FUTURE ORGANIZATIONAL DESIGN

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FUTURE

ORGANIZATIONAL DESIGN

The Scope for the IT-based Enterprise

LARS GROTH

Foreword by HENRY MINTZBERG

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This is an electronic edition of the book

“Future Organizational Design

The Scope for the IT-based Enterprise”

by Lars Groth

This work was originally published by John Wiley & Sons Ltd. in 1999 (ISBN:0-471-98893-6). The rights reverted to the author in 2010, after the original print run was sold out. This electronic edition has been created on the basis of the author’s original manuscript, and has been corrected to include changes made during final proofreading for the printed edition. In addition, a few typographical errors in the printed edition have been corrected.

The present electronic edition contains all the text in the printed edition, including Foreword, Preface, Series Preface, Acknowledgments, Author Index and Subject Index. The pagination is identical to the printed version.

Accordingly, any citation made from the electronic edition will be identical to the corresponding citation from the printed edition.

The author can be contacted at

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“Man is not the sum of what he has already, but rather the sum of what he does not yet have, of what he could have.”

Jean-Paul Sartre, Temporalité, in Situations (1947-49)

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Foreword

I have always been irked by the writings on the effect of information technology on organization. They reminded me of that joke about the consultant who sits on the edge of the bed each night and tells his wife how good it's going to be. Some years ago, I attended a conference on the subject at the Harvard Business School. Eventually 1 reached my limit: You guys have had thirty years to investigate the issue. What exactly have you done since that Levitt and Whistler article back in the 1950s? Then Lars Groth came along. I never would have looked at his material: it was on this same damnable subject, and a couple of hundred pages longer than what you see here. But he enticed me by sending a brief excerpt, which seemed unusual. So I called him. He sent me more and we arranged to meet at a stopover I had in Oslo airport. I read the material as the plane landed and was fascinated.

There he informed me that this labour of love was written over the previous eight years as a doctoral thesis to be submitted to the Sociology Department at the University of Oslo. He did this doctorate in classic European fashion: you meet your supervisor at the outset, disappear for years, and then show up and dump this huge document on his desk. Trouble was the man passed away, and Lars was having trouble getting anyone else to read it.

The rules in Norway are that another university can get involved, if it so chooses. Lars had made a contact at the Norwegian School of Economics and Business Administration in Bergen, and I reinforced this with a call to Torger Reve who was there at the time. Eventually they invited Lars to defend it there.

Only one problem: they asked me to be the outside examiner. How could I refuse?

The deeper I got into this, and I must repeat that there was more material here originally, the more fascinated I became. This was not your usual thesis, not in its history, not in its style, not in its substance,

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not in its approach. But it was damn good—the first thing I can remember reading that really brings some insight to the slippery question of the impact of information technology on organization. Lars defended this unusual document on a memorable day in Bergen.

In my comments there, I explained why this thesis should be unacceptable- the subject is too broad, the topic is too vacuous, no systematic empirical work was done, the document is too long. All of which is to say that there is no formula for writing a thesis, any more than for applying IT Don't trust the professors when it comes to these things. In fact, this is an extraordinary piece of work on all fronts: depth, creativity, language structure, historical perspective. It is a testimonial to scholarship without socialization: few of the highly indoctrinated doctoral students do this well. I disagree with the author in places, but adore the way his labour of love glows from beginning to end. This is what scholarship should be about. So Lars received his doctorate, a tribute to the School in Bergen.

I urged Lars to get it published. It was already as much a book as a thesis save being too long and belabored in places. So, being dragged kicking and screaming by the likes of me and the publisher, Lars whittled it down to the document you see before you.

I hate those endorsement blurbs on the back of books, and usually refuse to do them or allow them to be done on my books. (Greatest thing since sliced bread, etc.) I don't like to do Forewords either: for one thing, you should really read the book, for another, you should often be saying no, even to nice people and good friends. But when Lars asked me (remember, I had already read it all), how could I refuse?

Henry Mintzberg 1998

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Preface

"Sometimes a scream is better than a thesis."

Emerson, Journals, 1836

This book began its life as a research project and doctoral dissertation.

