SESSION 4 - The impact of IT on organisations and markets Flashcards
Does IT encourage centralisation or decentralisation
On one hand, IT can encourage centralisation by enabling the consolidation of data, applications, and infrastructure in a centralised location. This can lead to more efficient management and control of IT resources, as well as improved security and easier access to information.
On the other hand, IT can also encourage decentralisation by enabling remote work and collaboration, as well as the use of cloud services and mobile devices. This can lead to more flexibility and autonomy for individual users and teams but can also make it more difficult to manage and secure IT resources.
How does the IT affect the firm size vertical?
Vertical: Measured by the range of the value chain which the firm spans using its own hierarchy. A vertically large firm would produce in-house an intermediate good which is input to the next stage of the production process. The main advantage of vertical integration is the reduction of market transaction costs achieved by depending more on the hierarchy and less on the outside market. While a vertically large firm would have lower market transaction costs, internal coordination costs and operations costs, which work against the growth of such a firm
How does the IT affect the firm size horizontal?
Horizontal: a measure of the number and corresponding share of markets in which the firm sells its final goods and services. Horizontal size is positively correlated with the geographic scope of the firm, with the range of the product line, and with a firm’s market share. As a firm’s horizontal size increases, the benefits from scale economies increase, resulting in lower average operations costs. While internal coordination costs increase with firm size, the impact of firm size on external coordination costs is not unambiguous and can vary among different industries.
Different types of ICT? How they impact the firm size?
*Hardware: physical devices such as computers, servers, routers, and mobile devices that form the backbone of the IT infrastructure.
*Software: programs and applications that run on hardware devices, enabling users to perform tasks and access information.
*Networking: the systems and protocols that enable communication and data transfer between different devices and systems.
*Internet and web technologies: the tools and protocols used to access and share information online, such as websites, social media platforms, and cloud services.
