ (Carlson and Zmud, 1999, p. 167). As Poole and De Sanctis (1990) argue, when knowledge workers struggle with new communication technology, the solution may not be to change the system, but to provide support to the users. This support can take two forms: formal and informal. Formal support generally means explicit training of knowledge workers, while informal support involves the promotion of communication technology by key individuals, informal peer training, or role modelling. Formal Support The most obvious support for knowledge workers involves training programmes designed to help them to understand their own preferences and styles, and how these either help or interfere with their choices. This is important, since media preferences can influence the information that knowledge workers rely on for decision-making and may therefore have an impact on decision-making outcomes (Trevino et al., 1990). Training also serves the purpose of educating knowledge workers in the use and application of communication technology for particular purposes. Since communication technology can be appropriated in a number of ways, training helps to show how communication technology may

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be used to facilitate processes such as information acquisition, distribution and interpretation, or the storage of information. In a study, Igbaria and Chakrabarti (1990) found that computer training contributes strongly to a decrease in computer anxiety and has an indirect effect on attitudes towards new communication technologies. Computer experience and management support affect computer attitudes directly. It can thus be concluded that training programmes influence computer anxiety directly and increase an individual’s knowledge about computers, thus reducing anxiety and creating a positive attitude towards computer-based communication technologies. Training increases confidence in a person’s ability to master and use communication technology for work purposes. Since attitudes are linked directly to use, training programmes provide a good starting point in ensuring the success of communication technology implementation. Informal Support The traditional focus on training needs to be expanded to include informal support, such as team-building exercises (Zack and McKenney, 1995, p. 418), or the incorporation of multiple stakeholders in communication technology project teams and the use of the work group in order to help knowledge workers in their media choices. Team-building exercises help knowledge workers by helping to develop an understanding of each other’s information needs and ways in which communication technology can support these needs. Involving multiple stakeholders to support knowledge workers in their media choices implies staffing technology development and implementation project teams, with social psychologists, organizational development specialists, human resource managers, top management and user representatives jointly assessing the existing social context and designing appropriate communication technology options (Zack and McKenney, 1995). By having multiple constituencies in the team, the social context to implementation will probably be assessed and appropriated more realistically, so that the advantages of electronic mail can be used to the desired effect. It has been shown repeatedly that communication technology itself may not affect changes in behaviour directly, but rather the way that the technology is appropriated.5 Since the use of communication technology by members of a primary group is an important determinant in the behaviour of a potential adopter (Kraut et al., 1998), the use in the work group needs to be supported. Use by work group members increases the value of the system (i) by creating positive externalities; (ii) by displaying norms legitimizing the use; (iii) by defining the meaning of the new communication technology; and (iv) by inventing new applications. One potential support route is to offer incentives to early adopters. Since work groups are an important starting point for communication technology implementation,

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implementors should support particular work groups before offering the technology more broadly within the organization. In addition, opportunities should be provided for veteran users, who may act as champions, to discuss relevant usage norms with potential new users. The importance of informal support is especially crucial in phases of early adoption of new communication technology. According to Fulk (1993), ‘early users should be individuals who are (1) positively disposed toward the system and (2) important informal leaders in work groups and the organization as a whole’ (Fulk et al., 1990). Strassman (1985) suggests that informal training in the peer group is likely to be the most effective and least costly training method. Procedural Implications Given the managerial implications from the task and social environment perspective, the following process model has been developed, to reflect the steps necessary to enable knowledge workers to make successful communication technology choices. 1.

2.

3.

4.

5.

Take an inventory of incoming communications, usefulness of information by channel, and existing media availability, to determine the usefulness of new communication technology for particular tasks. Become familiar with the main features of the new communication technology by attending seminars, reading current literature, through associations or through knowledge workers from own or other organizations. In each situation of media choice, analyze the nature of the task in terms of three important determinants:  degree of task ambiguity;  urgency of the task; and  recipient availablity. In each situation of media choice, analyze the social environment in terms of six important determinants:  accessibility of a medium;  attitudes and behaviour of salient co-workers;  organizational norms in media usage;  maturity of information technology infrastructure;  proximity of communication partners; and  organizational position of communication partner. Embark on the choice of a medium that best matches the task and social context within the organization.

3 Communication Technology and Organizational Design Organizations1 are open social systems that process information (Mackenzie, 1985) to accomplish internal tasks, to co-ordinate activities and to interpret the external environment (Daft and Lengel, 1984). In order to accomplish these tasks, organizations are characterized by the division of labour. This has led to the existence of departments or subgroups within organizations. Information between these departments has to move horizontally and vertically to enable decision-making. Communication technology is one efficient strategy for processing the flow of information in order to enable departmental tasks to be co-ordinated horizontally and departmental goals to be aligned with the strategic goals of the organization.

FEATURES OF COMMUNICATION TECHNOLOGY While the previous chapter looked at the choices by knowledge workers of various communication media used within organizational settings, this chapter focuses on the relationship between new communication technologies and the flow of information. The features of new communication technologies, which offer important advancements for organizations are reach, recordability, memory and concurrency (see Table 2.4 on page 19). In particular, reach – the ability to connect people in different locations – has led to an increase in the amount of communication and an increase in the speed with which information is accessible, leading to high volumes of information moving between knowledge workers. This has been associated with a reduction in communication costs2 as the use of communication technology becomes more widespread. But it has also led to an increase in organizational costs as the potential for information overload and disruptions to work have become more pronounced. Overall, the additional features of new communication technologies have led to two important information-processing advancements: increased potential for information distribution; and better storage of information. These contributions from new communication technology are leading to changes in organizational design. As Fulk and DeSanctis (1995, p. 339) state: ‘electronic communication enables fundamental changes in organizational forms, which in turn generate requisites for communication system design, both of which are responsive to users’ activities to interarticulate technological and organization systems’. In the 41

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following sections, the features of new communication technology will be linked to the vertical and horizontal design of organizations as well as the organizational boundaries to investigate the particular set of changes that new communication technologies entail. The organizational design dimensions are derived from an information-processing framework.

THE ORGANIZATIONAL DESIGN FRAMEWORK FROM AN INFORMATION-PROCESSING PERSPECTIVE Organizations acquire and distribute internally information to carry out the critical functions of decision-making. These activities require the processing of information.3 Daft and Lengel (1984) have derived two perspectives on organizational information-processing: the vertical and horizontal perspectives. Vertical information-processing involves the acquisition of information from the environment and the distribution of information from boundary spanning units to organizational members at various hierarchical levels. Horizontal informationprocessing involves the co-ordination of internal tasks by distributing information between organizational members within and between departments. In addition to these two information-processing perspectives proposed by Daft and Lengel, organizations interact with other organizational entities to exchange information that is mutually beneficial. This involves crossing organizational boundaries. Figure 3.1 shows the three perspectives of information processing that are the foundation of this chapter. Within the information-processing framework, communication technology is one strategy in the organization’s ability to process information. Based on this Vertical information processing

Horizontal information processing

Environment

Figure 3.1 Organizational information-processing Source: Adapted from Daft and Lengel (1984).

Organizational boundaries

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framework, the relationship between a number of information-processing tasks, communication technology and organizational design trends are investigated. First, the relationship between the vertical information-processing perspective and communication technology is investigated. Next, the horizontal informationprocessing perspective and communication technology is explored. Finally, the role of communication technology in changing the traditional boundaries of the organization is examined. Vertical Information-Processing and Communication Technology One information task in the vertical information-processing model is to reduce ambiguity by making sense of the acquired information. Reducing ambiguity involves the organizational hierarchy. According to Daft and Lengel (1984), higher-level executives have the task of interpreting ill-defined events as well as deciding on goals, strategy and structure. Lower-level staff have to accomplish less ambiguous tasks, since rules and regulations have been established to govern daily activities. An organizational design dimension, which relates the hierarchical level to the information-processing tasks at hand is the degree of centralization versus decentralization of decision-making. Since decision-making requires the availability of unambiguous information, new communication technology has the potential to shift the level of decision-making by providing access to information. This is one of the design dimensions to be investigated. Another vertical design dimension to be discussed is the hierarchy of authority. New communication technology, by formalizing information-processing within organizations, is the resource that enables managers to report information. By enlarging the communication options, new communication technology has the potential to reinforce or undermine the existing authority structure. The influence of new communication technology in changing the role of middle management is the third vertical design aspect to be considered. Since new communication technology represents a capital investment, it has the potential to reduce the number of managers within the organization. Figure 3.2 shows the dimensions to be investigated from a vertical information-processing perspective. Centralization and Decentralization One of the first studies to investigate the effects of communication technology (more specifically, information technology) on centralization stems from Leavitt and Whistler (1958), who suggested that technology would lead to greater centralization of decision-making. In another important study that predicted theoretically

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Level of ambiguity

High

Low

Executives

Managers

Staff

(1) Level of decision-making: centralization versus decentralization (2) Authority structure

(3) Role of middle management

Figure 3.2 Vertical information-processing perspective

the effect of communication technology, it was proposed that for highly centralized organizations, the use of advanced communication technology leads to more decentralization, whereas the use of advanced communication technology for highly decentralized organizations leads to higher centralization (Huber, 1990). Empirical studies investigating the relationship between information technology and centralization or decentralization are, however, inconclusive (George and King, 1991; Wang, 1997). From a theoretical perspective, particularly taking an economic outlook, Gurbaxani and Whang (1991) start with the premise that the allocation of decision-making within organizations is determined by the costs of acquiring, processing, disseminating and storing information. It is argued that as decision-making rights are pushed downwards in the organizational hierarchy, the information-processing costs4 decrease, while agency costs resulting from goal divergence increase. Therefore, decision rights should be located where the sum of these costs is minimized. With this argumentation, the economic perspective provides an explanation for the unresolved issue of the influence of communication technology on centralization versus decentralization. According to Gurbaxani and Whang (1991), internal co-ordination costs are a function of agency costs and decision information costs. Decision information costs are costs associated with the sending of information upwards in the hierarchy, with miscommunication and opportunity costs caused by delays in communication. Agency costs result from costs in monitoring the organizational members who execute tasks, bonding costs resulting

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from frequent communication between employees and managers, and any other residual losses that may arrive as a result of a lack of information. Since decision information costs increase as decision-making authority is moved higher in the hierarchy, a possible conclusion appears, that decentralization is the answer to the problem. Yet, as decision information costs decrease, agency costs increase. Thus it is necessary to minimize total internal co-ordination costs. Communication technology can reduce both decision information costs and agency costs. Communication technology reduces decision information costs by improving the speed, and potentially the quality, of information-processing. Communication technology can, however, also reduce agency costs by improving monitoring and bonding capabilities. To reduce agency costs, an organization requires an appropriate incentive system, so that workers use their decision-making authority in the interests of the firm (Hitt and Brynjolfsson, 1997). In essence, communication technology serves as monitoring tool for agents’ actions (Brynjolfsson, 1994). Decentralization requires information and expertise to solve problems at the level of the organizational unit making decisions. Improved expertise and access to knowledge through communication technology can facilitate this autonomy. Distinguishing between general and specific knowledge,5 Hitt and Brynjolfsson (1997) point out that the organization should be structured so that actors with specific knowledge also have decision rights. Communication technology can specifically lower the costs of context-independent knowledge transmission, promoting the allocation of decision rights to those individuals who have access to specific knowledge. Malone (1997) points out that, in addition to decision costs, trust and motivation are factors which determine the location of decision-making. Communication technology can increase trust by making remote decision-makers more effective, by helping to monitor, and by socializing remote decision-makers. This will allow central decision-makers to trust local decision-makers in both their implementation and decision-making processes. In addition, organizational members are likely to be more motivated if they have a higher degree of autonomy in decision-making. Increased motivation can thus be viewed as a result of decentralization. Communication technology such as knowledge-based group support systems (GSS) can provide organizational units with the technical capability for complex problem-solving (Ferioli and Migliarese, 1996, p. 200) at the local decisionmaking level. Communication obstacles such as time and space constraints have hindered the provision of decisional autonomy to organizational units, since these constraints meant that information was frequently sent upwards and then communicated laterally between two individuals before being sent downwards

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again. The advance of communication technology, specifically GSS, has enabled direct contact between knowledge workers, thereby allowing decisions to be made at a lower hierarchical level. In addition, advances in telecommunication, diffusion of personal computers across the organization, and improvements in end-user computer literacy facilitate decentralization (Lee et al., 1995), since lower-level knowledge workers have easy access to information and have acquired the skills to obtain information when needed. The decrease of telecommunication costs and new telecommunication technology are providing reliable and cost-efficient networks for problem-solving at lower organizational levels. The increasing use of videoconferencing is an example of this tendency. Access to and literacy in the use of computers allows knowledge workers to satisfy specific needs in end-user applications, thereby increasing their productivity and autonomy in decision-making. Centralization is appropriate when communication is costly and central decision-makers are able to digest vast amounts of information. According to Brynjolfsson (1994), informational economies of scale support the centralized ownership of assets. Information can be collected centrally, processed, and redistributed to various units throughout the organization. Centralization is also appropriate in situations of indispensable co-ordination between the activities of subunits. Technological trends supporting centralization include the increasing storage potential of hardware; database capabilities; and the advance of personal-computer-based networks (Lee et al., 1995).6 The storage potential of hardware helps in maintaining databases, avoiding duplication of effort at several levels within the organization. Large databases, which provide routine transactions centrally are well suited for more centralization within organizations – for example, national hotel reservation systems, or customer service systems. Computer networks allow managers to control operational activities centrally by being able to track important indicators of individual sites from a central point. This is especially true for middle managers, who can use communication technology to facilitate control over a large number of employees and monitor an organizational unit’s performance (Ferioli and Migliarese, 1996). At the same time, communication technology can be used to obtain data from outside the department to align decisions with the overall strategy of the company. The danger of allocating decision rights at top management level only is the increased inefficiencies of information overload. This may demand that the decision-making process is decentralized. The extent to which communication technology can decrease communication costs, thereby making knowledge less specific, is one factor determining the allocation of decision rights. The ability of communication technology to relieve the burden of handling the increased flow of information and complement human judgement is another factor. If communication

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technology has the capacity to replace mental efforts and thereby increase the information-processing capacity of individuals, it truly has an impact on organizations. Information is, however, not the scarce resource in organizations; it is the processing capacity of individuals that is scarce. Therefore, information has to arrive at a level within the organization where information can be processed at the lowest cost to the organization. In order to determine the directional influence of a particular communication technology on organizational decision-making, it is necessary to look at associated cost-reduction effects. Organizations can employ new communication technology to allow the cost-reduction effect to work in the direction of either centralization or decentralization. For example, the implementation of a communication network may allow managers to exercise greater control over a large number of employees and thereby reduce agency costs, yet it also allows lowerlevel managers to gain access to more information, thereby lowering decision information costs. This means that the costs for both centralization and decentralization have decreased. Because of the bidirectional effect that communication technology can have, the net effect is not obvious. This is further complicated if a company employs a number of different communication technologies at the same time. In this case, the combined cost-reduction effect may work in the same direction but it can also work in opposite directions. It is therefore necessary to look at the area and purpose of communication technology use within organizations. In some organizations, communication technology may be employed to lead to more centralization, while in others it leads to more decentralization. By looking at the specific situation, a differentiated view of the role of communication technology is provided. Table 3.1 summarizes the situations in which communication technology tends to work in the direction of centralization or decentralization. Rather than viewing communication technology as a criterion for the allocation of decision-making authority, it has also been proposed that organizations shape the communication technology to conform to their needs. This means that it can be employed to work in the direction of both centralization and decentralization. It is argued that it is essentially managerial action that influences the outcome. One stream of research has suggested that those with power in organizations use communication technology to reinforce the existing power structure, this in turn affects the way communication technology is employed (George and King, 1991). From this perspective, it is not the technological imperative, but the organizational imperative, which drives the outcome of the use of communication technology. Rather than viewing organizational decision-making as an outcome of the employment of communication technology, it has been suggested that communication technology facilitates organizational design by providing managers with choices. For example, if decentralization is the desirable outcome, then

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Using Communication Technology Table 3.1 Communication technology and centralization or decentralization Purpose of communication technology employment Exchange of technical information between dispersed group members (in terms of time and space) Knowledge transfer Monitoring of departmental goals Control over a large number of employees

Type of communication technology Group support system; electronic mail; intranet

Organizational design trend

Decentralization

Intranet; electronic mail Management information system Communication network

Centralization

communication technology is the tool by which managers may bring about the outcome. This managerial action imperative suggests that managers are in control of organizations and can shape them to their needs, yet managers often do not have this control, since they lack the power or resources to push for either more centralization or more decentralization. There are a number of organizational circumstances, such as availability of technology and expertise, social and legal structures, and community opinion, which influence the decision-making authority in such a way that the outcome of managerial action may not work in the desired direction (George and King, 1991). The dynamics of the organizational environment may facilitate or impede managerial action. As Barley (1986, p. 105) suggests, ‘identical technologies can occasion similar dynamics and yet lead to different structural outcomes’. According to George and King (1991, p. 70), the final outcome is ‘filtered through an organization’s history and context and power structure and takes form through management action in a manner best accounted for by reinforcement politics perspective’. Since organizations are dynamic and complex, the directional influence can best be summarized by the emergent perspective. Hierarchy of Authority Hierarchy of authority is another vertical information-processing task, referring to the degree of power associated with the position in the hierarchy. Communication technology, by formalizing information-processing within organizations, is the

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resource that enables managers to report information and thereby influences the existing hierarchy of authority. The employment of communication technology has been found to both reinforce and undermine organizational authority structure. The existing organizational authority structure is reinforced when knowledge workers have superior access to communication technology (Orlikowski and Robey, 1991). By having superior access to decision-making tools they also have preferential access to the knowledge associated with it. Thus, information becomes a source of power (Pfeffer, 1982), and communication technology as a decisionmaking tool can facilitate differential access to information. Orlikowski and Robey (1991) suggested that, if communication technology is implemented on the basis of existing patterns of organizational authority, then it will reinforce these patterns within organizations by institutionalizing decisionmaking routines. An electronic mail group is an example of a technological tool that potentially reinforces the existing hierarchy of authority by providing preferential access to information by a small group of users. Monitoring an organizational unit’s performance by using a management information system is another example, where a selected group of users (for example, managers), gain access to information that is not shared widely within the organization. The organizational authority structure can, however, also be undermined when knowledge workers make use of communal technologies such as GSS. Tan et al. (1999) found that when groups are engaged in activities where authority differentials matter, a GSS can remedy the problem by allowing groups to substitute verbal with textual cues. This substitution process was found to have a dampening effect on status differentials.7 Middle Management In addition to predicting increased centralization as a result of employing communication technology, Leavitt and Whistler (1958) argued that communication technology would lead to the downsizing of middle management. They proposed that, with the introduction of communication technology, middle managers would become obsolete because of the automational and informational impact.8 Through communication technology, information would become easily accessible within the organization, replacing middle managers in their function as information brokers. The underlying premise is that communication technology ‘(1) provides managers with data that are more timely, comprehensive, and accurate; (2) enables managers to perform more precise, systematic, and sophisticated analyses of these data; and (3) provides managers with hands-on control of and direct access to information’ (Kraemer et al., 1993). Since the informational role of middle managers is seen as their most important managerial task, top managers can use communication technology to bypass middle managers in both upward and downward communication. This general

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tendency has been confirmed empirically by Brynjolfsson (1994), who found that communication technology results in better-informed managers, enables more flexibility in physical assets, and allows direct co-ordination among organizational members, thus reducing the need for managerial co-ordination. In summary, communication technology has the potential to reduce middle management by delegating the informational role to lower-level professionals and relying on top-level managers to make strategic decisions. On the other hand, a number of authors (Wynne and Otway, 1983; Millman and Hartwick, 1987) state that communication technology increases the number of middle managers, since the use of communication technology creates higher levels of complexity. This complexity is a result of involving a larger number of knowledge workers in decision-making, thereby requiring more co-ordination between individuals and subunits. From this perspective, middle managers are viewed as performing roles beyond those that automated information-processing through communication technology can replace. Since information frequently is socially embedded, the cognitive capabilities of human beings in informationprocessing are required to give relevance and purpose to information. As more information is being distributed through communication technology, the role of middle managers potentially increases, as humans are needed to sort through the vast amounts of information and act as relevance detectors. It has frequently been pointed out that the most effective managers are those who move beyond the role of information brokers and behave like knowledge executives (Kraemer et al., 1993). In this role, communication technology supports the manager who can use support staff to mediate their computer-based information environment. While support staff use the technology, middle managers primarily use their interpretative ability to deal with people and through people (Kraemer et al., 1993). From this perspective, middle managers have their role to play in an organization that is increasingly using new communication technology. Another explanation for an increase in middle managers is an interest in selfpreservation when communication technology is implemented. When managers occupy positions that are threatened by a new technology, they tend to make claims to new domains so that their profile of tasks expands (McKinley, 1993). George and King (1991) indicate that middle managers ‘pull down’ tasks from higher levels in order to sustain or enlarge their own domain. Although this may seem a feasible strategy in the short term, enlarging the domain may not be sustainable in the long term if the organization is threatened by decline. In sum, research indicates that communication technology has led to both an increase and a decrease in the number of middle managers within organizations (Pinsonneault and Kraemer, 1993, 1997). Taking a more differentiated view, Pinsonneault and Kraemer (1997) argue that communication technology will reinforce the power and influence of those who already exercise substantial

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decisional control. It is proposed that, when an organization is centralized the interests of top managers are better served, while a situation of decentralization is more advantageous to the interests of middle managers. Since top managers seek to enhance the efficiency and productivity of the organization, they will be motivated to replace capital for labour, replacing middle managers with communication technology. Linking the degree of centralization and decentralization and the level of communication technology penetration, Pinsonneault and Kraemer (1997) found that, in a centralized organization, higher levels of communication technology penetration lead to substantially lower numbers of middle managers. In this situation, top managers exercise a large degree of control, suggesting that communication technology investment decisions will lead to cost savings in labour, particularly that of middle management. As already noted, in a decentralized organization, higher levels of communication technology penetration lead to higher numbers of middle managers. Based on these findings, it can be concluded that the degree of communication technology penetration has an impact on the number of middle managers. When a critical mass of communication technology penetration has been achieved, middle managers are more likely to be affected. A time lag is suggested before the communication technology investment shows its desired effectiveness (visible through a reduction of staff) (Brynjolfsson et al., 1994). In order for time savings from communication technology to be translated into a reduction in numbers of middle managers, the impact on the informational role of managers has to be large enough to justify any downsizing. Since communication technology necessitates more educated workers at lower levels of the organization, it takes time for a higher level of education to be achieved for professionals before any decreases in managerial staff can be considered. Although the empirical findings of Pinsonneault and Kraemer (1997) show that the impact of communication technology on middle management is dependent on structural characteristics and the level of communication technology penetration, it is essentially the managers who make the decisions regarding the degree of centralization and the amount of communication technology invested. CASE STUDY 2: THE IMPACT OF COMMUNICATION TECHNOLOGY ON ORGANIZATIONAL DESIGN DIMENSIONS IN NEPAL, THAILAND AND SINGAPORE9 A wide range of studies have argued that communication technology will alter organizational design dimensions in a significant manner. However, continued

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these propositions have not been validated, particularly in the context of Asian organizations. As a result, a research study was undertaken to identify the possible impact of communication technology on organizations in Asia, testing the following propositions: (i) with increased use of communication technology, organizations reduce the number of hierarchical levels involved in decision-making; and (ii) with increased use of communication technology, decision-making in organizations decentralizes. A study of organizations in a developing, an emerging and a developed country in Asia was conducted in 1997/8. The countries were Nepal, Thailand and Singapore. Data was collected using two approaches. Qualitative research was conducted by in-depth interviews with senior managers at the corporate and middle management level. These managers had been involved in decisionmaking in the company for more than eight years. The idea was to collect expert opinion that was of practical relevance. Nine companies in Nepal, eight companies in Thailand and four companies in Singapore were included in the study. In order to further investigate the propositions, a quantitative survey was designed using a structured questionnaire. The communication technologies investigated were electronic mail, groupware, voice mail, videoconferencing, management information systems, intranet, internet, decision support systems and expert systems. Responses of communication technology use by sixty-five managers were evaluated statistically using regression analysis. Based on the overall sample of responses, the findings partially support the first proposition. It was found that increased use of communication technology led to an increased span of control by managers and a decrease in the number of authorization steps. In addition, there was a tendency to be a reduction in the number of middle-level managers. In general, though, no evidence was found that the use of more communication technology led to reductions in the overall number of employees. The influence of communication technology accounted for an average of 15–20 per cent of the changes. Communication technology was found to be an enabling factor, but not the only factor in determining flatter organizations. The findings did not support the second proposition. The data reveal that changes in decision-making are inconclusive. However, the initiation of new projects was found to have gone through significant changes. With the degree of communication technology usage shifting from a low level continued

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to medium level, decision-making on the initiation of new projects was found to be more centralized. When communication technology usage shifted from a medium to high level, the decision level shifted to a more decentralized level. The communication technology effect was, however, only attributable to 14 per cent of the changes. This means that many other internal and external influences other than communication technology were of equal importance in the shifting of decision-making. Nepal In Nepal, there was no statistically conclusive effect of communication technology employment on organizational design dimensions. Personal interviews, however, indicated that it had become easier to exercise control within the organizations, and there was a trend towards an increased span of control in organizations using communication technology, particularly for organizations that had used communication technology for a period of at least three years. In the latter organizations, there was also a trend towards a decrease in the number of hierarchical levels. The organizations that experienced a considerable effect through the introduction of communication technology were in the banking and tobacco sector and were joint venture operations with foreign companies. In general, organizations in Nepal do not yet use communication technology extensively. This may be because of a lack of perceived need and the unavailability of communication technology infrastructure in the country. The low degree of communication technology usage could be a reason why communication technology has had no statistically significant impact on organizational design dimensions. Thailand In Thailand, organizations generally used communication technology more intensely than in Nepal. Within this context, it was found that communication technology contributed to a flatter organizational structure with an increased span of control and a reduction in hierarchical levels. With the increasing use of communication technology, there was a corresponding increase in the span of control and a significant decrease in the number of authorization steps. Data analysis also indicated that the contribution of communication technology to both changes was to the extent of continued

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only 17 per cent and 15 per cent, respectively. Various internal influences, including cost competitiveness, organizational culture and history; and some external influences, including industry trends and competition, were forcing Thai organizations to become flatter. Personal interviews indicated that, in most of the organizations, a reduction in the number of middle managers was realized, but it was not clear whether the reduction was just a result of the need to restructure given the economic context of 1997/8. Singapore The level of communication technology usage was highest in Singapore in comparison to the other two countries. The high use of communication technology has been made possible by the developed communication technology infrastructure in the country and the availability of vendors for system supply and implementation. Based on the experience of the four organizations included in the study, it was found that communication technology led to an increased span of control and a reduction in the number of hierarchical levels. The impact of communication technology on the shifting of decisionmaking showed mixed results. Although the interviewed managers were of the opinion that communication technology in general supported a decentralization shift with increased information access and processing capability of middle management, they were unable to say which functions and how many functions were more centralized or decentralized. Although communication technology was generally viewed as a contributing factor to an increased span of control by managers and a decrease in the number of authorization steps, interviewed managers suggested that other factors encouraged these trends as well. According to them, strategic and economic factors, specifically the crisis of 1997, led to the necessity of making organizations flatter, reducing the number of middle managers and expediting the decision processes. Communication technology was seen as a tool that enabled changes, but not to the extent suggested by the proposed research.

