Most organizations are part of larger entities. In this paper, the company I have selected is AT&T. My primary focus will be on the Technology Standards and Solutions (TSS) organization structure, and factors associated with change of the organization. I will discuss the strategic view based on the organization structure. In addition to the strategic view, I will present one of the organizational designs - matrix structure for TSS. In the section, factors associated with change, I will briefly discuss the TSS elements of an organization environment along with impact from information technology. Before proceeding, I would like to begin with a brief history of the company, AT&T.
AT&T is one of the world's largest communication companies. First, back on January 1, 1984, Ameritech was launched. Before that, Ameritech was organized by state boundaries, with a Bell company in each of the five states, namely, Illinois, Indiana, Michigan, Ohio and Wisconsin. In 1984, all of these ‘baby bells' merged together and American Information Technologies —‘Ameritech' was born. “It provides services for more than 13 million customers. The company provides a wide array of local phone, data and video services. Ameritech also serves more than 1.5 million cellular and over 700,000 paging customers. It owns interests in some of the foreign countries like Norway, Poland, New Zealand, Hungary, Germany and other countries” (AT&T Overview of ACIS System, 1994, chap 1.1).
In a bold structural and cultural transformation known as ‘Breakthrough' (AT&T History and Culture, chap 1, 1997), Ameritech reconfigured its state companies and subsidiaries into fifteen business units and eight corporate services that focus intensely on specific customer needs. Ameritech progressed through a tradition of innovative milestones that testified to Ameritech's leadership in the communication industry. SBC Communication purchased Ameritech around 2000 and January 30, 2005, SBC acquired AT&T.
The strategic view
Companies that have decided to re-engineer their business processes have had impressive results. What is re-engineering? “Reengineering involves redesigning work to take advantage of two demographic and technological changes that have emerged since the advent of Scientific Management” (Schnitt, 1993, p.18). First, in today's economy includes many well-educated people that are knowledgeable and experienced enough to accomplish the task they have always performed, and make the decisions previously been reserved for supervisors and managers. Second, technology now makes it possible for information and documents to be stored in many places at once, allowing the same information and documents to be shared simultaneously by users.
According to AT&T reorganizes many of its corporate services and units. However, Technology Standards and Solutions Organization will be highlighted for the structural changes. In July 1997, there was a significant change in the Technology Standards and Solutions Organization. These changes were designed to facilitate improvements in the overall quality of technology use in the business units for clients and to more efficiently and cost-effectively deliver solutions. These strategic imperatives are essential in ensuring the long-term viability of AT&T, J. Golden, M. Haas, R. Ochal, G. Stam, C. Struck, and G. Thomas (personal communication, May 2008). According to Robbins & Judge (2007), “organization's structure is a means to help management achieve its objectives. Because objectives are derived from the organization's overall strategy, it's only logical that strategy and structure should be closely linked” p. 554.
Organizations can response to changes and modifications in a four ways according to Stensaker and Falkenberg, (2007): transformation, customization, loose coupling, and corruption. These changes and modifications are referring to the four responses (p.140). The responses are shown in Figure 1. Each response is briefly defined to obtain a better understanding on how corporate response to changes.
Transformation means when new ideas are implemented a major change occurs so that changes can apply to the theory behind the method. Next is customization, managers within organizations are labeled as customization because they respond to corporate change initiatives by making the new ideas more compatible with the organization without tearing down the main plans behind the change. The third response is loose coupling which is defined as “a change that is adopted superficially, retaining only a ritual function” (p.140). The last response is corruption, which means that changes become evidence symbolically and at the operational level.
Organizational Design - matrix structure
The structure of the team within the TSS organization at AT&T is that all members are on one team. However, each unit is interdependent on other teams. There are fifteen units with numerous teams on it. The example with TSS required solutions director from various teams to make decisions on improving the quality of the standards of technology tools. To assure a smooth communication of tasks, each unit is design as matrix structure. This organizational design is “a structure that creates dual lines of authority and combines functional and product departmentalization” (Robbins & Judge, 2007, p. 549).
Using the example of the TSS, the line of authority for team leaders is created on the second line of the organizational chart (see figure 2). In the matrix structure, TSS has five initiative managers. All five act as a team leader who has been given authority from the second line of authority to be over the team. The team leaders assume responsibility for any action of the team.
The team leaders' role as a team member in leadership has special requirements. They are to:
- Lead others by example to work together cooperatively.
- Facilitate team processes and suggests how to improve team effectiveness.
- Encourage open discussion by drawing in those with alternative viewpoints.
- Systematically shares own knowledge with all team members.
- Leverages relationships at all levels of the organizational to achieve team objectives
(M. Passino, personal communication, May 9, 2008).
In another example, the Lawrence Livermore National Laboratory (LLNL) in California, have been using a matrix style of organizational management since the late 1950s (Crites & Montgomery, 1988). The LLNL matrix structure shown in figure 3 was established to bring together their safety group to support a broad safety support to the laboratory program managers. The safety team leader has the resources and the leadership skill to effectively lead the team. In the matrix style, the safety organization is clearly discipline from top to bottom. For this example the technician supervisors are responsible for training the technicians that are assigned to them to ensure the implementation of the program.
