Table Of ContentInformation, Organization and Management
Arnold Picot Ralf Reichwald Rolf Wigand
● ●
Information, Organization
and Management
Prof. Dr. Dres. h.c. Arnold Picot Prof. Dr. Prof. h.c. Dr. h.c. Ralf Reichwald
Ludwig-Maximilians-Universität Munich Technical University of Munich
Munich School of Management TUM - Business School
Institute for Information, Organization Information, Organization
and Management and Management
Ludwigstr. 28 VG II Leopoldstr. 139
80539 Munich 80804 Munich
Germany Germany
[email protected] [email protected]
Prof. Rolf Wigand Ph.D.
University of Arkansas at Little Rock
CyberCollege
258A ETAS Building
2801 South University Avenue
Little Rock, AR 72204-1099
USA
[email protected]
ISBN 978-3-540-71394-4 e-ISBN 978-3-540-71395-1
Library of Congress Control Number: 2008925000
© 2008 Springer-Verlag Berlin Heidelberg
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Preface and Acknowledgements
This book has a long history. The three authors’ research foci are in related areas
and they have worked together on numerous projects in organization research, or-
ganization design, information systems and the use and application of information
and communication technologies. In addition they exchanged ideas for over 25
years. This occurred in the form of publications, at conferences in joint sessions
and on joint panels in Europe and North America, by guest lectures and through
visiting professorships at their respective universities. Toward the end of the
1980s the idea to write a book jointly and publish it simultaneously in English and
German emerged from this cooperation. After numerous meetings, the authors
were fascinated at the time by the idea to utilize new communication media in this
project enabling virtual teamwork and, in a sense, practice what they preach.
Transatlantic telecooperation, however, proved itself at times more difficult
than anticipated: The complexity of this book project, the rapid development of
the new technologies and their deployment resulted in substantial changes of the
subject matter addressed and demanded an intensive dialogue among the authors.
The subsequent development of the concept and content of the book had to be
clarified and discussed. The boundaries and limits of telecommunication and tele-
cooperation, as well as the book project reached a crisis stage.
During a most productive, week-long meeting in April 1994 in the Brewster Inn
at Casenovia Lake in New York the project was revitalized and a new conceptu-
alization together with a new work plan materialized.
Throughout these efforts we gained an experience that may also be a subject
topic for this book: The authors encountered the boundaries and limits, but also
the support potential of information and communication technology, especially the
Internet and its e-mail and file transfer services. This technology enabled the for-
mation of a virtual team, as well as the accomplishment of a complex project. All
of this was only possible of course on the basis of commonly shared values and
trust which were developed initially through face-to-face interactions. The general
recognition that complex projects have to pass through a serious crisis before they
find a suitable and goal-directed conclusion can certainly be confirmed in our
case.
The realization of our project may in part be attributed to the engaged coopera-
tion of our respective research teams. The innovative concept of the “boundary-
less firm” and the opportunity to help shape the new “management leadership in
the Information Age” excited and motivated them to contribute to this book in
VI Preface and Acknowledgements
some fashion. These teams too were virtually connected and thus contributed es
sentially to efficient geography- and time-expanding coordination of the final
product. In this fashion we were enabled to bundle knowledge and this coopera
tion approached the limits of co-authorship. The individual authors worked on the
development of various chapters in numerous locations throughout the world and
while on various sabbatical and research leave projects as well as on numerous
long transatlantic and transpacific flights.
A surprisingly difficult aspect turned out to be our desire to publish this book in
English and German simultaneously. The creation of both language versions really
was not all that difficult. Some portions of the book were written right from the
beginning in German while others started in English. Consequently a “two
language” manuscript was available that in each case was further developed by the
other authors and their teams and was translated and adapted. The English and
German versions are therefore not literal translations of each other. They differ
also content-wise as appropriate for the country-specific audience and their re
spective “textbook culture”.
For conceptual and content contributions we thank in particular Robert Benja
min, Wolfgang Burr, Juan-Ignacio Conrat, Burkhard Hermens, Gerhard Hesch,
Claudia Höfer-Weichselbaumer, Wolf-Guido Lutz, Donald A. Marchand, Kathrin
Möslein, Johann Niggl, Hans Sachenbacher and Dianne Lux Wigand. For their
valuable editorial support we thank, Rudolf Bauer, Nico Grove, Hans Koller, Jo
hann Kranz, Barbara Kreis, Rahild Neuburger, Heiner Röhrl, Sven Scheuble and
Birgitta Wolff. Carsten von Glahn, Tanja Ripperger and Angela Shelley contrib
uted in various translation efforts expertly and with much enthusiasm. Markus
Böhme, Christine Bortenlänger, Martin Braig, Jorun Cramer, Hermann Englber
ger, Christine Graap-Lippert, Florian Haase, Beth Mahoney, Florian Pfingsten,
Ulla Raithel, Dieter Riedel, Peter Rohrbach, Andrea Schwartz, Eckhard Wagner,
Axel Wiemers and Stefan Zeilner contributed and assisted in the creation and de
sign of figures, as well as other editorial tasks. We thank Ilse Evertse, the editor
and proofreader of this book. The authors thank Mary L. Good, Dean, College of
Engineering and Information Technology, as well as Dan Berleant, Chair, De
partment of Information Science and Robert B. Mitchell, Chair, Department of
Management, all with the University of Arkansas at Little Rock for their contin
ued support. Last, but by no means least, we would like to thank Mr. Jerry L.
