Tuesday, August 02, 2005

Week:1 Report

Executive Summary
The objective of this report is to compare three case studies and examine the interaction between organisational and technological change. The sociotechnical framework we have chosen to use for this comparison is based on the Scarbrough & Corbett model.
Company Y is an American owned global chemical company that manufactures organic chemicals for the pharmaceutical and agricultural industries. A Manufacturing Resources Planning (MRP) II system was implemented in Company Y to improve the management of inventory levels and investments of stock, as well as to improve production planning and to standardise information into one more accurate database.
British Telecom (BT) split from Royal Mail in 1981 and was privatised in 1984. In 1990 BT’s chairman announced Project Sovereign (PS); a plan of organisational change within BT. Senior management believed that in order for the centralisation of the company to succeed under PS, the Customer Service System (CSS) also needed to be centralised and redeveloped.
Royal Mail is a very traditional company whose origins trace back to 1482. The company had already undergone one technological change by the introduction of Optical Character Recognition equipment into the sorting office in 1992. At the same time a Local Area Network (LAN) was introduced in the Newcastle postal districts, which linked the different offices in the district together.
The case studies show changes in the organisations due to new technology. It is very difficult to distinguish between technological and organisational change as they are ‘fluid and interlocking’ processes that overlap and evolve over time (Scarbrough & Corbett, 1992). It seems that BT is shaped by technological change to a lesser degree. BT can adapt and use technology to compliment its organisational changes, but Royal Mail and Company Y appear to be more affected by the technology. According to sociotechnical philosophy, one cannot implement technology in an organisation without considering the people who must work with it (Laudon and Laudon, 2000).
1. Introduction
The objective of this report is to compare three case studies and examine the interaction between organisational and technological change. The sociotechnical framework we have chosen to use for this comparison is based on the Scarbrough & Corbett model, which suggests that technology is ‘shaped by actors within the organisation’ and that technology has a “distinctive impact upon both management structure and the organisation of work’. (Scarbrough & Corbett, 1992), Figure 1 below.
TECHNOLOGY<<---------->>ORGANISATIONAL
This report gives a brief summary of each case study and looks at the organisational and technological changes each company has undergone and how this has enhanced or hindered their development.
2.1. Company Y and MRP II
Manufacturing Resources Planning (MRP) systems focus on the support of the production material flow within a manufacturing organisation. MRP II systems go beyond this and amalgamate the planning and control of resources, materials and machines in one comprehensive computer based system. MRP and MRP II both are “demand-push” systems which can be described as “A management philosophy supported by numerous planning and control techniques” (Blevins, 1984).
2.1. Background Information
Company Y is an American owned global chemical company that manufactures organic chemicals for the pharmaceutical and agricultural industries. The company is relatively small with four plants on two sites in the North East of England employing approximately 600 people.
2.2. Organisational Changes
The main objective of the senior management within Company Y is to improve productivity and efficiency, which was the main reason for implementing the MRP II system. The culture of the company is traditional and autocratic with senior managers controlling all departments. No apparent organisational changes have occurred within the company. However, since the introduction of MRP II there appears to be a shift in the culture, which has increased political tension.
2.3. Technological Changes
A MRP II system was implemented in company Y to improve the management of inventory levels and investments of stock, as well as to improve production planning and to standardise information into one, more accurate, database. This resulted in a more efficient system with reduced costs, increased productivity and all departments taking equal responsibility.
Company Y was already familiar with computers; they were first used by the finance department to automate their accounts. They had a Plant Inventory Control System in place prior to the launch of MRP II, which was a computer based warehouse system. The decision to implement a new MRP II system began in 1987 when a project team was set up, but due to political conflict with the American parent company a system was not implemented until 1989.
3. BT, Project Sovereign and CSS
3.1. Background Information
British Telecom (BT) split from Royal Mail in 1981 and was privatised in 1984. Organisational changes from the privatisation persisted into the late 1980s. In 1990 BT’s chairman announced Project Sovereign (PS); a plan of organisational change within BT. Even with these changes implemented, BT is still struggling to remain competitive.
3.2. Organisation Changes
PS was driven by senior management, it was hoped that streamlining the company and taking a customer first attitude, would lead to a change in working practices and increased flexibility and efficiency within the company. The management structure was flattened to reduce duplication of work and management conflicts. Performance related pay schemes were introduced in an attempt to bring salaries in line with the rest of the market, but the scheme was not as successful as hoped.
3.3. Technological Changes
Prior to PS, each district had separate individual Customer Service Systems (CSS), which led to data duplication and poor information visibility across districts. The existing CSS allowed effective tracking of work and resource, but information output for management was not well structured.
