CHAPTER 2: INFORMATION SYSTEMS IN ORGANIZATIONS
The use of information systems to add value to the organization is strongly
influenced by organizational structure, culture, and change. Organizations use
information systems to support their goals. Because information systems typically
are designed to improve productivity, organizations should devise methods for
measuring the system’s impact on productivity. An organization is a formal
collection of people and other resources established to accomplish a set of goals.
The primary goal of a for-profit organization is to maximize shareholder value.
Nonprofit organizations include social groups, religious groups, universities, and
other organizations that do not have profit as the primary goal. Organizations are
systems with inputs, transformation mechanisms, and outputs. Value-added
processes increase the relative worth of the combined inputs on their way to
becoming final outputs of the organization. The value chain is a series (chain) of
activities that includes (1) inbound logistics, (2) warehouse and storage, (3)
production, (4) finished product storage, (5) outbound logistics, (6) marketing and
sales, and (7) customer service. Organizational structure refers to how
organizational subunits relate to the overall organization. Several basic
organizational structures include traditional, project, team, and virtual.
A virtual organizational structure employs individuals, groups, or complete
business units in geographically dispersed areas. These can involve people in
different countries operating in different time zones and different cultures.
Organizational culture consists of the major understandings and assumptions for a
business, corporation, or organization. Organizational change deals with how
profit and nonprofit organizations plan for, implement, and handle change. Change
can be caused by internal or external factors. The stages of the change model are
unfreezing, moving, and refreezing. According to the concept of organizational
learning, organizations adapt to new conditions or alter practices over time.
Principle Because information systems are so important, businesses need to be sure
that improvements or completely new systems help lower costs, increase profits,
improve service, or achieve a competitive advantage. Business process
reengineering involves the radical redesign of business processes, organizational
structures, information systems, and values of the organization to achieve a
breakthrough in results. Continuous improvement to business processes can add
value to products and services.
The extent to which technology is used throughout an organization can be a
function of technology diffusion, infusion, and acceptance. Technology diffusion is a
