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ITM 102 Chapter Notes -Disruptive Innovation, Product Differentiation, Information System

Information Technology Management
Course Code
ITM 102
Catherine Middleton

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ITM 102
Chapter 3-
- Information system and organizations influence one another
- Interaction between them is based on many different aspects including goal, structure, culture,
environment, etc.
- Organizations are a form of social structure that uses resources to produce goods or services.
- To implement information technology, organizations not only rearrange or add machineries, it
has to change the way they think, work, relationships, etc.
- Techniques and behavior does not separate technology systems, rather complements them.
- Routines develop into business processes, and combination of business processes are
- Organizational politics influence implementation of information technology in entities.
- Information systems are key for “scanning” external changes, so managers can react quickly to
those changes internally.
- Disruptive technology- when technology changes whole landscape of the whole industry
- Five types of organizations: Entrepreneurial structure, Machine bureaucracy, multiple
bureaucracy, professional bureaucracy, and adhocracy.
- Machine and multiple bureacraucy have strong centralized decision group, while professional
and adhocracy does not depend on that.
- IT both reduces cost of capital and cost of information
- IT acts as a substitution for labor, reducing costs and substituting for middle management and
- IT reduces transaction costs
- IT makes it possible for firms to outsource manufacturing for example so it reduces cost.
- Information technology allows firms (especially small firms) to lower the middle management
and clerical workers by monitoring and keeping records done through technology
- IT pushes decision making rights lower in the organization
- Information reaches managers so fast that they are able to make decisions very quickly so
reducing the number of managers needed.
- In general, five aspects shape a firm’s fate: traditional competition who are already in the
market, new market entrants, substitutes of products, suppliers, and buyers (customers)
- Organizations use IT to get ahead by having low-cost leadership, product differentiation, market
niche, and customer intimacy
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