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Chapter 2

Chapter 2. Information Systems in Organizations. Organizations and Information Systems. Organization A formal collection of people and other resources established to accomplish a set of goals. General Model of an Organization. (next slide). Value Chain.

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Chapter 2

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  1. Chapter 2 Information Systems in Organizations

  2. Organizations and Information Systems • Organization • A formal collection of people and other resources established to accomplish a set of goals

  3. General Model of an Organization • (next slide)

  4. Value Chain • Term coined by Michael Porter in a 1965 article in the Harvard Business Review • Def: a series of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service Schematic

  5. Organizations • Organizational structure • Organizational subunits and the way they are related to the overall organization • Traditional organizational structure • Major department heads report to a president or top-level manager Schematic

  6. S. Burry, President • Bailey,Legal counsel B. Wong, VP Accounting C.Rodrig,VP InformationSystems R. Henderson,VP Marketing K. Kelly,VP Production V. Cisborn,VP HumanResources S. SamuelSupervisor L. Bashran,Supervisor Traditional Organizational Structure

  7. Terminology (1) • Hierarchical organizational structure • See previous slide • Series of levels • Those at high levels have more power and authority within an organization • Flat organizational structure • An organizational structure with a reduced number of layers of management

  8. Terminology (2) • Empowerment • Giving employees and their managers more power, responsibility, and authority to make decisions, take certain actions, and have more control over their jobs

  9. Other Organizational Structures (1) Schematic • Project organizational structure • An organization structure centred on major products or services • Contrast with traditional structure • Team organizational structure • An organizational structure centred on work teams or groups

  10. B. Woods, PresidentAir & Aerospace Co. T. Walker, Senior VP,Aircraft Division W. Butler,Senior VP,Aerospace Division O. Teco,Senior VP, Communications &Satellite Division VP, Finance VP, Marketing VP, Production VP, Sales VP, Finance VP, Marketing VP, Production VP, Sales VP, Finance VP, Marketing VP, Production Project Organizational Structure

  11. Other Organizational Structures (2) • Multidimensional organizational structure • A structure that may incorporate several structures at the same time Schematic

  12. Multidimensional Organizational Structure

  13. Other Organizational Structures (3) • Advantages and disadvantages of different organizational structures • Read the book!

  14. Organizational Cultureand Change (1) • Culture • A set of major understandings and assumptions shared by a group • Organizational culture • The major understandings and assumptions for a business, a corporation, or an organization

  15. Organizational Cultureand Change (1) • Organizational change • Deals with how for-profit and non-profit organizations plan for, implement, and handle change • Organizational learning • The way organizations adapt to new conditions or alter their practices over time

  16. Models of Change • ‘Change model’ • A representation of change theories developed by Kurt Lewin and Edgar Schein in 1969 • Three-stage approach • Unfreezing • Moving • Refreezing Schematic

  17. Change Model

  18. Reengineering • Also called ‘Process redesign’ • The radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results • For example, to… • Reduce delivery time • Increase product and service quality • Improve customer satisfaction • Increase revenues and profitability

  19. Rules, Rules, Rules • Reengineering requires finding and vigorously challenging old rules

  20. Other Models • Continuous improvement • Constantly seeking ways to improve the business processes to add value to products and services

  21. Continuous Improvement vs.Reengineering

  22. Total Quality Management • Quality • The ability of a product (including service) to meet or exceed customer expectations • TQM • A collection of approaches, tools, and techniques, that offers a commitment to quality throughout the organization

  23. Outsourcing and Downsizing • Outsourcing • Contracting with outside professional services to meet specific business needs • E.g., advertising, hiring • Downsizing • Reducing the number of employees to cut costs • Also called ‘rightsizing’ • May have serious side effects • E.g., low employee morale, a need for expensive consultants, lost time, waning productivity

  24. Competitive Advantage • Competitive advantage • A position, product, service, etc., within a business that improves a position within a market with respect to competitors • Porter’s ‘Five force’ model of competitive advantage • Identifies factors that lead to competitiveness Schematic

  25. SubstituteProducts BuyerPower SupplierPower Rivalry NewEntrants Porter’s Five-force Model

  26. Strategic Planning for Competitive Advantage • Four techniques: • Strategic alliances (aka strategic partnerships) • Creating new goods or services • Improving existing goods or services • Using information systems for strategic purposes Next slide

  27. Strategic alliance • An agreement between two or more companies that involves the joint production and distribution of goods and services • E.g., Chrysler + Daimler Benz • Creating new goods or services • A company may become stagnant without the introduction of new goods and/or services • E.g., Compaq, Dell • Improving existing goods or services • Small variations to existing goods or services, and/or complete modifications • E.g., “light” foods • Using information systems for strategic purposes • IS for improving organizational effectiveness • E.g., SABRE (airline reservation system)

  28. Output achieved Input required Productivity = Performance-based Information Systems • Productivity • A measure of the output achieved divided by the input required

  29. Productivity • An example is given in the top paragraph on p. 65 • This is a bad example! • Why?

  30. represents Return on Investments (ROI) and the Value of IS • Return on investment (ROI) • A measure of IS value that investigates the additional profits or benefits that are generated as a percentage of the investment in information systems technology

  31. Measures of IS Value • Earnings growth • Market share • Customer awareness and satisfaction One of my favourite quotes: When you cannot measure, your knowledge is of a meager and unsatisfactory kind. Kelvin

  32. Justifying IS • Categories: • Tangible savings • Intangible savings • Legal requirements • Modernization • Pilot project

  33. Roles, Functions, and Careers in the IS Department • Categories: • Operations • Systems development • Support • Liaisons (information service units) Schematic

  34. CEO CIO Other functional areas InformationResourceManagementFunctions Operations Systemsdevelopment Support Informationservice unit Computer facility operations Systems analysis & design Data administration Data entry Information centre Programming Information technololgy Local Area network operations IS Department

  35. Information Centre • Information centre • Provides users with assistance, training, application development, documentation, equipment selection and setup, standards, technical assistance, and troubleshooting

  36. Information Service Unit • Information service unit • Attached to a functional area of the business. • Acts as a local information support organization within a functional area. • Performs the critical role of liaison between the functional area and IS

  37. Chief Information Officer (CIO) • Chief Information Officer (CIO) • A manager at the vice-president level responsible for IS planning, policy, and standards • Focused on supporting corporate goals

  38. Other IS Roles • Database Administrator • Systems Programmer • Network Specialist • LAN Administrator • Webmaster • Trainer

  39. IS Principles • Use of IS strongly influenced by organizational structure and problem orientations • IS are often intertwined within the value-added processes • IS usage may require change that could meet with resistance • Value-added IS needs to be continually sought

  40. End of Chapter 2 Chapter 3

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