1
Q
Relationship Between Organizations
and Information Technology
A
Information technology and organizations influence each other
– Relationship influenced by organization’s
Structure
Business processes
Politics
Culture
Environment
Management decisions
2
Q
What Is an Organization?
A
- Technical definition
– Formal social structure that processes resources from environment to produce outputs
– A formal legal entity with internal rules and procedures, as well as a social structure - Behavioral definition
– A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution
3
Q
Features of Organizations
A
- Use of hierarchical structure
- Accountability, authority in system of impartial decision making
- Adherence to principle of efficiency
- Routines and business processes
- Organizational politics, culture, environments, and structures
4
Q
Routines and Business Processes
A
- Routines (standard operating procedures)
– Precise rules, procedures, and practices developed to cope with virtually all expected situations - Business processes: Collections of routines
- Business firm: Collection of business processes
5
Q
Organizational Politics
A
- Divergent viewpoints lead to political struggle, competition,
and conflict - Political resistance greatly hampers organizational change
6
Q
Organizational Culture
A
- Encompasses set of assumptions that define goal and product
- May be powerful unifying force as well as restraint on change
7
Q
Organizational Environments
A
- Organizations and environments have a reciprocal relationship
- Organizations are open to, and dependent on, the social and physical environment
- Organizations can influence their environments
- Environments generally change faster than organizations
- Information systems can be instrument of environmental
scanning
8
Q
Disruptive Technologies
A
- Substitute products that perform as well as or better than
existing product - Technology that brings sweeping change to businesses, industries, markets
- First movers and fast followers
9
Q
First movers and fast followers
A
– First movers—inventors of disruptive technologies
– Fast followers—firms with the size and resources to
capitalize on that technology
10
Q
Organizational Structure
A
- Five basic kinds of organizational structure (Mintzberg)
– Entrepreneurial
– Machine bureaucracy
– Divisionalized bureaucracy
– Professional bureaucracy
– Adhocracy
11
Q
Economic Impacts
A
- I T changes relative costs of capital and information
- Information systems technology is a factor of production
- I T affects the cost and quality of information and changes economics of information
12
Q
Transaction Cost Theory
A
- Firms seek to economize on transaction costs
- I T lowers market transaction costs
13
Q
Agency Theory
A
- Firm is nexus of contracts among self-interested parties requiring supervision
- Firms experience agency costs which rise as firm grows
- I T can reduce agency costs
14
Q
Transaction Cost
A
the costs of participating in markets
15
Q
agency cost
A
the cost of managing and
supervising
16
Q
Organizational and Behavioral
Impacts
A
- I T flattens organizations
– Decision making is pushed to lower levels
– Fewer managers are needed - Postindustrial organizations
– Organizations flatten because in postindustrial societies, authority increasingly relies on knowledge
and competence rather than formal positions
17
Q
Organizational
Resistance to Change
A
- Four factors
– Nature of the innovation
– Structure of organization
– Culture of organization
– Tasks affected by innovation
18
Q
The Internet and Organizations
A
- The Internet increases the accessibility, storage, and
distribution of information and knowledge for organizations - The Internet can greatly lower transaction and agency
costs
19
Q
Implications for the Design and
Understanding
A
- Organizational factors in planning a new system:
– Environment
– Structure
– Culture and politics
– Type of organization and style of leadership
– Main interest groups affected by system; attitudes of end users
– Tasks, decisions, and business processes the system will assist
20
Q
Porter’s Competitive Forces Model
A
Provides general view of firm, its competitors, and environment
21
Q
Porter Five competitive forces
A
– Traditional competitors
– New market entrants
– Substitute products and services
– Customers
– Suppliers
22
Q
Dealing with Competitive Forces
A
- Four generic strategies for dealing with competitive forces,
enabled by using I T:
– Low-cost leadership
– Product differentiation
– Focus on market niche
– Strengthen customer and supplier intimacy
23
Q
Low-cost leadership
A
– Produce products and services at a lower price than competitors
24
Q
Product differentiation
A
– Enable new products or services, greatly change customer convenience and experience
- Mass customization; customer experience management
25
Focus on market niche
– Use information systems to enable a focused strategy on a single market niche; specialize
26
Strengthen customer and supplier intimacy
– Use information systems to develop strong ties and loyalty with
customers and suppliers
– Increase switching costs
27
Internet’s Impact on Competitive
Advantage
* Transformation or threat to some industries
* Competitive forces still at work, but rivalry more intense
* Universal standards allow new rivals, entrants to market
* New opportunities for building brands and loyal customer
bases
28
Smart Products and the Internet of
Things
* Internet of Things (Io T)
– Growing use of Internet-connected sensors in products
* Smart products
– Fitness equipment, health trackers
* Expand product differentiation opportunities
– Increasing rivalry between competitors
* Raise switching costs
* Inhibit new entrants
* May decrease power of suppliers
29
The Business Value Chain Mode
* Firm as series of activities that add value to products or
services
* Highlights activities where competitive strategies can best
be applied
– Primary activities vs. support activities
* At each stage, determine how information systems can
improve operational efficiency and improve customer and
supplier intimacy
* Utilize benchmarking, industry best practices
30
The Value Web
– Collection of independent firms using highly
synchronized I T to coordinate value chains to produce
product or service collectively
– More customer driven, less linear operation than
traditional value chain
31
Synergies
* When output of some units are used as inputs to others, or
organizations pool markets and expertise
32
Core Competencies
