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Course DT2491

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Different leadership styles. 15. Differences in Organisations (2) Different goals; ... Different leadership styles; ... A large classic bureaucracy. ... – PowerPoint PPT presentation

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Title: Course DT2491


1
Course - DT249/1
  • Subject - Information Systems in Organisations

Semester 2, Week 2
MODERN ORGANISATIONS AND THEIR STRUCTURE MODELS
OF INFORMATION SYSTEMS ORGANISATIONAL DEPARTMENTS
AND INDIVIDUAL ROLES
2
Textbooks?
  • The Laudon and Laudon book, Management
    Information Systems (Seventh Edition)
  • Chapters 1 (1.1) and
  • all of Ch. 3

3
The Organisation
  • An organisation is a person or group of people
    united for some purpose
  • to deliver a product, a service, information...
  • Many organisations are established for trade to
    generate profit, but not necessarily. They may be
    charities or government departments. They still
    need management and information systems!

4
Organisations
  • Organisations process and use information in
    order to produce outputs for an environment.
  • Most organisations are not designed primarily for
    processing information - they deliver services or
    products. Examples
  • a newspaper delivers news and opinions,
  • The Department of Social and Family Affairs
    deliver pension and unemployment services.

5
Organisations (2)
  • The previous definition of an organisation
    implies that introducing new technology changes
    the way inputs are combined into outputs,
  • i.e. a technical rearrangement of machines or
    workers.
  • This has the effect of changing procedures and a
    lot of information (… information systems).

6
Organisations (3)
Organisation
Structure Hierarchy Division of Labour Rules,
procedures Process Rights/obligations privileges/
responsibilities Values, Norms, People
Environmental outputs
Environmental resources
7
Organisations (4)
  • Appropriate information systems need to be
    developed to support the activities of an
    organisation
  • day to day activities,
  • longer term goals and objectives,
  • strategic management.
  • An organisation needs information about
  • its own internal activities and operations,
  • the markets and industry within which it operates.

8
Types of Organisation
  • There are four commonly recognised structures for
    organisations that are sometimes defined as
    types
  • Functional
  • Product (sometimes referred to as Project as an
    alternative)
  • Bureaucratic
  • Matrix

9
Types of Organisation (2)
  • Functional - aligned with the basic managerial
    functions, such as Purchasing, Sales,
    Personnel…(i.e. structured with Departments)
  • These are often hierarchical. It may be difficult
    to produce systems that span several functions
    (information) systems may overlap departments but
    may need to be different.
  • Product - activities are grouped by output or
    products.
  • These often deliver specific expertise but also
    duplication of activities if individuals are
    working independently.

10
Types of Organisation (3)
  • Bureaucratic having many detailed rules and
    procedures
  • These are often hierarchical, mechanistic and
    impersonal.
  • Matrix a hybrid of Functional and Product.

11
Types of Organisation (4)
  • Functional diagram

12
Types of Organisation (5)
  • Product diagram

13
Types of Organisation (6)
  • Matrix diagram

14
Differences in Organisations
  • Organisations may have (usually do have)
    different structures or shapes.
  • They have
  • Different goals
  • Benefit different groups
  • Different leadership styles

15
Differences in Organisations (2)
  • Different goals
  • coercive (military, prison), utilitarian
    (businesses) normative (religious groups,
    universities).
  • Benefit different groups
  • members (credit union), clients (welfare agency),
    owners (business).
  • Different leadership styles
  • democratic, laissez-faire (leadership absent),
    technocratic (technology based), bureaucratic
    (rule based), authoritarian.

16
Differences in Organisations (3)
  • Organisations exist in different environments
  • turbulence (rapid technology change), complexity
    (multiple competitors).
  • Perform different tasks
  • programmed routine tasks (inventory reorder),
    semi programmed (production scheduling),
    unprogrammed (selecting strategy, e.g.
    consulting).
  • Use different techniques technology.
  • craft (woodworker), batch routine (assembly
    line), continuous process (oil refinery).

17
Types of Organisations
  • Example- entrepreneurial structure
  • A simple structure…
  • Young, small entrepreneurial firms in fast
    changing environments.
  • Dominated by entrepreneur and managed by single
    CEO (Chief Executive Officer).
  • Information systems are sometimes poorly planned
    and significantly behind fast-breaking production
    developments. (Usually because there is no
    information Systems professional at work
    continually.)

18
Entrepreneurial Structure
The focus is on sales, rather than innovation
19
Types of Organisations (2)
  • Machine bureaucracy
  • A large classic bureaucracy.
  • It exists in slow changing environment, producing
    standardised products.
  • It is dominated by strategic senior management
    that centralised information flow and decision
    authority.
  • It is likely to be kept in functional divisions
    (manufacturing, finance, marketing, human
    resources… - departments.)
  • Information systems tend to be large-scale, well
    planned but limited to such functions as
    accounting, finance, simple planning and
    administration.

