RNB GLOBAL

UNIVERSITY
TOPIC: Information system and strategy : IS impact on organizations and
business firm , economic impact.
Subject: Management information system
Date:

Presented to –
Presented by -
Mr. Sanjay Diddee Shubham
Kumar Patra
Course -
What is an organization ?
An organization is a stable formal social structure that takes resources from the environment and process them
to produce output.

This definition focuses on three element of an organisation -

Capital
Labor
Organization

Organization are formal legal entities with internal rule and procedure that must be abide by law.

The technical microeconomics definition of the organization :-

How does organization relate to information system technology ?

Technical view of organisation encourage us to focus on how input are combined to create output when
technology changes are introduced into the company.

Some information system changes the organised balance of right , privilege , obligation , responsibilities.

How to achieve output through technological change.

Technological change require change in who own and control information who has the right to access the update
that information and who makes decision about whom, when and how.

Thousand of firms in competitive market combine capital, labor and information technology to complement each
other.
Features of organization
1. The organization is devoted to the principle of efficiency – (maximum output using limited input)
2. Business process
3. Organizational culture
4. Organizational politics
5. Surrounding environment
6. Organizational goal
Routine and business process
Organization including business firm become very efficient over time because individual in the firm develops
routine of producing goods and services.

Routine is called standard operating procedure.

Routine helps the employee to become more productive and efficient and the firm is able to reduce its cost.
Organizational politics
Political resistance is one of the great difficulties of bringing about organizational changes –
Especially the development of new information system.

Information system investment by a firm that bring about significant change in strategy, business objective,
business process.

Organizational culture
Organizational culture encompasses this set of assumption about what product the organization should produce,
how it should produce them, where to produce and for whom to produce.
 Organizational environment
Organization resides in environment from which they draw resources and to which they supply goods and services.

Environment generally change much faster than organization. New technology, new product and changing
public task and value put strain on any organizational culture, politics and people.
Disruptive technology
Riding the wave – sometimes a technology and resulting business innovation comes along to radically change the
business.

In some cases disruptive technology are substitute product

E.g.- car substitute for horse drawn carriage, word processor for typewriter.

Disruptive technology are tricky, firm that invent disruptive technology as “first mover” do not always benefit if they
lack the resources to exploit the technology or fails to see the opportunity.
How information system impact organization and business firms ?
Economic impact
IT changes both the relative cost of capital and the cost of information

Information system technology can be viewed as a factor of production.

Transaction cost theory

Firm and individual seek to economic on transaction cost, much as they do on production cost.
Information technology especially the use of network, can help firm lower the cost of market participation making
it worthwhile for firm to contact with external supplier instead of using internal sources.
Thank you