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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