Senior management believed that in order for the centralisation of the company to succeed under PS, the CSS also needed to be centralised and redeveloped. Some management believe that the senior management showed technocratic tendencies in their decision making.
It was hoped that the new CSS would help distinguish between the different types of BT customer, improve the level of information available to senior management, and increase the access permissions of low level management; giving increased visibility across the functional areas and districts. The consensus is that largely these objectives have been met, but not without their problems. In addition to the planned changes the new CSS also allows increased monitoring of staff and processes, which has increased the feeling of a panoptical environment within the organisation (Zuboff, 1988).
4. Royal Mail and the LAN
4.1.Background Information

Royal Mail is a very traditional company whose origins trace back to 1482. It is still Government owned but managed by a public corporation. The group as a whole has recorded a profit for the last 19 years despite the ongoing instability over privatisation.
4.2. Organisational Changes
From 1992 to 1996 Royal Mail embarked on a new “business development” restructuring process that reduced the 64 geographical postal districts down to 9 divisions, thus streamlining the business. This was in response to the government relaxing the financial restraints allowing for an increase in competition. During this time Royal Mail conducted a series of redundancy exercises across all levels of the business that reduced the management tier structure from 9 to 6 levels.
4.3.Technological Changes
The company had already undergone one technological change by the introduction of Optical Character Recognition equipment into the sorting office in 1992. This was seen as ‘Technology replacing jobs’ by the Independent and resulted in a reduction of staff by a third in the sorting office. At the same time a Local Area Network (LAN) was introduced in the Newcastle postal districts, which linked the different offices in the district together and will subsequently link through a gateway to other LAN networks around the country, eventually creating a national network. Technological decisions appear to be initiated by senior management to improve levels of efficiency, productivity, and to ultimately become more customer focused.
5. Comparisons of Company Y , Royal Mail and BT
5.1. Comparison of Company Profiles
When initially looking at the profile of the three companies, it appears that Royal Mail and BT have more in common with each other than with Company Y. Royal Mail and BT are both service providers, whereas Company Y is a manufacturing company. BT is much more technologically advanced than either Royal Mail or Company Y; this is probably due to the market in which BT operates. Royal Mail, also being a service provider, could learn from the experiences of BT.
5.2. Comparison of Technological Changes
Technological change within all three companies appears to be primarily activated by management with a technocratic view. In BT and Royal Mail there is evidence of some input from the workforce, “…you feel as though they have consulted the user…” (James Moore, BT). But on the whole decisions seem to be made by senior management, “Don’t ask me about the cost justifications because I don’t think that was ever actually explored… I suspect it was more of ‘we will do it’.” (Mike Flex, BT).
The MRP II system appears to have been forced on Company Y by its American parent company, “…it was the perception of the American department that they knew best what we should have on this site that was just completely wrong.” (Ken Smith, Company Y). This led to a feeling of negativity and a fear of job loss within the company. In Company Y technology has shaped the organisation rather than the organisation shaping technology. As a result the company appears divided, with poor communication and a lack of team focus. Some staff even refuse to use the technology, “…older die-hards remember the way the plant was run before MRP and they’ll bloody well still run it that way and never mind what the boss says.” (Bill Jones, Company Y).
The lack of understanding of the system could be due to the lack of training, “We didn’t give enough training (a) on the concept of the system and (b) on the sheer practicalities of how to use it on the shop floor.” (Ken Smith, Company Y). Samuel K. M. Ho outlines the need for training when new concepts are introduced to a company, users need to understand the concept and be behind it. All three case studies identified the need for more training. “I still feel that I could do with a lot more training…” (Harry Bainbridge, Royal Mail). Implementing technology alone will not predetermine the result; it is how the technology is used that creates success.
5.3. Comparison of Organisational Change
MRP II may have resolved some technical issues within company Y, but it seems to have resulted in some organisational issues. The improvement of accurate up to date information due to MRP II has led to departments being more accountable, and there has been a redistribution of power, “Dave’s view was ‘I’m going to take power from those accountants’…” (Mike Trainer, Company Y). The production department is not considered as important as before and they are now more accountable for waste stocks. This has increased animosity between the departments and fears concerning potential job losses. People have had to change the way they work in response to the implementation of MRP II, “…it’s not MRP II that’s going to change the way in which we operate, it’s going to be the way the people handle MRP II.” (Dave Rantor, Company Y). There are even some people who are ‘actually starting to work around it, to use it to they’re own advantage…” (Interviewer, Company Y).
