Chapter 3 - Organizational Strategy, I.S., and Competitive Advantage (Summary Notes)

Chapter 3 - Organizational Strategy, I.S., and Competitive Advantage (Summary Notes)

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 3 – Organizational Strategy, I.S., and Competitive Advantage WHAT IS THE PRODUCTIVITY PARADOX Stephen Roach once reported that computers to contribute to the productivity in our economy. Nobel Prize winning economist Robert Solow proved this theory and made the now famous statement, “We see computers everywhere except in the productivity statistics”. The productivity paradox was born. The question of how IT creates business value remains a question. Perhaps the most interesting fact about the paradox is that it was never practically viewed as a paradox for most organizations, as the economy underwent a substantial growth in investment in IT after the paradox was first published. Over time it has been recognized that measurement error may be a critical reason for the observed lack of productivity. The difficulty in measuring productivity in an increasingly service based economy has made it challenging to find productivity increases from IT. This mismeasurement is in part due to the often invisible or intangible benefits associated with IT. Ex: you do not see a difference from an essay typed by a computer or a type writer. But one was more likely easier/more productive. Researchers suggested that there were 3 different ways through which the value of IT can be realized: 1. The first is through productivity. IT allows a company to make more output from the same input or the same output faster. 2. The second way in which IT value is realized through the structure of competition. It can alter the way corporations compete. Ex: if one rival firm invests in IT, it is in the best interest of other firms to do so also. 3.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/23/2010 for the course COMP SCI 1032 taught by Professor Goldstein during the Winter '10 term at UWO.

Page1 / 4

Chapter 3 - Organizational Strategy, I.S., and Competitive Advantage (Summary Notes)

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online