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Electronic Communication and Changing Organizational Forms

Janet Fulk * Gerardine DeSanctis Annenberg School for Communication, University of Southem Califomia, 3502 South Hoover Street,

Los Angeles, Califomia 90089-0281 Fuqua School of Business, Duke University, Box 90120, Durham, North Carolina 27708-0120

Abstract We introduce this Special Issue by providing an overview of the interplay between communication technology and various dimensions of new organizational forms. We consider the major factors motivating dramatic change within and between organizations today, and describe key dimensions of intraorganizational and interorganizational forms that are linked to electronic communication technologies: vertical control, horizontal coordination, size of organization and constituent units, new types of coupling, core product, communication cultures, ownership and control, interorganizational coupling, strategic alliances, and interstitial linking. Our purpose is to sample the changes attendant upon advances in electronic communication and organizational forms, with the goal of energizing future research. Our overview uncovers possibilities for new avenues of study within the technology-organization relationship and reveals the important contributions made by the articles in this Special Issue. (Electronic Communication; Organizational Forms; In- terorganizational Relationships)

The study of form is at the core of organization science. Organizational form consists of the structural features or patterns that are shared across a large number of organizations (McKelvey 1982). A variety of organizational forms have been described by researchers. McKelvey (1982) reviews historical forms, beginning with the tribal. Economists traditionally have focused on two alternative forms, markets and hierarchies. Sociologists have focused on bureaucracy, a form Weber (1922/1968) described in contrast to the guild form. Currently, organizational scholars observe that an alternative to markets and hierarchies appears to be emerging, that of the network (Miles and Snow 1986, Nohria and Eccles 1992, Powell 1990, Monge and Fulk 1995). And there is growing interest in a number of alternative "postbureaucratic" forms, such as interactive (Heckscher 1994) and virtual (Nohria and Berkley

1994). Whatever the specific form, it includes not only the parts and activities of organizations but also communication: the linkage mechanism whereby the parts of the organization coordinate with one another and with other organizations (March and Simon 1958, Thompson 1967). Because communication is integral to organizational form, advances in communication capabilities through electronic technologies are implicated in a wide variety of changes in forms. Electronic communication technologies are enablers of changed forms by offering capabilities to overcome constraints on time and distance, key barriers around which organizational forms traditionally have been designed. Electronic communication systems are also implicated in form insofar as their configuration may be shaped as organizations evolve and change. Finally, electronic technologies can be viewed as "occasions" for structuring (Barley 1986) as Orlikowski, Yates, Okamura and Fujimoto described in this issue. In this view, communication technologies offer users opportunities to manipulate both the communication technologies themselves as well as the organizational contexts in which they are embedded.

Advances in communication technology have long been recognized for their impact on organizational form. Early on, the rudimentary file system, interoffice memo, and business meeting contributed to the development of bureaucracies, enabling coordination and control among organizational components (Yates 1989, Yates and Orlikowski 1992). Later, telephones, tele- graph, and mail systems enabled distributed forms of organization and interorganizational communication (Chandler 1977, Pool 1983). Organizational forms were designed to match communication needs; for example, boundary-spanning units were created to link uncertainty-reduction activities within the organization to activities within the environment (Thompson 1967, Galbraith 1973, Tushman and Nadler 1978). And com-

1047-7039/95/0604/ 337/$01.25 Copyright 3 1995. Institute for Operations Research and the Management Sciences ORGANIZATION SCIENCE/Vol. 6, No. 4, July-August 1995 337

Alexandros Theocharides




JANET FULK AND GERARDINE DESANCTIS Electronic Communication and Changing Organizational Forms

munication technology, in turn, was designed to match the organizational form; for example, dual reporting and workflow systems were developed to support matrix organizations. Beniger (1986, 1990), drawing on Weber's (1922/1968) dimensional criteria for a bureaucratic organization, argued that information technology and organization are truly homologous forms. Informa- tion technology creates new options for organization design; and new organizational forms, in turn, provide new opportunities for technology design. Indeed, "the design of information technology and the design of organizations are largely becoming the same task" (Lucas and Baroudi 1994, p. 9). The articulation of technology and organization recognizes that neither is fixed but that both are changing in relation to each other, and that technological users play active roles in shaping the design of this articulation.

In this article, we first summarize major changes that are currently taking place in electronic communication and in organizational forms. Second, we focus on the interplay between technology and various dimensions of new organizational forms, whichever they may be. Our goal is not to identify a single form, but rather to focus on dimensions of forms that are linked to electronic communication technologies. We consider seven dimensions of form that are primarily intraorganizational: vertical control; horizontal coordination; size of organization and constituent units; new types of coupling; core product; communication cultures; ownership and control. We then consider three dimensions of form that are interorganizational: interorganizational coupling, strategic alliances, and interstitial linkages. As the boundaries within and between organizations blur, these distinctions come to have less mean- ing; nevertheless, our analysis reveals the ways in which current advances in electronic communication systems can facilitate new ways of organizing. Third, we present a discussion of research issues surrounding the technology-organization relationship. We conclude with a summary of the papers in the special issue and their contributions to understanding electronic communication and changing organizational forms.

