3

INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

3.1

Prof Jess Role @ UEAB 2012

LEARNING OBJECTIVES

• •

IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONS ANALYZE RELATIONSHIP BETWEEN INFO SYSTEM & ORGANIZATIONS * 3.2

Prof Jess Role @ UEAB 2012

LEARNING OBJECTIVES

• • •

CONTRAST THEORIES OF ORGANIZATIONS DESCRIBE DECISION PROCESSES EVALUATE ROLE OF INFORMATION SYSTEMS IN SUPPORTING BUSINESS STRATEGY * 3.3

Prof Jess Role @ UEAB 2012

MANAGEMENT CHALLENGES

• • • •

ORGANIZATIONS & INFORMATION SYSTEMS CHANGING ROLES OF SYSTEMS IN ORGANIZATIONS MANAGERS, DECISION MAKING & INFORMATION SYSTEMS INFORMATION SYSTEMS & BUSINESS STRATEGY * 3.4

Prof Jess Role @ UEAB 2012

MANAGEMENT CHALLENGES

1. SUSTAINABILITY OF COMPETITIVE ADVANTAGE 2. FITTING TECHNOLOGY & ORGANIZATION * 3.5

Prof Jess Role @ UEAB 2012

ORGANIZATIONS & INFORMATION TECHNOLOGY

ORGANIZATIONS MEDIATING FACTORS: Environment Culture Structure Standard Procedures INFORMATION Politics TECHNOLOGY Management Decisions Chance 3.6

Prof Jess Role @ UEAB 2012

CEO

ORGANIZATION

TECHNICAL DEFINITION:

•

STABLE, FORMAL STRUCTURE TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTS * VP VP VP 3.7

Prof Jess Role @ UEAB 2012

TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATION

ORGANIZATION INPUTS FROM ENVIRONMENT PRODUCTION PROCESS OUTPUTS TO ENVIRONMENT 3.8

Prof Jess Role @ UEAB 2012

ORGANIZATION

BEHAVIORAL DEFINITION:

• • •

COLLECTION OF: RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIES DELICATELY BALANCED CONFLICT RESOLUTION * 3.9

Prof Jess Role @ UEAB 2012

FORMAL ORGANIZATION

STRUCTURE: Hierarchy Division of labor Rules, Procedures PROCESS: Rights/Obligations Privileges/Responsibilities Values Norms People 3.10

Prof Jess Role @ UEAB 2012

STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS • • • • • •

CLEAR DIVISION OF LABOR HIERARCHY EXPLICIT RULES & PROCEDURES IMPARTIAL JUDGMENTS TECHNICAL QUALIFICATIONS MAXIMUM ORGANIZATIONAL EFFICIENCY * 3.11

Prof Jess Role @ UEAB 2012

COMMON FEATURES OF ORGANIZATIONS • •

FORMAL STRUCTURE STANDARD OPERATING PROCEDURES

• •

POLITICS CULTURE * 3.12

Prof Jess Role @ UEAB 2012

UNIQUE FEATURES OF ORGANIZATIONS • • • • • •

ORGANIZATIONAL TYPES ENVIRONMENTS, GOALS, POWER CONSTITUENCIES, FUNCTION LEADERSHIP, TASKS TECHNOLOGY BUSINESS PROCESSES * 3.13

Prof Jess Role @ UEAB 2012

ORGANIZATIONAL STRUCTURES • • • • •

ENTREPRENEURIAL: Startup business MACHINE BUREAUCRACY: Mid-sized manufacturing firm DIVISIONALIZED BUREAUCRACY: Fortune 500 PROFESSIONAL BUREAUCRACY: Law firms, hospitals ADHOCRACY: Consulting firm * 3.14

Prof Jess Role @ UEAB 2012

ORGANIZATION & ITS ENVIRONMENT

THE ENVIRONMENT: RESOURCES & CONSTRAINTS GOVERNMENTS COMPETITORS FINANCIAL INSTITUTIONS CULTURE KNOWLEDGE TECHNOLOGY THE FIRM INFORMATION SYSTEMS 3.15

Prof Jess Role @ UEAB 2012

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 * 3.16

Prof Jess Role @ UEAB 2012

THE ORGANIZATION SENIOR MANAGEMENT MAJOR END-USERS (DIVISIONS) INFORMATION SYSTEMS DEPARTMENT IT Infrastructure: Hardware, Software Networks Information System Specialists: CIO Data Managers System Analysts System Developers Programmers Network Specialists Database Administrator Clerical 3.17

Prof Jess Role @ UEAB 2012

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 * 3.18

Prof Jess Role @ UEAB 2012

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 * 3.19

Prof Jess Role @ UEAB 2012

IMPLEMENTING CHANGE

TASK RESISTANCE TECHNOLOGY 3.20

Prof Jess Role @ UEAB 2012

STRUCTURE PEOPLE MUTUAL ADJUSTMENT

INTERNET & ORGANIZATIONS

• •

E-mail communication Electronic handbooks published & revised

• •

Interactive training classes Employees review, update personal data * 3.21

Prof Jess Role @ UEAB 2012

ROLE OF MANAGERS

•

CLASSICAL: Describe functions plan, organize, coordinate, decide, control

•

BEHAVIORAL: Based on observations of managers on the job * 3.22

Prof Jess Role @ UEAB 2012

INFO SYSTEMS, LEVELS, DECISIONS TYPE OF DECISION STRUCTURED SEMI STRUCTURED UNSTRUCTURED OPERATIONAL ORGANIZATIONAL LEVEL KNOWLEDGE MANAGEMENT ACCOUNTS RECEIVABLE ELECTRONIC SCHEDULING PRODUCTION COST OVERRUNS TPS OAS MIS BUDGET PREPARATION PROJECT SCHEDULING DSS FACILITY LOCATION KWS PRODUCT DESIGN STRATEGIC ESS NEW PRODUCTS NEW MARKETS 3.23

Prof Jess Role @ UEAB 2012

• • • • 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 * 3.24

Prof Jess Role @ UEAB 2012

INDIVIDUAL MODELS OF DECISION MAKING • • •

RATIONAL: Comprehensive rationality; evaluate all alternatives SYSTEMATIC: Structured, formal method INTUITIVE: Trial & error, unstructured, multiple approach * 3.25

Prof Jess Role @ UEAB 2012

ORGANIZATIONAL MODELS OF DECISION MAKING

• • •

BUREAUCRATIC: Follow standard operating procedures (SOP) POLITICAL: Key groups compete and bargain “ GARBAGE CAN ” : Organizations not rational; solutions accidental * 3.26

Prof Jess Role @ UEAB 2012

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 * 3.27

Prof Jess Role @ UEAB 2012

COMPETITIVE

FORCES MODEL NEW MARKET ENTRANTS THE FIRM THE INDUSTRY TRADITIONAL INDUSTRY COMPETITORS SUBSTITUTE PRODUCTS & SERVICES CUSTOMERS SUPPLIERS 3.28

Prof Jess Role @ UEAB 2012

COMPETITIVE

FORCES MODEL NEW MARKET ENTRANTS INDUSTRY SET SUBSTITUTE PRODUCTS & SERVICES INDUSTRY 1 INDUSTRY 2 INDUSTRY COMPETITORS INDUSTRY 3 INDUSTRY 4 SUPPLIERS CUSTOMERS 3.29

Prof Jess Role @ UEAB 2012

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.

3.30

Prof Jess Role @ UEAB 2012

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.

3.31

Prof Jess Role @ UEAB 2012

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.

3.32

Prof Jess Role @ UEAB 2012

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.

3.33

Prof Jess Role @ UEAB 2012

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

Prof Jess Role @ UEAB 2012

3.35

Prof Jess Role @ UEAB 2012

INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

3.36

Prof Jess Role @ UEAB 2012