Chapter 1

Information View of Organization

This book introduces a conceptual framework called information view of organization (IVO). IVO brings together the IS field (theory on information systems, information and information technology) and organization theory, and it integrates different streams within the IS field.

Bridging Theoretical Gulfs

The foundational assumption of IVO is that both information in its various modalities (meaning, knowledge, data, and wisdom) and information technology (IT) are at the nexus of organization. From the perspective of organization theory, this assumption is new. Phenomena of individual and group behavior, organizations’ relationship with environment, work organization, economics, politics, emblematic beliefs and practices categorized as organizational climate or culture and other aspects have traditionally consumed energy of organization scholars, while rendering marginal attention to relatively new phenomena of information and IT. Exceptionally, several areas of organizational research areas have come close to the core phenomena of IVO. For example, both the seasoned area of behavioral decision making and current research on knowledge management border with the information phenomenon. However, their conceptualizations of information are narrower (a limited set of individual cognition issues depicting choice making; knowledge as yet another organizational resource to be managed) and they are entirely divested from IT. This has been so in spite of the fact that organizational members and groups spend most of their time in information activities—the fact whose prominence is brought to the fore in the current service economy. In addition, although technology in a general sense has played a role in organization inquiry for a considerable period, it has been treated in a highly abstract way. Organizational technology has typically been conceived as a technical component that blends together cognitive and material artifacts and transforms organizational inputs into outputs. Therefore, IT as a particular kind of technology has usually been treated as just one of technologies, if acknowledged at all. This is so despite the pervasiveness of IT in every industry today and the huge investments IT has drawn in the past fifty years.

In contrast to organization theory, the IS field has made information and IT the central phenomena of research. However, the field is unbalanced if not literally fractured. As already mentioned in Introduction, some streams of the IS field focus on information (library and information science, information study, some MIS researchers like Tom Davenport, and other MIS researchers that close to balancing IT with information views like Claudio Ciborra, Wanda Orlikowski, and Lynne Markus). Other researchers are preoccupied by IT, typically with the electronic (digital) computer and the software for it (a canonical MIS view, often coupled with the positivist approach and quantitative inquiry). Exchanges between these two approaches are sporadic, in spite of the fact that meaning or knowledge as part of cognition cannot be understood fully without understanding IT that interacts with these, while IT cannot be understood fully without understanding information as one of its primary purposes. The consequences are that the soft (information) approach often fails to see differences that older and newer types of IT imprint on data, meaning, and knowledge, as well as important domains that operate independently of human intervention (e.g., automated production processes, supply chain operations, and e-commerce transactions). On its part, the hard (IT) approach fails to see information as the critical link between IT and organizational tasks and processes, as well as important information-related purposes that IT is supposed to play in organizations. Theoretically, the soft approach tends to operate with models of information user abstracted from organized contexts. The hard approach lacks clear selection criteria for borrowing from organization theory: missing an information point of view, behavioral, economic or some other perspectives can intrude in IS research as a consequence of fashion or researchers’ preferences rather than consistent research agendas. In the end-result, the IS field resembles an extension of the referenced disciplines rather than a distinctive discipline with a recognizable subject of research. Therefore, although the ideas in which the fundamental ideas behind IVO are not new to the IS field, the novelty is in defining the scope of the field by coupling information and IT. The IS field is both about information and IT because these two phenomena influence each other, while each being distinct in its own right. This assumption is supposed to assist the IS field in becoming equipped with a more complete and sharper research lenses.

In brief, IVO intends to bridge gulfs between organization theory and the IS field as well as within the IS field. This goal of advancing theory has a practical counterpart: the IVO framework should also serve the real world, managers and organization members to understand their workplaces in a new way, which is precursor to action. The importance of this goal is amplified by challenges of our time.

Intelligence in the Time of Unreason

The world we live in compels organizations to be intelligent in order to survive and prosper in a rapidly changing environment. Ours is a world in which the only certain thing is uncertainty. The only uniformity is in diversity. The only constant thing is change. These paradoxes are driven by a set of intertwined economic, political, demographic, and technological factors. Huge political changes in Europe and Asia have been paralleled by the development of market economies and globalization of business operations and markets. In the depth of new horizons that open up lingers a vacuum of the unexpected and unknown. Old empires crumble and young, enigmatic ones emerge over night. Historical orders cease to exist, and the void is being filled by new orders that do not have clear directions. The previous bipolar global equilibrium is replaced by a one-polar system that is continually shaken by economic and political stresses. The instability in core economies produces rapid ripple effects in economies in outer circles, while disturbances of energy sources and labor markets in the outer circles shake up the core. The state of stress spares no part of the world but those marginalized ones, which are left to struggle alone with their own, yet less solvable problems. And in nearly all corners of the world, organizational values and practices of stability, certainty, predictability, security, familiarity and control have all been shaken.