The Technology-Organization Relationship Changes in Electronic Communication Technology Although there has been considerable discussion of the technology-organization relationship, the specific mechanisms by which new electronic technologies affect and are affected by organizational form have not

been described in any systematic manner (Henderson and Venkatraman 1994). Five features of new communication technologies offer important advancements for organizations. The first is the dramatic increase in the speed of communication, with high volumes of data moving from one location to another at rates unimagin- able even a decade ago. The second advancement is the dramatic reduction in the costs of communication due to technical developments in computers and telecommunication technology and wider penetration of technology due to economies of scale. Third is the sharp rise in communication bandwidth, with more information of multiple frequencies travelling at the same time down a common communication line. High bandwidth is facilitating the explosion in multimedia communications, combining text, voice, video, data, and/or graphics within a common communication system. Electronic communication is enriched for sender and receiver as bandwidth increases (Trevino et al. 1987). Fourth is vastly expanded connectivity, with literally millions more people and machines linked together via local, wide-area, and inter-networks than was the case ten or even five years ago. Fifth, the integration of communication with computing technologies has moved communication technology beyond a purely connective function. Communication technologies can now store and retrieve information electronically from shared databases, enabling communal capabilities in communication (Fulk et al., forthcoming 1995). Furthermore, the integrated technologies can be used to manipulate and change information itself, providing constructive capabilities for communication (Fulk and Collins-Jarvis, forthcoming 1995). These five developments enable communication of richer, more complex information than was previously possible and contribute to a large variety of changes in organizational forms, including those discussed throughout this Special Issue.

Changes in Organizational Form Organization scientists generally agree that there has been an evolution in organizational forms whereby managerial hierarchy and divisional structures are being replaced by decentralized, more flexible approaches to arranging and coordinating activities (Daft and Lewin 1993, Lundberg 1994, Piore 1994, Mintzberg 1983). Unlike its more rigid, bureaucratic predecessor, the new organizational forms are viewed as responsive to varied environmental pressures, including height- ened market volatility, globalization of business, increased uncertainty, and demographic changes in labor and consumer sectors (Daft and Lewin 1993, Halal

338 ORGANIZATION SCIENCE/VO1. 6, No. 4, July-August 1995





(intra)


(inter)




1994, Heydebrand 1989). Electronic communication technologies could be construed as simply one more force in the spectrum of environmental pressures which contribute to shifts in form (Halal 1994, Pinder and Moore 1979). Population ecologists, for example, generally view form as an adaptive response to the environment (see Daft 1986). But we contend that technology-enabled form is more than reactionary. Many organizations are actively engaging in design and im- plementation of unique electronic communication systems (with varying degrees of success), not simply ab- sorbing available technology from the marketplace. As organizations design communication systems to meet their internal and external coordination needs, organizational form influences electronic communication technology (Thomas 1994).

Key forces of change in organizational life which currently affect the technology-organization relationship include: migration toward greater complexity (Lundberg 1994), global presence (Ghoshal et al. 1994, Mitroff et al. 1994), severe economic pressures (Halal 1994), a desire within the firm to enhance innovation (Zajac et al. 1991) and become more entrepreneurtial (Bartlett and Ghoshal 1993), and incorporation of social values for more participative, leaming-oriented and diverse management practices (Heydebrand 1989, Mitroff et al. 1994). Further, the management of form is increasingly enacted as management of relationships (Bartlett and Ghoshal 1993, Ring and Van de Ven 1994). Predefined control between fixed organizational units is being supplanted with neutral relationships which are contin- ually redefined and re-negotiated as activities shift and the organizational form changes. These developments contribute to the growing organizational interest in design and use of electronic communication systems.

The New Organizational Form New, electronically-based organizations can be described in archetypical form, although multiple forms are possible and indeed are evident. Heydebrand (1989, p. 327) sums up its generic features in terms of a "general, simplified profile of the typical postindustrial organization .., small or located in small subunits of larger organizations; its object is typically service or information, if not automated production; its technology is computerized; its division of labor is informal and flexible; and its managerial structure is function- ally decentralized, eclectic, and participative .... Whereas yesterday's organization reflected the metaphor of a tree-with a common trunk of communication linking progressively smaller branches up to a peak representing top management control-today's

organization is more like a nervous system: a multicen- tered entity with governance and operations managed differently at different centers (Hedlund 1986).

