Mis chapter 3

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Management Information Systems - - Chap. 3

By: Filmon HabtemichaelBy: Filmon Habtemichael

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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

Capital and labor (the primary production factors provided by the environment) are transformed by the firm through the production process into products and services (outputs to the environment).

The products and services are consumed by the environment, which supplies additional capital and labor as inputs in the feedback loop.

This definition of organizations is powerful and simple, but it is not very descriptive or even predictive of real-world organizations

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Technical Microeconomic Definition:

5Fig 3-2: The Technical view of Organizations .


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Behavioral Definition : A collection of rights, privileges, obligations, and

responsibilities that is delicately balanced over a period of time through conflict and conflict resolution

Collection Of Rights, Privileges, Obligations,

Responsibilities

Delicately Balanced

Conflict Resolution


How do these definitions of organizations relate to information system technology? A technical view of organizations encourages us to focus on the way inputs are

combined into outputs when technology changes are introduced into the company. Technological change requires changes in who owns and controls information, who has the right to access and update that information, and who makes decisions about whom, when, and how.

But the more realistic behavioral definition of an organization suggests that building new information systems or rebuilding old ones involves much more than a technical rearrangement of machines or workers—that some information systems change the organizational balance of rights, privileges, obligations, responsibilities, and feelings that has been established over a long period of time.

The technical and behavioral definitions of organizations are not contradictory. Indeed, they complement each other: The technical definition tells us how thousands of firms in competitive markets combine capital, labor, and information technology, whereas the behavioral model takes us inside the individual firm to see how that technology affects the organization’s inner workings.

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8Fig 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

Organizational environments Organizations and environments have a reciprocal

relationship Organizations are open to, and dependent on, the social and

physical environment Organizations can influence their environments

Alliances to political process, Advertise to influence customers Environments generally change faster than organizations Information systems can be an instrument of

environmental scanning, act as a lens The inertia in the SOP, the political conflicts, and the threat to closely held

cultural values inhibit change

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Organization & Its Environment


Figure 3-4

Organizational politics Divergent viewpoints lead on resource, reward and

punishment Results in struggle, competition, & conflict Political resistance greatly hampers organizational

change Significant changes in goals, procedures,

productivity, and personnel are politically charged and will elicit serious political opposition.

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Organizational culture Encompasses set of assumptions that define goal

and product What products the organization should produce How and where it should be produced For whom the products should be produced

May be powerful unifying force as well as restraint on change

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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(Particular ways in which work is organized,

coordinated, and focused to produce a valuable products and services


Adhocracy – a selectively

decentralized form of

organization thatemphasizes the

support staff andmutual adjustment

among people

Simple Structure – acentralized form oforganization that

emphasizes the upperechelon and direct

supervision

Machine Bureaucracy – a moderately

decentralized form oforganization thatemphasizes the

technical staff andstandardization of

work processes

Divisional Form – amoderately decentralized

form of organization that emphasizes the

middle level and standardization of outputs

ProfessionalBureaucracy –a decentralized

form oforganization thatemphasizes theoperating level

and standardizationof skills

Structural Configurations

ofOrganizations

Kyle P

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Mintzberg’s five types of organizational structure

18Table 3-3: Summary of Salient Features of Organizations.


19Fig 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 ? 3.3 Managers, Decision Making, and Information Systems3.3 Managers, Decision Making, and Information Systems

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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 ?

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

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Levels of Decision Making

Operationalcontrol

Knowledge-level decision

making

Managementcontrol

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


33Fig. 3-9: Different kinds of information systems at the various

organization levels support different types of decisions.

TPSOAS 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


34Fig 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 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 Strategies

Product

Differentiation

Focused

Differentiation

Tight Linkagesto customers& suppliers

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

42Fig. 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

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Business-Level StrategyBusiness-Level Strategy


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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 ?

Date post:	12-Feb-2017
Category:	Technology
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