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2	LEARNING OBJECTIVES Discuss characteristics of organizations Relationship between organizations and information systems Describe decision processes Evaluate role of Information systems in supporting business strategy
3	MANAGEMENT CHALLENGES Maintaining competitive advantage Technology leap frog game FITTING TECHNOLOGY & ORGANIZATION (Visa-versa) Business and technology alignment & Integration *
4	Organization, Management, IS and business strategy You will need to understand how management functions within an organization You will need to know how IS, management and business strategy fit together Many factors can influence the effectiveness of the organization and IT partnership See examples on next slide --à
5	ORGANIZATIONS & INFORMATION TECHNOLOGY
6	ORGANIZATION TECHNICAL DEFINITION: STABLE, FORMAL STRUCTURE, Legal TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTS ->
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8	ORGANIZATION BEHAVIORAL DEFINITION: COLLECTION OF: RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIES, Relationships DELICATELY BALANCED CONFLICT RESOLUTION *
9	FORMAL ORGANIZATION STRUCTURE: Hierarchy Division of labor Rules, Procedures PROCESS: Rights/Obligations Privileges/Responsibilities Values Norms People
10	Impact of IS changes on the organization Technical Organization Definition Infinitely maliable – Rearrangement of machines and workers Capital and labor are substatutes for each other Behavioral Organization Definition More complex Rights, privileges, relationships developed over time are difficult to upset
11	STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS - Bureaucracies CLEAR DIVISION OF LABOR HIERARCHY EXPLICIT RULES & PROCEDURES IMPARTIAL JUDGMENTS TECHNICAL QUALIFICATIONS MAXIMUM ORGANIZATIONAL EFFICIENCY *
12	COMMON FEATURES OF all ORGANIZATIONS FORMAL STRUCTURE STANDARD OPERATING PROCEDURES Can restrict change POLITICS Can restrict change CULTURE Can restrict change Only 10% of 1919 Fortune 500 companies till exist today *
13	UNIQUE FEATURES OF ORGANIZATIONS ORGANIZATIONAL TYPE ENVIRONMENTS, GOALS, POWER Government, legal, customer, competitors IS is key to environmental scanning CONSTITUENCIES, FUNCTION LEADERSHIP, TASKS TECHNOLOGY BUSINESS PROCESSES *
14	ORGANIZATIONAL Types ENTREPRENEURIAL: Startup business MACHINE BUREAUCRACY: Mid-sized manufacturing firm DIVISIONALIZED BUREAUCRACY: Fortune 500 PROFESSIONAL BUREAUCRACY: Law firms, hospitals ADHOCRACY: Consulting firms *
15	ORGANIZATION & ITS ENVIRONMENT
16	IT Infrastructure & Services What is IT infrastructure? How has IT changed? How has the use of IT changed? Information flow Widening role Complexity
17	What is an INFORMATION SYSTEMS DEPARTMENT? PROGRAMMERS: Write software System Admin: Setup hardware software and networks. IT/SYSTEMS ANALYSTS: Translate business problems into solutions IS MANAGERS: Department leaders END USERS: Department reps for whom applications are developed CIO: Chief information officer *
18	THE ORGANIZATION
19	HOW INFO SYSTEMS AFFECT ORGANIZATIONS MICROECONOMIC MODEL: Info technology is a factor of production, like capital & labor Can be substituted for labor and capitol TRANSACTION COST THEORY: Firms attempt to minimize transaction costs internally & externally Cost of IT goes down then labor is replaced with IT Lower transactional costs via networks Easier and cheaper to contract purchases & services *
20	HOW INFO SYSTEMS AFFECT ORGANIZATIONS AGENCY THEORY: Firm is nexus of contracts among self-interested parties requiring supervision Reduce management costs as IT makes it possible to manage more staff with less resource BEHAVIORAL THEORIES: Info systems could change hierarchy of decision making; reduce need for middle management & clerical support; distribute information IT allow information to jump levels in hierarchy Authority relies on knowledge and competence Task force or Virtual Team environments
21	More Behavior impact of IS Politics and IS are inseparable IS effects access to vital resources, Information IS can also impact work flow Decreasing or increasing the influence or need for department(s) May cause resistance to change
22	IMPLEMENTING CHANGE
23	To illustrate look at: INTERNET & ORGANIZATIONS E-mail communication Electronic handbooks published & revised Interactive training classes Employees review, update personal data *
24	Organizational Implications for design & implementation of IS Environment Organization Structure and SOP Culture and Politics Type of organization Style of leadership (micromanager) Extent of top managements support The tasks and business process effected Sentiments and attitudes of workers History of organization
