3.1 3 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY Chapter.

3.1

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INFORMATION INFORMATION SYSTEMS, SYSTEMS,

ORGANIZATIONS, ORGANIZATIONS, MANAGEMENT, MANAGEMENT, AND STRATEGYAND STRATEGY

Chapter

3.2

ORGANIZATIONS AND INFORMATION SYSTEMS

Figure 3-1

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy

MEDIATING FACTORS:MEDIATING FACTORS: Environment Environment Culture CultureStructure Structure Standard Procedures Standard Procedures Politics Politics Management Management Decisions ChanceDecisions Chance

ORGANIZATIONSORGANIZATIONS INFORMATION INFORMATION TECHNOLOGYTECHNOLOGY

The Two-Way Relationship Between Organizations and Information Technology

3.3


COMMON FEATURES OF ORGANIZATIONS

The Behavioral View of Organizations

Figure 3-3

3.4

All organizations have different:All organizations have different:• Structures/Organizational types Structures/Organizational types

• Goals Goals

• ConstituenciesConstituencies

• Leadership Styles, TasksLeadership Styles, Tasks

• Surrounding EnvironmentSurrounding Environment


ORGANIZATIONS & INFORMATION SYSTEMS

Unique Features of Organizations

3.5


Figure 3-4

Organization and Its Environment

ORGANIZATIONS & INFORMATION SYSTEMS

3.6


Figure 3-5

THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS

Information Technology Services

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Includes specialists:Includes specialists:

• Programmers:Programmers: Highly trained, write Highly trained, write softwaresoftware

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

Information Technology Infrastructure and Information Technology Services

3.8



Specialists (cont.):Specialists (cont.):• Information system managers: Information system managers: Leaders of Leaders of

various specialistsvarious specialists

• Chief information officer (CIO): Chief information officer (CIO): Senior Senior manager in charge of information systems manager in charge of information systems function in the firmfunction in the firm

• End users:End users: Department representatives outside Department representatives outside the information system department for whom the information system department for whom applications are developedapplications are developed

Information Technology Infrastructure and Information Technology Services

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Economic theoriesEconomic theories

• Information technology is a factor of Information technology is a factor of production, like capital and laborproduction, like capital and labor



How Information Systems Affect Organizations

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Transaction cost theory:Transaction cost theory: Firms can Firms can conduct marketplace transactions conduct marketplace transactions internally more cheaply to grow largerinternally more cheaply to grow larger




3.11

Transaction Cost Theory


Figure 3-6


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• Agency theory:Agency theory: Firm is nexus of Firm is nexus of contracts among self-interested parties contracts among self-interested parties requiring supervisionrequiring supervision




3.13

Agency Cost Theory


Figure 3-7


3.14

Behavioral theories:Behavioral theories:

• Information technology could change hierarchy of Information technology could change hierarchy of decision makingdecision making

• Lower cost of information acquisitionLower cost of information acquisition

• Broadens the distribution of informationBroadens the distribution of information




3.15

Virtual organization:Virtual organization:

• Task force networked organizationsTask force networked organizations

• Uses networks to link people, assets, and ideas Uses networks to link people, assets, and ideas to create and distribute products and services to create and distribute products and services without being limited to physical locationswithout being limited to physical locations




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Decisions are classified as:Decisions are classified as:

• Unstructured:Unstructured: Non routine, decision Non routine, decision maker provides judgment, evaluation, and maker provides judgment, evaluation, and insights into problem definition, no agreed-insights into problem definition, no agreed-upon procedure for decision makingupon procedure for decision making

• Structured:Structured: Repetitive, routine, handled Repetitive, routine, handled using a definite procedureusing a definite procedure

MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS

Managers and Decision Making

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TPSOAS MIS

KWS

DSS

ESS

Organizational LevelTYPE OFTYPE OFDECISIONDECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS RECEIVABLE

ELECTRONIC PRODUCTIONSCHEDULING COST OVERRUNS

SEMI- BUDGETSTRUCTURED PREPARATION

PROJECTSCHEDULING

FACILITYLOCATION

UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTSNEW MARKETS

Figure 3-9


Different Kinds of Information Systems

3.18


Figure 3-10


Decision-Making Process

3.19

• Rational:Rational: People, organizations, and People, organizations, and nations engage in consistent, value-nations engage in consistent, value-maximizing calculations or adaptations maximizing calculations or adaptations within certain constraintswithin certain constraints

• Cognitive style: Cognitive style: Underlying personality Underlying personality dispositions toward the treatment of dispositions toward the treatment of information, selection of alternatives, and information, selection of alternatives, and evaluation of consequencesevaluation of consequences



Models of Decision Making

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• Systematic decision makers:Systematic decision makers: Cognitive style,Cognitive style, describes people who describes people who approach a problem by structuring it in approach a problem by structuring it in terms of some formal methodterms of some formal method

• Intuitive:Intuitive: Cognitive style, describes Cognitive style, describes people approaching a problem with people approaching a problem with multiple methods in an unstructured multiple methods in an unstructured mannermanner