Normally, then, it should not have ended up in your hands, as doctoral dissertations belong to that peculiar class of texts whose meaning lies in the writing, not in the reading. As I started out, however, the thought of spending years of my life writing for an examining committee and the library shelves became too much to bear, and I decided to write a book rather than a thesis. I also wanted to write a text that was accessible and interesting for both organization people and computer people. This combination turned into a greater challenge than anticipated, and kept me busy for more years than I like to think of. Eventually, however, I had the good fortune of being accepted both at the Norwegian School of Economics and Business Administration in Bergen, Norway (for the degree of dr. oecon) and at John Wiley & Sons (for publication), and I can now finally say that it was a worthwhile effort! I hope you will enjoy reading it, and I welcome feedback. You will find me at www.lars.groth.com.

Changes have been made for the book edition though. Some of the chapters have been rather heavily edited, long quotations and detailed explanations needed for purely academic purposes have been shortened or omitted, the number of associative detours originally made as a personal therapy during the long years of writing have been pared down. However, I have not eradicated them completely. It is those small sparks springing from the associative cortex that makes the process of writing endurable, and I could not bring myself to carry out a complete

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purge – since doing so, I might even deprive the reader of some associations, insights, and new ideas. So please bear with me if you think I am straying somewhat from the subject: I will soon return. Writing a cross-disciplinary book, I have also run into the problems associated with addressing quite different professional and scientific com- munities- In addition to the danger of breaching professional community tenets, explanations included to serve one group may tax another's patience.

Clearly there is no panacea that can resolve this dilemma, and I have had to make a number of choices. The central decision has been to stick to my background as an organization sociologist and make the organization perspective the dominating one. It has nevertheless been impossible to avoid a certain dose of computerese, and I have tried to explain as I go along. If you are a complete stranger to computers, and find the explanations insufficient, you are welcome to visit my website and download a summary of the history of computing originally included in the dissertation as an appendix. There are also a number of books on the subject available Bit by Bit by Stan Augarten is unfortunately out of print now, but you might try A History of Modern Computing: 1945-1995 by Paul E. Ceruzzi or A History of the Information Machine by Martin Campbell- Kelly (details in the list of references in the back of the book).

Similarly, for those who feel they need some background on organization a brief overview of the many-faceted field of organization theory (the second appendix to the dissertation) can also be found on my website. For a more elaborate exposition, I recommend the book Organizations: Rational, Natural

and Open Systems by Richard W. Scott (details in the list of references).

. Throughout the book, I have tried to use examples to illustrate the properties of computers and information technology in general. Many of them are actual systems that are or have been in operation; but because my main objective is to say something about the kind of arrangements that should be possible, not just what has been done already, I cannot stop there To illustrate and explain what I see as the potential of information technology and its fundamental strengths and weaknesses, I have also used imagined examples or thought models of systems that are possible but not yet realized.

This immediately raises an important question about which level of technology those models should assume. To allow only existing products as bases for reasoning would be unduly restrictive when the pace of development is as fast as it demonstrably is in the IT industry (this text alone has resided on four generations of computer systems and has been edited with the help of three different word processing programs in a total of seven versions). Any conclusion would then be overtaken by new

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xix developments before the document left the printer. On the other side, speculations based on potential technological capabilities fifty years from now would not be very interesting either, since a) we do not have the foggiest idea of what that technology will look like and what its capabilities will be and b) it would be of no use for those who would like to do something about their organizations today or in the coming decade, since the capabilities assumed might not be available within the span of their entire careers.

I have tried to hit the middle of the road in this matter, by only assuming capabilities that computer-based systems already possess or are likely to attain in the near future. The trends in the development of the most fundamental parts of computer systems, such as microprocessors, memory, and mass storage have shown great stability in the pace of development for several decades; the present level of chip complexity was in fact predicted fairly accurately by Gordon Moore in 1964 (Noyce 1977). He overshot the target by less than a factor of 10, which is not bad at all when you bear in mind that the number of components per chip today (1999) is several million times higher than it was in 1964.

We therefore have every reason to believe that the established trends will continue for a substantial number of years. Moreover, we also know that most mainstream products today were at the laboratory or prototype stage ten years ago, and it is not unreasonable to assume that most of the mainstream products that will be available in the next decade can already be seen in today's laboratories. There are, of course, always surprises, but as an industry matures the number of surprises and completely new pro- duct classes tends to diminish.

