3.1 © 2006 by Prentice Hall 3 Chapter Information Systems, Organizations, Management, and Strategy.

3.1 © 2006 by Prentice Hall

3Chapter

Information Systems, Information Systems, Organizations, Organizations,

Management, and Management, and StrategyStrategy

Information Systems, Information Systems, Organizations, Organizations,

Management, and Management, and StrategyStrategy


OBJECTIVES

• Identify and describe important features of organizations that managers need to know about in order to build and use information systems successfully

• Evaluate the impact of information systems on organizations

• Assess how information systems support the activities of managers in organizations

Management Information SystemsChapter 3

Information Systems, Organizations, Management, and Strategy


• Analyze how information systems support various business strategies for competitive advantage

• Assess the challenges posed by strategic information systems and management solutions

OBJECTIVES (Continued)




ORGANIZATIONS AND INFORMATION SYSTEMS

The Relationship between Organizations and Information Technology is influenced by mediating factors

Figure 3-1



Managers need to understand how IS can change social/work life in their org.



What Is an Organization?What Is an Organization?

Organization:

• Stable, formal social structure

• Takes resources from the environment and processes them to produce outputs which returns (capital) as input





The Technical Microeconomic Definition of the The Technical Microeconomic Definition of the OrganizationOrganization

Figure 3-2





• Collection of rights, privileges, obligations, and responsibilities that are

• Delicately balanced over a period of time through conflict and

• Conflict resolution



Behavioral Definition of Organization:Behavioral Definition of Organization:



The Behavioral View of OrganizationsThe Behavioral View of Organizations

Figure 3-3





• Clear division of labor • Hierarchy• Explicit rules and procedures• Impartial judgments• Technical qualifications for positions• Maximum organizational efficiency



Shared Features of all Organizations: Shared Features of all Organizations:

Table 3-1



• Routines are patterns of individual behavior.

• Business processes are a collection of routines.

• Business firms are a collection of business processes.

• Business processes enable organizations to cope Business processes enable organizations to cope with all with all recurring expectedrecurring expected situations. situations.



Routines and Business ProcessesRoutines and Business Processes



• Structures

• Goals

• Constituencies

• Leadership styles

• Tasks

• Surrounding environments



UniqueUnique Features of Organizations Features of Organizations



• Entrepreneurial structure: Small start-up business Small start-up business

• Machine bureaucracy: Midsize manufacturing firm

• Divisionalized bureaucracy: Fortune 500 firms

• Professional bureaucracy: Law firms, school systems, hospitals

• Adhocracy: Consulting firms



Organizational StructuresOrganizational Structures



Organizing the IT FunctionOrganizing the IT Function

• Hardware

• Software

• Data storage

• Networks

The information systems department is responsible for maintaining:





Information Technology ServicesInformation Technology Services

Figure 3-6





IS Department in an organization includes:IS Department in an organization includes:

• Programmers: writers of the software writers of the software instructions for computersinstructions for computers

• Systems analysts: Translate business problems Translate business problems into solutions, act as liaisons between the into solutions, act as liaisons between the information systems department and rest of the information systems department and rest of the organizationorganization

• Information system managers• Chief Information Officer (CIO): Senior manager in Senior manager in

charge of information charge of information systemssystems function in the firm function in the firm• End users:




Organizational and Behavioral ImpactsOrganizational and Behavioral Impacts

IT Flattens Organizations:



• Facilitates flattening of hierarchies• Broadens the distribution of timely information • Increases the speed of decision making • Empowers lower-level employees to make

decisions without supervision• Increases management span of control (the

number of employees supervised by each manager)

HOW INFORMATION SYSTEMS IMPACT ORGANIZATIONS AND BUSINESS FIRMS


Flattening OrganizationsFlattening Organizations

Figure 3-9




Flattening involves business process re-engineering.


Virtual Firms:

• Use networks to link people, assets, and ideas

• Can ally with suppliers, customers to create and distribute new products and services

• Not limited to traditional organizational boundaries or physical locations

• call centers in India, production in China, product development in US, finance & acct in Cayman Islands, etc.



The Role of Managers in OrganizationsThe Role of Managers in Organizations

THE IMPACT OF IT ON MANAGEMENT DECISION MAKING

Classical Descriptions of Management:• Traditional description of management description of management

• Focuses on formal functions: Plan, organize, coordinate, decide, control



Managerial Roles:Expectation of activities that managers should perform in an organization



• Interpersonal: Managers act as figureheads and leaders.

• Informational: Managers receive and disseminate critical information, nerve centers.

• Decisional: Managers initiate activities, allocate resources, and negotiate conflicts.

Managerial Roles:Expectation of activities that managers should perform in an organization





• Rational model: A An individual manager identifies goals, ranks all possible alternative actions and chooses the alternative that contributes most to those goals (Utilitarianism)

• Is it always possible to find all possible alternatives and rank them according to how they contribute to a goal?• Is it possible to always know how an action

will contribute to a goal?

Models of Decision Making





• Organizational model: C Considers the structural and political characteristics of an organization• Bureaucratic model: Whatever organizations

do is the result of routines and existing business processes honed over years of active use

• Political model: What an organization does is a result of political bargains struck among key leaders and interest groups

• Garbage Can model: take take first available first available alternativealternative that looks good that looks good



Models of Decision Making (Continued)


INFORMATION SYSTEMS AND BUSINESS STRATEGY

• Business ecosystems are inter-dependent networks of • suppliers, distributors, outsourcing firms,

transportation service firms, and technology manufacturers.



IT plays a powerful role in creating new forms of business ecosystems.

Business Ecosystems:


INFORMATION SYSTEMS AND BUSINESS STRATEGY

Examples:

• Microsoft: 1 billion PCs worldwide and hundreds of thousands of businesses rely on Microsoft’s platform.• Intel, AMD, music industry, …

• EBay: Millions of people and thousands of business firms use this platform.

• Wal-Mart: Enterprise systems used by suppliers to increase their efficiency



Business Ecosystems:


OBJECTIVES

• Identify and describe important features of organizations that managers need to know about in order to build and use information systems successfully• All modern organizations have similarities & differences

• Evaluate the impact of information systems on organizations• IS & organizations mutually influence one another

• Assess how information systems support the activities of managers in organizations




• Analyze how information systems support various business strategies for competitive advantage

• Assess the challenges posed by strategic information systems and management solutions • Maintaining competitive advantage (easy to

copy IS of other firms, technology changes)• Organizational inertia (to changing)

OBJECTIVES (Continued)



3.1 © 2006 by Prentice Hall 3 Chapter Information Systems, Organizations, Management, and Strategy.

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