ITM 102 Lecture Notes - Lecture 3: Organizational Culture, Switching Barriers, Market Power

• School: Ryerson University
• Department: Information Technology Management
• Course: ITM 102
• Professor: Ozgur Turetken

Document Summary

How information systems impact organizations economic impacts. It changes relative costs of capital and the costs of information. Information technology is a factor of production, like capital and labour. It affects the cost (transaction and agency costs) and quality of information and changes economics of information. Transaction cost theory: firms seek to economize on cost of participating in market (transaction costs) It lowers market transaction costs for a firm, making it worthwhile for firms to transact with other firms rather than grow the number of employees. Agency theory: firm is nexus of contracts among self-interested parties requiring supervision, firms experience agency costs the cost of managing and supervising rise as firm grows. It can reduce agency costs: making it possible for firms to grow without adding to the costs of supervising, and without adding employees. Using information systems to achieve competitive advantage porter"s five forces model.