Chapter 2

Question 1

Cross Functional Business Processes

Answer 1

multiple functional areas collaborate to perform a process. Example: Procurement involves obtaining needed materials from an outside vendor. Procurement is completed in three different functional areas: warehouse, purchasing, and accounting.

Question 2

Business Process Reengineering

Answer 2

strategy for improving the efficiency and effectiveness of an organizations business process.

Question 3

Business Process Management

Answer 3

management technique that includes methods and tools to support the implementation and optimization of business process.

Question 4

business environment

Answer 4

social, legal, economic, physical, and political factors

Question 5

gloabalization

Answer 5

integration and interdependence of economic facets of life made possible to rapid advancements in IT.

Question 6

Market pressures

Answer 6

Globalization, the changing nature of the workforce, and powerful customers

Question 7

Why are market pressures more powerful than they were in the past?

Answer 7

The world is becoming flat because the international competitive playing field has been leveled out due to technology. Workforce is more diverse. Customers are becoming more knowledgeable about products and services therefore they have higher expectations.

Question 8

what technology pressures are organizations facing?

Answer 8

Innovation and obsolesce, information overload.

Question 9

What societal/political/legal pressures are organizations facing?

Answer 9

• Social responsibility (organizational social responsibility and individual social responsibility),
• compliance with government regulations,
• protection against terrorist attacks,
• ethical issues.

Question 10

What do organizations do to respond to pressures?

Answer 10

• Strategic Systems,
• customer focus,
• make-to-order (made for individual specifications) and mass customization (fits the needs and preferences and individual customers),
• e-business (broader term of e-commerce includes servicing customers, collaborating with business partners, performing electronic transactions) and e-commerce (buying, selling, transferring, exchanging via internet).

Question 11

make-to-order

Answer 11

customized products and services according to individual specifications

Question 12

mass customization

Answer 12

produces large quantity of items but customizes them to fit the needs of individual customers.

Question 13

How do you analyze the competitiveness of organizations?

Answer 13

Using Michael Porter’s 5 competitive forces model.

Question 14

Porter’s Five Competitive Forces

Answer 14

1) The threat of new competitors,
2) the bargaining power of suppliers,
3) the bargaining power of customers/buyers,
4) the threat of substitute products or services,
5) the rivalry among existing firms within the industry.

Question 15

entry barrier

Answer 15

an expectation normal customers have built for a product or service feature. the feature must be offered to survive in the marketplace.

Question 16

Porters Value Chain Model

Answer 16

identifies specific activities where organizations can use competitive strategies for greatest impact. where to use IT for competitive advantage. Divided into primary activities and support activities.

Question 17

Primary Activities

Answer 17

relate to the production and distribution of the firms products and services. create calue for which customers are willing to pay.

Question 18

support activities

Answer 18

do not add value directly, they only contribute to the firms competitive advantage by supporting primary activities.

Question 19

value system

Answer 19

value chain. includes suppliers that provide inputs to the firm along with their value chain.

Question 20

What strategies can organizations pursue to achieve a competitive advantage?

Answer 20

1. Cost leadership strategy
2. Differentiation strategy
3. Innovation strategy introducing new products or making new features.
4. Operational effectiveness strategy improve internal business processes.
5. Customer-orientation strategy concentrating on making the customers happy—web based systems are effective.

Question 21

business information technology alignment

Answer 21

integration of the IT function with the strategy, mission, and goals of the organization