Thus, managers need to be aware of the critical importance of their decisions and their impact on the organization. In sum, communication technology is one contributing force in changing vertical information processing by reducing the number of authorization steps in decision-making and increasing the span of control of managers. However,

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it has been found empirically to be accountable for less than 20 per cent of the changes in organizational design. This may be because of the ambiguous effect of communication technology on the vertical dimensions of organizational design. Communication technology can influence vertical organizational design changes towards centralization or decentralization, it can reinforce or undermine the hierarchy of authority, and it can lead to an increase or decrease in the number of middle managers. Given the various theoretical and empirical studies contributing to the field, it is not surprising to find that the study of the impact of communication technology on organizations in Asia – particularly in Nepal, Thailand and Singapore – did not find communication technology to be the major explanatory factor in organizational design changes. Based on the findings, one may conclude that the direction of influence also depends on the stakeholders of communication technology use. Among the organizational stakeholders of communication technology are the investors (frequently top management), designers of communication technology, and users. Top management usually invests in communication technology with a specific purpose in mind – for example, to increase organizational efficiency. Yet users and designers also play a critical role in the adoption process. Therefore, the outcome may not necessarily correspond with the intentions of top management. Designers may not always follow the recommendations of top management, and therefore the employment of communication technology may lead to unintended results. In addition, users may decide to employ the communication technology in ways not intended by either the designers or the technology itself. Thus communication technology and organizational design have a reciprocal influence. Communication technology may influence organizational design, yet patterns of interaction, the basis of organizations, are eventually determined by the users. Horizontal Information-Processing and Communication Technology As organizations become flatter, customer-focused and dynamic, effective organizational information processing requires what Galbraith (1973) called the creation of lateral relations – the ability to convey information beyond the confines of the hierarchy. Relatively few studies have dealt specifically with the lateral complexity of organizations (Robey, 1981). Modern communication technologies, by strengthening the informal communication process in organizations, contribute directly to the creation of lateral relations. This is so because lateral relations, by definition, require the ability to cut across the formal organizational structure based on the ability to exceed the space–time boundary. Figure 3.3 shows the horizontal design dimensions from an information-processing perspective, basically involving the facilitation of information exchange for the purpose of decision-making.

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(1) Directionality of information exchange (2) Number of communication linkages (3) Participation in decision-making

Figure 3.3 Horizontal information-processing perspective

The information-processing dimension which that represents the horizontal perspective is the flow of information to support decision-making. The flow of information within an organization has typically been analyzed in dichotomous terms such as downward versus upward, or routine versus innovative, yet the most enduring dichotomy has been informal versus formal (Lievrouw and Finn, 1996). Although these terms may represent the style or the origin of information exchange, ‘formality’ has usually been used to refer to the type of interaction experience. With the introduction and adoption of new communication technologies, the distinction into formal versus informal, based on the channel, has become blurred, since many types of information exchange have become both more informal and more documentable. The notion of formality that people experience can be seen in terms of (i) directionality of information exchange; (ii) involvement in the exchange (number of communication linkages); and (iii) degree of control over the situation (participation in decision-making). Directionality refers to the organizational area the communication situation entails; involvement pertains to the number of communication linkages; and control makes reference to the degree to which communicators can exert influence on others in a given decision-making situation. Together these three factors determine the formality of information exchange within organizations. Organizations vary in their degree of formalizing communication. Although informal, horizontal communication flow has always existed within organizations, researchers and managers have started more recently to emphasize their importance (Hinds and Kiesler, 1995). Informal relations outside the formal structure of the organization have been treated historically as emergent, ad hoc linkages (Allen, 1977; Monge et al., 1985) without recognizing their relevance to operational activities. With the emergence of new communication technologies, more deliberate attention has been paid to lateral communication within organizations; and specifically to the role of communication technology in supporting lateral and diagonal ties within organizations (Barley, 1994).

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Directionality of information exchange With the increasing technization of work,10 the use of new communication technology in the form of lateral flow of communication between employees is becoming more important (Hinds and Kiesler, 1995). Distinguishing between technical and managerial employees, it has been found that in settings that use communication technology extensively, 70 per cent of total information exchange for technical employees was lateral, while only 34 per cent was lateral for managerial employees. For lateral and out-of-chain communication, Hinds and Kiesler (1995) found that new communication technology (particularly voice mail and electronic mail) was less likely to be used than the telephone. When employing asynchronous communication technology, electronic mail rather than voice mail was used. The preference for the telephone for lateral departmental and extradepartmental communication for all types of employees seems to indicate that conveying social (context-related) information is just as important as substantive (content-related) information when people communicate laterally. The superiority of the telephone over asynchronous communication technology for conveying social information may outweigh the convenience of asynchronous technology when crossing a unit’s boundaries. When people are further away physically and across time, however, the tendency towards asynchronous communication technology is expected to increase.

CASE STUDY 3: TRENDS IN THE USE OF COMMUNICATION MEDIA IN ORGANIZATIONS IN NEPAL, THAILAND AND SINGAPORE In addition to studying the impact of communication technology on vertical design dimensions, trends in lateral communication were investigated in twenty four organizations in three Asian countries – Nepal, Thailand and Singapore. Based on the sample of organizations studied in Thailand and Nepal, it was found that these companies were using traditional communication media (face-to-face communication, the telephone and written letters) more than new communication technologies (electronic mail, intranet or voice mail) for lateral information exchange. Among the traditional communication media, a written letter was the most frequently used medium for interdepartmental communication, and the telephone was most frequently used for cross-departmental communication. Electronic media were more frequently used for cross-departmental continued

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than for interdepartmental communication. The following table shows the mean usage of different types of media for both interdepartmental and cross-departmental communication. Media type

Traditional communication media

New communication technology

Mean usage – interdepartmental communication*

Mean usage – cross-departmental communication*

Face-to-face communication

5.09

5.52

Telephone Written letter Electronic mail Intranet Voice mail

5.20 5.63 4.04 2.53 1.11

5.86 4.06 4.46 3.20 1.14

Note * Media usage is measured on a seven-point scale, whereby 1 is infrequently and 7 is very frequently used.

In Thailand, the number of companies that replaced traditional communication media with new communication technology was higher in comparison to Nepal, yet the overall pattern of usage was the same. Companies in Singapore were using new communication technology more frequently for both interdepartmental and cross-departmental communication in comparison to Nepal and Thailand. In Singapore, the mean of average use of new communication technology for interdepartmental communication was 5.5, and for cross-departmental communication, 5.75.

Number of Communication Linkages As a result of new communication technology entering organizations, both an increase (Culnan and Markus, 1987; Straub and Karahanna, 1998) and decrease (Sarbaugh-Thompson and Feldman, 1998) in the number of communication linkages between knowledge workers at the same hierarchical level has been observed. Figure 3.4 shows managers’ general perception regarding the impact of electronic communication on information exchange within organizations (Straub and Karahanna, 1990). According to the findings, electronic communication leads to an increase in communication linkages, since knowledge workers are getting into contact with the same people more often, and establish contacts with new people. At the same time, managers receive fewer calls. This means

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Freer expression Say more than phone Fewer calls Less paper Meetings better Contact more people More contact with same people Spend less time 1

2 Disagree

3

4

5

6

7

Agree

Figure 3.4 The impact of electronic communication on the exchange of information Source: Based on Straub and Karahanna (1990). Note: On the scale, 4 means no opinion.

that knowledge workers may have access to information from a larger pool of communication partners. Although communication may partially increase because of new communication technology (Dennis and Kinney, 1998), Sarbaugh-Thompson and Feldman (1998) found that, overall, communication declined. The increase in electronic communication did not offset the decrease in face-to-face communication. As visual displays through new communication technology increase, groups replace face-to-face communication with new communication technology to interrelate time and task activities so that the different knowledge workers’ perceptions of tasks and the activities they are likely to perform correspond (Ramarapu et al., 1999). A risk in reducing face-to-face interaction lies in providing fewer opportunities for casual conversation, which allows individuals to assess a person’s communication trustworthiness in social settings. It is therefore, important to encourage knowledge workers to treat opportunities for casual contact as an important part of their work. Influence on Decision-Making Although new communication technology may lead to a partial increase in communication linkages, particularly an increase of electronic communication, Benbasat and Lim (1993) reported that participation of more knowledge workers may not necessarily lead to a higher influence on decision-making. Straub and

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Karahanna (1990) have, for example, found that the use of electronic mail does not lead to freer expression. While the correlation between participation and influence is high for face-to-face communication, the link remains unclear for computer-mediated communication (McLeod, 1996). More participation by knowledge workers in decision-making could be a function of equating participation with message-sending. Since electronic mail changes the traditional communication mechanism of face-to-face meetings and telephone by decoupling message-sending from message-receiving, higher participation may easily be explained, since electronic systems facilitate the sending of messages to a high number of receivers without demanding their feedback. Knowledge workers can ‘participate’ and accomplish their tasks without having to respond to comments made by other organizational members. Another explanatory factor for the increase in participation could be the reduction of status influence through the use of computer-mediated communication (Tan et al., 1998). This can have two effects on communication within organizations. The increase in participation by organizational members could lead to delays and stalemates, as an increase in the number of individuals may neither contribute to decision quality nor to decision acceptance. It could, however, also lead to greater commitment by organizational members in pursuing a particular course of action. In the following section, the influence of electronic communication systems on group decision-making situations will be investigated in more detail. Based on the literature, one has to distinguish between the influence of communication technology on different types of organizational decision-making tasks: idea generation; establishing consensus; and conflict resolution. (See Figure 3.5) Use of Communication Technology for Idea Generation Tasks Studies that have reported an increase in participation because of communication technology are mainly studies that have investigated brainstorming or idea-generation tasks (Gallupe et al., 1991; 1992; Pinsonneault et al., 1999). Electronic brainstorming using GSS and electronic mail alleviates a number of problems inherent in face-to-face group brainstorming while enhancing its strengths.

Idea generation

Conflict resolution

Figure 3.5 Types of decision-making situations

Consensus

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Some of the problems of face-to-face group brainstorming are evaluation apprehension, production blocking (Valacich et al., 1994), free riding (Pinsonneault et al., 1999), and matching (Ramarapu et al., 1999). Evaluation apprehension refers to groups feeling reluctant to express their ideas because they fear that they will be judged negatively by others. Groups have been found to generate fewer ideas when authority figures are present (Mullen et al., 1991) and when group members are anxious about social interactions (Camacho and Paulus, 1995). Another problem is that production blocking entails situations in which individuals have to wait until other individuals have finished their contribution before expressing their own ideas. This waiting time impairs productivity because ideas might become irrelevant as discussion progresses, or participants may forget their ideas (Valacich et al., 1994). In addition, groups often suffer from free riding, where individuals intentionally limit their own efforts and contributions and rely on others to accomplish the task (Diehl and Stroebe, 1991). Because of the lack of clear responsibility in brainstorming groups, individuals may not feel responsible for the generation of ideas. Matching, another problem of face-to-face groups, means comparing rates of performance when individuals are generating ideas. In these situations individuals may not want to deviate from group norms, so high-output members may attempt to decrease their input. Computer-mediated communication provides a technological basis for overcoming these shortcomings of face-to-face brainstorming. GSS (group support system) groups, for example, generate ideas by using a network of computers, thus allowing the entry and sharing of ideas. The advantage of GSS is that individuals can enter their ideas in parallel, in this way avoiding the losses that occur because of production blocking (Gallupe et al., 1991). Parallelism also diminishes the problem of free riding, since organizational members do not have to compete for speaking time and everyone’s contribution is facilitated. The problem of evaluation apprehension is addressed by GSS, since the software usually enables a form of anonymity whereby individuals can read the ideas generated by others without knowing from whom they originate (Gallupe et al., 1991; Pinsonneault et al., 1999). Anonymity also reduces the problem of matching, since individuals do not know how much each individual contributed to the number of ideas generated. In addition to these advantages, electronic brainstorming offers stimulation and efficiency benefits (Pinsonneault et al., 1999). The written form of sharing ideas may inspire others to contribute, thereby stimulating the generation of more ideas. In addition, the written form also reduces the likelihood that ideas are suggested twice, as organizational members are able to see what others have contributed. Based on these advantages, empirical research has shown that electronic brainstorming outperforms face-to-face brainstorming (Pinsonneault et al., 1999).11 Gallupe et al. (1992) demonstrate that larger groups generate more

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unique and, more high-quality ideas, and were more satisfied, when using electronic brainstorming than when they used verbal brainstorming. Looking at the difference between two different communication technology tools – GSS and electronic mail, Shirani et al. (1999) showed that GSS groups generated more ideas, yet these were more basic, and electronic mail groups performed more problem-solving, and therefore generated more inferential ideas. Both GSS and electronic mail are viewed as outperforming face-to-face idea generation. The Use of Communication Technology for Consensus Tasks Studies that have required computer-supported groups to reach consensus have found that there are few benefits in computer facilitation (Strauss and McGrath, 1994). Benbasat and Lim (1993) and McLeod (1992) conducted a meta-analysis of lab studies and concluded that the effect of GSS use on consensus is negative. This is supported by an increasing amount of empirical research which suggests that communication technology support has no positive performance effect (Mennecke and Valacich, 1998; Strauss, 1996). A number of factors may contribute to this phenomenon. Parallel communication – for example, electronic mail or GSS – create an environment that is more likely to lead to divergent than to convergent communication, since knowledge workers have fewer cues available from their communication partners and are busy keying in their own comments rather than paying attention to the comments of others. Knowledge workers may thus not recognize that they have diverging or unshared information. A lack of awareness of diverging or unshared information disrupts the process of information sharing and thus creates difficulties in reaching consensus.12 In addition, communication technology lacks verbal feedback, which is important in resolving differences of opinion. McLeod (1996) suggests that, in the absence of a dominating individual who advocates a particular position, the difficulty in reaching consensus is increased. Although groups may have more information at their disposal, Mennecke and Valacich (1998) suggest that GSS groups do not use this information to choose the optimal decision. Explanations for the lack of information processing are anonymity and delayed feedback, which results in a lack of credibility of information. These factors hamper the process of reaching consensus. A few studies have, however, shown that, overall, computer-supported groups take the same amount of time to reach consensus as face-to-face groups (Hollingshead et al., 1993). In addition, DeSanctis and Gallupe (1987) propose that higher levels of sophistication or the appropriate use of communication technology enhance consensus development. According to Lim and Benbasat (1996–7) electronic communication not only has the potential to facilitate the reaching of a consensus, but can reduce judgement biases because of a lack of

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social influence, which pressures individuals into agreeing to ideas, or parallel communication which allows individuals to raise their comments simultaneously. Yet the majority of findings conclude that computer-mediated communication has not been found to be suitable for the task of reaching consensus. The Use of Communication Technology for Conflict Resolution Tasks Studies investigating the quality of conflict resolution outcomes using GSS have yielded ambiguous results. If the quality of conflict resolution outcomes is judged on the basis of the number of ideas generated as well as the solution and the degree of consensus by group members, then GSS has both a positive and a negative impact. GSS facilitates the negotiation process by (i) improving communication among participants; (ii) generating many alternatives before judging; (iii) separating personalities from the problem; and (iv) using objective data and criteria. GSS uses a structured process to eliminate the common constraints of face-to-face negotiation by enabling parallel communication, group memory, anonymity and a structured pattern of discussion (Nunamaker et al., 1991). Anonymity supports the generation of alternatives. Parallel communication leads to a separation of personality from issue and promotes more objective evaluation. Group memory allows the use of objective data and criteria to evaluate alternatives, and it helps to overcome limits to information-processing that can bring parties closer to the optimal solution (Benbasat and Lim, 1993).13 A structured pattern of discussion improves communication among participants. Since the quality of conflict resolution is, however, also determined by finding a solution to the conflict, which frequently requires consensus, GSS is not an appropriate medium to facilitate conflict resolution. As discussed in the previous section, the majority of findings suggest that communication technology is not suitable for reaching consensus. Thus GSS has an ambiguous impact on conflict resolution. Gains and Losses in Group Decision-Making Processes The use of communication technology in facilitating group decision-making processes is a result of the combined positive effects of group process gains and the negative effects of group process losses. Table 3.2 summarizes the process gains and losses evaluated from three perspectives: procedural; social-psychological; and economic mechanisms which are at the heart of group decisionmaking (Pinsonneault et al., 1999). These process gains and losses determine the impact of communication technology on group decision-making. Depending on the type of task, new communication technology may enhance or impede group decision-making. For the purpose of idea generation, communication technology has generally been found

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Type of mechanism

Process gains

Process losses

Procedural mechanisms

Separation of idea generation and evaluation

Production blocking Effort redundancy – generating duplicate ideas Cognitive interference – ideas generated by others may interfere Cognitive inertia – individuals may embark on a single train of thought

Socialpsychological mechanisms

Cognitive stimulation/ synergy – eliciting of new ideas from others Observational learning – imitating the best performers

Evaluation apprehension – fear of expressing ideas because of potential retaliation Negative productivity matching – adjustment of contribution to baseline level Pressure for cognitive uniformity/ conformity – pressure to remain within group norms Personalization of issues – discussion of issue related to personal matters Social influence – domination of process by a few group members

Social recognition – recognition of contribution by others Task orientation – focus on task rather than person

Economic mechanisms

Motivational/arousal

Free riding – intentional withdrawal of efforts

Source: Based on Pinsonneault et al. (1999).

to have a positive influence. Communication technology has a negative impact on the task of reaching consensus and an ambiguous effect on conflict resolution. Table 3.3 summarizes the impact of communication technology on organizations, depending on the type of decision-making situation. In summary, it can be concluded that communication technology has an impact on lateral communication in a limited number of situations. For brainstorming tasks, communication technology increases participation in decisionmaking, yet for consensus tasks, participation in decision-making decreases. Communication technology has an inconclusive effect on conflict resolution. The biggest impact of communication technology is in situations where organizational members have to exchange information across time and space. In this context, communication technology can lead to a less formalized organization.

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Table 3.3 Communication technology and influence in decision-making Type of decisionmaking situation

Communication technology

Organizational design trend

Idea generation

Electronic mail; GSS

Conflict resolution

Electronic mail, GSS

Consensus

Electronic mail; GSS

Increased participation of organizational members in decision-making Ambiguous effect on the quality of conflict resolution – increase in alternative generation, difficulty in reaching consensus regarding solution Decreased participation of organizational members in decision-making

Organizational Boundaries and Communication Technology In addition to influencing both vertical and horizontal design, communication technology impacts the boundaries of the organization. This is determined by the need for co-ordination and communication. Since communication technology has the potential to reduce the costs of co-ordination and exchange of information, it can alter the boundaries of the firm. Several authors (Drucker, 1988; Malone and Rockart, 1991; Hitt, 1999) have suggested that the decline in prices and the improvement in the quality of communication technology are enabling a shift in the structure of organizations similar to that seen in the Industrial Revolution. The cost reduction effect of communication technology influences organizational characteristics such as firm size, related and unrelated diversification, vertical and horizontal integration, and cooperative activities (Harris and Katz, 1989; Brynjolfsson et al., 1989, 1994; Hitt, 1999). Studies investigating the relationship between firm size and communication technology are relatively few. Harris and Katz (1989)14 studied the relationship between communication technology intensity and firm size, and found that communication technology intensity is higher for smaller firms. Studying six sectors of the economy, Brynjolfsson et al. (1994) found that communication technology leads to a decrease in firm size. This is consistent with the argument that the increased use of communication technology reduces the costs of co-ordination and thereby allows companies to downsize. Vertical Integration The impact of communication technology on vertical integration is determined by the degree to which communication technology changes co-ordination

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costs – both internally and externally. Vertical integration entails the combination of two or more activity levels, which are normally in the hands of a sole owner. The main advantages of integration lie in improving marketing activities, a tighter control of the business environment, and advantages related to product differentiation. The risks involve the damage generated by a decision-making process undertaken by an external agent, high capital requirements, a lower degree of specialization, and a decrease in flexibility. In order to overcome these risks, organizations have increasingly employed cooperation agreements and strategic alliances. In these organizational arrangements, activities of the companies are linked in the value chain, which implies a need for co-ordination. Communication technology has an impact on the degree of vertical integration by influencing internal and external co-ordination costs. If communication technology reduces external co-ordination costs by making it easier for firms to assess the market for needed materials, then firms may decrease vertical integration. Internal co-ordination costs represent expenses incurred for communication, data transfer and expenditure for managing dependencies between activities (Malone and Crowston, 1994), as well as agency costs. External co-ordination costs represent the costs of writing contracts, locating suppliers and other costs of market transactions. Although communication technology has been found to reduce both internal and external co-ordination costs, organizations will generally favour external procurement over vertical integration (Malone et al., 1987; Clemons et al., 1993). Communication technology can, for example, reduce the transaction risks associated with opportunistic behaviour by improving monitoring facilities. Yet the benefits from communication technology, and more specifically information technology, are greater for external co-ordination rather than internal co-ordination costs (Hitt, 1999). Since a vertically integrated firm favours an increase in internal co-ordination costs in return for lower external co-ordination costs, it benefits less from communication technology than does a less vertically integrated firm. Based on a case study, Malone et al. (1987) found that co-ordination benefits arising from communication technology lead to a decrease in vertical integration. Based on panel data, Hitt (1999) confirmed the hypothesis that communication technology causes a decrease in vertical integration.15 Hitt (1999) showed that firms that are less vertically integrated have a higher demand for communication technology when controlling for other explanations. Diversification The impact of communication technology on diversification is also determined by co-ordination costs. Diversification entails increased internal co-ordination costs because companies have to manage the increasingly complex relationship

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between different units. Diversification has little impact on external co-ordination costs, since it does not have the option of procuring external versus in-house production. Thus communication technology is expected to influence diversification positively. In an empirical study focusing on diversification, Hitt (1999) found that information technology causes an increase in diversification. In a more detailed study, Dewan et al. (1998) provide evidence which suggests that the greater the need for co-ordination, the higher the level of investment. According to the authors, related diversification demands greater technology use than does unrelated diversification because of the higher level of co-ordination required when sharing information across related lines of business. Firms pursuing related diversification exploit economies of scope through the sharing of physical and human resources across similar lines of business. Unrelated diversification relies on achieving economic benefits by allocating resources in an internal market more efficiently than through market exchanges. Related diversification, characterized by reciprocal interdependence and monitoring-based control, increases the need for more coordination, since it is more information-intensive than unrelated diversification, and characterized by pooled interdependence and incentive-based control. Thus communication technology has a larger impact on related diversification. The effect of communication technology on external co-ordination and transaction costs is likely to dominate the effects of communication technology on internal co-ordination costs (Hitt, 1999). Therefore, communication technology capital use is associated negatively with vertical integration and related positively to diversification. Since the effect of communication technology on external co-ordination costs is larger than on internal co-ordination costs, increased communication technology use leads to a decrease in vertical integration and an increase in diversification. Since the majority of empirical studies that support these tendencies are based on information technology rather than on the narrower term, communication technology, the conclusions warrant caution. Since co-ordination costs are, however, costs that can be reduced by distributing information, a characteristic of both information and communication technology, the tendencies should also apply to communication technology. Cooperation Co-ordination costs not only explain vertical integration and diversification, but also cooperation across organizational boundaries. When organizations are dependent on each other, communication technology can facilitate the reduction of costs for information transfer. Research has shown that the costs of information extraction depend on the local context, and that the best context is not

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always collocated with the site where the task is performed (von Hippel, 1994). Information that is expensive in one location may be free in another (von Hippel and Tyre, 1995). Thus organizations will cooperate across organizational boundaries when information retrieval from outside is less costly to the organization than information from the inside. The costs of retrieval and transfer of information refer to the stickiness of information (Szulanski, 1996). When information is embedded in the context of the organization, it is sticky, and therefore expensive to retrieve or transfer. Communication technology may change the marginal costs of retrieving embodied information and thereby facilitate the exchange between two organizations. When organizations are interdependent they need to retrieve and transfer embodied information and control for opportunism (King, 1999). Rather than reducing interdependence, organizations should retrieve and transfer embodied information, which leads to more problem-solving between organizational members. Communication technology can support the establishment of cooperative arrangements by helping to bring organizational members together to solve problems. A typical example where this becomes useful is for joint research and development cooperations. Teo et al. (1997, p. 141) mention that ‘along the organizational boundaries, information technology enables tight interorganizational linkages to the point where it is difficult to delineate where the boundary of one organization ends and that of another begins’. The ability to cross spatial and temporal barriers is the feature of new communication technology, which has enabled specifically the linkage between different organizations. Firms can, for example, use communication technology to cooperate on research and development projects. When groups of experts are located in different geographical regions, they can pass on their findings of the day to the next group in a different location, enabling a 24-hour research and development team to operate. Essentially, communication technology enables organizations to be structured independent of geography, where people are grouped together within one unit for the purpose of supervision and co-ordination. Communication technology links knowledge across spatial and temporal boundaries, and thereby redefines the traditional boundaries of organizations. In sum, the increasing use of communication technology has been found to lead to a decrease in firm size, a decrease in vertical integration, an increase in diversification particularly in related diversification, and an increase in cooperative activities. Communication Technology Penetration Over Time Although the potential of communication technology in changing the organizational design has been recognized, the revolutionary effect of communication technology has been neither empirically nor theoretically supported. It has been

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shown that communication technology can have an impact on both vertical and horizontal information-processing within organizations, as well as the boundaries of the firm, yet the social context within which communication technology is embedded remains a strong deterrent for radical change in organizations. In many organizations the hierarchy of authority and the patterns of decisionmaking are based on established social norms, which evolve over time and which develop a fundamental resistance to change. The role of communication technology is therefore one of incremental change rather than radical change. It can, however, be argued that, with increasing use of communication technology, increasing areas of the organization are affected. This is especially visible in studies investigating the boundaries of the firm, which focus on communication technology penetration and its impact. With increasing communication technology penetration, the effect on organizations is expected to grow. Since companies are currently in the process of employing more communication technology, the effects may still take time to materialize.

Organization A

Division I

Management Level 1

Management Level 2

Management Level 3

Phase 1

Organization B

Phase 4

Division II

Phase 3

Function a

Function b

Function a

Function b

Function a

Function b

Phase 2

Figure 3.6 Phases of communication technology penetration Source: Based on Harvey et al. (1998, p. 346).

