INFORMATION SYSTEM, ORGANIZATION AND STRATEGY

• To advance the objectives of the corporate organization, managers develop IS.
• Organizations and information systems both influence one another.
• The environment, organizational structure, best practices, culture, political climate, and management decisions of the company all function as mediating factors in the relationship between information technology and organizations.
• As a manager, you should decide which system will be developed, what it will achieve, and how it will be implemented.

Two-Way Relationship Between Organizations and Information Technology

Organizations

An organization is an organized social unit dedicated to achieving a specific aim. Organizations use specific resources to generate output and achieve their objectives. Organizations use certain resources to get results and accomplish their goals. For instance, a company that makes semiconductor memory chips uses specific resources and allocates them to achieve specific financial goals. A nonprofit hospital uses its resources to provide medical attention to its intended audience. There are four major types of organizational structure, though the choice will primarily rely on the size and nature of the business.

• Line Organization
  • Scalar organization is another name for this type of organizational system, which is among the earliest and most basic. Military and vertical organizations are two examples. The vertical line of power in this organizational structure goes from the highest-ranking manager to the lowest subordinate. The highest executive holds the authority, which he delegated to his subordinates, who then passed it on to their subordinates, and so forth. So, the relationship between a superior and a subordinate plays a major role in the line organization.
• Functional Organization
  • As implied by the name, all organizational operations, including as production, marketing, finance, and human resources, are collectively combined under this form of organizational structure. Every task is assigned to a specialist who is responsible for carrying out the task on behalf of the entire business. The divisional heads always have functional authority. For the entire company, the divisional heads delegate to a single specialist with regard to a single function. The divisional chiefs are functionally granted authority. The divisional heads report to one expert for one function and to another for the following function, for example.
• Line and Staff Organization
  • To attain the benefits of the two types of organizational structures outlined above, this type of organization has advanced. The dispersion of control is overemphasized by the line organization. Line and staff organizational structures have developed to achieve stability. In this type of organization, the line organization's general structure often applies, but functional experts are available to advise and recommend the line authorities while they carry out their duties.
• Committee Organization
  • Every action taken by any department has an impact on the functioning of other departments in the complex business environment of today. A little modification to the production plan will have an impact on the sales division. Similar to this, the sales manager cannot alter the sales policy without seeking advice from the manufacturing or finance departments. A committee is a collection of people who have been appointed specifically to come to a conclusion or make a decision on the issues that have been brought before them.

Technical Definition

An organization, from a technical standpoint, is a sanctioned, legitimate social structure that manages resources, or inputs, to achieve outcomes. The firm is seen as eternally changeable, with labor and capital simply substituting for one another.

In the microeconomic definition of organization, capital and labor (the primary production factors provided by the environment) are altered by the firm via the production process into products and services (outputs to the environment). The products and services are used by the environment, which supplies additional capital and labor as inputs in the feedback loop.

Behavioral Definition

Keeping rights, privileges, obligations, and responsibilities in check throughout time through conflict and conflict resolution is the behavioral definition of an organization. According to this description, developing new information systems or repairing existing ones entails considerably more than a simple rearrangement of the workforce or machinery. The ownership and control of information, who has the right to access and modify it as necessary, and who decides who, when, and how must change as a result of technological advancement.

Features of Organization

• Routines and Business Processes
  • All organizations, including businesses, eventually become incredibly efficient because employees establish routines for providing high-quality services. Routine, also known as standard operating procedures, is a collection of laws, policies, and methods created to address almost any predicted event.
• Organizational Politics
  • People work in organizations in a variety of positions with a range of specialities and viewpoints. They consequently naturally hold diverse views regarding the allocation of resources, rewards, and penalties. Managers that understand how to work with an organization's politics will be more effective managers.
• Organizational Culture
  • It outlines the set of presumptions on the type of product the organization should produce as well as where, how, and for whom it should be produced. It is an effective inhibitor of change, particularly technological change.
• Organizational Environment
  • Environment is where an organization draws its resources and where it distributes its products and services. Environment and organization are mutually dependent. Organizations are permeable to and dependent on the external social and physical environment. Typically, the environment changes considerably more quickly than an organization. Any organization's culture, politics, and workforce are put under pressure by emerging technologies, new products, and shifting public preferences and values.
• Organizational Structure
  • Every organization has a shape or structure. A commercial firm's information system and any problems it encounters are frequently reflections of the organization structure. In comparison to a large size organization, a small scale organization will have a system that is poorly built.

Organizational Structure

• Entrepreneurial
  • Small independent businesses
• Machine Bureaucracy
  • Mid-sized manufacturing company
• Divisional Bureaucracy
  • Fortune 500 companies
• Professional Bureaucracy
  • Law firms, the educational system, and hospitals
• Adhocracy
  • Consulting businesses

Reference

Laudon, Laudon, "Management Information Systems Managing the Digital Firm", twelfth edition