chapter 3: information systems, oganizations, management and strategy
DESCRIPTION
© 2003 by Prentice HallTRANSCRIPT
3.1 © 2003 by Prentice Hall
33
INFORMATION INFORMATION SYSTEMS, SYSTEMS,
ORGANIZATIONS, ORGANIZATIONS, MANAGEMENT, MANAGEMENT, AND STRATEGYAND STRATEGY
Chapter
3.2 © 2003 by Prentice Hall
• What do managers need to know about What do managers need to know about organizations in order to build and use organizations in order to build and use information systems successfully?information systems successfully?
• What impact do information systems have What impact do information systems have on organizations?on organizations?
• How do information systems support the How do information systems support the activities of managers in organizations?activities of managers in organizations?
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
OBJECTIVES
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• How can businesses use information How can businesses use information systems for competitive advantage?systems for competitive advantage?
• Why is it so difficult to build successful Why is it so difficult to build successful information systems, including systems information systems, including systems that promote competitive advantage?that promote competitive advantage?
OBJECTIVES
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
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1.1. Sustainability of competitive advantageSustainability of competitive advantage
2. Fitting technology to the organization (or 2. Fitting technology to the organization (or vice-versa)vice-versa)
MANAGEMENT CHALLENGES
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
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ORGANIZATIONS AND INFORMATION SYSTEMS
Figure 3-1
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MEDIATING FACTORS:MEDIATING FACTORS: Environment Environment Culture CultureStructure Structure Standard Procedures Standard Procedures Politics Politics Management Management Decisions ChanceDecisions Chance
ORGANIZATIONSORGANIZATIONS INFORMATION INFORMATION TECHNOLOGYTECHNOLOGY
The Two-Way Relationship Between Organizations and Information Technology
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Organization:Organization:
• Stable, formal structureStable, formal structure
• Takes resources from environment and Takes resources from environment and processes them to produce outputsprocesses them to produce outputs
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
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Technical Microeconomic Definition of the Organization
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
Figure 3-2
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Behavioral definition of Organization: Behavioral definition of Organization:
• Collection of rights, privileges, obligations, Collection of rights, privileges, obligations, responsibilitiesresponsibilities
• Delicately balancedDelicately balanced
• Conflict resolutionConflict resolution
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
ORGANIZATIONS AND INFORMATION SYSTEMS
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
COMMON FEATURES OF ORGANIZATIONS
The Behavioral View of Organizations
Figure 3-3
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
• Organizations are bureaucracies that have Organizations are bureaucracies that have
certain structural featurescertain structural features
ORGANIZATIONS AND INFORMATION SYSTEMS
Common Features of Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Structural Characteristics of Organizations:Structural Characteristics of Organizations:
• Clear division of laborClear division of labor
• HierarchyHierarchy
• Explicit rules and proceduresExplicit rules and procedures
• Impartial judgmentsImpartial judgments
ORGANIZATIONS AND INFORMATION SYSTEMS
Common Features of Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Structural Characteristics of Organizations Structural Characteristics of Organizations (cont.):(cont.):
• Technical qualificationsTechnical qualifications
• Maximum organizational efficiencyMaximum organizational efficiency
ORGANIZATIONS AND INFORMATION SYSTEMS
Common Features of Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Standard Operating Procedures:Standard Operating Procedures:
• Precise rules, procedures, and practicesPrecise rules, procedures, and practices
• Enable organizations to cope with all Enable organizations to cope with all expected situationsexpected situations
ORGANIZATIONS AND INFORMATION SYSTEMS
Common Features of Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Organizational Politics:Organizational Politics:
• Divergent viewpoints leads to political Divergent viewpoints leads to political struggle, competition, and conflictstruggle, competition, and conflict
• Hamper organizational changeHamper organizational change
ORGANIZATIONS AND INFORMATION SYSTEMS
Common Features of Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Organizational Culture: a set of Organizational Culture: a set of
fundamental assumptions about:fundamental assumptions about:• What products the organization should What products the organization should
produceproduce
• How and where it should produce themHow and where it should produce them
• For whom they should be producedFor whom they should be produced
ORGANIZATIONS AND INFORMATION SYSTEMS
Common Features of Organizations
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All organizations have different:All organizations have different:• Structures/Organizational types Structures/Organizational types
• Goals Goals
• ConstituenciesConstituencies
• Leadership Styles, TasksLeadership Styles, Tasks
• Surrounding EnvironmentSurrounding Environment
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
ORGANIZATIONS & INFORMATION SYSTEMS
Unique Features of Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , organizations, Management, and StrategyChapter 3 Information Systems , organizations, Management, and Strategy
• Entrepreneurial:Entrepreneurial: Start up business Start up business
• Machine bureaucracy:Machine bureaucracy: Midsize manufacturing firm Midsize manufacturing firm
• Divisionalized bureaucracy:Divisionalized bureaucracy: Fortune 500 Fortune 500
• Professional bureaucracy:Professional bureaucracy: Law firms, hospitals, Law firms, hospitals, school systemsschool systems
• Adhocracy:Adhocracy: Consulting firm Consulting firm
ORGANIZATIONS & INFORMATION SYSTEMS
Organizational Structures
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-4
Organization and Its Environment
ORGANIZATIONS & INFORMATION SYSTEMS
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
• Ultimate goalUltimate goal
• Different groups and constituenciesDifferent groups and constituencies
• Nature of leadershipNature of leadership
• Tasks and technologyTasks and technology
ORGANIZATIONS AND INFORMATION SYSTEMS
Other Differences Among Organizations
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THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Information systems department:Information systems department:
• Formal organizational unitFormal organizational unit
