ITEC 1010

Information and Organizations

Chapter 2
Information Systems in
Organizations
ITEC 1010
Information and Organizations
Organizations and Information
Systems
Organization
A formal collection of people and other
resources established to accomplish a set of
goals
ITEC 1010
Information and Organizations
General Model of an
Organization
(next slide)
ITEC 1010
Information and Organizations
ITEC 1010
Information and Organizations
Value Chain
Term coined by Michael Porter in a 1965
article in the Harvard Business Review
Def: a series of activities that includes
inbound logistics, warehouse and storage,
production, finished product storage,
outbound logistics, marketing and sales,
and customer service
Schematic
ITEC 1010
Information and Organizations
ITEC 1010
Information and Organizations
Organizations
Organizational structure
Organizational subunits and the way they are
related to the overall organization
Traditional organizational structure
Major department heads report to a president
or top-level manager
Schematic
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Information and Organizations
Traditional Organizational Structure
S. Burry,
President
A.Bailey,
Legal counsel
B. Wong,
VP Accounting
C.Rodrig,
VP Information
Systems
R. Henderson,
VP Marketing
K. Kelly,
VP Production
V. Cisborn,
VP Human
Resources
S. Samuel
Supervisor
L. Bashran,
Supervisor
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Information and Organizations
Terminology (1)
Hierarchical organizational structure
See previous slide
Series of levels
Those at high levels have more power and
authority within an organization
Flat organizational structure
An organizational structure with a reduced
number of layers of management
ITEC 1010
Information and Organizations
Terminology (2)
Empowerment
Giving employees and their managers more
power, responsibility, and authority to make
decisions, take certain actions, and have more
control over their jobs
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Information and Organizations
Other Organizational Structures (1)
Project organizational structure
An organization structure centred on major
products or services
Contrast with traditional structure
Team organizational structure
An organizational structure centred on work
teams or groups
Schematic
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Information and Organizations
Project Organizational Structure
B. Woods,
President
Air & Aerospace Co.
T. Walker,
Senior VP,
Aircraft Division
W. Butler,
Senior VP,
Aerospace Division
O. Teco,
Senior VP,
Communications &
Satellite Division
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Sales
VP,
Finance
VP,
Marketing
VP,
Production
VP,
Sales
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Information and Organizations
Other Organizational Structures (2)
Multidimensional organizational structure
A structure that may incorporate several
structures at the same time Schematic
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Information and Organizations
Multidimensional Organizational Structure
Vice President,
Marketing
Vice President,
Production
Vice President,
Finance
Publisher,
College Division
Marketing
Group
Production
Group
Finance
Group
Publisher,
Trade Division
Marketing
Group
Production
Group
Finance
Group
Publisher,
High School
Division
Marketing
Group
Production
Group
Finance
Group
ITEC 1010
Information and Organizations
Other Organizational Structures (3)
Advantages and disadvantages of different
organizational structures
Read the book!
ITEC 1010
Information and Organizations
Organizational Culture
and Change (1)
Culture
A set of major understandings and assumptions
shared by a group
Organizational culture
The major understandings and assumptions for
a business, a corporation, or an organization
ITEC 1010
Information and Organizations
Organizational Culture
and Change (1)
Organizational change
Deals with how for-profit and non-profit
organizations plan for, implement, and handle
change
Organizational learning
The way organizations adapt to new conditions
or alter their practices over time

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Information and Organizations
Models of Change
Change model
A representation of change theories developed
by Kurt Lewin and Edgar Schein in 1969
Three-stage approach
Unfreezing
Moving
Refreezing

Schematic
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Information and Organizations
Change Model
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Information and Organizations
Reengineering
Also called Process redesign
The radical redesign of business processes,
organizational structures, information systems, and
values of the organization to achieve a breakthrough in
business results
For example, to
Reduce delivery time
Increase product and service quality
Improve customer satisfaction
Increase revenues and profitability