During the ten years that have elapsed since I started to write this text, I have followed the development fairly closely, and no dramatic and unexpected new systems capabilities have surfaced. I therefore believe that we are on pretty safe ground if we assume that the basic capabilities we can expect from computers in the next couple of decades have already been demonstrated, and that the improvements in their capacity can be predicted with sufficient accuracy.

Windows may be ousted as the dominating operating system and Microsoft may go bust (market share for actual products is impossible to forecast), but the fundamental capabilities of computers will prevail.

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Series Preface

The information systems community has grown considerably since 1984, when we began publishing the Wiley Series in Information Systems. We are pleased to be a part of the growth of the field, and believe that this series of books is playing an important role in the intellectual development of the discipline. The primary objective of the series is to publish scholarly works which reflect the best of research in the information systems community.

The Present Volume

As the information systems field continues to mature, there is an increased need to carry the results of its growing body of research into practice. The series desires to publish research results that speak to important needs in the development and management of information systems, and our editorial mission recognizes explicitly the need for research to inform the practice and management of information systems. Lars Groth's book Future Organizational Design: The Scope for the IT-Based Enterprise serves such a purpose wonderfully. The author has provided an intriguing interpretation of how information technology could both inform and transform organizations. To this end, Groth sees organizations as 'constructible' in their own right and he traces how organizations have been constrained because of human limitations. To overcome these limitations, mankind has developed a variety of tools and techniques, typically in the form of alternative organizational structures. In his analysis, Groth draws heavily on work of Henry Mintzberg who has extensively explored the various forms of organizational structuring. Extending Mintzberg's view of organizations, Groth proposes the possibility of new forms of organizations because of the advancements in information technology. He postulates the existence of new organizational opportunities that

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heretofore were unimaginable. New structural configurations, made possible because of IT, will offer great promise to industry and government. This book provides some of the most innovative thinking to hit the field in a long time. It will be of interest to anyone who has even remotely considered what IT could do for organizations.

Rudy Hirschheim

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Wiley Series in Information Systems

Editors

RICHARD BOLAND Department of Management Information and Decision Systems, Weatherhead School of Management, Case Western Reserve University, 10900 Euclid Avenue, Cleveland, Ohio 44106-7235, USA

RUDY HIRSCHHEIM Department of Decision and Information Systems, College of Business Administration, University of Houston, Houston, Texas 77202-6283, USA

Advisory Board

NIELS BJORN-ANDERSEN Copenhagen Business School, Denmark D. Ross JEFFERY University of New South Wales, Australia

HEINZ K. KLEIN State University of New York, USA ROB KLING Indiana University, USA

TIM J. LINCOLN IBM UK Limited, UK

BENN R. KONSYNSKI Emory University, Atlanta, USA FRANK F. LAND London School of Economics, UK ENID MUMFORD Manchester Business School, UK MIKE NEWMAN University of Manchester, UK DANIEL ROBEY Georgia State University, USA

E. BURTON SWANSON University of California, USA ROBERT TRICKER Warwick Business School, UK ROBERT W. ZMUD University of Oklahoma, USA

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Acknowledgements

"Gratitude is the poor man's payment.”

English proverb

The impetus behind this project was my desire to be able to say something sensible about the interrelationship of information technology and organization.

However, without the funding generously supplied by a number of organizations, I would not have been able to probe the question in real depth. I am therefore very grateful to the Research Council of Norway for their early and bold support, which enabled me to attract support also from the County of Akershus, Elkem Aluminium, the Ministry of Government Administration, the Norwegian National Bank, Norsk Data (later taken over by Siemens), and Norsk Hydro. Norsk Data and the County of Akershus supported the participation of Akershus Central Hospital. In each of these organizations, there are many people who have helped with this project, and I feel grateful to them all.

Without their support, this effort could never have succeeded. I would also like to thank my employer during the first half of the project, Avenir, for gracious understanding when the project started to slip behind schedule. Finally, I would like to express my gratitude to my partners in Pharos, who generously provided me with the necessary overdraft facilities when my income dwindled during the intensive last year and a half of writing.

