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Managerial Levers

Jason C. H. Chen, Ph.D.


Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99223
chen@gonzaga.edu
Information Ecology (Davenport)

Data Information Knowledge


Simple Observations Data endowed with Info. from the mind
includes reflection,
of the world: relevance & purpose:
context, synthesis:
Easily structured Requires unit of
Hard to structure
analysis
Easily captured on
Difficult to capture
machines Need consensus on the
on machines
meaning
Often quantified
Often tacit
Human mediation
Easily transferred
necessary Hard to transfer
Organizational strategy frameworks
Key Idea Usefulness of IS
Discussions
Business 4 key organizational Using IS in an organization
components: 1) business will affect each of these
Diamond processes, 2) values and components. Use this
beliefs, 3) management framework to identify where
control systems, and 4) these impacts are likely to
tasks and structures. occur.

Managerial Organizational variables, This is a more detailed


control variables, and model than the business
Levers cultural variables are the diamond and gives specific
levers managers can use to areas where IS can be used
affect change in their to manage the organization
organization. and to change the
organization.

Source: Pearlson, 2001


D’Aveni’s Disruption and 7-S’s
Vision for Disruption
Identifying and creating opportunities for
temporary advantage through understanding
• Stakeholder satisfaction
• Strategic Soothsaying
directed at identifying new ways to serve existing
customers better or new customers that are not
currently served by others

Market Disruption

Capability for Disruption Tactics for Disruption


Seizing the initiative to gain advantage by
Sustaining momentum by developing
• Shifting the rules
flexible capacities for
• Signaling
• Speed
• Simultaneous and sequential strategic
• Surprise
thrusts
That can be applied across actions to
Build temporary advantage With actions that shape, mold, or influence
the direction or nature of the competitor’s
response
D’Aveni’s 7-S’s
Approach Definition

Superior stakeholder Understanding how to maximize customer satisfaction by adding


satisfaction value strategically

Seeking out new knowledge that can predict or create new windows
Strategic soothsaying of opportunity

Positioning for speed Preparing the organization to react as quickly as possible

Preparing the organization to respond to the marketplace in a


Positioning for surprise manner that will surprise competitors

Shifting the rules of Finding new ways to serve customers which transform the
competition industry

Signaling strategic Communicating the intended actions of a company, in order to


intent stall responses by competitors

Simultaneous and Taking a series of steps designed to stun and confuse


sequential strategic competitors in order to disrupt or block their efforts
thrusts
Managerial Levers:
Organizational Design Variables
Organizational variables
Authority to initiate, approve, implement, and control various types of
Decision rights
decisions necessary to plan and run the business.
Business Processes The set of ordered tasks needed to complete key objectives of the
business.
Formal reporting relationships The structure set up to ensure coordination among all units within the
organization.
Informal networks Mechanism, such as ad hoc groups, which work to coordinate and transfer
information outside the formal reporting relationship.

Control variables
Data The information collected, stored, and used by the organization.
The processes by which future direction is established, communicated, and
Planning
implemented.
Performance measurement The set of measures that are used to assess success in the execution of
and evaluation plans and the processes by which such measures are used to improve the
quality of work.
The monetary and nonmonetary devices used to motivate
Incentives
behavior within an organization.

Cultural variables The set of implicit and explicit beliefs that underlie decisions made and
Values actions taken.
Managerial Levers
Execution
Organization Control

Decision
rights
Business
processes Data

Formal
reporting Organizational
Strategy relationships People, Planning effectiveness
Information, and
Technology
Informal
networks Performance
measurement
and
evaluation
Incentives
Values
and
rewards

Culture
Source: Cash, et al., 1994
Summary of Key Strategy Frameworks
Usefulness in Information Systems
Framework Key Idea Discussions

Porter’s generic Firms achieve Understanding which strategy is chosen


strategies competitive advantage by a firm is critical to choosing IS to
framework through cost leadership, complement that strategy.
differentiation, or
focus.

D’Aveni’s Speed and aggressive The 7-S’s give the manager suggestions
hypercompetition moves and counter- on what moves and counter moves to
model moves by a firm make and IS are critical to achieve the
create speed needed for these moves.
competitive advantage.