* Activity for which firm is world-class leader
* Relies on knowledge, experience, and sharing this across
business units
33
Network-Based Strategies
* Take advantage of firm’s abilities to network with one
another
* Include use of:
– Network economics
– Virtual company model
– Business ecosystems
34
Network Economics
* Marginal cost of adding new participant almost zero, with
much greater marginal gain
* Value of community grows with size
* Value of software grows as installed customer base grows
* Compare to traditional economics and law of diminishing
returns
35
Virtual Company Model
* Virtual company
– Uses networks to ally with other companies
– Creates and distributes products without being limited
by traditional organizational boundaries or physical
locations
36
Business Ecosystems and Platforms
* Industry sets of firms providing related services and
products
37
Challenges Posed by Strategic
Information Systems (SIS)
* Sustaining competitive advantage
– Competitors can retaliate and copy strategic systems
– Systems may become tools for survival
* Aligning I T with business objectives
– Performing strategic systems analysis
Structure of industry
Firm value chains
38
Ethics
– Principles of right and wrong that individuals, acting as free moral
agents, use to make choices to guide their behaviors
39
Five Moral Dimensions of the Information Age
* Information rights and obligations
* Property rights and obligations
* Accountability and control
* System quality
* Quality of life
40
Key Technology Trends That Raise Ethical Issues
* Computing power doubles every 18 months
* Data storage costs rapidly decline
* Data analysis advances
* Networking advances
* Mobile device growth impact
41
Advances in Data Analysis Techniques
* Profiling
– Combining data from multiple sources to create dossiers of detailed information
* Nonobvious relationship awareness (NORA)
– Combining data from multiple sources to find obscure hidden connections criminals
42
Responsibility
Accepting the potential costs, duties, and obligations for decisions
43
Accountability
Mechanisms for identifying responsible parties
44
Liability
Permits individuals (and firms) to recover damages done to them
45
Due process
Laws are well-known and understood, with an ability to appeal to
higher authorities
46
Five-step process for ethical analysis
1. Identify and clearly describe the facts
2. Define the conflict or dilemma and identify the higher-order values involved
3. Identify the stakeholders
4. Identify the options that you can reasonably take
5. Identify the potential consequences of your options
47
Candidate Ethical Principles
* Golden Rule
– Do into others as you would have them do into you
* Immanuel Kant’s Categorical Imperative
– If an action is not right for everyone to take, it is not
right for anyone
* Slippery Slope Rule
– If an action cannot be taken repeatedly, it is not right to take
* Utilitarian Principle
– Take the action that achieves greater value
* Risk Aversion Principle
– Take the action that produces the least harm
* Ethical “No Free Lunch” Rule
– Assume that virtually all tangible and intangible objects are
owned by someone
48
Professional Codes of Conduct
* Promulgated by associations of professionals
– American Medical Association (AM A)
– American Bar Association (AB A)
– Association for Computing Machinery (AC M)
* Promises by professions to regulate themselves in the
general interest of society
49
Real-World Ethical Dilemmas
One set of interests pitted against another
(Ex: Facebook provides useful services for users but monitors user behavior and sells information to advertisers and app developers)
50
Privacy
– Claim of individuals to be free from
interference from other individuals, organizations, or state;
claim to be able to control information about yourself
51
In the United States, privacy protected by:
– First Amendment (freedom of speech and association)
– Fourth Amendment (unreasonable search and seizure)
– Additional federal statues (e.g., Privacy Act of 1974)
52
Fair information practices
– Set of principles governing the collection and use of
information
Basis of most U.S. and European privacy laws
– Used to drive changes in privacy legislation
CO PP A
Gramm-Leach-Bliley Act
HIPA A
53
FT C FI P principles
– Notice/awareness (core principle)
– Choice/consent (core principle)
– Access/participation
– Security
– Enforcement
54
EU General Data Protection
Regulation (GDP R)
* Requires unambiguous informed consent
* E U member nations cannot transfer personal data to countries without
similar privacy protection
* Privacy Shield: All countries processing EU data must conform to GDPR requirements
* Heavy fines: 4% of global daily revenue
55
Challenges to Privacy
* Cookies
* Web beacons (web bugs)
* Spyware
* Google services and behavioral targeting
56
Cookies
Identify browser and track visits to site
57
Web beacons (web bugs)
– Tiny graphics embedded in e-mails and web pages
– Monitor who is reading email message or visiting site
58
Spyware
– Surreptitiously installed on user’s computer
– May transmit user’s keystrokes or display unwanted ads
59
How Cookies Identify Web Visitors
1. The Web server reads the user's Web browser and determines the operating system,
browser name, version number, Internet address.
2. Tiny text file with user identification information called a cookie, which the user's browser receives and stores on the user's computer.
3. When the user returns to the Web site, the server requests the contents of any cookie
it deposited previously in the user's computer.
4. The Web server reads the cookie, identifies the visitor, and calls up data on the user.
60
Solution for Privacy
– Email encryption
– Anonymity tools
– Anti-spyware tools
– Browser features
“Private” browsing
“Do not track” options
61
Intellectual property
– Tangible and intangible products of the mind created by
individuals or corporations
62
Intellectual property Protected in four main ways
– Copyright
– Patents
– Trademarks
– Trade secrets
63
Challenges to Intellectual Property
Rights
* Digital media different from physical media
– Ease of replication
– Ease of transmission (networks, Internet)
– Ease of alteration
– Compactness
– Difficulties in establishing uniqueness
* Digital Millennium Copyright Act (DM C A)
64
Three principal sources of poor system performance
– Software bugs, errors
– Hardware or facility failures
– Poor input data quality (most common source)
ITM
flashcards
Decks in class (3)
# Cards
