Information Systems, Organizations, and Strategy

CHAPTER 3

ORGANIZATIONS AND INFO SYSTEM

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

FEATURES OF ORGANIZATIONS

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.

FEATURES OF ORGANIZATIONS (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

TYPES OF ORGANIZATIONAL STRUCTURES

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

IMPACT 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

USING INFO SYSTEMS FOR COMPETITIVE ADVANTAGE

Porter’s Competitive Forces model (Porter’s Five Forces)

Traditional competitors

New market entrants

Substitute products and services

Customers

Suppliers

STRATEGIES FOR DEALING WITH COMPETITIVE FORCES

INTERNET’S IMPACT

BUSINESS VALUE CHAIN MODEL

VALUE WEB

Collection of independent firms that use information technology to coordinate their value chains

OTHER 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

MANAGEMENT ISSUES

Sustain competitive advantage

Align IT with business objectives

Manage strategic transitions