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IMPACTS OF IS TO ORGANIZATIONS, INDIVIDUALS, WIDER SOCIETY. The impact that information system technology is having on the world today is often described as a revolution in the IT field. This does not refer to just its impact on the world of work but on all aspects of peoples’ lives today. The information system impacts the individuals, organizations and society in the following ways a. Organizations. From an economic point of view, information systems technology can be seen as a factor of production which can be freely substituted for capital and labor. As information systems technology automates the production process, less capital and labor are required to produce a specified output. According to the transaction cost theory, it states that organizations grow in size because they can obtain certain products or services internally at lower cost than by using external firms in the marketplace. By lowering the cost of market participation information technology allows firms to obtain goods and services more cheaply from outside
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sources than through internal means. Information systems can thus help firms increase revenue while shrinking in size. The information systems technology helps in the reduction of the agency costs, the costs used in the coordination and various activities. Here each manager is able to oversee a larger number of employees when inspecting. Behavioural researchers have theorized that information technology facilitates flattening of hierarchies by broadening the distribution of information to empower lower-level employees and increase management efficiency. Information systems can reduce the number of levels in an organization by providing managers with information to supervise larger numbers of workers and by giving lower-level employees more decision-making authority. This ensures that the organization run smoothly and with ease. b. Individuals Information system impacts the individuals in various ways. Job loss is one of the impacts of the information system towards the individuals. One of the largest negative effects of ICT can be the loss of a person’s job since all the work is done by the machine or computers. Another impact of information system towards the individuals is the reduced personal interaction: the individual needs not to be present at the office for the transactions to go on. Being able to
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  • Spring '12
  • Knapp

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