Organizations

Organizations are goal-directed, boundary maintaining and socially constructed systems of human activity.29

Organizations are designed and built for a purpose. These goals drive the behaviours of an organization’s many agents who dynamically interact with each other. The many interactions produce emergent macro-level patterns of organizational behaviour. IT organizations are complex systems embedded within the larger complex system of its business, customers and industry.

The transaction costs principle is a simple and yet powerful means for explaining organizations. It argues that, in certain circumstances, organizations are more efficient mechanisms for cooperation than contracting or sourcing. IT organizations are subject to transaction costs. They must search for, negotiate, monitor, coordinate and govern resources in order to produce services. As people come together in an organization, they must learn what to do and how to work with others to perform. If this cooperation is done ineffectively, transaction costs rise. The better the organization manages its transaction costs, the better it justifies its existence. Further, certain risks are better mitigated through organizations than through contracts:

• Incomplete contracts – no contract can ever cover every possible contingency. The greater and more complex the cooperation needed with external contractors, the greater the possibility of an incomplete contract.30
• The hold-up problem31 – services often require investments in specific assets such as infrastructure or facilities. The problem of incomplete contracts implies that there is always a possibility that contracts will unravel. Contractors are then stuck with these hard-to-reverse assets and may then withhold access as they seek better terms.
• Change endurance – organizations create structures that outlive the participation of their agents. These cooperative structures allow an organization to strive for complex strategies that may require years to enact.
• Collective learning – much like individuals, organizations are capable of learning.32 Despite changes in individuals, organizations act as a stabilizing and collective storehouse for knowledge while in pursuit of their goals.

Adequate scarce resources, a well-considered strategy and distinctiveness allow an organization to provide superior performance versus competing alternatives, in turn justifying the acquisition of still more scarce resources. This virtuous cycle is illustrated in Figure 6.1.

Дата добавления: 2015-11-14