Reinterpreting the demise of hierarchy: a case study in information technology, empowerment and incomplete contracts
Authors: Wareham, Jonathan; Bjørn‐Andersen, Niels; Neergaard, Peter
Journal: Information Systems Journal (1998)
DOI: 10.1046/j.1365-2575.1998.00039.x
<jats:p>This paper presents a case study of the implementation of a sophisticated internal performance monitoring system by the service division of a value‐added reseller of Canon products in Denmark. This new control system could not only aid in controlling cost and productivity but could also monitor customer service and quality levels. Although the new system was implemented with exceptional technical success, it met a very defensive reception among the technicians. In response, management decided to initiate an empowerment programme. In order for this programme to have a significant impact, management needed to make the requisite shifts from a strictly hierarchical to a team‐based organization form, as well as moving from a hierarchical to an interactive control process, it was only after the company completed this type of ‘organizational realignment’ that the real benefits of the system were harvested. This case study explores the implications of the dispersed and empowered organization and the consequent lack of direct process control, in order to fulfil this aim, the discussion is based on the Grossman, Hart and Moore theories of incomplete contracting and the role of ‘info…