ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
I. Class Notes
1. Assignments - Due on Canvas Friday February 24th
a. Change Management at Duke Hospital
b. Strategy at IBM
c. Strategic Analysis of Wile E. Coyote
d. More next Wednesday
2. IBM Book – be substantially done by Wednesday February 22nd
3. Analysis project – See Canvas next week – due on canvas Friday March 10th
4. Exam #2 – Monday, March 6th
II.
Review: Comment on Values and the Organization
This is important as values are one of the drivers how organizations process tasks. Here is an example from
The Art of War - Values set boundary for decisions.
“Sun Tzu Wu, according to Ssu-ma Ch'ien, was a native of the Ch'i state. His Art of War brought him to the
notice of Ho Lu, King of Wu [in middle-eastern China, west of Shanghai. The Capital was the present city of
Wuchang. Ho Lu said to him: "I have carefully perused your thirteen chapters. May I submit your theory to a
slight test?"
Test of His Principles
Sun Tzu replied: "You may." Ho Lu asked: "May the test be applied to women?" The answer was again in the
affirmative. So arrangements were made to bring 180 women from the palace. Sun Tzu divided them into two
companies and placed one of the King's favorite concubines at the head of each.
He then bade them all take spears in their hands, and addressed them thus: "I presume you know the difference
between front and back, right hand and left hand?" The girls replied: "Yes." Sun Tzu went on: "When I say 'Eyes
front,' you must look straight ahead. When I say 'Left turn' you must face towards your left hand. When I say
'About turn,' you must face right around towards the back."
The words of command having been thus explained, he gave them halberds and battle-axes in order to begin the
drill. Then, to the sound of drums, he gave the order, "Right turn!" But the girls only burst out laughing. Sun Tzu
said: "If the words of command are not clear and distinct, if orders are not thoroughly understood, then
the general is to blame." Then he started again, and this time gave the order, "Left turn!" Whereupon
the girls once more burst into fits of laughter. Sun Tzu said: "If the words of command are not clear and
distinct, if orders are not thoroughly understood, the general is to blame. But if his orders are clear and
the soldiers nevertheless disobey, then It is the fault of their officers." So saying, he ordered the leaders of
the two companies to be beheaded.
Wu's King was watching the scene from the top of a pavilion; and when he saw that his favorite concubines were
about to be executed, he hurriedly sent down the following message: "We are now quite satisfied as to our
general's ability to handle troops. If we are bereft of these two concubines, our meat and drink will lose their
savor. It is our wish that they shall not be beheaded."
Authority of High Command
Sun Tzu replied: "Having once received His Majesty's commission as general of His forces, there are certain
commands of His Majesty which, acting in that capacity, I am unable to accept." Accordingly, he had the
two women beheaded, and installed the pair next in order as leaders in their places.
When the execution was over, the drum was sounded for the drill once more. And the girls went through
all the evolutions, turning to the right or to the left, marching ahead or wheeling back, kneeling or standing, with perfect accuracy and precision, not venturing to utter a sound.
Then Sun Tzu sent a messenger to the King, saying, "Your soldiers, Sire, are now properly drilled and disciplined, and ready for Your Majesty's inspection. They can be put to any use that their sovereign may desire; bid
them go through fire and water, anu Us, We have no wish to come down and inspect the troops."
Sun Tzu's retort was: "The King is only fond of words and cannot translate them into deeds." After that
Ho Lu realized that Sun Tzu knew how to handle an army, and finally appointed him general.
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ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
This narrative may be apocryphal, but Sun Tzu says in his book: "There are commands of the sovereign
which must not be obeyed." This comment reminds us of the importance of values in the organization and
you will see Lou’s respect for values in the book.
In a more “contemporary” setting: “In matters of style, swim with the current; in matters of principle, stand like
a rock.” – Often attributed to Thomas Jefferson, third President of the United States.
We will now see where the organization puts “values” into what the organizations does – some of the functional areas.
III. Human Relations (HR) Issues – “Recruiting is a core competency for any company…Talented people
don’t need to work for you; they have plenty of options.” Peter Thiel in Zero to One.
1. Human resources vs. human capital
2. Job design and position management
a. Headcount as a critical success factor – CSF
b. Dashboards: →
3. SKA’s for job design
a. Skills
b. Knowledge
c. Abilities
4. Discrimination cases - examples
a. Protected classes: Title VII of the Civil
Rights act of 1964
i.
All persons of color
ii. National origin
iii. Gender including pregnancy but
not sexual orientation – there is
currently a bill in Congress on sexual orientation
iv. Religion
b. Disabilities – Americans with Disabilities Act (1990) – “reasonable accommodation”
c. Age: Age Discrimination Act of 1967: age of over 40 years
d. Pregnancy
5. Family and Medical Leave Act (1993) known as “FMLA” – 12 weeks of unpaid leave.
6. Legal theories of discrimination – this is primarily ethnic and racial, but can also be socio-economic – See course pack
a. Disparate or Adverse Treatment
b. Disparate or Adverse Impact
7. Equal pay for men and women: Equal Pay Act of 1963: comparable work standards
8. Harassment - creates a hostile or offensive work environment or when it results in an adverse
employment decision
a. Sexual Harassment
b. Racial or Ethnic Harassment 9. Fair Labor Standards Act - primarily for overtime wages
a. Nonexempt employees - See course pack
b. Exempt employees
10. Independent contractors vs true employee status – See course pack
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ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
IV. Information Technology – General Comments
Note: Here we go way back to the schools of modern management and look at the management science
school in the context of some of our recent topics. Think about Lou and Alex here.
