An information system is an integrated set of variants which are applied for attaining, storing and communication of available information (Laudon and Laudon, 2016). Amazon operates at the global level and earns over a $100 billion in annual sales as well it is the fastest company to attain the feat. It has appointed over 230000, part-time and permanent personnel for the year of 2015, employing seasonal workers and sovereign contractors in order to reduce the cost of the company (Amazon Com Inc. Company Profile., 2016). Present study revolves around the assessment of organization structure, human activity system and information system of Australia Amazon. The organization structure of the company has been assessed in detail in order to ascertain the existing information system. Further, the report ends with discussion relating to new information which will resolve the issues of the existing information system.
Amazon is the diligence of e-commerce; however, they are developing sluggishly in the retail industry. Initially, it was a book company, but nowadays it is one of the biggest online retailers. Amazon offers various types of products and services. Moreover, to be the earth most consumer-centric company is the vision of Amazon and also to construct a place where human beings could find and discern things they desire to purchase online (Amazon Annual Report, 2017). The competitive strategy applied by Amazon Australia in the market is to focus on a single term, i.e. convenience of the customer. The company believes in the term and in order to save time and make life easy for its customer, it created program Amazon Prime. Through, this customer is able to get merchandise shipped in two days or less. Presently, distribution centres have been developed throughout cities so that delivery can be made in two hours or less.
The organizational structure of Amazon can be categorized as Simple Structure specified in Mintzberg’s classification. Broadbent and et al. (2013) asserted that the main characteristic of simple structure is that its application of formal devices of structure and attempts to decrease its dependence on staff specialist. Moreover, the important and critical decision is taken by centralized chief executive officers only (Ashkenas, Jick and Kerr, 2015). The same features can be accessed in case of Australia Amazon organizational structure as it comprises senior administration teams have two CEOs, three Senior Vice Presidents and one universal controller, who are accountable for a various significant aspect of business reporting straightly to CEO Jeff Bezos. Along with this, there are seven sections, and they are, information technology, human resources and legal functioning, heads of sections also reports to CEO of Amazon. Apart from this, its organizational structure incorporates many small panels which deal with different aspects of the company. The founder of Amazon and its CEO is awarded for the introduction of two pizza rule. With accordance to the rule, the conference must be held in small teams that could be all fed with two pizzas only. Furthermore, it is significant to consider that in spite of its large size, Amazon continues to flexible towards acclimatize the modifications occurring in environment compare to other big companies which are functioning according to hierarchical organization structure. In addition to this, online retail massive leads alterations in the environment; it has caused disruptive innovation in e-commerce (Rothaermel, 2015). At the present time, it is likely to cause disruptive innovation in global logistics diligence. The reason behind the same is visionary and effective management by Amazon founder and its CEO.
Value chain analysis refers to a systematic framework that helps in recognizing the operation of the business which can create value and competitive gain to the company (Carroll, 2005).
Usually, Amazon does not comprise long-term deals or arrangements with its sellers in order to ensure the accessibility of goods, specific payment terms or expansion of credit limits. Fulfilment by Amazon (FBA) is the keystone of Amazon inbound logistics regarding company-owned retail business. Vendors can also utilize FBA though putting away their stocks in Amazon fulfilment centres. Into this case, Amazon presumes complete duties for logistics, consumer services and product return. In case a consumer order product of FBA and an Amazon owned-inventory item, then it ships both products to the consumer in the single box only as an important gain of effectiveness (Mudambi and Puck 2016). FBA is used as an alternative choice for vendors, and the same will creates items of third-party sellers suitable for Amazon Prime free two-day shipping, free shipping and other advantages.
Amazon Web Services can be referred to as another core part of Amazon primary activities (Amazon, 2015). This section deals with sales of computing, storage, database and other services providing for introducing, companies, government organizations and academic institutions. Sales of AWS augmented 55% and 43 % between 2016 and 2017 contrast to comparable previous year periods. AWS provides pay-as-go cloud storage, compute resources, networking, computing services and its main consumers comprises Pinterest, Dropbox and Airbnb.
