Unformatted text preview: Chapter 1 Discuss why investing in information technology does not by itself guarantee good returns. Ans. In order for investment in information technology to achieve good returns, it must be accompanied by
supportive values, structures, and behavior patterns in the organization and other complementary assets.
Complementary assets are those assets that are required to derive value from a primary investment.
Complementary assets can be classiﬁed as organizational assets, managerial assets and social assets.
Organizational assets include supportive organizational culture that values efﬁciency and effectiveness and
appropriate business model. Managerial assets include strong senior management support for technology
investment and change and incentives for management innovation. Social assets include the Internet and
telecommunications infrastructure and IT-enriched educational programs raising labor force computer
literacy. In summary, business ﬁrms need to change how they do business before they can really reap the
advantages of new information technology. Chapter 2 What are business processes and why are they signiﬁcant in information systems? Ans. Business processes refer to the manner in which work is organized, coordinated and focused to
produce a valuable product or service. They are the collection of activities required to produce a
product or service. Business processes are supported by the ﬂows of material, information, and
knowledge among the participants in business processes. Information systems automate parts of
business processes, and they can help organizations redesign and streamline business processes.
For example, information systems can change the ﬂow of information, making it possible for
many people to access and share information, replacing sequential steps with tasks that can be
performed simultaneously, and eliminating delays in decision making. Using IS can therefore
help to enhance an organization’s business processes, enabling the organization to be more
efﬁcient than its competitors. Chapter 3 What is the impact of information systems on organizations? Ans. Information systems and the organizations in which they interact with and inﬂuence each other.
The introduction of a new information system will affect organizational structure, goals, work
design, values, and competition between interest groups, decision making, and day-to-day
behavior. At the same time, information systems must be designed to serve the needs of
important organizational groups and will be shaped by the organization’s structure, business
processes, goals, culture, politics, and management. Information technology can reduce
transaction and agency costs, and such changes have been accentuated in organizations using
the Internet. New systems disrupt established patterns of work and power relationships, so there
is often considerable resistance to them when they are introduced. Question: What is Agency Theory? Why IT/IS can help reduce agency cost? Ans. The agency theory views the ﬁrm as a nexus of contracts among interested individuals.
The owner employs agents (employees) to perform work on his or her behalf and
delegates some decision-making authority to the agents. Agents need constant
supervision and management, which introduces management costs. As ﬁrms grow,
management costs rise. Information technology reduces agency costs by providing
information more easily so that managers can supervise a larger number of people with
fewer resources. ...
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- Spring '11