Brandenberg and Companies cooperate Being cooperative and competitive at the


Nalebuff’s and compete at the same time requires IS that can manage
co-operation model same time. these two roles.
Conventional and IT design variables
Conventional
Class of Variable Design Variable IT Design Variable
Structure Definition of Virtual components
organizational subunits
Determining purpose,
output of subunits
Reporting mechanisms
Linking mechanisms Electric linking
Control mechanisms
Staffing Technological leveling

Work process Tasks Production automation


Workflows Electronic workflows
Dependencies
Output of process
Buffers Virtual components

Communications Formal channels Electronic communications


Informal communication Technology matrixing
collaboration

Interorganizational Make vs. buy decisions Electronic relations


customer/supplier relationships
Exchange of materials Electronic
customer/supplier relationship
Communications Electronic linking mechanism

Source: H. Lucsa and J. Baroudi, “The Role of Information Technology in Organization.” JMIS, Spring 1994, pp. 9-23
Functional (Hierarchical) View of the Firm

Executive Management

Operations

Marketing

(source: Pearlson, p.9, 2001)


NOLAN’s Six Stages of IS Growth
The six stages are:
1. Initiation: Initial introduction of computers to the 2. Contagion (expansion): Centralized rapid growth as
organization. Batch processing to automate clerical users demand more applications based on high
operations to achieve cost reduction, operation systems expectations of benefits, move to online systems as ISD
focus, lack of management interest, and Centralized ISD. tries to satisfy all user demands. Little control if any. IT
expenses increase rapidly.

3. Control: In response to management concern about cost 4. Integration: Considerable expenditure on integrating (via
vs. benefits, systems projects are expected to show a telecommunications and databases) existing systems. Users
return, plans are produced and methodologies/standards accountability for system established, and ISD provides a
enforced. Often produces a backlog of applications and service to users, not just solutions to problems. At this time
dissatisfied users. Planning and controls are introduced. there is a transition computer use and a approach from data
processing to information and knowledge processing
(transition between the two curves).

5. Data administration: information requirements rather than 6. Maturity: The planning and development of IT in the
processing drive the applications portfolio and information is organization is closely coordinated with business
shared within the organization. Database capability is development. Corporatewide systems are in place. The ISD
exploited as users understand the value of information and and the users share accountability regarding the
are willing to share it. application of computing resources. IT has truly become a
strategic partner.

Source: Compiled from Nolan (1979).


NOLAN’s Six Stages of IS Growth
The six stages are:

1. Initiation: Initial introduction of computers to the 2. Contagion (expansion): Centralized rapid growth as
organization. Batch processing to automate clerical users demand more applications based on high
operations to achieve cost reduction, operation systems expectations of benefits, move to online systems as ISD
focus, lack of management interest, and Centralized ISD. tries to satisfy all user demands. Little control if any. IT
expenses increase rapidly.

3. Control: In response to management concern about cost 4. Integration: Considerable expenditure on integrating (via
vs. benefits, systems projects are expected to show a telecommunications and databases) existing systems. Users
return, plans are produced and methodologies/standards accountability for system established, and ISD provides a
enforced. Often produces a backlog of applications and service to users, not just solutions to problems. At this time
dissatisfied users. Planning and controls are introduced. there is a transition computer use and a approach from data
processing to information and knowledge processing
(transition between the two curves).

5. Data administration: information requirements rather than 6. Maturity: The planning and development of IT in the
processing drive the applications portfolio and information is organization is closely coordinated with business
shared within the organization. Database capability is development. Corporatewide systems are in place. The ISD
exploited as users understand the value of information and and the users share accountability regarding the
are willing to share it. application of computing resources. IT has truly become a
strategic partner.

Source: Compiled from Nolan (1979).


NOLAN’s Six Stages of IS Growth (Cont.)

I 2 3 4 5 6
Initiation Expansion Control Integration Data Maturity
administration
Critical Success Factors Questions

1. What objectives are central to your organization?

2. What are the critical factors that are essential


to meeting these objectives?

3. What decisions or actions are key to these critical factors?

4. What variables underlie these decisions, and how are they measured?

5. What information systems can supply these measures?


Value-Creating Business Opportunities

Commerce Content Community

Value-Enabling IT Infrastructure

Solutions and Services


• Enterprise resources planning • Pedagogic systems (Blackboard systems)
• Supply chain management • Internet service providers
• Customer relationship management • Systems integration services
• E-business packages • Outsourcing and hosting

Software Productivity and Development Tools


• Productivity packages
• Integrated development environments (Jbuilder, VB, C++Builder)
• Programming languages (Java, C++, VB, COBOL, etc.)
• Specialized software (simulation, statistical analysis, groupware)
• Web site development tools
• Streaming medium tools

Computing Communication
• Hardware (computers, printers, etc.) • Hardware (networks, routers, etc.)
• Operating systems • Network operating systems
• Database management Information • Gateways
• Document management systems • E-mail and file transfer services
• Application frameworks (J2EE, .NET, XML, etc.) • Servers: Web, applications, and database
• Tele-& Video-conferencing equipment
资产管理的演进过程

知识 智慧
资讯
结构性 全面性
机会性 (资讯比率) (夏普指数)
(绝对报酬)
资产管理
市场投资时机 另类投资
资产配置 (包括保本型商品。。。)

分散投资
(时间,资产类别 , 首选企业
投资模型。。。)

Source: ABN.AMRO Asset Management Taiwan Ltd.