Information Systems in Digital Age

Course Information

• Lecturer: Seon Renville
• Textbook: Laudon, K. C. & Laudon, J.P. Management Information Systems, Managing the Digital Firm, Chapter 3

Learning Objectives

• Understand organizational features crucial for managers to build and use information systems effectively.
• Analyze the impact of information systems on organizations.
• Apply Porter’s competitive forces model to develop competitive strategies using information systems.
• Utilize information systems to achieve competitive advantage through synergies, core competencies, and network-based strategies.
• Address the challenges posed by strategic information systems.

Influence Between Information Systems and Organizations

• Information systems are created by managers to benefit the firm.
• Organizations must be receptive to the impacts of information systems to leverage new technologies.

Technical Definition of an Organization

• An organization is a stable, formal social structure.
• It acquires resources from the environment and processes them into outputs.
• Key elements:
  • Capital and labor: Primary production factors from the environment.
  • Transformation: The organization converts inputs into products and services.
  • Outputs: Products and services consumed by the environment in exchange for inputs.

Contrasting Views of Organizations

• Technical View: Focuses on how inputs are combined to create outputs, especially when technology changes.
• Behavioral View: Emphasizes that implementing or changing information systems involves more than just technical adjustments.
  • It affects the balance of rights, privileges, obligations, responsibilities, and sentiments within the organization.

Features of Organizations

• Routines and Business Processes
• Organizational Politics
• Organizational Culture
• Organizational Environment
• Organizational Structure

Routines and Business Processes

• Organizations become efficient over time through the development of routines.
• Routines (standard operating procedures) are precise rules, procedures, and practices for handling expected situations.

Organizational Politics

• Different positions within organizations lead to varying specialties, concerns, and perspectives.
• This results in disagreements on resource, reward, and punishment distribution.
• Political struggles, competition, and conflict are inherent in organizations.
• Political resistance poses a major challenge to organizational change, especially in the development of new information systems.

Organizational Culture

• Organizational culture strongly resists change, especially technological change.
• Organizations tend to avoid changes to basic assumptions.
• Technological changes that threaten cultural assumptions face significant resistance.
• Sometimes, adopting a new technology that opposes the existing culture is necessary for progress, but the technology may be stalled until the culture adapts.

Organizational Environment

• Organizations depend on their environment for resources and to supply goods and services.
• There is a reciprocal relationship between organizations and their environments.
• Organizations rely on the social and physical environment for financial and human resources.
• They must comply with governmental regulations and respond to customers and competitors.
• Organizations can also influence their environments.

Role of Information Systems in Organizational Environment

• Information systems help organizations:
  • Perceive changes in their environments.
  • Act on their environments.
• They are crucial for environmental scanning, enabling managers to identify external changes.

Disruptive Technologies

• Disruptive technologies radically alter the business landscape.
• They often serve as substitutes that perform as well or better than existing products.
• Examples:
  • Car vs. horse-drawn carriage
  • Word processor vs. typewriter
  • Apple iPod vs. portable CD players
  • Digital photography vs. film photography

Organizational Structure

• Organizations have a structure or shape.
• Mintzberg’s classification identifies five basic types of organizational structure.
• The information systems and related problems within a firm often reflect its organizational structure.

Leadership and Task Differences

• Leadership styles vary (democratic vs. authoritarian).
• Organizations differ in tasks and technology used.
• Some perform routine tasks with formal rules, while others handle nonroutine tasks requiring judgment.