• Responsible for information systems in Responsible for information systems in the organizationthe organization
Information Technology Infrastructure and Information Technology Services
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-5
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
Information Technology Services
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THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Includes specialists:Includes specialists:
• Programmers:Programmers: Highly trained, write Highly trained, write softwaresoftware
• Systems analysts:Systems analysts: Translate business Translate business problems into solutions, act as liaisons problems into solutions, act as liaisons between the information systems between the information systems department and rest of the organizationdepartment and rest of the organization
Information Technology Infrastructure and Information Technology Services
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THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Specialists (cont.):Specialists (cont.):• Information system managers: Information system managers: Leaders of Leaders of
various specialistsvarious specialists
• Chief information officer (CIO): Chief information officer (CIO): Senior Senior manager in charge of information systems manager in charge of information systems function in the firmfunction in the firm
• End users:End users: Department representatives outside Department representatives outside the information system department for whom the information system department for whom applications are developedapplications are developed
Information Technology Infrastructure and Information Technology Services
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Economic theoriesEconomic theories
• Information technology is a factor of Information technology is a factor of production, like capital and laborproduction, like capital and labor
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
How Information Systems Affect Organizations
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Transaction cost theory:Transaction cost theory: Firms can Firms can conduct marketplace transactions conduct marketplace transactions internally more cheaply to grow largerinternally more cheaply to grow larger
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
How Information Systems Affect Organizations
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Transaction Cost Theory
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-6
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
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• Agency theory:Agency theory: Firm is nexus of Firm is nexus of contracts among self-interested parties contracts among self-interested parties requiring supervisionrequiring supervision
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
How Information Systems Affect Organizations
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Agency Cost Theory
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-7
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
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Behavioral theories:Behavioral theories:
• Information technology could change hierarchy of Information technology could change hierarchy of decision makingdecision making
• Lower cost of information acquisitionLower cost of information acquisition
• Broadens the distribution of informationBroadens the distribution of information
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
How Information Systems Affect Organizations
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Virtual organization:Virtual organization:
• Task force networked organizationsTask force networked organizations
• Uses networks to link people, assets, and ideas Uses networks to link people, assets, and ideas to create and distribute products and services to create and distribute products and services without being limited to physical locationswithout being limited to physical locations
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
How Information Systems Affect Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-8
Implementing Change and Organizational Resistance
THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Classical model of management:Classical model of management:• Traditional description of managementTraditional description of management
• Focuses on formal functions: plan, Focuses on formal functions: plan, organize, coordinate, decide, controlorganize, coordinate, decide, control
Behavioral model of management:Behavioral model of management:• Describes management based on Describes management based on
observations of managers on the jobobservations of managers on the job
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
The Role of Managers in Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Managerial rolesManagerial roles
• Expectation of activities that managers Expectation of activities that managers should perform in an organizationshould perform in an organization
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
The Role of Managers in Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
CategoriesCategories• Interpersonal: Interpersonal: Managers act as figureheads Managers act as figureheads
and leaders and leaders
• Informational: Informational: Managers receive and Managers receive and disseminate critical information, nerve centersdisseminate critical information, nerve centers
• Decisional: Decisional: Managers initiate activities, Managers initiate activities, allocate resources, and negotiate conflictsallocate resources, and negotiate conflicts
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
The Role of Managers in Organizations
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Process of Decision MakingProcess of Decision Making
• Strategic Decision Making:Strategic Decision Making: Determines long-term objectives, Determines long-term objectives, resources, and policiesresources, and policies
• Management Control: Management Control: Monitors Monitors effective or efficient usage of resources effective or efficient usage of resources and performance of operational unitsand performance of operational units
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Managers and Decision Making
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
• Operational control:Operational control: Determines how to Determines how to perform specific tasks set by strategic and perform specific tasks set by strategic and middle-management decision makersmiddle-management decision makers
• Knowledge-level decision making: Knowledge-level decision making: Evaluates new ideas for products, Evaluates new ideas for products, services, ways to communicate new services, ways to communicate new knowledge, ways to distribute knowledge, ways to distribute informationinformation
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Managers and Decision Making
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Decisions are classified as:Decisions are classified as:
