1. 3.1 © 2002 by Prentice Hall c h a p t e r 3 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

2. 3.2 © 2002 by Prentice Hall LEARNING OBJECTIVES IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONSIDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONS ANALYZE RELATIONSHIP BETWEEN INFORMATION SYSTEM & ORGANIZATIONSANALYZE RELATIONSHIP BETWEEN INFORMATION SYSTEM & ORGANIZATIONS*

3. 3.3 © 2002 by Prentice Hall LEARNING OBJECTIVES CONTRAST THEORIES OF MANAGERIAL ACTIVITIES AND ROLESCONTRAST THEORIES OF MANAGERIAL ACTIVITIES AND ROLES DESCRIBE HOW MANAGERS MAKE DECISIONS IN ORGANIZATIONSDESCRIBE HOW MANAGERS MAKE DECISIONS IN ORGANIZATIONS EVALUATE ROLE OF INFORMATION SYSTEMS IN SUPPORTING VARIOUS LEVELS OF BUSINESS STRATEGYEVALUATE ROLE OF INFORMATION SYSTEMS IN SUPPORTING VARIOUS LEVELS OF BUSINESS STRATEGY

4. 3.4 © 2002 by Prentice Hall MANAGEMENT CHALLENGES ORGANIZATIONS & INFORMATION SYSTEMSORGANIZATIONS & INFORMATION SYSTEMS –WHAT IS AN ORGANIZATION ? –COMMON FEATURES OF ORGANIZATIONS –UNIQUE FEATURES OF ORGANIZATIONS CHANGING ROLES OF SYSTEMS IN ORGANIZATIONSCHANGING ROLES OF SYSTEMS IN ORGANIZATIONS –INFORMATION TECHNOLOGY INFARSTRUCTURE AND INFORMATION SERVICES –HOW INFORMATION SYSTEMS AFFECT ORGANIZATIONS –THE INTERNET AND ORGANIZATIONS IMPLICATIONS FOR DESIGN AND UNDERSTANDING OF INFORAMTION SYSTEMS *

5. 3.5 © 2002 by Prentice Hall MANAGEMENT CHALLENGES MANAGERS, DECISION MAKING & INFORMATION SYSTEMSMANAGERS, DECISION MAKING & INFORMATION SYSTEMS –THE ROLE OF MANAGERS IN ORGANIZATIONS –MANAGERS AND DECISION MAKING IMPLICATIONS FOR SYSTEM DESIGN INFORMATION SYSTEMS & BUSINESS STRATEGYINFORMATION SYSTEMS & BUSINESS STRATEGY –WHAT IS A STRATEGIC INFORMATION SYSTEMS ? –BUSINESS-LEVEL STRATEGY AND THE VALUE CHAIN MODEL *

6. 3.6 © 2002 by Prentice Hall MANAGEMENT CHALLENGES 1. SUSTAINABILITY OF COMPETITIVE ADVANTAGE 2. FITTING TECHNOLOGY TO ORGANIZATION *

7. 3.7 © 2002 by Prentice Hall MEDIATING FACTORS: Environment Culture Structure Standard Procedures Politics Management Decisions Chance ORGANIZATIONS & INFORMATION TECHNOLOGY ORGANIZATIONS INFORMATION TECHNOLOGY

8. 3.8 © 2002 by Prentice Hall VP CEO ORGANIZATION TECHNICAL DEFINITION: STABLE, FORMAL STRUCTURE TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTSTAKES RESOURCES FROM ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTS* What is an organization ?

9. 3.9 © 2002 by Prentice Hall TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATION OUTPUTS TO ENVIRONMENTORGANIZATION PRODUCTION PROCESS INPUTS FROM ENVIRONMENT ORGANIZATIONS,CAPITAL AND LABOR ARE TRANSFORMED BY FIRM THROUGH THE PRODUCTION PROCESS INTO PRODUCTS AND SERVICES. THE PRODUCTS AND SERVICE ARE CONSUMED BY ENVIRONMENT

10. 3.10 © 2002 by Prentice Hall ORGANIZATION BEHAVIORAL DEFINITION: COLLECTION OF: RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIESRIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIES DELICATELY BALANCEDDELICATELY BALANCED CONFLICT RESOLUTIONCONFLICT RESOLUTION* PROCESS

11. 3.11 © 2002 by Prentice Hall ENVIRONMENTAL RESOURCES ENVIRONMENTAL OUTPUTS FORMAL ORGANIZATION STRUCTURE: Hierarchy Division of labor Rules, Procedures PROCESS: Rights/Obligations Privileges/Responsibilities Values Norms People

