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Managerial Levers Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223

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Presentation on theme: "Managerial Levers Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223"— Presentation transcript:

1 Managerial Levers Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA

2 Information Ecology (Davenport) Data Simple Observations of the world: Easily structured Easily captured on machines Often quantified Easily transferred Information Data endowed with relevance & purpose: Requires unit of analysis Need consensus on the meaning Human mediation necessary Knowledge Info. from the mind includes reflection, context, synthesis: Hard to structure Difficult to capture on machines Often tacit Hard to transfer

3 IS Strategy Triangle Business Strategy Organizational Strategy IT Strategy Where is the business going and why? What is required? How it can be delivered? N Direction for business Needs and priorities Infrastructure and services Supports business IT impact and potential We will study the business strategy later.

4 Organizational strategy frameworks Business Diamond 4 key organizational components: 1) business processes, 2) values and beliefs, 3) management control systems, and 4) tasks and structures. Using IS in an organization will affect each of these components. Use this framework to identify where these impacts are likely to occur. Managerial Levers Organizational variables, control variables, and cultural variables are the levers managers can use to affect change in their organization. This is a more detailed model than the business diamond and gives specific areas where IS can be used to manage the organization and to change the organization. Key Idea Usefulness of IS Discussions Source: Pearlson, 2001

5 The Business Diamond Business Process Jobs and Structure Values and Beliefs Management and Measurement Systems (Source: Hammer et al, 1994)

6 D’Aveni’s Disruption and 7-S’s Vision for Disruption Identifying and creating opportunities for temporary advantage through understanding Stakeholder satisfaction Strategic Soothsaying directed at identifying new ways to serve existing customers better or new customers that are not currently served by others Market Disruption Capability for Disruption Sustaining momentum by developing flexible capacities for Speed Surprise That can be applied across actions to Build temporary advantage Tactics for Disruption Seizing the initiative to gain advantage by Shifting the rules Signaling Simultaneous and sequential strategic thrusts With actions that shape, mold, or influence the direction or nature of the competitor’s response

7 D’Aveni’s 7-S’s Superior stakeholder satisfaction Strategic soothsaying Positioning for speed Positioning for surprise Shifting the rules of competition Signaling strategic intent Simultaneous and sequential strategic thrusts ApproachDefinition Understanding how to maximize customer satisfaction by adding value strategically Seeking out new knowledge that can predict or create new windows of opportunity Preparing the organization to react as quickly as possible Preparing the organization to respond to the marketplace in a manner that will surprise competitors Finding new ways to serve customers which transform the industry Communicating the intended actions of a company, in order to stall responses by competitors Taking a series of steps designed to stun and confuse competitors in order to disrupt or block their efforts

8 Managerial Levers: Organizational Design Variables Organizational variables Decision rights Business Processes Formal reporting relationships Informal networks Authority to initiate, approve, implement, and control various types of decisions necessary to plan and run the business. The set of ordered tasks needed to complete key objectives of the business. The structure set up to ensure coordination among all units within the organization. Mechanism, such as ad hoc groups, which work to coordinate and transfer information outside the formal reporting relationship. Control variables Data Planning Performance measurement and evaluation Incentives The information collected, stored, and used by the organization. The processes by which future direction is established, communicated, and implemented. The set of measures that are used to assess success in the execution of plans and the processes by which such measures are used to improve the quality of work. The monetary and nonmonetary devices used to motivate behavior within an organization. Cultural variables Values The set of implicit and explicit beliefs that underlie decisions made and actions taken.

9 Managerial Levers People, Information, and Technology Values Performance measurement and evaluation Incentives and rewards Data Planning Source: Cash, et al., 1994 Culture ControlOrganization Execution Informal networks Formal reporting relationships Business processes Decision rights Organizational effectiveness Strategy

10 Summary of Key Strategy Frameworks Framework Key Idea Usefulness in Information Systems Discussions Porter’s generic strategies framework Firms achieve competitive advantage through cost leadership, differentiation, or focus. Understanding which strategy is chosen by a firm is critical to choosing IS to complement that strategy. D’Aveni’s hypercompetition model Speed and aggressive moves and counter- moves by a firm create competitive advantage. The 7-S’s give the manager suggestions on what moves and counter moves to make and IS are critical to achieve the speed needed for these moves. Brandenberg and Nalebuff’s co-operation model Companies cooperate and compete at the same time. Being cooperative and competitive at the same time requires IS that can manage these two roles.

