© Farhan Mir 2014 IMS MIS BBA (Hons) Morn & Eve 6 th (Module 2) Management, Organizations, Decision Making, Strategy and IS Course Lecturer: Farhan Mir

© Farhan Mir 2014 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 2014 IMS Once we have seen how IS could enhance the effectiveness of Organizational Functions (Overall Performance) now we could explain their pivotal role in Organizations & Strategy

© Farhan Mir 2014 IMS Organizations & People  Organizations  Structure  Culture  Politics  Environment  Leadership  Nature of Business (Routine Vs Non-Routine)  New trends in organizations (Globalization)

© Farhan Mir 2014 IMS Organization and Behavioral Aspects  People (always bring Psychological issues)  Attitude  Personalities  Motivation  Resistance  The biggest problem area for/ in IS  Skills & abilities (Learning/ Training)  Career Development

© Farhan Mir 2014 IMS IS Impact on Organization Economic Cost Reduction Transaction Cost Agency Cost Structural Flatter Models Post Industrial Models (Knowledge) Behavioral

© Farhan Mir 2014 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 2014 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 2014 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 2014 IMS Structured and Unstructured Problems

© Farhan Mir 2014 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 2014 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 2014 IMS Why Information Is Incomplete Figure 7.2

© Farhan Mir 2014 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 2014 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 2014 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 2014 IMS 17 Competitive Forces Model THE FIRM TRADITIONAL COMPETITION NEW MARKET ENTRANTS SUPPLIERSCUSTOMERS SUBSTITUTE PRODUCTS & SERVICES

© Farhan Mir 2014 IMS 18 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 2014 IMS 19 Examples of Systems for Each Strategy Product differentiation Levi Strauss’ s Personal Pair (mass customization or one-to-one marketing) Hallmark’s computer generated cards Build to order products (Dell) Focus (market niche) Customer data analysis through CRM Hilton Hotels customer database Low cost producer CAD systems used in the automobile or airline industry Insurance claim adjusters use of pen-based computers Wal-Mart point of sale terminals sending information directly to suppliers

© Farhan Mir 2014 IMS

© Farhan Mir 2014 IMS 21 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 2014 IMS New Strategies based on IS Synergies Partnerships within and outside the organization to support adtivities Alliance between Bank of New York and JP Morgan Chase Enhancing Core Competencies Focusing on particular expertise to gain advantage over other P&G InnovationNet for knowledge sharing and learning Network-Based Strategies Network Economics Cost of adding new members is quite low as compared to gains yielded by expansion of network Virtual Company Model

© Farhan Mir 2014 IMS 23 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 2014 IMS 24 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 2014 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: (