12. 3.12 © 2002 by Prentice Hall STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS CLEAR DIVISION OF LABORCLEAR DIVISION OF LABOR HIERARCHYHIERARCHY EXPLICIT RULES & PROCEDURESEXPLICIT RULES & PROCEDURES IMPARTIAL JUDGMENTSIMPARTIAL JUDGMENTS TECHNICAL QUALIFICATIONS FOR POSITIONSTECHNICAL QUALIFICATIONS FOR POSITIONS MAXIMUM ORGANIZATIONAL EFFICIENCYMAXIMUM ORGANIZATIONAL EFFICIENCY*

13. 3.13 © 2002 by Prentice Hall COMMON FEATURES OF ORGANIZATIONS FORMAL STRUCTUREFORMAL STRUCTURE STANDARD OPERATING PROCEDURESSTANDARD OPERATING PROCEDURES POLITICSPOLITICS CULTURECULTURE*

14. 3.14 © 2002 by Prentice Hall UNIQUE FEATURES OF ORGANIZATIONS ORGANIZATIONAL TYPESORGANIZATIONAL TYPES ENVIRONMENTS, GOALS, POWERENVIRONMENTS, GOALS, POWER CONSTITUENCIES, FUNCTIONCONSTITUENCIES, FUNCTION LEADERSHIP, TASKSLEADERSHIP, TASKS TECHNOLOGYTECHNOLOGY BUSINESS PROCESSESBUSINESS PROCESSES*

15. 3.15 © 2002 by Prentice Hall ORGANIZATIONAL STRUCTURE TYPE ENTREPRENEURIAL: Startup businessENTREPRENEURIAL: Startup business MACHINE BUREAUCRACY: Mid-sized manufacturing firmMACHINE BUREAUCRACY: Mid-sized manufacturing firm DIVISIONALIZED BUREAUCRACY: Fortune 500 FIRM SUCH AS GMDIVISIONALIZED BUREAUCRACY: Fortune 500 FIRM SUCH AS GM PROFESSIONAL BUREAUCRACY: Law firms, hospitals, School systemsPROFESSIONAL BUREAUCRACY: Law firms, hospitals, School systems ADHOCRACY: Consulting firmADHOCRACY: Consulting firm*

16. 3.16 © 2002 by Prentice Hall ORGANIZATION & ITS ENVIRONMENT THE FIRM INFORMATION SYSTEMS ENVIRONMENTAL RESOURCES & CONSTRAINTS GOVERNMENTS COMPETITORS FINANCIAL INSTITUTIONS CULTURE KNOWLEDGE TECHNOLOGY

17. 3.17 © 2002 by Prentice Hall INFORMATION SYSTEMS DEPARTMENT PROGRAMMERS: Write softwarePROGRAMMERS: Write software SYSTEMS ANALYSTS: Translate business problems into solutionsSYSTEMS ANALYSTS: Translate business problems into solutions IS MANAGERS: Department leadersIS MANAGERS: Department leaders END USERS: Department reps for whom applications are developedEND USERS: Department reps for whom applications are developed*

18. 3.18 © 2002 by Prentice Hall THE ORGANIZATION SENIOR MANAGEMENT MAJOR END-USERS (DIVISIONS) INFORMATION SYSTEMS DEPARTMENT IT Infrastructure: Hardware Software Data Networks Information System Specialists: CIO Managers System Analysts System Developers Programmers Network Specialists Database AdministratorClerical

19. 3.19 © 2002 by Prentice Hall HOW INFO SYSTEMS AFFECT ORGANIZATIONS MICROECONOMIC MODEL: Information technology is a factor of production, like capital & laborMICROECONOMIC MODEL: Information technology is a factor of production, like capital & labor TRANSACTION COST THEORY: Firms attempt to minimize transaction costs internally & externallyTRANSACTION COST THEORY: Firms attempt to minimize transaction costs internally & externally*

20. 3.20 © 2002 by Prentice Hall AGENCY THEORY: Firm is nexus of contracts among self-interested parties requiring supervisionAGENCY THEORY: Firm is nexus of contracts among self-interested parties requiring supervision BEHAVIORAL THEORIES: Info systems could change hierarchy of decision making; reduce need for middle management & clerical support; distribute informationBEHAVIORAL THEORIES: Info systems could change hierarchy of decision making; reduce need for middle management & clerical support; distribute information* HOW INFO SYSTEMS AFFECT ORGANIZATIONS

