ORGANIZATIONAL CHARACTERISTICS

M.M.T.

WHAT IS AN ORGANIZATION?

Technical definition

A stable, formal, social structure Takes resources from environment, processes them and produces outputs

Examples?

SUMMARY ORGANIZATIONAL FEATURES

Common

Features

Unique Features

Formal Structure SOPs Politics Culture

Organizational Type Environment Goals Power Constituencies Functions/Processes Leadership Technology

FORMAL STRUCTURE

Clear division of labour Hierarchy Explicit rules and procedures (SOPs) Impartial judgment

decisions made based on facts and established rules

Technical qualifications for positions

Workers only qualify for jobs if they have the right skills and experience
The organization is set up to be efficient, organizations always trying to become more efficient

Maximum organizational efficiency

Does X have Formal Structure?

STANDARD OPERATING PROCEDURES

Standard Operating Procedures (SOPs)

Standard routines used within the organization to deal with expected situations Some formal, some rules of thumb Process an order, deal with a customer complaint Assist with efficiency why?

What are examples of SOPs at X?

ORGANIZATIONAL POLITICS
Politics

exist in all organizations Different interests and viewpoints disagreements, conflicts, struggles = politics Political resistance change

Do you think there are Politics at X?

ORGANIZATIONAL CULTURE

Fundamental beliefs in an organization about the reason for being for an organization
Products Way people should be treated

Culture can constrain politics (make sure people understand acceptable behavior) All organizations have a culture..

What are some key characteristics of FX culture?

HOW DO ORGANIZATIONS GAIN COMPETITIVE ADVANTAGE USING INFORMATION SYSTEMS?

Businesses determine competitive strategies Create processes to achieve strategies Information systems developed to support business processes

Help organizations achieve competitive advantage Need to avoid creating systems that are unrelated to organizations strategy

The only reason to build Information Systems is to solve business problems!

Organizational Structures

Entrepreneurial structure: Small start-up business

Machine bureaucracy: Midsize manufacturing firm Divisionalized bureaucracy: Fortune 500 firms Professional bureaucracy: Law firms, school systems, hospitals Adhocracy: Consulting firms

ORGANIZATIONS AND 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.

IMPACT OF IT IN AN ORGANIZATION.
IT changes both the relative costs of capital and the costs of information. Information systems technology is a factor of production, like capital and labor. Transaction cost theory: Firms seek to economize on the cost of participating in markets (transaction costs). IT lowers market transaction costs for firm, making it worthwhile for firms to transact with other firms rather than grow the number of employees.

IMPACT OF IT IN AN ORGANIZATION.
Agency theory: Firm is nexus of contracts among self-interested parties requiring supervision. Firms experience agency costs (the cost of managing and supervising). IT can reduce agency costs, making it possible for firms to grow without adding to the costs of supervising, and without adding employees.

ORGANIZATIONAL AND BEHAVIORAL IMPACTS

IT Flattens Organizations: Facilitates flattening of hierarchies Broadens the distribution of timely information Increases the speed of decision making Empowers lower-level employees to make decisions without supervision and increase management efficiency Management span of control (the number of employees supervised by each manager) will also grow