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• Organizational models of decision Organizational models of decision making:making: Consider structural and political Consider structural and political characteristics of an organizationcharacteristics of an organization




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Factors to consider while planning aFactors to consider while planning anew system:new system:

• Organizational environment Organizational environment

• Organizational structure, hierarchy, Organizational structure, hierarchy, specialization, standard operating specialization, standard operating proceduresprocedures



Implications for the Design and Understanding of Information Systems

3.23

• Culture and politics of the organizationCulture and politics of the organization

• Type of organization and its style of Type of organization and its style of leadershipleadership




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• Groups affected by the system and the Groups affected by the system and the attitudes of workers who will be using the attitudes of workers who will be using the systemsystem

• Kinds of tasks, decisions, and business Kinds of tasks, decisions, and business processes, information system is processes, information system is designed to assistdesigned to assist




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Characteristics to be kept in mind Characteristics to be kept in mind

while designing systems:while designing systems:

• Flexibility and multiple options for Flexibility and multiple options for handling data and evaluating informationhandling data and evaluating information

• Capability to support a variety of styles, Capability to support a variety of styles, skills, and knowledge skills, and knowledge




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• Capability to keep track of many Capability to keep track of many alternatives and consequencesalternatives and consequences

• Sensitivity to the organization’s Sensitivity to the organization’s bureaucratic and political requirementsbureaucratic and political requirements




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INFORMATION SYSTEMS AND BUSINESS STRATEGY

• Computer system at any level of an Computer system at any level of an organization organization

• Changes goals, operations, products, Changes goals, operations, products, services, or environmental relationshipsservices, or environmental relationships

• Helps organization gain a competitive Helps organization gain a competitive advantageadvantage


What is Strategic Information System

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Digital firmsDigital firms

• Manage the supply chain by building Manage the supply chain by building efficient customer “sense and response” efficient customer “sense and response” systemssystems

• Participate in “value webs” to deliver new Participate in “value webs” to deliver new products and services products and services


Business Level Strategy and the Value Chain Model

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Value Chain Model:Value Chain Model:

• Highlights the primary or support Highlights the primary or support activities adding a margin of value to activities adding a margin of value to products or servicesproducts or services

• Helps achieve a competitive advantageHelps achieve a competitive advantage



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Primary Activities:Primary Activities: • Directly related to the production and Directly related to the production and

distribution of a firm’s products or servicesdistribution of a firm’s products or services

Support Activities:Support Activities:• Make the delivery of primary activities Make the delivery of primary activities

possiblepossible• Consist of the organization’s infrastructure, Consist of the organization’s infrastructure,

human resources, technology, and human resources, technology, and procurementprocurement



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Firm Value Chain

Figure 3-11

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Product Differentiation:Product Differentiation:

• Competitive strategy Competitive strategy

• Creates brand loyalty by developing new Creates brand loyalty by developing new and unique products and services and unique products and services

• Products and services not easily Products and services not easily duplicated by competitorsduplicated by competitors



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Focused Differentiation:Focused Differentiation:

• Competitive strategy Competitive strategy

• Enables development of new market Enables development of new market niches for specialized products or servicesniches for specialized products or services

• Helps businesses compete better than Helps businesses compete better than competitors in the target areascompetitors in the target areas



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Efficient Customer Response System:Efficient Customer Response System:

• Directly links consumer behavior back to Directly links consumer behavior back to distribution, production, and supply distribution, production, and supply chainschains


Supply Chain Management and Efficient Customer Response System

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Switching costs:Switching costs:

• Expense incurred by a customer or Expense incurred by a customer or company in terms of time and expenditure company in terms of time and expenditure of resources when changing from one of resources when changing from one supplier or system to anothersupplier or system to another


Supply Chain Management and Efficient Customer Response System

3.36


Figure 3-13


Stockless Inventory Compared to Traditional and Just-in-time Supply Methods

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Core Competency:Core Competency:

• Activity at which a firm excels as a world-Activity at which a firm excels as a world-class leaderclass leader

• Information system encouraging the Information system encouraging the sharing of knowledge across business sharing of knowledge across business units enhances competencyunits enhances competency


Firm-Level Strategy and Information Technology

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Information partnership:Information partnership:

• Cooperative alliance formed between two Cooperative alliance formed between two or more corporations for sharing or more corporations for sharing information to gain strategic advantageinformation to gain strategic advantage

• Help firms gain access to new customers, Help firms gain access to new customers, creating new opportunities for cross-creating new opportunities for cross-selling and targeting productsselling and targeting products


Industry-Level Strategy and Information Systems

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The competitive forces model:The competitive forces model:

• Describes the interaction of external Describes the interaction of external influences, specifically threats and influences, specifically threats and opportunities, affecting an organization’s opportunities, affecting an organization’s strategy and ability to competestrategy and ability to compete


Industry-Level Strategy and Information Systems

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Figure 3-15


Porter’s Competitive Forces Model

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33

INFORMATION INFORMATION SYSTEMS, SYSTEMS,

ORGANIZATIONS, ORGANIZATIONS, MANAGEMENT, MANAGEMENT, AND STRATEGYAND STRATEGY

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3.1 3 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY Chapter.

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