1 Management Information Systems - Class Note # 4 (Chap-3) Prof. Yuan-Shyi Peter Chiu Feb. 2012.

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Management Information Systems - Class Note # 4 (Chap-3)

Prof. Yuan-Shyi Peter Chiu Feb. 2012

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Information Systems, Organizations, Information Systems, Organizations, Management, and StrategyManagement, and Strategy

3.1 Organizations & Information System3.1 Organizations & Information System

3.2 The Changing Role of Information 3.2 The Changing Role of Information Systems in Organizations Systems in Organizations

3.3 Managers, Decision Making, and 3.3 Managers, Decision Making, and Information Systems Information Systems

3.4 Information Systems and Business 3.4 Information Systems and Business Strategy Strategy

Chap. 3

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Technical Definition:

Stable, Formal, Social Structure

Takes Resources From Environment

Processes Them

To Produce Outputs

ORGANIZATION

4Fig 3-2: The Technical view of Organizations .


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Behavioral Definition :

Collection Of

Rights, Privileges, Obligations,Responsibilities

Delicately Balanced

Conflict Resolution


ORGANIZATION

6Fig 3-1: The Two-way relationship b/w Organizations and I.S.


MEDIATING FACTORS:MEDIATING FACTORS: Environment Environment Culture CultureStructure Structure Standard Procedures Standard ProceduresBusiness ProcessesBusiness ProcessesPolitics Politics Management Management Decisions ChanceDecisions Chance

ORGANIZATIONSORGANIZATIONS INFORMATION INFORMATION TECHNOLOGYTECHNOLOGY

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Structural Characteristics of All Organizations

Clear Division Of Labor Hierarchy Explicit Rules & Procedures Impartial Judgments Technical Qualifications Maximum Organizational Efficiency


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Common Features of Organizations

Formal Structure

Standard Operating Procedures

Politics

Culture


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Unique Features of Organizations

Organizational Types

Environments, Goals, Power

Constituencies, Function

Leadership, Tasks

Technology

Business Processes


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Organization & Its Environment


Figure 3-4

11Table 3-3: Summary of Salient Features of Organizations.


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Fig 3-5: Information Technology Services.

3.2 The Changing Role of Info Systems In Organizations3.2 The Changing Role of Info Systems In Organizations

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How Information Systems affect Organizations

The Impact of Information Systems on The Impact of Information Systems on OrganizationOrganization

Reduces Operating costs

Reduces Organizational size – middle managers – clerical workers


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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


How Information Systems affect Organizations

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How Organizations Affect Information Systems ?

Decisions about The Role of information systems

Decisions about

The Computer Package : - Who delivers information technology services ?

Decisions aboutWhy information systems are built ?


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Fig 3-8: Organizational Resistance and the mutually adjusting relationship between technology and the organization.


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Internet & Organizations

The internet increase the

■ Accessibility

■ Storage ■ Distribution of Info & Knowledge

For organizations ■ Lowering the transaction and agency

costs


◆

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Role Of Managers

Classical Descriptions of Management Describe functions-

plan, organize, coordinate, decide, control

Behavioral Models

Based on observations of managers on the job

3.3 Managers, Decision Making, and Information Systems3.3 Managers, Decision Making, and Information Systems

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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

What Managers Do ?


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Managerial Roles: Mintzberg (1971)

Interpersonal roles Figurehead

Leader

Liaison

Informational roles Nerve center

Disseminator

spokesperson


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Managerial Roles: Mintzberg (1971)

Decisional roles

Entrepreneur

Disturbance handler

Resource allocator

Negotiator


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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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Levels of Decision MakingLevels of Decision Making

Operationalcontrol

Operationalcontrol

Knowledge-level decision

making

Knowledge-level decision

making

Managementcontrol

Managementcontrol

Strategicdecisionmaking

Strategicdecisionmaking


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Decisions are classified as:Decisions are classified as:

Unstructured:Unstructured: Non routineNon routine, decision maker provides , decision maker provides

judgment, evaluation, and insightsjudgment, evaluation, and insights into into problem definition, problem definition, no agreed-upon no agreed-upon procedureprocedure for decision making for decision making

Structured:Structured: Repetitive, routine, handled using a definite Repetitive, routine, handled using a definite procedureprocedure


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Fig. 3-9: Different kinds of information systems at the various organization levels support different types of decisions.

TPS

OAS MIS

KWS

DSS

ESS

ORGANIZATIONAL LEVELTYPE OFDECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS RECEIVABLE

ELECTRONIC PRODUCTIONSCHEDULING COST OVERRUNS

SEMI- BUDGETSTRUCTURED PREPARATION

PROJECTSCHEDULING

FACILITYLOCATION

UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTSNEW MARKETS


27Fig 3-10: The decision making process.


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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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Management ChallengesManagement Challenges

Unstructured nature of important decisions

Diversity of managerial roles

Complexity of decision making


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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 .

3.4 Information Systems and Business Strategy3.4 Information Systems and Business Strategy

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Fig. 3-15: Porter’s competitive forces model


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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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Four basic Competitive StrategiesFour basic Competitive Strategies

Product

Differentiation

Product

Differentiation

Focused

Differentiation

Focused

Differentiation

Tight Linkages

to customers& suppliers

Tight Linkages

to customers& suppliers

Low-cost

producer

Low-cost

producer

New & UniqueProducts and

Services•ATM by Citibank•C-M-A by Merrill

Lynch

New Market Nichesfor specialized

Products or Services

•Sears Roebuck•American Express

“Lock” customers &Suppliers ;

Raises SwitchingCosts

• Federal Express• Baxter International

• Wizard by Avis• C-R-S by Wal-Mart• Yield mgmt by Airlines


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Data-mining Analysis of large pools of data to find patterns and patterns and

rulesrules that can be used to guide decision making and to predict future behaviorto predict future behavior.

Switching Costs The expense a customer or company incursThe expense a customer or company incurs in lost

time and expenditure of resources when changing when changing fromfrom one supplier supplier or system to a competing supplier or system.


Competitive forces model

35Fig. 3-13: Stockless inventory compared to traditional and just-

in-time supply methods.


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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 ActivitiesPrimary Activities

Activities most directly related to the production and distribution of a firm’s products or services .

Support ActivitiesSupport 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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Figure 3-11

38Figure 3-14

Business-Level StrategyBusiness-Level Strategy


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Strategic Strategic Information Information

SystemsSystems

Strategic Strategic Information Information

SystemsSystems

Competitive Forces Model

The Value Chain Model


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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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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 ?


What managers should do ?

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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?

~ THE END ~~ THE END ~

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1 Management Information Systems - Class Note # 4 (Chap-3) Prof. Yuan-Shyi Peter Chiu Feb. 2012.

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