New organizational forms, with electronic communication as an essential component, have been variously referred to as the adhocracy (Mintzberg 1983, Malone and Rockart 1991), technocracy (Burris 1993), the internal market (Malone et al. 1987, Ouchi 1980), heterarchy (Hedlund 1986), knowledge-linked organization (Badaracco 1991), virtual organization (Davidow and Malone 1992), network organization (Biggart and Hamilton 1992, Ghoshal and Bartlett 1990, Monge and Fulk 1995, Powell 1990, Rockart and Short 1991), and postbureaucratic form (Heckscher 1994). Progression to the new form has been gradual in most firms, dramatic in some, and nonexistent (or nearly so) in others (Appelbaum and Batt 1994, DiMaggio and Powell 1983, Piore 1994). But regardless of the rate of shift to the new form, the operative aspects of electronic communication are the same. Electronic communication enables fundamental changes in organizational forms, which in turn generate requisites for communication system design, both of which are responsive to users' activities to interarticulate technological and organization systems. We now describe some of the more important dimensions of form which are linked to electronic communication, considering first the perspective of intraorganizational form and then the perspective of interorganization form.

Intraorganizational Forms Vertical Control Perhaps the most common observation in discussions of new organizational forms is the dwindling ranks of the middle manager and the associated flattening of hierarchies. Closely related is the decline in administrative support staff and the resulting "leaner" organization. These changes are often attributed to communication and related information technology subsuming the coordination role of managers and staff (e.g., Zuboff 1988). Heydebrand (1989) describes this phe- nomenon as the substitution of technical rationalization for social rationalization. Hierarchical organizations achieve control in part through rationalization of activities via rules, programs, procedures, and goals that standardize information to permit its more effi- cient processing (Weber 1922/1968). Because electronic communication technologies can provide technology-based means of coordination and control, human-based coordination can be reduced in some

ORGANIZATION SCIENCE/Vol. 6, No. 4, July-August 1995 339







parts of the organizational hierarchy. The operative word here is "can", since the choices as to whether to deploy such technologies in this fashion are inherently managerial, as Zuboff (1988) and Koppel et al. (1988) note.

Horizontal Coordination

Electronic Workflow. The organization of units into divisions and departments has traditionally been based on the need to collocate activities with high levels of interdependence, in order to reduce the communication costs associated with coordinating activities in the face of uncertainty (Thompson 1967). But advances in electronic communication, especially its integration with computing technology, obviate the need for physical proximity of nodes to achieve horizontal coordination (Monge and Fulk 1995). The trend in distribution systems away from centralized warehousing facilities to many smaller local storage units coordinated through information and communication technology illustrates the use of technology to achieve horizontal coordination. The now popular coupling in interoffice communication systems of document-sharing with electronic mail systems illustrates the same trend. The process of work flow coordination is increasingly becoming more of an electronic task than a physical one.

Concurrent Engineering. Changes in horizontal coordination are particularly evident in product design. Traditionally, product design has involved sequential processing across functions, with handoffs as each stage is completed. Increasingly, this linear process is being replaced by parallel processing and concurrent engineering. Integrated communication and computing technology permit more fluid design procedures. Engi- neers and others who have a stake in a product, including suppliers, can work on different parts of the design simultaneously and with continual interaction among each other through electronic communication systems (Davidow and Malone 1992). The net effect, according to Piore (1994), is to "replace traditional hierarchy with more egalitarian relationships". Piore uses the label of a multidimensional matrix to approxi- mate the form thus enabled. Traditional functions are replaced by teams that include individuals downstream in the process, who previously would have had to wait for prior steps to be completed before their own step could be performed (Davidow and Malone 1992). These processes can also be completed by teams working from many different parts of the world who are linked by telecommunication systems, a hallmark of The Ford

Motor Company's new global organization (Business Week, April 3, 1994).

Stockless Production. Actions to reduce or eliminate in-process inventory can have dramatic implications for organizational forms. Common methods of inventory reduction are the Japanese kanban method and Ameri- can just-in-time systems. Inventory reduction can occur independently or as part of a flexible mass production system. Such a system has the capability to produce multiple-product designs, each based on different pro- gramming of generalized equipment. The principle is to have the materials that are needed for an operation delivered to the appropriate workstation just at the right time. When functioning well, such a system elimi- nates inventories without adding additional downtime due to late or missing parts. Piore (1994, p. 47) argues, based on a series of interviews with engineers and managers in American businesses, that elimination of buffer inventories leads to greater interdependence among workstations and "greater lateral communication, less hierarchy, a more broad-based, generally trained labor force, and a greater capacity to respond flexibly to changing market conditions".

Virtual Organization. Electronic communications are fueling the current movement toward a service-based society, with progressively less reliance on manufacturing of products to sustain economies. As movement of physical products becomes less important, horizontal coordination can occur via electronic communication systems. Popular notions of the virtual organization are exemplary (Davidow and Malone 1992). Virtual organizations consists of individuals working out of physically dispersed workspaces, or even individuals working from mobile devices and not tied to any particular workspace. The lifeline to the organization and major source of integration is the communication link among collaborating workers. Nohria and Berkley (1994, p. 115) describe virtual organizations along five dimensions: (1) electronic files replace material files, (2) increased (a) computer-mediated communication in primary activities, and (b) face-to-face communication in maintaining organizational cohesion, (3) structure consists of the organization of information and technology rather than persons such that the organization appears "structure- less", (4) networking across firms that creates ambigu- ous external boundaries, and (5) the generation of global, cross-functional computer-mediated jobs "such that individual members of the organization may be considered holographically equivalent to the organization as a whole."






