The Organization
Organizational Fundamentals
In order to analyze and design a proper
information system, the analyst needs to understand
the organization - the way it is doing its work and the
people involved in that organization.
The organization should be comprehended as
systems composed of some levels of management, an
organizational design and an organizational culture.
Organization as a System
Organizations are normally imagined as a system
designed to accomplish predetermined goals and
objectives through people and other resources that
they employ.
Organizations consist of smaller inter-related
sub-systems serving specific tasks including
accounting, marketing, production, data processing
and management.
These smaller sub-systems are interrelated as
well as interdependent and reintegrate through
various mechanisms to form the whole organization.
It is of prime importance to understand the
organization as a whole in order to ascertain
information requirements properly and to design
appropriate information system.
A detailed examination of the sub-systems of
the organization is also required to learn how they
function in building the whole organization.
INTER-RELATEDNESS AND INTERDEPENDENCE
OF SUB-SYSTEMS
All systems and sub-systems are interrelated and inter-dependent. This is an
important fact both for the organization and the
analyst because when any element of the
system is changed or eliminated, the rest of the
system's elements are also affected.
Organizational boundaries
In every organization,
two types of boundaries can be identified:
Internal
These are set by the higher management and
DSS. These can be changed from time to time.
External
These are set by the environment in which the
organization exists.
Organizational boundaries exist in a continuum
ranging from extremely permeable to almost
impermeable.
In order to survive and further develop,
organizations must import people, materials and
information and export their services, products and
information to the outside world without making the
boundaries too lax to endanger the organization's
competitive edge and overall performance.
System Feedback for Planning and Control
Organizations, as systems, use planning
and control through feedback to manage their
resources effectively.
This feedback helps administrators
formulate more specific goals for the
organization, thus, improving the performance.
An ideal system is one that self-corrects or
self-regulates in such a way that decisions on
typical occurrences are not required.
An organization's environment is anything
external to its boundaries. Numerous environments
for an organization can be defined which may affect
its functioning.
Although changes in environmental status can
be planned for, they often can not be directly
controlled by the organization.
Some of the environments that influence the
establishment and development of an organization
are:
Community environment
Depends on where the organization is physically
located. Important factors shaping this environment
are the size of its population, its demographic profile,
education level and average income.
Economical environment
This is set by market factors such as competition
with other organizations.
Political Environment
This includes the rules set by the government.
Openness and Closedness of an Organization
Openness refers to the free flow of information
within the organization. Sub-systems such as creative or
art departments are often characterized as open with a
free flow of ideas amongst the other sub-systems.
Closedness refers to a check on the information
flow. This can be done by restricting access to information
on "need to know" basis or a complete iron curtain. An
example could be a defense organization working on topsecret plans.
Operational management
This is at the bottom of the three-tiered
management. The Operational Managers make
structured decisions using predetermined rules that
have predictable outcomes when implemented
correctly.
These managers work in the most stable
decision making environment. They need internal,
repetitive, low-level, quantitative information and
make decisions that affect implementation in work
scheduling such as inventory control, shipping,
receiving and control of processes like production etc.
They have little use of the external information that
allows future projections or creation of "what-if"
scenarios.
The decisions made by the operational managers
tend to be repetitive and come from an analytic activity
by these managers rather than heuristic approach.
Operational management checks and makes sure
that the basic tasks of the organization are accomplished
to the rules and regulations provided by the organization.
Middle management
This level of management concerns itself with
managing the specific departments of an
organization.
These middle managers try to organize the tasks
of an organization as efficiently as possible.
They try to convert main goals that are defined
by the higher level into a form where they can be
implemented.
These managers, who both plan and control,
are in need of both short and long-term information
in real time, thus, depending on MIS to provide
summary reports to monitor and control the level
below.
Middle managers make short term planning and
controlled decisions about how resources should be
allocated to best meet the organization's objectives
and only some of these decisions are structured; the
rest semi-structured.
For this, they have a high requirement for
historical information, along with information that
allows prediction of future events and simulation of
numerous possible scenarios.
Middle managers experience very little
stable environment while making a
decision.
Their decisions range all the way
from forecasting future resources
requirements to solving problems of
the employees.
Strategic management
Also called Higher Management. It consists of
the president and vice-president(s), which are the
backbone of an organization.
They make policies and future planning that
affects the whole organization.
They need the information provided by the DSS
and ESS to help them plan and budget the
organizational resources.
This level of management sometimes looks
outwards from the organization to gather information
that will help them formulate new strategies that will
guide the middle and operational management in the
months and years ahead.
This level works in an uncertain and unstable
decision making environment because these
managers most often make one-time decisions that
are more heuristic rather than analytic.
Since the task of these strategic planners
demands projections into the uncertain future, they
have a high need for information of a qualitative,
predictive nature and information that allows creation
of many different "what-if" scenarios.