Lecture 2 Flashcards
What applies solutions developed by computer science and involves the study of information?
Information systems
+ focuses on the information needs of organizations, management and organization theory
What is the technical definition of organization?
- has stable, formal structure
2. takes resources from the environment to production process and in the end, produces outputs
What is the behavioral definition of organization?
- collection of rights, privileges, obligations, responsibilities
- delicately balanced
- conflict resolution
What is the problem of explaining organization by just technical definition?
- cannot explain the production process of the organization
2. cannot explain the ‘inside’ of an organization
What are the features of organization?
- hierarchical structure
- impartial decision making
- pursue efficiency
- routines and business processes
- organizational politics, culture, environments, and structures
What are the two major theories that explains how IS affects organization?
economic theories, behavioral theories
What kind of theories are in economic theories?
Transaction cost theory, agency theory
Explain the transaction cost theory.
IT moves the transaction function toward inside, and it reduces the transaction cost.
Explain the agency theory.
IT moves the agency cost function outwards which reduces the agency cost
What is an agency cost?
Cost for monitory agencies (like CEO)
What is a transaction cost?
Cost for buying and selling.
What is the behavioral theories?
- IT flattens organizations
- Postindustrial organizations
- Help make virtual firms
- Increase flexibility of organizations
- Understanding organizational resistance to change
What is a competitive advantage?
an advantage compared to your competitor not related to productivity
What is the most important aspects of competitive advantage?
to acquire information on the activities and actions of competitors
How does the information-gathering help business performance?
By increasing market knowledge
By improving knowledge management
By raising the quality of strategic planning
However, once data is gathered, must be processed into information and subsequently business intelligence
What are the 5 major forces in Porter’s competitive forces model?
- threat of entry of new competitors
- bargaining power of suppliers
- bargaining power of customers
- threat of substitute products or services
- rival among existing firms in the industry
What are the strategies in the generic strategies?
cost-leadership strategy differentiation strategy niche strategy growth strategy alliance strategy innovation strategy operational effectiveness strategy customer-orientation strategy time strategy entry-barriers strategy lock in customers or suppliers strategy increase switching costs strategy
What is the limit that Porter’s 5 forces model have?
It cannot show how company can gain margin or profit -> this can be shown in the value chain model
Explain the value chain model.
There is primary activities and support(=secondary) activities.
Primary activities are activities in which materials are purchased, processed into products, and delivered to customers. Each activity adds value to the product or service hence the value chain.
Support activities are operations that support the creation of primary activities.
What is the purpose of value chain model?
To analyze the internal operations of a corporation in order to increase its efficiency, effectiveness, and competitiveness.
What is the value system?
Includes the suppliers that provide the inputs necessary to the firm and their value chains. It is a larger stream of activities. (value system > value chain)
What is the basis for the supply chain management concept?
the value system
What is the IOS(Interorganizational Information Systems)s?
the internet connectivity that many of the alliances and business partnerships are based on
What kinds of benefits does the internet-based EDI systems offer?
- faster business cycle
- automation of business procedures
- reduced operational costs
- greater advantage in a fierce competitive environment
