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ITEC 1010 Information and Organizations
Chapter 2
Information Systems in
Organizations
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ITEC 1010 Information and Organizations
Organizations and Information
SystemsOrganization
A formal collection of people and other
resources established to accomplish a set ofgoals
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General Model of an
Organization (next slide)
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Value Chain
Term coined by Michael Porter in a 1965
article in theHarvard Business Review
Def: a series of activities that includes
inbound logistics, warehouse and storage,
production, finished product storage,
outbound logistics, marketing and sales,and customer service
Schematic
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Organizations
Organizational structure
Organizational subunits and the way they are
related to the overall organization
Traditional organizational structure
Major department heads report to a president
or top-level manager
Schematic
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Traditional Organizational Structure
S. Burry,PresidentA.Bailey,Legal counsel
B. Wong,
VP Accounting
C.Rodrig,
VP Information
Systems
R. Henderson,
VP Marketing
K. Kelly,
VP Production
V. Cisborn,
VP Human
Resources
S. Samuel
Supervisor
L. Bashran,
Supervisor
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Terminology (1)
Hierarchical organizational structure
See previous slide
Series of levels
Those at high levels have more power and
authority within an organization
Flat organizational structure An organizational structure with a reduced
number of layers of management
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ITEC 1010 Information and Organizations
Terminology (2)
Empowerment
Giving employees and their managers more
power, responsibility, and authority to makedecisions, take certain actions, and have more
control over their jobs
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ITEC 1010 Information and Organizations
Other Organizational Structures (1)
Project organizational structure
An organization structure centred on major
products or services
Contrast with traditional structure
Team organizational structure
An organizational structure centred on workteams or groups
Schematic
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ITEC 1010 Information and Organizations
Project Organizational Structure
B. Woods,President
Air & Aerospace Co.
T. Walker,Senior VP,
Aircraft Division
W. Butler,Senior VP,
Aerospace Division
O. Teco,Senior VP,
Communications &
Satellite Division
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Sales
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Sales
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Other Organizational Structures (2)
Multidimensional organizational structure
A structure that may incorporate several
structures at the same time Schematic
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Multidimensional Organizational Structure
Vice President,Marketing
Vice President,Production
Vice President,Finance
Publisher,
College Division
Marketing
Group
Production
Group
Finance
Group
Publisher,
Trade Division
Marketing
Group
Production
Group
Finance
Group
Publisher,
High SchoolDivision
Marketing
Group
Production
Group
Finance
Group
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Other Organizational Structures (3)
Advantages and disadvantages of different
organizational structures
Read the book!
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ITEC 1010 Information and Organizations
Organizational Culture
and Change (1) Culture
A set of major understandings and assumptions
shared by a group
Organizational culture
The major understandings and assumptions for
a business, a corporation, or an organization
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ITEC 1010 Information and Organizations
Organizational Culture
and Change (1)Organizational change
Deals with how for-profit and non-profit
organizations plan for, implement, and handlechange
Organizational learning
The way organizations adapt to new conditionsor alter their practices over time
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ITEC 1010 Information and Organizations
Models of Change
Change model
A representation of change theories developed
by Kurt Lewin and Edgar Schein in 1969 Three-stage approach
Unfreezing
Moving
Refreezing
Schematic
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Change Model
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Reengineering
Also called Process redesign
The radical redesign of business processes,
organizational structures, information systems, andvalues of the organization to achieve a breakthrough in
business results
For example, to
Reduce delivery time
Increase product and service quality
Improve customer satisfaction
Increase revenues and profitability
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Rules, Rules, Rules
Reengineering requires finding and
vigorously challenging old rules
Rule Original rationale Potential problem
Small orders held
until full truckload
Reduce delivery
costs
Customer deliver is
delayed
No order accepteduntil credit approved Reduce potential forbad debt Customer service ispoor
All product decisions
made at headquarters
Reduce number of
items in inventory
Perception of limited
product selection
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Other Models
Continuous improvement
Constantly seeking ways to improve the
business processes to add value to productsand services
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Continuous Improvement vs.
