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Chapter 3

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Information Technology Management
ITM 102

Management Information SystemsPart 1Organizations Management and the Networked EnterpriseChapter 3Information Systems Organizations and StrategyOpening CaseEbay FineTunes Its Strategy took advantage of the opportunities created by the netebay derives the bulk of its revenue from fees and commissions associated with its sales transactions revenue comes from direct advertising on the site and end to end service providers such as PayPal whose services increase the ease and speed of transactionsebay acquired shoppingcom and skype and the ticket reselling web site StubHub bought a 25 stake in classified ad site Craigslist purchased Kurant now Pro Store which helps users set up online stores ebay hasnt created the synergy that was intended and diversification has detracted from eBayss core business auctionsEbay sells many items at a fixed price and fixed sales already account for 40 of marketplace revenue they struck a deal with buycom to sell millions of DVDs electronics books and other items at lower prices ebay was going downhill to amazon and then revised its strategy by acquiring other Internet businesses and then deemphasizing online auctions in favour of fixed price sales by large companies such as buycomBusiness Challengeschanging customer tastesdetermine Managempowerful online business entcompetitorsstrategyrevise business modelBusiness OrganizatiSolutionsInformation absorb onincrease Systemacquisitionssaleshost fixedmake price salesagreements Technologwith large ysellers31 Organizations and Information Systemsorganizations and IS influence each otherIS are developed by managers to serve the interests of the business firm organizations must be aware of and open to the influences of IS to benefit from new technologiesinteraction between IT and organization is complex and influenced by many factors organizations structure business processes politics culture surrounding environment and management decisions must understand your business organizationWhat is an Organizationorganization technical a stable formal social structure that takes resources from the environment and processes them to product outputs 3 elements capital and labour are primary production factors provided by the organization the firm transforms these inputs into products and services in a production function then are consumed by environments in return for supply inputsOrganizationInputs from the environmentsOutputs to the environments Production Processorganizations are formal legal entities with internal rules and procedures that must abide by laws also social structures because they are a collection of social elements much as a machine has a structureparticular arrangement of valves cams shafts and other parts organization behaviourala collection of rights privileges obligations and responsibilities that are delicately balanced over a period of time through conflict and conflict resolution behavioural view people who work in organizations develop customary ways of working gain attachments to existing relationships make arrangements with subordinates and superiors about how work will be done the amount of work will be done and under what conditions work will done BEHAVIOURAL VIEW FORMAL ORGANIZATION StructureHierarchyDivision of labourRules proceduresBusiness processes Environmental resources Environmental CultureOutputsProcessRightsobligationsPrivilegesresponsibilitiesValuesNormsPeople technical view of organization encourages us to focus on how inputs are combined to create outputs when technology changes are introduced into the company firm is seen as infinitely malleable with capital and labour substituting for each other easilybehavioural definition of organization says that developing new IS or redeveloping old ones involves much more than a technical rearrangement of machines or workersIS change the organizational balance of rights privileges obligations feelings that been there for a long time
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