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Chapter 3

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COMM 226
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Chapter 3Business strategyIt is a broad based formula for how business is going to compete what its goals should be what plans and policies need to be carried outIntensity of competition attractiveIt is where there are few or more barriers to entryFEW if there are more its harder for new competitors to enter industry5 forces of Porter1 New entrants2 Suppliers3 Buyers4 Substitution5 CompetitorsOpen system modelIt is business operated by transforming inputs outputs and by interaction with environmentInputs areDataInfoKnowledgeLaborCapitalRaw materialTechnologyOutputs areProductsServicesWastePollutionFeedbackdata info knowledgeBusiness processInformation TechnologyPeopleThere are 2 significant components of the business environmentStakeholdersBoundariesStakeholderIs the person or entity that has interest or influence on how business will function in order to succeedBusiness processIt transforms inputs into output through series of stepsWhich one of the following is not an input to organization in an open systema Laborb Productivityc Infod TechnologyBTrue or FalseStakeholders are part of environment of open system model of organizationTrueA business carrieswhen it interacts with its environmentRiskIn functionaldecentralized structures the lines of authority and command are orientedVerticallyThe matrix structure It blends the functional and decentralized organizational structureFunctional Structure AdvantagesEconomy of scaleClear chain of AuthoritySignificant technical expertiseDisadvantagesPoor communication and coordination between functional areasInflexibleslow response to changeFocus only on functional area goalsDecentralized by geography or product structureAdvantagesFaster responseflexibilityGreater communication between organization unitsGreater management skillsDisadvantagesDuplication of resources and effortsNo indepth technical knowledge of functional areaLess direct control by upper managementMatrix structureAdvantagesGreater flexibility and responsiveness to changeEnhanced probability solving corporation communication resource sharingDecision making lower in organization closer to customerDisadvantagesFrustration dual lines of authority and responsibilitiesNeed for coordinationPotential goal conflict between functional and decentralized components of matrixWhich one of the following is not an organization forma Matrixb Functionalc CEObasedd Decentralized by geogCWhich one of the following is an advantage of functional organizationa Decision makers closer to customerb Economy of scalec Flexibilityd Greater communication between organization unitsBTrue FalseTeams are key part of matrix organizational structureTrue Method to analyzebetter understand processes IGOEIGOE stands forInputsGuidesOutputEnablersPurpose of performance feedbackTo monitor efficiency effectiveness of given processBusiness process reengineering BPRStudy of business processes to find ways of making them more efficientGoals of BPR bus process reengineeringReduce costsIncrease throughput and speedIncrease quality and serviceCompetitive advantage equationhint 3 componentsQuality insightspeed of executioncost competitive3 ways that IT can be applied to value chain actions to create business value1 Automating2 Informating3 TransformingAutomatingUsing technology to perform tedious or repetitive tasks faster cheaper and more consistentlyATM machines online banking bar code inventory syst reservation and scheduling systems are examples of automationInformatingIt is recognizing that executing processes also creates new data and information The new data is used to improve decision making improve process itselfInstalling ATM machines also tracks the use of services to provide most and profitable services to customers is an example ofTransformingUsing IT to acquire or continue competitive advantage over competitors 2 ways of gaining competitive advantage1 Cost delivers same benefits but at lower cost 2 Differentiation delivers superior benefits at the same costcompared to competitorsStructured decision It is a decision that can be programmed routine repetitiveSemistructured decisionA decision that involves some uncertainty doubt about outcomeUnstructured decision A decision that involves significant amount of uncertainty about outcomeRational decisionChoice that you make about what actions you will take not take in given situation after careful analysis of consequencesWhat helps business by providing information to decision makersInformation systems for eg DSSGOOD decisions require quality info 4 characteristicsCART find out whats in the CART
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