CH3

• The relationship between organizations and information technology


  Both influence each other
• Relationships influenced by organizations


  • Structure
  • Business process
  • Politics
  • Culture
  • Environment
  • Management decisions
• Organization (technical definition)


  Formal social structure that take resources from environment and produce output, Formal legal entry with internal rules and social structure
• Organization (behavioral definition)


  Group of rights, privileges & responsibilities balanced over time via conflict
• Features of organizations


  • Hierarchical structure
  • Accountability in decision making
  • Value in planning
  • Routine & business structure
  • Organizational politics, Culture, Structure, Environment
• Routine


  To produce goods and services, has precise rules & practices are established to handle all situations
• Business processes


  Collection of routines
• Business firms


  Collection of business processes
• Organizational politics


  Different opinions cause political struggles and conflicts, Political resistance prevents organizational changes
• Organizational culture


  Culture is the environment that surround you in work, It's a set of assumptions that define goals and products (what to produce, how, where & for who), it can be a powerful unifying force or a barrier to change
• Organizational environment


  Have a reciprocal relationship, organization relay on and are affected by the environment, they can shape their environment, Environment change faster than organizations, IS can be instrument of environmental scanning
• Organizational structure (Mintzberg)


  • Entrepreneurial
  • Machine bureaucracy
  • Divisionalized bureaucracy
  • Professional bureaucracy
  • Adhocracy
• Disruptive technologies

  Technology that changes businesses and markets, Substitute products that perform better than existing products (Netflix, iTunes), Ex- personal computers, smartphones & AI, First movers: inventors of DT, Fast followers: firms with resources to capitalize on new technology
• Other organizational features


  • Goals
  • Constituencies: some benefit their members other benefit their clients
  • Leadership style
  • Types of tasks
  • Different environment
• Economic impacts of IT


  IT changes the cost of buildings, labor & info, IS replace traditional labor, IT influences info cost and quality & enable firms to shrink because it lower transaction coast, outsourcing
• Transaction cost theory


  Firms want to save money doing businesses in markets, They might collab with other firms to hire more workers or to buy supplier, IT reduces market costs so firms chose to work with other firms instead of hiring more staff
• Agency theory (principle-agency theory)


  Principe- owner & agency- employee, Firms are a series of deals among self-interested people needing supervision, As firms grow they face higher costs of agency costs, IT can cut these costs
• Organizational and behavioral impacts of IT


  IT flattens organizations, decision making mover to lower levels, fewer managers are needed because IT speeds up decision making, Postindustrial organization have flatter organizations where authority depends on knowledge and skills
• Understanding organizational resistance to change


  IS is involved in organizational politics because they control access to key resources info, They can alter organizations structure, culture, politics and work, All 4 factors that change resistance together: Nature of IT innovation, Organization structure, Culture, Task impact
• The internet and organizations

  Internet makes organizations flatter, it improves access, storage and sharing info, it reduces transaction and agency costs
• Porter's competitive forces model

  Michael porter's CFM provides a general view of a firm, it's rivals & environment, 5 competitive forces shape fate of firms: Traditional competitors, New market entrants, Substitute products & services, Customers and Suppliers
• Porter's 5 competitive forces

  • Traditional competitors- firms compete in same market space always innovating to attract customers
  • New market entrants- some industries are easier to enter while other have high barriers, new firms have new equipment and innovation ideas but lack of brand recognition
  • Substitute products & services- alternatives customer might use if prices go up
  • Customers- can easily switch up competitors product
  • Suppliers- more suppliers mean more control over product & quality
• IS strategies for dealing with competitive forces

  • Low-cost leadership
  • Product differentiation
  • Focus on market niche
  • Strengthens customer & suppliers relationship
• The internet's impact on competitive advantage

  Transformation or threatens some industries (media), Competitive forces still at work but rivalry more intense, It's universal standards enable new rivals to enter the market compete on price, It creates opportunities to build strong brand & loyal customers
• Smart products and the internet of things

  IoT- products that connect to Wi-Fi, Smart products (fitness equipment), Expand product differentiation opportunities, New rivals, Raise switching costs, Decrease power of suppliers
• The business value chain model

  Sees firms as series of activities that add value to products or services, Primary activities- related to production & distribution (delivery), Support activities- enable primary activities (HR), At each stage determine how IS can improve efficiency, customer and supplier intimacy, It cause in utilizing benchmarking identifying
• Entrepreneurial

  Small start-ups
• Machine bureaucracy

  Large firms producing standard product
• Divisionalized bureaucracy

  Multiple firms producing multiple products
• Professional bureaucracy

  Hospitals, schools and law firms
• Adhocracy

  Flexible organizations respond to rapid changes with week central management
• 4 factors that change resistance

  Nature of IT innovation

  Organization structure

  Culture

  Task impact