11 Conventional and IT design variables Class of Variable Conventional Design Variable IT Design Variable Structure Work process Communications Interorganizational Make vs. buy decisions Definition of organizational subunits Determining purpose, output of subunits Reporting mechanisms Linking mechanisms Control mechanisms Staffing Tasks Workflows Dependencies Output of process Buffers Formal channels Informal communication Exchange of materials Communications Virtual components Electric linking Technological leveling Production automation Electronic workflows Virtual components Electronic communications Technology matrixing collaboration Electronic relations customer/supplier relationships Electronic customer/supplier relationship Electronic linking mechanism Source: H. Lucsa and J. Baroudi, “The Role of Information Technology in Organization.” JMIS, Spring 1994, pp. 9-23

12 Functional (Hierarchical) View of the Firm Executive Management Information flows Accounting Operations Marketing Sales and Support (source: Pearlson, p.9, 2001)

13 NOLAN’s Six Stages of IS Growth The six stages are: 1. Initiation: Initial introduction of computers to the organization. Batch processing to automate clerical operations to achieve cost reduction, operation systems focus, lack of management interest, and Centralized ISD. 2. Contagion (expansion): Centralized rapid growth as users demand more applications based on high expectations of benefits, move to online systems as ISD tries to satisfy all user demands. Little control if any. IT expenses increase rapidly. 3. Control: In response to management concern about cost vs. benefits, systems projects are expected to show a return, plans are produced and methodologies/standards enforced. Often produces a backlog of applications and dissatisfied users. Planning and controls are introduced. 4. Integration: Considerable expenditure on integrating (via telecommunications and databases) existing systems. Users accountability for system established, and ISD provides a service to users, not just solutions to problems. At this time there is a transition computer use and a approach from data processing to information and knowledge processing (transition between the two curves). 5. Data administration: information requirements rather than processing drive the applications portfolio and information is shared within the organization. Database capability is exploited as users understand the value of information and are willing to share it. 6. Maturity: The planning and development of IT in the organization is closely coordinated with business development. Corporatewide systems are in place. The ISD and the users share accountability regarding the application of computing resources. IT has truly become a strategic partner. Source: Compiled from Nolan (1979).

14 NOLAN’s Six Stages of IS Growth Source: Compiled from Nolan (1979). The six stages are: 1. Initiation: Initial introduction of computers to the organization. Batch processing to automate clerical operations to achieve cost reduction, operation systems focus, lack of management interest, and Centralized ISD. 2. Contagion (expansion): Centralized rapid growth as users demand more applications based on high expectations of benefits, move to online systems as ISD tries to satisfy all user demands. Little control if any. IT expenses increase rapidly. 3. Control: In response to management concern about cost vs. benefits, systems projects are expected to show a return, plans are produced and methodologies/standards enforced. Often produces a backlog of applications and dissatisfied users. Planning and controls are introduced. 4. Integration: Considerable expenditure on integrating (via telecommunications and databases) existing systems. Users accountability for system established, and ISD provides a service to users, not just solutions to problems. At this time there is a transition computer use and a approach from data processing to information and knowledge processing (transition between the two curves). 5. Data administration: information requirements rather than processing drive the applications portfolio and information is shared within the organization. Database capability is exploited as users understand the value of information and are willing to share it. 6. Maturity: The planning and development of IT in the organization is closely coordinated with business development. Corporatewide systems are in place. The ISD and the users share accountability regarding the application of computing resources. IT has truly become a strategic partner.

15 NOLAN’s Six Stages of IS Growth (Cont.) I Initiation 2 Expansion 3 Control 4 Integration 5 Data administration 6 Maturity

16 Critical Success Factors Questions 1. What objectives are central to your organization? 2. What are the critical factors that are essential to meeting these objectives? 3. What decisions or actions are key to these critical factors? 4. What variables underlie these decisions, and how are they measured? 5. What information systems can supply these measures?

17 Value-Creating Business Opportunities CommerceContentCommunity Value-Enabling IT Infrastructure Solutions and Services Enterprise resources planning Supply chain management Customer relationship management E-business packages Pedagogic systems (Blackboard systems) Internet service providers Systems integration services Outsourcing and hosting Software Productivity and Development Tools Productivity packages Integrated development environments (Jbuilder, VB, C++Builder) Programming languages (Java, C++, VB, COBOL, etc.) Specialized software (simulation, statistical analysis, groupware) Web site development tools Streaming medium tools Computing Hardware (computers, printers, etc.) Operating systems Database management Information Document management systems Application frameworks (J2EE,.NET, XML, etc.) Communication Hardware (networks, routers, etc.) Network operating systems Gateways and file transfer services Servers: Web, applications, and database Tele-& Video-conferencing equipment Security and Control Innovation and Diffusion

18 资产管理的演进过程 机会性 ( 绝对报酬 ) 市场投资时机 资讯 资产配置 知识 结构性 ( 资讯比率 ) 资产管理 分散投资 ( 时间,资产类别 , 投资模型。。。 ) 智慧 全面性 ( 夏普指数 ) 另类投资 ( 包括保本型商品。。。 ) 首选企业 Source: ABN.AMRO Asset Management Taiwan Ltd.


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