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It has been proposed that communication technology penetrates the organization through a gradual process, ultimately crossing organizational boundaries. A critical mass of users has to permeate the organization before it can show a visible impact (Markus, 1987). Once universal access has been achieved, users derive benefits that would not be available if only a small group of people used the technology. According to Rice et al. (1994), a critical mass of users is relevant, since the use of the system depends on the existence of a network. It has been suggested that communication technology penetrates in several phases, starting with an increased number of linkages between different management levels (Harvey et al., 1998). Then communication technology is used increasingly between various functions in the organization. In the next step, communication technology is used between different divisions, and finally it is used across organizational boundaries. Figure 3.6 shows this gradual process of communication technology penetration. Looking at this evolutionary process of communication technology penetration, Wang (1997) developed a model of incremental migration of organizations in the communication technology era. Figure 3.7 summarizes a ‘typical’ incremental transformation process of organizations as a result of using communication technology more intensively. This descriptive model is based on the idea that communication technology eventually affects three areas, from: (i) individuals; to (ii) teams; and to (iii) the formal structure of the organization.16 In this age of communication technology, individuals who contribute value by acquiring, distributing and interpreting information are knowledge workers. They use communication technology, such as electronic mail, to acquire information from the outside, distribute information and interpret information that has been distributed through a wide range of communication technologies. As knowledge workers become more accustomed to the use of communication technology, their demand for the use of it increases, and the tasks that are completed based on communication technology change (Wang, 1997). The first visible effects of communication technology on organizations is usually at the individual level as the foundations of transactions are built. This incremental change has been referred to as a ‘knowledge link’ (Wang, 1997). By increasing the number of knowledge links, the potential for distributing knowledge throughout the organization is enlarged. Since activities within organizations require co-ordination among a larger number of individuals, communication technology only has an impact on the entire organization if groups of individuals are affected by the technology. Eliminating redundant processes and creating more effective mechanisms of integration through the use of teams has been found to be the next incremental step in the transformation of organizations based on communication technology (Wang, 1997). Teams have to cooperate to fulfil cross-departmental tasks. For this purpose, group support systems have been used to facilitate the equal participation

Organizational Design

Team

Individuals

Organizational Design

Team

Individuals

Organizational Design

Team

Individuals

Organizational Design

Team

Individuals

t Figure 3.7 Communication technology transformation of organizations Source: Adapted from Wang (1997, p. 88).

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of individuals. Essentially, more links are created between individuals through networks to enable transactions to be integrated. This second incremental process of transformation has been called a ‘transaction link’ (Wang, 1997). By increasing the number of transaction links, more knowledge workers can be involved in decision-making. Although the integration of tasks across teams has the potential for redesigning the entire organization in terms of job descriptions or promotion schemes, management frequently lacks the commitment to change the entire control structure of the organization. It may take time to realize the potential of integrating tasks through teams. The potential may lie in a reduction of the number of middle managers or a change in the authority structure. It is, however, only when the full potential of communication technology has been realized that organizational structure changes become more visible. It may therefore take time to notice the longterm effect of increased communication technology use on organizational design. Full exploitation of communication technology goes beyond the organization and entails the building of interorganizational networks (Wang, 1997). Rather than relying solely on in-house information, organizations can benefit from the strategic information of other organizations. Two organizations may jointly develop new products, or source inputs using intranets established for the groups that need to interact frequently, or they may share information based on electronic data interchange. Business alliances are built based on the necessities of the organization, supported by new communication technology. Wang (1997) referred to this process as the ‘business alliance link’. Communication technology can facilitate the establishment of interorganizational ties, yet success depends on the inherent business necessities of such ties, and top management’s commitment to making them work. Since knowledge workers become accessible to a number of legally independent organizations, they are assets to a wider community, making them a valuable resource to be protected. In order to keep control over the assets that are invested into these new business alliances, organizations may establish a hierarchical structure of formal control for them. This depends on the significance of the alliance and the potential danger associated with losing key internal resources. In summary, communication technology can influence organizations through an incremental process starting at the individual level, transcending teams, affecting the entire organization, and eventually redefining the boundaries of the firm. The immediate effect of communication technology use may therefore only become visible after communication technology has been used intensively for a longer period of time. Although this model shows one ‘typical’ transformation process, there are unintended consequences in employing communication technology, which are not depicted. By using communication technology within organizations, there is

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a constant tension between the action of knowledge workers and the properties of the organization. This tension is reflected in the knowledge workers’ compliance with certain social norms of interaction. Yet, as users, they also create new norms of interaction by choosing to use a technology in an unintended manner, and thereby influencing the norms of the organization. By changing the social patterns of interaction, organizational design dimensions are affected. The use of communication technology will therefore result in intended and unintended consequences for organizations. The complex interaction between communication technology and organizational actors makes it difficult to predict the exact path of communication technology influence on organizations over time. In the best case scenario, the increased use of communication technology will lead to the ‘ideal’ organization, yet as Wang (1997, p. 89) has pointed out, ‘it is difficult, if not impossible, to determine … the ‘‘ideal’’ organization form for the future’. What we do know is that communication technology has enabled a more intensive flow of information, both vertically and laterally, which in turn has led to more differentiated models of organizations. Through communication technology, ‘adhocracies’, network organizations or virtual organizations have emerged, which differ in a number of design dimensions. This makes it, however, even more difficult to predict the ‘ideal’ organizational design.

MANAGERIAL IMPLICATIONS Although the search for the ‘ideal’ organizational form may never cease, it is none the less important to identify areas in which communication technology can make a contribution towards managers’ intentions, thus leading to more differentiated and situationally appropriate forms of organization. A first step in this identification process would be to analyze the organization from an information-processing perspective. This entails developing an understanding of the existing communication patterns within an organization in order to be able to locate a lack of linkages between knowledge workers. Relational Perspective to Organizational Analysis Since traditional organizational charts have difficulty in showing informal links between people (Mintzberg and Van der Heyden, 1999), it is impossible to indicate the potential for communication technology to create links between or across organizational units. As a result of the inability of traditional organizational charts to reflect adequately communication technology support, the relational perspective has been proposed as a new mode of organizational analysis (Ferioli and Migliarese, 1996). If organizations are viewed as networks of nodes

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and relations, then organizational actors essentially define the node, and relations define the links and formal borders. Relations – the links between two organizational actors – can be defined by the orientation towards a common goal that is organizationally relevant, the existence of a long-term relationship and support by several co-ordination tools (Ferioli and Migliarese, 1996). Communication technology is particularly useful in providing support to the relationship. Communication technology fosters the constitution of semi-autonomous nodes by supporting technical or managerial decisions. This can take the form of group support systems, which encourage group work collaboration. In addition, nodes can be grouped into criteria different from the traditional organizational chart, and thereby show the areas in which communication technology may be fully exploited for informal communication. If, for example, organizational actors are grouped by type of technical activity, the relational perspective can show how communication technology can enable faster information processing for research and development purposes, since organizational members with similar knowledge can exchange information easily. Based on the analysis of the organization from a relational perspective, areas where communication technology can have an impact on the organization should become more visible. The three main areas where communication technology is potentially expected to lead to changes are the horizontal and vertical design of organizations as well as business alliance links. Vertical Design Communication technology can help managers to steer the vertical design of organizations in the direction of their choice. Since communication technology has been shown to lead to both centralization and decentralization, to the reinforcement or the undermining of the existing hierarchy of authority, and to an increase or decrease in middle management, it is up to the decision-makers of the organization to determine the directional influence. Three criteria are proposed when deciding about the directional influence of communication technology on centralization versus decentralization. Looking at the decision information costs, the amount of trust top managers place in their subordinates, and the motivation of knowledge workers, managers can make an appropriate choice. For example, in a situation where local decision-makers have access to important information, which is difficult to transmit, and local decision-makers work hard but do not trust central decision-makers, communication technology should be employed to facilitate the decentralization of decisionmaking. Table 3.4 provides managers with criteria for analyzing organizational situations. These criteria determine the appropriateness of using communication technology for centralization or decentralization.

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Table 3.4 Managers’ criteria for centralization versus decentralization Centralization is desirable when

Decentralization is desirable when

Used information

Using remote information is valuable in decision-making, and the information can be communicated to central decision-makers at moderate costs

Local decision-makers have access to important information that cannot be communicated easily to central decision-makers or Remote information is not valuable in local decision-making or Remote information is valuable in decision-making and is very inexpensive to communicate.

Trust in decisionmakers

Central decision-makers do not want to (or cannot) trust local decision-makers to make important decisions

Local decision-makers do not want to (or cannot) trust central decision-makers to make important decisions

Motivation of decisionmakers

Local decision-makers work harder or better when told what to do by someone else

Local decision-makers work harder or better when they make decisions for themselves

Source: Adapted from Malone (1997).

Although managers may use communication technology to support decentralization or centralization, it can also be used to develop hybrid structures that are located in between the two extremes. ‘In the past, managers had to choose between a centralized and a decentralized structure. Today, there is a third option: technology-driven control systems that support the flexibility and responsiveness of a decentralized organization as well as the integration and control of a centralized organization’ (Applegate et al., 1988, p. 129). With the increasing availability of different types of communication technology such as electronic mail or group support systems and so on, managers can choose the systems that will fulfil their particular organizational needs. Rather than viewing communication technology as a determinant of structure, ‘technologies will be developed to meet the needs of the senior executives’ (Applegate et al., 1988, p. 132). The move towards a hybrid structure could not be implemented without advancements in communication technology. Managers may use communication technology to facilitate decentralization in the marketing department while enabling more centralization in the production department.

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Essentially, managers have to choose communication technologies in an organization with clearly-stated goals. Given the resistance to organizational change that will naturally accompany any new technological system, senior managers have to send clear messages regarding the strategic areas where they desire decentralization versus areas where centralization is desired. Since any change requires the cooperation and support of all its constituents, a hybrid structure will only develop if it is understood by those concerned. The impact of communication technology on middle managers depends on the level of penetration within the organization. The greater the level of communication technology penetration, the more likely it is that communication technology will have an impact on middle managers (Pinsonneault and Kraemer, 1997). Without some critical mass of penetration, however, the impact will be insignificant, as the capital investment will not be able to show its potential in reducing labour costs. In addition, communication technology has to be suitable for labour replacement in order to provide an economic rationale for information-led downsizing (Dewan and Min, 1997). Since the impact of communication technology is mainly in the informational role of managers, it has to facilitate informationrelated time savings in order to have an impact on potential downsizing. If the time savings are not realized, or the informational role simply cannot be substituted because of the need for human interaction, then a reduction in the number of middle managers is not warranted. As a first step, top management needs to create a high level of communication technology penetration before it is able to reap the potential benefits of downsizing. The impact of communication technology on middle managers is also mediated by the type of structural arrangement. In centralized organizations, where communication technology investment decisions are also centralized, the increased use of communication technology will probably lead to a reduction of middle managers, whereas in a decentralized organization it may lead to an increase in middle managers. In an organization where the structural arrangement of decision-making is incongruent, the effect on middle managers will be small. Thus, top managers should ensure the alignment of decision-making in various functional areas to benefit from increased communication technology use in the form of downsizing. The effect of communication technology on middle managers is, however, most likely to depend on the motivation of top management, since it is they who will decide upon the objectives of communication technology employment. If the goal is to reduce the number of middle managers, then communication technology is likely to serve that purpose. This is especially true when decision-making authority remains centralized, and top managers are in a better position to make key decisions regarding the various functional areas. In decentralized organizations, middle managers have a larger degree of control and may pull down

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tasks in order to avoid the potential downsizing effect of communication technology implementation.

Horizontal Design Based on the findings of this chapter, new communication technology seems to have a less significant impact on the horizontal design of organizations than might be expected. It has, however, the potential of changing decision-making by increasing the participation of groups from different organizational units (Wang, 1997). Given the advanced capabilities of new communication technology, changes in different group decision-making tasks are the prime target area of change. An increasing number of studies recently have pointed towards the efficacy of using an electronically-based group meeting system in a dispersed setting for group decision-making (Tan et al., 1999). The ability of such a system to incorporate both oral and written communication within one medium allows organizational members to perform a larger range of tasks – generating ideas, partially resolving conflicts, or sharing a greater amount of information. The advantages of using group support systems for decision-making lie in the anonymity and simultaneity of the system. Anonymity reduces the inhibitory effects of status differentials, thereby increasing the willingness of organizational members to express their ideas. Lower-status individuals may be willing to air their ideas without feeling apprehensive about potential reprimands. Simultaneity prevents one individual from dominating the idea-generation process and thereby helps to increase the number of ideas generated and peoples’ satisfaction with the outcome (Gallupe et al., 1992). In addition, group members in dispersed locations are able to generate ideas interactively. This may be particularly useful when people have different schedules because of different time zones or work loads. Together, these factors minimize disruptive behaviour and focus organizational members on improving the decision outcome. Group support technology ‘encourages equality of participation and discourages dominance by an individual member or subgroup, perceived member power and influence should become more distributed and decision quality should improve’ (DeSanctis and Gallupe, 1987, p. 605). Table 3.5 summarizes the positive effects of group support systems on organizations. Improvements in decision quality cannot, however, be expected for all decision-making situations. Although the use of electronic meetings by groups may lead to greater information exchange, it may not necessarily lead to improved decision-making. In order for electronic meeting systems to improve decisionmaking, groups have to be given sufficient time to study, assess and integrate the

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1. 2. 3. 4. 5. 6. 7.

GSS can increase the number of ideas generated during a brainstorming process. Meeting participants will be active rather than passive, thus increasing energy and group focus. Anonymity encourages participants to evaluate ideas more objectively. Anonymous constructive criticism improves the quality of ideas generated. It may increase buy-in to the final result of a group effort. It can make a well-planned meeting better, and can make a poorly planned meeting worse. It can reduce labour costs by more than 50% and project time by up to 90%.

Source: Based on Nunamaker et al. (1996–7).

new information before they are able to make a decision. It has been suggested that information-sharing be separated from decision-making, thus enabling organizational members to assess information before making their decision (Dennis, 1996). Providing more structure to group decision-making processes might be another way of improving the use of information once it has been shared. Electronic meeting systems are particularly useful in the case of creativity tasks requiring a search for solutions. The ability to focus on tasks is the skill that has been shown to improve a group’s decision quality, by adding rationality and a systematic approach to the decision process. But acceptance of a group’s decision has frequently been shown to have a low correlation with the quality of the solution. Quality is sometimes sacrificed in order to gain acceptance, suggesting a trade-off between performance and satisfaction. Since the communication technology itself cannot resolve this problem, designers, managers and users have to consider the purpose of the electronic meeting system before it is used. If the goal is to increase commitment to a decision, then group support systems serve the purpose of reducing the status effects seen during group decision-making. As noted above, lower-status individuals are likely to express their true opinions, which will encourage more participative management and thereby promote decision acceptance. If the goal is to act quickly in a rapidly-changing environment, group support systems may in effect hinder the ability to react promptly, since the influence of higher-status individuals is reduced. Hence it is desirable to employ group support systems to reduce status effects when time constraints permit, and when lower-status individuals can contribute to the decision quality or acceptance (Tan et al., 1998). In order to overcome the inherent trade-off between improved performance of electronic meeting systems and satisfaction by group members, Nunamaker et al. (1991) have suggested that the characteristics of the tool be matched to the characteristics of the group and its members, and the communication technology

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chosen with clearly stated goals in mind: ‘The key is to establish protocols and effectively frame group expectations prior to the meeting to produce both effective and satisfying outcomes’ (Nunamaker et al., 1991, p. 1343). Since electronic technologies have not been found to be successful in all decision-making situations, a combined media selection approach should be employed. For idea generation and the generation of alternatives when in the process of negotiating conflicts, new communication technologies can be used, but for reaching a final solution, face-to-face communication is more suitable. Although communication technology can potentially lead to the creation of informal lateral relations and improve decision-making in a number of situations, casual contact should not be ignored. Face-to-face communication performs an important role in organizations, particularly in reducing ambiguity to reach consensus. Although electronic communication systems may replace traditional channels of communication for certain tasks, and thereby increase efficiency, making face-to-face contact still matters, since people need to have the opportunity to signal that they can be trusted (Sarbaugh-Thompson and Feldman, 1998). Crossing Organizational Boundaries The results of the cross boundary analysis in this chapter imply that organizations that employ communication technology increasingly are moving from an era of large, vertically-integrated companies to small, independent companies that have co-operative linkages. According to Brynjolfsson et al. (1994, p. 1642), ‘the current downsizing of firms, the popularity of outsourcing, and the rise of value-adding partnerships is not simply a management fad, but rather may have a technological and theoretical basis’. In high-technology industries, this trend towards extensive networks of small companies is already visible. Businesses are spun off from large firms with the goal of focusing on the core business. Integrated firms are at a cost disadvantage, which is likely to lead to restructuring. Increasingly inexpensive communication technology allows companies to consider alternative forms of organizing which depend more on market co-ordination. Communication technology is often the catalyst for restructuring, and re-engineering, transformation projects that result in greater outsourcing, more partnerships and leaner internal staffing. The demand for co-ordination activity and the use of communication technology to facilitate co-ordination is the major driving force for the impact of communication technology on organizational boundaries. When co-ordination requirements are high, communication technology provides a useful tool in reducing co-ordination costs by making it easier for firms to assess the market for needed materials or information. Communication technology has the potential to reduce both internal and external co-ordination costs. By using communication

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technology to reduce internal co-ordination costs – for example, a reduction in communication costs, data transfer costs or expenditure for managing dependencies between activities – organizations can diversify or create business alliances and do not necessarily have to bear the costs of the increasing need for co-ordination. Communication technology investments can specifically become a powerful tool for co-ordination in diversified firms. In addition, communication technology reduces the transaction risks associated with opportunistic behaviour, by improving the monitoring facilities (for example, by forcing reports to be submitted electronically in real time). By using communication technology to reduce external co-ordination costs – for example, the costs of writing contracts, locating suppliers and other costs of market transactions – companies can create business alliances, which will bring a partner closer to the company. Communication technology does not always need to be employed to reduce organizational interdependence by reducing the costs associated with co-ordination; in fact, it can be used to increase interdependence. Increased interdependence facilitated by communication technology leads to more information-sharing and problem-solving (King, 1999). This is especially important for business alliances that cross organizational boundaries, such as joint research and development efforts between teams of individuals in different organizational settings. With communication technology, knowledge workers can develop new products or services jointly with other organizational members and thereby tap into resources that are commonly not available in the entity that the individual is working within. By crossing traditional boundaries, informal communication helps to solve complex problems that require the expertise of organizational members in different locations. This may eventually translate into new products, or solutions to existing problems. When co-ordination through communication technology becomes essentially free, it will become a less important factor in determining firm boundaries (Hitt, 1999). Rather than focusing on co-ordination as the main determinant of organizational boundaries, organizations will have to look increasingly to other assets such as knowledge, and the need to provide incentives to share knowledge as a determinant of firm boundaries. Incorporating the use of communication technology in an incentive scheme for knowledge-sharing may replace the co-ordination factor in explaining firm boundaries. In the future, boundaries will probably develop where it is difficult to use electronic mail or voice mail to share specific knowledge, requiring the increased employment of more interactive channels of communication which allow both written and verbal communication to be shared in real time.

4 Communication Technology and Organizational Learning Throughout the 1980s and 1990s, organizational learning achieved prominence among the ideas influencing management studies. The topic has attracted increasing attention, both in academic circles (Argyris and Schön, 1978; Shrivastava, 1983; Fiol and Lyles, 1985; Levitt and March, 1988; Huber, 1991), and in business practice (Hayes et al., 1988; Pedler et al., 1990; Senge, 1990; Garvin, 1993). One of the main reasons for this is the increasing pressure for change on organizations. Unfortunately, both the definition and the use of the term ‘organizational learning’ are still associated with considerable confusion (Edmondson and Moingeon, 1998; Easterby-Smith et al., 1998). The organizational learning field has the problem of trying to unify different theoretical approaches, while at the same time valuing the diversity that has evolved since its inception. With an increasing number of articles in the area of organizational learning and a lack of integration among theoretical perspectives, a variety of terms has accumulated which serve as multiple reference points for the organizational learning construct. Two main streams of literature have emerged, which can be classified as (i) behavioural adaptation to changing environments; and (ii) changes in the organizational knowledge base. While the first group focuses on change in behaviour, the second focuses on change in the state of knowledge,1 which creates the potential for changing behaviour. However, it is important to note that ‘change in behavior without a corresponding change in cognition, or change in cognition without a corresponding change in behavior, are transitional states since they create a tension between one’s beliefs and one’s action’ (Inkpen and Crossan, 1995, p. 599). This tension can only be resolved by integrating a change in behaviour at the same time as a change in cognition, so that beliefs and actions are in accordance with each other. ORGANIZATIONAL LEARNING AND INFORMATION PROCESSING One of the organizational learning concepts, which has integrated both perspectives, has been proposed by Huber (1991). He suggests that ‘an entity learns if, through the processing of information, the range of its potential behaviors is changed’ (Huber, 1991, p. 89). The processing of information is the cognitive dimension, while the change in behaviour refers to the behavioural dimension. The operationalization of the cognitive construct, which is an indicator of one of 81

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the organizational learning streams, is problematic, since it does not have tangible characteristics that would measure the effects of change in a person’s understanding. Daft and Macintosh (1981) have proposed that information-processing as an activity of organizational members can provide an indicator of change in the state of knowledge. According to Huber (1991), organizations learn when they increase their knowledge of action–outcome relationships by obtaining information that they recognize as being potentially useful. This is achieved through the processing of information (Daft and Weick, 1984). As a number of authors (Huber, 1991; Antal and Krebsbach-Gnath, 2000; Pentland, 1995) have pointed out, organizational learning encompasses the acquisition, distribution, interpretation and storage of information. Figure 4.1 shows the four learning processes. Information acquisition is the process by which information is obtained from the environment and added to the collective stock of knowledge within the organization. Information distribution involves sharing information sources among organizational members as it is needed or can be applied. Information interpretation refers to the process of establishing a shared understanding based on distributed information. Storing information plays a critical role in organizational learning, since socially accepted past experiences need to be accumulated for future use. The advantage of this framework is that it decomposes the overall learning phenomenon into a number of smaller and more observable processes. Although these processes are distributed over time and space, this classification makes the learning construct more readily identifiable. The ability to observe and identify these processes leads to a practical benefit: the diagnosis of ineffective or dysfunctional systems (Pentland, 1995). The constituent processes of learning help to isolate problems for which practical solutions can be found.

Information acquisition

Information distribution

Figure 4.1 Organizational learning processes

Information interpretation

Information storage

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To understand the nature of information processing, which is at the heart of learning, it is necessary to examine its origins. Research within the field of organization theory and communication suggests that there are two influences on information processing: uncertainty and ambiguity2 (Tushman and Nadler, 1978; Daft and Macintosh, 1981; Weick, 1979a, 1995). Galbraith (1974) proposed that, with increasing levels of uncertainty, organizational members process more information. According to Galbraith, uncertainty is the difference between the amount of information required to perform a task and the amount of information already possessed by the organization. Organizations acquire more data in order to reduce uncertainty. In contrast to uncertainty, ambiguity refers to the existence of multiple and conflicting interpretations about a situation within the organization (Weick, 1979b). When managers observe the environment, they often find that external information cues are ambiguous. This ambiguity may be a result of diverse interpretations by different organizational members, or it may be due to the inability of individuals to make sense of confusing information. As a result of ambiguity, managers are unsure about the consequences of that observation on organizational action. In order to resolve the ambiguity surrounding the information, there is a need to develop minimal shared interpretations in order to produce organized action (Donnellon et al., 1986). This may be achieved by negotiating a solution based on accumulated experience in order to establish mutual understanding. A major difference between uncertainty and ambiguity3 is the required information-processing response. Acquiring additional information through the process of search reduces uncertainty. Exchanging individual constructions of reality among organizational members to enact a solution jointly reduces ambiguity. Organizational members resolve disagreements based on ambiguity to arrive at a shared understanding. Thus, to reduce ambiguity, individuals within the organization have to define information jointly. Communication media vary in their capacity to reduce uncertainty or ambiguity. Therefore, media need to be matched with the type of information-processing task in order to enable organizational learning. Various media available to organizational members will be discussed to understand the role of media in fostering information acquisition, information distribution, information interpretation and information storage, and hence to support learning as defined by Huber (1991). Since the information-processing context connected with each learning process varies, managers need to match the context – that is, one of uncertainty or ambiguity – with the appropriate medium. MEDIA CHOICE Media choice refers to the choosing of channels of communication – for example, electronic mail for transmitting information. By using communication media,

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knowledge workers can reduce uncertainty or eliminate ambiguity, and thereby enable organizational learning. Yet media go beyond channels of communication embodying a constellation of features: ‘Features of a medium are both the objective and psycho-social characteristics of a medium that result from communication channel selection’ (Griffith and Northcraft, 1994, p. 273). Objective features of media include the speed of information transmission, the synchronity, ability to provide feedback, and so on (Nass and Mason, 1990). Psycho-social features are a result of collectively developed perceptions of contextually efficient media use (Fulk et al., 1987). A number of different media choice perspectives are portrayed briefly before they are linked to the information-processing tasks that are at the heart of learning. Media Richness When Lengel (1983) introduced the media richness concept, he suggested that media exhibit features that vary in the richness of information processed. The term ‘richness’ refers to the ability of media to change human understanding by clarifying ambiguous issues. For example, face-to-face communication, a rich medium, allows conflicts to be resolved by providing the communication partner with immediate feedback and visual cues. Since ambiguity is key to understanding the amount and kind of interaction appropriate for delivering a message (Trevino et al., 1987; Daft and Macintosh, 1981), tasks with a high degree of ambiguity require organizational members to choose media that are rich. Although empirical support for media choice theory has been growing (Steinfield and Fulk, 1987; Trevino et al., 1987; Schmitz and Fulk, 1991; Markus, 1994), new communication technologies such as electronic communication, teleconferencing and voice mail have challenged the original scale (see Chapter 2) developed by Daft and Lengel (1984). If the media richness scale does not explain media choice in its entirety once new communication technologies are included in the scale, there is a need to review the richness concept. This can be done in two ways: (i) by enlarging the traditional list of features proposed by Daft and Lengel (1984); or (ii) by adding a new dimension separate from the richness concept which enhances the theoretical perspective on media choice. If the traditional list of features proposed by Daft and Lengel (1984) is enlarged within a one-dimensional framework, no clear ranking of the various media emerges. Media may be high in one feature and low in another. Electronic communication is high on the ability to record messages and to address multiple people, yet it is low on the ability to convey multiple cues. The opposite applies to face-to-face communication. Therefore there is a need to enhance the theoretical perspective by adding a separate dimension, media scope.

