Managerial Levers

1. Managerial Levers Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223 chen@gonzaga.edu

2. Information Ecology (Davenport) Data Simple Observations of the world: Easily structured Easily captured on machines Often quantified Easily transferred Information Data endowed with relevance & purpose: Requires unit of analysis Need consensus on the meaning Human mediation necessary Knowledge Info. from the mind includes reflection, context, synthesis: Hard to structure Difficult to capture on machines Often tacit Hard to transfer

3. Organizational strategy frameworks Usefulness of IS Discussions Key Idea Source: Pearlson, 2001

4. Vision for Disruption • Identifying and creating opportunities for • temporary advantage through understanding • Stakeholder satisfaction • Strategic Soothsaying • directed at identifying new ways to serve existing • customers better or new customers that are not • currently served by others Market Disruption • Tactics for Disruption • Seizing the initiative to gain advantage by • Shifting the rules • Signaling • Simultaneous and sequential strategic • thrusts • With actions that shape, mold, or influence • the direction or nature of the competitor’s • response • Capability for Disruption • Sustaining momentum by developing • flexible capacities for • Speed • Surprise • That can be applied across actions to • Build temporary advantage D’Aveni’s Disruption and 7-S’s

5. D’Aveni’s 7-S’s Approach Definition Understanding how to maximize customer satisfaction by adding value strategically Superior stakeholder satisfaction Seeking out new knowledge that can predict or create new windows of opportunity Strategic soothsaying Positioning for speed Preparing the organization to react as quickly as possible Preparing the organization to respond to the marketplace in a manner that will surprise competitors Positioning for surprise Finding new ways to serve customers which transform the industry Shifting the rules of competition Signaling strategic intent Communicating the intended actions of a company, in order to stall responses by competitors Simultaneous and sequential strategic thrusts Taking a series of steps designed to stun and confuse competitors in order to disrupt or block their efforts

6. Authority to initiate, approve, implement, and control various types of decisions necessary to plan and run the business. Decision rights The set of ordered tasks needed to complete key objectives of the business. Business Processes The structure set up to ensure coordination among all units within the organization. Formal reporting relationships Mechanism, such as ad hoc groups, which work to coordinate and transfer information outside the formal reporting relationship. Informal networks Data The information collected, stored, and used by the organization. The processes by which future direction is established, communicated, and implemented. Planning The set of measures that are used to assess success in the execution of plans and the processes by which such measures are used to improve the quality of work. Performance measurement and evaluation The monetary and nonmonetary devices used to motivate behavior within an organization. Incentives The set of implicit and explicit beliefs that underlie decisions made and actions taken. Values Managerial Levers: Organizational Design Variables Organizational variables Control variables Cultural variables

7. Decision rights Business processes Data Strategy Formal reporting relationships Organizational effectiveness People, Information, and Technology Planning Informal networks Performance measurement and evaluation Incentives and rewards Values Managerial Levers Execution Organization Control Culture Source: Cash, et al., 1994

8. Firms achieve competitive advantage through cost leadership, differentiation, or focus. Understanding which strategy is chosen by a firm is critical to choosing IS to complement that strategy. Speed and aggressive moves and counter- moves by a firm create competitive advantage. The 7-S’s give the manager suggestions on what moves and counter moves to make and IS are critical to achieve the speed needed for these moves. Companies cooperate and compete at the same time. Being cooperative and competitive at the same time requires IS that can manage these two roles. Summary of Key Strategy Frameworks Usefulness in Information Systems Discussions Framework Key Idea Porter’s generic strategies framework D’Aveni’s hypercompetition model Brandenberg and Nalebuff’s co-operation model

9. Definition of organizational subunits Determining purpose, output of subunits Reporting mechanisms Linking mechanisms Control mechanisms Staffing Virtual components Electric linking Technological leveling Tasks Workflows Dependencies Output of process Buffers Production automation Electronic workflows Virtual components Formal channels Informal communication Electronic communications Technology matrixing collaboration Make vs. buy decisions Electronic relations customer/supplier relationships Electronic customer/supplier relationship Electronic linking mechanism Exchange of materials Communications Conventional and IT design variables Conventional Design Variable Class of Variable IT Design Variable Structure Work process Communications Interorganizational Source: H. Lucsa and J. Baroudi, “The Role of Information Technology in Organization.” JMIS, Spring 1994, pp. 9-23