Contemplating about this big picture led some students of organizations to conclude that we live in a time of change and even "chaos." Calls for responding creatively to the challenge and for taking advantage of it have been voiced (Clegg & Hardy, 1996; Davidow & Malone, 1992; Hatch, 1997; Heckscher & Donnellon, 1994; Morton, 1991). Other authors warn about the unpredictable and uncontrollable character of the changes. To borrow Handy’s (1989) remarkable characterization, ours is a “time of unreason," in spite of the fact that economic and political transformations seemed to be as expected and looked desirable at the outset (see also Clegg, 1990). Instead of clarity that was expected, ambiguity has set in.

Contemporary organizations are both the subject and object of these dynamics. Business organizations as well as those from other walks of life are affected by these developments, while simultaneously being the engines behind the developments. International and global corporations, smaller profit and non-profit enterprises, government, non-government and grass-roots organizations, organizations of education, entertainment, ecological care, mass media, political parties and movements, and others—all of them play on the global scene, creating it and experiencing influences of the resulting dynamics. Organizations are articulations of the economic, political, and demographic trends of change described above.

Another force acting on the global scene is technology in general and IT in particular. IT and associated information practices that it services and enables participate in deconstructing and reconstructing organizations. The accelerated development of IT in the last two decades of the 20th century has increased the capabilities of using and managing the electronic information that constitutes or participates in core business operations. Transferring this information around the globe became possible owing to the development of global computer networks and their linking medium—the Internet along with its Web segment. These global information flows carry out business transactions between firms and between the firms and consumers. Today, one can grow business operations through electronic networking rather than by adding people and material resources. The workplace in itself has been transformed, because electronic information and IT allow for breaking up spatial and temporal limitations, while the routinized work is moved to computers, leaving more space for people to do creative work. Accounting and financial control have improved in precision since a single piece of data can be tracked throughout an enterprise from the start to the end. Moreover, a cyberspace created via computer networks, information flows, and related ISes envelops and gives new dimensions to social gatherings, and this trend reaches beyond business to incorporate social services, civil society, and non-civil society. Conditions for organizational growth, development, innovation, emancipating knowledge and wisdom abound, as data flows annihilate various traditional boundaries, making the world a global workshop. All this indicates opportunities that appear to be incommensurable with any preceding period in history.

But again, the Janus that signifies this time of unreason boasts its face of the unexpected and unknown. Owing to the electronically networked character of today's global economy, the social forces that influence our lives now evade our comprehension and control more than ever (Castells, 1996). Money can be pushed rapidly via electronic channels into national and regional economies, and it can be quickly withdrawn as well. This nanosecond market is everywhere the Internet reaches, with the power of revitalizing some economies and marginalizing others. The timeless 24/7/365 mode of operation imposes a strain on organizational people. They also have to sustain effort of adopting yet new ISes, and managers have to deal with unpredictable consequences of adoption and with spiraling costs of systems maintenance. Countering the phenomenal power that modern IT brings to the control of information, there stands the fact that accounting and financial systems can be tweaked to consistently distort balance sheets, while the data within the systems remain perfectly integrated. Furthermore, the opportunity of global sourcing, based on the possibility of scanning electronically global markets, undermines the accustomed safety of supply chains. Opportunistic interorganizational arrangements utilizing electronic networking, such as some virtual organization forms, come and go at the spur of a moment. Stable relationships between buyers and suppliers thus are washed away, and neat models of competition are dramatically fogged. The global workshop the Internet engenders is not used just for creation and development, but also for teaching destruction and subjugation. Therefore, challenges abound as much as opportunities in this time of unreason.

