Alcan is a multinational mining company that has its headquarters in Montreal, Canada. It has made numerous mergers and acquisitions through the years, which has caused the disparity in the entire company’s IT infrastructure and IT initiatives (Dube, Bernier & Roy, 2009a). With the hiring of Robert Ouellete as the Vice-President of Corporate IT and later being appointed as Alcan’s Chief Information Officer, changes are implemented in Alcan’s IT culture where a shift is made “from a culture of decentralization to a culture of distributed collaboration” (Dube, Bernier & Roy, 2009b, p. 1).
In this regard, this paper discusses the organizational changes being implemented in Alcan’s IT infrastructure from the perspective of the socio-technical systems (STS) theory. It also discusses the communication policies at Alcan, as well as the writer’s ideas on the proper application of STS principles in Alcan in order to promote organizational improvement.
General Systems Theory and Socio-Technical Theory
General Systems Theory serves as a basis for the classification of systems in accordance to the organization and interrelatedness of their components (Ryan, 1973). This can be used in guiding decision-makers in their efforts to understand, modify, and control an organization. It provides a methodological way of describing the ways by which the various system objects function and behave, in turn allowing for the elaboration of generalized models of systems (Skyttner, 2005).
On the other hand, the socio-technical systems (STS) theory is a specific type of systems theory where the employees’ social requirements for doing their work are integrated with the technical requirements that they need to perform their work (Fox, 1995). According to the STS theory (Fox, 1995), it is important for both the social and technical aspects of an organization to be considered interdependently as arrangements that may be considered optimal for one may not be optimal for the other. As such, trade-offs would need to be made.
In Alcan, the General Systems Theory was applied in the way that Ouellette and the Senior Management team made it their objective to integrate the organization’s various IT resources, infrastructures, and systems in order to shift from a decentralized to a collaborative culture. This is in accordance to the principles of the General Systems Theory, which state that as the degree of the system’s wholeness increases, so does its efficiency (Ryan, 1973). This theory also indicates that the stronger the relationships among the various parts of the system, the more efficient its operation will be; the more compatible the system is with the environment, the more effective it will be; and the more optimized the system, the more effective it will be (Ryan, 1973).
On the other hand, Alcan implements concepts of the STS theory in that it addresses the technological needs of the organization by implementing new technologies and integrating the existing ones (Dube, Bernier & Roy, 2009b). The organization also addresses the social aspects of their IT systems in that they advocate for the development of their employees’ skills and competencies. However, the writer thinks that the STS theory wasn’t effectively or properly implemented in that more focus and a higher priority were given to the technical aspects than to the social aspects of the organization. Although the company did have initiatives for providing trainings for their employees and making each group’s leaders involved in the change initiatives, information on the ways by which the employees made use of the IT systems were not obtained and considered. It should be noted that in applying the STS theory, the solutions may not lie only on the implementation of the correct IT hardware and software infrastructure but also on the way employees make use of these IT resources.
Organizational Success, Failure, and Consequences
One of the features of the STS theory that Alcan successfully implemented with regards to its technological system was the grouping of its unit operations, which facilitated the identification of the required changes in skill and knowledge demands and also facilitated the coordination efforts (Fox, 1995). Alcan implemented this through the delegation of four IT leadership positions that would be responsible for the various areas of IT management. These consisted of the Strategic IT Programs Director, the Performance Management Director, the Chief Information Security Officer Director, and the Enterprise Architecture Director (Dube, Bernier & Roy, 2009b). The IT governance structure was also restructured and with the centralization of Alcan’s IT management -- a shift from the previous structure where each business group had its own director or VP (Dube, Bernier & Roy, 2009b) -- each of the IT directors or VPs would now report both to their group’s management head and to the CIO. This ensured that each group’s IT initiatives were aligned with the company’s strategic objectives and enabled the senior management team to better control and monitor the company’s IT initiatives and the costs incurred.
Another STS feature that Alcan successfully implemented was the identification of the necessary operations versus the optional ones and the extent to which these operations demanded special skill, effort, and attention (Fox, 1995). This was evidenced in the implementation of shared services where there was really no need for the same services to have duplicate instances in multiple locations (Dube, Bernier & Roy, 2009b). Another example was the company’s initiative of integrating the company’s SAP projects into a single platform.
