Chapter 3
Information Systems,
Organizations,
Management, and
Strategy
3.1
© 2006 by Prentice Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
OBJECTIVES
3.2
•
Identify and describe important features of
organizations that managers need to know about
in order to build and use information systems
successfully
•
Evaluate the impact of information systems on
organizations
•
Assess how information systems support the
activities of managers in organizations
© 2006 by Prentice Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
OBJECTIVES (Continued)
• Analyze how information systems support
various business strategies for competitive
advantage
• Assess the challenges posed by strategic
information systems and management solutions
3.3
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
The Relationship between Organizations and Information
Technology is influenced by mediating factors
3.4
Figure 3-1
Managers need to understand how IS
can change social/work
life inbytheir
org.
© 2006
Prentice
Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
What Is an Organization?
Organization:
• Stable, formal social structure
• Takes resources from the environment and
processes them to produce outputs which
returns (capital) as input
3.5
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
The Technical Microeconomic Definition of the
Organization
3.6
Figure 3-2
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Behavioral Definition of Organization:
• Collection of rights, privileges, obligations, and
responsibilities that are
• Delicately balanced over a period of time through
conflict and
• Conflict resolution
3.7
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
The Behavioral View of Organizations
3.8
Figure 3-3
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Shared Features of all Organizations:
•
•
•
•
•
•
Clear division of labor
Hierarchy
Explicit rules and procedures
Impartial judgments
Technical qualifications for positions
Maximum organizational efficiency
Table 3-1
3.9
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Routines and Business Processes
• Routines are patterns of individual behavior.
• Business processes are a collection of routines.
• Business firms are a collection of business
processes.
• Business processes enable organizations to cope
with all recurring expected situations.
3.10
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Unique Features of Organizations
• Structures
• Goals
• Constituencies
• Leadership styles
• Tasks
• Surrounding environments
3.11
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Organizational Structures
• Entrepreneurial structure: Small start-up business
• Machine bureaucracy: Midsize manufacturing firm
• Divisionalized bureaucracy: Fortune 500 firms
• Professional bureaucracy: Law firms, school
systems, hospitals
• Adhocracy: Consulting firms
3.12
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Organizing the IT Function
The information systems department is
responsible for maintaining:
• Hardware
• Software
• Data storage
• Networks
3.13
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Information Technology Services
3.14
Figure 3-6
© 2006 by Prentice Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
IS Department in an organization includes:
• Programmers: writers of the software
instructions for computers
• Systems analysts: Translate business problems
into solutions, act as liaisons between the
information systems department and rest of the
organization
• Information system managers
• Chief Information Officer (CIO): Senior manager in
charge of information systems function in the firm
• End users:
3.15
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
HOW INFORMATION SYSTEMS IMPACT ORGANIZATIONS AND
BUSINESS FIRMS
Organizational and Behavioral Impacts
IT Flattens Organizations:
• Facilitates flattening of hierarchies
• Broadens the distribution of timely information
• Increases the speed of decision making
• Empowers lower-level employees to make
decisions without supervision
• Increases management span of control (the
number of employees supervised by each
manager)
3.16
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
HOW INFORMATION SYSTEMS IMPACT ORGANIZATIONS AND BUSINESS
FIRMS
Flattening Organizations
Flattening
involves
business
process reengineering.
3.17
Figure 3-9
© 2006 by Prentice Hall
HOW INFORMATION SYSTEMS IMPACT
ORGANIZATIONS AND BUSINESS FIRMS
Virtual Firms:
• Use networks to link people, assets, and ideas
• Can ally with suppliers, customers to create
and distribute new products and services
• Not limited to traditional organizational boundaries
or physical locations
• call centers in India, production in China, product
development in US, finance & acct in Cayman Islands, etc.
3.18
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
THE IMPACT OF IT ON MANAGEMENT DECISION MAKING
The Role of Managers in Organizations
Classical Descriptions of Management:
• Traditional description of management
• Focuses on formal functions: Plan, organize,
coordinate, decide, control
Managerial Roles:
Expectation of activities that managers should
perform in an organization
3.19
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
THE IMPACT OF IT ON MANAGEMENT DECISION MAKING
Managerial Roles:
Expectation of activities that managers should
perform in an organization
• Interpersonal: Managers act as figureheads and
leaders.
• Informational: Managers receive and disseminate
critical information, nerve centers.
• Decisional: Managers initiate activities, allocate
resources, and negotiate conflicts.
3.20
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
THE IMPACT OF IT ON MANAGEMENT DECISION MAKING
Models of Decision Making
• Rational model: An individual manager identifies
goals, ranks all possible alternative actions and
chooses the alternative that contributes most to
those goals (Utilitarianism)
• Is it always possible to find all possible
alternatives and rank them according to how
they contribute to a goal?
• Is it possible to always know how an action
will contribute to a goal?
3.21
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
THE IMPACT OF IT ON MANAGEMENT DECISION MAKING
Models of Decision Making (Continued)
• Organizational model: Considers the structural
and political characteristics of an organization
• Bureaucratic model: Whatever organizations
do is the result of routines and existing business
processes honed over years of active use
• Political model: What an organization does is a
result of political bargains struck among key
leaders and interest groups
• Garbage Can model: take first available
alternative that looks good
3.22
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Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
INFORMATION SYSTEMS AND BUSINESS STRATEGY
Business Ecosystems:
IT plays a powerful role in creating new forms of
business ecosystems.
• Business ecosystems are inter-dependent networks of
• suppliers, distributors, outsourcing firms,
transportation service firms, and technology
manufacturers.
3.23
© 2006 by Prentice Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
INFORMATION SYSTEMS AND BUSINESS STRATEGY
Business Ecosystems:
Examples:
• Microsoft: 1 billion PCs worldwide and hundreds of
thousands of businesses rely on Microsoft’s platform.
• Intel, AMD, music industry, …
• EBay: Millions of people and thousands of business
firms use this platform.
• Wal-Mart: Enterprise systems used by suppliers to
increase their efficiency
3.24
© 2006 by Prentice Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
OBJECTIVES
•
Identify and describe important features of
organizations that managers need to know about
in order to build and use information systems
successfully
•
•
Evaluate the impact of information systems on
organizations
•
•
3.25
All modern organizations have similarities & differences
IS & organizations mutually influence one another
Assess how information systems support the
activities of managers in organizations
© 2006 by Prentice Hall
Management Information Systems
Chapter 3
Information Systems, Organizations, Management, and Strategy
OBJECTIVES (Continued)
• Analyze how information systems support
various business strategies for competitive
advantage
• Assess the challenges posed by strategic
information systems and management solutions
• Maintaining competitive advantage (easy to
copy IS of other firms, technology changes)
• Organizational inertia (to changing)
3.26
© 2006 by Prentice Hall