TLDR;
This lecture introduces organizational strategy, competitive advantage, and the role of information systems in business. It covers business processes, cross-functional processes, and how information systems play a role in organizational processes. The lecture also discusses competitive advantage, strategies, and Porter's Five Forces.
- Connect Master assignments are due tonight at 11:59 PM.
- Chapter 2 is a very important chapter and it really kind of sets the tone for business as a whole.
- Competitive advantage is any assets that provide an organization with an edge against its competitors in some measures such as cost, quality or speed.
Course Reminders and Introduction to Chapter 2 [0:02]
The instructor reviews upcoming due dates for Connect Master assignments, including the "Investigating MIS" adaptive learning assignment, a case study (due January 21st), and a quiz (due January 19th). Late submissions will not receive credit. The Connect Master grades will be curved at the end of the semester, potentially by 10 points. Attendance is optional and will not affect grades. The lecture will cover organizational strategy, competitive advantage, and information systems, providing background knowledge for analyzing firms and their profitability strategies.
Business Processes: Inputs, Processing, and Outputs [6:05]
A business process is an ongoing task with three major components: inputs, processing, and outputs. Inputs are the resources taken in, such as information or people. Processing involves actions like payroll calculations, including hours worked, compensation rates, withholdings, and benefits. Outputs are the results, such as employee payments and withholding information. Examples include managing accounts payable (input: invoice, output: payment) and managing stock transactions (input: client order, output: transaction).
Cross-Functional Processes and Information Systems [8:57]
Cross-functional processes involve at least two functional units (departments) within an organization. Order fulfillment is an example, involving IT, warehouse, and accounts receivable departments. Information systems play a role in executing processes, storing data for auditing and performance monitoring. Data is stored long term and accessible for meaningful insight.
Business Process Improvement: DMAIC [13:53]
Business process improvement aims to make processes more efficient and customer-friendly through simplification and cost reduction. Key considerations include customer satisfaction, cost reduction, cycle and fulfillment time reduction, quality, productivity, and differentiation. The DMAIC (Define, Measure, Analyze, Improve, Control) process is a five-step approach to process improvement. Each phase involves specific actions to identify problems, collect data, analyze it, implement improvements, and control the changes.
Competitive Advantage: Michael Porter's Insights [20:06]
Michael Porter's concept of competitive advantage refers to any assets that give an organization an edge over competitors in areas like cost, quality, or speed. Types of competitiveness include superior quality, efficiency, innovation, and customer responsiveness. Innovation can be protected through copyrights or patents, though international enforcement varies.
Competitive Strategies: Cost Leadership and Differentiation [24:10]
Porter identified two competitive strategies: cost leadership (offering lower prices) and differentiation (offering better or unique products/services). Differentiation can be in service or product, and can also focus on the target market (industry-wide vs. niche). A hybrid approach can combine these strategies. Quality can be defined as consistency or high-end distinction, and is achieved through precise measurements and continual improvement (Kaizen).
Efficiency, Innovation, and Customer Responsiveness [31:55]
Efficiency can refer to environmental impact or fraud reduction, with accounting information systems helping to prevent fraudulent spending. Innovation includes technological and process innovations, as well as service innovations. Superior customer responsiveness involves using marketing strategies and direct feedback to tailor products and services. Custom products and flexible manufacturing are also discussed.
Manufacturing Approaches: Mass Production, Customization, and Flexible Manufacturing [36:30]
Manufacturing approaches include mass production (one product for everyone), mass customization (minor tweaks to a product), and flexible manufacturing (specific orders to specifications). Mass production has high quantity and low unit price, while flexible manufacturing has low quantity and high price.
Organizational Strategy and Porter's Five Forces [38:54]
Organizational strategy involves how an organization evolves to meet its objectives, focusing on cost leadership, differentiation, innovation, operational effectiveness, and customer-oriented approaches. Porter's Five Forces (threat of entry, buyer power, threat of substitution, supplier power, and rivalry) determine the competitiveness of an industry. Each force influences the level of rivalry within the market.
Porter's Value Chain: Primary and Support Processes [48:59]
Porter's Value Chain identifies primary business processes (the core goods or services provided) and support processes (activities that enable the primary processes). Primary processes for a manufacturing firm include inbound logistics, operations, outbound logistics, marketing and sales, and service. Support processes include firm infrastructure, human resource management, IT, and resource procurement. These processes can lead to competitive advantage when managed effectively.