When I started to explore the possibilities for this project, I received crucial support from four persons. First of all I must thank Marie Haavardtun, then managing director of Avenir, who strongly encouraged me to go on and was very helpful in providing contacts with possible sponsors. Tron Espeli, who was secretary of the governing committee

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for the Research Council's program "Man, Computer, and Work Environment,"

went out of his way to help me structure the project to meet the Research Council's requirements. Professor Sverre Lysgaard at the Department of Sociology at the University of Oslo volunteered without hesitation to review my work—as he did more than a decade earlier when I wrote my master's thesis.

Finally, my colleague Peter Hidas both urged me on and volunteered to act as my mentor toward the Research Council.

Sadly, both Sverre Lysgaard and Marie Haavardtun died before the dissertation was finished, and before I could present them with the final results of their generous support. Their premature deaths were a blow to all of us who knew them and regarded them as friends.

Also, Professor Erling S. Andersen (the Norwegian School of Management, Oslo), Professor Per Morten Schiefloe (The Norwegian University of Science and Technology, Trondheim), Pal Sørgaard (then Associate Professor at the University of Oslo, now at the Directorate of Public Management) and Professor Ivar Lie (University of Oslo), Professor Kjell Grønhaug, and Professor Leif B. Methlie (both of the Norwegian School of Economics and Business Administration, Bergen), Age Borg Andersen, and Otto Stabenfeldt (both old colleagues from Avenir), Eivind Jahren (Ministry of Trade and Industry), Jan Heim (then at the Norwegian Computing Center), and Kamar Singh (GE Aircraft Engines) gave of their valuable time to read and comment.

Professor Tjerk Huppes (University of Groningen) found time to receive me and offer advice, and Assistant Professor Jan Brage Gundersen (University of Oslo) helped me with some of my philosophical excursions. My colleagues in Avenir and in Pharos have also been both helpful and supportive, prodding me on with their interest. I would especially like to thank Dag Solberg for his interest and suggestions. Dag is certainly one of the most experienced practitioners in the field of modeling in Norway, and he is also theoretically better versed in the subject than many academic specialists. His comments have been very useful.

However, during the writing process, two people have rendered more help and support than others, and without any formal obligation to do so.

First of all, I would like to thank Lee Gremillion for all his support and encouragement over the last eight years. Lee and I first met when I called on him in Boston early in 1990 following an article in Datamation on rapid prototyping, where a project that Lee managed was highlighted. Together with two colleagues, I contacted him to hear more about his experiences, and Lee, in his characteristically forthcoming and friendly way, freely shared his hard-won knowledge with the strangers from a small country far away. Later that year, he came over to Norway as the main speaker at a conference that Avenir organized in Oslo on the same subject. When

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xxvii he heard about my doctoral work, he expressed interest and offered to read my drafts and comment on them. Since then he has been my main reviewer, and whenever I sent something over, his comments returned with a promptness worthy of a rather more profitable client. With his doctorate from Harvard University, his background from academic appointments at Harvard, Indiana University, and Boston University School of Business, and his experience as a partner in PricewaterhouseCoopers in the U.S., his advice and criticism have been invaluable to me. He has also been an inexhaustible source of encouragement, which has helped greatly in pulling me through the deep troughs that invariably occur in such projects.

The second person I would like to single out is Associate Professor Gunnar Christensen at the Norwegian School of Economics and Business Administration in Bergen. We met during work on the Norwegian government's 1992-95 plan for developing the use of information technology in Norwegian industry, and afterward on one of the projects under that plan. I immediately seized upon the chance of recruiting Gunnar as an informal reviewer, and, by and by, he quietly accepted the role as sounding board. Patiently, he responded to my questions, offered suggestions, and listened to my occasional tales of frustration. During the final year, he also read and commented on the complete text, and thus effectively assumed the role Professor Sverre Lysgaard had before his death. As one of the few researchers in Norway who is equally well versed in organization theory and computer-based systems, Gunnar has been of great help. Of special importance was his assistance during and after my decision to stand for the doctorate in Bergen rather than at my alma mater in Oslo. His help with the formalities as well as with access to the other people there who had to look at my work was vital for the final success of my efforts.

