Download Week 3 Lecture click here

Information Systems and
Organisations
Outline:
• Understanding the inter-relationships
between IT and organisations,
• Formal models and theories of
organisations,
• Understanding and mapping business
processes
• How does the Information Systems function
fit into organisation.
ORGANIZATIONS & INFORMATION
TECHNOLOGY
ORGANIZATIONS
MEDIATING FACTORS:
Environment
Culture
Structure
Standard Procedures
Politics
Management Decisions
Chance
INFORMATION
TECHNOLOGY
CEO
ORGANIZATION
FORMAL DEFINITION:
VP
VP
- stable, formal structure
• takes resources/inputs from environment – capital,
labour, materials, knowledge(?) etc
• processes them
• to produce outputs
*
VP
STRUCTURAL CHARACTERISTICS OF
ALL ORGANIZATIONS
• Clear division of labor
• Hierarchy
• Explicit rules & procedures: standard operating
procedures (sop)
• Objective/impartial judgments
• Technical qualifications
• Strive for maximum organizational efficiency
*
STRUCTURE:
Hierarchy
Division of labor
Rules, Procedures
PROCESS:
Rights/Obligations
Privileges/Responsibilities
Values
Norms
People
*
ENVIRONMENTAL OUTPUTS
ENVIRONMENTAL RESOURCES
BEHAVIORAL VIEW OF ORGANIZATIONS
TYPES OF ORGANIZATIONS
• ENTREPRENEURIAL: Startup business
• MACHINE BUREAUCRACY: Mid-sized
manufacturing firm
• DIVISIONALIZED BUREAUCRACY: Very
Large, multi-business/multi-divisional
corporations
• PROFESSIONAL BUREAUCRACY: Law firms,
hospitals
• ADHOCRACY: Consulting firm
*
ORGANIZATION & ITS ENVIRONMENT
THE ENVIRONMENT:
RESOURCES & CONSTRAINTS
GOVERNMENTS
COMPETITORS
THE FIRM
FINANCIAL INSTITUTIONS
CULTURE
KNOWLEDGE
TECHNOLOGY
INFORMATION SYSTEMS
BROADER VIEW OF
ORGANIZATIONS
COMMON FEATURES:
• FORMAL STRUCTURE
• STANDARD OPERATING
PROCEDURES
• POLITICS
• CULTURE
*
3.11
SALIENT FEATURES OF
ORGANIZATIONS
UNIQUE FEATURES:
ORGANIZATIONAL TYPE
ENVIRONMENTS, GOALS, POWER
CONSTITUENCIES, FUNCTION
LEADERSHIP, TASKS
TECHNOLOGY
LEVELS
*
Business Process: The unique breakdown and sequence of
activities that an organisation specifies for the completion of a
task. Typically we refer to tasks that cut across multiple
functions or departments.
Eg. Order fulfillment, new product introduction
WORK GROUPS, PROBLEMS,
SYSTEM SUPPORT
• HIERARCHICAL: Frequent meetings,
workers dispersed
– VIDEO CONFERENCING, E-MAIL
• INTERDEPARTMENTAL COMMITTEES:
Need occasional direct communication
– ELECTRONIC MESSAGING
*
WORK GROUPS, PROBLEMS,
SYSTEM SUPPORT
• PROJECT TEAMS: Day-to-day interactions,
meeting schedules
– SCHEDULING/COMMUNICATION/
SUPPORT SOFTWARE, INTRANET
• COMMITTEES: High peak load, intermittent
communication
– ELECTRONIC BULLETIN BOARDS,
VIDEO/COMPUTER CONFERENCING, E-MAIL
*
WORK GROUPS, PROBLEMS,
SYSTEM SUPPORT
• TASK FORCES: Rapid communication,
internal/external data
– GRAPHICS DISPLAY, INFORMATION/
DOCUMENTATION INTERCHANGE
• PEER GROUPS: Intense personal
communication
– TELEPHONE, E-MAIL
*
PROBLEMS OF ALL WORK GROUPS
•
•
•
•
•
Making arrangements
Attending meetings
Long agenda
Cost of meetings
Between-meeting activities
*
DEVELOPMENT OF INFORMATION
ARCHITECTURE
• 1950s: ELECTRONIC ACCOUNTING
MACHINES
• 1960s: DATA PROCESSING DEPARTMENTS
• 1970s: INFORMATION SYSTEMS
• 1980s: INFORMATION SYSTEMS &
SERVICES
• 1990s: ENTERPRISE-WIDE INFORMATION
UTILITY
*
INFORMATION SYSTEMS DEPARTMENT
• PROGRAMMERS: Write software
• SYSTEMS ANALYSTS: Translate business
problems into solutions
• Data Administrators: in charge of managing the
information resources of the org.
