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c h a p t e r
33INFORMATION INFORMATION
SYSTEMS, SYSTEMS, ORGANIZATIONS, ORGANIZATIONS, MANAGEMENT, MANAGEMENT, AND STRATEGYAND STRATEGY
LEARNING OBJECTIVESLEARNING OBJECTIVES
• IDENTIFY SALIENT CHARACTERISTICS IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONSOF ORGANIZATIONS
• ANALYZE RELATIONSHIP BETWEEN ANALYZE RELATIONSHIP BETWEEN INFO SYSTEM & ORGANIZATIONSINFO SYSTEM & ORGANIZATIONS
**
LEARNING OBJECTIVESLEARNING OBJECTIVES
• CONTRAST THEORIES OF CONTRAST THEORIES OF ORGANIZATIONSORGANIZATIONS
• DESCRIBE DECISION PROCESSESDESCRIBE DECISION PROCESSES
• EVALUATE ROLE OF INFORMATION EVALUATE ROLE OF INFORMATION SYSTEMS IN SUPPORTING BUSINESS SYSTEMS IN SUPPORTING BUSINESS STRATEGYSTRATEGY
**
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
• ORGANIZATIONS & INFORMATION ORGANIZATIONS & INFORMATION SYSTEMSSYSTEMS
• CHANGING ROLES OF SYSTEMS IN CHANGING ROLES OF SYSTEMS IN ORGANIZATIONSORGANIZATIONS
• MANAGERS, DECISION MAKING & MANAGERS, DECISION MAKING & INFORMATION SYSTEMSINFORMATION SYSTEMS
• INFORMATION SYSTEMS & BUSINESS INFORMATION SYSTEMS & BUSINESS STRATEGYSTRATEGY
**
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
1. SUSTAINABILITY OF 1. SUSTAINABILITY OF COMPETITIVE ADVANTAGECOMPETITIVE ADVANTAGE
2. FITTING TECHNOLOGY & 2. FITTING TECHNOLOGY & ORGANIZATIONORGANIZATION
**
MEDIATING FACTORS:MEDIATING FACTORS: Environment Environment CultureCultureStructure Structure Standard Procedures Standard Procedures Politics Politics Management Decisions Management Decisions ChanceChance
ORGANIZATIONS & INFORMATION ORGANIZATIONS & INFORMATION TECHNOLOGYTECHNOLOGY
ORGANIZATIONSORGANIZATIONS INFORMATION INFORMATION TECHNOLOGYTECHNOLOGY
VP VP VP
CEOORGANIZATIONORGANIZATION
TECHNICAL DEFINITION:TECHNICAL DEFINITION:
STABLE, FORMAL STRUCTURESTABLE, FORMAL STRUCTURE
• TAKES RESOURCES FROM TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTSTHEM TO PRODUCE OUTPUTS
**
TECHNICAL MICROECONOMIC DEFINITION TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATIONOF ORGANIZATION
OUTPUTS TO ENVIRONMENT
ORGANIZATIONORGANIZATION
PRODUCTION PROCESS
INPUTS FROMENVIRONMENT
ORGANIZATIONORGANIZATION
BEHAVIORAL DEFINITION:BEHAVIORAL DEFINITION:
COLLECTION OF:COLLECTION OF:
• RIGHTS, PRIVILEGES, RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIESOBLIGATIONS, RESPONSIBILITIES
• DELICATELY BALANCEDDELICATELY BALANCED
• CONFLICT RESOLUTIONCONFLICT RESOLUTION
**
EN
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CE
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NV
IRO
NM
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OU
RC
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EN
VIR
ON
ME
NT
AL
OU
TP
UT
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NV
IRO
NM
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FORMAL ORGANIZATIONFORMAL ORGANIZATION
STRUCTURE:STRUCTURE: HierarchyHierarchyDivision of Division of
laborlabor Rules, ProceduresRules, Procedures
PROCESS:PROCESS: Rights/Rights/ObligationsObligations Privileges/ResponsibilitiesPrivileges/Responsibilities ValuesValues
NormsNormsPeoplePeople
STRUCTURAL CHARACTERISTICS OF ALL STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONSORGANIZATIONS
• CLEAR DIVISION OF LABORCLEAR DIVISION OF LABOR• HIERARCHYHIERARCHY• EXPLICIT RULES & PROCEDURESEXPLICIT RULES & PROCEDURES• IMPARTIAL JUDGMENTSIMPARTIAL JUDGMENTS• TECHNICAL QUALIFICATIONSTECHNICAL QUALIFICATIONS• MAXIMUM ORGANIZATIONAL MAXIMUM ORGANIZATIONAL
