1. Chapter 2 Information Systems Defined
Basic definitions and foundational Information Systems concepts

2. Course Roadmap Part I: Foundations
Chapter 1: Introduction
Chapter 2: Information Systems Defined
Chapter 3: Organizational Information Systems and Their Impact
Part II: Competing in the Internet Age
Part III: The Strategic use of Information Systems
Part IV: Getting IT Done

3. Learning Objectives
The definition of information system (IS) and information technology (IT), and the difference between the two concepts.
The definition of information system success and information system failure.
The principal reasons why modern firms create and deploy information systems.
The influence of the firm’s context and the external environment in which it is embedded on organizational information systems.
The four components that make up an information system and the manner in which they interact.
How to design successful information systems and how to troubleshoot problematic information systems implementations.

4. Introduction
Organizations around the world continue to spend significant amounts of money on IT, lured by its promise to yield efficiencies and improved competitive positioning
It is critical that firms are able to wring value from these investments
Having a narrow focus on your IT investments alone is problematic, but dangerous

5. Information System: Definition
Formal, socio-technical, organizational systems designed to collect, process, store, and distribute information

6. Formal vs. Informal

7. IS ≠ IT Hilton Hotels Did they have an IS in 1907? 1919: Opened
1963: First implementation of computers in hospitality (New York Hilton)
Did they have an IS in 1907?

8. IS ≠ IT Ricasoli Winery 1141: Opened
Fact: oldest family owned winery in Italy, producing wine in the heart of the Chianti region since obtaining ownership of the Brolio Castle
Did they have an I/S in 1907?

10. Four Components of an Information System
Technology
Process
People
Structure

11. Value to Managers
A solid understanding of the characteristics of each of the four components
An appreciation of how they relate and interact with one another
Appropriate business decisions as a general or functional manager

12. Component #1: Information Technology
Hardware Devices
Computer, other devices
Software Tools
Microsoft Office
Telecommunication Devices
Internet
This component is a cornerstone of any modern IS, enabling and constraining action through rules of operation that stem from its design

13. Don’t Forget!
The design of IT enables and constrains the behavior of the Information System
Software, particularly a custom developed application, is an opinion of how data should be represented, organized, and manipulated

14. Component #2: Process
The series of steps necessary to complete a business activity
Examples:
Check-in at a hotel
Credit approval at a bank
Paying bills online
There are multiple ways to perform an activity: Every process is designed to be efficient & effective

15. Official business process
Don’t Forget!
Official business process
Informal process

16. Comparison Business Process Informal Process Restocking the inventory
check the inventory and identify the needed items
call individual suppliers for quotes and delivery dates
compare the various quotes
select one or more suppliers for each of the needed items based on the terms of the agreement
call these suppliers and place the orders
receive the goods upon delivery, checking the accuracy and quality of the shipped items
pay the suppliers.
Restocking the inventory

17. Component #3: People
Those individuals or groups directly involved in the information system
End-users
Managers
Addressing their needs are a critical concern in designing and implementing a new Information System
Failure to do will result in the failure of your information systems

18. Component #4: Structure
The organizational structure component (structure for short) encompasses:
The organizational design
Hierarchy, decentralized, loose coupling
The reporting configuration
Functional, divisional, matrix
The organizational relationships
Communication and reward mechanisms
Culture

19. Systemic Effects: Components Working Together
The four components of an Information System are Interdependent
Changes in on component may affect all others
Success is based on the proper interaction of IT with the other components
Discuss systemic affects of designing and trouble shooting a system.
What are some options for addressing problems?
1. You could deem the new system a failure and cut your losses by dropping the use of hand-held technology altogether.
2. You could ascribe the failure to the quality of the user interface of the hand-held ordering devices. You could then negotiate with the provider to improve it. A solution focusing on the IT component.
Etc.

20. The Purpose of Information Systems
Fulfilling organizational processing needs
Improve efficiency and effectiveness while reducing cost
Achieve a (specified) Information System goal.
Example: Movie theatres
Goal: By offering customers the ability to purchase tickets online will improve the effectiveness of the theatre by reducing the number of people needed to the ticket counter

21. Information Systems Success
Has the system delivered expected results?
What are some of the unintended results?
Positive
Negative
Positive - including employees’ empowerment and the widening scope of their responsibility
Negative - including deskilling (i.e., the reduction of the scope of an individual's work to one, or a few, specialized tasks), loss of responsibility, and the creation of a monotonous working environment.

22. IS Success is often Elusive

23. Don’t Forget! Every organization is unique
Even fierce competitors often have different:
Firm strategy: The manner in which the organization intends to achieve its objectives.
Firm culture: The collection of beliefs, expectations, and values shared by the members of an organization.
Infrastructure: The technological backbone of the firm. It constrains and enables opportunities for future information systems projects.