• IS MANAGERS: Department leaders
• Chief Information Officer (CIO)
• END USERS: Department reps for whom
applications are
developed
*
PERSPECTIVES ON
ORGANIZATIONS AND
THE ROLE OF IT
• MICROECONOMIC MODEL/THEORY
OF THE FIRM: The outputs of the firm as a
function of key factors of production such as
capital C, labor L, and knowledge K.
Investments in IT can lead to increase in K
and reduction overall L.
PERSPECTIVES ON
ORGANIZATIONS AND
THE ROLE OF IT
• AGENCY/TRANSACTION COST THEORY:
Firm is nexus of contracts among agents who
make decisions. The firms attempts to minimise
transaction costs in contracting. IS/IT shrink
number of agents & reduce transaction costs.
• BEHAVIORAL THEORIES: Concepts from
Psychology, Political Science; Organizations &
Information Technology mutually influence each
other. Implementation strategies, resistance..
*
PERSPECTIVES ON
ORGANIZATIONS AND
THE ROLE OF IT
• DECISION & CONTROL THEORY: Decisions
are made under conditions of risk & uncertainty;
centralization & hierarchy can reduce uncertainty
in certain circumstances.
• SOCIOLOGICAL THEORY: Bureaucracy, SOPs
help stabilize organizations, but slow ability to
change
*
PERSPECTIVES ON
ORGANIZATIONS AND
THE ROLE OF IT
• POSTINDUSTRIAL THEORY: Flatter
organizations; dominated by knowledge
workers; decentralized decision making
• CULTURAL THEORY: Information
technology must fit organization’s culture
to be accepted
*
PERSPECTIVES ON
ORGANIZATIONS AND
THE ROLE OF IT
• POLITICAL THEORY: Info systems are
outcome of political competition among
coalitions and groups for power and
resources.
*
IMPLEMENTING CHANGE
TASK
RESISTANCE
TECHNOLOGY
PEOPLE
MUTUAL
ADJUST
MENT
STRUCTURE
Source: Leavitt, Handbook of Organization (1965)
HOW INTERNET AND THE WORLD
WIDE WEB AFFECT ORGANIZATIONS
• More info, anywhere, anytime/potential
information overload
• More scope, depth, range of knowledge
• Lowers cost, potential to raise quality of
info distribution: *
Types of Decisions
• Well-Structured decisions
• Semi-structured decisions
• Unstructured or ill-structured decisions
They lie along a continuum.
INFO SYSTEMS, LEVELS, DECISIONS
ORGANIZATIONAL LEVEL
TYPE OF
DECISION
STRUCTURED
OPERATIONAL
KNOWLEDGE
STRATEGIC
ACCOUNTS
RECEIVABLE
TPS
ELECTRONIC
SCHEDULING
OAS
SEMISTRUCTURED
PRODUCTION
COST OVERRUNS
MIS
BUDGET
PREPARATION
PROJECT
SCHEDULING
DSS
KWS
UNSTRUCTURED
MANAGEMENT
PRODUCT DESIGN
FACILITY
LOCATION
ESS
NEW PRODUCTS
NEW MARKETS
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
*
SOURCE: Simon, The New Science of Management Decision (1960)
MODELS OF DECISION MAKING
• RATIONAL MODEL: Assumes
comprehensive rationality - comprehensive
search for alternatives, their systematic
evaluation against objectives, choosing the
alternative that maximises value.
• Satisficing Models: Based on the concept of
bounded rationality - people do not have the
cognitive capacity to be comprehensively
rational; hence they ‘satisfice’.
• Political Model