UNIT 8. Information and technology driven strategy

Peter Drucker had theorized the rise of the “knowledge worker” back in the 1950s. He described how fewer workers would be doing physical labor, and more would be applying their minds. In 1984, John Nesbitt theorized that the future would be driven largely by information: companies that managed information well could obtain an advantage, however the profitability of what he calls the “information float” (information that the company had and others desired) would all but disappear as inexpensive computers made information more accessible.

Daniel Bell (1985) examined the sociological consequences of information technology, while Gloria Schuck and Shoshana Zuboff looked at psychological factors. Zuboff, in her five year study of eight pioneering corporations made the important distinction between “automating technologies” and “infomating technologies”. She studied the effect that both had on individual workers, managers, and organizational structures. She largely confirmed Peter Drucker's predictions three decades earlier, about the importance of flexible decentralized structure, work teams, knowledge sharing, and the central role of the knowledge worker.

In 1990, Peter Senge, who had collaborated with Arie de Geus at Dutch Shell, borrowed de Geus' notion of the learning organization, expanded it, and popularized it. The underlying theory is that a company's ability to gather, analyze, and use information is a necessary requirement for business success in the information age. In order to do this, Senge claimed that an organization would need to be structured such that:

· People can continuously expand their capacity to learn and be productive,

· New patterns of thinking are nurtured,

· Collective aspirations are encouraged, and

· People are encouraged to see the “whole picture” together.

Senge identified five components of a learning organization. They are:

· Personal responsibility, self reliance, and mastery — We accept that we are the masters of our own destiny. We make decisions and live with the consequences of them. When a problem needs to be fixed, or an opportunity exploited, we take the initiative to learn the required skills to get it done.

· Mental models — We need to explore our personal mental models to understand the subtle effect they have on our behaviour.

· Shared vision — The vision of where we want to be in the future is discussed and communicated to all. It provides guidance and energy for the journey ahead.

· Team learning — We learn together in teams. This involves a shift from “a spirit of advocacy to a spirit of enquiry”.

· Systems thinking — We look at the whole rather than the parts. It is the glue that integrates the other four into a coherent strategy.).

Stan Davis and Christopher Meyer (1998) have combined three variables to define what they call the BLUR equation. The speed of change, Internet connectivity, and intangible knowledge value, when multiplied together yields a society's rate of BLUR. The three variables interact and reinforce each other making this relationship highly non-linear.

Regis McKenna posits that life in the high tech information age is what he called a “real time experience”. Events occur in real time. To ever more demanding customers “now” is what matters. Pricing will more and more become variable pricing changing with each transaction, often exhibiting first degree price discrimination. Customers expect immediate service, customized to their needs, and will be prepared to pay a premium price for it. He claimed that the new basis for competition will be time based competition.

Access to information systems have allowed senior managers to take a much more comprehensive view of strategic management than ever before. The most notable of the comprehensive systems is the balanced scorecard approach developed in the early 1990s by Drs. Robert S. Kaplan (Harvard Business School) and David Norton (1992). It measures several factors financial, marketing, production, organizational development, and new product development in order to achieve a 'balanced' perspective.

Ex.1. Match two halves.

1. Mr McGregor was called in to advice the CEO of a company who wished to ensure
2. The front-line manager is the most important two-way communicator in any business: he is the mouthpiece
3. Top management looks to the HR

a. department, as it does to line managers, to control costs.

b. that his vice-presidents and middle managers paid more attention to employee development.

c. by which company messages are communicated downwards and upwards.

Ex.2. Match the term and its definition

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intangible assets; invoice; junk bonds; letter of credit; leveraged buyout; liabilities; litigate; mediation; offshore; perquisites (perks)

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a. a document stating the amount to be paid for the named goods or services

b.bonds with both a high rate of interest and a high risk of not being paid

c. a letter from one bank to another bank, by which a third party, usually a customer is able to obtain money

d.the buying of one company by another which borrows money on its own assets and those of the target company in order to finance the takeover

e. the debts owed by a business to its creditors and to its owners

f. assets owned by a person or company that do not have a physical substance (e.g. goodwill, trademarks, copyrights)

g. the action of a third, neutral party, to settle an industrial dispute

k. based or registered abroad

m. be involved or contest a claim in a lawsuit

o. fringe benefits offered to an employee in addition to salary

Ex.3. Complete these definitions by matching the noun combinations with the appropriate relative clause.

1. Decision-making tools are tools a.that have many different functions.

2. Feature-packed spreadsheets are b. that companies conduct to identify

spreadsheets customer needs.

3. An industry-standard battery c. that you evaluate choices and

package is a pack pf batteries options with.

4. Market studies are investiga- d. whose specifications comply with

tions industry norms.

Ex.4. Choose the word from the box which collocates with all the words in each set. Two words are not needed.