Introduction to the organization:
For analyzing the topic on hand I have selected ADWEA, UAE. ADWEA (formerly Water and Electricity Department) is state-owned company wholly-own by the government of Abu Dhabi, UAE. ADWEA stands for Abu Dhabi Water and Electricity Authority that supplies electricity and potable water to a population of more than 1.5 million in Abu Dhabi. ADWEA has been enactment of law in 1998, which replace the former Water & Electricity Department.
ADWEA corporate affairs are managed by Board of Management headed by Shaikh Diab Bin Zayed Al Nahyan. ADWEA also manages the affairs of several wholly-owned subsidiaries including the following:
* Abu-Dhabi Water and Electricity Company (ADWEC)
* Abu-Dhabi Transmission and Dispatch Company (TRANSCO)
* Abu-Dhabi Distribution Company (ADDC)
* Al-Ain Distribution Company (AADC) (ADWEA, 2010).
1.1. ADWEA and Decision Making:
As information technology is advancing with the passage of time, organization is learning new means of transacting its business. These new areas include innovation, problem solving and decision making. A decision is a choice made between two or more alternatives (Robbins & Coutler, 2004). An example of decision of ADWEA will be to price its various offerings. The manager have certain alternatives for the pricing decision. Decision maker across organization different types of condition, each required different strategy towards decision making. Organization usually takes decision in response to a problem or an opportunity. This can be of two types: structured and unstructured. Structured problem are routinely encounter by manager and are to some extent straight forward. On the other hand unstructured problem non-routine and manager lake the needed information to solve problems. The various types of decision a manager makes in his capacity as decision maker has been summarized in 1.
Programmed decisions are those decision that manager makes in response to structure problems and routine in nature. The decision maker can make this type of decision with relative ease as compared non-programmed decision because the information needed to solve the problem of an organization is available. Decisions made at middle level and lower levels of management by ADWEA are mostly non-programmed decisions. Programmed decision can be divided into three types:
Series of interconnected steps that are taken in chain to solve a structured problem is called procedure. An example of procedure will be the recruitment procedure for a new employee followed by ADWEA HR Manager.
Rules are unambiguous statements that set parameters for a management action. Simply the “do's” and “don'ts” of an organization can be called rules The example of rules for ADWEA will be the statement regarding the absenteeism.
Policy set out boundaries with which a manager can exercise his power of decision making. According to Robbins and Coutler “policy is a guide that establishes parameters for making decisions rather than specifically stating what should or should not be done” (Robbins & Coutler, 2004). An example of policy for ADWEA will be the firing decision used by the manager in the circumstances when his subordinates don't obey his orders.
Non-programmed decisions are those decisions that are taken in response to unstructured problems. These problems are usually non-routine in nature and the problem involved is usually unusual, and the available information is incomplete and ambiguous. Non-programmed decision requires management creativity and is best handled by professional managers who have the ability to strike through. Decisions made at the top level of the organization hierarchy of ADWEA are usually non-programmed decision.
1.2. Information and Decision Making:
Information is the vital component for the decision making. In fact the success or failure of decision rests on the information on hand. Situation in which a manager have full information regarding the problem is available is called certainty (for example what revenue the organization will earn from water services if the price is increased by 10%) and where the range of information is neither perfect and neither imperfect it is called risky decision making (for example what revenue the organization will earn if it increase electricity charges by 10% per unit) while the situation where the decision maker have no information regarding the problem on hand is called uncertainty (for example what revenue the organization will be earning after 5 year from all the business the organization undertakes).
It means that the outcome of a decision (certainty, risk, and uncertainty) rests on the available information regarding a decision making situation. The chances of the success of decision increases as the manager have more and more information.
1.3. Internal and External sources of Information:
An organization required two types of information: internal information, and external information. Internal information are gather and used for the decision making purpose inside the organization while the external information are gathered by managers that provides an organization intelligence information regarding the outside parties including customer, society, competitors, government etc.
