Management Information
Systems - Class Note # 4 (Chap-3)
Prof. Yuan-Shyi Peter Chiu
Feb. 2012
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Chap. 3
Information Systems, Organizations,
Management, and Strategy
3.1 Organizations & Information System
3.2 The Changing Role of Information
Systems in Organizations
3.3 Managers, Decision Making, and
Information Systems
3.4 Information Systems and Business
Strategy
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3.1 Organizations & Information System
ORGANIZATION
 Technical Definition:
Stable, Formal, Social Structure
 Takes Resources From
Environment
 Processes Them
 To Produce Outputs
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3.1 Organizations & Information System
Fig 3-2: The Technical view of Organizations .
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3.1 Organizations & Information System
ORGANIZATION
 Behavioral Definition :
Collection Of
 Rights, Privileges, Obligations,
Responsibilities
 Delicately Balanced
 Conflict Resolution
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3.1 Organizations & Information System
ORGANIZATIONS
MEDIATING FACTORS:
Environment
Culture
Structure
Standard Procedures
Business Processes
Politics
Management Decisions
Chance
INFORMATION
TECHNOLOGY
Fig 3-1: The Two-way relationship b/w Organizations and I.S.
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3.1 Organizations & Information System
Structural Characteristics of All
Organizations

Clear Division Of Labor

Hierarchy

Explicit Rules & Procedures

Impartial Judgments

Technical Qualifications

Maximum Organizational Efficiency
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3.1 Organizations & Information System
Common Features of Organizations

Formal Structure

Standard Operating Procedures

Politics

Culture
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3.1 Organizations & Information System
Unique Features of Organizations

Organizational Types

Environments, Goals, Power

Constituencies, Function

Leadership, Tasks

Technology

Business Processes
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3.1 Organizations & Information System
Organization & Its Environment
Figure 3-4
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3.1 Organizations & Information System
Table 3-3: Summary of Salient Features of Organizations.
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3.2 The Changing Role of Info Systems In Organizations
Fig 3-5: Information Technology Services.
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3.2 The Changing Role of Info Systems In Organizations
How Information Systems affect Organizations
The Impact of Information Systems on
Organization
 Reduces
 Operating costs
 Reduces
 Organizational size
– middle managers
– clerical workers
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3.2 The Changing Role of Info Systems In Organizations
How Information Systems affect Organizations
 Changes
 Organizational Structure
– decentralize
– less reliance on SOPs
 Increase
 Information and knowledge workers
 Self- guided workers
– information access: automated,
timeliness, and accuracy
 Shortens
 Decision Making Process
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3.2 The Changing Role of Info Systems In Organizations
How Organizations Affect Information Systems ?

Decisions about
The Role of information systems

Decisions about
The Computer Package :
- Who delivers information technology services ?

Decisions about
Why information systems are built ?
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3.2 The Changing Role of Info Systems In Organizations
Fig 3-8: Organizational Resistance and the mutually adjusting
relationship between technology and the organization.
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3.2 The Changing Role of Info Systems In Organizations
Internet & Organizations
 The internet increase the
■
■
■
Accessibility
Storage
Distribution of Info & Knowledge
 For organizations
■
Lowering the transaction and agency
costs
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3.3 Managers, Decision Making, and Information Systems
Role Of Managers
 Classical Descriptions of Management
Describe functionsplan, organize, coordinate, decide,
control
 Behavioral Models
Based on observations of managers
on the job
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3.3 Managers, Decision Making, and Information Systems
What Managers Do ?

Behavioral model of management
activities :
 High-volume, High-speed work
 Variety, Fragmentation, Brevity
 Issue preference current, ad hoc,
specific
 Contacts, complex web of interactions
 Strong preference for verbal media
 Control of the agenda
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3.3 Managers, Decision Making, and Information Systems
Managerial Roles:
Mintzberg (1971)
 Interpersonal roles
 Figurehead
 Leader
 Liaison
 Informational roles
 Nerve center
 Disseminator
 spokesperson
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3.3 Managers, Decision Making, and Information Systems
Managerial Roles:
Mintzberg (1971)
 Decisional roles
 Entrepreneur
 Disturbance handler
 Resource allocator
 Negotiator
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3.3 Managers, Decision Making, and Information Systems
◇
How information systems can benefit
managers ?
 What managers do ?
 What information managers need for
decision making ?
 How decisions are made ?
 What kinds of decisions can be
supported by formal information
systems ?
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3.3 Managers, Decision Making, and Information Systems
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3.3 Managers, Decision Making, and Information Systems
Levels of Decision Making
Operational
control
Knowledgelevel decision
making
Strategic
decision
making
Management
control
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3.3 Managers, Decision Making, and Information Systems
Decisions are classified as:

