What characteristics of organizations do managers need to know to successfully build and use information systems? What is the impact of information systems on organizations? Define an organization and compare the technical definition of organization with the behavioral definition. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The technical definition defines an organization as a stable, formal social structure that takes resources from the environment and processes them to produce results. This definition of organization focuses on three elements: capital, labor, production, and consumer products. The technical definition also implies that organizations are more stable than an informal group, are formal legal entities, and are social structures. The behavioral definition states that an organization is a set of rights, privileges, obligations, and responsibilities that are delicately balanced over a period of time through conflicts and conflict resolution. This definition highlights the people within the organization, their ways of working and their relationships. The technical definition shows us how a business combines capital, labor and information technology. The behavioral definition examines how information technology affects the internal functioning of the organization. Identify and describe characteristics of organizations that help explain differences in organizations' use of information systems. Common characteristics for organizations include: Business routines and processes: standard operating procedures have been developed that allow the organization to become productive and efficient thereby reducing costs over time. Organizational politics: divergent views on how resources should be distributed, rewards and punishments lead to political resistance to organizational change. Organizational culture: The assumptions that define organizational goals and products create a powerful brake on change, particularly technological change. Organizational Environments: There are reciprocal relationships between an organization and environments; Information systems provide organizations with a way to identify external changes that may require an organizational response. Organizational Structure: Information systems reflect the type of organizational structure: entrepreneurial, mechanical bureaucratic, divisionalized bureaucracy, professional bureaucracy, or adhocracy. Describe the main economic theories that help explain how information systems influence organizations. The two economic theories discussed in the book are transaction cost theory and agency theory. Transaction cost theory is based on the concept that a firm incurs transaction costs when it purchases goods on the market rather than making its own products. Traditionally, companies sought to reduce transaction costs by getting bigger, hiring more employees, through vertical and horizontal integration, and acquisitions of small businesses. Information technology helps businesses reduce the costs of participating in the market (transaction costs) and helps businesses shrink in size while producing the same or greater amount of output. Agency theory views the firm as a nexus of contracts between interested individuals. The owner employs agents (employees) to carry out work on his behalf and delegates some decision-making authority to the agents. Agents require constant supervision and management, which introduces management costs. As companies grow, operating costs increase. The technologyof information reduces agency costs by providing information more easily so that managers can supervise more people with fewer resources. Describe the major behavioral theories that help explain how information systems influence organizations. Behavioral theories, coming from sociology, psychology and political science, are useful for describing the behavior of individual companies. Behavioral researchers theorize this information technology could change the decision hierarchy by reducing the costs of acquiring and distributing information. IT could eliminate middle managers and their administrative support by sending information from business units directly to senior management and allowing information to be sent directly to lower-level business units. It even allows some organizations to act as virtual organizations because they are no longer limited by geographic locations. A behavioral approach views information systems as the result of political competition between organizational subgroups. IT is very involved in this competition because it controls who has access to what information, and information systems can control who does what, when, where and how. Explain why there is considerable organizational resistance to the introduction of information systems. There is considerable organizational resistance to new information systems because they change many important organizational dimensions, such as culture, structure, politics, and work. Leave it proposes a model according to which technological changes are absorbed, deflected and defeated by organizational task arrangements, structures and people. In this model the only way to achieve change is to change the technology, tasks, structure and people simultaneously. In a second model, the authors talk about the need to unfreeze organizations before introducing an innovation, quickly implementing the new system and then refreezing or institutionalizing the change. Describe the impact of the Internet and disruptive technologies on organizations. The Internet increases the accessibility, storage and distribution of information and knowledge for organizations; almost any information can be available anywhere at any time. The Internet increases the reach, depth and range of information and knowledge storage. It reduces costs and increases the quality of information and knowledge distribution. That is, it reduces transaction costs and information acquisition costs. By using the Internet, organizations can reduce multiple levels of management, allowing for closer and faster communication between higher and lower levels of management. The Internet also reduces agency costs. Disruptive technologies caused by technological changes can have different effects on different companies depending on how they manage the changes. Some companies create disruption and succeed very well. Other companies learn about this disruption and adopt it successfully. Other companies are being erased by changes because they are very efficient at doing what they no longer need to do. Some disruptions mostly benefit the company. Other disruptions mostly benefit consumers. 