Royal Mail has also been significantly shaped by technology. The implementation of a LAN has greatly increased the communication within the company, “The LAN means I can communicate more effectively than I could ever do in the past” (James Jobs, Royal Mail). However there is a feeling of isolation merging with the reduction of “face to face contact that you had in the past…” (Harry Bainbridge, Royal Mail). This has also occurred in BT where “…communications have improved very quickly…” (Dan Lloyd, BT), with the individual becoming more isolated, “I don’t have to know his telephone number…his address…anything…I can send him a message.” (Mike Flex, BT). Both these cases illustrate that communication now is becoming ‘textualised’ using e-mail via a remote computer screen (Zuboff, 1988).
Job losses have occurred in both BT and Royal Mail. It is very difficult to distinguish if the job losses are attributed to the organisational changes or the new technology. Job loss first occurred in Royal Mail due to the implementation of automated sorting machines, but further job losses could be a result of the organisational changes. Most of the job losses in BT have been attributed to PS, but it is still believed that CSS is contributing to job losses, “As for the job losses CSS had to contribute to it.” (Dan Lloyd, BT). This may be causing anxiety in the workforce, “I can’t say that my job will exist in two or three year’s time.” (James Moore, BT). A reduction of staff can cause a loss of skill and experience within the organisation, “…a little bit of a drop-off in skills levels” (Harry Bainbridge, Royal Mail). This has resulted in a deskilling of staff where the skills are now within the technology and not within the staff (Zuboff, 1988). This is certainly evident within BT where “The deskilling of workers has taken place to a dramatic degree…” (Mike Flex, BT). There is also evidence of job fragmentation or as Zuboff describes it, a demise of ‘action centred skills’ caused by the new technology, “…you chop the jobs up a little bit and you continue to chop them up.” (William Betchel, BT)
5.4. The Impact of Technology on the Organisation
The impact of new technology on an organisation is constantly evolving. Technology has affected all three companies, but BT appears to be shaped by technological to a lesser degree. They have had more time to gain experience and knowledge in implementing technology. Because of this, BT has learnt to adapt and use technology to compliment its organisational changes. The majority of managers in BT believe that PS would not have been as successful without the redevelopment of the CSS, “It was not possible under the old system.” (William Betchel, BT).
Although the MRP II system was fully deployed within Company Y, the organisation was still adapting and changing their working practices at the time of the case study (Kimble and McLoughlin, 1995). Royal Mail only implemented the LAN in the Newcastle area, this acts as a test bed, indicating what the effects of the technology will be when the system is developed nationwide. The full impact of technology cannot be predicted in the short-term because technology and organisations shape each other over time.
6.5. Conclusion
The three case studies have been examined and summarised, then compared using the Scarbrough & Corbett Model. The case studies show changes in the organisations due to new technology. It is very difficult to distinguish between technological and organisational change as they are ‘fluid and interlocking’ processes that overlap and evolve over time (Scarbrough & Corbett, 1992). It seems that BT is shaped by technological change to a lesser degree. BT can adapt and use technology to compliment its organisational changes, but Royal Mail and Company Y appear to be more affected by the technology. According to sociotechnical philosophy, one cannot implement technology in an organisation without considering the people who must work with it (Laudon and Laudon, 2000).
References:
Blevins, P.W. (1984) MRP II in Europe: a status report. Proceedings of Synergy. pp 57 - 60
BT: Case Study 2 based on: Kimble, C. and McLoughlin, K. (1995) ‘Computer based Information Systems and Manager’s Work’. New Tech. Work Employ. 10(1). pp 56-67
Company Y: Case Study 1 based on: Kimble, C. and McLoughlin, K. (1995) ‘Computer based Information Systems and Manager’s Work’. New Tech. Work Employ. 10(1). pp 56-67
Ho. S.K.M. (1999) Operations and Quality Management. International Thomson, London.
Kimble, C. and McLoughlin, K. (1995) ‘Computer based Information Systems and Manager’s Work’. New Tech. Work Employ. 10(1). pp 56-67
Laudon, K.C. and Laudon, J.P. (2000). Management information systems: organization and
technology in the networked enterprise (6th edition). Prentice-Hall, Inc., New Jersey.
Scarbrough, H. and Corbett, J. M. (1992) ‘Technology and Organisation – Power, Meaning and Design’. Routledge Series, Edited by David C. Wilson. pp 1-27
Royal Mail: Case Study 3 based on: Kimble, C. and McLoughlin, K. (1995) ‘Computer based Information Systems and Manager’s Work’. New Tech. Work Employ. 10(1). pp 56-67
Zuboff, S. (1988) ‘In the Age of the Smart Machine: The Future of Work and Power’ Basic Books. p 321

No comments: