Ralph M. Stair | George W.

Reynolds

Chapter 2

Information Systems in
Organizations

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or duplicated, or posted to a publicly accessible website, in whole or in part.
 Principles and Learning Objectives:
Support Business Goals

• Information systems must be implemented

in such a manner that they are accepted
and work well within the context of an
organization and support its fundamental
business goals and strategies
– Define the term “value chain” and describe
the role that information systems play in an
organization’s supply chain

© 2016 Cengage Learning®. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
2
 Principles and Learning Objectives:
Working Within the Organization’s Context

• Information systems must be implemented

in such a manner that they are accepted
and work well within the context of an
organization and support its fundamental
business goals and strategies
– Identify and briefly describe four change
models that can be used to increase the
likelihood of successfully introducing a new
information system into an organization

© 2016 Cengage Learning®. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
3
 Principles and Learning Objectives:
Competitive Advantage

• Because information systems are so

important, businesses need to be sure that
improvements or completely new systems
help lower costs, increase profits, improve
service, or achieve a competitive
advantage
– Define the term “competitive advantage” and
identify the factors that lead firms to seek
competitive advantage
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or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Principles and Learning Objectives:
Planning for Competitive Advantage

• Because information systems are so

important, businesses need to be sure that
improvements or completely new systems
help lower costs, increase profits, improve
service, or achieve a competitive
advantage
– Discuss strategic planning for competitive
advantage

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or duplicated, or posted to a publicly accessible website, in whole or in part.
5
 Principles and Learning Objectives:
Assessing an IS Project

• Because information systems are so

important, businesses need to be sure that
improvements or completely new systems
help lower costs, increase profits, improve
service, or achieve a competitive
advantage
– Describe three methods for assessing the
financial attractiveness of an information
system project
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 Principles and Learning Objectives:
Worker Functions

• The information system worker functions

at the intersection of business and
technology and designs, builds, and
implements solutions that allow
organizations to effectively leverage
information systems
– Define the types of roles, functions, and
careers available in the field of information
systems
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Why Learn About Information Systems in
Organizations?

• Organizations of all types use information

systems to cut costs and increase profits
• Nearly all careers involve working with
computers and information systems
• Information systems help organizations
produce higher-quality products and
increase their return on investment

© 2016 Cengage Learning®. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
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Organizations and Information Systems

• Organization: a group of people that is

structured and managed to meet its
mission or set of group goals
– There are relationships between members of
the organization and their various activities
– Processes are defined that assign roles,
responsibilities, and authority to complete the
various activities
• Organizations are open systems
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or duplicated, or posted to a publicly accessible website, in whole or in part.
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Organizations and Information Systems:
Value Chain

• Value chain: a series (chain) of activities

that an organization performs to transform
inputs into outputs
– The value of the input is increased
• Supply chain: key value chain in a
manufacturing organization

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or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Supply Chain

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or duplicated, or posted to a publicly accessible website, in whole or in part.
11
 Supply Chain Management (SCM)

• The management of all the activities

required to get the right product into the
right consumer’s hands in the right
quantity at the right time and at the right
cost
– Encompasses acquisition of raw materials
through customer delivery

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 Supply Chain Management (SCM)
(cont’d.)

• Supply chain organizations are “linked”

together through both physical flows and
information flows
– Physical: supplies and raw materials
– Information: participants communicating their
plans, coordinating their work, and managing
the efficient flow of goods and material

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 Organizational Structures

• Organizational structure
– Organizational subunits and the way they
relate to the overall organization
– Dependent upon an organization’s goals and
its approach to management
• Common types of organizational
structures
– Traditional – Project
– Team – Virtual
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 Flat Organizational Structure

• An organizational structure with a reduced

number of management layers
• Empowers employees at lower levels
– Gives employees and their managers more
responsibility and authority to make decisions

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or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Virtual Teams and Collaborative Work

• Virtual team: individual members are

distributed geographically; work as a
coherent unit through the use of information
systems technology
– Strength: the best available people are enlisted
to solve important organizational problems
– Supported by electronic communications: email,
instant messages, video conferences, etc.

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 Reengineering and Continuous
Improvement

• Reengineering (process design)

– The radical redesign of business processes,
organizational structures, information
systems, and values of the organization to
achieve a breakthrough in business results
• Continuous improvement
– Constantly seeking ways to improve business
processes and add value to products and
services

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 Organizational Culture and Change

• Culture: a set of major understandings and

assumptions shared by a group
• Organizational culture: the major
understandings and assumptions for a
business, corporation, or other
organization
• Organizational change: how organizations
plan for, implement, and handle change

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 Organizational Culture and Change
(cont’d.)

• Change model: a representation of change

theories that identifies the phases of
change and the best way to implement
them
• A three-stage approach for change
1. Unfreezing: preparing for change
2. Moving: making the change
3. Refreezing: institutionalizing

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 Lewin’s Change Model

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 Quality

• The ability of a product or service to meet

or exceed customer expectations
• Techniques used to ensure quality:
– Lean enterprise management
– Total quality management (TQM)
– Six Sigma

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 Outsourcing and Offshoring

• Outsourcing
– A long-term business arrangement in which a
company contracts for services with an
outside organization that has expertise in
providing a specific function
• Offshoring (offshore outsourcing)
– The service is located in a country different
than the firm obtaining the services

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 Downsizing

• Reducing the number of employees to cut

costs
• Also referred to as “rightsizing”
• Product quality and employee morale can
suffer

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23
 Competitive Advantage

• Significant and ideally long-term benefit to

a company over its competition
• Firms that gain a competitive advantage
often emphasize the alignment of
organizational goals and IS goals

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 Factors That Lead Firms to Seek
Competitive Advantage

• The five forces model identifies five key

factors:
1. Rivalry among existing competitors
2. Threat of new entrants
3. Threat of substitute products and services
4. The bargaining power of buyers
5. The bargaining power of suppliers

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 Summary – Principle 1

• Organizations are systems with inputs,

transformation mechanisms, and outputs
– An organization’s structure depends on its
goals and its approach to management
• Innovation is the catalyst for the growth
and success
• Organizational change deals with how
organizations successfully plan for and
implement change
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 Summary – Principle 2

• Information systems should help lower

costs, increase profits, improve service, or
support a competitive advantage
• Quality is the ability of a product or service
to meet or exceed customer expectations
• Financial analysis is performed to
determine whether a specific information
system project is worth doing

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 Summary – Principle 3

• The information system worker functions at

the intersection of business and technology
• Successful information system workers
need to have a variety of personal
characteristics and skills
• The IS organization has three primary
functions: operations, development, and
support

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 Summary – Principle 3 (cont’d.)

• Typical operations roles include data

center manager, system operators,
information system security analyst, and
LAN administrator
• Typical development roles include
software developer, systems analyst,
programmer, and Web developer
• Typical support roles include help desk
support specialist and DBA
© 2016 Cengage Learning®. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
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