Maulden and the Jerry L. Maulden-Entergy Endowment for continued support as
well as Nico Grove and Johann Kranz for the coordination and the finishing of the
book. We would like to thank them all sincerely for their excellent and much
committed work and cooperation with the authors. The responsibility for content
and potential errors remains of course with the authors exclusively.
It was surprising for us that in spite of all sorts of globalization and digitaliza
tion efforts in the publishing and media fields apparently no model for tandem
solutions in the management literature exists within English and German language
regions. Numerous discussions and meetings were necessary until two equally re
spected and expert publishing houses agreed to become cooperative partners for
Preface and Acknowledgements VII
this project. John Wiley & Sons, Ltd. as the publisher of the 1997 volume for the
English-language region and Gabler Verlag is the publisher of the book for the
German-language region. This German edition is now in its 5th edition and has en
joyed great success in the German speaking regions of the world. We would like
to thank Dr. Reinhold Roski and Mrs. Roscher (Gabler) for their and their col
leagues’ always constructive and cooperative work. We appreciate especially the
support and cooperation by Dr. Werner Müller and his team with Springer Verlag
for the present book. The earlier mentioned first version of the book has been sub
stantially changed and revised and, for all intents and purposes, the current version
more than ten years later is indeed a very different book.
We welcome of course any sort of feedback on this book and would like to thank
our readers in advance. They can reach us at the addresses specified on preceding
pages and, of course, via e-mail.
Munich and Little Rock, March 2008 Arnold Picot
([email protected])
Ralf Reichwald
([email protected])
Rolf T. Wigand
([email protected])
Table of Contents
Preface and Acknowledgements .............................................................V
Table of Figures......................................................................................XIII
Abbreviations........................................................................................ XVII
Chapter 1
Information, Organization, and Management:
The Corporation Without Boundaries ..................................................... 1
1.1 Changes in Competitive Environments and Corporate Structures............... 3
1.2 Transition to New Organization and Management Models ......................... 7
1.3 Structure and Special Features of This Book............................................. 12
Chapter 2
Market Dynamics and Competition: The Fundamental Role
of Information .......................................................................................... 19
Case Study Chapter 2: The Rise and Fall of Netscape.......................................... 21
2.1 Why Corporations and Markets? ............................................................... 22
2.2 Markets and Entrepreneurship ................................................................... 28
2.3 Theories of Organization ........................................................................... 34
2.4 Information and Network Economy .......................................................... 51
2.5 Changes in Firms and Markets Through Improvement in
Information and Communication Technology........................................... 58
2.6 Implications for Management.................................................................... 62
Chapter 3
Fundamental Information and Communication Models:
Insights into Communication and Information Behavior .................... 65
3.1 The Importance of Information and Communication in
Organizations............................................................................................. 67
3.2 Selected Models of Information Behavior................................................. 68
3.3 Selected Models of Communication Behavior .......................................... 75
3.4 Task-Medium-Communication..................................................................89
3.5 Knowledge Models.................................................................................... 98
X Table of Contents
3.6 Information, Communication, and Trust ................................................. 102
3.7 Implications for Management.................................................................. 111
Chapter 4
The Potential of Information and Communication Technology
for Corporate Development.................................................................. 115
4.1 Benefits and Adoption Levels of Technology ......................................... 117
4.2 Information and Communication Technology Development Trends ...... 119
4.3 Information Deployment Within the Firm............................................... 152
4.4 Information and Communication Systems .............................................. 164
4.5 Implications for Management.................................................................. 181
Chapter 5
The Dissolving of Hierarchies – Modularizing the Enterprise .......... 183
Case Study Chapter 5: The “Spaghetti Organization” of Oticon ........................ 185
5.1 Fundamentals of Modularization............................................................. 186
5.2 Implementation Forms of Modularization ............................................... 194
5.3 The Competitive Advantage of Modularization from the
Theoretical Model Perspective ................................................................ 208
5.4 The Role of ICT in Modularization ......................................................... 221
5.5 Implications for Management.................................................................. 230
Chapter 6
Dissolution of the Company – Symbiosis and Networks.................. 233
Case Study Chapter 6: Colliers International Property Inc. –
An Example of a Worldwide Entrepreneurial Network...................................... 235
6.1 The Basic Idea of Hybrid Organization Structures.................................. 236
6.2 Explaining the Development of Hybrid Organizations.............................. 237
6.3 Implementation Forms of Hybrid Organizations..................................... 246
6.4 The Role of ICT....................................................................................... 259
6.5 Implications for Management.................................................................. 265
Chapter 7