In addition, Alcan was able to identify the effective placement and nature of its maintenance operations such that downtime was reduced in the most cost-efficient way (Fox, 1995). In particular, Alcan moved the maintenance of a number of applications to the Shared Application Center. This enabled the development of the expertise needed for maintaining the various systems in accordance to the company’s business processes.
As well, the company was able to successfully promote a collaborative culture where the various functional units now worked together. For example, the Enterprise Architecture team worked closely with the Application Shared Competency Center and the Infrastructure Shared Services team (Dube, Bernier & Roy, 2009b).
On the other hand, one principle of the STS theory, which Alcan failed to implement, was the determination and consideration of how their staff used the IT systems. As a result, they had a difficulty in getting the business groups’ buy-in with regards to the proposed application changes (Dube, Bernier & Roy, 2009b). On one occasion, they had to rely on buy-in from Primary Metal in order to obtain buy-in from the other business groups. On another occasion, they had to implement the changes in increments in order to reduce resistance from the business groups.
Communication Policies and STS Practices
As aforementioned, the various IT VPs and directors are required to report to their group’s management and to the CIO (Dube, Bernier & Roy, 2009b). The CIO, in turn, reports to the CFO and meets with the Executive Committee at least once a year to report about the IT operations. In addition, the IT Council meets four times a year to discuss the CIO’s ideas before they are presented to the Executive Committee. This group consists of the Chief Financial Officer, the President who represents the business groups, and the CIO. This group was formed for the purpose of providing support for the CIO at the senior management level.
As well, the IT Leadership Committee was established to provide business groups with a venue for voicing out their concerns. This allows the shared services’ and the business groups’ IT directors to meet twice a month in order to evaluate current IT projects and better plan for future initiatives. Moreover, the internal Audit Committee meets with the IT senior management team twice a year in order to provide recommendations for managing risks and to report on the status of whatever risk management measures and policies are implemented.
These communication initiatives are in conformance to STS practices that advocate for the sharing of authority within the organization.
Application of Theories within the Organization
Although Alcan had provisions for the global management of its IT human resources in order to maximize the use of the competencies that already existed within the company, the writer thinks that the social aspect of the change was considered last when it should have been given the same level of priority as the technical aspect.
For example, although Ouellette and the senior management team implemented the best possible IT infrastructure for the company, the writer thinks that these were all based on theoretical assumptions, that is, they implemented the established best practices for the industry. However, they failed to check if these were effective for the employees in terms of how they performed their jobs.
If the STS approach were to be used, it would have been ideal for Ouellette and the executive team to have learned about how the employees worked and how they used the IT systems so that the executive team could have taken such into consideration when planning for and deciding about the cultural changes they wanted to implement. They could gather such data by actually visiting the employees and observing how they worked or at least asking the various managers to provide this information. Similarly, feedback from the employees should have been obtained on how effective the changes were and how they found their work environment after the new systems and policies were put in place.
In addition, aside from enabling the employees to develop and enhance their competencies, a performance management process and a rewards system should be established in order to encourage the behaviors that come with the cultural change and in order to ensure that the change is sustained.
This paper evaluated the organizational change implemented by Alcan from the STS perspective. While the company is headed in the right direction by integrating the company’s IT systems, infrastructure, and resources in order to create a more effective and efficient system as proposed by the General Systems theory, the company seemed to accord more importance to the technical aspects of the organization than to its social aspects. However, according to the STS theory, both the technical and social aspects of an organization must be interdependently considered, as this will enable the decision-makers to decide on the appropriate trade-offs. Given that Alcan failed to accord as much importance to the organization’s social aspects as was ideal, it is recommended that the company pay more attention to its employees by obtaining feedback on their use of the IT systems and on how these affect their performance of their jobs. As suggested by the STS theory, it is only when both the technical and social aspects of an organization are integrated will the work systems’ viability be ensured regardless of the changes that occur in their environments.
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