In brief, “structure is one of the administrative elements of a business, and it exists to make operations and strategy work better” (Peters, 1993, p. 60). So, when we think about how an organizational structure, the structure is based on strategy, operational policy, culture, people within the department, the customer or client and the market. According to Peters, the matrix structure became known in the 1970s and early 1980s. Leaders in organizations wanted to address their internal customers or internal clients, hence the “dotted line responsibility” in the chart. This means that command relationships are not drawn on an organizational chart as a solid line, but as a dotted line. See figure 2 above.
Factors associated with change
TSS Elements of an Organization's Environment
According to Robbins and Judge (2007), environment is “an organization's environment is composed of institutions or forces outside the organization that potentially affect the organization's performance” (p. 557). These outside forces may include suppliers, customers, competitors, and similar institutions. For AT&T TSS, the most important element social environment is to focus on customers' desires as opportunities to continue to set standards for value and quality. AT&T recognized that the new organizational structure would enable TSS to:
- Facilitate improvements in the overall quality of the technology services
- Change from a ‘systems to a ‘business' orientation
- Provide the basic organization structure to increase the stability of the organization
- Enhance the quality by partnering more closely with their clients
- To better meet the revenue and performance demands of the competitive marketplace
The material environment for AT&T would include: a full range of communications services, (local and long distance telephone, cellular, paging, security monitoring, cable TV, electronic commerce, Internet services, U-verse and more). This environment is also important because many people use these communications services.
“Information concerning the environment must be an integral component of the management control system” (Eckel, Fisher, & Russell, 1992, p. 16). Eckel, et al. of the Northern Telecom's Environmental (NTE) listed a number of performance measurement for a dependable system to take place. The framework for performance environment is not dependent on other corporate activities. However, they are built on dynamic planning and control process. Their corporate policies and objectives are constantly being revised due to external monitoring and the company's performance. Eckel, et al. main focus in NTE, just to name a few, is to:
- Integrate environment into the business planning and decision-making
- Identify, access, and manage environment risks
- Comply with all legal policies and regulatory requirements
- Establish a formal Environmental Protection Program, as well as setting specific, measurable goals
- Establish assurance programs, including regular audits
In both examples, ATT TSS organization and NTE organization, experienced dynamic environments meaning there had been changes in government regulations that affected their businesses, continually changes of product preferences by customers among other forces. All of these changes are due to environmental uncertainty (Robbins & Judge, 2007).
Information Technology (IT)
Technology is use in environmental forces for change. “Technology is changing jobs and organizations” (Robbins & Judge, 2007, p. 644). The organizational inputs are the services that support a stronger business orientation (Application, Solutions, Business, and Account Services), and improved operational effectiveness (Delivery, Verification, and Production Services). The desired outputs are to:
- Reduce complexity and redundancy of systems
- Improve business processes
- Establish common architecture & data model standards
- Build systems once
- “Fast follower” approach
- Focus on core competency: world class software development
- Learning organization
Yet, IT budgets are being cut in real terms for the first time in a decade. Entire MIS departments are being outsourced which means services are being transferred to an outside supplier. Schnitt (1993) pointed out that organizations adds computer work to many tasks that are done manually that may require more time designing the system through technology. Schnitt also stated that when IT implements a new system or designs a new system to fit into its organizations, system development methodologies do not question why things are done in that fashion, but instead accept the way change is done.
Throughout this paper the TSS organization, which is one of the entities of AT&T, was presented to apply concepts and theories from organizational behavior. According to Robbins and Judge (2007), “organization structure defines how job tasks are formally divided, grouped and coordinated” (p. 538). One of the elements that were focus from the organization design was based on the chain of command using the matrix view. I discussed “dotted line responsibility” in which authority is given to second line managers that reports to the first line manager.
Roberts (2004) argues that while strategic choice and organizational design are greatly complex that the underlying logic based on the concept of 'fit':
Certain strategies and organizational designs do fit one another and the environment, and thus produce good performance, and others do not. Moreover, there are frequently recognizable, understandable, and predictable relations among the environmental features and the choice variables of strategy and organization that determine which constellations of choices will do well and which are less likely to do so. These relations arise for both technological and behavioral reasons. Recognizing these relations and understanding their implications can guide the design problem. (p. 32)
Information technology (IT) was briefly discussed. Keep in mind that IT involves more than just computers. IT also takes into consideration how computers work. How these computers can further be used, how these computers can be used for communications and the role that problem-solving tasks will play. Since IT has significantly grown, here are some advantages of how IT can impact organizations: globalization, a single interdependent system; communication, when manager are not able to face the clients in person, communication can be for video conferencing; expansion of hours, some organizations can be in operation 24/7; probably the most advantage of IT is the creation of more creative employment opportunities.
On the other, IT can have some disadvantages: unemployment, due to outsourcing, downsizing, job redundancies; lack of job security, due to the continuous change in IT that people skills can become outdated; and lack of privacy, with cellular phones, electronic mails, and computers, people may feel their personal information can become public. In all, AT&T is continuingly growing, constantly changing and improving its products for customers.