EFFICIENCYEFFICIENCY
**
COMMON FEATURES OF COMMON FEATURES OF ORGANIZATIONSORGANIZATIONS
• FORMAL STRUCTUREFORMAL STRUCTURE
• STANDARD OPERATING STANDARD OPERATING PROCEDURESPROCEDURES
• POLITICSPOLITICS
• CULTURECULTURE
**
UNIQUE FEATURES OF UNIQUE FEATURES OF ORGANIZATIONSORGANIZATIONS
• ORGANIZATIONAL TYPES ORGANIZATIONAL TYPES
• ENVIRONMENTS, GOALS, POWERENVIRONMENTS, GOALS, POWER
• CONSTITUENCIES, FUNCTIONCONSTITUENCIES, FUNCTION
• LEADERSHIP, TASKSLEADERSHIP, TASKS
• TECHNOLOGYTECHNOLOGY
• BUSINESS PROCESSESBUSINESS PROCESSES
**
ORGANIZATIONAL STRUCTURESORGANIZATIONAL STRUCTURES
• ENTREPRENEURIAL:ENTREPRENEURIAL: Startup business Startup business• MACHINE BUREAUCRACY:MACHINE BUREAUCRACY: Mid-sized Mid-sized
manufacturing firmmanufacturing firm• DIVISIONALIZED BUREAUCRACY:DIVISIONALIZED BUREAUCRACY: Fortune Fortune
500500• PROFESSIONAL BUREAUCRACY:PROFESSIONAL BUREAUCRACY: Law Law
firms, hospitalsfirms, hospitals• ADHOCRACY:ADHOCRACY: Consulting firm Consulting firm
**
ORGANIZATION & ITS ENVIRONMENTORGANIZATION & ITS ENVIRONMENT
THE FIRM
INFORMATION SYSTEMSINFORMATION SYSTEMS
THE ENVIRONMENT:THE ENVIRONMENT:
RESOURCES & CONSTRAINTS
GOVERNMENTS
COMPETITORS
FINANCIAL INSTITUTIONS
CULTURE
KNOWLEDGE
TECHNOLOGY
INFORMATION SYSTEMS DEPARTMENTINFORMATION SYSTEMS DEPARTMENT
• PROGRAMMERS:PROGRAMMERS: Write software Write software
• SYSTEMS ANALYSTS:SYSTEMS ANALYSTS: Translate Translate business problems into solutionsbusiness problems into solutions
• ISIS MANAGERS: MANAGERS: Department leaders Department leaders
• END USERS:END USERS: Department reps for Department reps for whom applications are whom applications are developed developed
**
THE ORGANIZATIONTHE ORGANIZATION SENIOR MANAGEMENTSENIOR MANAGEMENT MAJOR END-USERS (DIVISIONS) MAJOR END-USERS (DIVISIONS)
INFORMATION SYSTEMS DEPARTMENTINFORMATION SYSTEMS DEPARTMENT
IT Infrastructure:IT Infrastructure:
HardwareHardwareSoftwareSoftwareData NetworksData Networks
Information System Information System Specialists:Specialists:
CIOCIOManagersManagersSystem AnalystsSystem AnalystsSystem DevelopersSystem DevelopersProgrammersProgrammersNetwork SpecialistsNetwork SpecialistsDatabase AdministratorDatabase AdministratorClericalClerical
HOW INFO SYSTEMS HOW INFO SYSTEMS AFFECT ORGANIZATIONSAFFECT ORGANIZATIONS
• MICROECONOMIC MODEL:MICROECONOMIC MODEL: Info Info technology is a factor of production, technology is a factor of production, like capital & laborlike capital & labor
• TRANSACTION COST THEORY:TRANSACTION COST THEORY: Firms attempt to minimize Firms attempt to minimize transaction costs internally & transaction costs internally & externallyexternally
**
• 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
• BEHAVIORAL THEORIES:BEHAVIORAL THEORIES: Info systems Info systems could change hierarchy of decision could change hierarchy of decision making; reduce need for middle making; reduce need for middle management & clerical support; management & clerical support; distribute informationdistribute information
**
HOW INFO SYSTEMS HOW INFO SYSTEMS AFFECT ORGANIZATIONSAFFECT ORGANIZATIONS
IMPLEMENTING CHANGEIMPLEMENTING CHANGE
Source: Leavitt, Handbook of Organization (1965)
TASKTASK
PEOPLEPEOPLETECHNOLOGYTECHNOLOGY
STRUCTURESTRUCTURE
RESISTANCERESISTANCE
