Discussion: Indicated Decision Rights

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Discussion: Indicated Decision Rights

Discussion: Indicated Decision Rights

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Decision Rights Decision rights indicate who in the organization has the responsibility to initiate, supply information for, approve, implement, and control various types of decisions. Ideally, the individual who has the most information about a decision and who is in the best position to understand all of the relevant issues should be the person who has its decision rights. But this may not happen, especially in organizations in which senior leaders make most of the important decisions. Much of the discussion of IT governance and accountability in Chapter 9 is based upon who has the decision rights for critical IS decisions. When talking about accountability, one has to start with the person who is responsible for the decision—that is, the person who has the decision rights. Organizational design is all about making sure that decision rights are properly assigned—and reflected in the structure of formal reporting

FIGURE 3.3 Organizational design variables. Source: Adapted from James I. Cash, Robert G. Eccles, Nitin Nohria, and Richard L. Nolan, Building the Information Age Organiza- tion (Homewood, IL: Richard D. Irwin, 1994).

Variable Description

Organizational variables

Decision rights The authority to initiate, approve, implement, and control various types of decisions necessary to plan and run the business

Business processes The set of ordered tasks needed to complete key objectives of the business

Formal reporting relationships The structure set up to ensure coordination among all units within the organization; reflects allocation of decision rights

Informal networks Mechanisms, such as ad hoc groups, which work to coordinate and transfer information outside the formal reporting relationships

Control variables

Data The facts collected, stored, and used by the organization

Planning The processes by which future direction is established, communicated, and implemented

Performance measurement and evaluation The set of measures that are used to assess success in the execution of plans and the processes by which such measures are used to improve the quality of work


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