Strategic Management and Information Systems

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Chapter 3

Information Systems, Organizations, and Strategy
After reading this chapter, you will be able to:
1. Identify and describe important features of organizations that managers need to know about in order to build and use information systems successfully. 2. Evaluate the impact of information systems on organizations. 3. Demonstrate how Porter’s competitive forces model and the value chain model help businesses use information systems for competitive advantage. 4. Demonstrate how information systems help businesses use synergies, core competencies, and network-based strategies to achieve competitive advantage. 5. Assess the challenges posed by strategic information systems and management solutions. 3.4
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The merged company adopted primarily the simple, flexible information systems and business processes of America West. It eliminated systems and business processes for carrying hazardous materials and handling unaccompanied minors on connecting flights because their costs were too high relative to the benefits they provided. The company only retained a few of the old US Airways’ processes and systems, such as an application for determining where and when to purchase fuel or check-in applications to support international routes. The new US Airways is now the fifth-largest carrier in the United States and the world’s largest low-cost airline. Will it be successful? It’s still too early to tell. It cost around $75 to $80 million to integrate the information system applications and business processes of the merging companies. Whether the merger will produce bene-




Part One Organizations, Management, and the Networked Enterprise

fits depends on how well the two companies’ systems and business processes are integrated. US Airways noted in regulatory filings “that the merger will result in certain synergies, business opportunities, and growth prospects” but the company “may never realize” them. “Significant challenges in consolidating functions, integrating...organizations, procedures and operations” will make the integration of the two airlines “costly, complex, and time-consuming.” If the merger is successful, the new US Airways will have a
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