3
INFORMATION
SYSTEMS,
ORGANIZATIONS,
MANAGEMENT,
AND STRATEGY
3.1
Prof Jess Role @ UEAB 2012
LEARNING OBJECTIVES
• IDENTIFY SALIENT CHARACTERISTICS
OF ORGANIZATIONS
• ANALYZE RELATIONSHIP BETWEEN
INFO SYSTEM & ORGANIZATIONS
*
3.2
Prof Jess Role @ UEAB 2012
LEARNING OBJECTIVES
• CONTRAST THEORIES OF
ORGANIZATIONS
• DESCRIBE DECISION PROCESSES
• EVALUATE ROLE OF INFORMATION
SYSTEMS IN SUPPORTING
BUSINESS STRATEGY
*
3.3
Prof Jess Role @ UEAB 2012
MANAGEMENT CHALLENGES
• ORGANIZATIONS & INFORMATION
SYSTEMS
• CHANGING ROLES OF SYSTEMS IN
ORGANIZATIONS
• MANAGERS, DECISION MAKING &
INFORMATION SYSTEMS
• INFORMATION SYSTEMS & BUSINESS
STRATEGY
*
3.4
Prof Jess Role @ UEAB 2012
MANAGEMENT CHALLENGES
1. SUSTAINABILITY OF
COMPETITIVE ADVANTAGE
2. FITTING TECHNOLOGY &
ORGANIZATION
*
3.5
Prof Jess Role @ UEAB 2012
ORGANIZATIONS & INFORMATION
TECHNOLOGY
ORGANIZATIONS
MEDIATING FACTORS:
Environment
Culture
Structure
Standard Procedures
Politics
Management Decisions
Chance
3.6
Prof Jess Role @ UEAB 2012
INFORMATION
TECHNOLOGY
CEO
ORGANIZATION
VP
VP
TECHNICAL DEFINITION:
STABLE, FORMAL STRUCTURE
• TAKES RESOURCES FROM
ENVIRONMENT AND PROCESSES
THEM TO PRODUCE OUTPUTS
*
3.7
Prof Jess Role @ UEAB 2012
VP
TECHNICAL MICROECONOMIC DEFINITION
OF ORGANIZATION
ORGANIZATION
INPUTS FROM
ENVIRONMENT
3.8
Prof Jess Role @ UEAB 2012
PRODUCTION
PROCESS
OUTPUTS TO
ENVIRONMENT
ORGANIZATION
BEHAVIORAL DEFINITION:
COLLECTION OF:
• RIGHTS, PRIVILEGES,
OBLIGATIONS, RESPONSIBILITIES
• DELICATELY BALANCED
• CONFLICT RESOLUTION
*
3.9
Prof Jess Role @ UEAB 2012
STRUCTURE:
Hierarchy
Division of labor
Rules, Procedures
PROCESS:
Rights/Obligations
Privileges/Responsibilities
Values
Norms
People
3.10
Prof Jess Role @ UEAB 2012
ENVIRONMENTAL OUTPUTS
ENVIRONMENTAL RESOURCES
FORMAL ORGANIZATION
STRUCTURAL CHARACTERISTICS OF ALL
ORGANIZATIONS
•
•
•
•
•
•
CLEAR DIVISION OF LABOR
HIERARCHY
EXPLICIT RULES & PROCEDURES
IMPARTIAL JUDGMENTS
TECHNICAL QUALIFICATIONS
MAXIMUM ORGANIZATIONAL
EFFICIENCY
*
3.11
Prof Jess Role @ UEAB 2012
COMMON FEATURES OF
ORGANIZATIONS
• FORMAL STRUCTURE
• STANDARD OPERATING
PROCEDURES
• POLITICS
• CULTURE
*
3.12
Prof Jess Role @ UEAB 2012
UNIQUE FEATURES OF
ORGANIZATIONS
•
•
•
•
•
•
ORGANIZATIONAL TYPES
ENVIRONMENTS, GOALS, POWER
CONSTITUENCIES, FUNCTION
LEADERSHIP, TASKS
TECHNOLOGY
BUSINESS PROCESSES
*
3.13
Prof Jess Role @ UEAB 2012
ORGANIZATIONAL STRUCTURES
• ENTREPRENEURIAL: Startup business
• MACHINE BUREAUCRACY: Mid-sized
manufacturing firm
• DIVISIONALIZED BUREAUCRACY:
Fortune 500
• PROFESSIONAL BUREAUCRACY: Law
firms, hospitals
• ADHOCRACY: Consulting firm
*
3.14
Prof Jess Role @ UEAB 2012
ORGANIZATION & ITS ENVIRONMENT
THE ENVIRONMENT:
RESOURCES & CONSTRAINTS
GOVERNMENTS
COMPETITORS
THE FIRM
FINANCIAL INSTITUTIONS
CULTURE
KNOWLEDGE
TECHNOLOGY
3.15
Prof Jess Role @ UEAB 2012
INFORMATION SYSTEMS
