Short Questions on Ch. 2
Information Systems, Organizations, and Strategy
Q.1= what is an organization (Technical)?
An organization is a stable, formal social structure that takes resources from
the environment and processes them to produce outputs.
Q.2= what is an organization (Behavioral)?
A collection of rights, privileges, obligations, and responsibilities that is
delicately balanced over a period of time through conflict and conflict
resolution.
Q.3= what are the features of an organization?
All modern organizations share some characteristics, such as:
 Use of hierarchical structure
 Accountability, authority in system of impartial decision-making
 Adherence to principle of efficiency
 Routines and business processes
 Organizational politics, culture, environments and structures etc…
Q.4= what do you mean by Routines of a business?
Standard operating procedures like precise rules, procedures, and practices
developed to cope with virtually all expected situations are called Routine of
business.
Q.5= what do you mean by business Processes?
Collections of routines are called Business Processes.
Q.6= what do you mean by business Firm?
Collections of business processes are called Business Firms.
Q.7= what do you mean by Organizational environments?
Organizations and environments have a reciprocal relationship.
Organizations are open to, and dependent on, the social and physical
environment. And can influence their environments. Environments generally
change faster than organizations.
Q.8= what do you mean by Transaction cost theory?
Firms traditionally grew in size to reduce transaction costs. IT potentially
reduces the costs for a given size and opening up the possibility of revenue
growth without increasing size, or even revenue growth accompanied by
shrinking size.
Q.9= what do you mean by Agency theory?
As firms grow in size and complexity, traditionally they experience rising
agency costs. IT can reduce agency costs, making it possible for firms to
grow without adding to the costs of supervising, and without adding
employees.
Q.10= Why do some firms become leaders within their
industry?
The answer is Michael Porter’s competitive forces model.
Q.11= what do you mean by Michael Porter’s competitive
forces model?
This Model Provides general view about firm, its competitors, and
environment. In this model, five competitive forces shape the fate of the
firm.
 Traditional competitors
 New market entrants
 Substitute products and services
 Customers
 Suppliers
Q.12=Write Four generic strategies for dealing with
competitive forces, enabled by using IT:




Low-cost leadership
Product differentiation
Focus on market niche
Strengthen customer and supplier intimacy
Q.13= what do you mean by Low-cost leadership?
Produce products and services at a lower price than competitors while
enhancing quality and level of service. e.g. Wal-Mart, Dell etc…
Q.14= what do you mean by Product Differentiation?
Enable new products or services; greatly change customer convenience and
experience. e.g. Google, Apple iPhone, PING, Easy Paisa etc…
Q.15= what do you mean by Focus on Market Niche?
Use information systems to enable a focused strategy on a single market
niche; specialize. e.g. Land’s End
Q.16= what do you mean by Strengthen customer and
supplier intimacy?
Use information systems to develop strong ties and loyalty with customers
and suppliers; increase switching costs e.g. Chrysler, Amazon
Q.17= what do you mean by Business Value Chain Model?
This model views firm as series of activities that add value to products or
services. And Highlights activities where competitive strategies can best be
applied.