Why is it important for business strategy to drive organizational strategy and IS strategy
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Peer Comments 1
importance of business strategy
Business strategy: defines company focus area, goals and strategies to compete successfully and sustain with present and future market.
Organization strategy: based on type of business strategy, organization structure is designed and hire suitable people, defined work processes and culture in the organization.
Is strategy: based on business strategy, IS strategy is evolved by defining proper hardware and software or re-engineering the existing software systems to adopt new technologies.
Based on business strategy both organizational and information strategy is defined, structured and created. Business strategy is a key in defining building blocks of organization and information strategy. if we don’t know what business strategy-key goal and what kind of products or services need to deliver to customers leads to bad and unbalanced sides of organizational and information strategy. for example, if we knew business strategy of company “A” is going to provide software services to financial sectors. Based on that we are going to create organizational structure, hire candidates who have knowledge in software and going to define information strategy to adapt hardware and software’s. Here business strategy act as a driver for both organizational and information strategy.
For example, Good business strategy example: If we consider “Amazon” company, when Internet is new, Jeff Bezos started online business. “Online business” this is main key and consider as business strategy. He adapted what is trending in the year of 1994 and sustainable in future, so based on business strategy organizational and information strategy is going to be created in company.
Failure business strategy example: if we consider “kodak” company, one who first created digital cameras using magnetic disks and made lots of profit on that one. But the technology is evolving they did not adapt the new business strategy with the latest update in market and continue to manufacture cameras with old traditional model and leads in loss of billions of dollars and fall apart from the market.
In the above two scenarios we can consider, how business strategy act like a driver for success and failure for running business and structuring organizational and IS strategy.
References: Pearlson, K. E. (2001). Managing and using information systems: A strategic approach. New York: J. Wiley & Sons.
Peer Comment 2
Niharika Tamma Reddy
In today’s business environment, managing information is critical for an organization to survive. Its facilities business decisions at all levels in an organization with regards to customer’s needs and wants, the market position in which an organization competes and the organization’s capabilities. Technology can no longer be viewed as an administration overhead with the ubiquity of smartphones, laptops and other personal devices. It enables an organization to compete globally and participate in supply chain partnerships. As business processes and IS are more integrated, it has become important that IS strategy and business strategy are aligned (Pearlson & Saunders, 2013).
What is Strategy?
Strategy is driven from an association’s crucial vision. It speaks to the fundamental belief of an association. It is the explanation an association exist alongside a forward-looking wanted eventual fate of the business. The corporate level system makes the activity intend to accomplish the hierarchical target. It falls down through utilitarian degrees of fund, generation, IS and so on. Accordingly, in principle procedure ought to adjust.
Information System Strategy Triangle
A successful organization will have an overarching business strategy which drives all other strategies. The organizational strategy and information strategies are dependent on the business strategy. All three strategies must be carefully balanced as a change will impact another (Pearlson & Saunders, 2013).
Strategy is defined by Pearlson & Saunders (2013, p. 26) as ‘a conditional set of actions to fulfil objectives, purposes and goals’ It set limits with regards to what an organization seeks to achieve. The business strategy is the articulated vision in relation to where the business is going, how it is going to get there and why? The Michael Porter’s three strategies for achieving competitive advantage model is used by organizations to understand their chosen strategies. Fig 1.2 illustrates the following:
- Overall Cost Leadership -organization aim to be the cheapest with low cost production e.g. Suzuki cars.
- Differentiation – good /service appears unique e.g. insurance companies claim settlements/ Coca Cola.
- Focus – narrow niche market based on cost or differentiation focus Ritz or Marriott hotels
Business Strategy incorporates competition, positioning and capabilities. It requires an understanding of the customers wants and needs along with competitors. Positioning is concerned with the way an organization wants to complete. IS provides input to evaluate the capabilities of the organization.
Organizational strategy is worried about how the business is set up to actualize business technique. Two models utilized are the business jewel and administrative switches. The Leavitt Business Diamond in Fig 1.3 decides an association’s basic parts of structure, individuals assignments, data and controls. All components are between related. The effect can be inconvenient with respect to neglecting to comprehend the connection between every one of the three.
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