Job responsibilities and lines of authority will shift regularly in the virtual organization (Davidow and Malone 1992). As evidence, Piore (1994) observes that job responsibilities have at least blurred where concurrent engineering has been implemented. Indeed, the virtual corporation is a "coordination-intense structure" (Malone and Rockart 1991), consisting primarily of pattems and relationships, and this form needs communication and information technology to function.

Organization and Unit Size The current trend toward a reduced labor force in many large firms is considered indicative of movement toward new forms of organization (Heydebrand 1989). Lean, dispersed nodes can be coordinated through new technologies, but the manifestation is not simply at the unit level. Reductions in administrative staff and in layers of middle management inevitably mean a reduction in organization size. Overall size reductions also accompany the trend toward reengineering, whereby sequential processing across multiple departments is replaced by integrated processing through a single individual or department (e.g., Hammer and Champy 1993). With the assistance of communication and related technology, large segmented organizations are replaced by leaner, integrated ones; and coordination is accom- plished by individuals and teams with cross-functional, computer-mediated jobs (Nohria and Berkley 1994).

There are other ways that communication technology can contribute to the general reduction in size of organizations, primarily through alteration in a firm's value chain. The 1980s are commonly described as an era of vertical integration and conglomeration of firms, with the 1990s showing the reverse trend. Whereas a decade earlier firms were integrating backward to assure sources of supply (or forward to assure markets), the current trend is away from vertical integration in favor of working with suppliers to improve their performance through investments in communication and information technology (Cash et al. 1992). These relationships are supported with interorganizational information systems and obviate the need for one firm to fully subsume the other. This strategy can improve not only supplier performance but also the supplier bond with the organization.

Closely related is the strategy of downsizing by outsourcing of value activities, even in what might be considered core aspects of the business. Governments are starting to outsource management of schools and prisons, for example; and numerous firms have elected to outsource their key information systems functions and to monitor outsourcing arrangements through in-

formation technology linkages. Outsourcing reduces the size of the core organization itself and the scope of value activities performed in-house (Cash et al. 1992). Quinn (1992) notes that with outsourcing comes a significant shrinkage in top management, headquarters and internal overhead groups. Those few at the top need different skills, including "leadership and coordination, rather than order giving" (p. 375).

New Types of Coupling Increased capabilities for both vertical and horizontal coordination across smaller, dispersed units facilitates new types of coupling across organizational units. One new form arises when a core organization capitalizes on innovative ideas by creating a spin-off en- trepreneurial organization for which the core organization retains some ownership and control (Reich 1991). The core "raises resources, seeds the core competency, manages the culture and sets priorities by selecting people" (Quinn 1992, p. 128). As the number of spin- offs emanating from the core increases, the organizational linkages take the form that Quinn labels as, "starburst." Information technology makes it possible to keep close contact with the spin-offs without imping- ing on their autonomy.

Federated organizations (Keen 1990) combine centralization with decentralization. Decentralized organizational units act relatively autonomously, but advanced communication technology permits some degree of monitoring and centralized control. In this way, organizations no longer must choose between centralized and decentralized modes of organization; new information and communication technologies permit simultaneous centralization-with-decentralization (Burris 1993, Heydebrand 1989, Keen 1990).

By contrast, Heckscher (1994, pp. 29-30) argues that moves to downsize labor and decentralize authority to individuals holding a broader scope of responsibility are not, by themselves, shifts away from basic principles of bureaucracy. Earlier models of industrial structure did indeed provide for "scope for autonomous action by experts... Over the long run, indeed, the pattern of bureaucratic evolution is an oscillation between centralizing and decentralizing moves; in recent years it appears this oscillation has speeded up in many companies, because neither solution deals with the essential problems." Heckscher argues that decentralization and other popular techniques such as just-in- time systems do indeed tighten the organization up, but through bureaucratic means. They do nothing, he contends, to accomplish one key requisite of a true postbureauratic organization: increase the dialogue





among the different parts of the organization. The combined effects of centralization and decentralization remain an open issue in new organizational forms.

Core Product With the shift from manufacturing to services in most developed economies comes a focus on manipulating information and symbols rather than physical products. Two major concomitant changes are the creation of more dispersed networks and alterations of production systems to process information rather than products. Organizations can now establish global, network forms (Monge and Fulk 1995, p. 23):

With information as the major "product" moving through channels in postindustrial economies, organizations and their component parts need not be linked so much by transporta- tion systems as by communication systems ... as information highways replace asphalt ones, global network organizations that permit local responsiveness through dispersed nodes become the preferred form.