Usually organization used some sort of information system to develop and maintain the internal sources of information. For example of ADWEA used an express Management Information System (MIS) for the its information gathering and dissemination purposes, this system will provide the internal information needed by manager in decision making.
According O'Brien and Marakas “an information system can be any organized combination of people, hardware, software, communication network and data resources that stores and retrieves, transforms and disseminate information in an organization” (O'Brien & Marakas, 2001). It means that the internal sources of information can be people (management and employees working in ADWEA), hardware (computer systems, fax machine etc used by ADWEA), and software (databases, spreadsheets, word processor etc used by ADWEA) communication networks (Local Area Network (LAN), Wide Area Network (WAN), intranets, extranets etc. used by ADWEA), and data resources (Management Information System (MSI), Decision Support System (DSS), Executive Support System (ESS) etc used by ADWEA).
The external sources of information provide most valuable information regarding the organization environmental factors. ADWEA environmental factor consists of economic factors, demographic factors, technological factors, political-legal factor, and socio-cultural factors related to UAE. This information's are of very importance for the business organization because the organization environment serves as an obstacle between the firm and its target market. Through proper scanning of the environmental factors managers are able to devise his strategies keeping in view the dynamic environment.
1.4. Recommendations for ADWEA Information:
In order to increase the usefulness of information whether internal or external, ADWEA is suggested to use the following recommendations:
The information whether provided by internal sources or external sources should available when needed. The timeliness of information will add values to the information in the shape of on-time decision that manager will be able to made on the basis of information provided.
The information gather and disseminated by the information system of the organization should one that a manager can trust. Therefore it need to be accurate and reliable.
The information provided should be complete in all aspects. Completeness of information means that it is sufficient for to solve the problem or the task at hand.
The information whether provided by internal source(s) or external source(s) should be relevant to the organization. Relevance of the information means that it should be related in some aspect to the business. The information provided by may be related to products offered, competitors, environmental factors etc.
The information provided should be understandable and provided using the appropriate form. This will add value to the information because the reader will take interest in the information and can thus takes his decision keeping in view the information that has been provided by internal or external sources(s).
Section 2: Stakeholder
2.1. Decision Making and Stakeholders:
Stakeholder is a term that denotes all those individual that have present or potential stacks (interest) in the business enterprise. ADWEA Stake holders can be divided into two categories (see 2.1.): primary stakeholders and secondary stakeholders. Primary stakeholders foe ADWEA include equity stockholders, management, employees, suppliers, customer and the local community. However the term secondary stakeholder is used in a broader since it includes groups such competitors, special interest groups, and regulatory agencies.
In order to achieve the firm stated mission and objectives the ADWEA need to maintain a positive relationship with all these stakeholders, because without the resources and support of these stakeholder the organization cannot survive, even for a single a day. The behavior of these groups positively or negatively affects the performance of the business. Hence the organization needs to come up with a decision that optimizes the business chances of success.
ADWEA is required to have a balance approach towards stakeholder management, because these stakeholders cooperation is very vital for the success of the business. On the other hand, if the organization took some decisions that are against the interest of these stakeholders they have the capacity to pressurize the business.
2.2. Stakeholders Relation Management:
Organization cannot succeed to achieve its mission without constant support and cooperation from its stakeholders. ADWEA strategist should therefore try their level best to optimize the firms' relation with various groups of stakeholders. The task of successful stakeholder's relation management required that the firm should first identify its various groups of stakeholders and then devise and implement a strategy to develop their cooperation and compact the threats they posed to the organization. Successful stakeholder relation management composed of the following steps:
1. Identify the primary and secondary stakeholders for ADWEA.
2. Divide them in two groups: 1st group---potential for cooperation, and 2nd group potential to threaten the organization.
3. Devise and implement a strategy that results maximizing cooperation and minimizing the threats posed by various group.
Besides dividing the stakeholders into primary stakeholder and secondary stakeholder ADWEA can classify these stakeholders into four categories for the sake of devising appropriate strategy to build relation.
1. Low threat-high support group:
This group is the least aggressive and most supportive for the firm. ADWEA can build value for itself if they involved the concerned stakeholders in relevant issues that result in long term relations. Firm's management and employee fit in to this group.
