Summary:
A more appropriate title for this chapter would have been How organizations utilize information
systems for strategic decision making. To best understand this, we must
first define what an organization is. The textbook definition is, “a stable,
formal social structure that takes resources from the environment and processes
them to produce outputs. “ As bastions
of collectivity, organizations develop their own culture based off of the unquestioned
assumptions that define their goals and products. Other features of
organizations include the development of routines, or standard operating
procedures, in business processes and the presence of politics brought about by
varied viewpoints about resource management. Modern organizations are
inherently specialized, hierarchical, and impartial, with the goal being to
maximize efficiency. The differences in how an organization uses information
systems is influenced by environmental factors such as goals, social roles,
leadership styles, types of tasks performed, and type of structure.
The introduction of new Information Systems (IS) in
organizations tends to be highly resisted. The very nature of an organization
is resistant to change. For effective integration, information systems must be
created with the end-user in mind. 4 factors must to be taken into
consideration to ensure the successful introduction of a new technology: Tasks
of the organization, People (culture, politics), Structure (hierarchy, routine,
and business processes), and existing technology.
Some technologies go
so far as to be classified as Disruptive
technologies. These are innovations that fundamentally change the business
environment that an organization works in. For instance, a substitute product
that works better than anything currently produced, like the automobile being
substituted for the horse-drawn carriage. These technologies are intended to help
an organization achieve a competitive advantage that will make the firm more
profitable, productive, and valuable then their competitors. This chapter discusses
the impact that the internet has on competitive advantage and further defines
some of the different strategies for using information systems to both counter
and enable competitive forces in an organizations’ environment.
Finally, Information technology greatly leverages the power
of the business ecosystem. Our text
describes a business ecosystem as loosely coupled but interdependent networks
of suppliers, distributors, outsourcing firms, transportation service firms and
technology manufacturers. Through the sharing of Information technology based
platforms, developed by key firms such as Microsoft or Wal-Mart, entire
industries can see enormous growth and profitability while ever-expanding the
network of ecosystems in the environment.
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