Heydebrand (1989) further notes that evaluation criteria can change radically when an organization processes information rather than physical products. When the object of production is physical, the product can be readily differentiated from the process by which it was created. When the core product is service or information, however, "the process itself becomes the product or is indistinguishable from it, leading to a restric- tion of evaluation to largely processual criteria" (Heydebrand 1989, p. 326). Thus we see, for example, efforts to identify the "best practices" available in an industry and to adapt them for use in multiple organizations. Likewise, there is a trend toward using client satisfaction as a key evaluative measure as well as other customer-based quality metrics which embed process into product evaluation (Quinn 1992).

Communication Cultures A consistent theme in the literature on new organizational forms is the need for organizations to rapidly learn and to innovate. These capacities drive the creation of very different cultures than those that charac- terized bureaucratic organizations in the recent past. Organizations are seen to be dominated by communication and influence relationships, rather than hierarchy (Reich 1991). Whereas in traditional bureaucracies consensus is created by individuals' acquiescence to authority and rules, the post-bureaucratic form is de- rived from "institutionalized dialogue" (Heckscher 1994). Communication and influence are the core features. Heckscher (1994) argues that in the postbureaucratic form influence relationships depend on trust, a

high degree of shared vision, and broad communication about corporate strategy. Influence relations are also fluid, unlike fixed positions on an organizational chart. Individuals learn to link with others throughout the organization, many of whom they may never have met. Organization-wide electronic mail and discussion systems support "weak ties" among persons who may not even know each other. Such ties have been shown to be strongly linked to innovation (Granovetter 1973, Rogers 1983). Also, because flexibility is critical to innovation and agility, the form is dominated by tenta- tive principles rather than fixed rules. Indeed, a general lack of expectation of permanence pervades the culture of the postbureaucratic organization (Heckscher 1994).

Lack of permanence, fluid authority relations, and sometimes lack of consistent physical workspace combine to create a unique culture in the so-called virtual organization. Nohria and Berkley (1994) argue that major changes in social space are enabled by communication and information technology, particularly the internet. Virtual space occurs outside the physical realm and raises provocative questions, such as, "in an occupational landscape composed of individuals networked through computers, how 'real' is the work organization itself?" (Nohria and Berkley (1994, p. 114). Indeed, the rapid growth of the internet and its virtual space is associated with a popular trend to regard such linkages as "virtual communities" (Jones 1995). Electronic communication technology is seen to facilitate a shift in conception of community from an association of neigh- bors to an interest-oriented collective (Rheingold 1993, Gumpert 1987). Such a shift brings the concept of virtual community closer to that of virtual organization. Issues include the extent to which such communities represent a new organizational form, or even the extent to which such networks represent true communities. It is clear that technology-based networks have many features of organizational cultures, and their development is an exciting new area of research.

Ownership and Control The observed reduction in organizational size that is due in part to outsourcing has its genesis in decisions regarding ownership and control of key segments of a firm's value activities. Transactions cost theory describes hierarchies as arising from the decision to own in order to achieve control of the costs of coordinating processes through internal management rather than use of external markets (Coase 1937, Williamson 1975). Developments in information and communication technology offer new options in the form of electronic

342 ORGANIZATION SCIENCE/Vol. 6, No. 4, July-August 1995




markets. Traditionally, hierarchical forms of organization have been favored under two conditions: asset specificity and complexity. Asset specificity occurs where knowledge of specific production processes does not readily transfer to other products, contexts, or organizations. Complexity is found where a large amount of information is needed to articulate to potential buyers the features of a particular product. Malone et al. (1987, p. 489) argue that "databases and high- bandwidth electronic communication can handle and communicate complex, multidimensional product de- scriptions much more readily than traditional modes of communication"(Malone et al. 1987, p. 489), favoring a shift toward markets. Flexible manufacturing technology permits rapid shifts in the organization of production, thus reducing the costs of switchover and coordination between asset-specific technologies, and permitting integration of asset-specific components obtained on the market into products produced inter- nally. These technology-supported developments favor a move toward use of internal market mechanisms, which Malone et al. (1987) label "electronic markets."

A related trend is. the increasing number of what Powell (1987) has labeled "mixed mode" forms that combine both hierarchy and market mechanisms in a complex network form of organization. This form is "neither market nor hierarchy". Powell (1990) describes eight key dimensions that differentiate network forms from both markets and hierarchies, attesting to their critical difference from either parent form. Com- pared to traditional hierarchies, network organizations have the following features: (1) the basis for organizing is complementary strengths rather than the employ- ment relationship; (2) the means of communication is relational rather than routine; (3) conflict is resolved through norms of fair exchange rather than administrative fiat; (4) flexibility is greater, but less than that of the market; (5) commitment is relatively similar; (6) the tone is focused on mutual benefits rather than formal- ity; (7) relationships are governed by interdependency rather than dependence; (8) multiple hybrid forms are possible.

