© Farhan Mir 2012 IMS MIS BBA (Hons) Morn & Eve 6 th (Module 2) Management, Organizations, Decision Making Strategy and IS Course Lecturer: Farhan Mir

© Farhan Mir 2012 IMS Expected Topics Introduction to IS Management & Decision Making IT Fundamentals Transaction Processing and Reports System DSS Knowledge-Based Systems System Development MIS in the Fundamental Areas of Business (Will be covered through case studies) Contemporary Issues & Trends (You will cover it through your research work and Presentations/ Seminars)

© Farhan Mir 2012 IMS Once we have seen how IS could enhance the effectiveness of Organizational Functions (Overall Performance) now we could explain their pivotal role in Decision Making & Strategy

© Farhan Mir 2012 IMS Organizations & People  Organizations  Structure  Culture  Management (Decision Making)  New trends in organizations (Globalization)  People (always bring Psychological issues)  Attitude  Personalities  Motivation  The biggest problem area for/ in IS  Skills & abilities (Learning/ Training)  Career Development

© Farhan Mir 2012 IMS Transformation of Organizations Flattening (Need for Agility) Decentralization (More focus on Behavioral Approaches) Flexibility Location Independence (Globalization Pressures) Low Transaction Cost Empowerment (Employee needs to respond quickly) Collaborative Work (More teams are emerging) Overall Performance (Effectiveness) Competitive Advantage

© Farhan Mir 2012 IMS Managers & Decision Making Decision Making The process by which managers respond to opportunities and threats by analyzing options, and making decisions about goals and courses of action. Decisions in response to opportunities—occurs when managers respond to ways to improve organizational performance. Decisions in response to threats—occurs when managers are impacted by adverse events to the organization.

© Farhan Mir 2012 IMS Scope of Decision Operational Planning and Control: Focus on efficient and effective execution of specific tasks. They affect activities taking place right now E.g... What should be today's production level Management Control and Tactical Planning Focus on effective utilization of resources more longer range planning horizon E.g... What is next years production level Strategic Planning Long-range goals and policies for resource allocation E.g... What new products should be offered

© Farhan Mir 2012 IMS What Makes Decision Making so Difficult? Complexity Uncertainty Organizational & Environment Pressure Individual Decision Making Limitations Experience, Beliefs & Perceptions of the Decision Maker

© Farhan Mir 2012 IMS Structured and Unstructured Problems

© Farhan Mir 2012 IMS Decisions are classified as: Unstructured: Non-routine, decision maker provides judgment, evaluation, and insights into problem definition, no agreed-upon procedure for decision making Structured: Repetitive, routine, handled using a definite procedure Managers and Decision Making

© Farhan Mir 2012 IMS Simon’s Rational Decision Making Model Intelligence Involves gathering information from external and internal sources. Design Involves generating alternative decisions. Choice Involves selecting one of the alternatives. Implementation Alternative is put into action.

© Farhan Mir 2012 IMS Decision Making Stages intelligence design choice IMPLEMENTATION search for information formulate alternatives evaluate and make a selection JUST DO IT!

© Farhan Mir 2012 IMS Six Steps in Decision Making Figure 7.4

© Farhan Mir 2012 IMS Realities facing Managers and Decision Making Managers perform high-volume, high speed work involving a large number of topics. Managers are often under stress. Managers often take shortcuts. Satisficing (sounds like?) nature of decision making Political motivations may impact decisions. Decisions should be transparent. (need for open communication)

© Farhan Mir 2012 IMS Why Information Is Incomplete Figure 7.2

© Farhan Mir 2012 IMS Information Systems & Decision Making Process

© Farhan Mir 2012 IMS Where IS Lies in Organizations? Traditional Roles (Past) A Separate Department having little influence in overall Organizational posture It was used to provide information only “Operational Role” Current & Future Status Linking all Departments (at heart of organizational operations) Progressively involved in planning and Objective setting Used as a business-creator/ initiator (Strategic Role)

© Farhan Mir 2012 IMS But Information Systems in organizations also act as an “Enabling” & “Filtering Tool” THE FIRM INFORMATION SYSTEMS THE ENVIRONMENT: RESOURCES & CONSTRAINTS GOVERNMENTS COMPETITORS FINANCIAL INSTITUTIONS CULTURE KNOWLEDGE TECHNOLOGY [CUSTOMERS!!]

© Farhan Mir 2012 IMS Transformation of Organizations Flattening (Need for Agility) Decentralization (More focus on Behavioral Approaches) Flexibility Location Independence (Globalization Pressures) Low Transaction Cost Empowerment (Employee needs to respond quickly) Collaborative Work (More teams are emerging) Overall Performance (Effectiveness) Competitive Advantage

© Farhan Mir 2012 IMS

© Farhan Mir 2012 IMS

© Farhan Mir 2012 IMS

© Farhan Mir 2012 IMS

© Farhan Mir 2012 IMS 24 Competitive Forces Model THE FIRM TRADITIONAL COMPETITION NEW MARKET ENTRANTS SUPPLIERSCUSTOMERS SUBSTITUTE PRODUCTS & SERVICES

© Farhan Mir 2012 IMS 25 Strategies Used With the Competitive Forces Model Product differentiation involves developing new and unique products and services not easily duplicated by competitors low-cost producer (provide same value but at a lower cost than competitors) Focused differentiation involves Narrowing the market by developing niches for specialized products or services where a business can compete better than its rivals Use of customer data (data mining, credit card transactions, Internet behavior )

© Farhan Mir 2012 IMS 26 Examples of Systems for Each Strategy Product differentiation Levi Strauss’ s Personal Pair (mass customization or one-to-one marketing) and Lands’ End Hallmark’s computer generated cards Build to order products (Dell) Focus (market niche) Customer data analysis through CRM Harrah’s case and Hilton Hotels Low cost producer CAD systems used in the automobile or airline industry Insurance claim adjusters use of pen-based computers

© Farhan Mir 2012 IMS

© Farhan Mir 2012 IMS 28 Primary Activities of the VC Model Inbound logistics - receiving and storing of materials Wal-Mart’s continuous replenishment system stockless inventory systems Operations - transformation of inputs to finished goods or the process of providing a service computer controlled machinery used by Gillette for producing razor blades Outbound logistics - storing and distributing the product airline reservation system automated shipping scheduling systems

© Farhan Mir 2012 IMS 29 Management Issues Opportunities Firms face a continuing stream of IT-based opportunities to achieve strategic advantages Challenges Some firms face big hurdles in implementing contemporary systems; resistance to change. Once an advantage is achieved, there are difficulties in sustaining the advantage. Organizations often cannot change fast enough to accommodate new technologies (Kodak).

© Farhan Mir 2012 IMS 30 Solutions: What Managers Can Do Managers cannot depend on IS professionals to tell them about strategic opportunities Managers must understand what is happening in their industry in general and the role of technology in particular How do you do this?

© Farhan Mir 2012 IMS References Charles Parker, Thomas Case. (2000). “Management Information Systems: Action & Strategy”. (2 nd Ed). Chapter 2 & 4 James O’Brien. (1998). “Introduction to Information Systems: A Networked Enterprise Perspective”. (2 nd Ed). Chapter 10,12 Kenneth C. Laudon & Jane P. Laudon (2011). “Management Information Systems: Managing a Digital Firm”.(7 th Ed). Chapter 3 Grover S. Kearns (1997). Alignment of Information Systems Plans with Business Plans: (