2. Low threat-low support group:
Professional unions and consumer activists group belongs to this group. ADWEA is only required to monitor this group on regular basis. However, support of this group will enhance the chances of success and eliminate potential threats that are why organization needs to build long-term relation with this group.
3. High threat-low support group:
An organization's competitors, government, labor unions, and media belong to high-threats-low support group. ADWEA should use defensive strategy while dealing with stakeholders that belongs to this group, and should try its level best to build relation with them in order to decrease or get rid of future threats.
4. High threat-high support group:
An organization skilled employee, whom supply is less that the demand for that skills and customers are usually classified in high threat-high support group. The best strategy used to optimize the ADWEA's success while dealing with members of this group is to team up with them on relevant tasks. When the organization increases the collaboration with the members of this group the potential threats from these stakeholders will be minimize as they will find it difficult to oppose the projects.
2.3. Stakeholder's involvement in Decision Making:
When an organization actively involve its various stakeholders while taking decision related to the key aspects of the business, organization increase its authority and enlarge its knowledge base when making strategic choices. The purpose of managing stakeholder is to increase firm's value creation and to maximize firm's financial performance. When the organization key stakeholders are involved in its decision making process, this lead to long-term decision outcomes. The inclusion of stakeholders in decision making will led to value creation and more opportunities for the firm. Moreover stakeholder involvement in decision making increase the organization chances of success, because more minds are involved in thinking about the problems and finding solution to the problem.
Different stakeholders involved in the decision making process serves as mediating role in the affiliation between apparent risk and uncertainty on the one side and more chances that the decision will have positive outcome and success for the firm on the other side. (Vermelun & Cursue, 2008). ADWEA should try its level best to involve its entire stakeholder while framing key strategies affecting the business. The dialogue between stakeholder and the management of the firm will result in mutual understanding and decrease in communication gap.
2.4. Strategies for Improvement of Stakeholders Involvement:
The following strategies are suggested to the management of ADWEA for the improvement of organization and stakeholder's relation through stakeholder's involvement in the formation of business strategies:
I. ADWEA should arrange meetings at regular intervals participated by organization's management and its key stakeholders. Stakeholders involvement in the business will results in mutual understanding of each other by stakeholders and organization management. Moreover early dialogue between the two groups will decrease the communication and will clarify the organization goals.
II. ADWEA should establish shared goals that should not only result in profitability for the organization but also provide value to its various stakeholders.
III. ADWEA should routinely involve its key decision making. This will led to useful and creative judgment that will optimize the business chances of success.
IV. The involvement and influence of stakeholders, their needs, responsibilities etc should be properly documented. This will serve as point of reference when organization planned its activities.
Section 3: Communication
3.1. Communication Across Organization:
We will explain this topic with the help of organization chart of ADWEA. The organization chart of the company has been depicted.
The process of transmitting ideas to someone is called communication. Communication can occur through different processes and methods and can also be classified on the channel used and the style of communication. On the basis of channels communication can be divided into verbal communication (communication in written or oral form) and non-verbal (communication through body language, expressions, visuals etc.)
Oral communication is the transmission of messages in face-to-face conversation. For example a meeting of engineering division has been called in which all the different managers of engineering department took part. At times oral communication lead to clear communication results as the respondents can ask question and the other party can provide immediate feedback. On the other hand oral communication may lead to some miscommunication as no written records are kept for the communication. For example the Shift Manager writes memos to all the functional heads regarding the new office timing. In written communication the sender and receiver exchange messages in written form, but this method served from the fact that the parties in the communication process may not be able to provide immediate feedback. Moreover written communication need careful preparation of messages because anything put in writing become a public record.
On the basis of style communication can formal and informal. Formal communication use organization channels to transmit or received messages. For example the communication between Executive General Manager (EGM) and Plan Manager (PM) will be called formal communication. Formal communication can be upward, downward, or horizontal. In upward communication (when PM writes to EGM) a subordinate transmit a message to a superior using the organizational structure of the firm. On the other hand in downward communication (from EGM to PM) a superior (EGM) transmits a message to subordinate (PM), while the horizontal communication is between two peers working at the same level of organizational structure.
