c h a p t e r 3 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

Quick Review of Ch. 2 2 dimensions IS systems2 dimensions IS systems 6 types of IS6 types of IS Which provides data for the most other IS?Which provides data for the most other IS? Structured decision?Structured decision? 5 qualities of Information?5 qualities of Information? –Richness –Reach –Asymmetry

Things of Interest in Ch. 3 Value chain analysis (H & R Block)Value chain analysis (H & R Block) Porter forces modelPorter forces model Organization’s relationship with ISOrganization’s relationship with IS Theories relating to IS impactsTheories relating to IS impacts Org. Structures / IS ImplicationsOrg. Structures / IS Implications Value ChainValue Chain Supply ChainSupply Chain

I believe, IS technology does not give an organization a sustainable advantage. A sustainable advantage (if possible) requires the use of IS technology to change the structure of the organization and it’s position with it’s market and suppliers.A sustainable advantage (if possible) requires the use of IS technology to change the structure of the organization and it’s position with it’s market and suppliers.

ORGANIZATIONS & INFORMATION TECHNOLOGY RELATIONSHIP ORGANIZATIONS INFORMATION TECHNOLOGY

ORGANIZATIONAL STRUCTURES ENTREPRENEURIAL: Start up businessENTREPRENEURIAL: Start up business MACHINE BUREAUCRACY: Mid-sized manufacturing firmMACHINE BUREAUCRACY: Mid-sized manufacturing firm DIVISIONALIZED BUREAUCRACY: Fortune 500DIVISIONALIZED BUREAUCRACY: Fortune 500 PROFESSIONAL BUREAUCRACY: Law firms, hospitalsPROFESSIONAL BUREAUCRACY: Law firms, hospitals ADHOCRACY: Consulting firmADHOCRACY: Consulting firm MATURE HITECH: Entrepreneurs make the jump to management: e.g., OSITECH, RIM,MATURE HITECH: Entrepreneurs make the jump to management: e.g., OSITECH, RIM, Billy G. * 3.7

Entrepreneurial Structure Driven by an Entrepreneur(s)Driven by an Entrepreneur(s) Personnel: Young, energeticPersonnel: Young, energetic Firm small in sizeFirm small in size Sometimes managed by a single CEOSometimes managed by a single CEO Operate in a fast changing marketOperate in a fast changing market IS typically poorly planned, adhocIS typically poorly planned, adhoc

Machine Bureaucracy Operates in slow changing environment (at least perceived that way).Operates in slow changing environment (at least perceived that way). Produces standardized products.Produces standardized products. Dominated by centralized senior management.Dominated by centralized senior management. Usually organized into functional units, e.g., production, marketing, payroll.Usually organized into functional units, e.g., production, marketing, payroll. Well planned IS (usually in accounting area).Well planned IS (usually in accounting area).

Professional Bureaucracy Based on Knowledge of Professionals.Based on Knowledge of Professionals. Managed by department heads and have weak centralized authority.Managed by department heads and have weak centralized authority. Primitive centralized IS system usually for billing.Primitive centralized IS system usually for billing. May have knowledge support systems.May have knowledge support systems. Example: Law firms, Doctor officeExample: Law firms, Doctor office

Divisonalized Bureaucracy Most common to Fortune 500 Co.Most common to Fortune 500 Co. Combination of many Machine Bureaucracies.Combination of many Machine Bureaucracies. Organization suited to slow moving environment.Organization suited to slow moving environment. IS systems elaborate and complex.IS systems elaborate and complex.

Adhocracy Task force organization.Task force organization. More innovative than Machine Bureaucracy and flexible than Professional Bureaucracy.More innovative than Machine Bureaucracy and flexible than Professional Bureaucracy. Weak central management.Weak central management. Very advanced in areas of Organization.Very advanced in areas of Organization. E.g., electronic firms, aerospace, high tech firms.E.g., electronic firms, aerospace, high tech firms.

David’s Mature High Tech Matured Entrepreneurial Organization.Matured Entrepreneurial Organization. Entrepreneur makes the switch to management.Entrepreneur makes the switch to management. Upper management is technologically competent.Upper management is technologically competent. Large functional groups (like Adhocracy) are technically competent.Large functional groups (like Adhocracy) are technically competent.

POINTS TO REMEMBER Organizational change is slower than technology change.Organizational change is slower than technology change. Organizations will resist all but the most basic changes.Organizations will resist all but the most basic changes. The environment changes faster than organizations.The environment changes faster than organizations. Technology can help or destroy a company (if they fail to change): Opportunity or threat?Technology can help or destroy a company (if they fail to change): Opportunity or threat?

Many strategic moves can work together to achieve a competitive advantage Achieving a Competitive Advantage IS as a Strategic Weapon

THE COMPUTER PERSONELLE INFORMATION SPECIALISTS: IS ManagersIS Managers Systems analystsSystems analysts ProgrammersProgrammers Maintenance programmersMaintenance programmers Database administratorsDatabase administrators*

HOW INFO SYSTEMS AFFECT ORGANIZATIONS MICROECONOMIC THEORY: Info technology is a factor of production, like capital & laborMICROECONOMIC THEORY: Info 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* 3.27

HOW INFO SYSTEMS AFFECT ORGANIZATIONS AGENCY THEORY: Firm is nexus of contracts among agents who make decisions; IS shrink number of agents & reduce costAGENCY THEORY: Firm is nexus of contracts among agents who make decisions; IS shrink number of agents & reduce cost BEHAVIORAL THEORIES: Concepts from Sociology, Psychology, Political Science; Organizations & Information Technology mutually influence each otherBEHAVIORAL THEORIES: Concepts from Sociology, Psychology, Political Science; Organizations & Information Technology mutually influence each other* 3.28

What is a Supply Chain? “A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request” It includes: raw material providers, manufactures, warehouses, retailers, customers etc. Glass of Milk at the cafeteria?

Value Chains Analysis The way of organizing and determining the value added activities that each strategic business unit undertakes to design, produce, promote, market, deliver and support the products or services it sells.

3. INFORMATION SYSTEMS, ORGANIZATIONS, & BUSINESS PROCESSES 3.34