Four Levels of Organizational Hierarchy Operational Level TPS

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: • OA: • KWS: • DSS: • MIS: • ESS: lower level work (order entry) document management (WP/storage) design and analysis cost analysis, pricing analysis inventory control, capital budgeting 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 (email, 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)