In informal business communication an organizational member exchanges information through in unofficial manner using grapevineAn example of this is communication between pears (different engineers of ADWEA).
3.2. Improving Communication at ADWEA:
For effective communication in an ADWEA it is vital to employee suitable people across the organization. The communication within and outside the organization will have impact only when the receiver (one who receives and interpret the message) pursue exactly what the sender (a person who transmit and idea or message) mans. This depends a lot on the people inside the organization. If people inside ADWEA are talented and have mature personality they will interpret the message by using their professional skills acquired through various training and development. If the case is opposite, the organization will be facing difficulties in every wake of life. Communication skills of employees will also add goodwill to ADWEA
People in today organization serve as a source of competitive advantage. In fact the success and failure of an organization depends on what type of people the organization has. If the organization has professional people in various departments, they will communicate effectively with each other. In this case the organization will be able to use the proper communication process that will ensure that the target understands what is stated and implied in the message. Through such a channel, a source develops a message, transmit it to an audience via some form of medium, and obtain feedback from the target.
On the other hand if members of the organization lack professional competencies it will affect the individual work as well as the organization as a whole. As the members of the organization will not be able to transmit effective ideas in efficient manner as well as not understand the idea that they have received from other sources. The organization will not be able to achieve its goals and objectives as it will be wandering here and there due to absence of proper communication.
The organization that employee professional people in the communication process are able to complete their tasks in more efficient manner, as they are able to decrease certain costs (e.g. time, printing, telephone etc). These costs savings adds to the value of the firm because fewer expenses are shown in the income statement. Moreover the organization having proper people in the communication process is able build an overall image for the organization. The image that has been built resulted from the use of proper communication method, by effectively utilizing organizational resources.
3.3. Weakness in ADWEA Communication System and Suggestion for Improvement:
ADWEA is using a diverse structure. Due to the structure there will be some definite problem in the communication process, because the organizational structure of ADWEA is neither based on function, nor on product or region. It is somewhat complex and a combination of all the three structure that an organization.
Due to this structure the organization may experience some communication problems, because people in a department will be having different background. Due to this background there will be high chances of miscommunication between the members of the organization. The organziaiton may also experience in allotting tasks to various employees, motivating them in professional manner, and agreement on tasks goals and objectives. Due to these problems it is suggested that the organization should go for functional structure.
A functional structure is an organizational arrangement where people that perform the same function (for example marketing) are grouped together and called department. When professional having the same background works together the chances of miscommunication decreases, and people can understand one another in a more coherent way. Moreover the motivation of employees also increases when they work with people of the same background while organization is also able to achieve its mission and objectives in a more coherent way. Due to these reasons ADWEA should change its organizational structure and should use the functional arrangement of organizational structure.
Section 4: Information and Information systems:
4.1. Information Use by ADWEA:
According to O'Brien and Marakas, “an information sytem can be any organized combination of people, hardware, software, communications, networks, and data resources that stores and retrieves, transform, and disseminates information in an organization”. (O'Brien & Marakas, 2001). ADWEA use a variety of techniques of information for collection, formatting, storage, and dissemination of information. These information systems include the following:
I. Transaction Processing System (TPS):
TPS process data that have been resulted due to transaction, and update the firm's database accordingly. TPS may also helps the business by preparing various business documents including sales invoice, inventory record sheet and other accounting statements.
II. Decision Support System (DSS):
DSS is used by organizations to provide support to decision makers by providing them relevant information relating to a particular situation. Example of DSS is profitability forecasting by marketing manager, information provided regarding product pricing decisions, risk analysis system etc.
