Changing Business Environments and Decision Support Systems
Changing Business Environments
The beginning of the 21st century brought huge changes in the management domain, people’s way of thinking, perception of organizational success and information technologies. Modern organizations are expected to be able to anticipate the future, quickly establish cause-and-effect relationships, and propose new ways of doing things. Allocating intangible resources (information and knowledge in particular) at the center of wealth production and skillfully utilizing information technologies have become a crucial task of the organization. Intelligent technologies and IT systems that are able to match the requirements of modern management have gained importance (Bui, 2000; Kersten, 2000; Laudon & Laudon, 2018; Olszak, 2016; Power, 2001; Turban et al., 2014).
It is claimed that change is an inherent element in which contemporary organizations have to operate. Growing information flows, new business practices, customers, competition, employees, and dramatically changing technology are the primary driving force of the ongoing changes. Technology plays an important role in both inducing and carrying out changes (McNurlin, Sprague, & Bui, 2014; Sauter, 2010).
Many authors are of the opinion (Rivard et al., 2004) that understanding the essence of changes that take place, both within and in the environment of modern organizations, and responding quickly to these changes, is the basis for achieving competitive advantage, improving customer relationships and enhancing organizational efficiency(Figure 1.1).
Figure 1.1 Organizations faced with changes.
Growing Information Flows
The modern world has been dominated by information and information flows are becoming increasingly complex. Tire problem for many organizations is not the lack of information but its excess, which causes informational noise and even informational chaos. Information on the basis of which organizations make decisions comes from various scattered resources. Information is often incomplete, inconsistent, and volatile (Laudon &C Laudon, 2018).
The nature of many decision-making problems has become extremely vague and fuzzy. Many events cannot be predicted or should be treated as hypotheses based on highly speculative premises. This applies in particular to dependencies that characterize the external environment of the organization, e.g., sales markets and long-term capital cost. Managers are faced with the need to solve problems with varying degrees of structuralization — from well-structured to partially structured up to unstructured decisions. Solving many economic issues requires the use of an interdisciplinary approach, i.e., the ability to combine knowledge from various disciplines, especially management, economics, sociology, statistics, computer science, and even physics.
New Organizational Structures and a New Distribution of Decision-Making Powers
Today, flat, process, network, and contract structures are gaining in importance in modern organizations where team coordination, self-discipline, trust in employees, business partners, as well as individual responsibility for created relationships and communication play a crucial role. Projects where employees are focused on tasks aimed at achieving specific goals are a vehicle for many types of work in organizations. The criteria for selecting members for such project teams are knowledge, competence, and experience. Organizations are becoming a complex chain of networks and decision-making teams that go beyond their traditional boundaries (Kelly, 2001).
It is hard not to notice that in traditional organizations, built in accordance with the linear hierarchical model, decision-making powers were clearly defined, well demarcated, and precisely distributed in a horizontal and vertical system (Jamali, 2005). The distribution of decision-making powers and associated responsibilities is usually less defined, less rigid, and more blurred in organizations with flatter structures. In such organizations, there are no clear and permanent divisions of work, and the exchange of information takes place in a highly individualized manner. Information centers, and consequently power centers, are dispersed, and in many cases hidden. They change their boundaries and internal structure. Most decisions are made in the process of consultations, negotiations, and tenders. Power is usually obtained for a short time, without any institutional and social guarantees, since it is situational, i.e., connected with the system of variable forces, and it must be constantly sought.
New Professions and Fields of Employment
The need to make increasingly complex decisions, based on highly aggregated and processed data, creates demand for new professions and fields of employment. These include, in particular, analysts, statisticians, and specialists in the field of data science, as well as creators of electronic markets, webmasters, Internet service providers, information and knowledge brokers, application testers, and security specialists. Work can increasingly be done remotely, and employees face retraining, frequent job changes, and even profession changes. Notably, already in 2020, approximately 85% of all professions in North America and 80% in Europe required the use of knowledge resources, and specialized software and hardware. At the same time, there is a dramatic reduction in employment in the area of material production, both industrial and agricultural. Research shows that, in a 2030 perspective, there will be a global growing demand for competences related to the ability to solve complex problems, critical and creative thinking, having interdisciplinary knowledge and the ability to negotiate, communicate, and cooperate. The progressive development of information technologies, contrary to what may seem, requires from employees not only skills related to the operation of equipment, mobile devices, and Internet but also the soft skills mentioned above. In addition, progressing globalization means that employees and managers use different languages and often have different cultural roots. It can be assumed that just as the process of receiving and evaluating information itself may significantly differ in such multicultural teams, the premises that guide them in making decisions may also be different (Viehland, 2005). This means that organizations should clearly provide their employees with information about the organizations goals and how to achieve them, as well as care for developing common ethical behavior and understanding of values. Furthermore, in fact, employees also place more and more demands on their employers. They expect support from them in the area of professional development and promotion as well as creating conditions for safe and decent work.