Unstructured:
Non routine, decision maker provides
judgment, evaluation, and insights into
problem definition, no agreed-upon
procedure for decision making

Structured:
Repetitive, routine, handled using a definite
procedure
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3.3 Managers, Decision Making, and Information Systems
ORGANIZATIONAL LEVEL
TYPE OF
DECISION
STRUCTURED
OPERATIONAL
KNOWLEDGE
STRATEGIC
ACCOUNTS
RECEIVABLE
ELECTRONIC
SCHEDULING
TPS
OAS
SEMISTRUCTURED
PRODUCTION
COST OVERRUNS
MIS
BUDGET
PREPARATION
PROJECT
SCHEDULING
DSS
KWS
UNSTRUCTURED
MANAGEMENT
PRODUCT DESIGN
FACILITY
LOCATION
ESS
NEW PRODUCTS
NEW MARKETS
Fig. 3-9: Different kinds of information systems at the various
organization levels support different types of decisions.
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3.3 Managers, Decision Making, and Information Systems
Fig 3-10: The decision making process.
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3.3 Managers, Decision Making, and Information Systems
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
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3.3 Managers, Decision Making, and Information Systems
Management Challenges
Unstructured nature of important decisions
Diversity of managerial roles
Complexity of decision making
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3.4
Information Systems and Business Strategy
Strategic Information Systems
( S.I.S )
 Computer systems at any level of the
organization that change
The goals, operations, products, services,
or environmental relationships, to
help the organization gain a competitive
advantage .
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3.4
Information Systems and Business Strategy
Fig. 3-15: Porter’s competitive
forces model
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3.4
Information Systems and Business Strategy
Competitive forces model
 Model used to describe the interaction
of external influences, specially threats
and opportunities, that affect an
organization’s strategy and ability to
compete.
◆
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3.4
Information Systems and Business Strategy
Four basic Competitive Strategies
Product
Focused
Differentiation
Differentiation
New & Unique
Products and
Services
New Market Niches
for specialized
Products or Services
•ATM by Citibank
•C-M-A by Merrill
Lynch
•Sears Roebuck
•American Express
Tight Linkages
to customers
& suppliers
“Lock” customers &
Suppliers ;
Raises Switching
Costs
• Federal Express
• Baxter International
Low-cost
producer
• Wizard by Avis
• C-R-S by
Wal-Mart
• Yield mgmt by
Airlines
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3.4
Information Systems and Business Strategy
Competitive forces model
 Data-mining
Analysis of large pools of data to find patterns and
rules that can be used to guide decision making
and to predict future behavior.
 Switching Costs
The expense a customer or company incurs in lost
time and expenditure of resources when changing
from one supplier or system to a competing
supplier or system.
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3.4
Information Systems and Business Strategy
Fig. 3-13: Stockless inventory compared to traditional and justin-time supply methods.
◆
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3.4
Information Systems and Business Strategy
Value Chain model
 Model that highlights the primary or support
activities that add a margin of value to a
firm’s products or services where
information systems can best be applied to
achieve a competitive advantage.
 Primary Activities
Activities most directly related to the production and distribution
of a firm’s products or services .
 Support Activities
Activities that make the delivery of a firm’s primary activities
possible. Consists of the organization’s infrastructure, human
resources, technology, and procurement.
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3.4
Information Systems and Business Strategy
Figure 3-11
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3.4
Information Systems and Business Strategy
Business-Level Strategy
Figure 3-14
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3.4
Information Systems and Business Strategy
Competitive
The Value
Forces Model Chain Model
Strategic
Information
Systems
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3.4
Information Systems and Business Strategy
What managers should do ?
 How is the industry currently using
information systems ?
 Can significant strategic opportunities
be gained by introducing new
information system technology ?
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3.4
Information Systems and Business Strategy
What managers should do ?
 What is the current business strategic
plan, and how does that plan mesh
with the current strategy for
information services ?
 Does the firm have the technology and
capital required to develop a strategic
information systems initiative ?
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HOMEWORK CHAP.3
# 1 What are the Mediating Factors between organizations and
Information Technology ?
# 2 Describe briefly what common features and unique features of
organizations are?
# 3 Describe how information systems affect organizations; and
how organizations affect information systems.
# 8 What specific managerial roles can information systems
support ? Where are information systems particularly
strong in supporting managers, and where are they weak?
# 9 What are the four stages of decision making described by
Simon?
# 12 What is a strategic information system?
# 13 Describe what competitive forces model and value chain
model are? Name four basic competitive strategies.
# 14 What managers should do after understanding the impact of
strategic information system?
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