ITSS 3300 Lecture Notes - Lecture 3: Job Design, Information System, Agency Cost
26 Jun 2018
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CH 3 REVIEW QUESTIONS
Which features of organizations do managers need to know about to build and use information
systems successfully? What is the impact of information systems on organizations?
All modern organizations are hierarchical, specialized, and impartial, using explicit routines to
maximize efficiency. All organizations have their own cultures and politics arising from differences in
interest groups, and they are affected by their surrounding environment. Organizations differ in goals,
groups served, social roles, leadership styles, incentives, types of tasks performed, and type of
structure. These features help explain differences in organizations’ use of information systems.
Information systems and the organizations in which they are used interact with and influence each
other. The introduction of a new information system will affect organizational structure, goals, work
design, values, competition between interest groups, decision making, and day-to-day behavior. At the
same time, information systems must be designed to serve the needs of important organizational groups
and will be shaped by the organization’s structure, business processes, goals, culture, politics, and
management. Information technology can reduce transaction and agency costs, and such changes have
been accentuated in organizations using the Internet. New systems disrupt established patterns of work
and power relationships, so there is often considerable resistance to them when they are introduced.
2. How does Porter’s competitive forces model help companies develop competitive strategies using
information systems?
In Porter’s competitive forces model, the strategic position of the firm, and its strategies, are
determined by competition with its traditional direct competitors, but they are also greatly affected by
new market entrants, substitute products and services, suppliers, and customers. Information systems
help companies compete by maintaining low costs, differentiating products or services, focusing on
market niche, strengthening ties with customers and suppliers, and increasing barriers to market entry
with high levels of operational excellence.
How do the value chain and value web models help businesses identify opportunities for strategic
information system applications?
The value chain model highlights specific activities in the business where competitive strategies and
information systems will have the greatest impact. The model views the firm as a series of primary and
support activities that add value to a firm’s products or services. Primary activities are directly related to
production and distribution, whereas support activities make the delivery of primary activities possible.
A firm’s value chain can be linked to the value chains of its suppliers, distributors, and customers. A value
web consists of information systems that enhance competitiveness at the industry level by promoting the use
of standards and industry-wide consortia, and by enabling businesses to work more efficiently with their
value partners.
4. How do information systems help businesses use synergies, core competencies, and network-based
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Document Summary
All modern organizations are hierarchical, specialized, and impartial, using explicit routines to maximize efficiency. All organizations have their own cultures and politics arising from differences in interest groups, and they are affected by their surrounding environment. Organizations differ in goals, groups served, social roles, leadership styles, incentives, types of tasks performed, and type of structure. These features help explain differences in organizations" use of information systems. Information systems and the organizations in which they are used interact with and influence each other. The introduction of a new information system will affect organizational structure, goals, work design, values, competition between interest groups, decision making, and day-to-day behavior. At the same time, information systems must be designed to serve the needs of important organizational groups and will be shaped by the organization"s structure, business processes, goals, culture, politics, and management. Information technology can reduce transaction and agency costs, and such changes have been accentuated in organizations using the internet.