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Media Scope Media scope involves two additional features: storage, referring to the ability to keep messages in memory; and reach, referring to the ability to address multiple people simultaneously. While rich media reduce ambiguity, organizational members need to use media that are high in scope to reduce uncertainty. The demand for information increases as organizational members work together on interrelated tasks, across organizational levels, and across time and space.4 The higher the demand for information from organizational members across organizational levels, time and space, the more relevant is the scope of a medium. Accessibility of another person in a different time zone (Swanson, 1987), and the ability to finish the task by sending the same message to several people instead of talking to them individually (Markus, 1994) may become as important as the ability of a medium to reduce ambiguity. This highlights the importance of media scope as a criterion for selecting media. A manager may use electronic mail, a medium high in scope, to communicate, because it is more important to reach a person in a different location within a short period of time, than it is to communicate face-to-face. It can therefore be argued that media scope represents an additional concept in determining media choice. The ability to keep messages in memory and the ability to address multiple recipients simultaneously reduce uncertainty by providing organizational members with wide access to information. The distinction between media richness and scope has been mentioned implicitly by Boisot (1995), where he suggested that (i) information abstraction or codification; and (ii) information diffusion are separate concepts that demand different types of support. Information diffusion makes information available to a larger population. For this purpose, media high in scope are useful. Information abstraction and codification demand cognitive investment and therefore require rich media. Figure 4.2 shows the trade-off between rich media and media high in scope. Based on analyzing the task in terms of the degree of ambiguity and uncertainty, media choice involves selecting a medium that matches the information-processing task. Since there is no ‘ideal’ medium, combining media richness and scope, media choice involves considering the type of information task, ambiguous versus uncertain tasks, and conducting a trade-off between the two concepts. Media Perception While media choice theory focuses primarily on matching the inherent features of media with task characteristics, it does not recognize the importance of the organizational context of use. Understanding the organizational context of media use is extremely important for learning, as choosing the correct communication

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High

Videoconferencing Telephone Voice mail Fax Electronic communication Formal written communication

Low Low

High

Media scope

Figure 4.2 The trade-off between media richness and media scope

medium ensures that the transmitted information can be integrated into the knowledge base. This is where social influence theory proposes an alternative view of media choice. Rather than viewing richness or scope as a cause of behaviour, these concepts are perceived as an outcome of social behaviour. The most comprehensive theory in this regard is the social influence model of technology use (Fulk et al., 1987; Fulk, 1993). It posits that media choice is not just a function of objective (rational) choice, but partly a social construction. Media use perceptions are social constructions resulting from social patterns of use, co-worker influences or organizational norms of media use. These factors determine media selection within organizations.5 Since the environment of organizations and social interactions vary between companies, media selection differs depending on the context. From this perspective, communication technology will not be adopted because of its invariant features, but rather because of individual attitudes or group norms towards various communication technologies. Media perception serves as a moderator to media choice based on features. Since media perception focuses mainly on the role of the social context within organizations, it increases or decreases implicity the costs of information acquisition, distribution, interpretation and storage, hence learning. The organizational norms or reward system are examples of contextual variables that affect media choice for information acquisition and distribution (Goodman and Darr, 1998). If there is a reward system in place that encourages competition between various departments, then knowledge workers are less likely to distribute information using widely accessible media. The opposite would be the case if rewards are

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Feedback Channel Source Language

Media choice

Storage Scope

Reach

Social patterns of media use Perception

Co-worker influences Organizational norms

Figure 4.3 Media choice determinants

given based on the sharing of information across units, since in this case organizational members would want to show that they are making a contribution. Thus, the specific influence of a communication technology is moderated by the perception among organizational members regarding appropriate media choice. Figure 4.3 summarizes the determinants of media choice based on media richness, media scope and media perception.

MEDIA CHOICE AND ORGANIZATIONAL LEARNING For media to foster organizational learning, they have to provide support to the processes of information acquisition, distribution, interpretation and storage. Media richness, media scope and media perception are all important factors to consider when choosing a medium to process information. The following section analyzes in more detail the ways in which media features or attitudes contribute to learning. It will be proposed that a match between information tasks and media richness, scope and perceptions contributes to learning organizations. Information Acquisition and Media Information acquisition refers to the incorporation of external information into the organizational knowledge base (MacDonald, 1995). The organization learns when information is acquired from outside the boundaries of the firm and integrated with existing information. The organization ‘must bring home this new information to be mixed with resident information to shape a novel pattern of knowledge into a package that can be used’ (MacDonald, 1995, p. 562).

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This process focuses on the breadth of organizational learning that is achieved by acquiring a large pool of external information (Huber, 1991). One of the challenges of information acquisition lies in the need to capture weak signals in the environment (Ansoff, 1975). Capturing weak signals involves the identification of threats and opportunities. Information acquisition which includes capturing weak signals (Ansoff, 1975) in strategically ambiguous environments demands the use of rich media. ‘When strategic uncertainty6 is high, personal sources may provide the direct understanding needed by senior executives to interpret unclear issues’ (Daft et al., 1988, p. 126).7 When acquisition is linked directly to interpretation, the use of rich media is necessary to make sense of the environment in order to be able to detect threats and opportunities. In this context, face-to-face communication, teleconferencing and the telephone provide multiple cues and allow for rapid feedback, thereby facilitating understanding. Task analyzability is an additional factor to be considered for media choice. Task analyzability refers to the way that individuals are able to respond to problems that arise in the process of task completion. ‘Analyzable tasks are those for which predetermined responses to potential problems and well-known procedures, are available and useful, because outcomes are well understood’ (Rice, 1992, p. 478). Unanalyzable tasks are those for which no suitable solutions are known ahead of time. Since the analyzability of a task makes reference to its degree of ambiguity, this determines the type of media required for learning. In situations involving unanalyzable tasks, Rice (1992) found some support for the hypothesis that rich media are used to acquire information. The unanalyzability of a task demands information processing that is ‘more personal, less linear, more ad hoc and improvisional’ (Daft and Weick, 1984, p. 187). This requires the use of rich media in order to arrive at solutions that are agreed upon by organizational members. In situations of analyzable tasks, media high in scope are suitable, since organizational members know how to respond if the type of problem is known. Under these circumstances, managers search for more information to be able to solve the problem that is a characteristic of an uncertain task, but not of an ambiguous one. In an empirical study, Lee and Heath (1999) found that managers had a slightly higher preference for rich (face-to-face and telephone – 44 per cent) over new communication technologies or written letters (41 per cent) when acquiring information to deal with complex problems. This was especially true when managers were keeping up to date on immediate and relevant issues. The more important the issue strategically for the organization, the more rich media were used by managers. In addition, managers perceived information received through rich media as being more comprehensible and more credible than non-rich media (78 and 61 per cent versus 22 and 39 per cent). The main reasons were the quality of

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interactions when using rich media. Interactive quality allows managers to ask questions and obtain more contextual information. Although rich media play an important role in information acquisition, Lee and Heath (1999) also found that managers prefer to receive information through multiple channels in order to reduce the potential distortion of receiving information from only one source. Media high in scope – for example, written documents – are particularly relevant when managers want to consider carefully the information in detail. In addition, in cases where managers have to make decisions in emerging areas for which little information is available and the area is rapidly changing, then written documents are consulted. These findings indicate that when managers seek information explicitly to eliminate uncertainties, they prefer to use media high in scope. When, however, they would like to exclude alternative explanations, they rely on rich media. For information acquisition, media perception is a less important moderator compared to the other learning processes – information distribution, interpretation and storage – since there is a larger degree of individual autonomy in using various media to acquire information from the outside. This autonomy enables managers to make choices with a relatively high degree of independence vis-àvis the organizational context. However, managers need to be aware of the media usage patterns of their communication partners outside the organization. Obtaining a report through electronic mail from an industry association, for example, requires knowledge about the availability of electronic mail within the association. In summary, it is suggested that different types of media are appropriate for learning based on information acquisition (Daft et al., 1992; Jones et al., 1988). Since ambiguous tasks demand rich media, while uncertain tasks demand media high in scope, one can conclude that effective media use for information acquisition depends on the perceived nature of the task. Figure 4.4 shows that both rich media and media high in scope need to be considered for information acquisition. Information acquisition

Richness and scope

Figure 4.4 Information acquisition and media choice

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Information Distribution and Media Through the distribution of information between organizational members, an organization is likely to develop increasingly varied interpretations of information. As Huber (1991, p. 102) argues, ‘it seems reasonable to conclude that more learning has occurred when more and more varied interpretations have been developed, because such development changes the range of the organization’s potential behaviors, and this is congruent with the definition of learning’. The sharing of information or joint experiences have been described by Nonaka and Reinmöller (2000) as the socialization process of knowledge creation. The main challenges for information distribution and sharing are spatial and hierarchical barriers between various functional groups or subcultures. Media high in scope, traditionally new communication technology, may help to overcome hierarchical and spatial barriers by increasing the likelihood of reaching organizational members across organizational levels, time and space. Sending information via electronic mail to the chief executive officer (CEO) for his or her information allows all organizational members to reach the CEO and does not involve the spatial constraints that face-to-face communication involves. In the face of high levels of work-related interdependence between organizational members, electronic mail, a medium high in scope, reduces co-ordination costs by obviating the need for physical proximity. This allows the widespread distribution of information and thereby contributes to organizational learning. Feldman (1987) found that the greater the distance between communication partners, the higher the proportion of messages that have been sent (or received) by electronic mail. By loosening the constraint of spatial proximity, electronic communication reduces the costs of signalling one’s interest, so that people who otherwise would not know that they share common interests can discover one another and communicate (Feldman, 1987, p. 95). By communicating with groups of people distant from his or her’s close network, a person has access to more ideas and information than would otherwise be true. Figure 4.5 shows that, for information distribution, media high in scope are generally more appropriate. Two of the dangers of overusing a medium that is high in media scope are potential information overload and a lack of consensus. These dangers affect the ability to process information and the establishment of shared interpretations that is one requirement for organizational learning to lead to action within organizations. Information overload refers to the inability of a unit’s capacity to process information adequately, while consensus refers to shared interpretations. These two concepts are linked. As organizational members become overwhelmed with increasing amounts of information, it becomes more difficult to establish shared interpretations of the vast amount of incoming information. Yet shared interpretations of information is necessary to enable the organization to

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Information distribution

Scope

Figure 4.5 Information distribution and media high in scope

act in accordance with the consensus reached. It is important to remember that organizational learning requires both consensus and diversity of interpretations (Fiol, 1994). Reaching consensus, in contrast to increasing diversity, frequently requires the inclusion of personal feelings to arrive at a shared understanding. So for this purpose, rich media are important. As Scherer and Tran (2000) indicate, emotional contagion emerges when interactions (through face-to-face communication) are high within a given group.8 For information distribution, media perception is an important moderator, since the reception of information depends on factors influenced by the social environment of the organization. Two important factors influencing the reception of information are organizational usage patterns and compatibility of media infrastructure. If there is a high degree of divergence in media infrastructure between sender and receiver, the sender cannot use all the media at his or her individual disposal to distribute information. A similar argument applies to usage patterns. A critical mass of users9 (Markus, 1994) has to exist within the organization in order that a manager may be reasonably sure that the information will arrive at most destinations. In addition, media perception is important, since symbolic cues are attached to different types of media. When, for example, the CEO of an organization announces the ‘best employee of the year’ award, a medium low in richness may not be sufficient to signal to other organizational members the significance the company attributes to personal achievements. Electronic mail may suffice to report on the unambiguous decision to reward an employee, but it may not be of enough symbolic value to motivate other employees to strive for similar recognition. Media perception will also be a result of the organizational patterns of media usage. Without a culture that is supportive of information exchange across units using new communication technology, it becomes difficult to capitalize on the potential for reducing the costs of information distribution. If individual users have few organizational incentives to distribute information electronically, then

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communication technology will not be able to facilitate learning. An organizational culture conducive to the exchange of information electronically may be a result of reward and performance systems, or the existence of small informal communities that already exchange information electronically. Although media high in scope may serve the purpose of distributing information widely, the repeated use of the same type of medium may be ineffective. According to Tourish and Hargie (1998), the main source of National Health Service (NHS) staff’s dissatisfaction regarding the reception of information from managers was a lack of face-to-face contact and too much written information. Overusing certain media can create confusion for organizational members about where the organization is headed, by focusing attention on less relevant issues. Thus not only the selection of certain media based on media perception, but also the amount of usage, is critical to learning. Information Interpretation and Media Interpretation is the ‘process through which information is given meaning’ (Daft and Weick, 1984, p. 294). Information interpretation as a subprocess of learning requires a certain amount of shared interpretation between individuals about the content of knowledge. Adding to this point, Huber (1991) argues that there is a need for a common or shared understanding among an organization’s units that various interpretations exist, thus requiring consensus about interpretations. One of the challenges for developing shared interpretations about information lies in the need for social interaction and collective ‘sensemaking’ (Weick, 1995). As Starbuck and Milliken (1988, p. 52) mention, sensemaking consists of understanding ‘incongruous events, events that violate perceptual frameworks’.10 In these situations, ambiguity is perceived as being caused by a lack of clarity, high complexity or a paradox making multiple interpretations possible (Martin, 1992). Since organizational members need to take action, contradictory conclusions about events require communication in order to arrive at a minimum shared understanding. Huber (1991, p. 102) suggests that the extent of shared interpretations of new information is likely to be affected by the richness of the media used to convey information. Media richness plays a crucial role in developing shared interpretation since rich media allow for both the sender and receiver of a message to develop a common meaning. Meaning is primarily created and negotiated as individuals retain cues from others and obtain feedback to help interpret information. This process is aided by the use of natural language, rapid feedback and multiple cues, all of which are characteristics of rich media. The anthropological literature has come up with similar findings, pointing out that the establishment of similar cultural patterns requires continuous first-hand contact (Czarniawska, 2000).

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Face-to-face communication, a rich medium, can change perceptual frameworks of organizational members within a specific time interval. Following a similar line of thought, Nonaka and Reinmöller (2000) speak of the ‘dialoguing ba’, the process of face-to-face interactions among a group of people. Weick (1995, p. 185) supports this suggestion by coming to the conclusion that ‘people need to meet more often. That implication arises from the reluctance with which people acknowledge that they face problems of ambiguity and equivocality, rather than problems of uncertainty.’ Through feedback and multiple cues in meetings, understanding can be checked and interpretations corrected. Daft et al. (1987) found that effective managers use rich media when developing a common understanding and thereby support the notion that richness is a determinant for the establishment of shared interpretations. In addition, Hedlund et al. (1998) found that face-to-face rather than computer-mediated communication allows for higher awareness of necessary information and higher group decision-making accuracy in tasks demanding consensus. This supports the need to use rich media for ambiguous tasks. By using rich media, the development of shared interpretations within the organization is facilitated. According to Donnellon et al. (1986), a minimum of shared interpretations within the organization is necessary to produce organized action, and hence organizational learning. Figure 4.6 shows that, for information interpretation, rich media are appropriate. Although rich media are generally perceived to be more appropriate for information interpretation, technological advancements have recently allowed a renewed discussion of the potential role of media high in scope in supporting this particular learning process. The main issue in discussing communication technology to support information interpretation is how to represent and share interpretations (Hine and Goul, 1998). With the advance of causal modelling, various approaches have been proposed to represent knowledge workers’ strategic interpretations. An example of a technological approach to information interpretation is the organizational learning support system (OLSS), a communication-technology-based Information interpretation

Richness

Figure 4.6 Information interpretation and rich media

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tool that facilitates information sharing. According to Hine and Goul (1998, p. 126) an OLSS requires a set of characteristics which include: (i) the development of individual interpretations; (ii) the sharing of individual and group interpretations; (iii) the detection of conflicts and commonalities among the individual and group interpretations; and (iv) the consolidation of multiple interpretations into a global interpretation. In order to enable organizational members to work with an OLSS, the technology has to provide a common context and grammar to allow the discussion of interpretations. Based on this, individual interpretations need to be represented, which then can be used to compare these interpretations. Although Schweiger et al. (1989) have found that conflict-based approaches yield better decisions than those that are consensus-based,11 Hine and Goul (1998) suggest that an OLSS should include both the detection of conflicts and commonalities of interpretations. This should be followed by the synthesis of interpretations. Finally, the development and maintenance of a storage location is an additional characteristic that has been suggested for OLSS in order to assist organizations ‘in knowing what they know’ (Hine and Goul, 1998, p. 127). Results from the use of the OLSS system suggest that individuals using the technology to support their meetings found that the presentation of expert advice and question/answer/pairs stimulated discussion, being placed in conflict with other groups stimulated discussion, and the group technology experience was positive. The use of the OLSS did not, however, translate into considerable differences in task performance. Since communication-technology-based learning systems are still in the early stages of development, these findings indicate promising avenues for the future (Hine and Goul, 1998). Currently, rich media such as face-to-face communication remain the most viable option for developing shared interpretations in ambiguous situations. This has been confirmed by empirical work which has shown that media richness is the most important criterion for media selection in ambiguous tasks (Carlson and Davis, 1998). Yet other choice criteria may intervene. These include criteria such as perceptions of users about the organizational context, communication partners, or the type of relationship between communication partners. Moreover, job and time pressure, geographic dispersion, individual media experience or attitudes of colleagues are additional factors that influence the context of media selection. A combination of geographic dispersion and job and time pressure, for example, may demand the use of a medium low in richness in order to complete the task when the other person is not available for face-to-face contact. Information Storage and Media Information storage refers to accumulated information from an organization’s history that can be used for decision-making (Walsh and Ungson, 1991).

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Organizations store information on a routine basis in the form of standard operating procedures (March and Simon, 1958), routines, rules12 and scripts (Nelson and Winter, 1982; Kieser et al., 2000). Storage involves the retention of information in various physical or mental locations ranging from individuals to organizational routines to archives. According to Huber (1991, p. 106), storing information plays a critical role in organizational learning, since the effectiveness of the organization’s memory influences the other learning processes. When past information is stored within the organization, it may not have to be acquired from the outside, but may be readily retrievable and available for distribution, and comments on the stored information may facilitate interpretation. It is proposed that media choice for information storage depends on the type of location. Individuals retain information mentally based on their own experiences and observations about action–outcome relationships. Walsh and Ungson (1991) propose that individuals have the cognitive capability to understand the ‘why’ of a decision. Since the ‘why’ of a decision ‘will distort and decay as it is passed over time from person to person’ (Walsh and Ungson, 1991, p. 68), it is important to use rich media for storing information with individuals. Face-to-face communication, a rich medium, minimizes the amount of distortion and enables the storage of information in the cognitive repositories of individuals. The degree to which these cognitive repositories serve learning depends on the interconnectedness, integration and trust of individuals within the organization (Kieser et al., 2000). Culture has been defined as learned ways of perceiving, thinking and feeling about problems that are transmitted to members of an organization (Schein, 1985). Routines are one of the forms in which cultural information is stored. Organizational routines reduce transaction costs associated with search and experimentation. They can facilitate learning by providing information on how to deal with the occurrence of typical problems, by increasing transparency through the provision of contextual information, by ensuring the analysis of deviations, and by allowing organizational members to participate in their establishment (Kieser et al., 2000). Organizational members develop routines over time through a process of sharing interpretations. For this purpose, rich media are required, since a shared definition of information is primarily created through natural language, rapid feedback and multiple cues. Rich media can also help to enhance people’s commitment and involvement in a collective learning process, hence the interest in teams as an organizational mechanism to promote learning. One of the dangers of using rich media is the creation of conflicting interpretations of events, which would lead to deviant memories and biases maintained by subcultures. This could lead to preferential recall of earlier memories, or to the repression of information from memory (Scherer and Tran, 2000).

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When the memories of individuals fail, organizational members may also turn to archives as sources for retention. Organizations use various forms of archival systems such as annual reports, performance indicators, benchmarking reports or database systems that chronicle an organization’s past. By storing information in archival systems and making it universally accessible, organizational members are more likely to retrieve it, thereby increasing the possibility that a large number of organizational members may use it. Since media high in scope support the archiving of information and thereby keep track of the organization’s past, information storage can be enhanced. The archival storage of information also enables organizational members to follow the pattern of their negotiation with others over time. As a result, the identification of common interests among organizational members is facilitated. This identification process may lead to jointly defined solutions (Griffith and Northcraft, 1994), based on which shared interpretations develop. Stored information can contribute to the development of shared understanding by enabling an individual’s perceptual framework to be traced over time and thereby build on existing knowledge. Electronic mail allows organizational members to trace their messages over time, therefore media high in scope seem appropriate for storing information in archival systems. In summary, learning based on information storage demands the use of media high in scope as well as rich media, depending on the type of storage location. If individuals or organizational culture are storage locations, then rich media are necessary to facilitate learning. The use of rich media enhances learning by keeping track of past decisions, cognitive maps or frames of references. The use of media high in scope fosters learning by storing information within database systems or archives. Figure 4.7 shows that both rich media and media high in scope are necessary for information storage. Media perception plays a critical role for storage locations where rich media are appropriate. If individuals are the storage location, media perception has an important impact on media choice, since the surrounding organizational norms of a Information storage

Richness and scope

Figure 4.7 Information storage and media choice

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medium’s use influence the way information is stored in the minds of individuals. For the development of organizational routines, media perception is important, as consistency of information-sharing can only be guaranteed if the medium used for information-sharing is consistent with the organizational norms of the medium’s general use within the organization. Media perception may not be as important for storing information in archival systems, since the social context of the organization has a lesser influence on storing information in documented form. The Link between Learning Processes, Type of Situation and Media Choice The type of medium to be chosen for organizational learning depends on the factors that influence each subprocess of learning. For example, in a situation of capturing weak signals from the environment, choosing rich media is important for information acquisition. Table 4.1 summarizes the relationship between each process of learning, the factors influencing the learning situation, and media choice. Information distribution primarily demands the selection of media high in scope, while information interpretation generally demands the selection of rich media. For information acquisition and storage, the choice of an appropriate medium depends on a number of factors. In order to identify opportunities and threats in the environment, or to find solutions to unanalyzable tasks, rich media are appropriate for information acquisition. For analyzable tasks, media high in scope should be chosen for information acquisition. Storing information through individuals or organizational routines demands the use of rich media, Table 4.1 Match between learning processes, learning situation and media choice Learning process Information Acquisition

Factors influencing learning situation

Media richness or media scope

Importance of media perception

Capturing weak signals Unanalyzable tasks Analyzable tasks

Media richness

Medium

Media scope

Low

Information Distribution

High interdependence Hierarchical and spatial barriers

Media scope

High

Information Interpretation

Consensus

Media richness

High

Information Storage

Individuals, routines Database systems, archives

Media richness Media scope

High Low

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while storing information in archival or database systems involves using media high in scope. In addition to choosing media based on their invariant features, managers need to pay attention to the organizational context within which the media are used. Organizational norms for various media may have developed over time, which undermine the use of certain media. It would therefore be more appropriate to consider the organizational context before making a final choice. Media perception has the most important impact on information distribution and interpretation, as well as on storing information in individuals or organizational repositories. Media perception is less important when acquiring information about analyzable tasks or storing information in database systems. It was proposed that media ought to be selected based on the type of information-processing task associated with learning. Since the underlying informationprocessing task for each learning process is fundamentally different, a match between learning process and media richness and scope is necessary to foster learning within organizations. Although media richness and media scope are considered to be two important criteria of selection, these variables are sometimes overridden by the presence of other needs, mainly referring to the social context of media use. Therefore, media perception has its part to play in all learning processes. For information distribution, information interpretation and information memorized by individuals or in organizational routines, media perception plays a critical role, as it is during these processes that the organizational context of media use is important. This is consistent with the findings of Zack and McKenney (1995), who argue that task requirements are only one imperative for media choice. Social perception was found to be the other imperative that was equally important.

CASE STUDY 4: THAI KNOWLEDGE WORKERS’ MEDIA CHOICE FOR LEARNING TASKS In an attempt to validate the theoretical foundations of media choice for information acquisition, distribution, interpretation and storage, Thai managers in middle and top management positions were asked to select an appropriate medium for different communication scenarios. These communication scenarios reflected the four learning tasks proposed by Huber (1991). The media options were face-to-face communication (ftf), electronic mail (em), telephone (tel), fax, voice mail (vm), videoconferencing (vc) continued

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and letters (let). Looking at the availability of these media within the studied organizations, it was found that voice mail was readily available to only 35 per cent of all managers, and videoconferencing was readily available to 10 per cent. This means that a large number of managers did not have access to some of the newer communication technologies. Given this context, the findings show that, when acquiring information, Thai managers selected electronic mail as the preferred medium. This was followed by telephone and fax. Newer communication technologies, particularly voice mail and videoconferencing, were not commonly chosen for the purpose of acquiring information even within those organizations where the medium was readily available. When distributing information inside the organization, Thai managers preferred the telephone followed by electronic mail, face-to-face communication and fax. Letters, voice mail and videoconferencing were not used for the purpose of information distribution. For both information acquisition and distribution, managers clearly distinguished between a group of media suitable for the task versus a group of media less suitable. The diagrams show the preferences of Thai managers for information acquisition and distribution.

Not preferred

5.0

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4.0

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Preferred

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1.0 ACQEM ACQTEL ACQFAX ACQFTF ACQLET ACQVC ACQVM

1.0 DISTEL

DISEM

DISFTF DISFAX DISLET

DISVM

DISVC

Media preference for information acquisition and information distribution

The proposed framework in this chapter suggested that the choice of medium for information acquisition depends on the type of task. It is therefore not surprising to find that both rich media and media high in scope were chosen for acquiring information. Although electronic mail, continued

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5.0

5.0

Not preferred

Not preferred

a medium high in scope, figures among the preferred media, rich media seem to follow as second choice, reflecting their importance for acquiring information. The framework also suggested that media high in scope were primarily used for the purpose of distributing information. The findings indicate that both rich media and media high in scope were equally important for Thai managers when distributing information. This may indicate that distributing information is frequently tied to information interpretation which demands rich media. For information interpretation, face-to-face communication and telephone clearly emerged as the preferred media. Since rich media have been proposed for information interpretation and face-to-face communication and telephone are among the richest media, these results are consistent with the proposed framework.

4.0

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2.0

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Preferred

Preferred

4.0

1.0 INTFTF INTTEL INTEM INTFAX INTVC INTLET INTVM

1.0 STORFAX STOREM

STORTEL

STORLET

STORFTF

STORVC

STORVM

Media preference for information interpretation and information storage

For the purpose of storing information, fax and electronic mail were chosen most frequently. Yet, it is difficult to distinguish between a group of media clearly preferred for this task. The framework suggests that storing information requires both media high in scope and rich media depending on the storage location. The Thai managers’ preference for fax and electronic mail emphasizes the importance of media high in scope. Specifically, electronic mail which encompasses the ability to reach multiple people and keep information in memory, characteristics of media high in scope, has been found to be relevant for storing information. Idea generation Conflict resolution Consensus continued

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Looking at the richness perception of the various communication media, it was found that face-to-face communication was clearly seen as the richest medium (low mean score), followed by the telephone. All other media received an average rating (high mean score), which indicates little difference in terms of richness. 4.5

4.0

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2.5

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Mean

1.5

1.0 FTFRM

TELRM

EMRM

VCRM

LETRM

VMRM

FAXRM

Media richness perception

KNOWLEDGE DEVELOPMENT AND COMMUNICATION TECHNOLOGY While Huber (1991) is a representative of the organizational learning field that mainly focuses on how information is acquired, distributed, interpreted and stored, the more recent stream concentrates on how new knowledge is developed (Nonaka, 1991).13 With the expansion of the organizational learning field into knowledge development, the term ‘knowledge’ has become increasingly important. This is reflected by a growing number of contributions that coined or use the term ‘knowledge management’ (Probst et al., 1997; McDermott, 1999; Sarvary, 1999). Although communication technology can enable learning by matching the type of information-processing task with the appropriate medium, new communication technology has been found to play a less significant role than is conventionally accepted, particularly for knowledge development (Earl and Scott, 1999). This is the case because new communication technology is particularly weak at supporting information interpretation, which is important for the development of knowledge. The reason for the weakness of new communication technology in supporting information interpretation is that interpretation is essentially a human act that involves thinking and creating at a given moment.

