1, pp. 128-136) argued that the advent of intensive computer networking in the corporate business setting will transform the internal structure and functioning of business organizations, and will fundamentally alter the way such organizations interact with their external environments. The authors postulated that such transformation will occur through a hierarchy of effects resulting from the implementation of computer network technology. The first-order effect in the effects hierarchy is the substitution of information technology for human coordination. An increased use of coordination is the second-order effect, while the third-order effect is a shift in organizational structure to one that is coordination-intensive.
As businesses compete, they create new opportunities for and threats to one another (Adler, McDonald, & MacDonald, 1992, p. 19). Many IS departments fail to rise above day-to-day concerns to look at the whole, dynamic market. Such IS functions simply react; they have no formal assessment process. They receive little useful feedback from the business's commercial side, and they ignore external developments. It is essential in the building of an effective MIS for the IS function to interact with planning, marketing, and sales. Competitor actions and market changes must be systematically analyzed to pick up advance signals of opportunities and threats. Formal mechanisms for getting information from planning, marketing, and sales are required. The most effective IS functions explore opportunities with customers, suppliers, governmental agencies, and other sources.
Many firms have re-engineered business processes from an indirect pattern, with many intermediate steps, to a direct pattern permitting two or more functions to proceed independently (Teng, Grover, & Fielder, 1994, p. 14). In the American automobile manufacturing industry, Ford Motor Company implemented such a process change based on the functionin...