2. How does Porter's competitive forces model help companies develop competitive strategies using information systems? Define Porter's competitive forces model and explain how it works. This model provides an overall view of the company, its competitors and the business environment. Porter's model is entirely focused on the overall economic environmentof the company. In this model, five competitive forces determine the fate of the firm: traditional competitors new market entrants substitute products and services customers suppliers Describe what the competitive forces model explains about competitive advantage. Some companies perform better than others because they have access to special resources that others do not have, or because they are able to use commonly available resources more efficiently. It could be because of superior knowledge and information resources. Regardless, they excel in revenue growth, profitability, or productivity growth, ultimately boosting their stock market valuations relative to their competitors. List and describe four information systems-enabled competitive strategies that companies can pursue. The four generic strategies, each of which is often enabled using technology and information systems, include: Low-Cost Leadership: Lower operating costs and the lowest prices. Product Differentiation: Enable new products and services or significantly change customer comfort in using existing products and services. Focus on market niche: Enable a specific market focus and serve this narrow target market better than competitors. Strengthen customers and suppliers: Strengthen ties with suppliers and develop intimacy with customers. Describe how information systems can support each of these competitive strategies and provide examples. Low-Cost Leadership: Use information systems to improve inventory management, supply management, and create efficient customer response systems. Example: Wal-Mart. Product Differentiation: Using information systems to create customized and personalized products and services to meet the precise specifications of individual customers. Example: Google, eBay, Apple, Lands' End. Focus on market niche: Use information systems to produce and analyze data for improved sales and marketing techniques. Carefully analyze customer purchasing patterns, tastes and preferences in order to efficiently present advertising and marketing campaigns to smaller target markets. Example: Hilton Hotels, Harrah's. Strengthen intimacy with customers and suppliers: use information systems to facilitate direct access by suppliers to information within the company. Increase switching costs and company loyalty. Example: IBM, Amazon.com Explain why aligning IT with business objectives is essential to the strategic use of systems. The basic principle of a company's IT strategy is to ensure that technology serves the business and not the other way around. The more a company can align its IT with its business goals, the more profitable it will be. Business people need to take an active role in shaping IT for the business. They cannot ignore IT problems. They cannot tolerate failure in the IT area as a simple annoyance to be worked around. They need to understand what IT can do, how it works, and measure its impact on revenue and profits. How do value chain and value web models help companies identify opportunities for strategic information systems applications? Define and describe the value chain model. The value chain model highlights specific business activities where competitive strategies can best be applied and where information systems are most likely to have a strategic impact. The model identifies specific and critical leverage points where a company can use information technology most effectively to improve itscompetitive position. The value chain model views the business as a series of core activities that add value to the company's products or services. Activities are classified as primary or support activities. Primary activities are most directly related to the production and distribution of the company's products and services, which create value for the customer. Support activities make it possible to carry out primary activities and consist of the organization's infrastructure. A company's value chain can be linked to the value chains of its suppliers, distributors and customers. Explain how the value chain model can be used to identify opportunities for information systems. Information systems can be used at every stage of the value chain to improve operational efficiency, reduce costs, improve profit margins and create a closer relationship with customers and suppliers. Organizations can use information systems to examine how value-added activities are performed at each stage of the value chain. Information systems can improve the relationship with customers (customer relationship management systems) and with suppliers (supply chain management systems) who may be external to the value chain but belong to an extended value chain. Information systems can help companies track benchmarks across the organization and identify best practices in their particular industries. After analyzing the various stages of the value chain, an organization can develop a list of candidate applications for information systems. Define the value network and show how it is related to the value chain. A value network is a collection of independent companies that use information technology to coordinate their value chains to collectively produce a product or service. It is more customer-oriented and operates in a less linear manner than the traditional value chain. The value web is a network system that can synchronize the business processes of customers, suppliers and business partners between different companies in an industry or related industries. Explain how the value web helps companies identify opportunities for strategic information systems. Information systems enable value networks that are flexible and adaptive to changes in supply and demand. Relationships can be grouped or disaggregated in response to changing market conditions. Businesses can accelerate time to market and customers by optimizing their valuable web relationships to make quick decisions about who can provide the right products or services at the right price and in the right place. Information systems allow companies to create and manage value networks. Describe how the Internet has changed competitive forces and competitive advantage. The Internet has nearly destroyed some industries and severely threatened others. The Internet has also created entirely new markets and formed the basis of thousands of new businesses. The Internet has enabled the rapid development of new products and services, new business models and new industries. Because of the Internet, competitive rivalry has become much more intense. Internet technology is based on universal standards that any company can use, making it easy for rivals to compete on price alone and for new entrants to enter the market. Because information is available to everyone, the Internet increases the bargaining power of customers, who can quickly find the cheapest supplier on the Web. How information systems help companies use synergies, core competencies and network-based strategies to achieve a.