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Knowledge develops within a community of knowledge workers as it circulates throughout the community and crosses the boundaries of ‘old and available knowledge’ (McDermott, 1999). For this purpose, face-to-face communication remains the prime form of interaction. Since knowledge development involves the thinking capacity of knowledge workers, new communication technology cannot be the central focus of knowledge management systems: ‘The great trap in knowledge management is using information management tools to design knowledge management systems’ (ibid., p. 104). The findings of this chapter have shown that traditional communication media are just as important, if not more so, for various learning tasks, particularly information interpretation. Thus new communication technology cannot just replace traditional media for knowledge development. New communication technology does, however, add new dimensions to communication. Thus, they can be seen as a supporting tool that enriches the communication options and enhances the thinking capacity of individuals. The difference between information and knowledge is fundamental for the use of new communication technology. Unlike information, knowledge is contextdependent, connected to human values and relational. Knowledge is information plus the causal links that help to make sense of the information. To support knowledge development, new communication technology has to establish and support these links. These can be relational links between knowledge workers to allow them to make sense of information, or links in the form of computer-based connections between different sources of information. Since new communication technology can provide tools for establishing and supporting links between information, they provide a starting point for knowledge development (Sarvary, 1999). New communication technology can, for example, be used to support information distribution, yet knowledge workers have to use more traditional media to make sense of the distributed information to enable it to develop into knowledge. Essentially, communication technology can inspire information sharing, yet it requires human beings to realize their potential. This is the case because knowledge involves thinking about the information. New communication technology can also play a critical role in raising the consciousness of existing links within the organization, since its implementation and use requires renewed thinking about the entire process of information acquisition, distribution, interpretation and storage. Given renewed thinking about these processes, communication technology implementation may unleash human thought that leads to the development of knowledge. Given the importance of human thinking capacity in knowledge development, leveraging knowledge requires a combination of human exchange and communication technology support. The challenge is to build communities of knowledge

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sharing that are supported by new communication technology and that engage in thinking rather than copying (McDermott, 1999). Knowledge management systems have been described by chief knowledge officers as 20 per cent technology and 80 per cent cultural change (Earl and Scott, 1999). This means that a knowledge management system consists of a communication technology and an organizational infrastructure to support the development of new knowledge (Sarvary, 1999). For the organizational infrastructure, appropriate incentive schemes, an open organizational culture, key people and teams need to be readily available to support the development of knowledge. For the communication technology infrastructure, access to a wide range of communication tools is necessary. Communication technology can be viewed as a knowledge development tool that is capable of capturing and making better use of both explicit and tacit knowledge. Yet, it has to be supported by the organizational infrastructure to be functional (McDermott, 1999).

MANAGERIAL IMPLICATIONS The proposed framework of matching learning processes to media has implications for media users, top managers and communication technology architects. Viewing communication technology as an enabler of learning allows media users – knowledge workers – to make more informed decisions about the appropriate use for various learning tasks. Studying the type of learning task before selecting a medium ought to lead to an improvement in a knowledge worker’s performance by finding an appropriate match between medium and information task. For information-system architects, viewing communication technology as an enabler of learning requires a feature-based understanding of media. This allows information-system architects to make more informed implementation decisions once they are aware of the learning purpose of new communication technologies. If top managers view communication technology as an enabler of learning, they have to develop the necessary vision to create an organizational context conducive to information-sharing through new communication technology. Without this context, the technology itself will not be able to develop the organization into a learning organization. Thus all parties need to contribute in order to create a learning organization. By increasing the media feature and perception awareness of knowledge workers and the user context awareness of informationsystem architects, and link these with the vision of top management, the likelihood will increase that communication technology will be able to contribute to the various learning processes.

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By matching different learning processes with the media choices of knowledge workers, communication technology can be viewed as an enabler of learning. Viewing communication technology as a managerial enabler rather than choosing between different communication media will be the central focus of this section. This involves discussing the circumstances of employing communication technology and presenting the advantages and disadvantages of communication technology implementation. Communication Technology as Enabler of Organizational Learning Since communication technology is ‘a package of how people should work differently’ (Markus and Benjamin, 1997, p. 58), it is an inherent enabler of learning within organizations, particularly during the process of communication technology implementation. The implementation of a groupware system is, for example, an occasion in the transformation of organizations intended to enhance the organizational knowledge base. In order that the implementation can act as a learning tool, communication technology has to be viewed as such. Ultimately, knowledge workers have to understand the idea of using communication technology for the purpose of learning, or the desired result cannot be accomplished. With communication technology implementation, it is tempting to distance the technology from the process of changing people, since technology-related change seems more objective than people-related change, yet technology will not work unless users enable the technology to work in the intended ways. This requires viewing the implementation of communication technology as a process whereby different constituents interact to enlarge the organizational knowledge base. Taking a process-orientation enables the constituents gradually to develop an understanding of the capability, necessity and intention of the communication technology, and thereby cooperate in the establishment of communication channels that enable information acquisition, distribution, interpretation and storage. In the past, communication technology implementation was linked to the belief that the roles of the various constituents within the organization are clearly defined – executives provide the resources and logic for implementing communication technology, information system specialists select the technology, and users are expected to produce the desired results. Recently, however, it has been suggested that, specifically, the communication technology change agents – top management and information system specialists – need to exhibit alternative roles: they need to facilitate the empowerment of knowledge workers to use communication technology and advocate its use (Markus and Benjamin, 1997). Knowledge workers should, however, not be empowered by communication technology but about communication technology,

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which means that users have opportunities of applying communication technology for the purpose of building the organizational knowledge base. This shows that groups must acknowledge explicitly, describe and diagnose their shared history, social context and pattern of interaction before attempting a direct intervention through communication technology (Zack and McKenney, 1995). By diagnosing the social context before implementing the technology, the interactional requirements and constraints have been analyzed, allowing the technology to challenge existing patterns of information flow. The goal is to create a pattern of information flow which allows for the creation of knowledge throughout the organization. Forces in Communication Technology Implementation Although communication technology can be viewed as a tool for learning, its success depends on the ability to identify the different factors that enable and constrain the implementation and use of communication technology. Without the identification of the conditions that impede and facilitate organizational learning, communication technology is frequently viewed as a static instrument. This limits the potential use of communication technology in enabling learning, since the process of implementation requires an understanding about the involved complexity and dynamics. Since social processes, such as learning, are situated in a particular time and space context, it is important to analyze the contextual conditions that have an impact on information acquisition, distribution, interpretation and storage before proceeding with communication technology implementation. Table 4.2 summarizes some of the frequently mentioned forces involved during communication technology implementation. Managers can use this type of analysis before Table 4.2 Enabling and constraining forces for communication-technology-based learning Enabling forces of communication technology implementation Compatability between organizational context and communication technology Existence of dedicated resources to provide support Existence of mutual trust Existence of mutual influence Recognition of the need to use communication technology

Constraining forces of communication technology implementation Increased complexity of communication options Limits of communication technology in storing information Lack of consideration of human– technical relationship Pressure for success Unanticipated responses from competitors or customers

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implementing communication technology in order to gain an understanding about the dynamics of the organizational context. Enabling Forces According to Orlikowski and Hofman (1997), there are two sets of enabling conditions for communication technology implementation: (i) aligning key change dimensions; and (ii) dedicating resources to provide ongoing support for the change process. Aligning key change dimensions implies creating compatibility between the technology, the organizational context and the change model used to manage the implementation. When the communication technology is treated as a black box that allows little flexibility to organizational users, then an ad hoc change approach may be more appropriate. If, for example, the new communication technology (for example, electronic mail or Lotus Notes) requires collaboration between individuals, and the organizational culture is one of competition between subunits, then the communication technology can do little in itself to support more information distribution within the organization. Therefore, managers may have to adjust policies and incentives to meet the requirements of the new communication technology to better align the organization with the intended use and capability of the technology. In addition to the alignment of communication technology, context and change model, resources in terms of time and money are crucial for communication technology to support learning. Since the implementation of communication technology is a long-term investment, key individuals need to be assigned to keep track of technology use over time and to initiate organizational and technological adjustments that will take advantage of identified opportunities and alleviate problems. Without managers committed to this role, communication technology may not be able to provide the expected value. Another factor enabling communication technology to serve as learning tool is to develop trust within the organization. Nelson and Cooprider (1996) mention that trust, a set of expectations shared by all those in exchange, has an impact on the distribution of information and the existence of shared knowledge. By alleviating fear of the unexpected and facilitating interactions and involvement, trust encourages a climate conducive to the sharing of knowledge. It increases understanding between communication partners. Trust is developed by working together repeatedly to develop mutual goals, and sharing expectations through communication. According to Nelson and Cooprider (1996), the perception of increased levels of mutual trust between groups in exchange leads to increased levels of shared knowledge between groups. In a similar way to trust, mutual influence – the ability to affect key policies and decisions of one another – also has an impact on the existence of shared

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knowledge. When groups engage in joint work, they can influence each other to achieve interdependent outcomes. Influence develops through reciprocity. In exchange for contributions, organizational members expect payback. Through ongoing exchange of information, where individuals seek support for their ideas and accept the ideas of others, cognitive perceptions are exchanged, leading to shared knowledge. Thus the perception of increased levels of mutual influence leads to increased levels of shared knowledge. In addition to these enabling factors, it has been found that communication technology will have a more profound impact when the organization is in a crisis – a situation of reorientation (Pinsonneault and Rivard, 1998). When an organization experiences severe competition or a rapidly changing environment, the need to change, and thus deviate from existing social patterns of interaction, is higher. Since reorientation contexts are characterized by the desire to ‘do things differently’, increased communication technology use may result in substantial modifications of the organizational knowledge base. In these situations, communication technology has a greater chance of making a profound impact more quickly. Situations of reorientation essentially create a higher level of willingness to use communication technology for the purpose of learning. Constraining Forces Although communication technology has been found to have the potential to change organizational behaviour by decreasing response time, by speeding up information processing and altering the time and place of work, there are unavoidable second-order effects that may constrain learning (Lucas and Olson, 1994). These effects relate to the increased dependence on communication technology, the stimulation of unanticipated responses from competitors or customers, or the need to manage a more complex organization. These may hinder learning taking place. If new communication technology is implemented, knowledge workers will have access to a larger pool of communication tools, thus increasing the complexity of media choice. This may lead to an inappropriate choice of communication media for information sharing, which may result in the inability of organizational members to use the shared information. Thus the increased complexity of a larger number of communication options hinders the development of a shared organizational knowledge base. Communication technology will not serve as a learning tool if managers do not give careful consideration to the design of the human–technology partnership (Gill, 1995). Lack of bidirectional channels of communication which increase the richness of the information flow have been found to hinder organizational learning. In addition, communication channels need to be updated continuously to

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assess their ability to support the work of organizational members. Only those tasks can be automated that do not require human cognitive abilities. Another constraint for learning arises from the failure to use communication technology effectively at an early stage. This is related to the pressure for immediate success. Since organizations are faced constantly with external pressure, organizational members find it difficult to spare the extra time, energy and resources to identify the problems inhibiting the effective use of communication technology (Tyre and Orlikowski, 1994). In addition, established patterns of use in the early period of introduction are difficult to revise, as organizational members adapt themselves quickly to their new communication technologies. This constrains exploration. Once functions have become habitual or automatic, organizational members resist changes to communication technology use. Although the new technology may have initially been intended to lead to more information distribution, evaluations may lead to an adaptation of expectations regarding actual achievements or the capability for them, thereby lowering the standard set. Once the initial enthusiasm of organizational members for the new communication technology has waned, it becomes difficult to adjust the technology. Strategies for Supporting Communication-Technology-Based Learning In the following section, considerations in facilitating communication-technologybased learning are mentioned. These considerations entail changing the existing mindset of knowledge workers, designing incentive systems for information exchange, matching the technology to the information processing task, creating forums for knowledge development, and paying attention to the timing of communication-technology implementation. Changing Existing Mindset of Knowledge Workers In order for communication technology to serve as a learning tool, knowledge workers need to be prepared to use it for the purpose of information acquisition, distribution, interpretation and storage. This involves changing people’s mindset and creating the willingness to use communication technology as a facilitator. Without the willingness to apply communication technology to enhance the organizational knowledge base, the instrument will not serve its purpose. Thus the first and most important step is to change the existing mindset of knowledge workers to accept communication technology as a learning tool. It is top management’s responsibility to encourage knowledge workers to take this first step. It is easier for managers to create this willingness in a crisis situation, as organization members are aware of the danger of failure, so they may be more ready to accept new practices within the organization at such a time.

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Design Incentive Systems for Information Exchange Creating the willingness of knowledge workers to use communication technology effectively for the purpose of acquiring, distributing, interpreting and storing information involves designing incentive systems. These incentive systems should reward individuals and teams who use communication technology for the purpose of developing the organizational knowledge base. Measurement instruments which may serve this goal are performance evaluations. By incorporating the extent to which individuals use communication technology for the purpose of developing the organizational knowledge base into the performance evaluation instrument, individuals and groups are likely to actually develop knowledge. According to Hitt and Brynjolfsson (1997), incentive instruments to foster the effective development of knowledge can be described in terms of the degree of observability from directly observable actions to merely goal alignment. 







Directly observable Actions are directly verifiable by an outside party or they can be deduced from data. An example of an effective incentive system in this situation is a piece-rate performance incentive. Assessed by supervisor Actions can be verified by the decision-maker’s supervisor, but not by an outside party. An example of an effective incentive system in this situation is job promotion. Assessed by peers Actions can only be judged by teammates, whereby the team punishes those that do not fulfil their part of the work. Peer pressure would be an incentive for individuals to comply with the interests of the company. Goal alignment Actions cannot be verified by supervisor or peers. Creating a sense of shared vision throughout the company may be the sole mechanism of aligning the goals of individuals with those of the organization.

The greater the degree of observability, the easier it is to measure the development of the organizational knowledge base. In order to create an organizational culture conducive to the exchange of information, incentive systems having a higher degree of observability should be employed initially. This is the case because incentive systems need to be visible throughout the organization in order to function as drivers of behaviour. Timing of Communication-Technology Implementation Although the importance of the temporal and spatial context in learning has already been mentioned, it is particularly valuable to consider the timing of communication-technology implementation (Eveland and Bikson, 1987; Tyre and Orlikowski, 1994). Tyre and Orlikowski found that the purpose for which communication technology is employed can only be moulded within a ‘finite

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window of opportunity’ (ibid.). This means that after an initial period of introducing new communication technology, during which knowledge workers find it relatively easy to make changes to the way the technology is being used, adapting the communication technology to serve other purposes becomes difficult. For example, if the communication technology has not been able to show its benefits for information distribution in a competitive environment between organizational subunits at an early stage, it will be difficult to redress this situation after a certain amount of time elapses. As Tyre and Orlikowski (ibid., p. 105) mention, ‘users quickly settled on a computing environment and actively worked to maintain its stability’. Making adaptations to communication technology use become increasingly difficult as the technology becomes embedded and routinized within a given user environment. An opportunity to rethink the implementation of a new technology arises when a disruptive event such as a change in manager, a change in project requirements, the breakdown of the technology itself, or an outside event, occurs. These events can lead to advances in communication-technology implementation for the purpose of learning at later periods. For example, if the communication technology has already found its place in the organization, a change in manager threatens to disrupt the habits and procedures, and thus presents a window of opportunity for making adaptations. Since these windows occur episodically, triggered by discrepant events or new discoveries on the part of the user (Tyre and Orlikowski, 1994), managers have to encourage adaptation of the communication technology by framing the interruptions as noteworthy. Rather than ignoring these instances, managers have to make a conscious effort in actively using the opportunities from disruptions to enable the use of communication technology as learning tool. Create Opportunities for Developing the Knowledge Base Since the development of the organizational knowledge base is the ultimate goal of learning, it is important to create opportunities for knowledge creation. Describing knowledge-intensive firms that employ all types of sophisticated communication technology, Boland and Tenkasi (1995) propose five classes of electronic communication forums as enablers of knowledge creation. These are: task narrative forum; knowledge representation forum; interpretative reading forum; theory building forum; and intelligent agent forum. Task Narrative Forum Within this forum, task experiences are codified explicitly through multimedia, using video and audio – for example, videoconferencing. By making the implicit transferable to the listener and overcoming temporal and spatial limitations, knowledge can be shared with a larger audience. The task narrative forum primarily serves the purpose of information distribution.

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Knowledge Representation Forum This forum should be established to focus on building a joint understanding of cooperative efforts depicted through various documents in use within the organization. Documents are hyper-linked through groupware – for example, group support systems. By providing visual representations of the organizational situation, problems or objectives can be understood more easily by a wider public. This forum helps in information interpretation of stored information. Interpretative Reading Forum This forum should be created to allow organizational members to reflect upon their assumptions of a given representation or experience. By reading the experiences and representations through electronic mail, implicit or tacit meanings can be questioned. Based on the reading, dialogues can occur, allowing organizational members to reflect on existing organizational knowledge. This forum enables critical thinking and interpretation of stored information. Theory Building Forum In this forum, models guiding daily work are articulated, critiqued, explored, and eventually extended. The intention of this forum is to foster a ‘theory corner’ and ‘thought experiments’ to enable dialogue about new ideas within the organization. By enabling dialogue, it facilitates the interpretation and distribution of information. Electronic mail could be a communication technology that supports this activity. Intelligent Agent Forum In this forum, intelligent agents in the form of sophisticated software systems travel through various information databases and repositories to direct the attention of knowledge workers towards topics of interest and assemble contextual information for building cross-document links. This forum serves the purpose of information distribution. Identify a Chief Learning or Knowledge Officer In order to initiate, drive and co-ordinate knowledge development within an organization and to promote communication technology as an integral part of knowledge development, organizations should identify a chief learning or chief knowledge officer (CLO/CKO). Since companies are still in the process of realizing the full potential of managing communication technology for the purpose of learning and creating knowledge, the role of a chief knowledge officer has not yet been clearly defined. In the future, the goals of the knowledge officer should be to pay explicit attention to the formal management of knowledge in ongoing operations, to expose the hidden value of corporate knowledge, to learn from past failures and successes in decision-making, and to create value from knowledge embedded in products or processes (Earl and Scott, 1999).

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Since the establishment of knowledge development programmes is still in its early stages, knowledge officers will have the task of making organizational or technological investments in developing tacit and explicit knowledge. As already noted, while knowledge development has been described as 20 per cent technology and 80 per cent cultural change, it has been recognized that communication technology frequently provides the starting point for knowledge development (Earl and Scott, 1999). It would be, for example, the task of the knowledge officer to facilitate the use of communication technology to design knowledge directories and systems. These technological solutions will capture, codify, store, protect and share explicit knowledge. Figure 4.8 shows the areas where communication technology can be used to develop knowledge management programmes. The purpose is to share explicit knowledge and to make tacit knowledge more transparent. In order to use communication technology for developing the organizational knowledge base, the CKO has to be informed about communication technology to evaluate what works, to judge when to adopt a particular technology, and to appreciate the opportunities for communication technology to enable knowledge development. Once a particular communication technology has been chosen, it will not be successful without an understanding of the context. Therefore, CKOs have to acquire an understanding of the social context, which entails frequent interaction with knowledge workers to understand their needs. It also involves assisting in the implementation of communication technology within Investments

Tacit

Knowledge

Explicit

Capabilities

Technological Exploration

– Education and development – Management processes – Measurement and protection

– Directories and tools – Groupware – Knowledge-based systems

Contactivity

Connectivity

– Meeting spaces – Events – Communities

– Videoconferencing – Intranets

Figure 4.8 Communication technology potential in knowledge development Source: Adapted from Earl and Scott (1999, p. 32).

Communication Technology Potential

Organizational

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the organization to ensure that the technology matches the needs and the social context. During implementation, the CKO and the chief information officer or senior information system specialists have to cooperate. All should be involved in communication technology projects and the training of users. In order that the CKO can use communication technology successfully for knowledge development, his/her office needs to have corporate-wide funding and the support of the CEO. Without the support of top management, resistance to knowledge development will be difficult to overcome, thus undermining the efforts of the CKO.

5 Communication Technology and Success Companies have invested increasingly in communication technology since the early 1990s. In 1991, America’s service sector companies spent over $100 billion on hardware, equal to more than $12 000 per information worker (Roach, 1991). Assuming that companies spend their resources wisely, it is tempting to conclude that higher expenditure on communication technology will increase a firm’s overall performance. Yet many authors claim that the benefits of these new technologies are at best disappointing (Loveman, 1988; Mahmood and Mann, 1993). Communication technology has failed to yield significant gains in productivity – known as the productivity paradox (Pinsonneault and Rivard, 1998). If investment into communication technology has not increased the value produced, management must rethink communication technology strategies. This has put managers responsible for determining the level of communication technology expenditure in a difficult position. While communication technology is viewed intuitively as an important asset, managers do not know how to measure its impact, how to decide on the area in which to invest in it, or even how much to invest into it. As a result, measuring the success of communication technology within organizations is a topic of central concern for both academics and practitioners. Academics need a measure for communication technology success as the dependent variable, and managers need to make decisions about the potential of communication technology investments. Without the evaluation of communication technology outcomes, this new and rapidly-deployed technology tool may either be over- or under-valued. Over-valuing communication technology may lead to investments into it that are not warranted, but under-valuing communication technology may mean that organizations are left behind their competitors. Thus performance criteria are necessary to allow managers to make informed decisions regarding the acquisition and design of communication technology within their organizations. THE RELATIVE NATURE OF SUCCESS Success is often regarded as an absolute, something that either is or is not. In fact, success and failure are relative matters, and can only be evaluated according to specific criteria and measures. Something that seems successful from one 114

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point of view often looks like a failure from another. If two managers use different measures to evaluate the effectiveness of communication technology, they may reach totally different conclusions; the fact that one manager considers the implementation of communication technology to be successful is no guarantee that the other manager will also be satisfied. A particular set of results can be judged quite differently, depending on the goals and expectations of the person doing the judging. If, for example, one manager hopes that communication technology will be used by 80 per cent of organizational members within six months, while the other simply wants the communication technology to be operational within the production facilities, the difference will certainly show up when the time arrives to judge the success of the communication technology. The diversity and relative nature of the various possible success criteria derive from four factors. First, there are many different kinds of success – for example, economic, strategic or behavioural. Different theoretical perspectives vary in their focus on the effectiveness criteria of communication technology. The economic perspective, for instance, focuses on cost–benefit analyses or returns on investment. Industrial economists propose measures such as return on assets or average growth. Strategic management researchers emphasize the importance of matching the communication technology strategy with the organizational strategy. Behavioural scientists often speak of user acceptance or decision-making quality when discussing communication technology success. Second, the level of analysis is important. Communication technology can support individual decision-making, but can also enable the competitive advantage of the organization. From the macro perspective, communication technology is judged by its ability to help the organization to gain competitiveness, which will lead to higher returns on investment. From the micro perspective, knowledge workers require information to execute their tasks, so communication technology is judged against the requirements of organizational members. Organizational level measures tend to focus more on criteria such as return on asset measures, while individual level indicators rely on measures such as system use, system satisfaction, or decision confidence. Third, different criteria are used, depending on who judges the success of communication technology. Evaluations tend to differ, depending on whether they are made by the users of communication technology, by communication technology specialists or by the executives responsible for supporting the investment. Effectiveness measures essentially have no objective referent. They are mental abstractions used by individuals to interpret their own understanding of the situation. These mental perceptions of communication technology success are often contradictory among the various constituencies within the organization. In addition, perceptions may change over time, making it even more difficult to

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come to a congruent understanding by those involved regarding the success of a particular communication technology system. Fourth, it is difficult to find context-independent, valid measures. The outcome of communication technology employment may be a result of opposing forces that enable and constrain communication technology to have the desired effects in the social context in which it is being implemented. Since managerial action is only one of the forces determining the outcome of communication technology implementation, the social context may undermine the intentions of managers and thereby lead to unintended consequences. This is one of the reasons why it is not surprising to find contradictory findings regarding the impact of communication technology on organizations. As Robey and Boudreau (1999, p. 70) have shown, communication technology has led to a number of polarized pairs of social outcomes: empowered and oppressed individuals; extended and reduced hierarchy; organizational rigidity and flexibility; and increases as well as decreases in staff. These contradictory findings suggest that measuring the effectiveness of communication technology is a matter of context. Studies seem to show that communication technology is not a determinant of organizational or individual outcomes, but rather an enabler whose effects are dependent upon how it is implemented and used (Pinsonneault and Rivard, 1998). These introductory remarks are intended to show that there is no single valid concept of success that can be applied to communication technology effectiveness in general. On the contrary, it can be said that measurement of success is characterized by multiple dependencies: different concepts of success are relevant depending on the viewpoint of the observer, the chosen level of analysis, and the particular person doing the evaluation. The following questions summarize the difficulties involved in evaluating the effectiveness of communication technology: What level of analysis is being used? What is the purpose of assessing effectiveness? What time frame is being employed? What type of data are being used for assessments? and What is the referent against which effectiveness is judged? Every organization has to define its concept of ‘success’. Managers must decide which interests and objectives should be taken into account, what timescale applies (long-term or short-term), and at what level the assessment is to be made. The practical issue is what to measure, and what criteria to use in any given situation. The variety of possible definitions of success, and their relative nature, can lead to grave misunderstandings if the basis for making success judgements in a particular case is not specified clearly and in detail. The same applies to theoretical analyses. A great deal of work has been done on the study of success and failure of communication technology, and attempts have been made to identify ‘success factors’, yet which measures to use remains unclear.