20
Machine Bureaucracy
Board of Directors
CEO
Vice President (VP)
Administration
Exec VP
Operations
Engineering
Personnel
Financial
Marketing
RD
Facilities Planning
RD Research and Development
  • E.g. Semi state organisations, An Post,
    Electricity Supply Board (ESB), RTE

21
Types of Organisations (3)
  • Divisionalised bureaucracy
  • A combination of many machine bureaucracies, each
    producing a different product or service, topped
    by a central headquarters.
  • Suited to slow changing environments and
    standarised products.
  • Organisations are divisionalised so tend to
    operate in different environments (i.e. for each
    product or service).
  • Information systems are elaborate and complex to
    support central headquarters financial planning,
    reporting requirements and operational
    requirements of the divisions.

22
Divisionalised Bureaucracy
President
Planning
Legal
Finance
Division 1
Division 2
Division 3
Purchasing
Purchasing
Purchasing
Engineering
Engineering
Engineering
Manufacturing
Manufacturing
Manufacturing
Marketing
Marketing
Marketing
23
Types of Organisations (4)
  • Professional bureaucracy
  • Example a knowledge-based organisation selling
    professional service.
  • Suitable for slow changing environments and skill
    sets.
  • Dominated by Department Heads with weak
    centralised authority.
  • Professional members create product or service.
    (Consider systems analysts and programmers of a
    software company.)
  • Example problem poor central administration
    system while working with sophisticated
    knowledge-work support systems.

24
Professional Bureaucracy The Hospital Example
Board of Trustees
Executive Committee
Council of Physicians
Exec Director
Director of Admin Services
Director of Hosp Services
Director of Nursing
Director of Prof Services
Medicine
Surgery
Radiology
Pediatrics
  • Other examples law firms, accounting firms,
    schools.

25
Types of Organisations (5)
  • Adhocracy the structure is arbitrary
  • Example a task force organisation.
  • Characterised by large groups of specialists
    organised into short-lived, multidisciplinary
    task forces focusing on new products.
  • High tech firm that must respond to rapidly
    changing environments or markets (or derive money
    from government contracts).
  • Innovative and flexible but with weak central
    management.
  • Information systems might be poorly developed at
    the central level, but often advanced within task
    force.

26
Adhocracy The Oil Refinery Example
Board of Directors
Resource Development
Chemicals Materials Petroleum
Products
Exploration
New Resources
Chemicals
Logisitics
Marketing
Production
Artic Pipelines
Transportatn
Coordination
Administration Services
Corp Affairs
Empl Relations
Treasurer
IT services
Purchasing
Comptroller
Medical
Build Admin
Law
Research
Travel Arrang
Env Protection
Tax
Bus Dev
  • Other examples research orgs, aerospace
    companies, medical, electronic, biomedical orgs.

27
Business Organisations
  • Business organisations vary in size from huge
    international companies to private individuals,
    including
  • manufacturing and commercial companies,
  • central and local government departments,
  • financial institutions,
  • administrative organisations,
  • service agencies,

28
Business Organisations (2)
  • Product flow is the flow of raw materials to
    finished goods.
  • Information flow is the creation and movement of
    the administrative and operational documentation
    necessary for product flow and for providing a
    service.
  • Business Information Systems support information
    flow and provide information to companies to
    assist in achieving their aims.

29
Processes within an Organisation
Supplier
  • A Business Cycle example

materials
order
Purchasing
order
materials
Customer
Production
Sales
delivery
product
30
Organisation Functional Areas/Processes
  • Main work areas inherent in most companies are
  • Accounts (including billing, collection, payment,
    payroll)
  • Personnel (including recruitment, professional
    development, etcetera.)
  • Sales (and Marketing)
  • Purchasing
  • Inventory / stock control
  • Production

31
Example - Payroll
  • Payroll accounting
  • Dealing with payment of employees.
  • Requires a personnel administration system which
    provides information on employees personal
    details and terms of employment.
  • Requires a payroll system
  • computation of gross earnings
  • computation of deductions and net earnings
  • accounting (distribution and updating of ledgers)

32
Example Payroll (2)
  • Typical documents (electronic or otherwise)
  • Time reports/time cards
  • Payslip
  • Bank direct credit list - Electronic Funds
    Transfer (EFT)
  • Cheques
  • Accounting reports - deduction and cost analyses
  • End of year documents (such as P60s)
  • Audit and control
  • Employee wage history

33
Example - Sales
  • Order Control ensures that customer orders are
    received, processed and fulfilled efficiently and
    in organised way.
  • Sales Accounting deals with monetary side of
    customers orders, invoicing, payment etc.
  • Typical functions
  • Dealing with enquiries re price, availability…
  • Checking credit ratings,
  • Validating orders,
  • Handling customer complaints,
  • Checking the status of orders.

