Four Levels of Organizational Hierarchy

1. 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

2. 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

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

4. 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

5. 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?

6. 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

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

8. 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)

9. 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)

10. 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.

11. 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

12. 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

13. 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?

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

15. Organizational Differences • Organizational type • Environment • Goals • Power • Constituencies • Function • Leadership • Tasks • Technology

16. 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

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

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

19. 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

20. 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

21. Organizational Choice Models

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