The infrastructure of Firm: – Amazon provides services to consumers, vendors and developers by its retail websites. Moreover, it also produces and sells the Kindle e-reader. It also offers programs through which vendors can sell their goods on its websites and their own branded websites. To attain the same Amazon has classified its functions into two major sections that are North America and International (Ritala, Golnam and Wegmann, 2014).
Human Resource Management: – It has an organic organizational structure. The reason behind the same is that E-business tends to obtain organic properties to attain basic flexibilities, speed and directness.
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Competitive Rivalries |
Generally, the main competitors of Amazon are eBay, Barnes and Noble. Barnes and Noble is one of the biggest booksellers in the field of booksellers and receives approximately 6 million guests every month. Like Amazon, customers almost could find each and everything for cheap through entering in the auction procedure. Due to same, eBay can attract more consumers which results in loosing of the customer for Amazon. Thus, because of various competitive rivalries, Australia Amazon has a high competitive risk. |
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Bargaining Powers of Buyers |
With accordance to the model, the power of the buyer is sturdy since each, and every individual can utilize his/her mouse to determine what they want. Hence, Under the Amazon power of buyer is strong which results in a high rate of bargaining power. |
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Bargaining Power of Suppliers |
Amazon has a large customer base and sturdy competitive benefits like technology inventive and cost leadership. It is extremely difficult to increase price since products existing in the online shop could be offered by many firms. Moreover, also the orders of Amazon are substantial quantity because huge consumers and suppliers do not desire to give up the business. Hence, it can assess that Amazon’s bargaining power of supplier is low. |
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Threats of Entries (E. Dobbs, 2014) |
Amazon’s online store is very striking. Therefore, there are many companies who want to join the new market. Though, there are no restrictions regarding entry of companies in this diligence, at the same time it is very hard to create brand loyalty among consumers. This implies that an organization needs to think about the expediency of the online shopper, economical price and range of products. In case, organization desires to win over its rivalry then it should spend money on IT expertise, on-going technological inventive and other investments. Thus, it can be concluded that Amazon has a very low risk of entry. |
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Threat of Substitutes |
Contrasting with conventional bookstores and supermarket, books which are sold on websites of Amazon is 40%-50% economic. Furthermore, Amazon offers super save like free shipping as well as consumers do not have to pay tax on the website. The same can result in saving of lots of money. Sometimes customers will select traditional department store if customers choose an enjoyable environment to read like Barnes and Nobles provided. Apart from this, if shoppers do not desire to wait for a long period of time regarding products since usually, they require 3-7 days for delivery. Hence, Amazon has a low to medium risk of substitutes. |
Figure 3: Assessment of variant of Porter model for Amazon
The human activity system states a theoretical model of some human activity. This model also depicts the change of inputs into outputs and requirements of its stakeholders (Hill, Jones and Schilling, 2014). The depiction of the system is usually documented in Root Definition. The theoretical Human Activity System (HAS) has been recognized as a constituent of Soft Systems Methodology (Morden, 2016).
The main issue which has been assessed in Human activity system of Australia Amazon is that customers and shareholders are provided priority over all the stakeholders of the company. Due to this reason, it is ignoring the significant need for a portion of stakeholders who it ultimately depends on. It is necessary for an organization to balance all the polarities in order to sustain the business for a long period. Another issue which has been analyzed through assessing the Human activity system is that the main decisions are taken by senior executives. This kind of decision making reflects that other employees are not considered during decision making. The major part which is responsible for implementation of the significant procedure is not considered in the discussion relating to same. The practice not only results in de-motivation but also leads to arising in an unproductive environment in the organization.