34
Example Sales (2)
  • Typical documents
  • Customer orders
  • Sales invoice
  • Sales statements (for account customers)
  • Sales analysis reports
  • These may be used to forecast sales and plan
    marketing activities.

35
Example - Marketing
  • Marketing is the provision of goods and services
    to meet customer needs.
  • Typical functions
  • Monitoring competitors,
  • Liaising with existing customers and clients,
  • Market research,
  • Identification and follow up of leads,
  • Product or service promotion.

36
Example - Purchasing
  • Purchasing ensures that materials, equipment,
    tools, etc are available at the right time, right
    place and at the right price.
  • Typical functions
  • Obtaining quotations from prospective suppliers,
  • Placing orders with suppliers and monitoring
    delivery,
  • Checking and handling goods received,
  • Passing details of goods received to accounts,
  • Checking supplier invoices before payment,
  • Maintaining supplier details re price, quality
    etc.

37
Example Purchasing (2)
  • Typical documents
  • Purchase order (PO)
  • Good Received Note (GRN)
  • Delivery docket
  • Purchase invoice
  • Cheque or credit transfer (EFT)
  • Purchase records (supplier records)
  • Purchase analyses - measure supplier efficiency,
    costs per work area, job costing…

38
Example - Stock Control
  • Stock (inventory) control is the monitoring and
    decisions regarding the items held in stock.
  • Stock is the buffer between supply (production or
    external entities) and demand (customers or
    internal entities if the product is used
    on-site.)
  • Stock costs money it is important to minimise
    the money held in stock and still meet demand
    this often leads to JIT inventory control.
  • Just In Time - JIT - computer systems monitor
    supply and demand continuously and trigger rapid
    resupply when necessary. This requires close
    cooperation with suppliers.

39
Example - Stock Control (2)
  • Typical functions
  • Maintenance of stock level records
  • Issue of stock
  • Identifying and monitoring reorder levels
  • Managing outstanding orders
  • Stock valuation (stock check) and reconciliation
  • Information systems complexity depends on the
    number of stock items, turnover rate and the
    number of dispersed stores.

40
Example - Stores Control
  • Stores control is the methods of operating the
    stores or warehouses, i.e. storage space,
    handling equipment, security, packaging,
    labelling.
  • It is determined by
  • size, weight and value of stock items
  • flammability, stability (e.g. shelf-life) and
    identification.

41
Example - Stores Control (2)
  • Typical documents
  • Materials request,
  • Purchase requisition
  • Inventory transfer

42
Example - Production
  • Production designs and develops the product.
  • Production planning covers what to make and how
    to make it.
  • Production control ensures planning is achieved
    by monitoring and control of machines, processes
    and people involved in production.

43
Example Production (2)
  • These areas generate a huge amount of raw data
    and require considerable amount of information to
    control.
  • Production is an area subject to considerable
    automation
  • CIM - Computer Integrated Manufacture
  • CAD/CAM Computer Aided Design/Computer-Aided
    Manufacture

44
Example Production (3)
  • Information required for production control
  • Material requirements per time period (Man
    Hours or Unit Time).
  • Quantities of components and subassemblies per
    period.
  • Amounts of equipment, machines, tools required
    per stage.
  • Amount of labour category required per stage.
  • Progress of each job, reason for delays.

45
Example Distribution
  • Distribution receives the finished goods from
    production and ships the product to the customer.

46
Information Flow
Customers
Employees
time cards
payment
customer invoice
sales orders
Accounts
payslip, P60
shipping notice
Sales
sales notice
supplier invoice
shipping order
supplier payment
Production
transfer notice
Purchasing
Distribution
MR
purchase requisition
Inventory
supplier invoice
goods received Notice (GRN)
PO
Purchase Order (PO)
inventory transfer
Typical Manufacturing Organisation Information
Flow
Receiving/Goods Inwards
Suppliers
delivery docket
MR manufacturing requisition
47
Information Flow (2)
Customers
Employees
timecards
customer invoice
payslips, P60
Payroll
Billing
payment
Payment
customer payment notice
sales notice
Collection
payment
GRN
supplier invoice
Sales
Suppliers
Purchasing
Receiving
Information Flow within Accounts
48
Management of Organisations
  • The traditional view models organisations as
    having three levels of management
  • Strategic
  • Tactical
  • Operational

