Chapter3 review.docx

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Business Administration
BUS 237
Kamal Masri

Chapter3 Q1: What is the productivity paradox? “We see computers everywhere except in the productivity statistics.”-----The productivity paradox was born. Productivity paradox: The increase in investment in information technology combined with small changes in worker productivity. 但是其实有 intangible benefits to do the IT investment. How can IT create business value? One response to the productivity paradox was a careful consideration of the value that can be derived from IT investment. 1. The first is through productivity. Information technology allows a company to make either more output from the same inputs, and/or to make better output, and/or to make the output faster than before the technology was in place. 2. The second way in which IT value is realized is through the structure of competition. ----- IT can alter the way corporations compete. 3. The final way that IT investment value is realized is through benefit to the end customer. -----IT helps make processes more efficient and changes the nature of competition. Q2: Can information systems improve productivity? Productivity for organizations can be increased either through increased efficiency or effective business processes. 1. Increasing efficiency: means that business processes can be accomplished either more quickly or with fewer resources and facilities (or both) When organizations focus on efficiency they are working toward “doing things right.” Doing things right often means using just the right amount of resources, facilities, and information to complete the job satisfactorily. 2. Increased effectiveness means that the company considers offering either new or improved goods or services that the customer values. When companies focus on increasing effectiveness, rather than efficiency, they are interested in “doing the right things.” Doing the right things often requires companies to consider changing their business processes to deliver something new and improved. ----- Companies with long-term success in mind understand the important balance between effectiveness and efficiency. Business processes and value chains A value chain is a network of activities that improve the effectiveness (or value) of a good or service. ----- The more value a company adds to a good or service in its value chain, the higher the price the company can charge for the final product. Margin: the difference between the price the customer is willing to pay and the cost the company incurs in moving the goods or services through the value chain. Primary activities: activities in which value is added directly to the product Support activities: they support the primary activities. (通常指人) support activities add value only indirectly. Primary Activities Five general activities 1. Inbound logistics: Receiving, storing, and disseminating inputs to the product 2. Operations: transforming inputs into the final product 3. Outbound logistics: Collecting, storing, and physically distributing the product to buyers 4. Marketing and sales: Inducing buyers to purchase the product and providing a means for them to do so 5. Service: assisting customer’s use of the product and thus maintaining enhancing the product’s value Each of these activities add costs and add value to product, Net result is total margin associated with the product Support Activities XP Four activities 1. Firm infrastructure 2. Human resources 3. Technological development 4. Procurement These activities contribute directly to production, sale, and service These activities also add value and costs Sometimes produce margin that is difficult to calculate 回答问题: Understanding the value chain helps us understand how information systems can increase productivity. 1.Ena
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