INFORMATION SYSTEMS DEPARTMENT
• PROGRAMMERS: Write software
• SYSTEMS ANALYSTS: Translate
business problems into solutions
• IS MANAGERS: Department leaders
• END USERS: Department reps for
whom applications are
developed
*
3.16
Prof Jess Role @ UEAB 2012
THE ORGANIZATION
SENIOR MANAGEMENT
MAJOR END-USERS (DIVISIONS)
INFORMATION SYSTEMS DEPARTMENT
Information System Specialists:
CIO
IT Infrastructure:
Hardware, Software
Networks
3.17
Prof Jess Role @ UEAB 2012
Data
Managers
System Analysts
System Developers
Programmers
Network Specialists
Database Administrator
Clerical
HOW INFO SYSTEMS
AFFECT ORGANIZATIONS
• MICROECONOMIC MODEL: Info
technology is a factor of production,
like capital & labor
• TRANSACTION COST THEORY:
Firms attempt to minimize
transaction costs internally &
externally
*
3.18
Prof Jess Role @ UEAB 2012
HOW INFO SYSTEMS
AFFECT ORGANIZATIONS
• AGENCY THEORY: Firm is nexus of
contracts among self-interested parties
requiring supervision
• BEHAVIORAL THEORIES: Info systems
could change hierarchy of decision
making; reduce need for middle
management & clerical support; distribute
information
*
3.19
Prof Jess Role @ UEAB 2012
IMPLEMENTING CHANGE
TASK
RESISTANCE
TECHNOLOGY
PEOPLE
MUTUAL
ADJUSTMENT
STRUCTURE
3.20
Prof Jess Role @ UEAB 2012
INTERNET & ORGANIZATIONS
• E-mail communication
• Electronic handbooks published &
revised
• Interactive training classes
• Employees review, update personal
data
*
3.21
Prof Jess Role @ UEAB 2012
ROLE OF MANAGERS
• CLASSICAL: Describe functionsplan, organize, coordinate, decide,
control
• BEHAVIORAL: Based on
observations of managers on the job
*
3.22
Prof Jess Role @ UEAB 2012
INFO SYSTEMS, LEVELS, DECISIONS
ORGANIZATIONAL LEVEL
TYPE OF
DECISION
STRUCTURED
OPERATIONAL
KNOWLEDGE
MANAGEMENT
STRATEGIC
ACCOUNTS
RECEIVABLE
TPS
ELECTRONIC
SCHEDULING
OAS
SEMISTRUCTURED
PRODUCTION
COST OVERRUNS
MIS
BUDGET
PREPARATION
PROJECT
SCHEDULING
DSS
KWS
UNSTRUCTURED
3.23
Prof Jess Role @ UEAB 2012
PRODUCT DESIGN
FACILITY
LOCATION
ESS
NEW PRODUCTS
NEW MARKETS
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
*
3.24
Prof Jess Role @ UEAB 2012
INDIVIDUAL MODELS OF
DECISION MAKING
• RATIONAL: Comprehensive
rationality; evaluate all alternatives
• SYSTEMATIC: Structured, formal
method
• INTUITIVE: Trial & error, unstructured,
multiple approach
*
3.25
Prof Jess Role @ UEAB 2012
ORGANIZATIONAL
MODELS OF
DECISION MAKING
• BUREAUCRATIC: Follow
standard operating procedures
(SOP)
• POLITICAL: Key groups compete and
bargain
• “GARBAGE CAN”: Organizations not
rational; solutions accidental
*
3.26
Prof Jess Role @ UEAB 2012
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
*
3.27
Prof Jess Role @ UEAB 2012
COMPETITIVE FORCES MODEL
SUBSTITUTE
PRODUCTS &
SERVICES
NEW MARKET
ENTRANTS
THE
INDUSTRY
THE FIRM
SUPPLIERS
3.28
Prof Jess Role @ UEAB 2012
TRADITIONAL