• Unstructured:Unstructured: Non routine, decision Non routine, decision maker provides judgment, evaluation, and maker provides judgment, evaluation, and insights into problem definition, no agreed-insights into problem definition, no agreed-upon procedure for decision makingupon procedure for decision making
• Structured:Structured: Repetitive, routine, handled Repetitive, routine, handled using a definite procedureusing a definite procedure
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Managers and Decision Making
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
TPSOAS MIS
KWS
DSS
ESS
Organizational LevelTYPE OFTYPE OFDECISIONDECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC
STRUCTURED ACCOUNTS RECEIVABLE
ELECTRONIC PRODUCTIONSCHEDULING COST OVERRUNS
SEMI- BUDGETSTRUCTURED PREPARATION
PROJECTSCHEDULING
FACILITYLOCATION
UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTSNEW MARKETS
Figure 3-9
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Different Kinds of Information Systems
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
• Intelligence:Intelligence: Collect information, identify Collect information, identify problemproblem
• Design:Design: Conceive alternative solution to a Conceive alternative solution to a problemproblem
• Choice:Choice: Select among the alternative solutions Select among the alternative solutions
• Implementation:Implementation: Put decision into effect and Put decision into effect and provide report on the progress of solutionprovide report on the progress of solution
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Stages of Decision Making
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-10
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Decision-Making Process
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• Rational:Rational: People, organizations, and People, organizations, and nations engage in consistent, value-nations engage in consistent, value-maximizing calculations or adaptations maximizing calculations or adaptations within certain constraintswithin certain constraints
• Cognitive style: Cognitive style: Underlying personality Underlying personality dispositions toward the treatment of dispositions toward the treatment of information, selection of alternatives, and information, selection of alternatives, and evaluation of consequencesevaluation of consequences
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Models of Decision Making
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• Systematic decision makers:Systematic decision makers: Cognitive style,Cognitive style, describes people who describes people who approach a problem by structuring it in approach a problem by structuring it in terms of some formal methodterms of some formal method
• Intuitive:Intuitive: Cognitive style, describes Cognitive style, describes people approaching a problem with people approaching a problem with multiple methods in an unstructured multiple methods in an unstructured mannermanner
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Models of Decision Making
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• Organizational models of decision Organizational models of decision making:making: Consider structural and political Consider structural and political characteristics of an organizationcharacteristics of an organization
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Models of Decision Making
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Factors to consider while planning aFactors to consider while planning anew system:new system:
• Organizational environment Organizational environment
• Organizational structure, hierarchy, Organizational structure, hierarchy, specialization, standard operating specialization, standard operating proceduresprocedures
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Implications for the Design and Understanding of Information Systems
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• Culture and politics of the organizationCulture and politics of the organization
• Type of organization and its style of Type of organization and its style of leadershipleadership
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Implications for the Design and Understanding of Information Systems
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• Groups affected by the system and the Groups affected by the system and the attitudes of workers who will be using the attitudes of workers who will be using the systemsystem
• Kinds of tasks, decisions, and business Kinds of tasks, decisions, and business processes, information system is processes, information system is designed to assistdesigned to assist
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Implications for the Design and Understanding of Information Systems
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Characteristics to be kept in mind Characteristics to be kept in mind
while designing systems:while designing systems:
• Flexibility and multiple options for Flexibility and multiple options for handling data and evaluating informationhandling data and evaluating information
• Capability to support a variety of styles, Capability to support a variety of styles, skills, and knowledge skills, and knowledge
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Implications for the Design and Understanding of Information Systems
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• Capability to keep track of many Capability to keep track of many alternatives and consequencesalternatives and consequences
• Sensitivity to the organization’s Sensitivity to the organization’s bureaucratic and political requirementsbureaucratic and political requirements
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
Implications for the Design and Understanding of Information Systems
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
• Computer system at any level of an Computer system at any level of an organization organization
• Changes goals, operations, products, Changes goals, operations, products, services, or environmental relationshipsservices, or environmental relationships
• Helps organization gain a competitive Helps organization gain a competitive advantageadvantage
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
What is Strategic Information System
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Digital firmsDigital firms
• Manage the supply chain by building Manage the supply chain by building efficient customer “sense and response” efficient customer “sense and response” systemssystems
• Participate in “value webs” to deliver new Participate in “value webs” to deliver new products and services products and services
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Business Level Strategy and the Value Chain Model
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Value Chain Model:Value Chain Model:
• Highlights the primary or support Highlights the primary or support activities adding a margin of value to activities adding a margin of value to products or servicesproducts or services
• Helps achieve a competitive advantageHelps achieve a competitive advantage
