Chapter 3 - Information Systems, Organizations, and Strategy

Chapter 3 – Information Systems, Organizations, and Strategy

Chapter 3 describes how organizations and information systems work together, or sometimes against each other; the idea is to keep them in sync.

Consider this, an automobile dealership would have some similarities to a department store (both sell products) and yet they would have major structural differences. Organizations that enter into collaborative partnerships tend to seek out companies with similar structures. It is much easier for the employees to work together if they aren’t required to learn a whole different work structure on top of learning new tasks.

Organizations generally differ because their ultimate goals differ; some organizations are small by nature or small by design. Many differ due to size, goals, and environmental factors that restrict growth.

For instance, a real estate company is constantly looking for new customers and new products to sell. It may choose to stay small or to go with a nationwide conglomerate. The environmental factors that are likely to influence it are the state of the national and local economy.

Organizations and information systems influence each other. Each organization shares common characteristics that the information system can enhance. On the other hand, each organization has unique characteristics that should be taken into account when incorporating technology. Perhaps the most important role of all is the end user.

Various forces affect an organization’s ability to compete and therefore greatly influence a firm’s business strategy. There are threats from new market entrants and from substitute products and services. Customers and suppliers exercise bargaining power; traditional competitors constantly adapt their strategies to maintain their market positioning.

Using information systems can help a company beat the competition through differentiation and providing services that are valuable to customers and suppliers. Information systems can also be used to reduce costs. What is the goal?

Completing a strategic systems analysis is one of the first steps managers should accomplish to help determine how they can use information systems to gain a competitive advantage. A well-developed strategic information system that is integrated throughout the company can be used to lower overall costs and provide greater value to the company, the supplier, and the customer.