Customers: Corporate social responsibility policy of Amazon is mainly focused on consumers as the most significant stakeholder group. Amazon considers consumers as the crucial determinant for the victory of its e-commerce business. The reason behind the same is particularly because these stakeholders considerably influence the profits of the company. Such prioritization consents with the mission and vision statement of Amazon, which emphasize the centrality of consumers in the business and its expansion.
Shareholders: The shareholders are considered as important stakeholders of Amazon Company on a priority basis. They are a significant determinant of the company as they make sure that companies take into account the interest of a wide range of constituencies and of communities within which they are functioning. They also make sure that their boards carry out work in an effective manner as they are accountable to the company and also to shareholders.
It can be accessed from the above rich diagram that the human activity system of Australia Amazon that all the complaints and needs of the customer are accomplished at priority. Every aspect of their complaint is analyzed in detail. All the feedbacks are assessed in detailed and are discussed with the appropriate manner with a senior executive of the organization. All the members of the organization have a vital role in the success of an organization. IN case of Australia Amazon it could be assessed from an analysis of Human activity system that main decision of the organization are taken by senior executives, and the member who is responsible for implementation of same are not considered while taking a decision. The existence of feeling which arises the variants relating to avoidance might lead to obstacles. The diagram also represents the manner in which the problems of the organization are discussed with leader members (senior executives).
As per the existing information system, initially, when the order is placed by the customer, the system of Amazon checks what the product is and whether it is available or not, and it is examined by the Amazon that whether the product is own production or is of outside seller. If the order is placed, under the given circumstances, the same is transferred to the requisition process which is based on two aspects that is store approval hierarchy and spending authority information. After that, if the product is checked and the order is created, the purchase type is decided, and following to this, the guidelines are presented in front of the client so as to ease the online process. Subsequently, all of the commercial policies and standards are fulfilled from the side of seller and customer, and then the production requirements are fulfilled by the seller and are check listed to facilitate the manufacturing process. Further, the purchase origin is decided, and the production is scheduled. Also, the customer is provided with the real-time order history and tracking. This process model is mainly focused on customers and their order which ignores other critical aspects such as decision making, analysis and value management. For better information system it should consider overall aspects that are supported by considering all the operations of the business.
Areas in which the existing human activity system is not successful as per DeLone-McLean Model of Information System Success
The areas in which existing human activities are not successful according to De-Lone-McLean Model of an information system are:
As all departments are not involved while taking the decisions of the company due to which the information system is not able to perform effectively as appropriate information is not provided to same. The reason behind the failure of the area of system quality is that only seniors of the company take the decisions and no other employees are involved. Thus the decision of the system is taken without considering all the variants. Further, the ineffectiveness of the above-specified variants affects net system benefits, and the extent to which benefits can be attained is not achieved.
Efficiency: As the decision is made by the senior executive and leader who have enough knowledge and experience, thus the HAS system is efficient enough.
Efficacy: As all the departments are not evolved in a significant decision, the existing HAS does not have not enough efficacy. It leads to failure in producing the desired result (Bonini, 1963)
Effectiveness: Existing HAS is not effective as at the time of decisions, employees are not involved due to which they are not satisfied and not perform work in an efficient manner.
In the new information system of Amazon, the main emphasis will be provided to suppliers and society along with customers, employees and shareholder. The same will add value to the business of Amazon as it will assist in resolving the existing complain that the organization provides importance to shareholder and customer over other stakeholders.
Suppliers: Suppliers: Suppliers are considered as an important determinant for the success of the company, The reason behind same is they supply raw material which is utilized to manufacture finished products and in most of the cases they supply directly manufactured product. Thus, in order to earn a profit, the company must maintain good relations with suppliers else they will stop supplying raw materials to that company (Broadbent and et al. 1996).
Society: They are significant for long-term survival of a company (Beynon, 2013). In case the society is not satisfied with the services provided by the company they stop supporting it. This will results in a loss for organizations as a society will stop buying goods of that organization. Hence, in the new information system along with consumers, employees and shareholders, society also gives due importance.