MUTUALMUTUALADJUSTMENTADJUSTMENT
INTERNET & ORGANIZATIONSINTERNET & ORGANIZATIONS
• E-mail communicationE-mail communication
• Electronic handbooks published & Electronic handbooks published & revisedrevised
• Interactive training classesInteractive training classes
• Employees review, update personal Employees review, update personal datadata
**
ROLE OF MANAGERSROLE OF MANAGERS
• CLASSICAL:CLASSICAL: Describe functions- Describe functions- plan, organize, coordinate, decide, plan, organize, coordinate, decide, controlcontrol
• BEHAVIORAL:BEHAVIORAL: Based on Based on observations of managers on the jobobservations of managers on the job
**
INFO SYSTEMS, LEVELS, DECISIONSINFO SYSTEMS, LEVELS, DECISIONS
TPSOAS MIS
KWS
DSS
ESS
ORGANIZATIONAL LEVELORGANIZATIONAL 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
STAGES OF STAGES OF DECISION MAKINGDECISION MAKING• INTELLIGENCE:INTELLIGENCE: Collect Collect information; information;
identify problemidentify problem• DESIGN:DESIGN: Conceive alternatives; select Conceive alternatives; select
criteriacriteria• CHOICE:CHOICE: Use criteria to evaluate Use criteria to evaluate
alternatives; select alternatives; select • IMPLEMENTATION:IMPLEMENTATION: Put decision into Put decision into
effect; allocate resources; controleffect; allocate resources; control
**
SOURCE: Simon, The New Science of Management Decision (1960)
• RATIONAL:RATIONAL: Comprehensive Comprehensive rationality; evaluate all rationality; evaluate all alternativesalternatives
• SYSTEMATIC:SYSTEMATIC: Structured, formal Structured, formal methodmethod
• INTUITIVE:INTUITIVE: Trial & error, unstructured, Trial & error, unstructured, multiple approachmultiple approach
**
INDIVIDUAL MODELS OFINDIVIDUAL MODELS OFDECISION MAKINGDECISION MAKING
• BUREAUCRATIC:BUREAUCRATIC: Follow Follow standard operating procedures standard operating procedures (SOP)(SOP)
• POLITICAL:POLITICAL: Key groups compete and Key groups compete and bargainbargain
• ““GARBAGE CAN”:GARBAGE CAN”: Organizations not Organizations not rational; solutions accidentalrational; solutions accidental
**
ORGANIZATIONAL ORGANIZATIONAL MODELS OF MODELS OF DECISION MAKINGDECISION MAKING
BUSINESSBUSINESS LEVEL STRATEGY LEVEL STRATEGY
LOCK IN CUSTOMERS & SUPPLIERSLOCK IN CUSTOMERS & SUPPLIERS• SUPPLY CHAIN MANAGEMENT:SUPPLY CHAIN MANAGEMENT: Stockless Stockless
inventories, continuous replenishment, just-in-inventories, continuous replenishment, just-in-time deliverytime delivery
• INTRA FIRM STRATEGY:INTRA FIRM STRATEGY: Product Product differentiation, focused differentiation, low-cost differentiation, focused differentiation, low-cost producerproducer
• EFFICIENT CUSTOMER RESPONSE:EFFICIENT CUSTOMER RESPONSE: Point-of- Point-of-sale systems, dataminingsale systems, datamining
**
COMPETITIVECOMPETITIVE FORCES MODEL FORCES MODEL
SUBSTITUTE PRODUCTS &
SERVICES
NEW MARKET ENTRANTS
SUPPLIERS CUSTOMERS
THE FIRMTRADITIONAL
INDUSTRY COMPETITORS
THE THE INDUSTRYINDUSTRY
COMPETITIVECOMPETITIVE FORCES MODEL FORCES MODEL
SUBSTITUTE PRODUCTS &
SERVICES
NEW MARKET ENTRANTS
SUPPLIERS CUSTOMERS
INDUSTRY INDUSTRY SETSET
INDUSTRY COMPETITORS
INDUSTRY 4
INDUSTRY 3
INDUSTRY 2
INDUSTRY 1
c h a p t e r
33INFORMATION INFORMATION
SYSTEMS, SYSTEMS, ORGANIZATIONS, ORGANIZATIONS, MANAGEMENT, MANAGEMENT, AND STRATEGYAND STRATEGY
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