Chapter 3

Question 1

What is a productivity paradox?

Answer 1

The increase in investment in information technology combined with small changes in worker productivity

Question 2

What is productivity?

Answer 2

It is a ratio of the GDP of a country divided by the total paid hours worked by people in the country

Question 3

What are recent employment trends?

Answer 3

Jobs are becoming more polarized: more high-skill jobs and more low-skill job, while middle class pay jobs are being replaced by technology.

Question 4

How can IT/IS create business value?

Answer 4

Productivity(more output from the same inputs, and/or better output), Structure of competition(alter the way corporations compete), Benefit to the end customer.

Question 5

How do IS improve productivity?

Answer 5

Increasing efficiency( business process can be accomplished more quickly or/and with fewer resources) Increasing effectiveness(the company offers new and/or improved goods or services that the customer values)

Question 6

What is the value chain?

Answer 6

Value chain describes how organizations create value(and margin) in products and services that the company delivers.

Question 7

Wha kind of activities are there in a value chain?

Answer 7

Primary and Support acivities

Question 8

What are primary activities?

Answer 8

Primary activities create value directly to the product.(Inbound logistics, operations, outbound logistics, marketing and sales, services)

Question 9

What is a margin?

Answer 9

The net result of value added to the product and the costs

Question 10

What are support activities?

Answer 10

Indirectly responsible for benefit to a consumer.(Firm infrastructure, HR, Technological development, procurement)

Question 11

What is an organizational strategy?

Answer 11

it maps out how a company indents to meet its goal and objectives(developed from organizational structure, creates value chain for organization, establishes the structure, features and functions of IS)

Question 12

What forces determine industry structure?

Answer 12

Porter’s five forces:Bargaining power of customers, threat of substitution, bargaining power of suppliers, threat of new entrants, rivalry among existing firms.

Question 13

What is a competitive strategy and how does IT strategy relates to that?

Answer 13

A competitive strategy is a set of plans and initiatives that outline how an organization chooses to respond to a particular industry structure. IT strategy should support organization’s competitive strategy.

Question 14

What kind of strategies are there according to Porter?

Answer 14

Cost leadership across industry or focused on a particular segment, differentiation across industry or focused on particular industry segment.

Question 15

What is a sustaining technology?

Answer 15

Sustaining technology are changes in technology that maintain the rate of improvement in customer value.

Question 16

What is ruptive technology?

Answer 16

Disruptive technologies introduce a very new package of attributes to the mainstream products.

Question 17

What is of innovation?

Answer 17

Diffusion of innovation considers how quickly an innovation is accepted by an individual.

Question 18

What stages does innnovation go through

Answer 18

1)Knowledge 2)Persuasion 3)Decision 4)Implementation 5)Confirmation

Question 19

Which ways can an IS provide a competitive advantage?

Answer 19

There are two ares where companies can implement changes to create competitive advantage: via Product or via Business Process.

Question 20

What are the ways that an organization can gin a competitive advantage via product?

Answer 20

Creating a new products or services, Enhancing existing product or services, Differentiating their products and services from those of their competitors.

Question 21

How can an organization get a competitive advantage by implementing business systems?

Answer 21

Locking in customers, locking in suppliers, create entry barriers, establish alliances, reduce costs.