Management information system ralp 7e ch02

Principles of Information Systems, Seventh Edition 2• The use of information systems to add value to the organization is strongly influenced by organizational structure, culture, and ch

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Principles of Information Systems, Seventh Edition 2

• The use of information systems to add value to the

organization is strongly influenced by organizational

structure, culture, and change

• Identify the value-added processes in the supply chain

and describe the role of information systems within them

• Provide a clear definition of the terms organizational

structure, culture, and change and discuss how they affect

the implementation of information systems

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• Because information systems are so important, businesses

need to be sure that improvements or completely new systems help lower costs, increase profits, improve service, or achieve

a competitive advantage

• Identify some of the strategies employed to lower costs or improve service

• Define the term competitive advantage and discuss how

organizations are using information systems to gain such

an advantage

• Discuss how organizations justify the need for information systems

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• Information systems personnel are the key to unlocking

the potential of any new or modified system

• Define the types of roles, functions, and careers available

in information systems

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Organizations and Information Systems

• Organization: a formal collection of people and other

resources established to accomplish a set of goals

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Figure 2.1: A General Model of an

Organization

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Organizations and Information Systems

(continued)

• Value chain: a series (chain) of activities that includes

inbound logistics, warehouse and storage, production,

finished product storage, outbound logistics, marketing and sales, and customer service

• Upstream management: management of raw materials,

inbound logistics, and warehouse and storage facilities

• Downstream management: management of finished

product storage, outbound logistics, marketing and sales, and customer service

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Figure 2.2: The Value Chain of a

Manufacturing Company

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Traditional Organizational Structure

• A hierarchical structure

• Major department heads report to a president or top-level

manager

• A managerial pyramid shows the hierarchy of decision

making and authority

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Figure 2.3: A simplified organizational model, showing the managerial pyramid

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Figure 2.4: A Traditional Organizational

Structure

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Project Organizational Structure

• Centered around major products or services

• Temporary project teams

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Figure 2.5: A Project Organizational

Structure

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Team Organizational Structure

• Centered on work teams or groups

• Temporary or permanent teams

• Various sizes

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Multidimensional Organizational

Structure

• May incorporate several structures at the same time

• Advantage: ability to simultaneously stress both

traditional corporate areas and important product lines

• Disadvantage: multiple lines of authority

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Figure 2.6: A Multidimensional

Organizational Structure

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Virtual Organizational Structure and

Collaborative Work

• Employs individuals, groups, or business units in

geographically dispersed areas

• People may never meet face to face

• Can be permanent or temporary

• Collaborative work: managers and employees can

effectively work in groups around the world

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Organizational Culture and Change

• Organizational culture: Major understandings and

assumptions for a business, corporation, or organization

• Organizational culture can significantly influence

information systems

• Organizational change: deals with how organizations

plan for, implement, and handle change

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Reengineering

• Process redesign

• Radical redesign of business processes, organizational

structures, information systems, and values of the

organization to achieve a breakthrough in business results

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Figure 2.8: Reengineering

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Continuous Improvement

• Constantly seeking ways to improve business processes

• Benefits:

• Increased customer loyalty

• Reduced customer dissatisfaction

• Reduced opportunity for competitive inroads

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Table 2.2: Comparing Business Process Reengineering and Continuous Improvement

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Technology Diffusion, Infusion, and

Acceptance

• Technology diffusion: measure of how widespread the

use of technology is in an organization

• Technology infusion: extent to which technology

permeates a department

• Technology Acceptance Model (TAM): specifies factors

that can lead to higher usage of technology in an

organization

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Total Quality Management

• Quality: ability of a product or service to meet or exceed

customer expectations

• Total quality management (TQM): approaches, tools,

and techniques that foster a commitment to quality

throughout the organization

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Outsourcing, On-Demand Computing,

and Downsizing

• Outsourcing: contracting with outside professionals

• On-demand computing: contracting for computer

resources to rapidly respond to an organization’s varying workflow

• Downsizing: reducing the number of employees in an

organization to cut costs

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Organizations in a Global Society

• As companies rely more heavily on virtual structures and

outsourcing, businesses can operate around the world

• Challenges to operating in a global society:

• Every country has a set of customs, cultures, standards,

politics, and laws

• Language

• Difficulty in managing and controlling operations in

different countries

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Competitive Advantage

• Competitive advantage: significant, long-term benefit to

a company over its competition

• Ability to establish and maintain a competitive advantage

is vital to a company’s success

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Factors That Lead Firms to Seek

Competitive Advantage

• Rivalry among existing competition

• Threat of new entrants

• Threat of substitute products and services

• Bargaining power of customers and suppliers

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Strategic Planning for Competitive

Advantage

• Change the structure of the industry

• Create new products or services

• Improve existing products or services

• Use information systems for strategic purposes

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Table 2.4: Competitive Advantage

Factors and Strategies

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Table 2.4: Competitive Advantage Factors and Strategies (continued)

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Performance-Based Information

Systems

• Considers both strategic advantage and costs

• Uses productivity, return on investment (ROI), net present

value, and other measures of performance

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Figure 2.9: Three Stages in the Business

Use of Information Systems

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Productivity

• A measure of output achieved divided by input required

• Higher level of output for a given level of input means

greater productivity

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Return on Investment and the Value of

Information Systems

• Earnings growth

• Market share

• Customer awareness and satisfaction

• Total cost of ownership

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Careers In Information Systems

• Degree programs:

• Degrees in information systems

• Business degrees with a global or international orientation

• Computer systems are making information systems

professionals’ work easier

• Opportunities in information systems are not confined to

single countries

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Roles, Functions, and Careers in the Information Systems Department

• Primary responsibilities in information systems

systems functions

projects and ongoing maintenance and review

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Typical Information Systems Titles and

Functions

• Chief Information Officer (CIO): employs the IS

department’s equipment and personnel to help the

organization attain its goals

• LAN administrators: set up and manage the network

hardware, software, and security processes

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Typical IS Titles and Functions

(continued)

• Internet careers:

• Strategists

• Programmers

• Web site operators

• Chief Internet Officer

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Summary

• An organization is a system

• Categories of organizational structure: traditional, project,

team, multidimensional, and virtual

• Organizational culture: major understandings and

assumptions of an organization

• Reengineering: radical redesign of business processes,

organizational structures, information systems, and values

of the organization to achieve a breakthrough in business results

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• Continuous improvement: constantly seeking ways to

improve business processes

• Outsourcing: contracting with outside professionals

• Downsizing: reducing number of employees to cut costs

• Competitive advantage: significant, long-term benefit

to a company over its competition

• Performance-based information systems considers both

strategic advantage and costs

Summary (continued)

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• Productivity: a measure of output achieved divided

by input required

• Primary responsibilities in information systems:

operations, systems development, and support

• Typical information systems titles: Chief Information

Officer (CIO), LAN administrator

Summary (continued)

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