Monge and Fulk (1995) note that multinational corporations have traditionally been viewed as having a central core that connects directly to satellite organizations. When viewed alternatively as networks, these organizations can be seen to contain both networks and hierarchies in their internal structures, as well as external networks whose organizations are intercon- nected and which transcend national or regional boundaries. Rather than a central core with tentacles, the global network organization is a dense set of inter-

connected organizations which are themselves embedded in networks that span the globe. Monge and Fulk (1995) point out that the global nature of such enter- prises poses at least three important challenges for communication: extensive geographic distances, asyn- chonicity across time zones, and diverse national and regional cultures. Currently available electronic communication technology has much to offer for managing the first two challenges, due to its volume and speed advancements as well as its ability to provide for rapid yet asynchronous interaction. Newer technologies such as language translators, multimedia networks, and con- versational databases would seem to have potential for addressing the third challenge.

Decisions regarding relative use of market, hierarchical, and network forms delve into issues that also cut across organizations, particularly since market transactions are inherently interorganizational. We now consider the relationship between electronic communication technology and new interorganizational forms.

Interorganizational Forms There is rising interest in creative forms of interlinking organizations, whether or not they share the same value chain. Many interorganizational forms are possible, -including strategic alliances, partnerships, coali- tions, joint ventures, franchises, research consortia, and networked organizations (Ring and Van de Ven 1994). We consider three of the more primary dimensions here.

Interorganizational Coupling When a hierarchical organization elects to outsource or otherwise shift to electronically-assisted relationships with other firms, that firm's value chain is funda- mentally altered. New forms of coupling may be developed through communication technology, in what has been termed the electronic integration effect (Malone et al. 1987, Venkatraman and Zaheer 1994). On the supply side, for example, a firm may manage its relationships with suppliers by requiring each supplier to adopt a particular form of electronic data exchange (EDI), resulting in very tight coupling between buyer and supplier. Managing forward in the value chain, an organization may connect its operations with those of customers, creating a disincentive for customers to seek other suppliers. The now-classic example of this strategy was developed by American Hospital Supply, which initiated a trend in direct order entry that has spread widely throughout industry (see Cash et al. 1 992)





Strategic Alliances Strategic alliances are a very common form today, and not just between firms operating along the same value chain. An increasing number of alliances cut across industries and link divergent value chains, with electronic communication technology facilitating these alliances. A now-popular example is the linkage between major banks and airlines to offer frequent flier miles for bank credit cards users. This type of alliance is based on information as a core product, and it would not be possible without the enhanced capability of communication systems to share real-time data between otherwise separate organizations. Inter-linking of organizational relationships across such diverse industries as banking, travel, insurance, and telecommunications is resulting in complex alliance webs in which one organization can serve simultaneously as not only supplier to another but also competitor, customer, and consultant. The result is a circular value chain and new forms of interdependence. Norman and Ramirez (1993) argue that such complexity has transformed value chains into "value constellations." Complex, intercon- nected value activities illustrate the boundaryless fea- ture of new organizational forms and the importance of relational trust to managing such complex networks of interdependencies.

Interstitial Linkages Monge and Fulk (1995) describe the increasing preva- lence of the interstitial organization. This organization spans the interstices between organizations that are noncompetitively pursuing similar goals. The strategic mission of such an organization is to generate a new product or service by linking organizations pursuing similar goals but whose efforts have not been well coordinated. The situation faced by the individual organization is one of need for collective action to achieve shared goals. Examples include international alliances for management of telecommunication services, alliances among health care providers, and the Japanese keiretsu. Communication and information technologies can be important contributors to the development of interstitial organizations. Monge and Fulk (1995) describe the example of the Los Angeles County Re- gional Criminal Information Clearinghouse (LACRIC), created by the CEOs of the 48 law enforcement organizations. The purpose was to provide a mechanism for communication and information sharing among jurisdictions to achieve better interorganizational coordination of enforcement activities for illegal drugs. LACRIC was created at a cost of millions of dollars, and it has two assets: information, and the computing-communi-

cation systems that facilitate information sharing among the jurisdictions.

This brief review of dimensions of organizational form that are distinctly linked to electronic communication technologies has highlighted changes in vertical control, horizontal coordination, size of organization and constituent units, new types of coupling, core products, communication cultures, ownership and control, interorganizational coupling, strategic alliances, and interstitial linkages. The issues and changes are indeed complex, and much more needs to be learned about the relationship of communication and information technology to changing organizational forms. Al- though much has been written about such potential changes, there is a dearth of carefully designed research to demonstrate their existence and the pro- posed trajectories. Even less detail is available on the specific intersection with electronic communication technologies. The research agenda is substantial. A few key issues are described below to illustrate the types of challenging questions that await the researcher in this burgeoning field.

