Information Systems and Organizations

First of all, let us define what is an Organization. An Organization can be defined as a formal structure which takes resources from the environment processes them and makes output.

 One organization can be divided into some functional areas like: Production and Manufacturing, Sales and Marketing, Finance and Accounting and Human Resources Department. All of these functional areas have their own task levels such as: Operational level where major business events or transactions are recorded, Middle Management level where they put in work the plannings of the Upper Managements who in turn are responsible for the long term strategies and planning of the organizations.

Organizations have their structure, division of labor and hierarchy. But, they can differ in their politics and the culture of both their employees and managers. Organizations can be specific and differ from each other depending upon their respective environment. So, the environment shape what the organization can do but also the organization can change the environment. Information Technology plays a major role of how the organization observes the environment and how can they react on changing the environment.

Many if not most of organizations have a specific Information Systems department where they are responsible for the maintenance and the connection between the business and information technology spheres in the organization. Information Systems department has: Programmers, Business Analysts, Information Systems Managers,  Chief Information Officers. 

Information Technology can considerably minimize the transaction costs one organization needs to pay when they participate in the market. In the past in order to minimize the transaction costs firms grew in size. With the help of IT firms can reduce the transaction costs without the need of firm growth which increases the revenue even in some cases there is shrink in the firm structure accompanying revenue growth.

Every functional area and task level is now accompanied with an Information System which performs the specific function depending upon the business processes or procedure by the departments. The informations or datas between various departments can seamlessly flow with the help of Enterprise Systems in order to support the cross functional business processes. 

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Written by Leo

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