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Case Study #1--Verifone
Applegate, L. et al. Corporate Information Systems Management: Text and Cases, 5th ed., p40-55.
What are the key attributes of the VeriFone organizational structure? Do you agree with those who identify Verifone as a virtual company?
At the very least, Verifone is a widely distributed organization. Three thousandemployees are distributed among thirty-four offices in nine countries, on all the continents meaning that the average office size is small and personal. Many functions, such as human resources and IS are decentralized and duplicated in these offices.
Even though they are dispersed, Verifone employees, and even their families, spend a great deal of time and energy keeping in contact with one another.Telephone, e-mail, video conferencing, exchange programs, frequent conferences and meetings in varied office locations were all listed as frequently used forms of communication within the organization. Informal relations are strongly encouraged and a number of company programs and policies are designed to broaden and deepen the nature of relationships among offices, employees, and their families.The corporate culture strongly emphasizes the empowerment of individuals to exercise creativity and initiative, but also requires that they accept responsibility for their decisions. To a great extent it is left up to each individual to determine how he/she will create value for the company. Innovation is valued and supported from whatever quarter it may come. Controlled risk is part of the plan.Failure of up to 80% of the ideas that emerge is acceptable provided the damage is controlled and the benefits from the other 20% are substantial. The chance "to make a difference" is a motivating factor for employees both to work and remain in the company.
The CEO leads by example and is openly supportive of ideas being exchanged and explored. This leadership was cited numerous times as havinga tremendous impact on the organization.
The atmosphere is definitely one of support and actively demonstrates the company policy for interest in individuals. The company definitely seeks to address the whole person and not just as an employee. This is recognized by employees and works to win their loyalty and hard work.
In summary, that it is a supportive, close-knit but distributed,innovative, strongly led, and highly communicative organization are the attributes that are key to its success. To determine whether it is a virtual company, I would compare it to both Mowshowitz' definition of virtual organization and to Turoff's discussion of virtuality.
Mowshowitz sees virtual organization as sets of critical tasks combined with sets of "satisficers" which can be dynamically called intoplay. In the sense that Verifone's structure is redundant to a certain extent, I think this would allows one to consider the offices in different locations as satisficers. For example, since there are separate HR groups in different offices it would be possible to match up an HR deficiency in one office with a surplus in another. Manufacturing, sales, and R&D are all dispersed, suggesting that acertain amount of dynamic allocation of tasks to resources would be possible. From the case study it appears that this type of allocation does in fact occur so on those grounds I would say that Verifone uses virtual organization.
Turoff's conception of virtuality regards how structures that evolve in virtual environments, structures that don't exist in the "real world," can be adopted and broughtinto non-virtual environments. I think the critical element to call attention to in Verifone's case is the exchange between company-wide employees and their children via the web. This is exactly the type of exchange that triggers the creative impulse in people. Exposure to diverse environments, ideas, people all foster a sort of lateral thinking that lends itself to creativity. While perhaps...
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