49
Management of Organisations (2)
  • Strategic level management is responsible for
    overall strategy and direction -
  • typically, top level management.
  • Tactical or middle level management ensure
    policies for achieving the strategic objectives
    are carried out -
  • typically, heads of departments.
  • Operational level management are responsible for
    the day to day activities -
  • typically, foremen, supervisors, team leaders…

50
Business Information
Information types Strategic (trends,
patterns, decision making)
Information types Middle/Tactical
(summary, prediction and control)
Information types Operational (summary, short
term, real time)
51
Information for Strategic Management
  • Strategic information
  • Answers questions like What markets should we be
    in? or Where do we locate the new factory?
  • Is highly selective and summarised and usually in
    graphical form
  • Likely to originate outside the organisation
  • Has value for a longer period
  • Requires high degree of experience and judgement
    in its application
  • …/ continued

52
Information for Strategic Management (2)
  • Decisions based on this information tend to be
    unstructured.
  • Example - patterns of expenditure from market
    surveys or trade publications, market
    availability and penetration figures.

53
Management Information
  • Management Information for monitoring and
    control
  • Answers questions like Of what (product/service)
    are we selling most? or Are the sales team
    meeting their targets?
  • Needs to be condensed and summarised information
    in the form of reports, graphs and tables,
    forecasts.
  • Is usually derived from information collected at
    operational level.
  • …/ cont

54
Management Information (2)
  • Is shorter term information (months), concerned
    with the departmental level.
  • Example - sales analyses, sales forecasts,
    production schedules.

55
Operational Information
  • Operational Data for enabling and recording
    routine business activity
  • Answers questions like What is the stock level
    for a given product? or Can this customer be
    given credit?
  • Is very detailed, highly specific and generated
    internally.
  • Is short term (hourly, weekly), used for
    decisions concerned with immediate situation.
  • …/ cont

56
Operational Information (2)
  • Structured decisions
  • Examples - stock levels, customer order details,
    overdue purchase orders.

57
Information Purpose and Example of Systems
  • Strategic Management
  • modelling and simulation for decision support,
  • financial models and profit margin change
    simulations.
  • Middle Management
  • monitoring and control of current information,
  • production planning, sales forecasting, market
    research.
  • Operational Management
  • transaction processing,
  • Stock Control, Payroll, Accounting

58
Characteristics of Information Required
Operational Middle Strategic Management
Management Management
Time Scales Level of Detail Source Degree
of Uncertainty Frequency
Immediate Highly detailed Internal Certain
Frequent
Long Term Summarised External Uncertain In
frequent
59
MIS, DSS, EIS Systems
  • Management Information System (MIS) - computer
    system that provides management information
  • A user will normally have to access one or more
    databases to get the information required.
  • Decision Support System (DSS) supports decision
    making i.e. provides information on demand (ad
    hoc) and as simply as possible.

60
MIS Management Information Systems
Screen-dump example of an MIS interface
61
DSS Decision Support Systems
Screen-dump example of a DSS interface
62
EIS Executive Information Systems
Screen-dump example of an EIS interface
63
MIS, DSS, EIS Systems (2)
  • Simple DSS systems provide information for
    manager to make decision - Sophisticated systems
    analyse data according to algorithms and produce
    recommendations.
  • It is necessary for DSS to have access to a wide
    range of software and large corporate databases
    so that facilities needed to make decision can be
    accessible.

64
MIS, DSS, EIS Systems (3)
  • MIS/DSS usually have graphical interface - need
    to provide information in simple and easily
    assimilated presentation
  • graphs and histograms,
  • drill down and hot spots features.
  • Simulation DSS - allows interactive modelling
  • values can be changed to see effect on business.
  • What if… scenarios.

65
MIS, DSS, EIS Systems (4)
  • Executive Information Systems (EIS) are
    integrated systems to suit senior management
  • senior management historically have been
    resistant to systems - but this has changed a lot
    in recent years out of necessity.

66
MIS, DSS, EIS Systems (4)
  • Executive Information Systems provide
  • decision support, (DSS)
  • information retrieval from corporate databases,
    ad hoc reporting,
  • powerful display and multimedia capabilities,
  • presentation facilities, e.g. PowerPoint,
  • communications, e.g. e-mail, fax,
  • organisational support, electronic diary, etc.
  • The user interface is important. (Executives do
    not hack.)

67
Where to Next?
  • The management of organisations often has several
    levels.
  • Each level deals with somewhat different
    information and data so they have different
    information systems requirements. The structure
    of those systems can be identified and designed
    by the process of systems analysis.
  • By the way, what is information? What is a
    system? What are Management Information Systems?
    We can look at these things next.
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