Role of Information Technology in
Managing Organizational Change and Organizational Interdependence

1. Introduction

In a recent survey article in The Economist, John Browning (1990) wrote: "Information technology is no longer a business resource; it is the business environment." His statement is not far from truth. Ongoing advances in information technology (IT), alongwith increasing global competition, are adding complexity and uncertainty of several orders of magnitude to the organizational environment. One of the most widely discussed area in recent business literature is that of new organizational network structures that [supposedly] hold the promise of survival and growth in an environment of ever-increasing complexity (Bradley, Hausman and Nolan, 1993; Byrne, 1993; Davidow & Malone, 1993; Eccles and Nolan, 1993; Jarillo & Ricart, 1987; Malone & Rockart, 1993; Miller, Clemons and Row, 1993; Naisbitt, 1982, 1985; Toffler, 1985). How can IT help the organizations in responding to the challenges of an increasingly complex and uncertain environment? How can IT help the organizations achieve the "flexible" organization structure? These are the topics of discussion in this article.

We are observing a strong trend of convergence of the technologies of computing and telecommunications (McFarlan and McKenney, 1983). Changing technology economics, merging of formerly disparate technologies with different managerial traditions, and the problems of managing each of the phases of IT assimilation in different ways calls for a major reappraisal of the organization structures designed for yesteryears.

IS researchers have expressed time and again that technological change poses the greatest challenge to their research (cf: Teng & Galletta, 1991). Dickson and DeSanctis (1991) mentioned that not much attention has been given to the integration of technology or its use as a coordinating mechanism for organizational units. It is our contention that IT should be studied as an independent variable affecting the organizational structure. Huber (1990) recommends a reassessment of certain components of organization theory which are affected by the tremendous changes that have occurred in the capabilities and forms of communication technologies. This article will attempt to contribute to the development of these issues.

The article describes the open systems theory (Bertalanffy, 1950; Boulding, 1956) as one possible tool for organizational MIS research and practice, using the issues of environmental change, organizational structure and organizational interdependence to illustrate its use. The area of environmental change and organizational IT response is an especially appropriate application area for the open systems theory because, as this article describes, several critical issues can be addressed by the open systems theory. An IS perspective on these issues is given in section 2. A literature survey of the relevant issues in open systems theory appears in section 3. The open systems theory is then applied to the study of environmental change and organizational response in section 4. Section 5 presents some limitations of the open systems theory perspective and conclusions from this preliminary work.

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