It Flattens the Organizations

I T FLATTENS THE ORGANIZATIONS

EXPLANATION:

Many large organizations have reduced the number of employees and also the number of levels in their organizational structure and this has happened due to information technology. It facilitates flattening of hierarchies by empower the lower-level employees and increase management efficiency. So lower-level employees receive the information they need to make decisions without supervision due to IT. Information systems can reduce the number of levels in an organization by providing managers with information to supervise larger numbers of workers and by giving lower-level employees more decision-making authority. Many companies have eliminated thousands of middle managers due to IT and decision making has become more decentralized and information becomes more common throughout the firm.

Example:

General Electric Motors (GE) has flattened its organizational structure:

Decision- making has become decentralized because the top management of GE has direct contact to the front line employees by reducing managerial layers in an organizational structure as a result of introducing information systems and has empowered the frontline employees. Jeff Imelda, Chairman of GE, has declared that the managers of the four newly independent units of GE would give information directly to him instead of the business head because he wanted a direct contact with the financial services teams. GE invested energy and resources in designing their organizations and has also designed its market products and services. Its organizational structure has pushed decision-making authority and responsibility to employees because IT has taken a place in managing the records of its business units and it has designed information systems. They deal directly with customers thereby tending to reduce