To exist, survive and succeed today, organizations have to be able to mobilize optimally all resources in their command. They need to act as a form of intelligence in a rapidly changing environment. The idea of intelligent enterprise is not new, indeed (e.g., Argyris & Schön, 1978; Cronin & Davenport, 1991; Quinn 1992; Gupta & Sharma, 2004; Thannhuber, 2005; Wassermann, 2001). Even going farther back in the past than this discussion does, one could argue that organizations had to be somehow smart in order to succeed. The new moment the IVO framework emphasizes is that individual ingenuity is not enough. Organizational intelligence is a result of synergizing individual competences as well as of managing both information in its various formats and IT by actors and methods that provide optimal outcomes (e.g., in teams, processes cutting through organizational functions, interorganizational arrangements, or in the traditional hierarchy). In addition, both information and IT shoulder organizational intelligence rather than just one of these agents, as it has been assumed in the previous images of intelligent enterprise. A metaphor of nervous system adds to this new image.

Morgan’s (1986) analogy between team-based organization and the human brain serves as the point of departure in developing the metaphor nervous system equals information and IT. Although the differentiation of brain cells is small, can develop intricate patterns of connections that underlie the process of learning. This is a self-organizing process, which helps the brain both in becoming initially organized and in recuperating after being damaged. Morgan argues that work teams carry a similar self-organizing capability. Moreover, the brain can be compared to the drops of water created by a splash in a pond. As each drop contains the entire picture of the surroundings so do the brain cells carry the capacity to create larger mental capabilities that they do not possess themselves. Morgan argues that teams resemble brain cells since, among other things, they carry organizational knowledge and are able to perform in different roles. This propensity of brain-like flexible organizing is extended owing to electronic IT, because it enables “organizing without having an organization in physical terms" (Morgan, 1986: 84). Using these ideas, and assuming that other organizational designs can also grow intelligence, let us see what are the additional similarities between the nervous system and organization intelligence based on information and IT.

As the brain, spinal cord and nerves enable a human organism to think and act intelligently, so do information and IT for social organizations. The intelligent organization mobilizes optimally its information and IT. Similarly to the creativity pertinent to the human brain, organizations have to invent new ways of manipulating new types of IT and electronic data, while still coping with the persistent paper trail and older types of electronic IT. The intelligent organization persistently endeavors to put in sync these different types of IT and information. Furthermore, the brain that is resilient to aging is the one that never ceases to learn. Similarly, the intelligent organization is involved in continual learning in order to advance its vital aspects, such as the organization of work, shared visions and values, communication, decision making, planning, and relations with the environment. The brain exhibits the capability of memorizing, and so does the intelligent organization. Knowledge, wisdom, meaning, and data are part of organizational memory that is located in organization members. Data also reside in information systems and repositories, while knowledge can be also embedded in the organization of work, physical structure of the intelligent organization, and its technologies and culture. It follows that organizational intelligence is distributed rather than localized. This is similar to the structure of the humans’ autonomous nervous system. Finally, the nervous system penetrates the entire human body. The idea of distributed intelligence implies that the same is true for information and IT in the intelligent organization. One purpose of IVO is to provide an analytical framework for understanding that information and IT sit at the nexus of every organizational aspect studied in different areas of organization theory.

The distributed character of organizational intelligence allows for understanding nuances of what is happening inside/outside of an organization, and for controlling and preventing surprises. This is the essence of a “mindful” behavior (Weick & Sutcliffe, 2001). The authors posit that a mindful organization is one that is capable of managing the unexpected—the key challenge of our time, as we argued above. This organization refines expectations based on new experiences and unprecedented events, and it can understand the context in ways that improve foresight and current functioning (ibid., p. 42). The mindful organization is attentive to knowledge that moderates and reduces surprises and is open to checking its operating assumptions against reality. Information needed for work flows smoothly around this organization, and information sharing is intensified when something unexpected happens. Near misses and errors are used as an opportunity to learn. Challengers of the status quo, skeptics, divergent thinkers, careful listeners, innovators and trustful persons alike have the space in the mindful organization. In order to get mindful decisions, decision making activities move to most highly qualified members regardless the hierarchical rank. (ibid., pp. 85-115). All these traits of mindful organizations complete our image of organization that draws its intelligence from information and IT.

In summary, we live in a time of the unexpected and uncertainty that constitute global trends. Organizations are both subjects and objects of these trends. In order to survive and prosper, they have to be intelligent. To accomplish this, organizations need to treat their information and IT in the way the nervous system works in the human body.

Assumptions Behind Information View

IVO draws on several assumptions. Follows a brief overview of these, and a more detailed discussion will fill the reminder of the chapter.