System Information and Technology

Weekly Assignment: Chapter 3 Summary

Information Systems, Organizations, and Strategy
(Aileen Irmina P. 19/440371/EK/22297)
Organization is a stable, formal social structure that takes resources form the
environment end processes them to produce outputs. Every business has an organization to do
a business processes. The features affect the kinds of information systems used by
organizations are routines and business processes, organizational politics, organizational
culture, organizational environments, organizational structure, and other organizational
features.
Theories and concepts from economics and sociology as the impact of information
systems on organizations are:
Economics Impacts: IT changes both the relative costs of capital and the costs of
information, according to transaction cost theory and agency theory. Organizational and
Behavioral Impacts of IT are: IT flattens organizations; postindustrial organizations
(increasingly relies on knowledge and competence and not merely formal positions);
Understanding Organizational Resistance to Change.The Internet and Organizations increases
the accessibility, storage, and distribution of information and knowledge for organizations.
Implications for the Design and Understanding of Information Systems is to understand the
organizational factors to consider when planning a new system.Porter’s competitive forces
model is a model for understanding advantage which contains of five competitive forces:
traditional competitors, new market entrants, substitute products and services, customers, and
suppliers. There are four Information system strategies for dealing with competitive forces:
low-cost leadership, product differentiation, focus on market niche, and strengthening
customer and supplier intimacy. The internet’s impact on competitive advantage has nearly
destroyed some industries and has severely threatened more. However internet has also created
entirely new markets and provided new opportunities for building brands.
The value chain model could provide specific activities in the business where
competitive strategies can best be applied and where information systems are most likely to
have a strategic impact. Primary activities are related to the production and distribution of the
product, while support activities make the delivery of the primary activities possible.
Still, a strategic information systems have several challenges in order to achieve the
goals such as:
Sustaining competitive advantage: is not last long enough to ensure long-term
profitability since the competitors can copy that rapidly. Aligning IT with business objectives:
the more successfully a firm can align information technology the more profitable it will be
and only one-quarter of firm’s profits can be explained by alignment of IT with the business.
Managing strategic transitions: business goals, relationships with the customers and suppliers,
and business processes are integrated together so there is no boundaries between external and
internal parties.