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A FRAMEWORK FOR MEASURING COMMUNICATION TECHNOLOGY SUCCESS Communication technology effectiveness is a multidimensional construct,1 consisting of a great many measures. A comprehensive scheme of performance measurement of communication technology effectiveness should include both individual and organizational level measures (Grover et al., 1996). These measures are frequently based on theoretically-defined models of effectiveness. Recently, empirical research has begun to validate an increasing number of measures, particularly at the individual level (Hendrickson et al., 1993; Segars and Grover, 1993). Empirically validated communication technology measures provide a clearer understanding of the relationship between the variables proposed in the theoretical models. The empirical validation of measures lends itself to the identification of causal relationships between variables. It has, for example, been found that satisfaction with communication technology leads to higher levels of organizational usage. Although this finding is less surprising, it allows managers to understand the link between individual- and organizational-level variables. The underlying goal is to develop valid measures that can be employed by researchers and managers. Throughout this chapter, various measures of communication technology effectiveness are discussed, based on the framework shown in Figure 5.1. The framework distinguishes between two different units of analysis – the organizational level and the individual level. For each unit of analysis, three perspectives are proposed. At the organizational level, the economic, strategic and process perspectives are shown. At the individual level, the cognitive, behavioural and productivity perspectives are discussed. The framework is based on Grover et al. (1996), who distinguish between macro- and micro-level measures based on three different types of evaluation – process, response and impact-based. Organizational Measures In the following section, organizational measures of communication technology outcomes will be investigated from three different perspectives – the economic, strategic and process perspective. Organizational level measures focusing on the impact of communication technology are economic measures. For example, the communication technology expense ratio is related to return on assets. Measures capturing the response of the internal and external market to the introduction of communication technology are strategic measures. Obtaining a resource-based competitive advantage measured in terms of information-related research and development (R&D) expenditure is an example of this type of measure. Organizational measures that highlight the process refer to the extent that

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Organization

Strategic measures

Process measures

Evaluation criteria Cognitive measures

Individual

Behavioural measures

Productivity measures Figure 5.1 Theoretical framework for analyzing communication technology success Source: Adapted from Grover (1996).

communication technology penetrates the organization in terms of the efficiency and accuracy associated with the distribution of information. An example of this type of measure is decision accuracy.

Economic Measures The majority of studies evaluating economic outcomes focus on measures related to information technology rather than communication technology. Although some studies have found little correlation between information technology spending ratios and various economic measures such as profit or stock returns (Harris and Katz, 1989), there is increasing evidence that these technologies contribute significantly to firm-level output (Brynjolsson and Hitt, 1996). Given the uncertainty of this relationship, managers are in a difficult position when deciding about the specific measures to use to evaluate success.

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In order to justify the impact of information technology on organizations, managers have increasingly used the Computerworld Index that ranks companies based on their information technology success. The Computerworld Index uses six criteria to evaluate the impact of information technology. Table 5.1 shows these criteria and the research findings regarding the relationship between each criteria and return on equity. Sethi et al. (1993) examined the appropriateness of this index as a measure of success. Looking at data from 1988–9 to 1990–1, they found that only one of the six measures was related to return on equity in the predicted direction. They concluded that the index lacks both a theoretical basis and empirical evidence that would indicate a positive relationship between the various information technology measures and company performance.2 Although economic performance, more specifically return on equity, is influenced by a number of factors far beyond information technology, this criterion remains an important measure monitored by management. Thus identifying the relationship between different information-technology measures and business performance is extremely pressing, since it would help to explain how much and why information technology creates value. Table 5.1 Computerworld index – measure of informationtechnology effectiveness Computerworld informationtechnology measure

Relationship between information-technology measure and performance

Annual information system budget as percentage of revenue relative to the industry average

Not associated with return on equity

Information system staff costs as percentage of information system budget

Positively associated with return on equity

Information system personnel training costs as percentage of information system budget

Positively associated with return on equity

Current market value of information system equipment as percentage of revenue

Not associated with return on equity

Degree of user access to technology: ratio of microcomputers to total employees

Negatively related to return on equity

Five-year company profitability Source: Based on Sethi et al. (1993).

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Given a lack of association between an index frequently employed by managers, and the economic impact on organizations, the question is: What do economic measures focus upon? Generally speaking, economic measures of information technology success are based on the assumption that they can influence three economic concepts: (i) scale economies in information production, by decreasing the costs associated with each transaction; (ii) scope economies in information distribution, by facilitating the ability to offer related complementary products or services; and (iii) product and service differentiation by firms (Harris and Katz, 1989). To measure the impact of information technology investments, the technology is frequently operationalized as ratios – for example, information technology investments as a percentage of total assets; or information technology as a percentage of operating expenses or income. This concept can be applied to communication technology, as shown in Table 5.2. Harris and Katz (1989) have identified two managerial control ratios for measuring the effectiveness of information technology. The first, the information technology expense ratio, is believed to be a measure of the extent to which the business processes of the firm are integrated and co-ordinated through the accomplishment of management goals and objectives. The second measure, the information technology cost efficiency ratio, is viewed as a proxy measure for the expense efficiency of information technology resources relative to the premium income revenues realized by the firm. At the industry level, changes in the information technology cost efficiency ratio over time signal a change in the cost economies of information technology Table 5.2 An example of potential communication technology ratios Measure

Computation

Communication technology stock/employee

Computer capital plus three times communication technology labour

Communication technology labour

Labour portion of the communication technology budget deflated by labour price

Communication technology expense ratio

Communication technology expense out of total expenses

Communication technology Cost efficiency ratio

Ratio of communication technology expense to premium income

Tobin’s q ratio

Capital market value of the firm divided by the replacement value of its assets

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employment (Harris and Katz, 1989). Cost economies of information technology employment could, for instance, lead to a reduction of labour. Changes in the cost efficiency ratio are expected to show when there are significant changes in the technological sophistication of the industry. Higher levels of technology employment will show up in the cost efficiency ratio, depending on the net effect of the increased levels of expenditure on premium income revenues. These ratios are then related to organizational performance measured as the ratio of total operating expenses to premium income (Harris and Katz, 1989). If the assumptions for the measurement of the ratios hold true, then a link between the ratios and organizational performance can lead to the discovery of the impact of the technology. Another economic measure, which examines the relationship between information technology investments and a firm’s future performance potential is Tobin’s q ratio (Bharadwaj et al., 1999). Tobin’s q ratio, first introduced by Tobin in 1969, is the capital market value of a firm divided by the replacement value of its assets. It is a forward-looking, risk-adjusted financial market measure based on the efficient market hypothesis. Financial market measures have the advantage of being based on stock prices, which are a good measure of stockholder value and provide the basis for investors to evaluate the impact of managerial decisions. Because of the forward-looking nature of Tobin’s q, it has been used extensively as a measure for the intangible value of a firm based on the assumption that the long-run equilibrium market value must be equal to the replacement value of its assets, giving a q value close to one. If q is significantly higher than one, then the firm enjoys intangible value. Since information technology is expected to contribute to the long-run performance and intangible value of the firm, the q ratio is seen as an accurate measure reflecting the effectiveness of information technology (Bharadwaj et al., 1999). Given the learning curve associated with the increasing use of information technology, investments may take years to translate into the profit stream. In addition, information technology helps to overcome risks by providing timely information to decision-makers. According to Quinn and Baily (1994), information technology investment decisions are increasingly being made to avoid losses. Given the focus of Tobin’s q on ex ante financial market valuation of the level and risk of future profitability, it reflects the contributions of information technology. In addition, information technology not only leads to cost reductions, but by embedding information technology with other organizational resources – for example, using information technology to support a culture of open communication, it can develop into a resource-based competitive advantage (Powell and Dent-Micallef, 1997). Recently, corporate users have been paying more attention to the complementarity of information technology with other less tangible resources and realizing that the specific contribution of information technology may be difficult to pinpoint. The association of information technology with the

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intangible value of the firm is another reason why the q ratio may be a critical measure for its effectiveness (Bharadwaj et al., 1999). The importance of linking information technology to intangible factors such as improved quality is increasingly receiving attention (Brynjolfsson and Hitt, 1996). The problem lies in identifying the strategies responsible for the increase in information technology productivity. Another economic approach evaluating the success of information technology is the cost–benefit approach. A cost–benefit analysis is a comparison between two states, whereby the proposed system is compared with the current system. Thus there always needs to be a base line case for judging the new technology (Lincoln, 1986). Although it may seem logical to use the same organization before and after implementation as the comparison, there are too many mediating variables that affect the organization over time. Thus it is more desirable to look for an alternative system for comparison. This may be the previous system, a manual system, or another piece of information technology used for a similar purpose. Since information technology is frequently intertwined with business decisions, most senior executives prefer that a comparison be conducted against the level of service provided by a traditional communication system (for example, written letters). Since it can be compared to a zero-based budgeting process, it has the advantage of showing which objectives could be met at lesser cost, given a manual alternative. In order to be able to present the findings of a cost–benefit analysis, managers need to collect information about the relevant costs and benefits. Table 5.3 summarizes some of the most frequently used categories for assessing both costs and benefits. Since the identification of the exact costs associated with a system is somewhat arbitrary, companies have relied on the internal audit function to ensure that costs are reasonable. Identification of benefits seems to be equally difficult. Frequently, an organization has to rely on data provided by users indicating how information technology would meet their objectives without having Table 5.3 Cost–benefit factors Costs System development System operation System maintenance User analysis Training Management time

Benefits System usage User satisfaction Perceived importance Operational costs Expected growth User requested enhancements

Source: Based on Lincoln (1986).

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witnessed its actual implementation. Using multiple interviews with users, managers can ensure that realistic estimates are being made. The difficulty with using economic measures lies in the lack of a standard definition of what comprises a communication technology expense. These measures do, however, provide quantifiable data which, if measured consistently, are objective rather than perceptual. The underlying idea of these measures is the goal approach to effectiveness, which focuses on the achievement of objectives through communication technology and essentially provides benchmarks for management’s decision-making. Strategic Measures Even though communication technology investments are expected to translate into improved economic performance, this ultimate goal is mediated by the ability of an organization to achieve a competitive advantage. The communication technology literature has suggested that the use of communication technology should lead to increases in ‘bottom-line’ measures, such as return on assets, by acquiring information from the outside, distributing information internally, or providing cost efficiencies and so on. A competitive advantage has been achieved when a firm receives a return on investment that is greater than the industry average, and is sustained for a long enough period to alter the nature of industry competition (Porter, 1985). Applying Porter’s concept to communication technology suggests that a strategic communication technology system should reduce costs, add value, or create significant switching costs that result in financial benefit before competitors are able to copy the technology. Hitt and Brynjolfsson (1996) found that productivity, customer value and above-average returns are, however, different measures that do not necessarily coincide. Information technology, in particular, has been found to lead to both increased productivity and customer value, yet the link to supranormal business profitability has not been confirmed (Hitt and Brynjolfsson, 1996). Although the concept of the sustainability of a competitive advantage remains popular, there is growing concern that strategic communication technology decisions will not generate increased profits. Communication technology is, in fact, a potential risk, as it changes the basis of competition. What may be a short-term competitive advantage translates into an obligation for continued competitive viability. It is therefore less surprising to find that case studies and anecdotes propose that communication technology in itself does not lead to sustained performance advantages. Rather than viewing communication technology as the factor enabling companies to achieve a competitive advantage, it has to be viewed as a ‘strategic necessity’ (Clemens and Row, 1991). The ‘strategic necessity hypothesis’ argues that communication technology provides value to the firm by increasing internal and

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external co-ordinating efficiencies. Companies that do not adopt communication technology will have a higher cost structure and be at a competitive disadvantage. In addition, since communication technology is readily available to all companies, including competitors, it cannot be a factor for sustained competitive advantage. Rather than viewing communication technology as an opportunity on which to build a future strategy, it is more likely to be a threat, since avoiding investments into communication technology may be a reason for competitive decline. In order to use communication technology strategically to build a competitive advantage, there are three feasible paths: (i) reinvent communication technology advantages perpetually through continuous, leading-edge communication technology innovation; (ii) move first and erect unassailable first-mover advantages; or (iii) embed communication technology in organizations in such a way as to produce valuable resource complementarity3 (Powell and Dent-Micallef, 1997, p. 378). Since the first two paths can only be followed by a few firms, the third path seems to show a more reasonable chance of success. According to the resource-based view of firms, companies should invest in communication technology in areas that together form a resource configuration providing a competitive advantage. It has been suggested that, by exploiting pre-existing, complementary human and business resources, communication technology creates an advantage (Powell and Dent-Micallef, 1997). From a resource-based view, resource complementarity involves leveraging firm-specific intangible resources and merging them with communication technology in such a manner that the pieces fit together (Keen, 1993). An example would be to use communication technology systematically to share knowledge across research and development divisions which otherwise would not have access to this knowledge. ‘Complementarity represents an enhancement of resource value, and arises when a resource produces greater returns in the presence of another resource than it does alone’ (Powell and Dent-Micallef, 1997, p. 379). Over time, existing resources merge with the application of communication technology to help build a competitive advantage. By improving the internal operational efficiency and functionality, and the competitive position in the environment, communication technology fends off threats and pre-empts competition (Li and Ye, 1999). Integrating communication technology into the organization creates synergies, which develop into a resource that has an impact on the overall performance of the company. When measuring the competitive advantage of companies, researchers have frequently relied on return on investment or return on assets as the measure, yet these only reflect the economic dimension of communication technology investments. Venkatraman (1989) and Raymond et al. (1995) propose to use more subjective measures, where top management is asked to assess how the firm performs relative to the industry average using figures from the previous five

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years relating to long-run profitability, growth of sales, financial resources, public image and client loyalty. A similar subjective measure could be used to evaluate the impact of a firm’s communication technology; essentially benchmarking communication technology use among companies within the same industry. Another indicator of communication technology success from a strategic perspective is the learning curve. The degree of sophistication in using communication technology to enhance the organizational knowledge base could be a criterion for obtaining a competitive advantage (Kettinger et al., 1994). The ability of a firm to build on the organizational knowledge base of its employees to develop new products or enhance the provision of services at lower costs has been considered an indicator of organizational learning (Cool and Schendel, 1987). This is based on the assumption that employees use communication technology to share information, which acts as a basis for developing new products. The development of technological resources by using communication technology could also be a source of a sustainable competitive advantage. Internally developed communication-technology-based services, or the use of these internal services to create new technologies that can be sold externally, could be the basis of a strategic advantage. In the strategic management literature, this has been measured using indicators such as expenditure on research and development (Douglas and Rhee, 1989) or invested capital relative to sales (Chakravarthy, 1986). To make these measures more specific to communication technology, one could measure communication technology investments as a percentage of total expenditure on research and development. These measures are based on the belief that firms with more advanced technological resources will develop more sophisticated products ahead of other industry participants. In addition to technological resources, a firm may also achieve a strategic advantage by building information resources; these may take the form of intelligence embedded in the use of group support systems. Both the mere existence and the ability to exploit these systems provide the basis of an advantage (Ghemawat, 1986). The existence of information resources could be measured by the degree to which companies have group support systems available for the use of knowledge workers. Since it has been shown that communication technology needs to be leveraged and embedded within the organization, it is more important to investigate the long-term impact of strategic communication technology decisions. There is a need to track the impact of communication technology over time and to match communication technology investments with measures of organizational performance – for example, market share or sales growth (Weill and Olson, 1989). Kettinger et al. (1994) found that the initial impact of communication technology decisions on performance did not always translate into a sustained impact. The difference between those companies that developed a sustained competitive

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advantage and those that were not able to sustain their advantage was a result of pre-existing structural differences regarding the environmental situation and foundation factors. Among the environmental factors, sustainability was more likely to flourish in industries that had few competitors. This can easily be explained, since market share is concentrated in a few firms and therefore firstmover effects may be more significant. Essentially, in industries with few competitors, a firm has a larger time-cushion before the cannibalization of communication technology innovation begins. The results of Kettinger et al.’s study suggest that, to be strategic, communication technology investments must be driven by the business strategy and integrated into the product and process of the organization so that they develop into core competencies, which then exploit environmental opportunities and risks. Process Measures Although communication technology is expected to translate into economic benefit in the long run, process measures provide an intermediate measure for communication technology effectiveness. Improvements in team performance or group decision-making are the most commonly employed intermediate measures. Process measures that have been used for the performance of teams are quality of decisions, speed of decision-making, consensus reached, quality of the decision process, and number of alternative solutions generated (Chidambaram and Jones, 1993; Dennis and Kinney, 1998). These measures are related to the use of communication technology in achieving these outcomes. Contradictory findings have resulted from studies investigating the relationship between communication technology and quality of decisions. Some studies have indicated that computer-mediated communication leads to improved decision quality (Benbasat and Lim, 1993; Jarvenpaa et al., 1988), yet in other cases it had no impact (Chidambaram and Jones, 1993; Dennis and Kinney, 1998). It has been shown that the type of task is a mediating variable influencing decision quality. For complex tasks, computer-mediated communication seems to improve decision quality, while for simple tasks, it appears to have no effect (Dennis and Gallupe, 1993). Another possible mediating variable may be the learning effect of the group. Ad hoc groups that have no history of working together will first have to establish cohesiveness before improving the quality of the decision (Chidambaram and Jones, 1993). Once they have become accustomed to each other and the technology, and incorporated the technology into the decision-making process, the group may be able to produce higher-quality decisions (Poole and DeSanctis, 1990). A communication technology that has been shown to have a positive impact on the quality of decisions is electronic meeting systems.

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The use of electronic meeting systems was shown to have a positive impact on the quality of the decision process (Chidambaram and Jones, 1993; Saunders and Miranda, 1998). Decision (process) quality was assessed using a report written by group members, asking each decision to be evaluated by two raters using a Likert-type scale. The reasons for using an electronic meeting system to improve the decision quality lie in the fact that this medium provides an anonymous vehicle for interaction, thus reducing evaluation apprehension and improving topic focus during discussion. In addition, the technology helps participants to focus on tasks rather than on personal factors when making decisions. Chidambaram and Jones (1993) found that electronic meeting systems had the clearest impact on the number of alternatives generated in decision-making. Communication technology is perceived to avoid production blocking, thereby allowing groups to generate more ideas. No time is wasted on individual presentation, and this increases the group’s creativity. Another success measure for improvement in organizational processes is decision accuracy. Hedlund et al. (1998) examined the effects of two modes of communication (face-to-face and computer-mediated) on decision accuracy and found that computer-mediated communication teams rated higher on the quality of their decisions. Since the task the teams performed has an objectively measurable outcome, the difference in the team’s decision and the correct decision was used as a measure to assess decision accuracy.4 Other measures that may provide an indication regarding the impact of communication technology on the behaviour of groups are: (i) consensus level: the degree to which group members agree regarding the ranking of ideas generated by the group; and (ii) change in consensus level: the relative change in the agreement by the group (Mejias et al., 1996–7). These process measures are intermediate criteria for success and are frequently measured using questionnaires based on Likert-type scales. Research findings on consensus and changes in consensus are generally mixed. While some assert that computer-mediated communication leads to a reduction in consensus (DeSanctis and Gallupe, 1987), others say that it has no effect (Watson et al., 1988; Mejias et al., 1996–7), and a third group posits that it increases group consensus levels (Stefik, 1987; Turoff and Hiltz, 1982). Regarding changes in consensus, both Dennis and Kinney (1999) and Mejias et al. (1996–7) found that groups using computer-mediated communication for highly ambiguous tasks showed a greater increase in consensus change. Individual Measures Although organizational level measures are of central importance for managers to be able to evaluate the company-wide impact of communication technology

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investments, the difficulty in operationalizing these measures has led to the increased use of micro-level, or individual-level, measures. The most frequently employed micro-level measure is user satisfaction. It is a cognitive measure that captures user attitudes and beliefs regarding communication technology. Essentially, user satisfaction is an easily identifiable proxy measure, which is the root of its popularity. Yet behavioural measures such as real usage, which capture the extent to which organizational members in fact employ communication technology are probably an equally good, if not better, guide to increases in organizational productivity (which is the eventual goal of communication technology implementation). Productivity measures at the individual level are impact measures that reflect how communication technology enhances the performance of individuals. It is based on the assumption that improvements in the performance of a number of individuals will eventually translate into organizational performance improvements. Cognitive Measures At the individual level, user satisfaction is the most prominent measure for communication technology effectiveness. The existence of instruments to measure user satisfaction has certainly encouraged the more widespread employment of this measure in evaluating communication technology effectiveness (Melone, 1990). Assuming that these measures are valid and reliable, they not only provide information about overall satisfaction with communication technology products and services, but the measurement of user satisfaction also allows management to use the result as a standard for making comparisons across organizational units and over time within units. In addition, the measures are relatively simple and inexpensive to use within organizations. All these advantages have encouraged the frequency of their employment. Measures of perceived user satisfaction with the communication system have generally been done through attitude surveys. Table 5.4 shows the most frequently used categories for measuring user satisfaction within all sizes of organization – large, medium and small. Table 5.4

Measure of user satisfaction

User satisfaction Information content Information accuracy Information format Ease of use Timeliness

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Although the advantages of utilising user satisfaction are profound, there are a number of theoretical and practical issues of concern. Scott (1987) argues that user satisfaction as a measure of communication technology effectiveness is associated with a view that knowledge workers are capable of pursuing two goals at the same time – achieving specified goals while also engaging in a variety of activities necessary to maintain themselves within a social unit. The view is that knowledge workers can attend to output and support goals simultaneously. When an organization is in conflict regarding the need to attend to both output and support goals, support goals frequently dominate (Melone, 1990). Since communication technology mainly fulfils a support goal, it is not surprising to see cognitive measures being used so frequently. Although the use of cognitive measures is valid in these cases, management is probably equally interested in achieving output goals through the use of communication technology. For this purpose, user satisfaction is not an appropriate measure. Another concern when employing user satisfaction lies in the lack of agreement among authors regarding the conceptual definition of the construct. As a result, user satisfaction has been associated with such terms as felt need, communication technology acceptance, perceived usefulness, ease of use, and communication technology appreciation. More generally, these terms refer to attitudes and perceptions about the extent to which communication technology serves an individual’s information requirements. Evaluations based on attitudes are a response by users based on the belief that communication technology serves a useful purpose. Thus, user attitudes are an underlying construct of user satisfaction. User attitudes are, however, a slightly broader construct than user satisfaction, encompassing as they do the circumstances surrounding the behaviour and conditions under which an attitude was formed (Melone, 1990). In order to develop a broader measure of effectiveness, Melone proposes to incorporate the cognitive (user attitudes towards communication technology) and behavioural intentions (actual use of communication technology) into one construct. This would enable the construct to relate better to actual behaviour, and provide a more comprehensive reference point for evaluation. Behavioural Measures While user satisfaction has been studied extensively, its use as a behavioural construct has lagged behind (Doll and Torkzadeh, 1998). In the past, usage measures tended to be unidimensional, yet increasingly it is postulated that there is a need to search for multidimensional usage measures that are performancerelated, reflecting how communication technology is in fact used within organizations (Melone, 1990). There are a number of different measures which may serve this purpose. Table 5.5 summarizes some that have been used in the past.

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Using Communication Technology Table 5.5 Usage measures in communication technology Usage measures Use of group support systems (or other types of communication technologies) Hours of usage Frequency of requests using communication technology Number of group support system features used (or features from other types of communication technologies) Number of messages sent or received in one day Percentage of time group support systems are used (or other types of communication technologies) Number of requests for information using communication technology Frequency of past or intended usage of communication technology Percentage of total work time use of communication technology Number of different communication technology applications used Level of sophistication of communication technology usage

Measures of actual use are based on a view of the organization as a rational system whereby communication technologies are used to achieve goals. From this view, the number and quality of outputs and the economies obtained in the transformation from input to output are criteria reflecting the role of communication technology in achieving organizational goals. Data used to judge effectiveness are based on behaviour – for example, the actual use of communication technology. In Appendix 4 (see page 159), a study reporting the use of information technology in Chinese trademark agencies is presented. Since use is related to the nature of work, different organizational tasks provide the basis for considering the functions of communication technology utilization in an organizational context. From this perspective, the use of communication technology by individuals in a work context fulfils organizationally relevant functions such as decision-making, the co-ordinating of work, and so on. To determine the multidimensional nature of communication technology use, Doll and Torkzadeh (1998) conducted a factor analysis on a comprehensive list of items related to the organizational work context. The results showed three main factors as determinants of communication system use: decision support, work integration and customer service. Decision support refers to the extent that communication technology is used to identify problems and improve decisionmaking. Work integration refers to the extent that communication technology helps in horizontal and vertical co-ordination of work; and customer service is concerned with using communication technology to provide support to internal and external stakeholders. This multidimensional construct has the advantage of investigating communication technology use along organizationally relevant dimensions, independent of the required or voluntary nature of use. Through this

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multidimensional construct, ‘a complex socio-technical phenomenon defined by the interaction of people and technology in an organizational context’ (Doll and Torkzadeh, 1998, p. 181) is measured. It is therefore probably better suited as a mediating variable to the success of communication technology. Use becomes a tool for assessing whether communication technology is being appropriated in new ways, which may in the long-term have an impact on the organization. Although usage and user satisfaction have been found to be significantly positively correlated, they are different, yet complementary. A particular communication technology may be the only alternative available to users, so the use of that specific communication technology is more frequent than it might have been if alternatives had been available. When use of the communication technology is mandatory, user satisfaction may be a good proxy measure for success. Yet, in the case of voluntary use, actual use is a more appropriate measure, since this reflects the degree to which communication technology in fact meets a need within an organization. Combining actual use and user satisfaction into a broader measure provides a more complete picture of communication technology success. Productivity Measures In addition to assessing the perceptions and behaviour of individuals using communication technology, the impact on their performance remains an area that lacks research. Productivity measures focus on the ability of individuals to increase their efficiency in performing tasks. Some of the measures that have been employed for this purpose are performance appraisals, ability of communication technology in fulfiling managerial roles, and the perceived impact of communication technology by the user. One study that assessed the relationship between communication technology and performance at the individual level investigated media choice and performance appraisal outcomes. Daft et al. (1987) studied the relationship between the selection of a communication medium based on the type of information task and the performance of managers. They demonstrated that managers who match medium to message content are rated as being better performers. Pinsonneault and Rivard (1998) studied the relationship between communication technology use and the nature of managerial work, with the objective of investigating the claim that communication technology spending will lead to increased productivity among knowledge workers. Based on a sample of fiftynine large companies, the authors found that the level of communication technology usage and the nature of managerial work were stronger in a context where the organization is undergoing change. Communication technology was primarily used by managers to support and reinforce the informational role. This role was measured using such items as gathering market information, monitoring customer relationships, or informing other managers. Using communication technology, top

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Using Communication Technology Table 5.6 Impact factors Impact measures Usefulness Effectiveness

Makes job easier Useful Increases productivity Effectiveness Job performance

Source: Based on Segars and Grover (1993).

management spent greater amounts of time reorientating middle managers. The study found support for the claim that communication technology usage depends on the organizational context in which it is deployed. Therefore, general predictions on increases on productivity across organizational contexts cannot be made. Individuals themselves may also assess improvements in performance. One measure that provides an indication to this effect is the perceived impact of communication technology. While Davis (1989) found that the perceived impact consisted of six items, including the ability to work more quickly, Segars and Grover (1993) replicated the study and identified two major impact factors: usefulness and effectiveness. Individual-level productivity measures have, however, the problem that individual productivity increases are not always correlated with organizational improvements. Table 5.6 shows the factors explaining the perceived impact of communication technology. Both micro and macro level measures of communication technology effectiveness are needed, since it has been found that communication effectiveness operates at both levels (Zack and McKenney, 1995). Meaningful messages between individuals at the micro level have little to do with the use of electronic mail and communication effectiveness at the macro level, and the appropriateness of the resulting communication network. Although individuals understand how to use communication technology, they might not use it, since social norms have been established within the organization that restrain individuals from fully exploiting its potential. As a result, it is not only the ability to use the technology, but also the willingness to do so that determines behaviour. Since the social context determines willingness, task requirements are only one imperative for media choice; social perceptions are another imperative that is equally important (Zack and McKenney, 1995). THE CHAIN OF COMMUNICATION TECHNOLOGY MEASURES Measures of communication technology outcomes can be ordered sequentially as if moving along a chain – starting at the individual level and moving towards the organizational level. At each stage of the chain, communication technology

