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    Case 3-1

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    Jyotsana
    This document discusses how some start-up companies are experimenting with non-hierarchical management structures and attempting to replace middle managers with technology. It provides examples of companies like Chubbies and Zappos that have adopted flat organizations without traditional managers. While these structures aim to increase agility, the document also notes challenges that some companies faced, such as unclear responsibilities and stalled work. It concludes that middle managers play an important coordinating role and that things can fall apart without them.

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    Case 3-1

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    Jyotsana
    32 views2 pages
    This document discusses how some start-up companies are experimenting with non-hierarchical management structures and attempting to replace middle managers with technology. It provides examples of companies like Chubbies and Zappos that have adopted flat organizations without traditional managers. While these structures aim to increase agility, the document also notes challenges that some companies faced, such as unclear responsibilities and stalled work. It concludes that middle managers play an important coordinating role and that things can fall apart without them.

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    This document discusses how some start-up companies are experimenting with non-hierarchical management structures and attempting to replace middle managers with technology. It provides examples of companies like Chubbies and Zappos that have adopted flat organizations without traditional managers. While these structures aim to increase agility, the document also notes challenges that some companies faced, such as unclear responsibilities and stalled work. It concludes that middle managers play an important coordinating role and that things can fall apart without them.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    32 views2 pages

    Case 3-1

    Uploaded by

    Jyotsana
    This document discusses how some start-up companies are experimenting with non-hierarchical management structures and attempting to replace middle managers with technology. It provides examples of companies like Chubbies and Zappos that have adopted flat organizations without traditional managers. While these structures aim to increase agility, the document also notes challenges that some companies faced, such as unclear responsibilities and stalled work. It concludes that middle managers play an important coordinating role and that things can fall apart without them.

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    © All Rights Reserved
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    of 2

    120 Part One Organizations, Management, and the Networked Enterprise

    INTERACTIVE SESSION: MANAGEMENT


    Can Technology Replace Managers?
    Start-up companies are known for being innovative, chain of command, holocracy organizes the busi-
    and one of those innovations appears to be the way ness as a series of overlapping, self-governing
    they are being managed. A number of these new “circles.” Instead of having jobs, holocracies have
    firms are trying to minimize headcount and maxi- “roles.” Each role belongs to a circle rather than
    mize agility by eliminating management hierarchy. a department. The circles overlap, and individu-
    In place of managers, they’re turning to technol- als hold many different roles. Individuals assigned
    ogy, including user-friendly software and low-cost roles in these circles work together, and their meet-
    web-based services such as Amazon.com’s Redshift ing outcomes are recorded using web-based soft-
    for storing corporate data, analyzing the data, and ware called Glass Frog. This system allows anyone
    presenting the results in the form of dashboards in the company to view who’s responsible for what
    that anyone in the firm can use. In the past such role and what they’re working on. Glass Frog pro-
    data were difficult to obtain, required more senior vides a “to-do” list that teams use to define the work
    managers to organize and interpret, or could not be they’re supposed to be doing and to hold themselves
    analyzed without expensive business intelligence accountable for those tasks.
    systems costing millions of dollars. Today even small Although Zappos CEO Tony Hsieh continues to
    start-ups can afford to store and manipulate nearly trumpet self-management, it is unclear if employees
    limitless pools of data in near real time. widely share his enthusiasm. Some employees wel-
    For example, Chubbies, a rapidly growing clothing comed the opportunity for more independence. With
    start-up targeting college fraternities, doesn’t have a experience and expertise downplayed, less senior
    CEO. Instead, it has four co-CEOs, each in charge of employees with fresh ideas receive more attention.
    his or her own business function. This structure is Introverts have benefited from the expectation that
    repeated all the way down the company’s hierarchy. everybody speak in meetings. Other employees were
    All Chubbies employees have access to the same data confused and frustrated by numerous mandates,
    as its top managers. According to Tom Montgomery, endless meetings, and uncertainty about who did
    one of the Chubbies co-CEOs, when you don’t have what. To whom would they report to if there were
    a traditional CEO and final decision maker, you have no bosses? What was expected of them if they did
    to trust people to make the right decisions based on not have a job title, and how would they be compen-
    the information they see. Although it takes time to sated? Within weeks after Zappos embraced holoc-
    build up that trust, once you do, the company can racy, about 14 percent of employees had left the
    move much more quickly. company. The employee exodus has continued. Zap-
    Montgomery points out that in the past, an associ- pos’s turnover rate for 2015 was 30 percent, 10 per-
    ate specializing in events for clients might report to centage points above its typical annual attrition rate.
    a manager in the marketing department in charge of Treehouse Island Inc., a Portland, Oregon, online
    thinking about why the company should be throw- coding school, also had a flat organization. Staff
    ing events in the first place. Today, the event plan- worked four-day weeks, worked only on projects they
    ner working alone can use an array of dashboards to liked, rarely had to send e-mail, and had no direct
    determine exactly how many Facebook likes, Insta- bosses. However, the business grew, with about
    gram posts, and sales arose from a particular event, 100,000 students enrolled in its online courses and
    and she is able to decide on her own whether future 100 employees. Some projects weren’t being com-
    events should be scheduled. With the right data and pleted, and employees were unsure of their responsi-
    tools to back up her decision, she doesn’t need a bilities. Treehouse wasn’t burdened by bureaucracy,
    manager to validate her choices. but work still stalled nevertheless. Without managers
    Web retailer Zappos.com Inc. announced in 2013 to coordinate projects and supervise and encourage
    that it was eliminating managers in order to keep workers, Treehouse employees weren’t as produc-
    the 1,500-person company from becoming too rigid, tive as they could have been. According to Treehouse
    too unwieldy, and too bureaucratic as it grows. founder Ryan Carson, there was no real reason to
    Zappos adopted a “holocracy” model in which work- work hard because no one knew about it. Some of
    ers manage themselves without the aid of middle Treehouse’s best employees started believing that not
    managers. In contrast to a traditional corporate as much was expected of them.
    Chapter 3 Information Systems, Organizations, and Strategy 121