ITEC 1010
Information and Organizations
Rules, Rules, Rules
Reengineering requires finding and
vigorously challenging old rules
Rule Original rationale Potential problem
Small orders held
until full truckload
Reduce delivery
costs
Customer deliver is
delayed
No order accepted
until credit approved
Reduce potential for
bad debt
Customer service is
poor
All product decisions
made at headquarters
Reduce number of
items in inventory
Perception of limited
product selection
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Information and Organizations
Other Models
Continuous improvement
Constantly seeking ways to improve the
business processes to add value to products
and services
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Information and Organizations
Continuous Improvement vs.
Reengineering
Reengineering Continuous Improvement
Strong action to solve serious problem Routine action
Driven by senior executives Worker-driven
Broad in scope; cuts across
organizations
Narrow in scope
Goal to achieve a major breakthrough Continuous, gradual
Often led by outsiders Led by workers
IS integral to the solution IS provides data to guide
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Information and Organizations
Total Quality Management
Quality
The ability of a product (including service) to
meet or exceed customer expectations
TQM
A collection of approaches, tools, and
techniques, that offers a commitment to quality
throughout the organization
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Information and Organizations
Outsourcing and Downsizing
Outsourcing
Contracting with outside professional services to meet
specific business needs
E.g., advertising, hiring
Downsizing
Reducing the number of employees to cut costs
Also called rightsizing
May have serious side effects
E.g., low employee morale, a need for expensive consultants,
lost time, waning productivity
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Information and Organizations
Competitive Advantage
Competitive advantage
A position, product, service, etc., within a
business that improves a position within a
market with respect to competitors
Porters Five force model of competitive
advantage
Identifies factors that lead to competitiveness

Schematic
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Information and Organizations
Porters Five-force Model
Substitute
Products
Supplier
Power
New
Entrants
Buyer
Power
Rivalry
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Information and Organizations
Strategic Planning for
Competitive Advantage
Four techniques:
Strategic alliances (aka strategic partnerships)
Creating new goods or services
Improving existing goods or services
Using information systems for strategic purposes

Next slide
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Information and Organizations
1. Strategic alliance
An agreement between two or more companies that
involves the joint production and distribution of
goods and services
E.g., Chrysler + Daimler Benz
2. Creating new goods or services
A company may become stagnant without the
introduction of new goods and/or services
E.g., Compaq, Dell
3. Improving existing goods or services
Small variations to existing goods or services, and/or
complete modifications
E.g., light foods
4. Using information systems for strategic purposes
IS for improving organizational effectiveness
E.g., SABRE (airline reservation system)

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Information and Organizations
Performance-based Information
Systems
Productivity
A measure of the output achieved divided by
the input required
Productivity =
Output achieved
Input required
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Information and Organizations
Productivity
An example is given in the top paragraph
on p. 65
This is a bad example!
Why?
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Information and Organizations
Return on Investments (ROI) and
the Value of IS
Return on investment (ROI)
A measure of IS value that investigates the
additional profits or benefits that are generated
as a percentage of the investment in
information systems technology

represents
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Information and Organizations
Measures of IS Value
Earnings growth
Market share
Customer awareness and satisfaction

One of my favourite quotes:
When you cannot measure, your knowledge is
of a meager and unsatisfactory kind.
Kelvin
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Information and Organizations
Justifying IS
Categories:
Tangible savings
Intangible savings
Legal requirements
Modernization
Pilot project

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Information and Organizations
Roles, Functions, and Careers in
the IS Department
Categories:
Operations
Systems development
Support
Liaisons (information service units)
Schematic
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Information and Organizations
IS Department
CEO
CIO
Operations
Systems
development
Support
Information
service
unit
Other
functional
areas
Data
administration
Information
centre
Information
technololgy
Systems
analysis
& design
Programming
Computer
facility
operations
Data
entry
Local
Area network
operations
Information
Resource
Management
Functions
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Information and Organizations
Information Centre
Information centre
Provides users with assistance, training,
application development, documentation,
equipment selection and setup, standards,
technical assistance, and troubleshooting
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Information and Organizations
Information Service Unit
Information service unit
Attached to a functional area of the business.
Acts as a local information support
organization within a functional area.
Performs the critical role of liaison between
the functional area and IS
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Information and Organizations
Chief Information Officer (CIO)
Chief Information Officer (CIO)
A manager at the vice-president level
responsible for IS planning, policy, and
standards
Focused on supporting corporate goals

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Information and Organizations
Other IS Roles
Database Administrator
Systems Programmer
Network Specialist
LAN Administrator
Webmaster
Trainer

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Information and Organizations
IS Principles
Use of IS strongly influenced by
organizational structure and problem
orientations
IS are often intertwined within the value-added
processes
IS usage may require change that could meet
with resistance
Value-added IS needs to be continually sought
ITEC 1010
Information and Organizations
End of Chapter 2
Chapter 3