INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

1. 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

2. LEARNING OBJECTIVES • IDENTIFY SALIENT CHARACTERISTICS OF ORGANIZATIONS • ANALYZE RELATIONSHIP BETWEEN INFO SYSTEM & ORGANIZATIONS *

3. LEARNING OBJECTIVES • CONTRAST THEORIES OF ORGANIZATIONS • DESCRIBE DECISION PROCESSES • EVALUATE ROLE OF INFORMATION SYSTEMS IN SUPPORTING BUSINESS STRATEGY *

4. MANAGEMENT CHALLENGES • ORGANIZATIONS & INFORMATION SYSTEMS • CHANGING ROLES OF SYSTEMS IN ORGANIZATIONS • MANAGERS, DECISION MAKING & INFORMATION SYSTEMS • INFORMATION SYSTEMS & BUSINESS STRATEGY *

5. MANAGEMENT CHALLENGES 1. SUSTAINABILITY OF COMPETITIVE ADVANTAGE 2. FITTING TECHNOLOGY & ORGANIZATION *

6. INFORMATION TECHNOLOGY ORGANIZATIONS ORGANIZATIONS & INFORMATION TECHNOLOGY MEDIATING FACTORS:Environment Culture Structure Standard Procedures Politics Management Decisions Chance

7. CEO VP VP VP ORGANIZATION TECHNICAL DEFINITION: STABLE, FORMAL STRUCTURE • TAKES RESOURCES FROM ENVIRONMENT AND PROCESSES THEM TO PRODUCE OUTPUTS *

8. ORGANIZATION INPUTS FROM ENVIRONMENT PRODUCTION PROCESS OUTPUTS TO ENVIRONMENT TECHNICAL MICROECONOMIC DEFINITION OF ORGANIZATION

9. ORGANIZATION BEHAVIORAL DEFINITION: COLLECTION OF: • RIGHTS, PRIVILEGES, OBLIGATIONS, RESPONSIBILITIES • DELICATELY BALANCED • CONFLICT RESOLUTION *

10. ENVIRONMENTAL RESOURCES ENVIRONMENTAL OUTPUTS FORMAL ORGANIZATION STRUCTURE: Hierarchy Division of labor Rules, Procedures PROCESS: Rights/Obligations Privileges/Responsibilities Values Norms People

11. STRUCTURAL CHARACTERISTICS OF ALL ORGANIZATIONS • CLEAR DIVISION OF LABOR • HIERARCHY • EXPLICIT RULES & PROCEDURES • IMPARTIAL JUDGMENTS • TECHNICAL QUALIFICATIONS • MAXIMUM ORGANIZATIONAL EFFICIENCY *

12. COMMON FEATURES OF ORGANIZATIONS • FORMAL STRUCTURE • STANDARD OPERATING PROCEDURES • POLITICS • CULTURE *

13. UNIQUE FEATURES OF ORGANIZATIONS • ORGANIZATIONAL TYPES • ENVIRONMENTS, GOALS, POWER • CONSTITUENCIES, FUNCTION • LEADERSHIP, TASKS • TECHNOLOGY • BUSINESS PROCESSES *

14. ORGANIZATIONAL STRUCTURES • ENTREPRENEURIAL: Startup business • MACHINE BUREAUCRACY: Mid-sized manufacturing firm • DIVISIONALIZED BUREAUCRACY: Fortune 500 • PROFESSIONAL BUREAUCRACY: Law firms, hospitals • ADHOCRACY: Consulting firm *

15. THE ENVIRONMENT: RESOURCES & CONSTRAINTS GOVERNMENTS COMPETITORS FINANCIAL INSTITUTIONS CULTURE KNOWLEDGE TECHNOLOGY THE FIRM INFORMATION SYSTEMS ORGANIZATION & ITS ENVIRONMENT

16. 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 *

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

18. 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 *

19. 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 *

20. TASK RESISTANCE TECHNOLOGY PEOPLE MUTUAL ADJUSTMENT STRUCTURE IMPLEMENTING CHANGE

21. INTERNET & ORGANIZATIONS • E-mail communication • Electronic handbooks published & revised • Interactive training classes • Employees review, update personal data *

22. ROLE OF MANAGERS • CLASSICAL: Describe functions- plan, organize, coordinate, decide, control • BEHAVIORAL: Based on observations of managers on the job *

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

24. 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 *

25. INDIVIDUAL MODELS OFDECISION MAKING • RATIONAL: Comprehensive rationality; evaluate all alternatives • SYSTEMATIC: Structured, formal method • INTUITIVE: Trial & error, unstructured, multiple approach *

26. ORGANIZATIONAL MODELS OF DECISION MAKING • BUREAUCRATIC: Follow standard operating procedures (SOP) • POLITICAL: Key groups compete and bargain • “GARBAGE CAN”: Organizations not rational; solutions accidental *

27. 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 *

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

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

30. 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.

31. 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.

32. 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.

33. 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.

34. 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 recipe.

36. INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY