Ch. 3 Text Flashcards
What is an organization?
Stable, formal social structure that takes resources from the environment and processes them to produce outputs.
What is the behavioral definition of an organization?
A collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and resolution.
People in organizations develop customary ways of working; they gain attachments to existing relationships; and they make arrangements with subordinates and superiors about how work will be done, the amount of work that will be done, and under what conditions work will be done.
What is the technical definition of an organization?
Encourages us to focus on how inputs are combined to create outputs when technology changes are introduced into the company.
Tells us how thousands of firms in competitive markets combine capital, labor, and information technology.
What are the features of an organization?
1) Routines and Business Processes
2) Organizational Politics
3) Organizational Culture
4) Organizational Environments
5) Organizational Structure
What are routine and business procedures?
Precise rules, procedures, and practices that have been developed to cope with virtually all expected situations.
As employees learn these routines, they become highly productive and efficient, and the firm is able to reduce its costs over time as efficiency increases.
What are organizational politics?
People in organizations occupy different positions with different specialties, concerns, and perspectives.
They naturally have divergent viewpoints about how resources, rewards, and punishments should be distributed.
Political resistance is one of the greatest difficulties to bringing about organizational change – especially the development of new information systems.
What is organizational culture?
Encompasses this set of assumptions about what products the organization should produce, how it should produce them, where, and for whom.
Organizational culture is a powerful unifying force that restrains political conflict and promotes common understanding, agreement on procedures, and common practices.
What are organizational environments?
Environment from which they draw resources and to which they supply goods and services.
Environments generally change much faster than organizations.
Most organizations are unable to adapt to a rapidly changing environment.
What are some economic impacts of information systems on organizations?
As the cost of information technology decreases, it is substituted for labor, which historically has been a rising cost.
As the cost of information technology decreases, it also substitutes for other forms of capital such as buildings and machinery, which remain relatively expensive.
Information technology helps firms contract in size because it can reduce transaction costs – the costs incurred when a firm buys on the marketplace what it cannot make itself.
Information technology, especially the use of networks, can help firms lower the cost of market participation (transaction costs), making it worthwhile for firms to contract with external suppliers instead of using internal sources.
As transaction costs decrease, firm size should shrink because it becomes easier and cheaper for the firm to contract for the purchase of goods and services in the marketplace rather than to make the product or offer the service itself.
Information technology, by reducing the costs of acquiring and analyzing information, permits organizations to reduce agency costs because it becomes easier for manager to oversee a greater number of employees.
What are some organizational impacts of information systems on organizations?
Large, bureaucratic organizations have been able to downsize, reducing the number of employees and the number of levels in their organizational hierarchies.
Management costs decline as a percentage of revenues, and the hierarchy becomes much more efficient.
The shape of organizations flattens because professional workers tend to be self-managing, and decision making should become more decentralized as knowledge and information become more widespread throughout the firm.
May encourage task force – networked organizations in which groups of professionals come together – face-to-face or electronically – for short periods of time to accomplish a specific task.
What is Porter’s Competitive Forces Model?
Provides a general view of the firm, its competitors, and the firm’s environment.
Five competitive forces shape the fate of the firm:
1) Traditional Competitors
2) New Market Entrants
3) Substitute Products and Services
4) Customers
5) Suppliers
What are traditional competitors?
All firms share market space with other competitors who are continuously devising new, more efficient ways to produce by introducing new products and services and attempting to attract customers by developing their brands and imposing switching costs on their customers.
What are new market entrants?
New companies are always entering the marketplace.
New companies have several possible advantages:
1) They are not locked into old PPE
2) They often hire younger workers who are less expensive and perhaps more innovative
3) They are not encumbered by old worn-out brand names, and they have more motivation.
These advantages can also be weaknesses:
1) They depend on financing
2) Have little brand recognition
3) Have a less-experienced work force
What are substitute products and services?
New technologies create new substitutes all the time.
The more substitute products and services in your industry, the less you can control pricing and the lower your profit margins.
Why are customers important?
A profitable company depends in large measure on its ability to attract and retain customers and charge high prices.
