MIS COURSE: CHAPTER 3 INFORMATION SYSTEMS, ORGANIZATIONS, AND STRATEGY Composed by DUONG TO DUNG, JAN 2019

CONTENT Which features of organizations do managers need to know about to build and use IS successfully? What is the impacts of IS on organizations? How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using IS? What are the challenges posed by strategic IS and how should they be addressed?

Which features of organizations do managers need to know about to build and use IS successfully? ISs and organizations influence one another. ISs are built and used to benefit the firm. Also the firms must be aware of and open to the influences of ISs to benefit from new technologies. The interaction between IS & Org. is complex and is influenced by many mediating factors, including the org. structure, biz processes, politics, culture, surrounding environment, and management decisions. You will need to understand how IS can change social and work life in your firm. You will not be able to design new systems successfully or understand existing systems without understanding your own business organization.

Which features of organizations do managers need to know about to build and use IS successfully? WHAT IS AN ORGANIZATION? An organization is a stable, formal social structure that take resources from the environment and process them to produce outputs. A more realistic behavioral definition of an organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution. In this behavioral view of the firm, people who work in organizations develop customary ways of working. Most of these are not discussed in any formal rulebook.

Which features of organizations do managers need to know about to build and use IS successfully? HOW DO THESE DEFINITION OF ORGANIZATION RELATE TO IS TECHNOLOGY? + A technical view of org. encourages us to focus on how inputs are combined to create outputs when technology changes are introduced into the company. + But the more realistic behavioral definition of an org. suggests that building new IS or rebuild the old ones, involves much more than a technical re-arrangement of machines or workers, that some IS change the organizational balance of rights, privileges, obligations, responsibilities, and feelings that have been established over a long period of time. + Changing these elements can take a long time, be very disruptive, and requires more resources to support training and learning.

Which features of organizations do managers need to know about to build and use IS successfully? FEATURES OF ORGANIZATIONS + Routines & Business Processes + Organizational Politics + Organizational Culture + Organizational Environments + Disruptive Technologies: radically change the business landscape and environment (p.115, Table 3.1) + Organizational Structure (Table 3.2, p.116) + Other Organizational Features: goals, target customers, leadership…

What is the impacts of IS on organizations? + Economic Impacts: reduce transactional cost + Organizational & Behavioral Impacts: flattened org. * Postindustrial Organizations: authority increasingly relies on knowledge and competence, not merely on formal positions  flattened, decentralized, self-managing. * Organizational Resistance to Change + The Internet & Organization IMPLICATIONS FOR THE DESIGN AND UNDERSTANDING OF IS: IS should be built with clear understanding of the organization in which they will be used: environment, structure, culture, politics, type of org., leadership style, people, processes…

How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using IS? + Porter’s 5 competitive forces: new entrants, substitute P/S, customers, suppliers, rivals + IS Strategies for dealing with competitive forces: * Low-cost leadership; * Product differentiation; * Focus on Niche; * Strengthen Customer and Supplier Intimacy

The Internet’s Impact on Competitive Advantage

Smart Products and The Internet of Things (IoT) A smart product is a data processing object, which has several interactive functions. A smart product combines the physical and software interfaces. The usage of a smart product is interactive and requires also some cognitive work by the user. Smart products are dedicated to certain functionality – they are not up-gradable. *** The Internet of things (IoT) is the network of devices, vehicles, and home appliances that contain electronics, software, and connectivity which allows these things to connect, interact and exchange data. IoT involves extending Internet connectivity beyond standard devices, such as desktops, laptops, smartphones and tablets, to any range of traditionally dumb or non-internet-enabled physical devices and everyday objects. Embedded with technology, these devices can communicate and interact over the Internet, and they can be remotely monitored and controlled.

How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using IS? + Business Value Chain: p.132 + Extending the Value Chain: The Value Web

How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using IS? + Synergies: the use of IS in these synergy situation is to tied together operations of disparate business units so that they can act as a whole. + Enhancing Core Competencies + Network-based Strategies: network economics (economic values depends on the number of people using P/S), virtual company model, business eco-systems & platforms

What are the challenges posed by strategic IS and how should they be addressed? + Sustaining Competitive Advantage + Aligning IT with Business Objectives * Management Checklist: Performing a Strategic Systems Analysis: p.139 What is the structure of the industry in which the firm is located? What are the business, firm, and industry value chains for this particular firm? Have we aligned IT with our business strategy and goals? + Managing Strategic Transitions

What are the challenges posed by strategic IS and how should they be addressed? + Managing Strategic Transitions: everything changes, especially nowadays: the socio-technical changes, affecting both social and technical elements of the org., can be considered strategic transitions – a movement between levels of socio-technical systems. Such changes often entail blurring of org. boundaries, both external and internal. Suppliers and customers must become intimately linked and may share each other’s responsibilities. Managers will need to devise new business processes for coordinating their firm’s activities with those of customers, suppliers, and other organizations.

REVIEW SUMMARY Which features of organizations do managers need to know about to build and use IS successfully? What is the impacts of IS on organizations? How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using IS? What are the challenges posed by strategic IS and how should they be addressed?

REVIEW QUESTIONS LET’S GO THROUGH THEM TOGETHER! LOOK AT THE CASE STUDY ON PAGE #144: DEUTSCHE BANK: THE COST OF LEGACY SYSTEMS END!