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Business Level Strategy and the Value Chain Model
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Primary Activities:Primary Activities: • Directly related to the production and Directly related to the production and
distribution of a firm’s products or servicesdistribution of a firm’s products or services
Support Activities:Support Activities:• Make the delivery of primary activities Make the delivery of primary activities
possiblepossible• Consist of the organization’s infrastructure, Consist of the organization’s infrastructure,
human resources, technology, and human resources, technology, and procurementprocurement
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Business Level Strategy and the Value Chain Model
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
INFORMATION SYSTEMS AND BUSINESS STRATEGY
Firm Value Chain
Figure 3-11
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Value Web:Value Web:
• Customer-driven network of independent Customer-driven network of independent firms firms
• Uses information technology to coordinate Uses information technology to coordinate value chains for collectively producing a value chains for collectively producing a product or service product or service
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Business Level Strategy and the Value Chain Model
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
INFORMATION SYSTEMS AND BUSINESS STRATEGY
The Value Web
Figure 3-12
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Product Differentiation:Product Differentiation:
• Competitive strategy Competitive strategy
• Creates brand loyalty by developing new Creates brand loyalty by developing new and unique products and services and unique products and services
• Products and services not easily Products and services not easily duplicated by competitorsduplicated by competitors
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Business Level Strategy and the Value Chain Model
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Focused Differentiation:Focused Differentiation:
• Competitive strategy Competitive strategy
• Enables development of new market Enables development of new market niches for specialized products or servicesniches for specialized products or services
• Helps businesses compete better than Helps businesses compete better than competitors in the target areascompetitors in the target areas
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Business Level Strategy and the Value Chain Model
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Efficient Customer Response System:Efficient Customer Response System:
• Directly links consumer behavior back to Directly links consumer behavior back to distribution, production, and supply distribution, production, and supply chainschains
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Supply Chain Management and Efficient Customer Response System
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Switching costs:Switching costs:
• Expense incurred by a customer or Expense incurred by a customer or company in terms of time and expenditure company in terms of time and expenditure of resources when changing from one of resources when changing from one supplier or system to anothersupplier or system to another
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Supply Chain Management and Efficient Customer Response System
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-13
INFORMATION SYSTEMS AND BUSINESS STRATEGY
Stockless Inventory Compared to Traditional and Just-in-time Supply Methods
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-14
INFORMATION SYSTEMS AND BUSINESS STRATEGY
Enhancing Core Competencies
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Core Competency:Core Competency:
• Activity at which a firm excels as a world-Activity at which a firm excels as a world-class leaderclass leader
• Information system encouraging the Information system encouraging the sharing of knowledge across business sharing of knowledge across business units enhances competencyunits enhances competency
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Firm-Level Strategy and Information Technology
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Information partnership:Information partnership:
• Cooperative alliance formed between two Cooperative alliance formed between two or more corporations for sharing or more corporations for sharing information to gain strategic advantageinformation to gain strategic advantage
• Help firms gain access to new customers, Help firms gain access to new customers, creating new opportunities for cross-creating new opportunities for cross-selling and targeting productsselling and targeting products
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Industry-Level Strategy and Information Systems
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
The competitive forces model:The competitive forces model:
• Describes the interaction of external Describes the interaction of external influences, specifically threats and influences, specifically threats and opportunities, affecting an organization’s opportunities, affecting an organization’s strategy and ability to competestrategy and ability to compete
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Industry-Level Strategy and Information Systems
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-15
INFORMATION SYSTEMS AND BUSINESS STRATEGY
Porter’s Competitive Forces Model
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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Figure 3-16
INFORMATION SYSTEMS AND BUSINESS STRATEGY
New Competitive Forces Model
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Network Economics:Network Economics:
• Model of strategic systems at the industry Model of strategic systems at the industry level level
• Based on the concept of a network Based on the concept of a network
• Adding another participant entails zero Adding another participant entails zero marginal costs but can create much larger marginal costs but can create much larger marginal gainmarginal gain
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Industry-Level Strategy and Information Systems
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INFORMATION SYSTEMS AND BUSINESS STRATEGY
Managing strategic transitions:Managing strategic transitions:
• Movement from one level of Movement from one level of sociotechnical system to anothersociotechnical system to another
• Required when adopting strategic Required when adopting strategic systems demanding changes in the social systems demanding changes in the social and technical elements of an organizationand technical elements of an organization
Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 3 Information Systems , Organizations, Management, and StrategyChapter 3 Information Systems , Organizations, Management, and Strategy
Using Systems for Competitive Advantage: Management Issues
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INFORMATION INFORMATION SYSTEMS, SYSTEMS,
ORGANIZATIONS, ORGANIZATIONS, MANAGEMENT, MANAGEMENT, AND STRATEGYAND STRATEGY
Chapter