Sem 2, AY2022/2023

Yang Lu
• Which features of organizations do managers need to know about to build
and use IT/IS successfully?
• Organizational structure
• Business model
• Business process
• Business/IT alignment

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§ Technical definition
§ A stable, formal social structure that takes resources from the environment
and processes them to produce inputs.
§ Formal legal entities with internal rules and procedures that must abide by
laws.

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§ Behavioral definition
§ A collection of rights, privileges, obligations, and responsibilities delicately balanced
over a period of time through conflict and conflict resolution.

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§ Bureaucracies with clear-cut divisions of labor and specialization
§ Accountability, authority in system of impartial decision making

§ Adherence to principle of efficiency

§ Maximizing output using limited inputs

§ Routines and business processes

§ Organizational politics, culture, environments, and structures

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§ A two-way relationship

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• Organization structure
• The formal configuration between individuals and groups regarding the
allocation of tasks, responsibilities, and authority within the organization
• Five basic kinds of organizational structure (Mintzberg, 1971)
• Entrepreneurial
§ Machine bureaucracy
§ Divisionalized bureaucracy
§ Professional bureaucracy
§ Adhocracy

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• Entrepreneurial:
• Simple structure
• Fast-changing environment
• Major decision made by one or two key personnel
• Direct supervision
• e.g., small start-up business

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§ Machine bureaucracy:
• Centralized management/decision making
• Slowly changing environment -> stable environment
• A high degree of formalization and work specialization
• Standardization of business processes
• Many levels exist in the chain of command from top management to the bottom of
organization
• Goal: achieve internal efficiency
• e.g., midsize manufacturing firm, government agencies

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§ Divisionalized bureaucracy:
§ Multiple machine bureaucracies,
each producing a different product
or service
§ Decision making is decentralized at
divisional level
§ Little coordination among the
separate divisions
§ Topped by central headquarter
§ e.g., Fortune 500 firms with multiple
product lines

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§ Apple – Leadership Model
§ In general, divisionalized bureaucracy with different business units.
§ Previously, each unit is with it’s own P&L responsibilities.
§ Revamp:
§ General managers of all the business units were laid off in a single
day
§ General managers: people who control an entire process from
product development through sales and are judged according to a
P&L statement
§ Put the entire company under one P&L
§ One functional structure
§ Centers on functional expertise
§ Its fundamental belief is that those with the most expertise and
experience in a domain should have decision rights for that
domain
§ The finance team is not involved in the product road map meetings
of engineering teams, and engineering teams are not involved in
pricing decisions.

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§ Professional bureaucracy:
§ Knowledge-based organization
§ Goods and services depend on the expertise and knowledge of professionals
§ Relatively formalized but decentralized to give autonomy to professionals
§ Department heads with weak centralized authority
§ Top management is small, few middle managers
§ Goal: Innovate and provide high-quality services
§ e.g., large law firms, universities, hospitals

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§ Adhocracy:
§ Low in formalization and decentralization
§ Task force organization that must respond to rapidly changing environment
§ Engage in nonroutine tasks and use sophisticated technology
§ Goal: Innovation and rapid adaptation to changing environment
§ Large groups of specialists organized in short-lived multidisciplinary teams
§ Weak central management
§ e.g., consulting firms, research and development firms

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• Information system often reflects
organizational structure
• E.g., centralization/decentralization

• IT/IS could also influence

organizational structure

• Organization structure influences

IT/BA/Information Security/…
unit performance

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§ NUS IT ORGANISATION CHART

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§ A local ride-hailing firm’s Business Analytics function structure design
§ BA team is supposed to support all business analytics projects from all other
departments
§ E.g., transportation, food, advertisement, customer relationship, HR
§ Is it better to be centralized or decentralized ?

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§ A business model specifies how a company will create, deliver, and capture
value.
§ A business model reflects the following:
1. What does a company do?
2. How does a company uniquely do it?
3. In what way (or ways) does the company get paid for doing it?
4. What are the key resources and activities needed?
5. What are the costs involved?

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• Business Processes:
• Logically related set of activities/steps that define how specific business tasks are
performed
• Flows of material, information, knowledge
• May be tied to functional area or be cross-functional

§ Businesses: Can be seen as collection of business processes

§ Business processes may be assets or liabilities

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§ Business process reengineering
§ The analysis and design of workflows and business processes within an
organization

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§ NUS CHRS HR system – 07, 2019

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§ Business/IT Alignment
§ The alignment of information systems with a business’s strategy.
§ Utilize IT to meet business strategic goals
§ A continuous process of adjusting business goals and the IS architecture to achieve
business objectives
§ Utilize IT to support/enable business transformation

§ How?
§ Deep understanding of business and IT
§ Business vision
§ Technology trend

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§ Grab starts business in SG: 2013
§ Grab merges with Uber in 2018

§ ComfortDelGro to trial ride-hailing

service with private-hire cars from
Feb 4, 2021
§ ComfortDelGro to launch all-in-
one app (i.e., Zig) offering taxi,
private bus, car rental and leasing
services in 2021.
§ Comment on ComfortDelGro Taxi’s
current Business/IT alignment
maturity in SG.
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§ Podolny and Hansen (2020). How Apple is Organized for Innovation, Harvard
Business Review, 98: 86-95.

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§ L3 Information Systems and Competition Strategies
§ Quiz 1 starts this week:
§ Sat – Wed
§ 5 days to complete it

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