When analysts speak of companies or organizations, they are actually referring to open systems composed of subsystems, each of which must function efficiently and effectively if the organization is to survive. Often, these subsystems are viewed independent from the larger whole, but in fact, they are interrelated and interdependent. This interrelationship has become increasingly clear as information technology has emerged that is able to bring together various pieces of data generated in different and disparate subsystems but used by entirely different subsystems. Managing the information technology in this environment is a challenging and even daunting task, but bringing together key pieces of data and transforming them into valuable information can be a critical success factor for many companies. This research considers the various subsystems at a typical company and how three different applications of information technology link those subsystems together through management information systems.
Fundamental to the understanding of organizations is the concept of the organization as system. In this context, a system is composed of interrelated and interacting components that modify their environment. In other words, the organization-as-system takes inputs from the environment, modifies them, and returns the resulting output to the environment (Daft, 1998).
Open systems must have external interaction in order to survive. For profit-making organizations, such interactions can be found in the company's relationships with vendors and customers as well as with other stakeholders (such as owners and even employees, who can change their employers). Internal structure and efficiency are critical success factors for these organizations, but are dependent on external factors to determine how successful the organization will be. For example, an organization that operates in a highly dynamic market may succeed with a horizontal stru...