During this last phase, when the final draft was out there begging for the final comments, I also had the good fortune of attracting the attention of Henry Mintzberg, whose organization models constitute the platform for reasoning about computer-based organization in this book. His instant enthusiasm rekindled my dwindling fires of inspiration and provided the fresh energy sorely needed to finally complete the project. When he accepted a request from the Bergen school to serve on my examining committee, it was another morale booster, and his kind support during my hunt for a publisher was invaluable.

Thank you for bothering to look under the small stones along the road. Henry.

You are living proof that success need not lead to aloofness.

Lastly, I want to thank my family for enduring the hardships with me. I have read many such statements of gratitude toward a family through the years, and until a few years ago I viewed them as perhaps little more than

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a social reflex. Now I know better. To have one of the parents strained by dissertation work year after year, often working both evenings and weekends, is an experience most families could well do without. I am very grateful that you put up with me, supporting me even through the nth delay and then again through the editing of the book manuscript. I hope I shall never test your love and tolerance in this way again.

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I A Platform for the Investigation

In this part, my purpose is to build the foundation for the main analytic thrust of the book. In Chapter 1, Recourse to Reason, I delineate the project’s point of departure and the approach chosen for the analysis: to use the basic human preconditions for organizing as a starting point, and investigate how they are enhanced by technology—first by pre-computer technology and then by information technology itself. The chapter summarizes the main findings, outlines the other chapters and provides a short note on some central terms.

In Chapter 2, Organization and Tools—the Human Advantages, I set out to establish the (in my view) crucial link between organization and technology and explain the concept space of constructible organizations. The chapter ends with a delineation of the scope of the analysis.

In Chapter 3, The Basic Preconditions for Organizing, I discuss the subject of organization, especially how organizations are defined and what their basic elements of structuring are. The structural configurations of Henry Mintzberg are adopted as the main framework for the analysis. The discussion concludes that coordination is the linchpin of all organization, and a taxonomy of coordinating mechanisms (based on Mintzberg’s definitions) is proposed. The chapter ends with the definition of what I see as the basic human preconditions for organizing, which will serve as the foundation for my main analysis.

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1 Recourse to Reason 3

1 Recourse to Reason

“A man’s behavior is the index of the man, and his discourse is the index of his understanding.”

Ali Ibn-Abi-Talib, Sentences, 7th century.

Sustained Success Grows from Knowing Why

This is not a quick-fix book. It will not teach you simple prescriptions for turning stagnating enterprises into dynamic winners with the help of the latest in information technology. Neither will it inundate you with computerese—

although it will introduce a number of novel concepts and hopefully coin a few new words. It is guaranteed not to admonish you to turn your company into a knowledge-based learning organization, virtualized into multidisciplinary, networked teams, assembled on the go for each new challenge, meeting and working over the Internet and delivering their products in digital form directly to the prosumer. Indeed, you will not even find a separate chapter on the Internet.

This book is written on the presumptions that knowledge is better than slogans and comprehension is better than prescription—that the real key to a sustained, profitable exploitation of information technology is a thorough knowledge of the technology, of organizations, of people, and—above all—a well-founded understanding of how they interact and can be combined.

A Quest for Practical Directions

In course of the 1980s, the interest in the relationship between information technology and organization was picking up. One of the most intriguing statements a speaker could make at the time was that a widespread adoption of advanced computer systems would make it possible to build new

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organization structures, more efficient and flexible than the ones we were used to. This was always a sure hit, especially with the more well-groomed professional audiences in the chip-chip-hurrah community. From time to time, however, uninitiated participants would have the temerity to ask “how” or

“what kind of structures,” instantly creating that special kind of embarrassed silence experienced in close-knit congregations when newcomers ask “stupid”

questions about central dogmas.

That also happened to this speaker a few times, and time and again I had to fall back on the well-worn examples of American Hospital Supply Corporation and American Airlines (and, fortunately, a couple of credible local cases).

However, they did not quite seem to fit the bill. The companies in question had undoubtedly changed some aspect of the way they did business, and with notable success, but the systems’ organizational impacts were questionable, apart from eliminating a number of positions associated with the old routines.

