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.

MEDIATING FACTORS:MEDIATING FACTORS: Environment Environment CultureCultureStructure Structure Standard Procedures Standard Procedures Politics Politics Management Decisions Management Decisions ChanceChance

ORGANIZATIONS & INFORMATION TECHNOLOGY

ORGANIZATIONSORGANIZATIONS INFORMATION INFORMATION TECHNOLOGYTECHNOLOGY

V P V P V P

C E OORGANIZATION

FORMAL DEFINITION:

- stable, formal structure• takes resources/inputs from environment – capital,

labour, materials, knowledge(?) etc• processes them• to produce outputs

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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

*

ENVI

RO

NM

ENTA

L R

ESO

UR

CES

ENVI

RO

NM

ENTA

L R

ESO

UR

CES

ENVI

RO

NM

ENTA

L O

UTP

UTS

ENVI

RO

NM

ENTA

L O

UTP

UTS

BEHAVIORAL VIEW OF ORGANIZATIONS

STRUCTURE:Hierarchy Division of laborRules, Procedures

PROCESS: Rights/Obligations Privileges/Responsibilities ValuesNorms People *

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

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ORGANIZATION & ITS ENVIRONMENT

THE FIRM

INFORMATION SYSTEMSINFORMATION SYSTEMS

THE ENVIRONMENT:THE ENVIRONMENT:

RESOURCES & CONSTRAINTS

GOVERNMENTS

COMPETITORS

FINANCIAL INSTITUTIONS

CULTURE

KNOWLEDGE

TECHNOLOGY

BROADER VIEW OF ORGANIZATIONS

COMMON FEATURES:• FORMAL STRUCTURE• STANDARD OPERATING

PROCEDURES• POLITICS• CULTURE

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3.11

SALIENT FEATURES OF ORGANIZATIONS

UNIQUE FEATURES:ORGANIZATIONAL TYPE

ENVIRONMENTS, GOALS, POWERCONSTITUENCIES, FUNCTION

LEADERSHIP, TASKSTECHNOLOGY

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

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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.

• 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

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

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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

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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

Source: Leavitt, Handbook of Organization (1965)

TASKTASK

PEOPLEPEOPLETECHNOLOGYTECHNOLOGY

STRUCTURESTRUCTURE

RESISTANCERESISTANCE

MUTUALMUTUALADJUSTMENTADJUSTMENT

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

TPSOAS MIS

KWS

DSS

ESS

ORGANIZATIONAL LEVELORGANIZATIONAL LEVELTYPE OFTYPE OFDECISIONDECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS RECEIVABLE

ELECTRONIC PRODUCTIONSCHEDULING COST OVERRUNS

SEMI- BUDGETSTRUCTURED PREPARATION

PROJECTSCHEDULING

FACILITYLOCATION

UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTSNEW 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)

• 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

MODELS OF DECISION MAKING