Skill Development at it’s Best
MIS
BBA & MBA
Lecture 789
Information Systems, Organizations,
Management and Strategy
Course Lecturer: Farhan Mir
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Expected Topics
• Introduction to IS
• Management & Decision Making
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IT Fundamentals
Transaction Processing and Reports System
DSS
Knowledge-Based Systems
System Development
MIS in the Fundamental Areas of Business (Will be covered
through case studies)
• Contemporary Issues & Trends (You will cover it through your
research work and Presentations/ Seminars)
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Once we have seen how IS could enhance
the effectiveness of Organizational
Functions (Overall Performance) now we
could explain their pivotal role in
Organizations & Strategy
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Organizations & People
 Organizations
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Structure
Culture
Politics
Environment
Leadership
Nature of Business (Routine Vs Non-Routine)
New trends in organizations (Globalization)
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Organization and Behavioral
Aspects
 People (always bring Psychological issues)
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Attitude
Personalities
Motivation
Resistance
The biggest problem area for/ in IS
Skills & abilities (Learning/ Training)
Career Development
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IS Impact on Organization
• Economic
• Cost Reduction
– Transaction Cost
– Agency Cost
• Structural
• Flatter Models
• Post Industrial Models (Knowledge)
• Behavioral
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Transformation
of
Organizations
Flattening (Need for Agility)
•
• Decentralization (More focus on Behavioral
Approaches)
• Flexibility
• Location Independence (Globalization Pressures)
• Low Transaction Cost
• Empowerment (Employee needs to respond quickly)
• Collaborative Work (More teams are emerging)
• Overall Performance (Effectiveness)
• Competitive Advantage
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Managers & Decision Making
• Decision Making
– The process by which managers respond to opportunities
and threats by analyzing options, and making decisions
about goals and courses of action.
• Decisions in response to opportunities—occurs when
managers respond to ways to improve organizational
performance.
• Decisions in response to threats—occurs when
managers are impacted by adverse events to the
organization.
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What Makes Decision Making so
Difficult?
Complexity
Uncertainty
Organizational & Environment Pressure
Individual Decision Making Limitations
Experience, Beliefs & Perceptions of the
Decision Maker
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Structured and
Unstructured Problems
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Managers and Decision Making
Decisions are classified as:
• Unstructured: Non-routine, decision
maker provides judgment, evaluation, and
insights into problem definition, no agreedupon procedure for decision making
• Structured: Repetitive, routine, handled
using a definite procedure
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Realities facing Managers and
Decision Making
• Managers perform high-volume, high speed work
involving a large number of topics.
• Managers are often under stress.
• Managers often take shortcuts.
• Satisficing (sounds like?) nature of decision
making
• Political motivations may impact decisions.
• Decisions should be transparent. (need for open
communication)
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Why Information Is Incomplete
Figure 7.2
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Where IS Lies in Organizations?
• Traditional Roles (Past)
– A Separate Department having little influence in overall
Organizational posture
– It was used to provide information only
• “Operational Role”
• Current & Future Status
– Linking all Departments (at heart of organizational
operations)
– Progressively involved in planning and Objective
setting
– Used as a business-creator/ initiator (Strategic Role)
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But Information Systems in
organizations also act as an
“Enabling” & “Filtering Tool”
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THE ENVIRONMENT:
RESOURCES & CONSTRAINTS
GOVERNMENTS
THE FIRM
COMPETITORS
FINANCIAL INSTITUTIONS
CULTURE
INFORMATION SYSTEMS
KNOWLEDGE
TECHNOLOGY
[CUSTOMERS!!]
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Transformation
of
Organizations
Flattening (Need for Agility)
•
• Decentralization (More focus on Behavioral
Approaches)
• Flexibility
• Location Independence (Globalization Pressures)
• Low Transaction Cost
• Empowerment (Employee needs to respond quickly)
• Collaborative Work (More teams are emerging)
• Overall Performance (Effectiveness)
• Competitive Advantage
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Competitive Forces Model
NEW
MARKET
ENTRANTS
SUBSTITUTE
PRODUCTS
& SERVICES
THE FIRM
SUPPLIERS
TRADITIONAL
COMPETITION
CUSTOMERS
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Strategies Used With the Competitive
Forces Model
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• Product differentiation involves developing new and unique
products and services not easily duplicated by competitors
• low-cost producer (provide same value but at a lower cost than
competitors)
• Focused differentiation involves
– Narrowing the market by developing niches for specialized products or
services where a business can compete better than its rivals
– Use of customer data (data mining, credit card transactions, Internet
behavior)
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Examples of Systems for Each Strategy
• Product differentiation
– Levi Strauss’ s Personal Pair (mass customization or one-to-one
marketing)
– Hallmark’s computer generated cards
– Build to order products (Dell)
• Focus (market niche)
– Customer data analysis through CRM
– Hilton Hotels customer database
• Low cost producer
– CAD systems used in the automobile or airline industry
– Insurance claim adjusters use of pen-based computers
– Wal-Mart point of sale terminals sending information directly to
suppliers
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Primary Activities of the VC Model
• Inbound logistics - receiving and storing of materials
– Wal-Mart’s continuous replenishment system
– stockless inventory systems
• Operations - transformation of inputs to finished goods
or the process of providing a service
– computer controlled machinery used by Gillette for
producing razor blades
• Outbound logistics - storing and distributing the product
– airline reservation system
– automated shipping scheduling systems
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New Strategies based on IS
• Synergies
– Partnerships within and outside the organization to support adtivities
– Alliance between Bank of New York and JP Morgan Chase
• Enhancing Core Competencies
– Focusing on particular expertise to gain advantage over other
– P&G InnovationNet for knowledge sharing and learning
• Network-Based Strategies
– Network Economics
• Cost of adding new members is quite low as compared to gains
yielded by expansion of network
– Virtual Company Model
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Management Issues
• Opportunities
– Firms face a continuing stream of IT-based opportunities
to achieve strategic advantages
• Challenges
– Some firms face big hurdles in implementing
contemporary systems; resistance to change.
– Once an advantage is achieved, there are difficulties in
sustaining the advantage.
– Organizations often cannot change fast enough to
accommodate new technologies (Kodak).
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Solutions: What Managers Can Do
• Managers cannot depend on IS professionals to tell them
about strategic opportunities
• Managers must understand what is happening in their
industry in general and the role of technology in particular
• How do you do this?
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References
• Charles Parker, Thomas Case. (2000). “Management Information Systems:
Action & Strategy”. (2nd Ed). Chapter 2 & 4
• James O’Brien. (1998). “Introduction to Information Systems: A Networked
Enterprise Perspective”. (2nd Ed). Chapter 10,12
• Kenneth C. Laudon & Jane P. Laudon (2011). “Management Information
Systems: Managing a Digital Firm”.(7th Ed). Chapter 3
• Grover S. Kearns (1997). Alignment of Information Systems Plans with
Business Plans:
(http://hsb.baylor.edu/ramsower/ais.ac.97/papers/kearns.htm)
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