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3. INFORMATION SYSTEMS, ORGANIZATIONS,

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Title: 3. INFORMATION SYSTEMS, ORGANIZATIONS,


1
3
INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT,
AND STRATEGY
2
LEARNING OBJECTIVES
  • IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONS
  • ANALYZE RELATIONSHIP BETWEEN INFO SYSTEM
    ORGANIZATIONS

3
LEARNING OBJECTIVES
  • CONTRAST THEORIES OF ORGANIZATIONS
  • DESCRIBE DECISION PROCESSES
  • EVALUATE ROLE OF INFORMATION SYSTEMS IN
    SUPPORTING BUSINESS STRATEGY

4
MANAGEMENT CHALLENGES
  • ORGANIZATIONS INFORMATION SYSTEMS
  • CHANGING ROLES OF SYSTEMS IN ORGANIZATIONS
  • MANAGERS, DECISION MAKING INFORMATION SYSTEMS
  • INFORMATION SYSTEMS BUSINESS STRATEGY

5
MANAGEMENT CHALLENGES
  • 1. SUSTAINABILITY OF COMPETITIVE ADVANTAGE
  • 2. FITTING TECHNOLOGY ORGANIZATION

6
ORGANIZATIONS INFORMATION TECHNOLOGY
MEDIATING FACTORS Environment
Culture Structure
Standard Procedures Politics
Management Decisions
Chance
7
ORGANIZATION
  • TECHNICAL DEFINITION
  • STABLE, FORMAL STRUCTURE
  • TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES
    THEM TO PRODUCE OUTPUTS

8
TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATION
9
ORGANIZATION
  • BEHAVIORAL DEFINITION
  • COLLECTION OF
  • RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIES
  • DELICATELY BALANCED
  • CONFLICT RESOLUTION

10
FORMAL ORGANIZATION
  • STRUCTURE Hierarchy Division of
    labor Rules, Procedures
  • PROCESS Rights/Obligations
    Privileges/Responsibilities Values Norms
    People

11
STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS
  • CLEAR DIVISION OF LABOR
  • HIERARCHY
  • EXPLICIT RULES PROCEDURES
  • IMPARTIAL JUDGMENTS
  • TECHNICAL QUALIFICATIONS
  • MAXIMUM ORGANIZATIONAL EFFICIENCY

12
COMMON FEATURES OF ORGANIZATIONS
  • FORMAL STRUCTURE
  • STANDARD OPERATING PROCEDURES
  • POLITICS
  • CULTURE

13
UNIQUE FEATURES OF ORGANIZATIONS
  • ORGANIZATIONAL TYPES
  • ENVIRONMENTS, GOALS, POWER
  • CONSTITUENCIES, FUNCTION
  • LEADERSHIP, TASKS
  • TECHNOLOGY
  • BUSINESS PROCESSES

14
ORGANIZATIONAL STRUCTURES
  • ENTREPRENEURIAL Startup business
  • MACHINE BUREAUCRACY Mid-sized manufacturing firm
  • DIVISIONALIZED BUREAUCRACY Fortune 500
  • PROFESSIONAL BUREAUCRACY Law firms, hospitals
  • ADHOCRACY Consulting firm

15
ORGANIZATION ITS ENVIRONMENT
16
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

17
THE ORGANIZATION
SENIOR MANAGEMENT
MAJOR END-USERS (DIVISIONS)
18
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

19
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

20
IMPLEMENTING CHANGE
21
INTERNET ORGANIZATIONS
  • E-mail communication
  • Electronic handbooks published revised
  • Interactive training classes
  • Employees review, update personal data

22
ROLE OF MANAGERS
  • CLASSICAL Describe functions- plan, organize,
    coordinate, decide, control
  • BEHAVIORAL Based on observations of managers on
    the job

23
INFO SYSTEMS, LEVELS, DECISIONS
24
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

25
INDIVIDUAL MODELS OF DECISION MAKING
  • RATIONAL Comprehensive rationality evaluate
    all alternatives
  • SYSTEMATIC Structured, formal method
  • INTUITIVE Trial error, unstructured, multiple
    approach

26
ORGANIZATIONAL MODELS OF DECISION MAKING
  • BUREAUCRATIC Follow standard operating
    procedures (SOP)
  • POLITICAL Key groups compete and bargain
  • GARBAGE CAN Organizations not rational
    solutions accidental

27
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

28
COMPETITIVE FORCES MODEL
29
COMPETITIVE FORCES MODEL
30
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.
31
How does Gallo manage to maintain its market
leadership? The answer is by continually finding
new ways to master the art and science of
wine-making and by paying close attention to the
distribution and marketing of wine worldwide.
Gallo very carefully manages its production
processes and relationships with suppliers.
32
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.
33
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 by-bottle profitability analysis so
that Wal-Mart 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 Wal- Mart's, but Gallo
clearly benefits from providing this service.
34
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 recipe.
35
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36
INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT,
AND STRATEGY
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