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Management Information Systems

Notes 5.6.2 Smart Cards and Microminiaturization

Take a credit card out of your wallet and look at the magnetic strip on the back. The strip may
seem too small to hold much data. You might be surprised to learn that through
microminiaturization, virtually all of your personal information, from health records to school
records to credit records, can be stored on that small area with room to spare. Some states are
now including vital medical information on the back of driver’s licenses which can be accessed
by paramedics if you’re ever in an accident and need medical attention. The technology has
already saved lives.

5.6.3 The Network Structure

The concept of the network’s form of organization has been particularly popular with
management writers for its potential to build the flexible organization with the ability to meet
the challenges of a changing and global environment. Despite both the abundant available
literature and the existence of a certain consensus on some aspects, there is still too much
ambiguity in the concepts used in this area. Taking into account the formation of networks,
which is an interesting field of recent development with strong repercussions on the inter-
organizational relationships, it is necessary to clear the existing terminological confusions in
order to formulate its theory and to improve its implementation.

Starting from the definition, a network is a specific kind of relationship joining a particular
group of people, objects, or events. Two factors needed for constituting a network can be obtained
from this definition; first, a network is formed by a group of elements; second, these elements
establish specific relationships among them. We must show that the establishment of a
co-operative network is not a purpose itself but “it must be a dynamic structure that allows
consolidating the competitive position of its members”.
By means of a network structure, the competitive position of the enterprises can be reinforced as
these concentrate on what they do best, and on what maintains their success in the market. In this
way, other enterprises make the activities left, in which they have distinctive competences too.
The enterprises outsource those activities that are ballast and bureaucratize them.
The enterprises that belong to a network have not all the elements needed for manufacturing a
product or providing a service under their absolute control. Within the networks, the involved
elements belong to independent enterprises and are placed along the value system of a product
or service.
All this drives to an organizational structure in which the enterprises generate more value in
those areas where they have specific competencies. The success of these emergent organizational
forms seems to be based, on a great extent, on an effective co-ordination by means of the use of
advanced information systems, which are based on the Information Technologies (IT). There is
an increasing interest in the relationship between the emerging organizational ways and the
function of the IT/IS insofar as the progresses in each field have influenced the others.

5.6.4 Information Technology on the Emergence of Networks

At the moment, the most spectacular and potentially powerful uses of the information systems
technology go beyond the individual borders of the enterprises. In fact, the most important
function of IT in the nineties is the better management of the interdependencies among the
enterprises. Information Technology has to be the most powerful instrument to reduce the co-
ordination costs. While the traditional uses of IT tried to facilitate the internal processes of the
enterprises, the Interorganizational Information Systems (IOS) are addressed towards the
efficiency of a group of enterprises.

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