Ch. 1 Text Flashcards
What are the 6 objectives in business?
1) Operational excellence
2) New products, services, and business models
3) Customer and supplier intimacy
4) Improved decision making
5) Competitive advantage
6) Survival
What is operational excellence?
Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability.
Information systems and technology are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in business operations.
What are new products, services, and business models?
Information systems and technologies are a major enabling tool for firms to create new products and services as well as entirely new business models.
A business model describes how a company produces, delivers, and sells a product or service to create wealth.
What is customer and supplier intimacy?
When a business knows its customers and serves them well, the customers generally respond by returning and purchasing more. This raises revenues and profits.
Likewise with suppliers, the more a business engages with its suppliers, the better suppliers can provide vital inputs. This lowers costs.
What is improved decision making?
Managers rely on forecasts, best guesses, and luck. The result is over or underproduction of goods and services, misallocation of resources, and poor response time.
Information systems and technology have made it possible for managers to use real-time data from the marketplace when making decisions.
What is competitive advantage?
Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales and higher profits that your competitors cannot match.
What is survival?
Necessity for business. Many federal and state statues and regulations create a legal duty for companies and their employees to retain records, including digital records.
What is a digital firm?
A firm in which nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated.
What are the characteristics of a digital firm?
Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations.
Any piece of information required to support key business decisions is available at any time and anywhere in the firm.
Business is being conducted 24/7 instead of the typical 9 am to 5 pm workday.
Work takes place in a global workshop as well as within national boundaries. Work is accomplished physically wherever in the world it is best accomplished.
What is a complementary asset?
Assets that are required to derive value from a primary investment.
***Managers need to consider the broader organization and management dimensions of information systems to understand current problems as well as to derive substantial above-average returns for their information technology investments.
Why are complementary assets beneficial?
Firms that support their technology investments with investments in complementary assets, such as new business models, new business processes, management behavior, organizational culture, or training, receive superior returns.
Firms failing to make complementary investments receive less or no returns on their information technology investments.
What are key organizational complementary investments?
A supportive business culture that values efficiency and effectiveness, an appropriate business model, efficient business processes, decentralization of authority, highly distributed decision rights, and a strong information system development team.
What are important managerial complementary assets?
Strong senior management support for change, incentive systems that monitor and reward individual innovation, an emphasis on teamwork and collaboration, training, and a management culture that values flexibility and knowledge.
What are important social investments?
The Internet and the supporting Internet culture, educational systems, network and computing standards, regulations and laws, and the presence of technology and service firms.