4.2. Proposed Information System for ADWEA:
Although the information systems used by ADWEA (TPS and DSS) is fulfilling the needs of the organization and serving the organization appropriately, but still there is some information gap that needs to be fulfill. The organization is therefore suggested that besides using the above-mentioned methods it should also use the following methods:
I. Management Information System (MIS):
According to O'Brien and Marakas, management information system provides information in the form of pre-specified reports and displays to support business decision making (O'Brien & Marakas, 2001). For example procurement manager of ADWEA can use its networked computer and web browsers to get instant displays about the inventory of various inventory items, and access the supplier's computer to place orders for inventory items whose level have reached the minimum level of inventory.
II. Executive Information System (EIS):
ESS uses the key information of MIS, TPS, and DSS and other sources and furnished key information to the organization top management to be used in decision making. An example of ESS for ADWEA will be the monitoring information related to a particular competitor marketing activities from MIS, DSS and other sources and then furnishing this information to organization the Marketing head of ADWEA for the appropriate action. The head of Marketing well then use the stated information to tailor his marketing strategies in an efforts to tackle the competitor.
Advantages of the proposed Information system:
a) Support Business Processes:
The proposed MIS and EIS will enhance the organization information resources, and the ADWEA will be able to use it as a competitive advantage. The company can use these systems to support its various functions including finance, marketing, production etc.
b) Support Decision Making:
The proposed MIS and EIS will also help ADWEA store managers and other business professional to make better decision. For example, decision on what lines of electricity need to be added or discontinued, or on what kind of investment they require, are typically made after an analysis provided by MIS and EIS.
c) Support Competitive Advantage:
The proposed MIS and EIS will enhance ADWEA competitive advantage, as the company will now be able to take advantage of the opportunities provided by external environment and minimize the threats posed by change in the environmental conditions. This will add value to the organization, and the organization will continue to enjoy its leadership status.
4.3. Strategy for Improving Access to Information and Knowledge:
In the last two decades, the world has experience extraordinary changes the way information were created, stored, disseminated and used. Information is now been cited in management literature as a vital resource like financial resources, human resources etc. An organization like ADWEA should use the following strategy to get maximum of the information resources and the associated knowledge.
Digital technology used by organization has change the way information was created and used by organizations. This has created new opportunities as well as new threats for a business organization. Strategies that were used previously did not work in today environment. As technology is evolving with the passage of time, the strategy for strategic leadership in the field of information and knowledge management need to be reconsidered. The extraordinary speed of information technology coupled with change in organization culture has resulted to an inaptness of information systems between various functional departments, and a need for investment in strategic information more effectively.
The organization should focus its efforts on creating effective management and leadership. The experience of these individual will give the organization experience that can be used more widely to use it for competitive advantage.
The organization should create an organization culture that helps and support information gathering from different sources, and use these strategic information in strategic and tactical decision making. The culture that support and uphold the information will lead to unprecedented information that managers can rely upon in making decision affecting the business.
Companies around the world have changed their strategies and the process it use to process inputs into outputs. Organizations are now able to produce their products using the state of the art technology requiring few inputs, thus decrease in the cost per unit.
Managers that will lead the organization of tomorrow need to be knowledgeable. Good knowledge on the part of manager requires that the manager should be involved in maximizing the value of information and turning it into knowledge, that will results in more informed decision making. Organization information management should be linked with good knowledge management. If this is not the case the value of information as an asset of the organization will be undermined, and the organization will thus not be able to provide cost effective and effiecient services to its target market.
To maximize the knowledge management, organization needs to share appropriate e-business strategy that is secured to be used for creating new business for the firm. This will be a critical factor for success during the digital age. Organization should use its information system to integrate its various functional departments by using information as valuable asset, thereby add in management decision making.
ADWEA. (2010). Abu Dhabi Water and Electricity Authority. Retrieved March 2, 2010, from About ADWEA: http://www.adwea.ae/eng/about.html
O'Brien, J. A., & Marakas, G. M. (2001). Management Information Systems. USA: Prentice Hall.
Robbins, S. P., & Coutler, M. (2004). Management. USA: Pearson.
Vermelun, P. A., & Cursue, P. L. (2008). Entraprenuer Decision Making: A Cognitive Perspective. UK: Petrick Elward Publishing Company.