Information Systems and Organizations

1. Information Systems and Organizations Yinglei Wang, Ph.D. Assistant Professor FC Manning School of Business yinglei.wang@acadiau.ca

2. Learning Objectives • Features of organizations • The impacts of IT/IS on organizations • “The world is flat” • “Here comes everybody: The power of organizing without organizations”

3. Two-Way Relationship

4. Organization?

5. The Technical Microeconomic View • Stable, formal social structure that takes resources from environment and processes them to produce outputs

6. The Behavioural View • A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution

7. Features of Organizations • Routines and business processes • Organizational politics • Organizational culture • Organizational environments • Organizational structure

8. Routines and Business Processes

9. IT Enhances Business Processes • Increasing efficiency of existing processes • Automating steps that were manual • Enabling entirely new processes that are capable of transforming the businesses • Change flow of information • Replace sequential steps with parallel steps • Eliminate delays in decision making

10. Organizational Politics and Culture • Organizational politics • Divergent viewpoints lead to political struggle, competition, and conflict • Political resistance greatly hampers organizational change • Organizational culture • Encompasses a set of assumptions that define goals and behaviors • May be powerful unifying force as well as restraint on change

11. Resistance to Change • Information systems become bound up in organizational politics because they influence access to a key resource – information. • Information systems potentially change assumptions about goals and behaviours in organizations. • The most common reason for failure of large projects is due to organizational and political resistance to change.

12. Example: Electronic Health Records “Most Doctors Aren’t Using Electronic Health Records” – The New York Times http://www.youtube.com/watch?v=t9ATw1TjJbs&feature=related http://upload.wikimedia.org/wikipedia/en/8/8f/VistA_Img.png

13. Organizational Environments • Organizations and environments have a reciprocal relationship • Environments generally change faster than organizations • Information systems can be instrument of environmental scanning, act as a lens

14. IS as A Lens

15. Disruptive Technologies • Technology that brings about sweeping change to businesses, industries, markets • Examples: personal computers, word processing software, the Internet, the PageRank algorithm • First movers and fast followers • First movers – inventors of disruptive technologies • Fast followers – firms with the size and resources to capitalize on that technology

16. Organizational Structure • Five basic kinds of structure (Mintzberg, 1979) • Entrepreneurial: Small start-up business • Machine bureaucracy: Manufacturing firm • Divisionalized bureaucracy: Fortune 500 firms • Professional bureaucracy: Law firms, school systems • Adhocracy: Consulting firms

17. Large and Entrepreneurial? http://www.mochatini.org/2009/02/20/google-offices/

18. Actual Impacts?

19. Transaction Cost Theory • Firms seek to economize on cost of participating in market (transaction costs). • When it is cheaper to own, firms include functions/services into their boundaries; otherwise, they buy from the market. • IT lowers market transaction costs for firm, making it worthwhile for firms to transact with other firms rather than grow the number of employees.

20. The Effect of IT • IT potentially reduces transaction costs for a given size. Third party

21. Agency Theory • Firm is nexus of contracts among self-interested parties requiring supervision. • Firms experience agency costs (the cost of managing and supervising) which rise as firm grows. • IT can reduce agency costs, making it possible for firms to grow without adding to the costs of supervising, and without adding employees.

22. The Effect of IT • IT enables firms to economize on managers through better coordination and communication.

23. Organizational/Behavioural Impacts • Empowerment • Decision making pushed to lower levels • Fewer managers needed (IT enables faster decision making and increases span of control) • Postindustrial organizations • In postindustrial societies, authority increasingly relies on knowledge and competence rather than formal positions

24. Flattening Organizations

25. The Internet and Organizations • The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations • The Internet can greatly lower transaction and agency costs • It seems the flattening trend has been strengthened by the Internet

26. “The World Is Flat” Source: http://seeker401.wordpress.com/2009/05/25/the-world-is-flat-thomas-friedman/ http://www.youtube.com/watch?v=DvXnXcDhRA0

27. “Here Come Everybody…” Clay Shirky Soure;http://s3.amazonaws.com/adaptiveblue_img/books/here_comes_everybody_power_of_organizing_without_organizations/clay_shirky http://i.zdnet.com/blogs/clay_shirky.jpg

28. Takeaways • There is a two-way interaction between organizations and IT/IS. • IT/IS can change a number of organizational characteristics. • The Internet has profound impacts on how we collaborate.