3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY c  h  a  p  t  e  r
LEARNING OBJECTIVES <ul><li>IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONS </li></ul><ul><li>ANALYZE RELATIONSHIP BETWE...
LEARNING OBJECTIVES <ul><li>CONTRAST THEORIES OF ORGANIZATIONS </li></ul><ul><li>DESCRIBE DECISION PROCESSES </li></ul><ul...
MANAGEMENT CHALLENGES <ul><li>ORGANIZATIONS & INFORMATION SYSTEMS </li></ul><ul><li>CHANGING ROLES OF SYSTEMS IN ORGANIZAT...
MANAGEMENT CHALLENGES <ul><li>1. SUSTAINABILITY OF COMPETITIVE ADVANTAGE </li></ul><ul><li>2. FITTING TECHNOLOGY & ORGANIZ...
ORGANIZATIONS & INFORMATION TECHNOLOGY MEDIATING FACTORS:   Environment  Culture Structure  Standard Procedures  Politics ...
ORGANIZATION <ul><li>TECHNICAL DEFINITION:   </li></ul><ul><li>STABLE, FORMAL STRUCTURE </li></ul><ul><li>TAKES RESOURCES ...
TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATION OUTPUTS TO  ENVIRONMENT ORGANIZATION PRODUCTION PROCESS INPUTS FROM ENV...
ORGANIZATION <ul><li>BEHAVIORAL DEFINITION:   </li></ul><ul><li>COLLECTION OF: </li></ul><ul><li>RIGHTS, PRIVILEGES, OBLIG...
FORMAL ORGANIZATION <ul><li>STRUCTURE: Hierarchy Division of labor Rules, Procedures </li></ul><ul><li>PROCESS: Rights/Obl...
STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS <ul><li>CLEAR DIVISION OF LABOR </li></ul><ul><li>HIERARCHY </li></ul><ul>...
COMMON FEATURES OF ORGANIZATIONS <ul><li>FORMAL STRUCTURE </li></ul><ul><li>STANDARD OPERATING PROCEDURES </li></ul><ul><l...
UNIQUE FEATURES OF ORGANIZATIONS <ul><li>ORGANIZATIONAL TYPES  </li></ul><ul><li>ENVIRONMENTS, GOALS, POWER </li></ul><ul>...
ORGANIZATIONAL STRUCTURES <ul><li>ENTREPRENEURIAL:  Startup business </li></ul><ul><li>MACHINE BUREAUCRACY:  Mid-sized man...
ORGANIZATION & ITS ENVIRONMENT THE FIRM INFORMATION SYSTEMS THE ENVIRONMENT: RESOURCES & CONSTRAINTS GOVERNMENTS COMPETITO...
INFORMATION SYSTEMS DEPARTMENT <ul><li>PROGRAMMERS:  Write software </li></ul><ul><li>SYSTEMS ANALYSTS:  Translate busines...
THE ORGANIZATION SENIOR MANAGEMENT   MAJOR END-USERS (DIVISIONS) INFORMATION SYSTEMS DEPARTMENT IT Infrastructure: Hardwar...
HOW INFO SYSTEMS  AFFECT ORGANIZATIONS <ul><li>MICROECONOMIC MODEL:  Info technology is a factor of production, like capit...
<ul><li>AGENCY THEORY:  Firm is nexus of contracts among self-interested parties requiring supervision </li></ul><ul><li>B...
IMPLEMENTING CHANGE Source: Leavitt, Handbook of Organization (1965) TASK PEOPLE TECHNOLOGY STRUCTURE RESISTANCE MUTUAL AD...
INTERNET & ORGANIZATIONS <ul><li>E-mail communication </li></ul><ul><li>Electronic handbooks published & revised </li></ul...
ROLE OF MANAGERS <ul><li>CLASSICAL:  Describe functions- plan, organize, coordinate, decide, control </li></ul><ul><li>BEH...
INFO SYSTEMS, LEVELS, DECISIONS TPS OAS MIS KWS DSS ESS ORGANIZATIONAL LEVEL TYPE OF DECISION OPERATIONAL KNOWLEDGE MANAGE...
STAGES OF  DECISION MAKING <ul><li>INTELLIGENCE:   Collect  information; identify problem </li></ul><ul><li>DESIGN:   Conc...
<ul><li>RATIONAL:   Comprehensive  rationality; evaluate all  alternatives </li></ul><ul><li>SYSTEMATIC:  Structured, form...
<ul><li>BUREAUCRATIC:   Follow  standard operating procedures  (SOP) </li></ul><ul><li>POLITICAL:   Key groups compete and...
BUSINESS  LEVEL STRATEGY <ul><li>LOCK IN CUSTOMERS & SUPPLIERS </li></ul><ul><li>SUPPLY CHAIN MANAGEMENT:  Stockless inven...
COMPETITIVE  FORCES MODEL SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS SUPPLIERS CUSTOMERS THE FIRM TRADITIONAL INDU...