Often I ended up saying that the ways and means here were not quite clear yet, as we were all in the forefront of a development that was just taking off, and that, consequently, the new structures and ways of working had yet to emerge. It was hardly a satisfying answer for the audience, and definitely not a satisfying experience for me. I was in dire needed of a qualified answer, and my quest for this answer escalated into the research effort behind this book.

My viewpoint was and is a practical one. I have been working as a consultant since 1980, and my clients always expect practical advice that will produce concrete improvements in their organizations. That is what they pay to get, and that is what I strive to provide. The basic goal for my research has therefore been to offer my clients better advice and perhaps also help others who needed to understand how their organizations could really come to grips with this new and exciting technology. The basic questions I wanted to answer were no more and no less than those I had encountered during my talks:

• What will the organizations look like that really take advantage of the full power of information technology?

• How should they be structured?

• How will they function?

• What will be their benefits and drawbacks?

• Are the opportunities the same across the board, or do they vary among organizations of different kinds?

If I could answer these questions, I felt I would also be in a much better position to help my clients both to take advantage of contemporary systems and to stake out the road ahead—since I would then be able to

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1 Recourse to Reason 5 tell if their particular organizations could benefit from intensive use of information technology, what they would need to do in order to exploit it, and (just as important) how they could not exploit it.

Most of the literature in this field is prescriptive and refer to concrete examples. Prescriptions may be helpful for organizations very similar to those described, and good examples can be inspiring, but organizations always differ more than one should believe from a cursory look. Blind attempts to replicate other organizations’ achievements may easily turn into disaster, since successful adaptation always requires more than mimicry. Without real understanding of the strengths and limitations of information technology, and how and why it enables certain organizational designs and not others, it is very difficult to determine where the greatest potentials are—and equally hard to stake out the most advantageous path into the future. This book is an attempt to establish such an understanding.

Venturing Beyond Prescriptions

It may seem brash to imply that this is a new approach—but the literature on the organizational effects of information technology largely ignore the substantial, established body of knowledge about organizations. It is as if the advent of the computer has at one and the same time obliterated history and changed human nature beyond recognition. However, IT is just a technology (albeit powerful), it is not some kind of magic; it is not impenetrable to reason. It does not throw everything into a turmoil or invalidate all previous knowledge about technology, organizations and how humans use technology. Our natural abilities and dispositions have hardly changed at all in historic times; our basic social habits and the way we prefer to pattern interpersonal relationships are also remarkably stable. We therefore have every reason to believe that major parts of existing organizational and psychological theory are valid also in the age of information technology.

As a machine, the computer is also something we can comprehend. We can analyze its actual and possible contributions in depth, just as we have done with previous organization technology—for the computer is certainly not the first tool we have created to improve on our natural capabilities for organizing.

Tracing the history of human civilization, we will notice the impacts of innovations like networks of posting stations, roads, sailing ships, railroads, cars, airplanes, telegraph, telephone and radio—not to mention the art of writing, the most momentous innovation of them all. Throughout history, we have time and again used these tools creatively to expand the space of constructible organizations—the sum of all the variations in organization allowed by our biology, our tools and

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our mores. We have literally millennia of experience with organizations, with organizational tools and their interrelations, and for at least a century we have been studying these matters scientifically in the modern sense of the word. To discard such established knowledge can never be wise, even if it may sometimes be fashionable.

In this book, the main link to established organization theory will be the organizational configurations Henry Mintzberg first presented in his book The Structuring of Organizations in 1979. They are particularly well suited to the purpose, since they in an excellent way sum up the work of numerous others, provide very useful concepts for the analyses, and are sufficiently well-known to serve as a frame of reference for a large part of today’s managers.

My main arguments and findings are summarized in Tables 1-1 to 1-3 on pages 6-8. The basic notion is that our use of technology—any technology—has its roots in our desire to overcome limitations in our natural, physiologically defined capabilities, and that this also applies to the construction of organizations. To gain an understanding of how we might exploit information technology in organizations, I therefore first had to define our most important limitations with respect to organization-

Table 1-1: Overview: The basic human abilities and constraints and the resulting organizational configurations.

Basic Human Abilities Basic Human Constraints Versatile and creative in work. Serial: Only one task at a time.

