Management Information Systems

Objectives
What is an organization?
What are important features of an

organization?
What is the relationship of organization and
information system?
What is the relationship of organization and
environment?

Organizations and Information Systems

Information systems and organizations influence one another. Information systems are

built by managers to serve the interests of the business firm.

At the same time, the organization must be aware of and take advantage of information
systems in order to benefit from new technologies
You will need to understand how information systems can change behaviour and work
life in your firm.
You will not be able to design new systems successfully or understand existing systems
without understanding your own business organization.

THE TWO-WAY RELATIONSHIP BETWEEN ORGANIZATIONS AND

INFORMATION TECHNOLOGY

WHAT IS AN ORGANIZATION?
An organization is a formal structure that takes resources from the

environment and processes them to produce outputs.

Capital and labor are primary production factors provided by the
environment.
Organizations have internal rules and procedures that must abide by laws

FEATURES OF ORGANIZATIONS
Features of organization are:
Routines and business processes.
Organizational politics
Organizational culture
Organizational environment
Organizational Structure

Routines and Business

Processes

All organizations including business companies becomes very well-

organized eventually, because people in the firm develop routines

for producing goods and services.
Routinessometimes called standard operating proceduresare
precise rules, procedures, and practices that have been developed
to deal with almost all expected situations.
As employees learn these routines, they become highly
productive and well-organized, and the firm is able to reduce its
costs over time as efficiency increases.

Organizational Politics
People working in firms have different viewpoints,

specialties, concerns which causes competition and conflict

about how resources, rewards, and punishments should be
distributed.
These differences is one of the great difficulties of bringing

about organizational change especially the development of

new information systems.

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Organizational Culture
All organizations have assumptions that define their goals and products.
Consists of set of assumptions that define goal and product

What products the organization should produce?

How and where it should be produced?

For whom the products should be produced?

Organizational culture is a powerful force that restrains political conflict

and promotes common understanding.

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Organizational
Environments
Organizational environments:
Organizations and environments have a reciprocal relationship
Organizations are open to, and dependent on, the social

environment
Organizations can influence their environments
Environments generally change faster than organizations
Organizations get resources from environments resources and to

which they supply goods and services

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Organizational Structures
5 basic kinds of organizational structure
Entrepreneurial:

Small start-up business

Machine bureaucracy:
Midsize manufacturing firm
Divisionalized bureaucracy:

Very large corporations

Professional bureaucracy:
Law firms, school systems, hospitals
Adhocracy:

Consulting firms

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INDIVIDUAL ASSIGNMENT
5%
INSTRUCTIONS:
Find five different firms and each one must have one type of organizational

structure in Mogadishu. Due date is 11 Oct and submitted during class.

Hardcopy and maximum of 3 pages plus cover-page. Late submission wont be
accepted.
Distribution of Marks:
Cover page = 1 mark
Content
= 3 marks
Format
= 1 mark
Format Style:
Font name: Times New Roman
Font size: 12
Line spacing: 1.5
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ORGANIZATIONAL AND
BEHAVIORAL IMPACTS
IT Flattens Organizations
Decision

making are pushed to lower levels employees because they receive the
information they need to make decisions without supervision.
Fewer managers are required because managers now receive so much more
accurate information on time and they become much faster at making decisions

Some of these large organizations have reduced the number of

employees and the number of levels in their organizational hierarchies.

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Organizational Resistance to Change

Information systems potentially change

an organizations structure, politics, and

work
Most common reason for failure of large
projects is due to organizational and
political resistance to change.
Most employees do not happy about
companies change.

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THE INTERNET AND

ORGANIZATIONS
The Internet increases the accessibility,

storage, and distribution of information

and knowledge for organizations
The Internet can greatly lower transaction
and costs
Example: Large firm delivers internal
operating procedures handbook to
employees via a corporate Web site,
saving millions of dollars in distribution
costs
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USING INFORMATION SYSTEMS TO

ACHIEVE COMPETITIVE ADVANTAGE
Why do some firms become leaders in their industry?
In almost every industry you examine, you will find that some firms do better than most others.
In the automotive industry: Toyota is considered a superior performer

In online retail: Amazon is the leader, in off-line retail Walmart

In online music: Apples iTunes is leader
industry of digital music players: the iPod is the leader.
In Web search: Google is considered the leader.

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USING INFORMATION SYSTEMS..

There is Michael Porters competitive forces model
This model provides a general view of the firm, its

competitors, and the firms environment.

Five competitive forces shape fate of firm
1.
2.
3.
4.
5.

Traditional competitors
New market entrants
Substitute products and services
Customers
Suppliers

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Porters competitive forces model

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USING INFORMATION SYSTEMS

TO..
Traditional competitors
All firms share market space with competitors
who are continuously devising new products,
services, efficiencies, switching costs
New market entrants
Some industries have high barriers entering the

marketplace e.g. computer chip business

New companies have new equipment, often hire
younger workers, who are less expensive and
perhaps more innovative and more hungry, but
little brand recognition
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USING INFORMATION SYSTEMS TO..

Substitute products and services
Customers might substitute products if prices become too high,
e.g. iTunes substitutes for CDs.
Customers
A profitable company depends in large measure on its ability to

attract and retain customers.

Suppliers
The more different suppliers a firm has, the greater control it
can exercise over suppliers in terms of price, quality, and
delivery schedules.

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