COMPETITIVE  FORCES MODEL SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS SUPPLIERS CUSTOMERS INDUSTRY SET INDUSTRY COM...
3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY c  h  a  p  t  e  r
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Information systems, organizations, management, and strategy

  1. 1. 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY c h a p t e r
  2. 2. LEARNING OBJECTIVES <ul><li>IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONS </li></ul><ul><li>ANALYZE RELATIONSHIP BETWEEN INFO SYSTEM & ORGANIZATIONS </li></ul><ul><li>* </li></ul>
  3. 3. LEARNING OBJECTIVES <ul><li>CONTRAST THEORIES OF ORGANIZATIONS </li></ul><ul><li>DESCRIBE DECISION PROCESSES </li></ul><ul><li>EVALUATE ROLE OF INFORMATION SYSTEMS IN SUPPORTING BUSINESS STRATEGY </li></ul><ul><li>* </li></ul>
  4. 4. MANAGEMENT CHALLENGES <ul><li>ORGANIZATIONS & INFORMATION SYSTEMS </li></ul><ul><li>CHANGING ROLES OF SYSTEMS IN ORGANIZATIONS </li></ul><ul><li>MANAGERS, DECISION MAKING & INFORMATION SYSTEMS </li></ul><ul><li>INFORMATION SYSTEMS & BUSINESS STRATEGY </li></ul><ul><li>* </li></ul>
  5. 5. MANAGEMENT CHALLENGES <ul><li>1. SUSTAINABILITY OF COMPETITIVE ADVANTAGE </li></ul><ul><li>2. FITTING TECHNOLOGY & ORGANIZATION </li></ul><ul><li>* </li></ul>
  6. 6. ORGANIZATIONS & INFORMATION TECHNOLOGY MEDIATING FACTORS: Environment Culture Structure Standard Procedures Politics Management Decisions Chance ORGANIZATIONS INFORMATION TECHNOLOGY
  7. 7. ORGANIZATION <ul><li>TECHNICAL DEFINITION: </li></ul><ul><li>STABLE, FORMAL STRUCTURE </li></ul><ul><li>TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTS </li></ul><ul><li>* </li></ul>VP VP VP CEO
  8. 8. TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATION OUTPUTS TO ENVIRONMENT ORGANIZATION PRODUCTION PROCESS INPUTS FROM ENVIRONMENT
  9. 9. ORGANIZATION <ul><li>BEHAVIORAL DEFINITION: </li></ul><ul><li>COLLECTION OF: </li></ul><ul><li>RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIES </li></ul><ul><li>DELICATELY BALANCED </li></ul><ul><li>CONFLICT RESOLUTION </li></ul><ul><li>* </li></ul>
  10. 10. FORMAL ORGANIZATION <ul><li>STRUCTURE: Hierarchy Division of labor Rules, Procedures </li></ul><ul><li>PROCESS: Rights/Obligations Privileges/Responsibilities Values Norms People </li></ul>ENVIRONMENTAL RESOURCES ENVIRONMENTAL OUTPUTS
  11. 11. STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS <ul><li>CLEAR DIVISION OF LABOR </li></ul><ul><li>HIERARCHY </li></ul><ul><li>EXPLICIT RULES & PROCEDURES </li></ul><ul><li>IMPARTIAL JUDGMENTS </li></ul><ul><li>TECHNICAL QUALIFICATIONS </li></ul><ul><li>MAXIMUM ORGANIZATIONAL EFFICIENCY </li></ul><ul><li>* </li></ul>
  12. 12. COMMON FEATURES OF ORGANIZATIONS <ul><li>FORMAL STRUCTURE </li></ul><ul><li>STANDARD OPERATING PROCEDURES </li></ul><ul><li>POLITICS </li></ul><ul><li>CULTURE </li></ul><ul><li>* </li></ul>
  13. 13. UNIQUE FEATURES OF ORGANIZATIONS <ul><li>ORGANIZATIONAL TYPES </li></ul><ul><li>ENVIRONMENTS, GOALS, POWER </li></ul><ul><li>CONSTITUENCIES, FUNCTION </li></ul><ul><li>LEADERSHIP, TASKS </li></ul><ul><li>TECHNOLOGY </li></ul><ul><li>BUSINESS PROCESSES </li></ul><ul><li>* </li></ul>
  14. 14. ORGANIZATIONAL STRUCTURES <ul><li>ENTREPRENEURIAL: Startup business </li></ul><ul><li>MACHINE BUREAUCRACY: Mid-sized manufacturing firm </li></ul><ul><li>DIVISIONALIZED BUREAUCRACY: Fortune 500 </li></ul><ul><li>PROFESSIONAL BUREAUCRACY: Law firms, hospitals </li></ul><ul><li>ADHOCRACY: Consulting firm </li></ul><ul><li>* </li></ul>
  15. 15. ORGANIZATION & ITS ENVIRONMENT THE FIRM INFORMATION SYSTEMS THE ENVIRONMENT: RESOURCES & CONSTRAINTS GOVERNMENTS COMPETITORS FINANCIAL INSTITUTIONS CULTURE KNOWLEDGE TECHNOLOGY
  16. 16. INFORMATION SYSTEMS DEPARTMENT <ul><li>PROGRAMMERS: Write software </li></ul><ul><li>SYSTEMS ANALYSTS: Translate business problems into solutions </li></ul><ul><li>IS MANAGERS: Department leaders </li></ul><ul><li>END USERS: Department reps for whom applications are developed </li></ul><ul><li>* </li></ul>