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success is evaluated from a different perspective. At the beginning of the chain – studies focusing on the implementation of communication technology – the reasons for success are investigated using measures based on individual beliefs or attitudes towards communication technology. For this purpose, qualitative measures are mainly used, yet since the measures are at the beginning of the chain, it is difficult to distinguish between factors determining and those indicating performance. A typical measure would be user satisfaction. Moving along the chain, communication technology use becomes an important measure of success. This is an individual, behavioural measure. Use should, however, eventually translate into individual productivity gains, which, when accumulated, transform into organizational impacts, first behavioural and eventually organizational. A measure that reflects the organizational impact of communication technology usage is decision accuracy. Moving further along the chain, communication technology investment areas are a basis for evaluations. Examples of measures are the ability of the organization to develop intangible resources based on the employment of communication technology. The advantage of using communication technology investment areas lies in the ability to track each measure separately as various areas of the organization are scrutinized. The disadvantage lies in a lack of selection criteria, which indicate the areas that should be taken into strategic consideration. Sethi et al. (1993) suggest that, at the end of the chain, communication technology investments are used to evaluate the economic impact on the organization. Examples of measures reflecting this perspective are communication technology budgets as a percentage of revenue. Figure 5.2 summarizes the communication technology chain, showing the measures and specific examples. At the beginning of the chain, communication technology success is evaluated from an individual perspective, while evaluations at the end focus more on organizational outcomes. Individual

Organization

Types of measures BELIEFS

ATTITUDES

BEHAVIOURS ORGANIZATIONAL IMPACT

STRATEGIC IMPACT

Examples of measures USER SATISFACTION

USAGE

DECISION ACCURACY

INTANGIBLE RESOURCE

ECONOMIC IMPACT

IT BUDGET AS PERCENTAGE OF REVENUE

Figure 5.2 Chain of communication technology measures

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MANAGERIAL IMPLICATIONS Although this chapter has provided a multitude of measures for assessing the effectiveness of communication technology within organizations, managers may still be uncertain regarding the measures to use in their own company. As Quinn and Baily (1994) state, ‘antiquated performance/reward systems remain one of the most important shortcomings in the management of IT’. According to Cameron (1986), measuring effectiveness is tied to the presence of mutually exclusive opposites – paradoxes. For example, communication technology can be used in specific areas to enhance efficiency, or it can be distributed throughout the organization to reinforce flexibility. Both situations may be desirable, yet success measures frequently assess only one of the two situations. Conditional Use of Success Measures In order to capture the full picture of communication technology outcomes, it is the primary task of managers to match appropriate measures with a managerial situation. For example, in a situation of clear goals and stakeholder agreement, economic measures are suitable, since they provide a benchmark for decisionmaking regarding the expected outcome of communication technology investments. When communication technology is used to obtain a sustainable competitive advantage, then it has to complement other resources within the organization. If the other resources with which communication technology is expected to create synergies are identifiable, then strategic measures can be employed. When the focus lies on using communication technology to enhance group decision-making processes, process measures may be appropriate. Cognitive measures are suitable when the designers expect adaptations to be made to the use of communication technology. In this case, cognitive measures lead to the identification of problems which can be resolved based on feedback from users – for example, user satisfaction. Behavioural measures focusing on actual use are relevant in situations when various stakeholders may have different success criteria that can only be assessed by looking at the behaviour of individuals. Productivity measures are useful when a clear connection exists between individual and organizational performance. Table 5.7 summarizes the different measures and the conditions under which they are particularly useful. Considering the situation before deciding on an appropriate success measure is one strategy managers can employ. Yet Cameron (1986) also recommends the use of a mass of criteria for assessing effectiveness. Since success is a socially constructed concept and people have competing values, Quinn and Rohrbaugh (1983) suggest that criteria should be selected explicitly, weighted, and then integrated to produce an overall evaluation or a global estimate of effectiveness.

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Table 5.7 Conditional communication technology success measures Types of Measure

Organizational measures

Individual measures

Definition

Useful when

Economic measures

Focus is on achieving stated economic goals

Goals are clear, consensual and measurable. Goals provide benchmark for decision-making.

Strategic measures

Focus is on the ability to acquire and maintain scarce resources.

Complementarity between communication technology and other resources is identifiable.

Process measures

Focus is on smooth internal functioning of the organization.

Connection exists between group processes and organizational performance measured in economic terms.

Cognitive measures

The focus lies on the perception of individuals about the appropriateness of the technology.

Changes to the communication technology can be made based on problem identification by the users.

Behavioural measures

Focus is on actual usage of the technology.

Criteria for effectiveness are unclear or strategies for improvements are needed.

Productivity measures

Focus is on the performance of individuals within the organization.

Connection exists between individual performance improvements and organizational performance improvements.

By evaluating the extent to which several elements are present within an organization, managers can make more explicit and refined judgements about the usefulness of communication technology. For example, using cognitive measures such as user satisfaction as criteria for evaluation allows changes to be made to the usage pattern within the organization, while economic measures such as return on assets provide an indication regarding the bottom-line impact of communication technology. While user satisfaction is a measure based on the user’s perspective, return on assets is mainly a measure upon which top management relies, since they are ultimately held accountable by external stakeholders. Strategies to enhance success To enhance the success of communication technology usage within organizations, the organization should employ a multi-stakeholder perspective. Each perspective

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has a different view on communication technology implementation. From the user perspective, communication technology should be adapted to the type of job performed. For this purpose, user participation in the implementation process is an important criterion for success. From the designer perspective, understanding the usage pattern is important, since it allows them to make more informed implementation decisions. From a top management perspective, communication technology should be implemented to translate into improved bottom-line results. In the following section, four different perspectives are proposed: (i) the user perspective; (ii) the designer perspective; (iii) the management perspective; and (iv) the joint perspective. User Perspective Communication technology implementation research has discovered that failure on the part of communication technology designers to pay attention to the reactions of users and the organizational context of implementation has led to a lack of success. Since attitudes and beliefs measured in terms of user satisfaction are related to actual use, employing user satisfaction as an effectiveness measure is an important step in the direction of problem identification. The advantage of utilizing user satisfaction as a measure lies in the ability to diagnose possible causes of dissatisfaction with the communication technology and thereby suggest correction action. User participation has frequently been cited as a measure for overcoming communication technology implementation failure (Lu and Wang, 1997). This is the case because user participation leads to user commitment, avoids resistance and ensures that user requirements are met. At the same time, it has been argued that participation in communication technology implementation is dysfunctional because of the inherent political problems that may result from increased numbers of organizational members wishing to voice their opinions (Hirschheim, 1989). Despite this criticism, user participation is becoming increasingly popular within organizations. User participation can take the form of involvement in varying degrees. Mumford and Henshall (1979) distinguish between three different levels of user involvement: consultative, representative and consensus mode; these are shown in Figure 5.3. The difference between these levels is the degree of influence and control by the user. In the consultative mode, the main decision-makers are the communication technology system developers. In the representative mode, a team is formed representing users within the organization who, together with the communication technology system developers, manage the implementation of the new technology. Consensus participation is a democratic approach, which tries to involve most organizational members throughout the communication technology design process. The latter approach is generally viewed to be feasible

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CONSULTATIVE LOW DEGREE OF USER PARTICIPATION

REPRESENTATIVE

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CONSENSUS HIGH DEGREE OF USER PARTICIPATION

Figure 5.3 Types of user involvement in communication technology implementation

only in a setting with few users, since the political dimension of implementation becomes unmanageable with a large number of users. A study by Lawrence and Low (1993) found that the representative mode of user involvement and top management support are related positively to user satisfaction. Other studies have found similar positive relationships between user involvement, communication technology usage and user satisfaction (Baroudi et al., 1986; Franz and Robey, 1986). This demonstrates the importance of user representation in explaining user satisfaction, and would therefore suggest that managing the relationship between the end user and communication technology system designers is an essential element of success in communication technology implementation. Using the representative mode, it involves ensuring that users understand the working of the user representative group and have faith in its ability to represent their interests in the communication technology implementation process. In addition to user involvement, measuring user acceptance is extremely important. Igbaria and Tan (1997) found that user acceptance measured in terms of communication technology usage and user satisfaction has a significant effect on an individual’s performance. Essentially, the acceptance of new communication technology helps individuals to accomplish their tasks more effectively and thus increases their productivity. This has implications for management. When making communication technology investment decisions, management should consider the impact of the proposed technology on individual productivity. Users who are more satisfied are more likely to report a greater level of use, which eventually translates into a greater impact on individual productivity. Designer Perspective Communication technology designers have the responsibility of implementing a communication system to serve the organization’s goals and to achieve customer

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satisfaction. To achieve the latter, communication technology designers need to identify the internal demands and needs of users and supply the technology that matches user requirements and the overall strategy of the firm. Identifying the needs of users – knowledge workers – could be done in a variety of ways along the formal–informal and quantitative–qualitative continuum. For example, at an informal level, communication technology designers could ask knowledge workers to express their views about communication needs. A more formal system would involve traditional surveys asking knowledge workers for their opinions. Focus groups are an approach that is somewhere between the two. Quantitative approaches allow the establishment of benchmarks for future comparison of communication technology needs, but qualitative forums provide richer information. In addition to the identification of the knowledge workers’ communication needs, implementation of communication technology needs to go beyond a focus on the technical side. It has been recognized that non-task and non-technical conditions are equally important in implementing a technology into an organization’s social system. So the implementation of communication technology must be viewed as a social as well as an organizational and technological intervention. The social context is, however, rarely addressed when implementing communication technologies. In order to overcome this problem, communication technology designers need to gain a profound understanding of the user context, at both organizational and group level in order to overcome potential barriers to implementation. As a first step, this involves conducting an analysis of the social context of the organization. At the group level, a survey of usage patterns of various communication media among work groups will determine the types of group involved, and the attitude of group members using a particular technology. The investigation of the work group structure using a survey of communication needs to assess existing attitudes towards the technology. At the same time, the survey can identify the groups with the greatest need for, and problems with, technological innovation. Once the needs of the users and the organizational context of usage have been analyzed and the appropriate technology chosen, designers of communication technology should provide users with control over the communication technology by inciting curiosity and interest. Allowing users to control their own usage pattern has been shown to lead to more positive attitudes and more positive changes in communication-related outcomes (Trevino and Webster, 1992, p. 566). User control can be achieved by presenting the advantages and disadvantages of new communication technology, such as electronic mail. They need to be made aware of the speed, accuracy and ease of use as well as the ways in which social cues may be incorporated when communicating. Since advantages may differ among hierarchical levels, communication technology designers need to tailor the presentation of advantages to the level of the potential user (Carlson and Davis,

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1998). Inciting curiosity also means that designers need to help knowledge workers recognize their own communication technology requirements. In order to facilitate the implementation process, communication technology designers can call on the help of human resource specialists. Human resource involvement in the communication technology adoption phase has been shown to have a positive influence on user satisfaction and organizational productivity (Martinsons and Chong, 1999). If human resource specialists are used as change agents, they can support both end-users and communication technology specialists in adjusting to their new roles. They can act as facilitators in the adoption process and explain the benefits of the new system to individual users; plan for the associated organizational change; and deliver training programmes to smooth the transition process. The involvement of human resource specialists has not been adopted widely, yet their involvement seems justified, since a positive link has been observed between their involvement and communication technology outcomes (Martinsons and Chong, 1999). Ultimately the successful implementation of communication technology in dispersed settings mainly depends on user-situational factors; more specifically, training and user involvement (Alavi and Joachimsthaler, 1992), for which communication technology designers can be made responsible. The authors suggest that these factors can improve the implementation success rate by as much as 30 per cent. Thus communication technology designers have an important role to play in supporting knowledge workers. The role of communication technology designers is, however, not necessarily the same throughout the entire process of communication technology implementation (Kim and Lee, 1986). The definition stage seems very important to designers. Although only a limited number of resources are spent at this early stage, it has a great effect on user attitudes and satisfaction. Designers therefore need to ensure that user involvement is initiated in these early stages, since participation has been found to lead to higher satisfaction and greater use of communication technology. After the technology has been implemented, communication technology designers must ensure service quality (Pitt et al., 1995). Since service quality influences use and user satisfaction, communication technology designers must assess their services to discover how much their services, such as responding to questions about hardware and software, providing training and giving equipment advice, are appreciated. This assessment will allow the designers to adapt to the needs of the knowledge workers. Management Perspective In order to use communication technology effectively, top management must be involved in developing the communication technology strategy, goals and

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implementation plan. Based on case studies, Lucas and Olson (1994) show that a lack of leadership reduces substantially the benefits of communication technology adoption. In addition, top management needs to be open to new ideas and use outside parties such as communication technology specialists and organizational consultants to help to integrate communication technology within the organization. Since organizations are becoming increasingly dependent on communication technology, management must be aware of the complexity this entails for the organization. In order to deal with increased usage, they need to ensure that the organization has access to an adequate number of professionals to adapt and maintain the technology. In addition, management needs to be sensitive to any unanticipated consequences of communication technology use on the organization and be ready to deal with them. Since communication technology is not an object that has no social effects, management should consider it as a variable that impacts the design of the organization. Once communication technology is implemented more broadly, managers could empower a group of mediators to provide images, procedures and use guidelines different from already established norms within the organization. Since these mediators are interested in the effective use of communication tools, they are in a better position to provide the necessary support to a group’s use of communication technology than are support staff or local experts (Orlikowski et al., 1995, p. 443). Mediators can also support the evolution of technology, work habits and communication routines in conditions of change, by providing occasions for experimentation. A mediator might be a top manager such as the chief information officer or chief knowledge officer. It has frequently been suggested that individuals in this position should be deeply involved with the management team in understanding the business and its problems, in educating the team on the effective use of communication technology, and in creating and selling plans for new communication technology investments. Although communication technology may have a productivity effect, studies have suggested that managers should adopt a critical perspective regarding the competitive advantage pay-off. The introduction of communication technology may lead to increases in productivity, but it does not necessarily lead to supranormal business profitability (Hitt and Brynjolfsson, 1996). When costs play a central role within an organization, communication technology investments can be a source of cost leadership (given that competitors cannot copy the strategy), but in situations where barriers to the adoption of communication technology are generally low and costs are not a central issue within the industry, the potential for communication technology to lead directly to a sustainable competitive advantage is limited. In this case, the implementation of communication technology has to be viewed as more of a necessity rather than a source of sustainable advantage.

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Since the impact of communication technology remains unclear, managers should not be overenthusiastic about the pay-off. From this stance, managers should view communication technology as a ‘potential’ strategic lever. Communication technology needs to be driven by the company’s business strategy and integrated with the product and process dimensions of the organization to lead to competencies that can overcome environmental threats (Kettinger et al., 1994). The key to business profitability is to create synergies between communication technology, internal organizational characteristics and an available market opportunity. In order to develop sustainable competencies, it is worthwhile conducting a competitive analysis of potential industry reaction. This would allow managers to take communication-technology-based strategic initiatives that are not copied rapidly by competitors.

Joint Perspective In order to overcome the perceived uncertainty associated with the implementation of a communication technology, Swanson and Ramiller (1997) propose the concept of an organizing vision. An organizing vision represents the product of the efforts of all the stakeholders to make sense of the innovation as an organizational opportunity. Since the implementation of a new communication technology is associated with basic uncertainties concerning the requirements, design and use of the new system, organizing visions help in charting a successful course by facilitating the interpretation, legitimization and mobilization enabling the exploitation of the communication technology. Organizing visions help in providing understanding about the usefulness and institutional necessities of the new communication technology. It also provides a rational explanation of the existence of the technology by answering the question: ‘Why implement it?’ By linking the rationale to the business needs of the organization, organizing visions legitimize the innovation. This is frequently supported by the reputation and authority of those who promulgate it. The organizing vision also serves the purpose of helping to activate and motivate the realization of the intended change by attracting necessary resources and facilitating exchange between organizational members. The idea of an organizing vision has been supported by Nelson and Cooprider (1996), who found that an understanding and appreciation among communication technology designers and line managers, increases the performance of groups using communication technology. This shared knowledge is mediated by mutual trust and influence. This implies that organizations need to be sensitive to opportunities for social interaction to enable the development of trust. These opportunities could take the form of joint planning sessions; the creation of

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cross-functional teams (Henderson, 1990); the strategic rotation of managers (Nonaka, 1994); or workshops for developing an organizing vision. The purpose of these opportunities is to provide a social context to improve the understanding of the constraints of each group and to facilitate the development of a vision, which will lead to success in communication technology implementation.

6 A Dynamic Model of Communication Technology Employment Although it may seem reasonable from a managerial perspective to expect a consistent relationship between communication technology and organizations, more recent literature (Robey and Boudreau, 1999; Yates et al., 1999) seems to suggest that this common assumption does not hold. Earlier chapters have shown that empirical evidence regarding the impact of communication technology is often contradictory: some authors argue that the increased use of communication technology leads to centralization, while others argue the opposite; some say it leads to the reinforcement of the organizational hierarchy, but others say it undermines it; some maintain it reduces the number of middle managers, while others suggest that it increases the number; some argue for an increase in participation of knowledge workers in decision-making, but others propose a decrease in the number of people involved, and so on. Essentially, the desire of management researchers to maintain an ‘elusive consistency’ (Poole and Van de Ven, 1989) has led to a refusal to acknowledge paradoxes or contradictions in empirical findings. Confronted by evidence that points explicitly towards the existence of contradictions, solving this issue becomes the task.

COMMUNICATION TECHNOLOGY AS A MODERATING VARIABLE One approach is to view communication technology as a moderating variable – that is, a variable that changes the relationship between two other variables but has no direct influence on the independent variable (Robey, 1981). From this point of view, changes in organizational design, organizational learning and the employment of effective communication technology are caused by other factors, such as environmental uncertainty and changes in organizational culture, which intervene in the relationship between communication technology and organizations. As a moderating variable, communication technology creates a dynamic relationship between communication technology, organizations and the actors within the organization. The importance of communication technology to organizations lies in the significance of the created and manipulated information. In essence, there is a 143

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relationship between what is carried by the technology and what is understood by the user. Communication technology is a carrier of information and as such it can create social dynamics which differentiates it from other technological tools. These dynamics may account for the contradictory findings of communication technology use within organizations. A model is developed below, based on the assumption that there is an inherent dynamic between actors, organizational context and communication technology. Based on this assumption and the presented evidence of previous chapters, this model aims to propose a dynamic link between communication technology, top management, knowledge workers, organizational design and organizational processes.

THE DYNAMIC MODEL The dynamic model relating communication technology to organizations starts with the premise that the interaction between communication technology and organizations is a function of the different actors and contexts implicated in its development and use.1 According to Orlikowski and Robey (1991), there is an underlying duality between communication technology and organizations: ‘This duality is expressed in its constituted nature – communication technology is the social product of subjective human action within specific structural and cultural contexts – and its constitutive role – communication technology is simultaneously an objective set of rules and resources involved in mediating (facilitating and constraining) human action and hence contributing to the creation, recreation, and transformation of these contexts’ (ibid., p. 151). Basically, in the authors’ opinion, communication technology is the cause and consequence of organizational action.

Top management’s choice Goal Communication technology

Figure 6.1 The introduction of communication technology

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Communication Technology and Managers Initially, top management makes communication technology investment decisions with a specific purpose in mind. It may be to facilitate the distribution of information, to monitor organizational units, or to enable the generation of ideas within a group. From a management perspective, communication technology should primarily serve the intended goals. Figure 6.1 shows the relationship between top management and the employment of communication technology to meet organizational goals. Communication Technology and Knowledge Workers Once the communication technology implementation decision has been made, the introduction of communication technology has to be viewed as an occasion in the life of an organization (Barley, 1986) that affects the processing of information by knowledge workers. With the implementation of communication technology, an external parameter has been introduced within the organization that changes the creation and manipulation of information. The fundamental question arising is concerned with the relationship between this external parameter and the agents – knowledge workers – of the organization. As communication technology is introduced, knowledge workers have to make media choices that translate into alternative ways of processing information. These media choices are made in the context of having to achieve an expected level of individual performance. In these circumstances, knowledge workers appropriate the technology according to their needs and given organizational norms. Although top management may have a specific output in mind, the invested communication technology is adopted by organizational members who make the eventual decision regarding the use of the technology. The underlying idea is that communication technology is created and changed by human action, yet it is also used by people to accomplish organizational aims. Knowledge workers may, for example, decide to use group support systems for the purpose of generating ideas, yet refuse to use these for overcoming conflicts. These choices are basically actions that are selected according to in-built preferences2 and the information-processing capacity of actors (Whittington, 1988, p. 254). This means that knowledge workers are limited in their full range of media choices. Furthermore, political processes within organizations demand the negotiation of appropriate media choices. These negotiation processes adhere to established social patterns that have developed over time. This means that the media choices of organizational actors are partially predetermined by established organizational norms. This in addition to the inability to make media choice decisions under perfect information limits the ‘optimal’ use of communication technology within organizations.

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Using Communication Technology Individual informationprocessing constraints

Communication technology options

Knowledge workers’ choice

Organizational constraints

Figure 6.2 Communication technology choices by knowledge workers

As such, knowledge workers have ‘bounded’ autonomy (Child, 1997), since they can take proactive initiatives while at the same time being constrained by the organizational and external environment. Figure 6.2 shows the constraints of knowledge workers in making communication technology choices. Although knowledge workers may have a certain degree of influence over the use of communication technology, the communication technology environment has properties, that cannot simply be denied by knowledge workers. This means essentially that communication technology has both objective and negotiable properties. Objective properties are given by the type of communication technology employed as well as the inherent features of the technology. Groupware leads to a different impact on the organization than does electronic mail because of the features that the technology provides. Groupware allows several people to communicate simultaneously, while electronic mail is an asynchronous medium. Communication technology has objective properties, but it is its subjective properties that are negotiated through social interaction between organizational actors. These subjective properties develop through repeated patterns of use of communication technology, which in turn form routine practices within the organization, and, over time, these become objective features of the organization. Communication Technology and Organizational Design According to Orlikowski (1992, p. 406), Communication technology is the product of human action, while it also assumes structural properties. That is, communication technology is physically constructed by actors working in a given social context, and communication

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technology is socially constructed by actors through the different meanings they attach to it and the various features they emphasize and use. However, it is also the case that once developed and deployed, communication technology tends to become reified and institutionalized, losing its connection with the human agents that constructed it or gave it meaning, and it appears to be part of the objective, structural properties of the organization. Over time, interactions between knowledge workers form patterns of communication behaviour which become institutionalized as formal organizational structure. Once the socially constructed organizational environment becomes institutionalized, structural constraints limit the choices of knowledge workers. Thus the process of social construction may enable or constrain knowledge workers. As time passes, the choices of actors and the organizational setting become interpenetrated through collaboration between actors both within and outside the group in such a way that the distinction blurs between the two entities. Essentially, the relationship between the organizational setting and agents is one between choice and constraint (Child, 1997). Communication Technology and Organizational Processes Changes in the communication processes and structure gradually occur through learning. Continuous learning by knowledge workers leads to the questioning of established communication technology patterns of use and norms, and thereby enables a change in the collective knowledge structure. Such changes lead to a revision of communication technology patterns of use, and thereby have an impact on institutionalized communication patterns, and eventually on the organizational structure itself. Feedback loops exist between communication technology choice and organizational design in such a way that both influence each other, constantly changing the communication patterns and design dimensions of the organization. Figure 6.3 shows the dynamic relationship between knowledge workers and organizational design over time. The model makes specific reference to the existence of enabling and constraining forces, and thereby acknowledges the existence of opposing forces. These determine the degree to which knowledge workers and the organizational context influence the outcome of communication technology use. Enabling forces help in fulfilling the intentions of top management, while constraining forces work in the opposite direction. Essentially, the outcome of communication technology use is a result of knowledge workers’ preferences and established organizational design dimensions, as well as constraining and enabling forces in communication technology use. For example, the more established the existing organizational design

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Using Communication Technology Enabling and constraining forces t Knowledge workers

Outcome (?)

Communication technology

Organization t Enabling and constraining forces

Figure 6.3 Dynamic model of communication technology and organizations

dimensions, the more difficult it is for knowledge workers to influence existing patterns unless enabling forces such as a strong top management vision (for communication technology employment) facilitate the change. Since the outcome is a result of a multitude of factors, it is difficult to predict the outcome clearly. Enabling and constraining forces can either transform an organization or lead to the persistence of established patterns, or both at the same time in different areas. As a result, the organizational form that emerges frequently cannot be anticipated: ‘As intended new structures are greeted by political opposition, cultural drag, institutional inertia, or existing organizational memory, unexpected new organizational forms may appear’ (Robey and Boudreau, 1999, p. 181). This explains the mass of conflicting empirical evidence. Rather than viewing communication technology as determining new organizational structures, communication technology interacts with organizations to produce social consequences. This indeterminancy does not, however, mean that organizational consequences are entirely unpredictable. While managers may not be in a position to determine unilaterally the outcome of communication technology implementation, they have to take a process-orientated view towards communication technology employment. This process-orientated view entails an understanding of the different organizational actors, the given context and the types of communication technology employed.

MANAGERIAL IMPLICATIONS Although this chapter suggests that the outcome of communication technology implementation is not entirely predictable, management can employ a

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process-orientated design framework, which will serve as a thread for communication technology use over time. This thread can steer management through the different phases of communication technology implementation and use. It is based on the findings of the previous chapters and should be viewed as a sensitizing device that reminds managers about the most important issues during communication technology implementation and use. The Process-orientated Communication Technology Design Framework The process-orientated design framework of communication technology implementation and use consists of five steps: (i) needs assessment of communication technology use; (ii) development of a communication technology strategy; (iii) initiation of a project on communication technology use; (iv) implementation of communication technology; and (v) monitoring of communication technology use. Throughout the implementation, it is necessary to understand the needs of the stakeholders in communication technology; the given context; and the types of communication technology employed. Particular attention is to be paid to the various actors involved during communication technology implementation and use, since it has an effect on them. Step 1:

Needs Assessment of Communication Technology

The first step consists of assessing the communication technology requirements of knowledge workers within the organization, taking into consideration the resource constraints and intentions of top management in employing communication technology. To obtain a holistic picture of communication technology needs within organizations, it is necessary to involve knowledge workers, communication technology designers and top management, since communication technology transcends the organization. In addition, a change model needs to be selected for communication technology implementation. (i) (ii) (iii)

(iv)

Assess the needs of the target population; Consider resource/budget factors; Include knowledge workers, communication technology designers and top managers in the needs assessment phase so that communication technology considerations match the communication technology employment goals; and Choose a communication technology implementation model (select topdown versus bottom-up implementation process).

