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Questions and Answers
Low-cost leadership is achieved using information systems to provide the highest operational costs.
Low-cost leadership is achieved using information systems to provide the highest operational costs.
False
The Internet of Things (IoT) signifies a decline in the use of sensors in consumer products.
The Internet of Things (IoT) signifies a decline in the use of sensors in consumer products.
False
Smart products provide detailed information that benefits only consumers and not producers.
Smart products provide detailed information that benefits only consumers and not producers.
False
The impact of the Internet has made competitive rivalry less intense than before.
The impact of the Internet has made competitive rivalry less intense than before.
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Information systems help organizations focus on specific market niches by analyzing customer preferences.
Information systems help organizations focus on specific market niches by analyzing customer preferences.
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An organization can be defined technically as a structure that transforms inputs into outputs.
An organization can be defined technically as a structure that transforms inputs into outputs.
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According to the behavioral definition, an organization is solely about the physical structure and not the social dynamics involved.
According to the behavioral definition, an organization is solely about the physical structure and not the social dynamics involved.
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Organizations aim to achieve efficiency by maximizing output while utilizing a limited amount of inputs.
Organizations aim to achieve efficiency by maximizing output while utilizing a limited amount of inputs.
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In organizations, authority is completely unrestricted and can be exercised by any employee at any time.
In organizations, authority is completely unrestricted and can be exercised by any employee at any time.
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Technological changes in organizations can alter the ownership of information and decision-making processes.
Technological changes in organizations can alter the ownership of information and decision-making processes.
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Organizations typically hire employees based on personal relationships rather than their qualifications.
Organizations typically hire employees based on personal relationships rather than their qualifications.
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The value chain model helps organizations develop competitive strategies using information systems.
The value chain model helps organizations develop competitive strategies using information systems.
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Conflict resolution is not a significant aspect of the behavioral definition of organizations.
Conflict resolution is not a significant aspect of the behavioral definition of organizations.
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Routines are also known as operational guidelines within a business firm.
Routines are also known as operational guidelines within a business firm.
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The relationship between organizations and their environments is entirely one-sided.
The relationship between organizations and their environments is entirely one-sided.
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Disruptive technologies lead to incremental changes in the business environment.
Disruptive technologies lead to incremental changes in the business environment.
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Organizational culture defines the goals and products of an organization through underlying assumptions.
Organizational culture defines the goals and products of an organization through underlying assumptions.
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Inertia within an organization can facilitate quick adaptation to changes in the environment.
Inertia within an organization can facilitate quick adaptation to changes in the environment.
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Information systems help organizations respond to environmental changes.
Information systems help organizations respond to environmental changes.
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IT reduces transaction costs, allowing firms to maintain or expand in size.
IT reduces transaction costs, allowing firms to maintain or expand in size.
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A business firm is a collection of organizational routines.
A business firm is a collection of organizational routines.
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According to agency theory, a firm is seen as a unified entity rather than a nexus of contracts.
According to agency theory, a firm is seen as a unified entity rather than a nexus of contracts.
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As firms grow, agency costs are likely to decrease due to fewer employees needing supervision.
As firms grow, agency costs are likely to decrease due to fewer employees needing supervision.
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IT can aid in reducing agency costs by enhancing information analysis and facilitating employee monitoring.
IT can aid in reducing agency costs by enhancing information analysis and facilitating employee monitoring.
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Flattening organizations means decision-making rights are transferred to higher levels in the hierarchy.
Flattening organizations means decision-making rights are transferred to higher levels in the hierarchy.
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The Internet simplifies the access and distribution of information, consequently lowering transaction and agency costs.
The Internet simplifies the access and distribution of information, consequently lowering transaction and agency costs.
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The culture of people in an organization is not a significant factor in resistance to change.
The culture of people in an organization is not a significant factor in resistance to change.
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A task force is formed by IT to unite professionals to work on predetermined tasks for short durations.
A task force is formed by IT to unite professionals to work on predetermined tasks for short durations.
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Porter's five competitive forces model focuses on internal organizational structure rather than external market forces.
Porter's five competitive forces model focuses on internal organizational structure rather than external market forces.