Memory with great capacity and flexibility. Short term (working) memory extremely limited, long term memory fickle and unsuited for precise administrative information.

Flexible information processing capacity, good mechanisms for integration and simplification.

Limits in the working memory severely restricts human ability to tackle complexity.

Versatile communication abilities, great capacity for visual processing.

Verbal communication slow and serial.

Communication range well adapted to simple, local communication.

Severe limitations in range, communication over distance depends on messengers.

Emotions always important—we are less rational than we like to believe. Emotions are the source of both cohesion …

… and conflict.

Archaic Configurations: Emergent Organizations

Simple Structure Feudal Form Adhocracy

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1 Recourse to Reason 7 Table 1-2: Overview: The basic contribution of pre-computer tools, the

remaining constraints and the resulting organizational configurations.

Contributions of Pre-Computer Tools Remaining Constraints Writing provides unlimited information

storage without loss of content and implicit coordination of work.

Laborious search and retrieval, implicit coordination limited by need for physical file access.

By augmenting the working memory, writing greatly improves the human ability for complex processing. It also allows monitoring of complex events, extensive distribution of tasks and automation

Processing still bound to the human mind and thus limited by the capacity of the living humans.

Physical transport revolutionized,

information exchange doubly so (telegraph, telephone, radio).

Fast, large volume point-to-point communication expensive, basic human communication capacity unchanged.

Some improvements in the speed with which we can absorb and disseminate information, significant improvements in information accessibility.

Basic human input/output limitations still an iron constraint.

Some improvements in the management of emotions.

Emotions still just as important for both cohesion and conflict.

Main new organizational opportunities with Pre-Computer Tools - Revolutionary increases in productivity and quality through automation.

- Revolutionary development of mechanical energy.

- Ability to tackle much more complex undertakings.

- Explicit design of organizations.

- Ability to organize and support really large organizations.

Modern Configurations: Explicitly Designed Organizations

Machine Bureaucracy Professional Bureaucracy Divisionalized Form

building and how they constrain us in establishing and maintaining organizations (Table 1-1). I then explored the range of organizations built on these basic capabilities alone (the archaic configurations at the bottom of the table).

To isolate the possible contributions of information technology, I first looked into the most important of the pre-computer technologies and how they helped us overcome some of our basic limitations (Table 1-2). The most important new opportunities these tools provided are also listed in the table. The art of writing towers over all other inventions, as it liberated us from the crushing constraint of having to remember every single piece of information we needed to retain.

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Table 1-3: Overview: The basic contribution of information technology, the remaining constraints and the resulting organizational configurations.

Contributions of Information Technology Remaining Constraints Revolutionary im-provements in information

storage and implicit coordination

Use of information still limited by human reading capacity.

Information processing outside the mind, vastly extended scope for automation

Human internal processing capacity is still unchanged.

Vastly increased bandwidth for electronic communication, dramatically lower prices.

Basic human communication capacity unchanged.

Much improved comprehension of complex information.

Basic human input/ output limitations still an iron constraint.

No improvements in the management of emotions.

Increasingly abstract work with systems that can also be relentless and pacing may induce strain.

Main new organizational opportunities with Information Technology - Extensive elimination of work and increased flexibility through hyperautomation and

implicit coordination, possibilities for much larger and more responsive organizations.

- Support for extremely large, organized entities that are not organizations in the classic sense.

- Close coupling of separate organizations in extended value chains, wholly or partly automated.

- Extensive centralization of power through informating.

- Increased decentralization through improved information availability, despecialization and increased depth of control.

- Elimination of routine jobs through increases in personal productivity.

- Improved group cooperation over distance, improved cohesion in teams and groups who cannot otherwise meet.

Computer-based Configurations: Model-driven Organizations Joystick

Organization

Flexible Bureaucracy

Interactive Adhocracy

Meta- Organization

Organized Cloud

Some of the potential created by this expanding inventory of tools was exploited fairly early; some remained dormant. In fact, it was not until the advent of the Industrial Revolution that the potential was explored to any depth, and it was not until the twentieth century that the three modern organizational configurations were developed to a point where we finally came up against the limits of pre-computer tools. In contrast with the archaic organizations, which more or less emerged from tradition and