Information Systems in Organizations

ORGANIZATIONS AND INFORMATION SYSTEMS

Organization
A formal collection of people and other resources
established to accomplish a set of goals

GENERAL MODEL OF AN ORGANIZATION

ORGANIZATIONS STRUCTURES
Organizational structure
Organizational subunits and the way they are related to the overall organization

Types
Traditional organizational structure
Major department heads report to a president or top-level
manager

CONTINUE

Hierarchical organizational structure

Series of levels Those at high levels have more power and authority
within an organization

Virtual organizational structure

An organizational structure with a reduced number of
layers of management

Managers and employees work in collaborative way

CONTINUE

Project organizational structure

An organization structure centred on major
products or services

Contrast with traditional structure

Team organizational structure

An organizational structure centred on work
teams or groups

OTHER ORGANIZATIONAL STRUCTURES

Multidimensional organizational structure

A structure that may incorporate several
structures at the same time

ORGANIZATIONAL CULTURE AND CHANGE

Culture
A set of major understandings and assumptions shared
by a group

Organizational culture
The major understandings and assumptions for a
business, a corporation, or an organization

ORGANIZATIONAL CULTURE AND CHANGE

Organizational change
Deals with how for-profit and non-profit organizations
plan for, implement, and handle change

Organizational learning
The way organizations adapt to new conditions or alter
their practices over time

MODELS OF CHANGE

Change model
A representation of change theories developed by
Kurt Lewin and Edgar Schein in 1969

Three-stage approach
Unfreezing Moving Refreezing

Change Model

REENGINEERING

Also called Process redesign

The radical redesign of business processes,
organizational structures, information systems, and values of the organization to achieve a breakthrough in business results

For example, to
Reduce delivery time Increase product and service quality Improve customer satisfaction Increase revenues and profitability

RULES
Reengineering requires finding and vigorously
challenging old rules
Rule Small orders held until full truckload No order accepted until credit approved Original rationale Reduce delivery costs Reduce potential for bad debt Potential problem Customer deliver is delayed Customer service is poor Perception of limited product selection

All product decisions Reduce number of made at headquarters items in inventory

OTHER MODELS

Continuous improvement
Constantly seeking ways to improve the business
processes to add value to products and services

CONTINUOUS IMPROVEMENT VS. REENGINEERING

Reengineering Strong action to solve serious problem Continuous Improvement Routine action

Driven by senior executives

Broad in scope; cuts across organizations Goal to achieve a major breakthrough IS integral to the solution

Worker-driven
Narrow in scope Continuous, gradual IS provides data to guide

TOTAL QUALITY MANAGEMENT

Quality
The ability of a product (including service) to meet or
exceed customer expectations

TQM
A collection of approaches, tools, and techniques, that
offers a commitment to quality throughout the organization

OUTSOURCING AND DOWNSIZING

Outsourcing

Contracting with outside professional services to meet

specific business needs E.g., advertising, hiring

Downsizing

Reducing the number of employees to cut costs Also called rightsizing May have serious side effects
lost time, waning productivity

E.g., low employee morale, a need for expensive consultants,

COMPETITIVE ADVANTAGE

Competitive advantage
A position, product, service, etc., within a business that
improves a position within a market with respect to competitors

Porters Five force model of competitive advantage

Identifies factors that lead to competitiveness

Substitute Products

Buyer Power

Rivalry

Supplier Power

New Entrants
Porters Five-force Model

STRATEGIC PLANNING FOR COMPETITIVE ADVANTAGE

Four techniques: Strategic alliances (aka strategic partnerships) Creating new goods or services Improving existing goods or services Using information systems for strategic
purposes

1.

2.

3.

4.

Strategic alliance An agreement between two or more companies that involves the joint production and distribution of goods and services E.g., Chrysler + Daimler Benz Creating new goods or services A company may become stagnant without the introduction of new goods and/or services E.g., Compaq, Dell Improving existing goods or services Small variations to existing goods or services, and/or complete modifications E.g., light foods Using information systems for strategic

PERFORMANCE-BASED INFORMATION SYSTEMS

Productivity

A measure of the output achieved divided

by the input required

Output achieved Productivity = Input required

RETURN ON INVESTMENTS (ROI) AND THE VALUE OF IS

Return on investment (ROI)

A measure of IS value that represents
the additional profits or benefits that are generated as a percentage of the investment in information systems technology

MEASURES OF IS VALUE

Earnings growth Market share Total cost Customer awareness and satisfaction