Research Issues Many aspects of the technology-organization relationship offer interesting, important avenues for study. Some of the more critical, in our view, include the following.

Organizational Form Development The study of how forms emerge, evolve, and dissolve over time is central to the study of organization design (Daft 1986). Organizational form development becomes even more important within the dynamic context of electronic communication technology, which can enable more rapid development of new forms. Related to this is the study of how variations of forms are created either independently or within the shell of other forms (Burris 1993, Heydebrand 1989, Ring and Van de Ven 1994). By employing the concept of archetype, we recognize that new forms can represent ideal states that are approached by few organizations, approxi- mated by others, and out of reach for yet other organizations where resistances, inadequate resources, niche competition, and inertia offer contrasting forces. For organizations that have started a radical transformation process toward a new form, there may be no turning back. Yet, for a variety of other reasons, a full transformation may not be possible. What forms do these "stuck-in-the-middle" organizations acquire? Are such forms stable over the longer term? How prevalent





will such forms be and what competitive advantages and disadvantages do such midrange forms offer? Are there environmental conditions under which such forms are more sustainable? A vast array of research questions center on the stops along the road to new forms that become more permanent locations.

A related concern is the failures to transform (Thomas 1994). Much has been written about innovative organizations and their movement toward new forms, but much less has been written about those that fail along the way and the conditions that favor failure over success. Some organizations may not simply stop along the way; they may be derailed altogether. As much can be learned about the process of transformation from the unsuccessful cases as from those that do succeed. Studies that account for the inertial proper- ties of existing organizational forms are particularly needed.

Pickering and King's essay in this issue relates to the theme of organizational form development; and articles by Zack and McKenney and Orlikowski, Yates, Okamura and Fujimoto consider how an existing organizational form incorporates new electronic communication technologies into its structure.

Situated Evaluation of Electronic Communication Systems Comparative studies of new media effects on communication quality have been popular in the research literature and will continue to be important. But also needed are situated studies which account for varying organizational arrangements in which electronic communication systems are used and/or compare the relative effectiveness of alternative media forms for sup- porting specified, new arrangements. The flexibility and multifunctionality of new, integrated media systems implies that multiple alternative configurations potentially can support the same specific dimensions of new forms. In the future, it is important for research to focus on these multifunctional systems rather than studies of single media detached from the overall media system. Articles in the current issue by Hinds and Kiesler and by Lind and Zmud take situated approaches to comparing the relative effectiveness of new electronic communication technologies.

Alternative Design Approaches for New Communication Technologies It is imperative that researchers examining the technology-organization relationship account for the complexities of the technologies being studied and, further, consider alternative approaches to designing new tech-

nologies. New organizational forms require not only organizational design but technology design as well. Even an apparently narrow technology, such as electronic mail, can be configured in many different ways; and much work remains to be done in the area of electronic communication design. Example issues include defining standard individual and group protocols for network communication (Kambil and Short 1994), developing theories and methods for distributed, asynchronous communication, and exploring issues of adaptive systems design and management. Just as organizational forms may change in response to changes in communication systems, so too can electronic systems change in response to changes in organizational structure. Articles by Boland and Tenkasi, Lea, O'Shea and Fung, and Barua, Lee and Whinston consider design issues in new communication technology.

Work Life in the New Organizational Form Redesign of organizations necessarily entails losses as well as gains (Victor and Stephens 1994). Downsizing, layoffs, part-time work, and associated stress for the parties involved illustrate the kinds of pressures that may be associated with new organizational forms. As Davidow and Malone (1992, p. 7) put it, companies in transition to new forms are "forced to endure continu- ous, unremitting, almost unendurable transmutation." Of related concern is the possibility that alienation may occur in the midst of the hyper-connectivity of new organizations. Issues of equity, trust, commitment, and conflict resolution are important in relationships among network entities. And researchers should consider the wider impacts of new forms on social relationships: impacts on young children whose parents do not have job security; impacts on elderly who do not have corporate pensions; impacts on workers who do not have employer-provided health care; and the loss of privacy and contemplative time as technology permeates our lives.

In sum, considerable discussion has appeared in the literature regarding the causal status of technology in relation to social systems, and critiques abound. It is important that our cumulative research, in combination, address issues of technological determinism, social determinism, mutual determinism, and structura- tion as valuable perspectives for seeking to understand the relationship of technological systems to organizational form. The development of a body of research that incorporates these multiple perspectives in our search for knowledge is an important contributor to understanding the elusive relationship of electronic





Dissadvantage of shifting to virtual organisations and electronic communications


communication technology to changing organizational forms.