10. Executive Management Sales and Support Information flows Operations Accounting Marketing Functional (Hierarchical) View of the Firm (source: Pearlson, p.9, 2001)

11. The six stages are: 1. Initiation: Initial introduction of computers to the organization. Batch processing to automate clerical operations to achieve cost reduction, operation systems focus, lack of management interest, and Centralized ISD. 2. Contagion (expansion): Centralized rapid growth as users demand more applications based on high expectations of benefits, move to online systems as ISD tries to satisfy all user demands. Little control if any. IT expenses increase rapidly. 3. Control: In response to management concern about cost vs. benefits, systems projects are expected to show a return, plans are produced and methodologies/standards enforced. Often produces a backlog of applications and dissatisfied users. Planning and controls are introduced. 4. Integration: Considerable expenditure on integrating (via telecommunications and databases) existing systems. Users accountability for system established, and ISD provides a service to users, not just solutions to problems. At this time there is a transition computer use and a approach from data processing to information and knowledge processing (transition between the two curves). 5. Data administration: information requirements rather than processing drive the applications portfolio and information is shared within the organization. Database capability is exploited as users understand the value of information and are willing to share it. 6. Maturity: The planning and development of IT in the organization is closely coordinated with business development. Corporatewide systems are in place. The ISD and the users share accountability regarding the application of computing resources. IT has truly become a strategic partner. Source: Compiled from Nolan (1979). NOLAN’s Six Stages of IS Growth

12. NOLAN’s Six Stages of IS Growth The six stages are: 1.Initiation: Initial introduction of computers to the organization. Batch processing to automate clerical operations to achieve cost reduction, operation systems focus, lack of management interest, and Centralized ISD. 2. Contagion (expansion): Centralized rapid growth as users demand more applications based on high expectations of benefits, move to online systems as ISD tries to satisfy all user demands. Little control if any. IT expenses increase rapidly. 3. Control: In response to management concern about cost vs. benefits, systems projects are expected to show a return, plans are produced and methodologies/standards enforced. Often produces a backlog of applications and dissatisfied users. Planning and controls are introduced. 4. Integration: Considerable expenditure on integrating (via telecommunications and databases) existing systems. Users accountability for system established, and ISD provides a service to users, not just solutions to problems. At this time there is a transition computer use and a approach from data processing to information and knowledge processing (transition between the two curves). 5. Data administration: information requirements rather than processing drive the applications portfolio and information is shared within the organization. Database capability is exploited as users understand the value of information and are willing to share it. 6. Maturity: The planning and development of IT in the organization is closely coordinated with business development. Corporatewide systems are in place. The ISD and the users share accountability regarding the application of computing resources. IT has truly become a strategic partner. Source: Compiled from Nolan (1979).

13. I Initiation 2 Expansion 3 Control 4 Integration 5 Data administration 6 Maturity NOLAN’s Six Stages of IS Growth (Cont.)

14. Critical Success Factors Questions 1. What objectives are central to your organization? 2. What are the critical factors that are essential to meeting these objectives? 3. What decisions or actions are key to these critical factors? 4. What variables underlie these decisions, and how are they measured? 5. What information systems can supply these measures?

15. Value-Creating Business Opportunities Commerce Content Community Value-Enabling IT Infrastructure Solutions and Services • Enterprise resources planning • Supply chain management • Customer relationship management • E-business packages • Pedagogic systems (Blackboard systems) • Internet service providers • Systems integration services • Outsourcing and hosting Software Productivity and Development Tools Security and Control Innovation and Diffusion • Productivity packages • Integrated development environments (Jbuilder, VB, C++Builder) • Programming languages (Java, C++, VB, COBOL, etc.) • Specialized software (simulation, statistical analysis, groupware) • Web site development tools • Streaming medium tools Computing Communication • Hardware (computers, printers, etc.) • Operating systems • Database management Information • Document management systems • Application frameworks (J2EE, .NET, XML, etc.) • Hardware (networks, routers, etc.) • Network operating systems • Gateways • E-mail and file transfer services • Servers: Web, applications, and database • Tele-& Video-conferencing equipment

16. 智慧 知识 资讯 全面性 (夏普指数) 结构性 (资讯比率) 机会性 (绝对报酬) 资产管理 另类投资 (包括保本型商品。。。) 市场投资时机 资产配置 分散投资 (时间，资产类别 ， 投资模型。。。) 首选企业 资产管理的演进过程 Source: ABN.AMRO Asset Management Taiwan Ltd.