ReengineeringReengineering Continuous Improvement
Strong action to solve serious problem Routine action
Driven by senior executives Worker-driven
Broad in scope; cuts across
organizations
Narrow in scope
Goal to achieve a major breakthrough Continuous, gradual
Often led by outsiders Led by workers
IS integral to the solution IS provides data to guide
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ITEC 1010 Information and Organizations
Total Quality Management
Quality
The ability of a product (including service) to
meet or exceed customer expectations
TQM
A collection of approaches, tools, and
techniques, that offers a commitment to qualitythroughout the organization
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ITEC 1010 Information and Organizations
Outsourcing and Downsizing
Outsourcing
Contracting with outside professional services to meetspecific business needs
E.g., advertising, hiring
Downsizing
Reducing the number of employees to cut costs
Also called rightsizing
May have serious side effects E.g., low employee morale, a need for expensive consultants,
lost time, waning productivity
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Competitive Advantage
Competitive advantage
A position, product, service, etc., within a
business that improves a position within amarket with respect to competitors
Porters Five force model of competitive
advantage Identifies factors that lead to competitiveness
Schematic
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Porters Five-force Model
Substitute
Products
Supplier
Power
New
Entrants
Buyer
PowerRivalry
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ITEC 1010 Information and Organizations
Strategic Planning for
Competitive Advantage
Four techniques: Strategic alliances (aka strategic partnerships)
Creating new goods or services
Improving existing goods or services
Using information systems for strategic purposes
Next slide
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1. Strategic alliance
An agreement between two or more companies thatinvolves the joint production and distribution of
goods and services E.g., Chrysler + Daimler Benz
2. Creating new goods or services
A company may become stagnant without theintroduction of new goods and/or services
E.g., Compaq, Dell3. Improving existing goods or services
Small variations to existing goods or services, and/orcomplete modifications
E.g., light foods4. Using information systems for strategic purposes
IS for improving organizational effectiveness
E.g., SABRE (airline reservation system)
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ITEC 1010 Information and Organizations
Performance-based Information
Systems
Productivity
A measure of the output achieved divided by
the input required
Productivity =
Output achieved
Input required
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ITEC 1010 Information and Organizations
Return on Investments (ROI) and
the Value of IS
Return on investment (ROI)
A measure of IS value that investigates the
additional profits or benefits that are generatedas a percentage of the investment in
information systems technology
represents
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ITEC 1010 Information and Organizations
Measures of IS Value
Earnings growth
Market share
Customer awareness and satisfaction
One of my favourite quotes:
When you cannot measure, your knowledge isof a meager and unsatisfactory kind.
Kelvin
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Justifying IS
Categories:
Tangible savings
Intangible savings
Legal requirements
Modernization
Pilot project
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Roles, Functions, and Careers in
the IS Department
Categories:
Operations
Systems development
Support
Liaisons (information service units)
Schematic
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ITEC 1010Information and Organizations
IS Department
CEO
CIO
OperationsSystems
developmentSupport
Informationservice
unit
Otherfunctional
areas
Data
administration
Information
centre
Information
technololgy
Systems
analysis
& design
Programming
Computer
facility
operations
Data
entry
Local
Area network
operations
Information
Resource
Management
Functions
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Information Centre
Information centre
Provides users with assistance, training,
application development, documentation,equipment selection and setup, standards,
technical assistance, and troubleshooting
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Information Service Unit
Information service unit
Attached to a functional area of the business.
Acts as a local information supportorganization within a functional area.
Performs the critical role of liaison between
the functional area and IS
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Chief Information Officer (CIO)
Chief Information Officer (CIO)
A manager at the vice-president level
responsible for IS planning, policy, andstandards
Focused on supporting corporate goals
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Other IS Roles
Database Administrator
Systems Programmer
Network Specialist LAN Administrator
Webmaster
Trainer
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IS Principles
Use of IS strongly influenced by
organizational structure and problem
orientations IS are often intertwined within the value-added
processes
IS usage may require change that could meet
with resistance
Value-added IS needs to be continually sought
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ITEC 1010
End of Chapter 2
Chapter 3
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