La integración pedagógica de las Tecnologías de la Información y de la Comunicación

Assumption Biases Inability to Predict Milliken (1987) + + Teece et al. (1997)

Shimizu & Hitt (2004)

Figure 3.2 Inability to Predict Model

Uncertainty + Resistance to Change

+

B.-Fuller & Volberda (1997) Shimizu & Hitt (2004)

Delayed Decisions

Shimizu & Hitt (2004)

Figure 3.3 Resistance to Change Model

Hence, assumption biases are positively correlated with inability to predict. In this regard, Teece et al. [110] affirm that “narcissistic organizations are likely to be impaired [in rapidly changing environments]”.

Therefore, the inability to predict is increased by both environmental uncertainty and biased attitudes. This relationship is illustrated in Fig. 3.2.

3.1.2 Resistance to Change

Another factor mentioned by Shimizu and Hitt [104] is the resistance to change. The more uncertain is the environment, the higher is the people’s resistance to change established rou- tines. People often believe that “consequences of changing are usually less well-known than the consequences of not changing” [104]. In this regard, Baden-Fuller and Volberda [8] discuss that organizations must develop mechanisms to reconcile the paradox of conflicting forces for change and stability.

The resistance to change results in several problems to an organization, which might nega- tively impact its performance. When people are resistant to implement changes, the decisions tend to be delayed [104]. Often, such delays impair the exploitation of business opportunities. Also, delayed decisions may make the company continue pursuing activities that are unlikely to be successful, resulting in severe losses.

This can be exemplified from the cases of Kodak and Motorola companies. Both firms un- derestimated the effects of digital technology and resisted to get into the digital era. With such a behavior, they not only lost a very profitable business opportunity, but they also continued investing in the analog technology for too much time [104]. Shimizu and Hitt [104] report that many companies studied by them delayed their responses for more than one year after the poor results started to appear.

Thus, although a resistance to change may be seen as a problem on its own, its impact over firm performance is mediated by an increase in the delaying of decisions and response actions. Thus, the more resistant to change is the organization, the more time it takes to recognize the situation and to take decisions on how to respond to environmental threats and opportunities.

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Centralized Decisions

Coordination & Integration +

+ Ginkel & Knippenberg (2009)

Bloom (2010)

Information Gap

Delayed Decisions +

Andersen (2000)

Allaire & Firsirotu (1990) Yan et al. (2010) Andersen (2000) Barua et al. (1997) Zahra et al. (2006) - Barua et al. (1997)

Figure 3.4 Centralized Decisions Model

3.1.3 Centralization of Decisions

A survey conducted by Bloom et al. [10] among firms in India shows that one of the major problems of companies in developing countries is their tendency to centralize decisions. Most companies lack of delegation of decision making from owners to senior managers. According to Bloom et al. [10], such centralization impair the firm’s growth, since growth is limited by the time supply of the owner. They report on several companies that participated in their survey that exhibited substantial drops in their productivity due to broken equipments. The problem is that plant managers did not have the authority to order parts to repair such equipments and the owners were often traveling on business, delaying the equipment repairing.

Several authors have approached the relationship between decision-making characteris- tics and firm’s performance in the context of uncertain and turbulent organizational environ- ments [6, 12, 40].

The literature suggests that centralized decision-making has both positive and negative im- pacts over performance. One of the negative impacts is an increase in decision delays. Central- ized decision-making impairs the capacity to respond to changes timely, once decisions require more steps and more time to be done [6, 10]. A second negative impact is an increase in the

information gaps [5, 116]. The scope and complexity of the firm may grow beyond of top man-

agers’ capacity to comprehend all necessities of all units. Also, firms may shift to new business areas which call for different and more specialized skills [5]. This makes low-level managers much more informed to take decisions than top managers [123].

A positive impact of centralization is an improved capacity to coordinate and integrate ac- tivities and projects [6, 110]. Standardized procedures and integrated information systems re- duce information gaps and improve the managers’ capacity to take adequate decisions [9, 89]. In this context, strategic plans can be accounted as an instrument for centralization of deci- sions [5]. Centralized strategic plans are claimed to provide better coordination of actions and improved functional integration, which improve the organization’s performance [6]. However, strategic plans are difficult to adjust in accordance with new events observed by decentralized managers [6]. This reduces its effectiveness to coordinate the action of autonomous managers.

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3.1.4 Inadequate Decisions

The ability to take good decisions does not depends only on the manager’s skills. Organiza- tional influences and external factors can increase or decrease the manager’s capacity to make adequate choices at a given time.

One of these factors is the inability to predict the future [75]. Shimizu and Hitt [104] affirm that even highly intelligent managers struggle with the decision that should be taken after acknowledging poor outcomes. In a case reported by them, the managers were uncertain about whether the poor outcomes arose from organizational problems or from transitory market conditions. Much of their decisions were taken in the assumption that transitory conditions were taking place. Only after three years the directors perceived that they have been making wrong decisions and that changes were demanded [104].

The information gaps also prevent administrators from getting a clear grasp of the situation and its requirements [5, 116]. According to Barua et al. [9], it is common the situation in which two or more units must exchange their information, but this information is being collected in a form only useful to the unit that is collecting it.

For example, Barua et al. [9] report the case of Southern Cross, Inc. When the managers of this company needed to perform a company-wide analysis to isolate the root cause for un- satisfactory sales performance, they required information from several sources. However, the data from each source showed several inconsistencies, such as grouping the same products into different categories. As a result, additional efforts had to be made to firstly standardize the information before they could start analyzing it.

Ginkel and Knippenberg [116] affirm that decision-making groups with distributed informa- tion often make suboptimal use of their information resources. One of the difficulties imposed by distributed information is a reduced knowledge of who knows what.

The relationship between top managers and functional managers may also be marked by large information gaps [123]. Allaire and Firsirotu [5] discuss that, in firms that adopt a “numerous-driven” planning culture, the functional managers have much more information about the business than the executives. Very often the strategic plans turns into a post facto control mechanism focused only on the financial/quantitative aspects. According to Allaire and Firsirotu, when the results sour, the board members may be the last to know [5]. Further- more, when merges and acquisitions are made and companies start working at new businesses, more specialized skills are required [5]. It is likely that the corporate managers will not have the skills necessary for taking the most adequate decisions in the areas apart from the initial business of the company.

A third factor that diminishes the managers’ capacity to decide adequately is the absence of

clear goals [106,119]. In Volberda’s chaotic type of organization [119], the absence of strategic

directions makes the range of possible procedures very large. Making a choice becomes a very difficult task in such setting.

Even if goals are well-defined, when uncertainty is observed and a strategic change is re- quired, there is a need for changing goals as well. This period of change makes unclear which goals are to be kept and what will be the new goals. In a case study described by Melnyk et al. [73], a company was shifting from a cost leadership strategy to a differentiation through innovation strategy. Unfortunately, managers at different levels of the company comprehended

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