INDUSTRY
COMPETITORS
CUSTOMERS
COMPETITIVE FORCES MODEL
INDUSTRY
SET
NEW MARKET
ENTRANTS
INDUSTRY
1
SUBSTITUTE
PRODUCTS &
SERVICES
INDUSTRY
2
INDUSTRY COMPETITORS
INDUSTRY
3
SUPPLIERS
3.29
Prof Jess Role @ UEAB 2012
INDUSTRY
4
CUSTOMERS
Gallo Winery Leads by Blending
Business with Technology
E.&J. Gallo Winery is the largest wine producer
in the world, selling 65 million cases of wine in
2003. Despite its leadership position, Gallo must
be concerned about how its wines taste and
also about price and service. It has other large
competitors, including Allied Domecq, Kendall
Jackson, Beringer Blass, Robert Mondavi, and
several Australian winemakers, all of whom offer
good quality wines at low prices.
3.30
Prof Jess Role @ UEAB 2012
How does Gallo manage to maintain
its market leadership? The answer is
by continually finding new ways to
master the art and science of winemaking and by paying close
attention to the distribution and
marketing of wine worldwide. Gallo
very carefully manages its
production processes and
relationships with suppliers.
3.31
Prof Jess Role @ UEAB 2012
To make sure shoppers know exactly where to
find its products, Gallo implemented a product
accountability system at its regional distribution
centers. A complex warehouse management
system coordinates production, component
replenishment, inventory, and shipment,
integrating with Gallo's order and transportation
management systems. This system helped
shorten the order-to-door cycle by 10 days. All
orders are electronic, and payment is received
electronically. Gallo's distributors know exactly
what they are going to get by eligibility, product,
and place.
3.32
Prof Jess Role @ UEAB 2012
To further support close relationships with
distributors and retailers, a system called
Gallo Edge helps retail customers such as
Albertsons and Wal-Mart manage
wine placement and profitability in their
stores. Gallo Edge analyzes Wal-Mart's
data about Gallo sales to produce a bybottle profitability analysis so that WalMart buyers can see which products are
selling quickly, which aren't, and whether
they are making money on products. Gallo
never sees the results-the data are WalMart's, but Gallo clearly benefits from
providing this service.
3.33
Prof Jess Role @ UEAB 2012
Gallo is updating a production control
system called Gallo Wine Manager to
help management evaluate the
relationship between wine taste and
costs. Because
Gallo sells 95 different brands of wine in a
variety of price ranges, from everyday
table wine to very expensive wine, it
wants to be able to understand the cost
of
each blend. This system lets winemakers
see the cost impact of any winemaking
3.34
recipe.
Prof Jess Role @ UEAB 2012
3.35
Prof Jess Role @ UEAB 2012
INFORMATION
SYSTEMS,
ORGANIZATIONS,
MANAGEMENT,
AND STRATEGY
3.36
Prof Jess Role @ UEAB 2012