Information Systems, Organizations, and Strategy C HAPTER 3

O RGANIZATIONS AND I NFO S YSTEM  Organization  social structure/takes resources from environment and processes them to produce outputs (technical def.)  Collection of rights, privileges, obligations, responsibilities/delicately balanced over time through conflict and conflict resolution (behavior def.)  Need both technical and behavioral definitions

F EATURES OF O RGANIZATIONS Routines and business processes  Routines make up business processes  Business processes make up the firm  People in organizations have different perspectives, concerns, specialties Politics  Different perspectives, concerns, etc.

F EATURES OF O RGANIZATIONS ( CONT ) Culture  Made up of assumptions that define goals and products (what to produce, how, etc) Environments  Change faster than organizations  Environmental scanning  Disruptive Technologies Organizational structure  Based on different groups served

T YPES OF O RGANIZATIONAL S TRUCTURES  5 basic kinds of organizational structures  Entrepreneurial: Small start-up business  Machine bureaucracy: Midsize manufacturing firm  Divisionalized bureaucracy: Fortune 500 firms  Professional bureaucracy: Law firms, school systems, hospitals  Adhocracy: Consulting firms

I MPACT OF INFORMATION SYSTEMS ON ORGANIZATIONS AND BUSINESS FIRMS  Economic  Transaction cost theory – can reduce costs of firms buying on the marketplace what they cannot make/contracting with external suppliers  Agency theory - agents (employees) contracted by owner/agents need constant supervision/managers can oversee more employees by using IT to acquire and analyze information  Organizational and behavioral  Flattens organizations, information systems, employees make decisions and are self-managing, and can potentially change an organizational culture, etc.  Internet and organizations  Increases accessibility, store and disseminate knowledge and information

U SING INFO SYSTEMS FOR C OMPETITIVE ADVANTAGE  Porter’s Competitive Forces model (Porter’s Five Forces)  Traditional competitors  New market entrants  Substitute products and services  Customers  Suppliers

S TRATEGIES FOR DEALING WITH COMPETITIVE FORCES

I NTERNET ’ S IMPACT

B USINESS V ALUE C HAIN M ODEL

V ALUE W EB Collection of independent firms that use information technology to coordinate their value chains

O THER WAYS TO USE INFO SYSTEMS FOR COMPETITIVE ADVANTAGE  Synergies - When output of some units used as inputs to others, or organizations pool markets and expertise  Example: Google purchases YouTube  Enhance core competencies  Network-based strategies  Network economics  Virtual Company  Business Ecosystem

M ANAGEMENT ISSUES  Sustain competitive advantage  Align IT with business objectives  Manage strategic transitions