    Questions about which subjects to teach would hours. With roles now clearly defined and managers
    spark much analysis and chatter but resulted in tracking assignments, e-mail is actually enhancing
    few answers or plans. Michael Watson, who headed productivity.
    Treehouse finance and operations, estimated that According to Quy Huy, professor of strategy at the
    decisions about matters such as Treehouse’s website Singapore campus of the prestigious graduate busi-
    design took twice as long as they should have. ness school Insead, middle managers are often vili-
    Treehouse partially reversed course in the spring fied as symptoms of corporate bloat, but things fall
    of 2015. Employees still work four-day weeks, but apart without them.
    they now have managers. Since that change was Sources: David Gelles, “The Zappos Exodus Continues After a Radical
    made, revenue has increased along with the number Management Experiment,” New York Times, January 13, 2016; Bour-
    ree Lam, “Why Are So Many Zappos Employees Leaving?” The Atlan-
    of minutes of video courses the company produces. tic, January 15, 2016; Christopher Mims, “Data Is the New Middle
    The time required for customer support employ- Manager,” Wall Street Journal, April 19, 2015; and Rachel Feintzeig,
    ees to respond to students who have questions “Radical Idea at the Office: Middle Managers,” Wall Street Journal,
    April 18, 2015.
    has dropped to three and a half hours from seven

    CASE STUDY QUESTIONS


    1. How do flat organizations differ from traditional from a traditional bureaucracy to a flatter
    bureaucratic hierarchies? organization?
    2. How has information technology made it possible 4. Can technology replace managers? Explain your
    to eliminate middle manager positions? answer.
    3. What management, organization, and technology
    issues would you consider if you wanted to move

    Understanding Organizational Resistance to Change


    Information systems inevitably become bound up in organizational politics
    because they influence access to a key resource—namely, information. Infor-
    mation systems can affect who does what to whom, when, where, and how in
    an organization. Many new information systems require changes in personal,
    individual routines that can be painful for those involved and require retraining
    and additional effort that may or may not be compensated. Because informa-
    tion systems potentially change an organization’s structure, culture, business
    processes, and strategy, there is often considerable resistance to them when
    they are introduced.
    There are several ways to visualize organizational resistance. Research on
    organizational resistance to innovation suggests that four factors are para-
    mount: the nature of the IT innovation, the organization’s structure, the culture
    of people in the organization, and the tasks affected by the innovation (see
    Figure 3.7). Here, changes in technology are absorbed, interpreted, deflected,
    and defeated by organizational task arrangements, structures, and people. In
    this model, the only way to bring about change is to change the technology,
    tasks, structure, and people simultaneously. Other authors have spoken about
    the need to “unfreeze” organizations before introducing an innovation, quickly
    implementing it, and “refreezing” or institutionalizing the change (Kolb and
    Frohman, 1970).
    Because organizational resistance to change is so powerful, many informa-
    tion technology investments flounder and do not increase productivity. Indeed,
    research on project implementation failures demonstrates that the most com-
    mon reason for failure of large projects to reach their objectives is not the

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