Which features of organizations do managers need to know about to build and use information system successfully?

1.

Identify and describe important features of organizations that managers need to know about in order to build and use information systems successfully.

Managers need to understand certain essential features of organizations to build and use information systems successfully. All modern organizations are hierarchical, specialized, and impartial. They use explicit routines to maximize efficiency. All organizations have their own cultures and politics arising from differences in interest groups. Organizations differ in goals, groups served, social roles, leadership styles, incentives, surrounding environments, and types of tasks performed. These differences create varying types of organizational structures, and they also help explain differences in organizations� use of information systems.

2.

Evaluate the impact of information systems on organizations.

Information systems and the organizations in which they are used interact with and influence each other. The introduction of a new information system will affect organizational structure, goals, work design, values, competition between interest groups, decision making, and day-to-day behavior. At the same time, information systems must be designed to serve the needs of important organizational groups and will be shaped by the organization�s structure, tasks, goals, culture, politics, and management. Information technology can reduce transaction and agency costs, and such changes have been accentuated in organizations using the Internet. The information systems department is the formal organizational unit that is responsible for the organization�s information systems function. Organizational characteristics and managerial decisions determine the role this group will actually play.

3.

Assess how information systems support the activities of managers in organizations.

Several different models of what managers actually do in organizations show how information systems can be used for managerial support. Early classical models of managerial activities stress the functions of planning, organizing, coordinating, deciding, and controlling. Contemporary research looking at the actual behavior of managers has found that managers� real activities are highly fragmented, variegated, and brief in duration, with managers moving rapidly and intensely from one issue to another. Managers spend considerable time pursuing personal agendas and goals, and contemporary managers shy away from making grand, sweeping policy decisions.

           Decision making can also take place at the individual or group level. Individual models of decision making assume that human beings can rationally choose alternatives and consequences based on the priority of their objectives and goals. Organizational models of decision making illustrate that real decision making in organizations takes place in arenas where many psychological, political, and bureaucratic forces are at work.

           Information technology provides new tools for managers to carry out both their traditional and newer roles, enabling them to monitor, plan, and forecast with more precision and speed than ever before and to respond more rapidly to the changing business environment. Information systems have been most helpful to managers by providing support for their roles in disseminating information, providing liaisons between organizational levels, and allocating resources. However, some managerial roles cannot be supported by information systems, and information systems are less successful at supporting unstructured decisions.

4.

Analyze how information systems support various business strategies for competitive advantage.

Businesses can use strategic information systems to gain an edge over competitors. Such systems change organizations� goals, business processes, products, services, or environmental relationships, driving them into new forms of behavior.

           Information systems can be used to support strategy at the business, firm, and industry levels. At the business level of strategy, information systems can be used to help firms become the low-cost producers, differentiate products and services, or serve new markets. Information systems can also be used to lock in customers and suppliers using efficient customer response and supply chain management applications. Value chain analysis is useful at the business level to highlight specific activities in the business where information systems are most likely to have a strategic impact.

           At the firm level, information systems can be used to achieve new efficiencies or to enhance services by tying together the operations of disparate business units so that they can function as a whole or promote the sharing of knowledge across business units.

           At the industry level, systems can promote competitive advantage by facilitating cooperation with other firms in the industry, creating consortiums or communities for sharing information, exchanging transactions, or coordinating activities. The competitive forces model, information partnerships, business ecosystems, and network economics are useful concepts for identifying strategic opportunities for systems at the industry level.

5.

Assess the challenges posed by strategic information systems and management solutions.Information systems are closely intertwined with an organization�s structure, culture, and business processes. New systems disrupt established patterns of work and power relationships, so there is often considerable resistance to them when they are introduced.

           Implementing strategic systems often requires extensive organizational change and a transition from one sociotechnical level to another. Such changes are called strategic transitions and are often difficult and painful to achieve. Moreover, not all strategic systems are profitable, and they can be expensive to build. Many strategic information systems are easily copied by other firms so that strategic advantage is not always sustainable. The complex relationship between information systems, organizational performance, and decision making must be carefully managed. A strategic system analysis is helpful.

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