Four Levels of Organizational Hierarchy Operational Level –TPS: order tracking, payroll, sales, marketing Knowledge Level –CAD/CAM, Lotus Notes, spreadsheet/financial planning, OA Management Level –decision support/mis: budgeting, cost analysis, production mix/scheduling, Strategic Level: –ESS: forecasting, profit planning, manpower planning

Major types of information systems TPS: lower level work (order entry) OA: document management (WP/storage) KWS: design and analysis DSS:cost analysis, pricing analysis MIS:inventory control, capital budgeting ESS:strategic planning, profit planning

TPS: Types Sales/marketing systems Manufacturing/production systems Human resources systems Industry specialized (vertical markets)

Knowledge Work Systems & OA Systems KWS: Engineers, data analysts (Wall Street “rocket scientists”), scientists –Example: MRIs and CAT scans, biomedical OAS: knowledge workers, managers –Word processing/desktop publishing/presentation programs, –document imaging/management

MIS MIS: supports management level by providing routine summary reports and exception reports: –Example: Which students were here in the Fall who did not choose to return in the Spring?

DSS DSS provides material for analysis for the solution of semi-structured problems, unique or rapidly changing problems –provides the ability to do “what if” analysis DSS uses the data from MIS but is: –more a “right now” analysis than a long-term structure like MIS

MIS vs. TPS MIS differs from TPS in that MIS deals with summarized and compressed data from the TPS. TPS (data) to MIS (information)

DSS vs. ESS DSS: provides material for analysis for: –semi-structured problems, unique or rapidly changing problems –Ability to do “what if” analysis ESS: supports senior managers with unstructured decision-making. –Less analytical than DSS with less use of models (linear or forecasting)

Strategic Information System vs. Strategic- Level System Strategic information system: –Changes the goals, operations, products, services, environmental relationships of organizations –Changes the very nature of the firm’s business Strategic-level system: –Provide long-term planning information to senior executives –Not as far reaching and deeply rooted –Does not transform the organization itself (fundamentally)

Value chain vs. competitive forces Models Both models complement each other Both models are used to aid firms in identifying where information systems can provide a competitive advantage –Competitive force model examines external environment to identify threats/opportunities –Value chain model highlights specific activities within firm to identify where competitive strategies can be best applied.

Four Basic Competitive Strategies Product differentiation: –Unique products/services –Distinct from competititor Focused differentiation: –“Mine” information to focus on previously unexploited market niche –The new, under 14 millionaires (bacon holder) Tight linkages to customers/suppliers: –Lock in customers and suppliers –facilitate purchasing/raise switching costs Low-cost producer: –produce goods and services at a lower price or with greater efficiency than competitors

Strategic Systems??? Strategic systems are difficult to build: –Entail massive sociotechnical changes within the organization –Organizational boundaries between firm and customer and suppliers and departments must be broken down –New relationships among parts of the company and customers and suppliers must be redefined. An entirely new organizational structure (Saturn & GM Resistance to change impacts responsibilities and jobs

Information Partnerships: Do they work? Retailers cooperate with airlines to award frequent flier miles Each gains access to customers of the others and information on good customers Does this relationship benefit the customer?

Universal Characteristics of organizations Clear division of labor Hierarchy Explicit rules and procedures Impartial judgments Technical Qualifications for positions Maximum organizational efficiency

Organizational Differences Organizational type Environment Goals Power Constituencies Function Leadership Tasks Technology

Environmental and Institutional Model of Information Systems Environmental: (Constraints and Opptys) –Rising cost of labor, competitive action of other organizations, changes in govt regulations –New technologies, new sources of capital, demise of competitor, new govt program Institutional: –Values, norms, vital strategic interests

The modern manager in an IS environment Highly fragmented activities Changing activities rapidly Spending time pursuing personal goals Shying away from sweeping policy decisions

IS Management Support: Strengths and Weaknesses Strengths: –Nerve center ( , information) –disseminator –spokesman –resource allocator Weaknesses: –figurehead –leader –disturbance handler –negotiator roles

Structured vs. Unstructured Decisions Unstructured: –Nonroutine decisions in which decision maker must provide judgment and evaluations for which there is no standard procedure for doing so. Example: a decision to invest in a country of an untested product history Structured: –Repetitive and routine with standard operating solutions. Example: product mix, plant scheduling

Four Stages of Decision Making by Simon Intelligence: data and information gathering Design: Alternatives are established Choice: Make the choice among the alternatives Implementation: Put decision into effect

Organizational Choice Models

Assignments Proctor and Gamble Greyhound Group Quiz To be Announced (info processing)