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142 Part One Organizations, Management, and the Networked Enterprise

MANAGING STRATEGIC TRANSITIONS

Adopting the kinds of strategic systems described in this chapter generally
requires changes in business goals, relationships with customers and suppliers,
and business processes. These sociotechnical changes, affecting both social
and technical elements of the organization, can be considered strategic transi-
tions—a movement between levels of sociotechnical systems.
Such changes often entail blurring of organizational boundaries, both external
and internal. Suppliers and customers must become intimately linked and may
share each other’s responsibilities. Managers will need to devise new business
processes for coordinating their firms’ activities with those of customers, suppli-
ers, and other organizations. The organizational change requirements surround-
ing new information systems are so important that they merit attention through-
out this text. Chapter 14 examines organizational change issues in more detail.

LEARNING TRACK MODULE

The following Learning Track provides content relevant to topics covered in
this chapter.
1. The Changing Business Environment for Information Technology

Review Summary

1. Which features of organizations do managers need to know about to build and use information systems
successfully? What is the impact of information systems on organizations?
All modern organizations are hierarchical, specialized, and impartial, using explicit routines to
maximize efficiency. All organizations have their own cultures and politics arising from differences
in interest groups, and they are affected by their surrounding environment. Organizations differ in
goals, groups served, social roles, leadership styles, incentives, types of tasks performed, and type of
structure. These features help explain differences in organizations’ use of information systems.
Information systems and the organizations in which they are used interact with and influence each
other. The introduction of a new information system will affect organizational structure, goals, work
design, values, competition between interest groups, decision making, and day-to-day behavior. At the
same time, information systems must be designed to serve the needs of important organizational
groups and will be shaped by the organization’s structure, business processes, goals, culture, politics,
and management. Information technology can reduce transaction and agency costs, and such changes
have been accentuated in organizations using the Internet. New systems disrupt established patterns
of work and power relationships, so there is often considerable resistance to them when they are
introduced.

2. How does Porter’s competitive forces model help companies develop competitive strategies using
information systems?
In Porter’s competitive forces model, the strategic position of the firm, and its strategies, are
determined by competition with its traditional direct competitors, but they are also greatly affected by
new market entrants, substitute products and services, suppliers, and customers. Information systems
help companies compete by maintaining low costs, differentiating products or services, focusing on
market niche, strengthening ties with customers and suppliers, and increasing barriers to market
entry with high levels of operational excellence.

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