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Title: The Boundaries of Business: The Impact of Technology. By: Jaikumar, Jay, Harvard Business Review, 00178012, Sep/Oct91, Vol. 69, Issue 5 . Database: Business Source Complete

The Boundaries of Business: The Impact of Technology

The HBR World Leadership Survey provides eloquent testimony to the fact that technology has revolutionized the work that managers do. In fact, technology has effected this transformation so thoroughly that the managers responding to the survey, typical of managers around the world, tend to react to the surface disturbances that have been created by the underlying technological shifts. Therefore, managers will tend to talk about the atter organization or about workforce changes and miss commenting on the revolution in technology that has precipitated these changes. It is, however, this deeper revolution in technology that managers must understand, appreciate, and ultimately become a part of if they are to keep pace with the new demands of competition. Perhaps this omission on the part of managers is understandable in light of what we know about the ways organizations adjust to technology. In the workplace, technology can precipitate revolutionary changes that have dramatic impacts on the content of work. But it usually takes time for organizations to realize how powerful technology can be. The walls set up in organizations--between managers and workers, between functions, between work and home, between company and society--constrain change, and managers are slow to dismantle them. Only when the walls begin to crumble do companies feel the full potential of technology. In my own work helping companies restructure their operations, I have found that it can take a decade or more for managers to create large enough openings in the walls for technology to change the content of work radically. As the survey results indicate, change in the content of work is a unifying element across countries. In manufacturing, for example, companies are quick to transfer across national borders even the most revolutionary changes in production machinery, production technology, or traditional automation. But when technology is embodied in know-how and knowledge and no longer contained only in a machine, change occurs at a very slow pace. When people are the

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instruments of technology, organizational walls that separate functions and levels inhibit the diffusion of knowledge. That is why technological advancement often takes place at a faster pace and in a more complete way at companies with atter, smaller organizations staffed with generalists. While the technology should dictate these kinds of organizational shifts, companies seem slow to move. Take the fact that the survey shows managers reporting higher levels of satisfaction with their jobs but less loyalty to their companies. Company structures have changed as a result of downsizings, reorganizations, CEO changes, mergers, acquisitions, and divestitures. Yet hierarchy still rules industrial organizations and the split between the upper-level manager and the work force is as large as ever. Why? Because companies are reluctant to embrace the logic of the technology and dismantle the walls that separate levels of management. Consider another kind of wall -- the space that separates different parts of the organization--and the impact of telephones and fax machines, technologies that can break down the wall of space. With these technologies, managers can communicate with anyone around the world as easily as if he or she were down the hall. Everyone agrees that to ignore these technologies would impair a company's competitiveness. Yet the technology of the telephone, which has been around for more than a century, has not fundamentally changed management style or thinking. What could become a powerful tool to break down the walls between functions and levels in an organization, to share information and speed decision making, has instead been limited in use to enhancing the communications that already are a part of most managers' lives. Managers have used these technologies to wire the walls rather than to remove them. In my view, the most disappointing element of the survey responses is the emphasis that managers put on the consequences of changes in the external world without examining management's role in developing those changes. This external orientation masks the fact that corporations around the world are facing the same trends regarding the content of work, although their responses may vary widely. Almost everything in the survey reinforces the notion that signicant change is occurring. Managers acknowledge change in the form of apprehension about a number of things: corporate insularity, the erosion of the work ethic, government red tape and corruption, the level of investment in infrastructure, the quality of work skills. Clearly these managers are not only aware of change but also feel embattled by it. But in the face of fundamental and rapid change, managers are simply reacting to their immediate circumstances rather than reecting on the impact and causes of the change. The content of work, of what actually gets done on the job, has been transformed over the past decade, but the responses indicate no awareness of why that change has occurred. Ultimately, each company will nd its own solution to the technological imperatives of today --

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EBSCO nationality. Privacy Policy Terms of Use regardless of culture or Support Site For example, given components Copyright of equivalent quality and cost, cultural similarities might dispose an Italian company to do business with another Italian company instead of with one in the United States. But if the components of domestic companies are inferior or more costly, economics and competitive considerations will drive the decision. After all, exhortations to patriotism did not prevent Americans from abandoning Detroit for more economical and fuel-efcient imported cars during the 1970s. For companies in the 1990s, the same logic will hold, which is why we will see close alliances between suppliers and customers around the world, better and more rapid product development, and a world of work that emphasizes productivity, technology, and commitment.

Reprint 91502 PHOTO (BLACK & WHITE) PHOTO (BLACK & WHITE) ~~~~~~~~ By Jay Jaikumar

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