A. Terms
1. Data – the attributes
2. Information – the organization of the attributes
3. Usefulness of information
a. Timeliness – the information is available in-time to make the optimal decision: realtime is the term used for “current” data like the real-time reporting of bank balances.
b. Relevance – only the information needed by the manager is provided and extraneous
information that will confuse the decision making process is eliminated.
c. Completeness – this is other side of relevance: the information that is needed is provided and if not then uncertainty, ambiguity and risk increase.
d. Quality – accuracy and reliability describe the quality of the information: accuracy is
the relationship to reality and reliability is related to the variation of the results in
repeated tests.
Example: Blood test in an
emergency room:





Timeliness
Relevance
Completeness
Quality
Decisions
B. Relationship to organizational behavior: change will occur where information is used
1. Optimizing and satisficing analysis – use the “chains” to do this.
2. In IT (information technology) consulting there is a saying:
“The adage ‘You can’t teach an old dog new tricks’ is not true. What is true is that ‘When you
can’t learn a new trick you are an old dog.’” – so the learning organization is closely related to
information technology.
Important point for us: IT affects the way the organization behaves – how IT affects the organization
for us is limited to how decisions are made. We are not interested here in the technology but rather
how IT affects the decision making process.
V. Types of Information Systems
A. Some terms
1.
Transaction processing systems (TPS) – traditional accounting and finance applications
like payroll and sales recording. The transactions (the data) “roll-up” to information (reports).
2.
Operational information systems – applications that move along the supply chain: inventory control, order-processing, procurement, human-relations management
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ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
3.
ERP (same as the one we discussed in BPR) – enterprise resource planning systems – links transactionprocessing systems with operational information systems into one integrated system that include (generally) at least these two characteristics:
a. Best practices – so we end up with the “tail wagging
the dog” – but the tail is right this time.
b. A single-source of information – so no “redundancy
of data” – this can be risky to the organization so
maybe up to 80% of the ERP effort is for security,
backup, recovery, validation – verification of data.
c. A single-source to all functions
d. Generally requires the elimination of “shadow systems”
e. Generally requires the reduction of data centers from
up to 100 to four or five of which these “copies” are
the limit of data redundancy.
4.
5.
6.
Example: Folsom data center for Intel
Vendors:
i. SAP
ii. Oracle – several version of which JD Edwards is one shown above
iii. IBM
iv. Lawson
What makes the new IT systems work:
a. Computer literate users
b. Telecommunications
c. IT infrastructure – size and speed
d. Results in end-user computing – an example
of the management sciences school of management
See next page
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ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
#1. Structured Query Language
#2. Example of SQL code
#3. Where you can take a class – most community colleges have online classes for SQL. This one is
from Foothill Community College.
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ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
7.
Relational databases allows for ease
of access to data
a. One-to-many relationships by
use of pointers and addressing
b. Minimize data redundancy
c. Increase data access and data security
B. IT as an enabling technology for the flat
organizational structure
1. Horizontal information flow such as
predictive models: Taco Bell is an
example.
2. The “control” purpose of the hierarchal structure can be provided by IT reporting and communications – our dashboard from earlier
in the class is an example.
VII.
Ethics – In the Organizational Setting, not Personal Ethics
A. Stakeholders – those who have a claim on the success and failure of an organization
1.
2.
3.
4.
Stockholders
Managers
Employees
Suppliers
5.
6.
7.
8.
Distributors
Customers
Community
The “reach” of the organization
B. Type of Ethics:
1.
Societal – how members of a society should interact
2.
Occupational – standards of behavior for a profession or trade
3.
Organizational – guiding practices for a company’s managers to view their responsibility to stakeholders
4.
Individual – personal standards and values on how one should interact with others
C. Rules to Solve an Ethical Dilemma: When a decision needs to be made that will have an adverse effect someone.
1.
Utilitarian: greatest good for the greatest number of people
2.
Moral rights rule: protects the fundamental rights and privileges
3.
Justice rule: a fair and equable distribution of benefits and harms
4.
Practical rule: a “business model” that says you should only make decisions that you are willing to disclose to the public
D. Importance:
1.
Trust – willingness of a person or a group to have confidence in the
goodwill and competency of another person or organization even though
this willingness puts them at risk
2.
Reputation – how others see managers and organizations as a result of
their ethical behavior – reputation leads to trust.
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ARE 112 – Winter 2017 Notes #7 – Organizational Structures: Decisions #2 - HR, IT, EthicsFebruary 15th
VIII. Decision Rights – An Example of a Management Tool
A. An organizational
rather than individual concept of
formally assigning the authority
to select one of
the alternatives
for a decision.
B. Generally assigned based on
the type of decision and exists on a continuing basis and on a situational basis
C. Usually more for unstructured decisions
D. Examples:
1.
Who decides on the bid amount on a proposed construction project by the general contractor?
2.
Who decides one which capital improvements to make at a hospital?
3.
Who decides how many analysts to hire this fall at Genetech?
Here is an example of an analysis of decision right from Bain Consulting:
http://www.bain.com/publications/index.aspx - you can subscribe here
E. A short explanation
1.
Recommender
2.
Inputer
3.
Agreer
4.
Decider
5.
Performer
See course pack for more management tool topics from Bain.
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