Employees: Employees are considered as an important determinant of the performance of the organization as well as CSR strategies and programs by Australia Amazon. This group of stakeholder is interested in competitive payment and development of career (Laudon and Laudon, 2016). Personnel is vital for the organization since they prop up competitive gain based on Amazon’s organizational structure.
The data information system which is used in the new information system will be attained from all the departments, i.e. considered each level of organizational structure. Benbasat and Zmud (2003) specify that the involvement of employees in decision making will increase the efficiency of employees as they feel that they are part of the company and important for the company.
By considering the previous information system, it can be noticed that the major loophole was that it was focused on a single stakeholder without considering the overall aspects of the business. To resolve the proposed issue, the recommended information system covers billing-utilization areas, network quality supplier, and engineering maintenance model, product service model and customer value analytic model. These are followed by three crucial steps which are data collection and analysis, proposed feasible action plans, decision management and performance review. The KPI model is covered under the data collection and analysis which helps in demonstrating the manner by which the key goals of the company are achieved effectively. Also, a knowledge-based interaction system is managed by the Amazon to solve and address the complex issues, which makes optimal utilization of knowledge basis with the help of human expertise. The performance is measured through the KPI model, to attain the optimal measures and core objectives of the management. By considering this aspect, data collection is done through marketing segment targeting and position (STP) and 4ps analysis, they have applied to analyses the market and the research segments, and it is the best suitable strategic approach in contemporary marketing.
The new information system of Amazon can be classified as a front-end system. Front-end system is that part of an information system which directly provides information to the users and interacts with users in order to receive or employing back-end abilities of the host system. As per assessment of Kerzner and Kerzner (2017) ,through providing information directly to users organization is able to provide details regarding the manner in which company is concerned about all the stakeholders and not only for customers and shareholders. Evolvement of employees in decision making will assist in assisting them to know about the company more and the types of goods and services provided by them.
With the assistance of a new information system, existing issues of Amazon will resolve such as giving significant importance only to customers and shareholders. As now stakeholder will be given equal importance. Along with this, the problem of not involving employees at the time of decision making will also end up to a major extent. The involvement of employees is necessary as the end as they are the one who has to work according to the expectations of customers. Now, the human resource of Amazon gives innovative ideas related to the development of inventive ideas to increase the efficiency of the business. Hence these are some positive impacts will come to the company after the implementation of the new information system. Along with positive impacts is one negative impact of a new information system that is a delay in decision making. The reason behind the same is that if there is involvement each and every employee while taking the decisions, then it will result in a delay in decisions and also the decisions which are important for the company. In case the decisions which are to be taken urgently and because of the involvement of all employees there can be a delay in decision making.
Efficiency: New information system is more efficient as now decision takes after considering data and information attained from employees as well as another department of the organization. This information will assist in revealing detail fact about the issues faced by the organization.
Efficacy: Through logical and systematic procedure company can address all the crucial constituents which are important for the success of the company (Braglia andFrosolini, 2014). It depicts that the new system has the efficacy component and it will be able to attain the desired result.
Effectiveness: Moreover, new information also helps in exploring the options which are obtained by investigating information in detail, and the same enhances the significance o effective variant measure of success.
In order to add value to the existing information system of Australia Amazon, it is recommended to make changes as per the specifications provided in a new information system. In case the specified changes cannot be accepted in the same manner than the same can be moulded or accepted to the extent to which it is possible.
The specified new information system could be implemented through making head or senior manager of each department. Moreover, they should be made a practice to have meetings with employees of their department, so that they get a feeling that they are a vital part of the organization. The same should be practised on a compulsory basis in case the issue is relating to the specific department.
Conclusion
It can be concluded from the above study that information system of an organization plays a critical role in the attainment of main objectives of the organization. It is one of the main sources for extracting adequate and appropriate information which is necessary for taking the correct decision. Australia Amazon is compulsorily required to reassess its information system in order to depict existing issues in detail manner and resolve the same.
References
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