ITM Chap 3 Flashcards
Technical definition of organization
A stable, formal social structure that takes resources from the environment and processes them to produce outputs / formal legal entity / Social structure
Behavioural definition of organizations
emphasizes group relationships, values, and structures / A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution
Routines or Standard Operating Procedures
precise rules, procedures, and practices that have been developed to cope with virtually all expected situations
Business process
Collection of Routines
Business firm
Collection of business processes
Organizational Environment
- Government
- Competitors
- Customers
- Financial institution
- Culture
- Knowledge
- Technology
Disruptive Technologies
substitute products that perform as well as or better (often much better) than anything currently produced
5 Organizational Structure
- Entrepreneurial structure
- Machine bureaucracy
- Divisionalized bureaucracy
- Professional bureaucracy
- Adhocracy
Entrepreneurial structure
Young, small firm in a fast-changing environment. It has
a simple structure and is managed by an entrepreneur serving as its single chief executive officer
Machine Bureaucracy
Large bureaucracy existing in a slowly changing environment, producing standard products. It is dominated by a centralized management team and centralized decision making.
Divisionalized Bureaucracy
Combination of multiple machine bureaucracies, each producing a different product or service, all topped by one central headquarters
Professional Bureaucracy
Knowledge-based organization in which goods and services depend on the expertise and knowledge of professionals. Dominated by department heads with weak centralized authority
Adhocracy
Task force organization that must respond to rapidly
changing environments. Consists of large groups of
specialists organized into short-lived multidisciplinary
teams and has weak central management
Transaction Cost Theory
Frms and individuals seek to economize on transaction costs, much as they do on production costs. Traditionally, firms have tried to reduce transaction costs through vertical integration, by getting bigger
Agent Theory
Economic theory that views the firm as a nexus of contracts among self-interested individuals who must be supervised and managed (principal / agent theory)
IT flattens organizations
behavioural theory
IT facilitates flattening of hierarchies by broadening the distribution of information to empower lower-level
employees and increase management efficiency
IT flattens organizations
Postindustrial Theory
Authority increasingly relies on knowledge and competence, and not merely on formal positions. Hence, the shape of organizations flattens, because professional workers tend to be self-managing, and decision making should become more decentralized
Organizational resistance to change
In this model, the only way to bring about change is to change the technology, tasks, structure, and people simultaneously
The Internet and Organizations
The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations
6 central organizational factors to concider
- The environment in which the organization must function
- The structure of the organization: hierarchy, specialization, routines, and business
processes - The organization’s culture and politics
- The type of organization and its style of leadership
- The principal interest groups affected by the system and the attitudes of workers who will be using the system
- The kinds of tasks, decisions, and business processes that the information system is designed to assist
Porter’s Competitive Forces Model
Value Chain Model
Model that highlights the primary or support activities that add a margin of value to a firm’s products or services where information systems can best be applied to achieve a competitive advantage
Primary Activities
Most directly related to the production and distribution of
the firm’s products and services, which create value for the custome. Includes inbound logistics, operations, outbound logistics, sales and marketing, and service
Support Activities
make the delivery of the primary activities possible and consist of organization infrastructure (administration and management), human resources (employee recruiting, hiring, and training), technology (improving products and the production process), and procurement (purchasing input)
