Chapter 3_Slides (1) - CIS 510 Chapter 3 Business of IT...

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1-1 CIS 510 Chapter 3: Business of IT Instructor: Dr. Spiro Samonas
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1-2 REAL WORLD EXAMPLE Cognizant Technology Solutions grew fast to become a $1.4 billion revenue company providing IT outsourcing services. A quick growth required that they reinvent their organization – move from a cost-based to a relationship -based structure. Managers had to interact with customers and developers in different locations. A tremendous strain was put on managers because they had to work day and night. Some of the units adopted a matrix structure sharing managerial responsibilities.
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1-3 REAL WORLD EXAMPLE - (CONT.) Tata Consultancy Services (TCS), the largest outsourcing company and software exporter in India, chose a different organization structure designed to focus on customers and boost revenue growth. Added a new layer of leaders to oversee the businesses and free up the CEO’s time to work on strategy. Different organizational structures reflect different organizational strategies that are used by organizations to implement their business strategies and accomplish organizational goals.
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1-4 ORGANIZATIONAL STRATEGY Includes the organization’s design , as well as the managerial choices that define, set up, coordinate, and control its work processes . Optimized organizational design and management control systems support optimal business processes which reflect the firm’s values and culture. Figure 3.3 summarizes complementary design variables from the managerial levers framework. Three types of managerial levers: organizational, control, cultural .
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1-5 Variable Description Organizational variables Decision rights Authority to initiate, approve, implement, and control various types of 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 relationships. Control variables Data The information collected, stored, and used by the organization. Planning The processes by which future direction is established, communicated, and implemented. Performance measurement and evaluation The set of measures that are used to assess success in the execution of plans and the processes by which such measures are used to improve the quality of work. Incentives The monetary and non-monetary devices used to motivate behavior within an organization. Cultural variables Values The set of implicit and explicit beliefs that underlie decisions made and actions taken. Figure 3.1 Organizational design variables.
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1-6 IS AND ORGANIZATIONAL DESIGN IS in the organizational designs: Defines the flow of information throughout the organization.
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