Chapter 3

4 Pages

Information Technology Management
Course Code
ITM 102
Vikraman Baskaran

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ITM Chapter 3 What is organization? - Capital and Labour are primary production factors provided by the environment Technical definition: - Stable, formal social structure that takes resources from environment and processes them to produce outputs - A formal legal entity with internal rules and procedures, as well as a social structure Behavioral definition: - A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution Features of Organizations - Principle of efficiently: maximizing output using limited inputs Routines and business processes - Routine (standard operating procedure) are precise rules, procedures and practices that have been developed to cope with virtually all expected situation. - Firm become more efficiently for producing goods and services as employees learn the routine Organization Politics - Occupy different positions with different specialties, concerns, and perspectives (leads to political struggle, competition and conflict). - Divergent viewpoint about how resources, rewards, and punishment should be distributed - Political resistance greatly hampers organizational change - Organizational Culture - All organizations have bedrock unassailable, unquestioned assumptions that define their goals and products What products the organization should produce How and where it should be produced For whom the products should be produced - Powerful unifying force and restraint on change Organizational Environment - Organizations and environments have a reciprocal relationship - Organizations are open to, and dependent on, the social and physical environment - Organizations can influence their environments - Organization must respond to legislative and other requirements imposed by the government as well as actions of customers and competitors. - New technologies, products, changes in public taste and value put strains on any organization’s culture, politics and people - Environments generally change faster than organizations, and most are unable to adapt to a rapidly changing environment - Information systems can be instrument of environmental scanning, act as a lens Disruptive Technology - Technology that brings about sweeping change to businesses, industries, markets - Examples: personal computers, word processing software, the Internet, the PageRank algorithm - First movers and fast followers - First movers – inventors of disruptive technologies - Fast followers – firms with the size and resources to capitalize on that technology Organizational Structure Other organizational Features - Organization have goals and use different means to achieve them - Serve different groups or have different constituencies, some primarily benefiting their members, clients, stakeholders or the public - May be democratic or authoritarian then others Economic Impacts - IT flattens organizations - Postindustrial organizations - Understanding organizational resistance to change - IT changes relative costs of capital and the costs of information - Firms and individuals seek to economize on transaction costs, much as they do on productio006E - Information systems technology is a factor of production, like capital and labor - IT affects the cost and quality of information and changes economics of information - Information technology helps firms contract in size because it can reduce transaction costs (the cost of participating in markets) - Outsourcing Transaction cost theory - Firms seek to economize on cost of participating in market (transaction costs) - IT lowers market transaction costs for firm, making it worthwhile for firms to transact with other firms rather than grow the number of employees Agency theory - Firm is nexus of contracts among self-interested parties requiring supervision - Firms experience agency costs (the cost of managing and supervising) which rise as firm grows - IT can reduce agency costs, making it possible for firms to grow without adding to the costs of supervising, and without adding employees Organizational and behavioral impacts IT flattens organizations - Decision making pushed to lower levels - Fewer managers needed (IT enables faster decision making and increases span of control) Postindustrial organizations - Organizations flatten because in postindustrial societies, authority increasingly relies on knowledge and competence rather than formal positions Organizational resistance to change - Information systems become bound up in organizational politics because they influence access to a key resource – information - In
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