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COMM 190 (19)
Chapter 3

Chapter 3

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COMM 190
Mosey Nicholas J

Chapter 3: Productivity, Innovation, and Strategy Why Should I Care About Productivity and Innovation?  Productivity is the ratio of CAN GDP over the total paid hours worked by Canadians o Measures the value that Canadian workers produce per hour o May be the primary indicator of per capita income  Increasing productivity is about working smarter not harder o Predicted by the country’s ability to innovate  Productivity paradox: The lack of evidence of an increase in worker productivity associated with the massive increase in investment in info tech o Need to figure out how IT can create value for the business o One response is the careful consideration of the value that can be derived from IT investment  three different ways  First through Productivity  create more/better outputs with the same inputs & faster  Second through the structure of competition  when 1 firm invests, competitors follow  Through benefits to the consumer  cost reduction passed to consumer: cheaper & better What is Business Technology Mgmt. and How is it Related to Productivity & Innovation?  BTM is a category of skills focused on the ability to effectively innovate using infortaion technology in organizations  created by the Canadian Coalition for Tomorrow’s ICT skills (founded by Bell Canada) o Increase in the need for students to have skills in tech and business  The Canadian ICT industry is Canada’s primary driver of innovationthis program is meant to give individuals the knowledge in increase productivity through innovation  Universities across the country are also creating BTM programs How Do Information Systems Improve Productivity?  Business processes are an important consideration in productivity o Productivity can ↑ through ↑efficiency or more effective business processes  Increasing efficiency means that business processes can be accomplished either more quickly or with fewer resources and facilities (or both)  doing things right  When focuses on effectiveness (doing the right things) it means they consider offering either new or improved goods that the customer values  often changing processes Business Processes and Value Chains  A value chain is a network of activities that improve the effectiveness (value) of a p/s o Made up of one or more business processes  every step further adds value to p/s  Primary activities are activities in which value is added directly to the product  Support activities are activities that support the primary ones  add value indirectly o May not add value to the customer but it’s critical to the success of the org  Info systems enable the development of efficient/effective support activities  ↑ margins  Also increase productivity by offering new and improved services, primary activities that would not be able to function without IT How are Organizational Strategy and Industry Structure Related?  An org’s strategy reflects its goals and objectives o Strategy is influenced by the competitive structure of the industry  One model used to assess industry structure is Porter’s Five Forces o Bargaining power of customers; Bargaining power of su
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