Unit 2.3
The Relationship Between Information Systems and Organization
Learning Objectives
By the end of this chapter, you will be able to:
- β Describe the two-way relationship between information systems and organizations.
- β Explain how an organization's strategy and culture influence its IS.
- β Provide examples of how IS can shape an organization's structure and processes.
The Core Concept: A Two-Way Street
Information systems and organizations have a mutual, two-way relationship.
Organization Π²ΠΏΠ»ΠΈΠ² Information Systems
Information Systems Π²ΠΏΠ»ΠΈΠ² Organization
It's a mistake to think of IS as just a technical tool. It's a deeply integrated partnership.
π Interactive: The ISβOrganisation Loop
Click a box to see examples of influence in that direction
Click β shapes IS
Click β shapes Org
Part 1: How Organizations Affect IS
The organization's "DNA" shapes the technology it builds.
π― Strategy
A low-cost leader (e.g., a budget airline) will build systems for maximum efficiency and cost-cutting.
An innovation leader (e.g., a design firm) will build systems for collaboration and creativity.
π€ Culture & People
An open, collaborative culture will successfully adopt social tools.
A rigid, hierarchical culture may resist them.
Employee skills and training determine how effectively any new system is used.
Example: Strategy's Influence
Accounting Firm vs. Advertising Agency
π Large Accounting Firm
Strategy: Accuracy, security, efficiency.
Resulting IS:
- Highly structured databases
- Secure, access-controlled systems
- Automated auditing tools
π¨ Creative Ad Agency
Strategy: Creativity, collaboration, speed.
Resulting IS:
- Cloud-based file sharing (e.g., Figma, Google Drive)
- Project management tools (e.g., Slack, Asana)
- Digital asset management systems
π― Scenario: Match the IS to the Strategy
1οΈβ£ Click a company card β 2οΈβ£ Click the best-fit IS below
π Bhatbhateni Supermarket
Large retail chain, 20+ stores. Focus: cost control, stock accuracy, fast checkout.
βοΈ Sarathi Law Associates
Kathmandu law firm. Needs: secure client files, case histories, deadlines tracked.
π Deerwalk Services
Nepal IT startup. Remote teams, agile sprints, rapid feature deployment.
Part 2: How Information Systems Affect Organizations
Technology is not just a tool; it's a force for change.
β‘ IS can fundamentally alter an organization's structure, processes, and even its core business model.
1. Organizational Structure
Changes who reports to whom.
2. Business Processes
Changes how work gets done.
3. Business Models
Changes what the company sells and how it makes money.
Effect 1: Flattening Organizations
IT empowers employees and reduces bureaucracy.
Before IT
Information is slow and flows up and down a rigid hierarchy.
CEO
|
VP -- VP
| |
MGR--MGR--MGR
| | |
EMP--EMP--EMPAfter IT
Information is widely available, empowering lower-level employees with decision-making authority.
CEO
|
-----------------
| | |
EMP --- EMP --- EMP
(with data access)Result: Fewer middle managers are needed, leading to a "flatter," more agile organization.
π’ Simulation: Org Structure Flattening
Effect 2: Streamlining Business Processes
Making work faster, cheaper, and more accurate.
Example: Enterprise Resource Planning (ERP) Systems
Before ERP, departments worked in silos with separate systems:
Sales System 𧱠Finance System 𧱠Warehouse System
After ERP, a single integrated system connects the entire organization:
Sales βοΈ Finance βοΈ Warehouse βοΈ HR
This automation and integration makes processes like "order-to-cash" incredibly efficient.
β‘ Before vs. After: Manual vs. ERP Process
Effect 3: Enabling New Business Models
IT as the foundation for digital disruption.
Many of today's largest companies would be impossible without sophisticated information systems.
E-Commerce
Global marketplace, recommendation engines, logistics networks.
Sharing Economy
Real-time matching of supply (drivers) and demand (riders).
Digital Subscriptions
Streaming content on-demand, personalized recommendations.
π³π΅ Which IS Made This Possible? Nepal Quiz
Select the IS type that made each Nepal service possible, then check your answers:
Practical Application: The Nepali Context
How IS is transforming business in Nepal.
π Case Study: Digital Transformation in Nepal
Digital Payments (eSewa, Khalti)
Enabled a new business model for cashless transactions, utility payments, and mobile top-ups, changing how people and businesses handle money.
Ride-Sharing (Pathao, inDrive)
Created a new "sharing economy" model for transportation, using GPS and matching algorithms to connect riders and drivers efficiently.
These companies did not just introduce new technology; they introduced entirely new ways of operating that reshaped their respective industries in Nepal.
Summary & Key Takeaways
Remember the two-way relationship.
- Information systems and organizations mutually influence each other. One does not exist in a vacuum.
- An organization's strategy, culture, and people will dictate the kind of systems it builds and how they are used.
- In turn, information systems can flatten organizational structures, streamline core processes, and reduce costs.
- Most importantly, IT is a powerful enabler of new, disruptive business models that can redefine entire industries.
Discussion Questions
- How might the information systems at a creative advertising agency differ from those at a large accounting firm? (Think culture and strategy).
- Explain in your own words what is meant by IT "flattening" an organization. What is the role of middle managers in this new structure?
- Can a company successfully implement a new information system (like an ERP) without changing its business processes? Why or why not?
Thank You
Any Questions?
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