1. Information Systems and Organizations
Yinglei Wang, Ph.D.
Assistant Professor
FC Manning School of Business

2. Learning Objectives Features of organizations
The impacts of IT/IS on organizations
“The world is flat”
“Here comes everybody: The power of organizing without organizations”

3. Two-Way Relationship

4. Organization?

5. The Technical Microeconomic View
Stable, formal social structure that takes resources from environment and processes them to produce outputs

6. The Behavioural View
A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution

7. Features of Organizations
Routines and business processes
Organizational politics
Organizational culture
Organizational environments
Organizational structure

8. Routines and Business Processes

9. IT Enhances Business Processes
Increasing efficiency of existing processes
Automating steps that were manual
Enabling entirely new processes that are capable of transforming the businesses
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making

10. Organizational Politics and Culture
Divergent viewpoints lead to political struggle, competition, and conflict
Political resistance greatly hampers organizational change
Organizational culture
Encompasses a set of assumptions that define goals and behaviors
May be powerful unifying force as well as restraint on change

11. Resistance to Change
Information systems become bound up in organizational politics because they influence access to a key resource – information.
Information systems potentially change assumptions about goals and behaviours in organizations.
The most common reason for failure of large projects is due to organizational and political resistance to change.

12. Example: Electronic Health Records
“Most Doctors Aren’t Using Electronic Health Records” – The New York Times

13. Organizational Environments
Organizations and environments have a reciprocal relationship
Environments generally change faster than organizations
Information systems can be instrument of environmental scanning, act as a lens

14. IS as A Lens

15. Disruptive Technologies
Technology that brings about sweeping change to businesses, industries, markets
Examples: personal computers, word processing software, the Internet, the PageRank algorithm
First movers and fast followers
First movers – inventors of disruptive technologies
Fast followers – firms with the size and resources to capitalize on that technology

16. Organizational Structure
Five basic kinds of structure (Mintzberg, 1979)
Entrepreneurial: Small start-up business
Machine bureaucracy: Manufacturing firm
Divisionalized bureaucracy: Fortune 500 firms
Professional bureaucracy: Law firms, school systems
Adhocracy: Consulting firms

17. Large and Entrepreneurial?

18. Actual Impacts?

19. Transaction Cost Theory
Firms seek to economize on cost of participating in market (transaction costs).
When it is cheaper to own, firms include functions/services into their boundaries; otherwise, they buy from the market.
IT lowers market transaction costs for firm, making it worthwhile for firms to transact with other firms rather than grow the number of employees.

20. The Effect of IT
IT potentially reduces transaction costs for a given size.
Third party

21. Agency Theory
Firm is nexus of contracts among self-interested parties requiring supervision.
Firms experience agency costs (the cost of managing and supervising) which rise as firm grows.
IT can reduce agency costs, making it possible for firms to grow without adding to the costs of supervising, and without adding employees.

22. The Effect of IT
IT enables firms to economize on managers through better coordination and communication.

23. Organizational/Behavioural Impacts
Empowerment
Decision making pushed to lower levels
Fewer managers needed (IT enables faster decision making and increases span of control)
Postindustrial organizations
In postindustrial societies, authority increasingly relies on knowledge and competence rather than formal positions

24. Flattening Organizations

25. The Internet and Organizations
The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations
The Internet can greatly lower transaction and agency costs
It seems the flattening trend has been strengthened by the Internet

26. “The World Is Flat” http://www.youtube.com/watch?v=DvXnXcDhRA0
Source:

27. “Here Come Everybody…”
Clay Shirky
Soure;

28. Takeaways
There is a two-way interaction between organizations and IT/IS.
IT/IS can change a number of organizational characteristics.
The Internet has profound impacts on how we collaborate.