Step 2:

Develop Communication Technology Strategy

The second step entails the development of a communication technology strategy that considers the range of communication options available within the

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organization. When deciding on the implementation of a new communication technology, the goals, the phases of implementation and the time frame should be made explicit. At the same time, a multitude of outcome criteria at both the individual and the organizational level need to be established in order to be able to judge the success of communication technology implementation. Once the strategy has been set up, it is up to top management to provide the rationale and communicate it to the knowledge workers and communication technology designers. (i) (ii) (iii)

Establish communication technology strategy – goals, phases and time frame; Establish outcome criteria – individual and organizational level; and Provide leadership rationale and explain the rationale for communication technology implementation.

Step 3: Initiate a Project on Communication Technology Use The third step requires the initiation of a project, involving the various stakeholders in communication technology use. Involving the stakeholders requires the establishment of a task force with all the various stakeholders represented in it. Since it has repeatedly been argued that communication technology use depends on the ‘conduciveness’ of the organizational context, it is important to ensure the support of all parties involved. This means that knowledge workers are aware of the benefits of use, communication technology designers have to understand the needs of knowledge workers and be able to match the technology with their needs, and top management has to provide the leadership and the resources throughout the implementation process. This task force should then review the analysis of the organization regarding communication technology needs, document the current state of communication technology applications within core and support activities, and conduct an analysis of the enabling and constraining forces in communication technology implementation. These activities require the involvement of the affected groups by communicating the results of the various activities to the larger organization. (i) (ii) (iii) (iv)

Create a task force including representatives of knowledge workers, communication technology designers and top managers; Assign the task of reviewing and updating the organizational diagnosis to the task force; Document the state of communication technology applications and opportunities within core business and support activities; Analyze the enabling and constraining factors in communication technology implementation;

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Involve affected groups in review of work context and task processes; and Decide on communication channels for the task force.

Step 4:

Communication Technology Implementation

In many instances, organizations implement the fourth step without the first three steps. This step – communication technology implementation – entails not only the development of prototypes, but also ensuring support for the use of communication technology. For this purpose, communication technology mediators should be assigned, and team building, training and management programmes need to be developed. So that the new communication technology will be accepted, top management should foster a climate conducive to change and start institutionalizing the change when it occurs. (i) (ii) (iii) (iv) (v) (vi)

Develop prototypes; Define a group of communication technology mediators; Begin team building, training and management development; Involve task force throughout implementation process; Foster climate conducive to change; and Institutionalize change.

Step 5:

Communication Technology Monitoring

The fifth and last step is in fact a continuous process, involving monitoring communication technology use over time. In order to ensure that the implementation of new communication technology will lead to the intended outcome, top management needs to hold status review meetings and fine-tune the design of communication technology to match the needs of knowledge workers. Guaranteeing that communication technology will be used to support learning requires the creation of knowledge-development forums, which support information acquisition, distribution, interpretation and storage. The creation of these forums could be facilitated by communication technology designers, but the incentives for using them should come from top management. (i) (ii) (iii)

Hold status review meetings and fine-tune design of communication technology use; Conduct independent programme evaluation of communication technology; and Institutionalize organizational learning mechanisms using communication technology.

Communication technology implementation involves making strategic choices. These choices include finding coherence among organizational strategy,

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the tasks of knowledge workers, organizational structure, communication technology, reward systems and people. By aligning the various organizational dimensions, communication technology can contribute to the bottom-line results of organizations. Since the chief information officer or chief knowledge officer is frequently responsible for the results of communication technology implementation and use, this person should have a particular interest in aligning the various organizational dimensions and support the initiatives taken during communication technology implementation. Yet it demands the attention of all the stakeholders concerned in order to use new communication technologies successfully.

Appendix 1: Assumptions about Organizations Since organizations may be viewed from a number of different perspectives, it is important to clarify the assumptions that underlie the analysis of this book. The most basic assumption is that organizations are open social systems which process both external and internal information. Organizational members acquire information from the environment in order to reduce uncertainty and share information internally to reach a common understanding to enable them to proceed with managerial action. A second assumption is that organizational members have limited information-processing capabilities. This is the case because people usually have to act on the basis of incomplete information about possible courses of action and the consequences of these. Since people have limited time, they are unable to explore all the alternatives relating to any given decision and are unable to assign accurate values to outcomes. Organizational members are essentially bounded in their rationality.

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Appendix 2: Origins of Information Processing To understand the nature of information processing, it is necessary to examine its origins. Research within the field of organization theory and communication suggests that there are two influences on information processing: uncertainty and ambiguity1 (Daft and Macintosh, 1981; Weick, 1979b, 1995). Galbraith (1974) proposed that, as the level of uncertainty increases, the amount of information processed by organizational members increases to reduce uncertainty. Uncertainty is the difference between the amount of information required to perform a task and the amount of information already possessed by the organization. There are different types of uncertainty, as noted in Table A.2.1, yet the response of knowledge workers is the same, regardless of the type of uncertainty, namely the acquisition of additional information. In contrast to uncertainty, ambiguity refers to the existence of multiple and conflicting interpretations about a situation within the organization (Weick, 1979b). When managers observe the environment, information cues are often ambiguous. As a result, they are

Table A.2.1 Types of uncertainty Types of uncertainty Ignorance Historical uncertainty Effect uncertainty State uncertainty Response uncertainty

Table A.2.2

Types of ambiguity

Types of ambiguity Multiple, conflicting interpretations Unclear goals Ill-structured problem Poor understanding of cause–effect relationship Different value orientations

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155

unsure about the consequences of that observation on organizational action. In order to resolve the ambiguity surrounding the information, there is a need to arrive at a shared understanding about the next steps to take. As a result, managers negotiate a solution based on accumulated experience in order to establish mutual understanding. Table A.2.2 summarizes the different situational types of ambiguity.

Appendix 3: Interview Results for the Comparative Study of the Impact of Communication Technology on Organizations in Nepal, Thailand and Singapore Table A.3.1 The impact of communication technology on organizational design dimensions in Nepal Org.

Time frame

CT* use level

No. of hierarchical levels

No. of employees

No. of middle level managers

No. of authorization steps

Max. span of control

C1

t95** 1998 t95 1998 t95 1998 t95 1998 t95 1998 t93 1998 t95 1998 t95 1998 t95 1998

Low Medium Low Medium Medium High Low Low Medium Medium Low Medium Medium High Low Low Low Medium

4 5 4 4 5 4 7 9 5 5 4 4 6 5 6 7 6 6

203 355 200 250 170 200 8225 7893 100 230 220 80 380 402 2100 1900 3500 4400

16 21 20 28 35 40 590 645 15 27 8 7 74 80 250 238 425 590

3 4 3 3 4 3 4 5 4 3 3 3 4 2 4 4 4 4

5 7 6 6 5 8 15 15 6 6 9 16 10 16 10 10 11 12

C2 C3 C4 C5 C6 C7 C8 C9

*CT use:communication technology use **t95:5 years ago

156

Time to decision

Less Less Less Same Uncertain Less Less Same Same

157

Interview Results: Nepal, Thailand and Singapore Key: Label C1 C2 C3 C4 C5

Industry sector Hydro power (electrical) Construction Banking Power utility Banking

C6 C7 C8 C9

Electrical manufacturing Tobacco manufacturing and distribution Airlines Telecom utility

Table A.3.2 The impact of communication technology on organizational design dimensions in Thai organizations Org

Time frame

CT use level

C1

t95 1998 t95 1998

Medium High Medium High

4 3 6 3

t95 1998 t95 1998

Medium Medium Medium High

t95 1998 t93 1998 t95 1998 t95 1998

C2

C3 C4

C5 C6

C7 C8

Key: Label C1 C2 C3 C4

No. of hierarchical levels

No. of middle level managers

No. of authorization steps

Max. span of control

30% less 120 90

120 95 35 30

3 Flexible 3 to 4 Up to 2

911 :10 5 to 10 Up to 15

5 4 5 4

1500 750 100 200

15% do 15 24

4 2 to 3 3 to 5 Up to 2

7 to 10 Do 7 to 8 10 to 13

Low Medium Medium High

4 5 6 to 7 4

24286 25425 180 107

n.a.

n.a.

Low Medium Low Medium

4 4 5 5

75 70 1000 750

n.a.

3 to 4 Do 3 to 5 Less (group) 2 2 3 to 5 Do

Industry sector Electrical/industrial systems Electrical/communication Communication Electronic component manufacturing

No. of employees

C5 C6 C7 C8

28 16

92 58

Telecom utility Manufacturing/marketing Financial consulting Electrical/industrial systems

Time to decision

Less Sign. Less Less Sign. Less Less

7 to 10 12 7 Do 920 Do

Sign. Less Less Less

158

Appendix 3 Table A.3.3 The impact of communication technology on organizational design dimensions in Singaporean organizations

Org.

Time frame

CT use level

No. of hierarchical levels

C1

t95 1998 t95 1998

Low Medium Medium High

t95 1998 t95 1998

Medium High Medium High

5 5 4 3* (matrix) 4 4 4 3

C2

C3 C4

Key: Label C1 C2

Industry sector Multi-disciplinary consulting Electrical system/equipment

No. of employees

110 145 130 90 70 45** 100 60

C3 C4

No. of middle level managers

No. of authorization steps

Max. span of control

Time to decision

50 62 20 to 25 10 to 12

2 to 3 2 to 3 Up to 3 Up to 2

25 25

Less

Increased

Much

25 15 30 15

Up to 3 Up to 2 3 to 4 Up to 2

n.a. Less :5 95

Much Less

Independent power producer Gas and oil pipelines

Notes * Dynamic system with team leader having authority to change the structure of a team ** Numbers of staff depend on projects undertaken; this data does not include site workers.

Appendix 4: A Case Study of Communication Technology Use in Chinese Trademark Agencies Since the literature suggests that communication technology usage is one of the individual-level criteria for assessing the impact of communication technology within organizations, an empirical study was conducted that assessed the degree to which Chinese trademark agencies used communication technology. The level of communication technology usage was investigated based on a number of factors identified by Raymond and Pare (1992). Table A.4.1 shows the factors that served as the basis of the investigation. To explore communication technology usage within small and medium-sized enterprises in the Chinese trademark service industry, this study used the case study approach to investigate six companies in the Beijing area. The investigated companies provide professional trademark registration and related law services (trademark agencies) or include such services as an important part of their business (patent and trademark agencies). Table A.4.2 provides an overview of the cases studied. Regarding the hardware and software configuration, it was found that almost everyone working in the investigated companies had at least one computer, except for those who worked outside, or those older people who were not obliged to use computers. IBM PCs or compatibles were the predominant computers used. The type of PC ranged from 386 to Table A.4.1

Determinants of communication technology usage

Communication 1. Hardware and software configuration technology usage No. and type of computers System and application software used 2. System connectivity and centralized databases Presence and type of networks and number of servers Presence of centralized database, development tools and source of database applications 3. Use of the newly-emerged internet Reactions to the internet-based new technologies Source: Adapted from Raymond and Pare (1992).

159

160

Appendix 4 Table A.4.2 Companies in the study Case company

CCPIT CTS CPA NTD BTA W&A

Scope of business

Trademark; patent Trademark only Trademark; patent Trademark; patent Trademark only Trademark only

Number of employees in company

Number of employees in trademark division

Unit of analysis

240

74

70

–

100

20

53

26

30

–

15

–

Trademark division Whole company Trademark division Trademark division Whole company Whole company

Table A.4.3 Hardware and software configuration Company name

Number of employees

CCPIT

74

CTS

70

CPA

20

NTD

26

BTA

30

W

15

No. of computers PC Total (Incl. -386 486 .Pentium) PC Total (Incl. -386 486 .Pentium) PC Total (Incl. -386 486 .Pentium) PC Total (Incl. -386 486 .Pentium) PC Total (Incl. -386 486 .Pentium) SUN SPARC Macintosh650 PC Total (Incl. -386 486 .Pentium)

System software 85 8 35 42 39 2 21 16 26 0 8 18 29 0 12 17 29 4 7 18 1 2 13 0 5 8

Application software

DOS, Windows3.1, Windows95

Office 4.3 Office 95 WPS

Windows3.1, Windows95 Chinese Star

Office 4.3 Office 95

Windows95

Office 4.3 Office 95

Windows95

Office 4.3 Office 95

DOS, Windows95

Office 4.3 Office 95

Solaris System 7 Windows95

Photoshop Office 4.3 Office 95

161

Chinese Trademark Agencies Table A.4.4 Networking and database systems implementation Company

Networking

Name

Year of establishment

No. of servers

CCPIT CTS CPA

1957 1990 1980

PC Server PC Server PC Server

NTD BTA

1987 1992

PC Server PC Server SUN SPARC Work station

Database

Network operating system

Year set up

Developed by

Setup time (months)

3 2 2

Netware4.1 Netware3.12 Netware3.12

1993 1995 1995

12 6 1

2 1 1

Windows NT Netware 3.11 Solaris

1994 1994

Self-made Self-made Outsourced from CCPIT Self-made Self-made

7 16

Pentium-based computers. Since all companies relied on IBM PCs or compatibles, it was not surprising to find that Microsoft Windows (Windows 3.1 or Windows 95) was the most popular system software used, and that Microsoft Office (Office 4.3 under Windows 3.1, or Office 95 under Windows 95) was used uniformly by all companies; see Table A.4.3. Very soon after their establishment, the trademark agencies began to set up their networks and central databases. As Table A.4.4 indicates, the earliest systems were introduced in 1993, with most of the network operating systems introduced around 1994. The earlier-built network operating systems in CCPIT and BTA had a total elapsed time of one year or longer between arrival and operation. In most cases, the exceptionally long set-up time was caused by a lack of packaged software, which led to a widespread requirement for custom programming in application development. All the computer systems in these trademark agencies were connected internally. Apart from decentralized dial-up networks to access electronic mail in some agencies, external networking to branches in other cities or headquarters was not common. This lack of connectivity may be attributed to high charges by the national telecommunication infrastructure provided by China’s telecommunication monopoly. None of the six companies made extensive use of new communication technology such as the internet. Of the six companies, only NTD created its own website. Although BTA had obtained a domain name, at the time of the survey, its website was awaiting construction. The use of electronic mail in these agencies was low. Although every company had a number of modems, electronic mail was not checked regularly. Traditional ways of communication – for example, letters, telephone and fax – were the primary means of communication.

Appendix 5: Terminology Information

Raw material of managerial work

Information processing

Acquisition, distribution, interpretation and storage of information to carry out the critical functions of decision-making

Organizations

Open social systems that process information

Knowledge

Information plus the causal links that help to make sense of the information

Communication

Exchange of information between individuals

Communication technology

Application of computer technologies in the acquisition, storage, analysis, distribution and presentation of information

Richness

Amount of information that can be transferred and its ability in changing human understanding

Reach

Number of people who can exchange information

Media substitution

Replacement of one medium for another

Recordability

Ability to document and modify the communication flow

Memory

Ability to search previous communication flows

GSS

Group support systems

162

Notes 1

Communication Technology and Organizations

1.

According to Evans and Wurster (1997) richness also includes the degree of specificity of information as well as the amount of interaction involved – for example, addressing a small group of people allows a manager to convey more specific information as posting an advertisement for the public. The survey was conducted in 1996 based on telephone interviews with 1313 managers from Britain, the USA, Australia, Singapore and Hong Kong. Participants were identified as key recipients and users of information and were split evenly between junior, middle and senior management. The departments represented were sales and marketing, public relations, finance, legal, and human resources. Participants were asked how they dealt with information consisting of reports, newspapers, memos and electronic communication. It was commissioned from Britain’s Benchmark Research by Reuters Business Information, part of the international news and information organization Reuters Holdings plc. The survey is based on managers’ perceptions of information-processing behaviour. Since information technology is more encompassing than communication technology and this book particularly focuses on communication technology, the term communication technology is used throughout the text. When the original authors investigated information technology, but the results could not be transferred entirely to a communication technology context, then the term information technology is used.

2.

3.

2

Knowledge Workers’ Choices of Communication Technology

1.

Situational theory investigated media choice looking at characteristics of the situation surrounding media choice. An example is the urgency of the task in a given situation. Allen (1977) was one of the first to suggest that the accessibility of information was more important than its quality. Context-independent factors refer to factors that are free from social influences of a particular workplace. Context-dependent factors are factors that shape the social environment of the workplace. Vandenbosch and Ginzberg (1996–7) investigated the impact of Lotus Notes within an insurance company and show that although general satisfaction was high, no change in the amount of collaboration followed. They conclude that this is the result of lack of support in using the technology, or lack of fit between the technology and the social context.

2. 3. 4. 5.

3

Communication Technology and Organizational Learning

1. For the underlying assumptions about organizations, see Appendix 1. 2. Communication costs are costs associated with the amount of information needed for decision-making.

163

164 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

13.

14. 15.

16.

4 1. 2.

Notes For the origins of information processing, see Appendix 2. Information processing costs are costs associated with sending information upwards in the hierarchy for the purpose of decision-making. The more costly knowledge is to transfer, the more specific it is; and the less costly the knowledge is to transfer, the more general it is (Jensen and Meckling, 1992). Some of these technological solutions belong to the larger term ‘information technology’ rather than communication technology above. Status differentials refer to differences between knowledge workers in terms of level of hierarchy. The reasons for the dampening effect of group support systems of status are mentioned more specifically in the section on participation in decision-making. The automational impact refers to the ability to distribute information automatically to a larger audience without having to make use of middle managers. For more empirical support of the findings of the study, see Appendix 3. Technization of work refers to the increasing need for specialized knowledge to perform the job. Although electronic brainstorming has been shown to be superior to face-to-face group brainstorming, groups using nominal brainstorming performed best (Pinsonneault et al., 1999). Sharing information has been found to be a function of group history. Established groups discuss significantly less initially shared information than do ad hoc groups (Mennecke and Valacich, 1998). Since established groups develop a shared interpretative context, they are less likely to feel the need to share all information, since they assume that other group members will approach the problem from a common perspective. This has been supported by the finding that established groups not only share less information but also spent less time working on a task (Carley, 1986). For established groups, computer-mediated communication may thus even have a negative impact on reaching consensus, since parallel processing of information is likely to reinforce the fact that even less information is shared. Although groups interacting using GSS exchanged about 50 per cent more information, providing sufficient information to enable the optimal decision to be reached, only one GSS group chose the optimal solution (Dennis, 1996). Explanations for the lack of processing of the information are anonymity and delayed feedback, which resulted in the lack of credible information provided for decision-making. Harris and Katz (1989) studied information technology in general and thus included technologies that do not necessarily fall under communication technology. He found that firm-level information technology capital and industry-level information technology capital influence firm structure in similar ways when considered separately. Yet the choice of information technology use outweighed the general tendency of firms in information-technology-intensive industries to have less vertical integration. The formal structure reflects the reporting relationships, the allocation of decisionmaking and the hierarchy of authority. Teams refer to the work relationships between employees in less formal groups. Individuals reflect the foundation of organizations who contribute by processing information.

Communication Technology and Organizational Learning In this case, knowledge refers to the mental frame of reference of an individual. Weick (1995) uses the terms equivocality and ambiguity interchangeably.

Notes 3. 4. 5. 6. 7. 8.

9.

10. 11. 12. 13.

5 1. 2. 3. 4.

165

For more information on the different types of uncertainty and ambiguity, see Appendix 2. The greater the interrelation of tasks and the more co-ordination of work across organizational levels, and time and space, the greater the complexity. In this situation, more information is required. For more specific information on social environment determinants of media choice, see Chapter 2. In this case strategic uncertainty refers to unclear issues, a characteristic of ambiguity. Personal sources refer to direct human contact as typified by face-to-face and telephone media (Daft et al., 1988). According to Scherer and Tran (2000) emotions can play a major role in the process of filtering and searching, since they act as ‘relevance detectors’. These relevance detectors allow organizational members to filter distribution lists while at the same time allowing people to broadcast their problems and potential solutions to others with similar interests. Once common interest has been identified, the exchange of ideas is likely to increase, thereby leading to the development of more interpretations of information, and hence learning. In the anthropological literature, the idea of critical mass has been expanded with the term diffusion or translation referring to the idea that through interaction between people information is mediated and a new link created that did not exist before (Czarniawska, 2000). The term perceptual framework refers to the interpretations an individual holds regarding information. Conflict-based approaches search for differences in interpretation before identifying shared interpretations, while consensus-based approaches search immediately for shared interpretations. After having conducted an extensive review of the literature, Kieser et al. (2000) define rules as ideas that are shared by a number of people in which behaviour is appropriate under certain conditions. Routines link behaviour to rules. The difference between Huber’s concept of learning as reflected in the four learning constructs and the knowledge development perspective lies in the process. While Huber’s model can be viewed primarily in terms of different processes of learning, the knowledge development view highlights the spiral process of knowledge creation.

Communication Technology and Success Communication technology effectiveness is a multidimensional construct, since the term effectiveness cannot be associated with a single, valid measure. Although the results are based on an information technology index, it is presumed that the findings would be similar given an index specifically addressing communication technology. Resource complementarity involves leveraging firm-specific intangible resources and merging them with communication technology in such a manner that the pieces fit together. Decision-making accuracy was measured by assessing the difference, on average, between the team’s decision and the correct decision by representing the decision alternative with values from one to seven.

166 6

Notes A Dynamic Model of Communication Technology Employment

1.

According to Orlikowski (1992) many of the actions that constitute technology are separated in time and space from the actions constituted by the technology. Technology designers influenced by the properties of the organization construct a technology to meet managerial goals, while users of technology are influenced by the given technology. 2. According to Child (1997, p. 50) ‘the concept of action determinism draws attention to the relevance of predetermined mind-sets for the interpretative process which takes place when strategic choice is exercised and it accounts for how these could limit the range of choices recognized and considered’.

Appendix 2: 1.

Origins of Information Processing

Weick (1995) uses the term equivocality instead of ambiguity.

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Index access, 49 accuracy of information, 28 actors, 144 actual use, 130, 136 advanced communication technology, 6, 44 agency costs, 44 ambiguity, 10, 17, 21, 35, 43, 83, 92, 154 anonymity, 63 archives, 96 behavioural measures, 134 benchmarking, 125 bounded autonomy, 146 brainstorming, 61 business alliances, 72, 80 centralization, 43, 46, 76 change dimensions, 106 channels, 7 chief knowledge officer (CKO), 111, 112, 152 cognitive measures, 134 communication costs, 41 communication linkages, 58 communication media, 5 communication technology designers, 150, 151, 152 communication technology implementation, 151 communication technology monitoring, 151 communication technology penetration, 51, 69, 76 communication technology strategy, 150 communication technology usage, 159 communication technology use, 150 comprehensiveness, 28 computer literacy, 46 Computerworld Index, 119 concurrence, 19 conflict resolution, 63 conformity, 32 consensus, 62, 127

consistency, 143, constraining forces, 148 context-dependent factors, 32 context-independent factors, 32, 116 contexts, 105, 144 cost reduction effect, 47, 65 cost–benefit approach, 122 crisis, 107 critical mass, 23, 33, 38, 91 culture, 95 customer value, 123 decentralization, 43, 45, 76 decision accuracy, 127 decision information costs, 44, 74 decision-making, 42, 43, 52 diversification, 66 downsizing, 49, 76 dynamics, 144 economic measures, 134 effectiveness, 117, 134 electronic mail, 8, 19, 33, 38, 57, 60, 62, 90, 91, 96 electronic meeting systems, 77, 127 enabling forces, 148 equal participation, 70 evaluation appreciation, 61 expenditure on research and development, 125 external co-ordination costs, 66, 67, 80 face-to-face communication, 102 features, 7, 84, 98 formality, 56 forums, 110 free riding, 61 group process gains, 63 group process losses, 63 group support systems, 6, 45, 49, 61, 62, 63, 70 groupware, 8, 104, 146

182

183

Index hierarchy, 24, 29, 48 horizontal information-processing, 42, 55 human resource involvement, 139 human-technology partnership, 107 hybrid structures, 75, 76 incentive systems, 109 indeterminancy, 148 individual traits, 30 influence, 59 informal links, 73 information acquisition, 82, 88, 99 information distribution, 41, 82, 99 information interpretation, 82, 92, 100 information overload, 2, 46, 90 information system specialists, 103, 104 information technology cost efficiency ratio, 120 information technology expense ratio, 120 information processing, 1, 81 internal co-ordination costs, 66, 67, 80 job category, 29 judgement biases, 62 knowledge, 102 knowledge base, 81, 86, 87 knowledge development, 101 knowledge executives, 50 knowledge link, 70 knowledge officers, 103 knowledge workers, 15, 103, 104, 107, 138, 145, 150, 152 lateral communication, 57 lateral relations, 55 learning curve, 125 level of analysis, 115 limited information processing, 153 managerial action, 47 managerial roles, 29 matching, 61 media accessibility, 28, 30 media attitudes, 25, 136 media expertise, 29 media feature, 103 media high in scope, 85, 89, 90, 92 media perception, 86, 89, 90, 96, 98

media richness, 26, 92 mediators, 140, 151 memory, 19, 95 message intention, 30 moderating variable, 143 motivation, 74 multiple stakeholders, 39, 55, 135 needs assessment, 149 nodes, 74 norms, 34 number of users, 38 open social systems, 153 opportunities, 110 organization vision, 141 organizational boundaries, 42 parallelism, 61 participation, 60, 77 perception, 22, 34, 94, 103 personality, 30 perspectives, 8, 115, 117 pressure for immediate success, 108 process measures, 134 process model, 40 process-oriented design framework, 149 production blocking, 61 productivity, 123 productivity crisis, 4, 131 productivity measures, 134 productivity paradox, 2 proximity, 23, 31 quality of decisions, 126 quality of information, 28 rational choices, 32 reach, 1, 2, 19, 41, 85 recipient availability, 25, 36 recordability, 19 redundancy insurance, 37 relational perspective, 73 relations, 74 relevance detectors, 50 resource complementarity, 124 resources, 106 richness, 1, 16, 17, 35, 84, 89 routines, 95

184 self-preservation, 50 service quality, 139 social influence model, 21 social norms, 33 social presence, 27, 35 spatial and hierarchical barriers, 90 spatial and temporal boundaries, 68 stages, 24 status, 24, 60 stickiness of information, 68 storage, 41, 82, 85, 100 strategic measures, 134 strategic necessity, 123 structural constraints, 147 success, 114 symbols, 31 task analyzability, 88 task closure, 25, 36 team-building, 39 telephone, 57 timeliness of information, 28

Index timing, 109 Tobin’s q ratio, 121 top management, 103, 139, 144, 150, 151 training, 38 transaction link, 72 transformation process, 70, 72 trust, 74, 106 uncertainty, 10, 21, 83, 154 unintended consequences, 73 universal access, 23 urgency, 20, 21, 36 use patterns, 33, 138 user acceptance, 137 user attitudes, 129 user participation, 136, 139 user satisfaction, 128, 129, 136 vertical information-processing, 42 vertical integration, 65 video telephone systems, 8, 34 voice mail, 8, 30