Assign: Managing the Digital Firm

Topics: Decision making, Strategic management, Information systems Pages: 28 (7977 words) Published: February 16, 2013
Management Information Systems


Chapter 3

Information Systems, Organizations, Management, and Strategy

Kenneth C. Laudon

Jane P. Laudon

9th edition


Prentice Hall


Chapter 3
|After completing this chapter, you will be able to: | |Identify and describe important features of organizations that managers need to know about in order to build and use information systems successfully. | |Evaluate the impact of information systems on organizations. | |Assess how information systems support the activities of managers in organizations. | |Analyze how information systems support various business strategies for competitive advantage. | |Assess the challenges posed by strategic information systems and management solutions. |

Discussion Questions:
1. Look at an organization you belong to. How are decisions made in this organization?

2. Describe the difference between the Economic Theory and the Behavioral Theory of how information systems affect organizations.

3. What synergies do you see in the merged AOL/TimeWarner Company that can give it the competitive advantage? In your opinion, why hasn’t the merger between these two companies been more successful?

4. How can managers’ roles be enhanced with a well-integrated information system? How can their roles be diminished with a poorly-integrated information system?

5. Ask yourself these questions about your own firm:

a. What is the structure of the industry in which your firm is located?

b. What are the business, firm, and industry value chains for your firm?

Information Systems, Organizations, Management, and Strategy

Chapter 3 describes how organizations and information systems work together, or sometimes against each other. The idea, of course, is to keep them in synchronized, but that's not always possible. We'll look at the nature of organizations and how they relate to information systems.

3.1 Organizations and Information Systems

You could say that this chapter relies on the chicken-and-egg theory to develop a relationship between organizations and information systems. You need to design information systems that serve the existing organization. At the same time you must be ready and willing to restructure the organization to take advantage of the improvements an information system can offer. So which one takes precedent? The organization or the information system? Actually neither one. The goal is to adapt one to the other.

What Is an Organization?

An organization is very similar to the information system described in Chapter 1. Remember Figure 1.6 from Chapter 1? Compare it to Figure 3.2 from Chapter 3. [pic]
These two figures have many things in common. Both information systems and organizations require inputs and some sort of processing, both have outputs, and both depend on feedback for successful completion of the loop. An Organization is a stable, formal social structure that takes resources from the environment and process them to produce outputs. This technical definition focuses on 3 elements. - Capital and Labor are primary Production Factors provided by the environment. - The Organization (the firm) transforms these inputs into products and services in a Production Function. - The products and services are consumed by environment in return. An Organization is a collection of rights, privileges, obligations and responsibilities...
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