  17. 17. THE ORGANIZATION SENIOR MANAGEMENT MAJOR END-USERS (DIVISIONS) INFORMATION SYSTEMS DEPARTMENT IT Infrastructure: Hardware Software Data Networks Information System Specialists: CIO Managers System Analysts System Developers Programmers Network Specialists Database Administrator Clerical
  18. 18. HOW INFO SYSTEMS AFFECT ORGANIZATIONS <ul><li>MICROECONOMIC MODEL: Info technology is a factor of production, like capital & labor </li></ul><ul><li>TRANSACTION COST THEORY: Firms attempt to minimize transaction costs internally & externally </li></ul><ul><li>* </li></ul>
  19. 19. <ul><li>AGENCY THEORY: Firm is nexus of contracts among self-interested parties requiring supervision </li></ul><ul><li>BEHAVIORAL THEORIES: Info systems could change hierarchy of decision making; reduce need for middle management & clerical support; distribute information </li></ul><ul><li>* </li></ul>HOW INFO SYSTEMS AFFECT ORGANIZATIONS
  20. 20. IMPLEMENTING CHANGE Source: Leavitt, Handbook of Organization (1965) TASK PEOPLE TECHNOLOGY STRUCTURE RESISTANCE MUTUAL ADJUSTMENT
  21. 21. INTERNET & ORGANIZATIONS <ul><li>E-mail communication </li></ul><ul><li>Electronic handbooks published & revised </li></ul><ul><li>Interactive training classes </li></ul><ul><li>Employees review, update personal data </li></ul><ul><li>* </li></ul>
  22. 22. ROLE OF MANAGERS <ul><li>CLASSICAL: Describe functions- plan, organize, coordinate, decide, control </li></ul><ul><li>BEHAVIORAL: Based on observations of managers on the job </li></ul><ul><li>* </li></ul>
  23. 23. INFO SYSTEMS, LEVELS, DECISIONS TPS OAS MIS KWS DSS ESS ORGANIZATIONAL LEVEL TYPE OF DECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC STRUCTURED ACCOUNTS RECEIVABLE ELECTRONIC PRODUCTION SCHEDULING COST OVERRUNS SEMI- BUDGET STRUCTURED PREPARATION PROJECT SCHEDULING FACILITY LOCATION UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTS NEW MARKETS
  24. 24. STAGES OF DECISION MAKING <ul><li>INTELLIGENCE: Collect information; identify problem </li></ul><ul><li>DESIGN: Conceive alternatives; select criteria </li></ul><ul><li>CHOICE: Use criteria to evaluate alternatives; select </li></ul><ul><li>IMPLEMENTATION: Put decision into effect; allocate resources; control </li></ul><ul><li>* </li></ul>SOURCE: Simon, The New Science of Management Decision (1960)
  25. 25. <ul><li>RATIONAL: Comprehensive rationality; evaluate all alternatives </li></ul><ul><li>SYSTEMATIC: Structured, formal method </li></ul><ul><li>INTUITIVE: Trial & error, unstructured, multiple approach </li></ul><ul><li>* </li></ul>INDIVIDUAL MODELS OF DECISION MAKING
  26. 26. <ul><li>BUREAUCRATIC: Follow standard operating procedures (SOP) </li></ul><ul><li>POLITICAL: Key groups compete and bargain </li></ul><ul><li>“ GARBAGE CAN”: Organizations not rational; solutions accidental </li></ul><ul><li>* </li></ul>ORGANIZATIONAL MODELS OF DECISION MAKING
  27. 27. BUSINESS LEVEL STRATEGY <ul><li>LOCK IN CUSTOMERS & SUPPLIERS </li></ul><ul><li>SUPPLY CHAIN MANAGEMENT: Stockless inventories, continuous replenishment, just-in-time delivery </li></ul><ul><li>INTRA FIRM STRATEGY: Product differentiation, focused differentiation, low-cost producer </li></ul><ul><li>EFFICIENT CUSTOMER RESPONSE: Point-of-sale systems, datamining </li></ul><ul><li>* </li></ul>
  28. 28. COMPETITIVE FORCES MODEL SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS SUPPLIERS CUSTOMERS THE FIRM TRADITIONAL INDUSTRY COMPETITORS THE INDUSTRY
  29. 29. COMPETITIVE FORCES MODEL SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS SUPPLIERS CUSTOMERS INDUSTRY SET INDUSTRY COMPETITORS INDUSTRY 4 INDUSTRY 3 INDUSTRY 2 INDUSTRY 1
  30. 30. 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY c h a p t e r

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