2. Chapter 3 Organizational Strategy and Information Systems Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

3. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Who/What Delivers IT Value? IT Value is a function of ______, ______, and _________. ________ ___________ IT Value is also a function of ___________ value.

4. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 3 MIS and Management Roles Data Information __________ roles __________ Based roles ________- related roles  Seeks and receives Specific information  Transmits information To employees, managers,etc.  Transmits information To vendors, customer, etc.  Initiates improvements  Supervises projects  Allocates and approves Resources  Represents the firm in Settling disputes Figurehead Leader Liaison  Very easy role  No major decision making Or information processing  Most significant; judging, Promoting, monitoring, training  “Give-and-take” relationships Monitor Facilitator Spokesperson Entrepreneur Problem Solver Resource Allocator negotiator _______________ MIS/IS Management Roles Description Actionable Results Actionable Results

5. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 4 Organizational Ware Organizational Ware HW SW N

6. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 5 IS/IT Strategy How it can be delivered? N Business (Firm) Strategy Where is the business going and why? Why Organization Strategy?

7. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Learning Objectives Understand how the use of information technology impacts an organization. Identify the type of organizational structure that tends to be most willing to embrace technological change and sophistication. List the advantages and disadvantages of the networked organizational structure. Discuss how IT has changed the way managers monitor and evaluate Define and explain the concept and importance of virtual organizations. Identify the challenges that are faced by virtual teams.

8. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 7 HierarchicalFlatMatrixNetworked Description Characteristics Type of Environment Best Supported Basis of Structuring Power Structure Key Tech. Supporting this Bureaucratic w/ defined levels of management Division of labor specialization, unity of command Stable Certain Primary function Centralized Mainframe, centralized data and processing Decision-making pushed down to lowest level Informal roles, planning and control; often sm.,young orgs. Unstable Uncertain Primary function Centralized Personal computers Workers assigned to 2 or more supervisors Dual reporting based on function/purpose Unstable Uncertain Functions and purpose Distributed Networks Formal/informal communication networks that connect all Known for flexibility and adaptability Unstable Uncertain Networks Distributed Intranets and Internet Figure 3.4 Comparison of Organizational Structures Traditional

9. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Other Organizational Structures An organization is seldom a pure form of one of the four structures described above (i.e., hierarchical, flat, matrix and networked). It is more common to see a hybrid structure in which different parts of organization use different structures depending on their information needs and desired work processes. Adaptive or _____ time organization –a newer organizational design is designed to be highly flexible, agile and responsive so that __________ can be configured quickly to respond to changing _________. 8

10. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices IS and Organizational Design IS in the organizational designs: –Defines the flow of information throughout the organization. –Facilitate management control at the organizational and individual levels. Culture impacts IS and organizational performance. IS in the organization’s physical structure is designed to facilitate the ___________ and work ______ necessary to accomplish the organization’s goals. The organization structures of Cognizant and TCS, while very different, reflect and support the goals of each company.

11. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 10 What is Organization Transformation? Organization transformation is a comprehensive organization-wide change initiative that results in change in the “deep structure” of the firm, _______ altering strategy, structure, systems, processes, human resource requirements, and core values and beliefs. With the overall change initiative resulted in radical change, the implementation process proceeded through overlapping episodes of ______ and radical change consistent with the change process.

12. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 11 Dilemma in Organization Design Complex Simple Organization Stable Certain EnvironmentDynamic Uncertain ??? Hierarchy (_______) Entrepreneurial (________) N N

13. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 12 The IT Design Challenge Parallels the Organization Design Challenge Complex Simple Organization EnvironmentStable Certain Dynamic Uncertain “Centralized Intelligence” Mainframe (Control) 1960s, 1970s “Decentralized Intelligence” Microcomputer (Autonomy) 1980s Main Frame “Networked Intelligence” (Collaboration/ _______) 1990s and beyond

14. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 13 The Emerging Information Age Organization Complex Simple Organization EnvironmentStable Certain Dynamic Uncertain Hierarchy Autonomy Entrepreneurial Collaboration (commitment) Learning Flexibility Standardization __________________ Supervision (compliance) ______ _________ Shared understanding Shared purpose Information ________

15. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 14 Transitions in Organization Design From Control to _____________ –Promote flexibility, creativity, and learning while continuing to enable tight control of operating process From Autonomy to _____________ –Line mangers are empowered to make decisions –Timely, quality distributed information and new communication technologies (e.g., video conferencing) are important factors that are enabling dramatic changes in organization redesign. TM -14 Dr. Chen, Information, Organization, and Control TM -14

16. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 15 The Organization Design Challenge _________: centralized intelligence control –complex organization in stable environment – mainframe ________ : autonomy decentralized intelligence –simple organization in dynamic environment –microcomputer ____________ : distributed intelligence collaboration –complex organization in dynamic environment –networked IT architecture –flat, fast, flexible and focused on areas of core competency Dr. Chen, Information, Organization, and Control TM -15

17. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 16 Lessons of the Information Age Organization Design _______ counts, but not at the expense of control. Empowerment is not _______. Transforming an organization requires more than just changing the structure. –Maximizing flexibility, innovation, and control. –Maximizing independence and interdependence: collaboration, the missing organization design criterion. –Organization transformation needs a comprehensive organization-wide change initiative that results in change in the “deep structure” of the firm, radically altering strategy, structure, systems, processes, human resource requirements, and core values and beliefs. N N

18. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices Social Network Computer and information technologies facilitate ____________ across distances, social networks and virtual communities are formed. Useful in getting a job done, even if not all of the members of the network belong to the same organization. (i.e. LinkedIn) Social network is –an ___-enabled network that links individuals together in ways that enables them to find experts, get to know colleagues, and see who has relevant experience for projects across traditional organization lines. –a form of _________ network

19. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices INFORMATION SYSTEMS AND MANAGEMENT CONTROL SYSTEMS IT changes the way Managers _______. IT changes the way Managers Evaluate. IT changes the way Managers Provide Feedback. IT changes the way Managers ________ and _______. IT changes the way Managers Control Processes. 18

20. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 19 CULTURE Culture is the third managerial lever. Plays an increasingly important role in IS development and use. It is defined as a shared “set of _______ and _______about what is desirable and undesirable in a community of people” (also see TAM model in chapter 4). Culture is not static but always changing. Different levels of culture. Culture should be considered as the most important organizational ________ resources for improving its competitive advantage as it is non- ___________

21. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices IT Vision/ IT Strategy Strategic Vectors Business Strategy Business Vision Technology Concepts Standards Protocols Performance Compatibility Guidelines Key Issues Operating System Data Bases Applications Communications Processors _________ Management _________ Management IT ____________ Technology Selection Hardware Software Fig. 3 (Extra): IT Architecture and Strategic Business Vision

22. Dr. Chen, Information Systems – Theory and Practices  John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices 21 The power of Is department now and the future will come from _______, influence and capability - and less from control. The measure of success of the IS will no longer be numbers of people but contributions to the business - ______, speed, products/services, and _______. The roadblock to competitive advantage generally is not technology, but ___________ - with people. Successful implementation requires working closely with line people. Thus IS departments need to establish better relationships with outside organizations, senior management, and users. Conclusions TM -21 Dr. Chen, Information, Organization, and Control