New Forms of Market Coordination – Electronic Markets ................ 271
Case Study Chapter 7: Covisint – An Electronic Marketplace for the
Automobile Industry ........................................................................................... 273
7.1 Basic Concept of Electronic Markets ...................................................... 274
7.2 Types of Electronic Markets.................................................................... 276
Table of Contents XI
7.3 Approaches for the Explanation of Electronic Markets........................... 285
7.4 The Role of Information and Communication Technology..................... 312
7.5 Implications for Management.................................................................. 313
Chapter 8
Overcoming Location Boundaries: Telecooperation and
Virtual Enterprises.................................................................................317
Case Study Chapter 8: “The Worldwide Group” – A Future Work Scenario? ..... 319
8.1 The Fundamental Idea of Dispersed Organizations................................. 323
8.2 Implementation Models of Dispersed Organizations .............................. 330
8.3 Explanatory Approaches for Dispersed Organizations............................ 352
8.4 The Role of Communication and Information Technology..................... 360
8.5 Implications for Management.................................................................. 363
Chapter 9
People in the Boundaryless Organization: New Demands on
Employees and Managers .................................................................... 369
9.1 People in the Boundaryless Organization ................................................ 371
9.2 New Roles of Customers, Employees, and Managers in the
Boundaryless Organization...................................................................... 376
9.3 How Communication and Organization Change Affect People .............. 384
9.4 Tackling the Future Organization and Its Challenges for People ............ 403
9.5 ICT and the New Role of People Within Boundaryless
Organizations........................................................................................... 418
9.6 Implications for Management.................................................................. 420
Chapter 10
Controlling the Boundaryless Enterprise: Strategies and
Control Systems .................................................................................... 423
Case Study Chapter 10: The Virtual Factory of North West
Switzerland / Mittelland ...................................................................................... 425
10.1 Strategic Challenges for Boundaryless Organizations............................. 427
10.2 Controlling Challenges in Boundaryless Organizations .......................... 433
10.3 Interface Coordination in the Boundaryless Organization....................... 436
10.4 Area of Tension Between Direct and Indirect Management.................... 440
10.5 Controlling Systems ................................................................................ 446
10.6 Implications for Management.................................................................. 475
References ............................................................................................. 477
Index ....................................................................................................... 533
Table of Figures
Fig. 1.1. Potential for innovation, competitive markets, and innovation
strategies ..............................................................................................3
Fig. 1.2. New models for innovation strategies................................................10
Fig. 1.3. The emergence of coordination forms ...............................................12
Fig. 2.1. The organization problem..................................................................25
Fig. 2.2. Proportion of transaction costs of the US gross national product.........26
Fig. 2.3. Possible results within a market period .............................................30
Fig. 2.4. The fundamental entrepreneurial idea as creative bridging
between information spheres ............................................................34
Fig. 2.5. (Pure) coordination problem: choice between two norms .................36
Fig. 2.6. Motivation problem: the prisoner’s dilemma situation....................37
Fig. 2.7. Solution of the motivation problem by means of norms
requiring supervision ..........................................................................38
Fig. 2.8. Trade-off between welfare losses through external effects and
transaction costs ................................................................................42
Fig. 2.9. Factors influencing transaction costs ..................................................43
Fig. 2.10. Examples of alternative decisions for optimizing the delivery of
goods and services..............................................................................45
Fig. 2.11. Integrated forms and specificity .......................................................46
Fig. 2.12. Overview of principal-agent theory ...................................................50
Fig. 2.13. Typology of standardization processes..............................................55
Fig. 2.14. Move to the market due to decreasing transaction costs ......................60
Fig. 3.1. Information need and information supply..........................................69
Fig. 3.2. Confirmation, newness and pragmatic information ...........................71
Fig. 3.3. Levels of information transmission analysis......................................76
Fig. 3.4. Technical communication model by Shannon/Weaver 1949 ...........78
Fig. 3.5. Axioms of communication according to Watzlawick, Beavin
and Jackson 1990...............................................................................79
Fig. 3.6. Four sides of a message ......................................................................81
Fig. 3.7. The TALK model ..............................................................................82
Fig. 3.8. Action types according to Habermas .................................................85
Fig. 3.9. The task-oriented communication model...........................................92
Fig. 3.10. The media richness model based on Daft and Lengel........................93
Fig. 3.11. Media sensitivity and management success ........................................94
Fig. 3.12. Comparison of time and activity profiles of upper level managers ......96