24. External Environment External environment:
The legal and regulatory context
The competitive landscape
The general business and social trends surrounding the organization

25. Bringing it all Together: Information Systems in Context

26. Information Systems and Organizational Change
First Order Change: Automate
Second Order Change:
Informate
Third Order Change: Transform

27. First Order Change: Automate
First order change only affects the technical subsystem
Thus, it is:
Easiest to envision
Easiest to justify
Easiest to manage.
Affects only technology and process
Occurs when IT innovation is introduced

28. Second Order Change: Informate
Second order change affects the people component
It thus provides more of a challenge to implementation
Affects technology and process
Affects people performing the process

29. Third Order Change: Transform
Third order change affects organizational structures
It seeks to transform how the organization operates
It requires significant managerial and executives’ involvement

30. Culture & IS
Culture: the unwritten rules of the social game that are shared by the members of some group
National Culture
Organizational Culture

31. Theories of Culture Hall’s Low-Context, High-Context Approach
Cultural Cluster Approach
Hofstede’s Five Dimensions

32. Hall’s Low-Context, High-Context Approach
words used by speaker explicitly convey speaker’s message
High-context:
the context in which a conversation occurs is just as important as the words spoken;
cultural clues are critical to communication

33. High- and Low-Context Cultures
U.S./ Canadian
Scandinavian
Vietnamese
Japanese
German
Spanish
Chinese
Korean
Swiss
Britain
Italian
Greek
Arab

34. A Synthesis of Country Clusters

35. Hofstede’s Five Dimensions
Social Orientation
Power Orientation
Uncertainty Orientation
Goal Orientation
Time Orientation

36. Geert Hofstede Cultural Dimensions
Prof. Geert Hofstede conducted comprehensive study of how values in the workplace are influenced by culture.  
Geert Hofstede analyzed a large data base of employee values scores collected by IBM between 1967 and 1973 covering more than 70 countries
Subsequent studies validating the earlier results have included
commercial airline pilots and students in 23 countries,
civil service managers in 14 counties,
'up-market' consumers in 15 countries and
elites' in 19 countries.

37. Geert Hofstede Cultural Dimensions
Hofstede developed a model that identifies four primary Dimensions to assist in differentiating cultures:
Power Distance - PDI,
Individualism - IDV,
Masculinity - MAS, and
Uncertainty Avoidance - UAI.
Fifth Dimension added after conducting an additional international study with a survey instrument developed with Chinese employees and managers.
Long-Term Orientation - LTO
applied to 23 countries
based on Confucian dynamism.

38. Hofstede Overview

39. PDI
PDI (Power Distance Index) - the PDI score relates to the degree of equality or inequality between people in a country's society.
High PDI score indicates that inequalities of power and wealth exist in a country
Low PDI score countries there is more social equality.

40. IDV
IDV (Individualism) - the individualism score focuses on the degree to which a culture values and reinforces the importance of the individual as opposed to the group.
High PDI scoring country will view individuality and individual rights as critical.
Low PDI scoring countries will value the group, i.e. family, tribe, etc.

41. MAS
MAS (Masculinity) - masculinity focuses on the degree to which a culture reinforces the traditional role of males vs females.
High MAS scoring country will have a more acute degree of gender differentiation
Low MAS scoring countries there is less differentiation and discrimination between genders.

42. UAI
UAI (Uncertainty Avoidance) - uncertainty avoidance looks at the level of tolerance for uncertainty and ambiguity within a culture.
High UAI score will have a low tolerance for uncertainty and ambiguity. A more rule-oriented society that institutes laws, rules, regulations.
Low UAI scoring country is less concerned about ambiguity and uncertainty and is less rule-oriented, more ready to accept change, consider new ideas and take more and greater risks.

43. Geert Hofstede Cultural Dimensions
These five Hofstede Dimensions correlate with other country, cultural, and religious paradigms.

44. High Context/Low Context VS Hofstede Measures
PDI
IDV
MAS
UAI 1
German 35 65 2
Swiss 34 68 70 60 3
Scandinavian 31 5 30 4
U.S./ Canadian 40 91 62 46
Britain
35 
89 
65  6
Italian 50 78 7
Spanish 57 52 42 85 8
Greek 59
110 9
Arab 43 10
Vietnamese 11
Japanese 54 45 90 12
Korean 18 39 13
Chinese 80 20
Low Context
High Context

45. Organizational Culture
Firms have a culture
They assume an organization culture that fits with an individualistic, egalitarian, uncertainty tolerant mindset
There has to be a fit between organizational culture and the IS design in order for the IS to be effective in the firm

46. SUMMARY

47. Implications
IT should NOT be the start of your Information System design process
Strategy may be inspired by IT but
IT selection is a point of arrival not departure
Never forget Systemic Effects
components of an IS mutually influence one another
Anticipate the Ripples
Successful introduction a of new IS can only occur of your team can anticipate & manage the ripples

48. Implications Design and use of an IS is iterative
cyclical evaluation of individual IS components
assessment of how different organizational systems work together to support the business
Optimize the Information System
as a whole, not the components individually
Organizations are dynamic
They need to be re-evaluate often

49. The Recap
Information systems are designed and built with the objective of improving the firm’s efficiency and effectiveness by fulfilling its information processing needs.
Success can only occur when the systems that are used achieves their intended goals
Information systems exist in an organizational context, characterized by the firm strategy, culture, and IT infrastructure.
Every organization is subject to the influences of a ever-changing external environment, including regulatory requirements, social and business trends, and competitive pressures.

50. The Recap Information systems are subject to systemic effects
You will need to overcome these effects us in order to ensure that your information system achieves its goals
There is a direct link between organizational change and the introduction of new information technologies.
Any change requires sponsorship and commitment as the result of the change in technology

51. What We Learned
The definition of information system (IS) and information technology (IT) and the difference between the two.
The definition of information system success and information system failure.
The principal reasons why modern firms create and deploy information systems.
The influence of the firm’s context and the external environment in which it is embedded on organizational information systems.
The four components that make up an information system and the manner in which they interact.
How to design successful information systems and how to troubleshoot problematic information systems implementations.