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Study Notes
Learning Objectives
- Managers need to understand organizational features to build and use information systems effectively.
- Information systems significantly impact organizations.
- Porter's competitive forces, value chain models, synergies, core competencies, and network economics help firms develop competitive strategies using information systems.
- Strategic information systems present challenges that need effective solutions.
What is an Organization (Technical and Behavioral Definitions)?
- Technical Definition: Focuses on three core elements: capital, labor, and the transformation of inputs (resources) into outputs (products/services). Organizations are stable, formal social structures.
- Behavioral Definition: An organization is a collection of rights, privileges, obligations, and responsibilities, balanced over time through conflict and resolution.
How do Organizational Definitions Relate to Information Systems?
- Technical Definition: Highlights how information systems change input-output processes in organizations.
- Behavioral Definition: Highlights how information systems impact the balance of rights, responsibilities and feelings within an organization. Technological change alters who owns, accesses and decides about organizational information.
Features of Organizations
- Organizations are bureaucracies with specialized tasks and workers.
- Decision-making authority follows a hierarchy.
- Organizational structure follows rules set by procedures.
- Organizations prioritize skills over personal relationships, aiming for efficiency through maximizing output.
- Other features include business processes, organizational culture, politics, and environment.
Organizational Culture and Routines
- Organizational culture defines shared assumptions about the business operations and goals.
- Routines (standard operating procedures) are critical for handling situations and tasks, and form the foundation of business processes. Business firms are collections of business processes.
Organizations and Environments
- Organizations interact with their environments; they are dependent and open to environmental influences.
- Organizations must comply with legal necessities and react to changes in customer & competitor actions.
- Organizations also actively influence their environments, including governmental and political interactions.
Organizational Adaptation to Change
- Organizational inertia, political conflict, and threats to existing values hinder adaptation to rapid changes.
Disruptive Technologies
- Disruptive technologies cause radical changes in business and environment.
- "First movers" (companies that invent disruptive technologies) do not always benefit unless they have proper exploitation methods and resources.
Basic Organizational Structures
- Different organizational structures (entrepreneurial, machine bureaucracy, divisionalized bureaucracy, professional bureaucracy, and adhocracy) exist.
Information Technology (IT) Impact on Organizations
- IT affects capital and information costs. IT can be viewed as a production factor that substitutes for capital and labor.
- IT reduces transaction costs allowing businesses to be smaller in size.
Agency Theory and IT's impact on Agency Costs
- Agency theory views firms as contracts among interested individuals. Agents (employees) may have different priorities than principal(owners).
- IT can reduce agency costs by providing and analyzing information more effectively and efficiently, allowing managers to monitor employees.
Organizational and Behavioral IT Impacts
- IT flattens organizations by moving decision-making authority to lower levels.
- IT facilitates task forces and promotes organizational politics. (by speeding task completion and facilitating interactions.)
Organizational Resistance to Change
- Factors like the nature of IT innovation, organizational structure, organizational culture, and tasks affected by the change contribute to organizational resistance.
Internet's Impact on Organizations
- The Internet provides easier information access, storage, and distribution.
- Internet reduces transaction and agency costs.
Planning New Information Systems
- Factors to consider include the environment, organizational structure, business processes, organizational culture, types of workers, and tasks supported by the system.
Porter's Five Competitive Forces
- Porter's five forces (traditional competitors, new market entrants, substitute products/services, customers, and suppliers) impact industry rivalry.
Information System Strategies
- Strategies for mitigating competitive forces using information systems include low-cost leadership, product differentiation, focus on market niches, and strengthening customer-supplier intimacy.
Internet's Impact on Competitive Advantage
- The Internet intensifies competitive forces and makes it easier for businesses to access information about competitors and customers, impacting price-based competition and entry barriers for new competitors..
Internet of Things (IoT)
- IoT uses sensors in industrial and consumer products, impacting industries.
Smart Products and Market Impacts
- Smart products combine information and services, raising product functionality and consumer information; enhancing competition.
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Description
Explore how information systems influence organizations through both technical and behavioral definitions. Understand key concepts such as competitive forces and value chain models that help firms devise effective strategies. This quiz will enhance your comprehension of the relationship between organizations and information systems.