21. 3.21 © 2002 by Prentice Hall IMPLEMENTING CHANGE TASKPEOPLETECHNOLOGY STRUCTURE RESISTANCE MUTUAL ADJUST MENT All four components must be changed simultaneously

22. 3.22 © 2002 by Prentice Hall INTERNET & ORGANIZATIONS E-mail communicationE-mail communication Electronic handbooks published & revisedElectronic handbooks published & revised Interactive training classesInteractive training classes Employees review, update personal dataEmployees review, update personal data*

23. 3.23 © 2002 by Prentice Hall THE ROLE OF MANAGERS IN ORGANIZATIONS CLASSICAL model: Describe functions : planning, organizing, coordinating, deciding, controllingCLASSICAL model: Describe functions : planning, organizing, coordinating, deciding, controlling BEHAVIORAL model : Descriptions of management based on scientists’ observations of what managers actually do in their jobsBEHAVIORAL model : Descriptions of management based on scientists’ observations of what managers actually do in their jobs*

24. 3.24 © 2002 by Prentice Hall INFO SYSTEMS, LEVELS, DECISIONS TPS OAS MIS KWS DSS ESS ORGANIZATIONAL LEVEL TYPE OF DECISIONOPERATIONALKNOWLEDGEMANAGEMENTSTRATEGIC STRUCTURED ACCOUNTS RECEIVABLE ELECTRONIC PRODUCTION SCHEDULING COST OVERRUNS SEMI-BUDGET STRUCTUREDPREPARATION PROJECT SCHEDULING FACILITY LOCATION UNSTRUCTUREDPRODUCT DESIGN NEW PRODUCTS NEW MARKETS

25. 3.25 © 2002 by Prentice Hall STAGES OF DECISION MAKING INTELLIGENCE: Collect information; identify problemINTELLIGENCE: Collect information; identify problem DESIGN: Conceive possible alternatives; select criteriaDESIGN: Conceive possible alternatives; select criteria CHOICE: Use criteria to evaluate alternatives; selectCHOICE: Use criteria to evaluate alternatives; select IMPLEMENTATION: Puts decision into effect; allocate resources; controlIMPLEMENTATION: Puts decision into effect; allocate resources; control*

26. 3.26 © 2002 by Prentice Hall RATIONAL: Comprehensive rationality; evaluate all alternativesRATIONAL: Comprehensive rationality; evaluate all alternatives SYSTEMATIC: Structured, formal methodSYSTEMATIC: Structured, formal method INTUITIVE: Trial & error, unstructured, multiple approach to find solutionINTUITIVE: Trial & error, unstructured, multiple approach to find solution* INDIVIDUAL MODELS OF DECISION MAKING

27. 3.27 © 2002 by Prentice Hall BUREAUCRATIC model: Follow standard operating procedures (SOP)BUREAUCRATIC model: Follow standard operating procedures (SOP) POLITICAL: Key groups compete and bargainPOLITICAL: Key groups compete and bargain “GARBAGE CAN model”: Organizations not rational; solutions accidental“GARBAGE CAN model”: Organizations not rational; solutions accidental* ORGANIZATIONAL MODELS OF DECISION MAKING By group, organization

28. 3.28 © 2002 by Prentice Hall BUSINESS LEVEL STRATEGY LOCK IN CUSTOMERS & SUPPLIERS SUPPLY CHAIN MANAGEMENT: Stockless inventories, continuous replenishment, just-in-time deliverySUPPLY CHAIN MANAGEMENT: Stockless inventories, continuous replenishment, just-in-time delivery INTRA FIRM STRATEGY: Product differentiation, focused differentiation, low-cost producerINTRA FIRM STRATEGY: Product differentiation, focused differentiation, low-cost producer EFFICIENT CUSTOMER RESPONSE: Point-of-sale systems, dataminingEFFICIENT CUSTOMER RESPONSE: Point-of-sale systems, datamining*

29. 3.29 © 2002 by Prentice Hall COMPETITIVE FORCES MODEL SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS SUPPLIERSCUSTOMERS THE FIRM TRADITIONAL INDUSTRY COMPETITORS THE INDUSTRY

30. 3.30 © 2002 by Prentice Hall COMPETITIVE FORCES MODEL SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS SUPPLIERSCUSTOMERS INDUSTRY SET INDUSTRY COMPETITORS INDUSTRY 4 INDUSTRY 3 INDUSTRY 2 INDUSTRY 1