Introduction to the Special Issue The articles in this Special Issue present a range of perspectives on electronic communication and new organizational forms. Together they provide a gradual unfolding of the technology-organization relationship, starting with a broad view of communication within and between communities (Boland and Tenkasi), and progressively focusing on more concentrated arenas, including interdepartmental communication (Hinds and Kiesler), communication within contrasting work groups (Zack and McKenney), communication within one group (Orlikowski, Yates, Okamura, and Fujimoto), and, finally, communication between dyadic partners (Lind and Zmud). Concluding articles cross these levels to consider relationships between global and local networks for communication (Lea, O'Shea and Fung), interorganizational communication within professional communities (Pickering and King), and the interplay between individual and group in the design of organizations and the technologies that they use (Barua, Lee and Whinston). All of the articles seek a balanced view of the technology-organizational relationship, avoiding overemphasis on one dimension to the neglect of the other. Neither technology nor social process is treated holistically or as "black box"; rather, the complexities of each dimension are recognized.

An array of communication technologies is examined in this issue, from telephones and electronic mail to more sophisticated systems, such as electronic confer- encing, discussion databases, news systems, cognitive mapping, and group decision support software. The authors employ a variety of methods, from theory building to theory testing, from longitudinal case study to model development and evaluation. Finally, the articles examine communication across a range of set- tings, including automobile dealerships, morning news- papers, a telecommunications firm, a European professional services company, and a Japanese manufacturing firm. The articles consider both formal work groups and self-created "virtual" communities.

Boland and Tenkasi begin the issue with an explo- ration of the knowledge production process within and between communities. They distinguish between perspective making, which is communication that strength- ens unique knowledge of a given community, and perspective taking, which takes the knowledge of other communities into account. Boland and Tenkasi employ models of language, communication and cognition to

propose how electronic communication systems can be designed to support knowledge intensive firms.

Hinds and Kiesler study the communication patterns of technical and administrative employees within and between departments of a large telecommunications firm. They discover high levels of lateral communication and interdepartmental communication and a no- table preference for synchronous technologies to support lateral communication. Hinds and Kiesler report more boundary-crossing communication in less- hierarchical work groups. They conclude that the rise of technical work together with horizontal organization of technical workers increases nonhierarchical communication. Their research emphasizes the tight coupling between technology, structure, and communication patterns.

Zack and McKenney show how similar groups using similar electronic systems in similar organizations can yield quite different communication patterns due to differences in communication climate, management philosophy, and group philos. In their field study, variations in organizational context resulted in different forms of appropriation of communication technology and, ultimately, differential levels of communication and performance effectiveness. The results verify the growing literature which documents that effects of electronic communication can be socially constructed by the organization in which the technology is used.

Lind and Zmud provide a unique empirical study of voice mail effects. They take great care to link the specific functionality of the technology to specific organizational processes and reveal both direct and indirect effects of communication technology on interorganizational effectiveness. Researchers will find their method for mapping technical functionality with organizational process to be helpful in studies of electronic communication impacts on outcomes.

Lea et al. offer a thought-provoking essay on the importance of fully accounting for the dimensions of technology in research on technology and organizations. Though researchers have been (correctly) enam- ored with the power of social processes in influencing technology outcomes, these authors remind readers that technology should not be simplified or treated as a black box in studies of electronic communication in organizations. They offer an "actor-network" approach, which they use to describe the co-construction of the new organizational form and the new communication systems.

Pickering and King follow with an equally stimulat- ing essay outlining the forces encouraging growth of interorganizational computer-mediated communica-



tion. They argue that the long-predicted shifts away from hierarchical to market forms of organization are being bootstrapped via two strong forces: the profes- sionalism of key occupational communities seeking autonomy, and a persistent desire by organizations to reduce fixed costs and organizational size. These forces are operating to hardwire what are weak social ties, thus spurring real movement toward new organizational forms.

The issue concludes with an analysis by Barua, Lee and Whinston of the complementarity effects between incentives, communication technology design, and organization and task characteristics. They show how incentives and technology development approaches for traditional, hierarchical organizations may not be appropriate for the flatter, team-based firm. They call for studies which carefully consider how interactions among reward systems, system design features and organizational factors determine group behavior and, subsequently, the organizational payoff. Like the articles before them, they consider the implications of their analysis both for communication technology design and for organization design.

No small set of papers can comprehensively address the vast array of issues that deserve attention in the broad area of electronic communication and new organizational forms. In combination, however, these papers touch on issues of central importance from a variety of perspectives.

We thank the reviewers and submitting authors for contributing to a valuable dialogue which has benefited our research community but which, unfortunately, can- not appear within the confines of this issue. The list of reviewers with whom we had the pleasure to converse appears later in this issue. We are particularly grateful to our editorial board for this issue, each of whom reviewed multiple papers during the review process: Gary Dickson, Joey George, Paul Goodman, Lynne Markus, and Carol Saunders. We thank Candita Gerzevitz of INFORMS for her patience and fine editorial help; she worked under great pressure in the final stages of this issue. We thank both Gary Dickson and Peter Monge for their comments as this essay was evolving. Finally, we thank Arie Lewin for his ongoing intellectual encouragement and for making this Special Issue possible.

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