25	Types of Managers CLASSICAL: Describe functions- plan, organize, coordinate, decide, control Functions of the role are not necessarily what managers really do BEHAVIORAL: Based on observations of managers on the job Maybe much less formal then the classic model suggests. Interpersonal aspects *
26	Roles of Managers Interpersonal Informational Decisional
27	Decision Making – Science Types of Decisions Strategic – Determine long-term objectives Management – Monitor efficiency of resources and performance Knowledge-Level – new products, services, ways to communicate Unstructured – non-routine, problem definition, no agreed process Structured – Repetitive, routine, a defined procedure
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29	STAGES OF DECISION MAKING INTELLIGENCE: Collect information; identify problem DESIGN: Conceive alternatives; select criteria CHOICE: Use criteria to evaluate alternatives; select IMPLEMENTATION: Put decision into effect; allocate resources; control LOOP BACK??? Costly but common *
30	INDIVIDUAL MODELS OF DECISION MAKING Individual vs Group decisions RATIONAL: Comprehensive rationality; evaluate all alternatives. Identify goals, Rank options and choose best fit Must remove emotion and politics SYSTEMATIC: Structured, formal method Often requires consensus. Difficult to attain? INTUITIVE: Trial & error, unstructured, multiple approach My mechanic uses this method
31	ORGANIZATIONAL MODELS OF DECISION MAKING BUREAUCRATIC: Follow standard operating procedures (SOP) Change can be damaging to the organization POLITICAL: Key groups compete and bargain Decisions are a form of compromise between different groups with competing goals Tilted by unequal power and diverse interests “GARBAGE CAN”: Organizations not rational; solutions accidental Analysis paralysis Just do it
32	IS role in Decision making Provide multiple models for the evaluation of data Decision support capability for groups Sensitive to political and bureaucratic requirements. Can be overridden!!! A group decision can always be overridden. Should it?
33	Strategic Information Systems Tools to stay ahead of the competition Used by all organization levels Alter the way a firm operates or maybe even the very business of the firm
34	Value chain model Business level strategy Become lowest cost producer Differentiate products and services Change scope of product or service. Global versus regional niche. Value Chain - Specifies parts of the business were competitive strategies can be exploited Primary activities - Most directly relate to product and distribution of a firms products and services Support activities - make the delivery of primary activities possible. Technology, Management, Accounting, HR
35	Value Web A collection of firms connect through technology to coordinate behavior to produce a product or service. Industrial networks form the infrastructure
36	BUSINESS LEVEL STRATEGY LOCK IN CUSTOMERS & SUPPLIERS SUPPLY CHAIN MANAGEMENT: Stockless inventories, continuous replenishment, just-in-time delivery INTRA FIRM STRATEGY: Product differentiation, focused differentiation, low-cost producer EFFICIENT CUSTOMER RESPONSE: Point-of-sale systems, datamining *
37	IS products and services Differentiate products and services ATMs, Internet stock trading, banking, reservations Niche (focused) Market Finding product niches can be facilitated with IS
38	Supply chain Value chains developed with vendors and suppliers to keep inventory stocked Traditional inventory Inventory may sit in storage for weeks Just-in-time Inventory used within a week of delivery Stockless inventory Daily deliveries Eliminating the store room Larger offsite bulk distribution centers Efficient IS can allow less overhead in inventory maintenance
39	Customer chain management Cost 5 time as much to acquire new customer then to keep existing Value chain that involve customer responsiveness can help retain customers while maintaining efficient levels of inventory Internet product configurators Tied into production schedules and supply chain Supply push economy – Based on historical 12 month forecasts to determine production Demand pull economy – Customer demand pulls production schedules
40	Firm Level Strategies Synergy – pulling together complimenting products and services to leverage customer relationships Deere’s product and service model Information Partnerships – Credit cards/Hotels and frequent flier miles Core Competencies – World classed leader. Firms product focus
41	Industry level strategies Information partnerships Non competitive companies join forces without merging to develop strategically valuable customer options Competitive forces model New entrants into the market Substitute products Traditional competition in Industry Now broadened by Industry Sets Auto manufactures need to complete with other transportation industries
42	COMPETITIVE FORCES MODEL
43	COMPETITIVE FORCES MODEL
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