Title: Session 4: Organization Management and Information systems
1Session 4 Organization Management and
Information systems
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3Management
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4A Company System
INPUT of raw materials/ information
OUTPUT of finished products/ service
Manufacturing/ operation PROCESS
5What is an organization?
- Technical definition a stable, formal social
structure that takes resources from the
environment and process them to produce output. - Behavioral definition a collection of rights,
privileges, obligations, and responsibilities
that are delicately balanced over time through
conflict and conflict resolution.
6ORGANIZATIONS AND INFORMATION SYSTEMS
The Two-Way Relationship Between Organizations
and Information Technology
MEDIATING FACTORS Environment
Culture Structure
Standard Procedures(??) Politics
Management Decisions
Chance
7ORGANIZATIONS AND INFORMATION SYSTEMS
- Organization
- Stable, formal structure
- Takes resources from environment and processes
them to produce outputs
8ORGANIZATIONS AND INFORMATION SYSTEMS
- Behavioral definition of Organization
- Collection of rights, privileges, obligations,
responsibilities - Delicately balanced
- Conflict resolution
9ORGANIZATIONS AND INFORMATION SYSTEMS
- Common Features of Organizations
- Organizations are bureaucracies that have certain
structural features - Clear division of labor
- Hierarchy
- Explicit rules and procedures(?????)
- Impartial judgments
- Technical qualifications
- Maximum organizational efficiency
- Standard Operating Procedures
- Precise rules, procedures, and practices
- Enable organizations to cope with all expected
situations
10ORGANIZATIONS AND INFORMATION SYSTEMS
- Common Features of Organizations
- Organizational Politics
- Divergent viewpoints leads to political struggle,
competition, and conflict - Hamper organizational change
- Organizational Culture a set of fundamental
assumptions about - What products the organization should produce
- How and where it should produce them
- For whom they should be produced
11ORGANIZATIONS INFORMATION SYSTEMS
- Unique Features of Organizations
- Structures/Organizational types
- Goals
- Constituencies(??)
- Leadership Styles, Tasks
- Surrounding Environment
12ORGANIZATIONS INFORMATION SYSTEMS
- Organizational Structures
- Entrepreneurial Start up business
- Machine bureaucracy Midsize manufacturing firm
- Divisionalized bureaucracy Fortune 500
- Professional bureaucracy Law firms, hospitals,
school systems - Adhocracy(???? ) Consulting firm
13THE CHANGING ROLE OF INFORMATION SYSTEMS IN
ORGANIZATIONS
- Information Technology Infrastructure and
Information Technology Services - Information systems department
- Formal organizational unit
- Responsible for information systems in the
organization
14THE CHANGING ROLE OF INFORMATION SYSTEMS IN
ORGANIZATIONS
- Information Technology Services
15The Systems Analyst as a facilitator
IT Vendors
Steering committee
User 1
Applications programmers
User 2
System Analyst
User N
Network administrator
Mgt/system owner
Database administrator
Interface design expert
16How Information Systems Affect Organizations
- Economic theories(????)
- Information technology is a factor of production,
like capital and labor
17Transaction cost theory(??????) Firms can
conduct marketplace transactions internally more
cheaply to grow larger
18Agency theory(????) Firm is nexus of contracts
among self-interested parties requiring
supervision
19Flattening Organizations
20- Behavioral theories(????)
- Information technology could change hierarchy of
decision making - Lower cost of information acquisition
- Broadens the distribution of information
21Implement Change
Tasks
Resistant
People
Technology
????MUTUAL ADJUSTMENT
Structure
Source Leavitt, Handbook of Organization (1965)
22MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
- The Role of Managers in Organizations
- Classical model of management
- Traditional description of management
- Focuses on formal functions plan, organize,
coordinate, decide, control(??????????????) - Behavioral model of management
- Describes management based on observations of
managers on the job - Managerial roles
- Expectation of activities that managers should
perform in an organization
23- ?????? Managers act as figureheads and leaders.
- ???? Managers receive and disseminate critical
information, nerve centers. - ???? Managers initiate activities, allocate
resources, and negotiate conflicts.
24MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
- Managers and Decision Making
- Process of Decision Making
- Strategic Decision Making Determines long-term
objectives, resources, and policies - Management Control Monitors effective or
efficient usage of resources and performance of
operational units - Operational control Determines how to perform
specific tasks set by strategic and
middle-management decision makers - Knowledge-level decision making Evaluates new
ideas for products, services, ways to communicate
new knowledge, ways to distribute information
25MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
- Decisions are classified as
- Unstructured Non routine, decision maker
provides judgment, evaluation, and insights into
problem definition, no agreed-upon procedure for
decision making - Structured Repetitive, routine, handled using a
definite procedure
26MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS
27Business Model, Business Processes, and
Information systems
28CASE Dell COMPUTER CORPORATION
- Analyze the PC industry and its market segments
29PC Industry
- Product life cycles in the PC industry have
shrunk from about 22 months in 1988 to six months
in 1997, and the price/performance of key
components has continued to double every 18
months or less. As a result, excess inventory
depreciates rapidly (an estimated 10 per month .
) - driven by rapid technological improvements
- getting new, quality products to market on time
is critical to maintaining competitiveness in an
industry where customers are willing to pay a
premium for the latest technologies and reward
quality by repeated purchases.
30PC Industry
- companies that minimize inventory and bring new
products to market faster can reduce costs,
increase market share and maintain higher
margins. - the standardized, modular nature of the PC.
- the structure of distribution.
31Dells Direct Distribution Channel
- Selling direct removes two links in the supply
chain where inventory could build up and also
enables Dell to know its final customers, provide
better service to them, and promote repeat or
expanded sales to them. - Build-to-order production allows Dell to
introduce new technologies as soon as customers
want them and makes it possible to adjust
production to demand very quickly. It also means
that Dell does not purchase components and
assemble PCs until it has received payment from
the customer, giving the company a negative cash
conversion cycle in which it receives payment
from customers before it must pay suppliers.
32Dells Global Sales Characteristics
33Dell Build-to-Order Production
- The build-to-order production system is the focal
point of Dells business operations, the common
contact point for sales, procurement, logistics,
manufacturing and delivery. - This requires very close coordination between
Dells sales and manufacturing arms and between
Dell and its suppliers. It achieves this by
refining its business processes, developing close
relationships with a limited number of suppliers,
and by using IT to facilitate communication
within and outside the company.
34Dell ??
- Direct sales eliminates inventory in the channel,
provides Dell with information on and access to
the final customer, and allows Dell to offer
other services to the customer. - Build-to-order allows Dell to offer the latest
technologies which carry a higher margin, allows
it to customize its products to user
specifications, and means that Dell doesnt lay
out cash for parts until it receives payment for
the PC. - Together, direct sales and build-to order help
create a strong relationship between Dell and its
customers, as both require direct interaction and
allow Dell to gather information on its
customers needs.
35Dells Use of Information And Technology----Refine
ment of the Dell Model
36Extension of the Dell Model
37Dell Sales Revenue (Millions )
38Dell Worldwide Market Share in (based on unit
shipments)
39Dell U.S. Market Share in (based on unit
shipments)
40Dell's Share Price
41Dell Net Income
42Dell Online History
Late 1980s 1994 1995 1996 1997
1998 1999 2000
43What advantages had Dell Online in comparison to
its competitor?
- Transaction segment
- Market access 250000 visits per week to dell.com
website. (?The website sale is incremental or
merely cannibalization of existing customers) - Cost saving
- A website sale rep was able to carry 1.5 time
monthly quota as a traditional sale rep - Service efficiency
44What advantages had Dell Online in comparison to
its competitor?
- Relationship Segment
- Premier Pages will build switching costs and
build customer loyalty ?! - Market access
- Provide them with an opportunity to offer
customers a differentiated service/product.
45What role does information system play in the
business model?
- Differentiate product/service
- Reduce the cost, improve the business process.
- Increase the revenue
- Increase the customer switch cost
- Lock in customers and in suppliers
- Change industry business model
- unpick the internally built products and outside
distributors, dealers, resellers, and retailers - Mass customization
46Traditional Business Model
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