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ITM CH 3.doc

Information Technology Management
Course Code
ITM 102
Vikraman Baskaran

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ITM CH 3- Information Systems, Organizations, and Strategy
Organizations and Information Systems
Information Systems are developed by managers to serve the interests of the
business firm
Interaction between info tech and org is complex and is influenced by
mediating factors such as the org structure, business processes, politics, culture,
surrounding env and mgmt decisions
An organization is a stable, formal social structure that takes resources from
the env and processes them to produce outputs
An org is more stable then an informal group in terms of longevity and
Are formal legal entities with internal rules and procedures that must abide by
laws, are also social structures
Organization can also be a collection of rights, privileges, obligations, and
responsibilities that is delicately balanced over a period of time through conflict and
conflict revolution
Features of Organizations
They are bureaucracies with clear cut divisions of labour and specialization
Business processes, organizational culture, organizational policies, surrounding
environments, structure, goals, constituencies, and leadership styles
All these features affect the kinds of info systems used by org
Routines and business processes: Routines- sometimes called standard
operating procedures are precise rules, procedures, and practices that have been
developed to cope with virtually all situations. Business processes are collections of
such routines
Organizational Politics: people work in different positions, have different
viewpoints about how resources, rewards, punishments should be distributed, they
result in political struggle
Organizational Culture: is a powerful unifying force that restrains political
conflicts and promotes common understanding, agreement, and common practices
Organizational Environments: have a reciprocal relationship
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Disruptive technologies: technology’s impact on org is especially noteworthy
bc it has become such a disruptive force. Sometimes new technology comes along
like a tsunami and destroys everything
Organizational Structure: 5 types- entrepreneurial- fast changing env, simple
structure, single chief executive officer, machine bureaucracy- slowly changing env,
centralized management team and decision making, divisionalized bureaucracy-
combination of multiple nachine bureaucracies, each produces different
product/service, professional bureaucracy-goods and servicecs depend on the
expertise and knowledge of professionals , weal centralized authority, adhocracy-
responds to rapidly changing env, large groups of specialists, weak central
Organizational Features- coercive goals, utilitarian goals, normative goals,
different groups/constituciencies, democratic or authoritarian, tasks they perform or
technology they use
How information systems impact organizations and business firms
Have become integral online interactive tools
According to the transaction cost theory firms and individuals seek to
economize on transaction costs much as they do on production costs
IT can reduce internal mgmt costs
Agency theory – the firm is viewed as a nexus of contracts amongst self
interested individuals rather then as a unified profit maximizing entity
Organizational Behaviours and Impacts
IT flattens organizations- facilitates flattening of hierarchies by broadening the
distribution of info to empower lower level employees and increase mgmt efficiency
IT pushes decision making rights lower in the org
Post Industrial Org-based more on history and sociology than economics also
support the notion that IT should flatten hierarchies , authority increasingly relies on
knowledge and competence
Understanding Organizational Resistance to change- Leavitt-the diamond:
chanhes in technology are absorbed, deflected, and defeated by the arrangement of
the organizational tasks, structures and people, only way to bring change is to change
technology, tasks, structure and people
The Internet and Organizations
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