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INFORMATION SYSTEM, ORGANIZATIONS AND STRATEGY - Coggle Diagram

- - - - A formal legal entity with internal rules and procedures, as well as a social structure
      - Formal social structure that processes resources from environment to produce outputs
    - - A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution
  - - - 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
    - - Politics
        
        Political resistance greatly hampers organizational change
        
        Divergent viewpoints lead to political struggle, competition, and conflict
      - Culture
        
        Encompasses 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
        
        May be powerful unifying force as well as restraint on change
      - Environments
        
        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, act as a lens
      - Structure
        
        Five basic kinds of organizational structure (Mintzberg)
        
        Entrepreneurial
        
        Machine bureaucracy
        
        Divisionalized bureaucracy
        
        Professional bureaucracy
        
        Adhocracy
        
        Information system often reflects organizational structure
- - - - Outsourcing
- - - - Hierarchy, specialization, routines, business processes
- - - - All firms share market space with competitors who are continuously devising new products, services, efficiencies, and switching costs
    - - Some industries have high barriers to entry, for example, computer chip business
      - New companies have new equipment, younger workers, but little brand recognition
    - - Substitutes customers might use if your prices become too high, for example, iTunes substitutes for CDs
    - - Can customers easily switch to competitor's products? Can they force businesses to compete on price alone in transparent marketplace?
    - - Market power of suppliers when firm cannot raise prices as fast as suppliers
- - - - Produce products and services at a lower price than competitors
      - Example: Walmart’s efficient customer response system
    - - Enable new products or services, greatly change customer convenience and experience
      - Mass customization
      - Example: Google, Nike, Apple
    - - Use information systems to enable a focused strategy on a
        single market niche; specialize
      - Example: Hilton Hotels’ OnQ system
    - - Use information systems to develop strong ties and loyalty with customers and suppliers
      - Increase switching costs
      - Examples: Chrysler, Amazon, Starbucks
- - - - 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
    - - Virtual company
        
        Uses networks to ally with other companies
        
        Creates and distributes products without being limited by traditional organizational boundaries or physical locations
      - Example: Li & Fung
        
        Manages production, shipment of garments for major fashion
        companies
        
        Outsources all work to thousands of suppliers
    - - Industry sets of firms providing related services and products
      - Platforms
        
        Microsoft, Facebook
      - Keystone firms
      - Niche firms
      - Individual firms can consider how IT will help them become profitable niche players in larger ecosystems
- - - - Structure of industry
      - Firm value chains