Customers
Customers are believed to have become the driving force behind many changes that are taking place inside the organization and in its business environment. A modern customer is often a very inquisitive, well-educated person interested in highly personalized services and products; together with producers shaping the organization’s value system (Brilman, 2002; Chapman, 2001). The customer’s interest in a specific offer and maintenance of their long-term loyalty to the company has become extremely difficult, and also a priority task for many organizations. It is regarded that organizations can deal with these issues by developing the ability to quickly discover and satisfy customer needs by providing highly personalized products and services. However, it should be noted that personalization requires changes in virtually everything that the organization has done so far (from needs analysis, through product design, advertising, to distribution). The correct implementation of the individualization assumptions is associated with the development of various relationships with customers and suppliers, which should be based on trust and close integration. It must be admitted that we still know too little about how to anticipate those needs. Skills in customer segmentation and profiling, reaching the target group as soon as possible, developing individual customer relationships, and engaging them in the process of developing new products and services are extremely valuable (Tiwana, 2000).
Competition
More and more often one can come across the statement that for a contemporary organization what is happening in its environment has become more important than what is happening within it. This is due to the fact that in the past, organizations functioned in a predictable and even friendly environment. Contemporary business environment is turbulent and often hostile. It requires constant monitoring, anticipation, and quick response to any signals coming from the market. Systematic and professional analysis of competitors and markets, defined as benchmarking, has become an effective way of learning and gaining experience for many organizations. It casts competition in a completely different light than previously. Competition is treated as a valuable source of information and a partner for exchanging views. Today, we are witnessing the formation of joint interest groups and mergers of companies that have recently competed with each other. Strategic alliances, outsourcing, and joint ventures have already become a certain norm. They are concluded as the need for using the same raw materials, creating strong organization-supplier relationships, as well as joint research groups arises. As a consequence, this leads to the development of broad cooperation and collaboration.
Stakeholders
In modern management, which often takes on the characteristics of network management, an organization is a system of many groups of shareholders connected with each other. Organizations must cooperate with stakeholders who belong to different institutional spheres and thus support different views, interests, and values. Tlie basic groups of stakeholders of an organization include owners (primarily interested in return on equity and share prices), employees (primarily interested in earnings, job satisfaction, and working conditions), customers (interested in the quality of products and services, price, and service), suppliers (interested in contract terms and liability regulations), lenders (interested in timely repayments and organization’s development perspectives), local communities (interested in job creation and environmental protection) and state authorities (primarily interested in an efficient tax system and compliance with the law). This situation of increased pluralism is a new challenge for organizations. Not only do they have to deal with the dispersion of power, but also face the need to create strategies in the context of complex and often contradictory goals, ’[he efficiency and effectiveness of modern business requires meeting the expectations of stakeholders in the economic area as well as in social and image-related areas.
New Conflicts and Threats
The development of modern organizations brings various fears and new threats (Rivard et ah, 2004). Conflicts and anxieties are of a different nature than they used to be. Their source is, among others, lack of accessibility and ability to use information technologies which may consequently lead to digital division of the world. It is believed that organizations which will not keep up with technological development are at risk of isolation and exclusion from economic and social activity. Another escalating problem is terrorism and electronic attacks. It is mainly about hacker attacks on stock exchanges, banks, energy networks, water supply systems, military systems, air navigation, as well as electronic surveillance and invasion of privacy. In those circumstances, solutions (technological, legal, business and transnational) are needed to protect organizations against these types of threats and crimes.
At this point of considerations, we pose the fundamental question of how organizations can deal with such a diverse range of changes taking place within them and in their business environment, and, above all, how to use these changes to achieve competitive advantage and create new values.
We believe that the following are important to deal with changes: (1) the organization’s ability to manage intangible assets, such as information and knowledge; (2) creative people and creative organizations; and (3) information technologies.
