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BUS237 - Week 3
Week 3 BUS237
36
Business
Undergraduate 2
10/08/2013

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Cards

Term
Productivity
Definition
- AKA labour productivity
- The ratio of the Canadian gross domestic product (GDP) over the total paid hours worked by Canadians
- Measures the value Canadians generate per hour
Term
T or F?

The Conference Board of Canada has suggested that labour productivity is the primary indicator of our per capita income
Definition
True
Term
T or F?

Higher education levels are the best measure of Canada's future growth.
Definition
False: Increasing labour productivity is the best measure of Canada’s future growth
Term
The Productivity Paradox
Definition
- There is no evidence of an increase in worker productivity associated with the massive increase in investment in information technology (1989, Roach)
- "We see computers everywhere except in the productivity statistics" - Robert Solow
Term
How Can IT Create Business Value?
Definition
- Productivity – IT allows a company to make either more output from the same inputs, and/or to make better output and/or to make the output faster than before the technology

- Structure of competition – IT can alter the way corporations compete

- Benefits to the End customer – IT helps make processes more efficient and changes the nature of the competition. Consumer may see cheaper and better goods and services
Term
T or F?

The ICT industry isn't very important for productivity and innovation.
Definition
False:

The ICT industry sector is an important industry for productivity and innovation because it includes technologies that can enhance individual and organizational productivity

Canadian policymakers are looking to the ICT industry as a primary driver of innovation and hence increased productivity in Canadian industries
Term
Business Technology Management (BTM)
Definition
- A new program designed by CCICT
- BTM programs include a variety of course topics, such as business and technical training, financial accounting, system analysis and design, project management, IT infrastructure, marketing, international business management, writing and business communication, organizational behaviour, and teamwork skills
- BTM programs are designed for students who are inspired to use technology to change the way the world does business
Term
Increasing efficiency vs. Increasing effectiveness
Definition
- Increasing efficiency means that business processes can be accomplished either more quickly or with fewer resources and facilities (or both) - AKA “doing things right”

- Increased effectiveness means that the company considers offering either new or improved goods or services that the customer values - AKA “doing the right things”

- These two can sometimes be in conflict
Term
Value Chain
Definition
- A network of value-creating activities including primary activities and support activities - they improve the effectiveness or value of a good/service
- Made up of at least one and often many business processes
Term
Porter's Value Chain Model
Definition
Term
Primary Activities
Definition
- Activities in which value is added directly to the product
- Stages accumulate costs and add value to product
- Net result is total margin of chain
Term
5 Primary Activities
Definition
1. Inbound logistics - receiving, storing and disseminating inputs to the product
2. Operations - transforming inputs into the final product
3. Outbound logistics - collecting, storing and physically distributing the product to buyers
4. Marketing and sales - inducing buyers to purchase the product and providing a means for them to do so
5. Service - assisting customer's use of the product and thus maintaining and enhancing the product's value
Term
Support activities
Definition
- Activities that support the primary activities
- Contribute indirectly to production, sale, and service
- Add value and costs
- Produce margin that is difficult to calculate
Term
Support Activities (4)
Definition
1. Firm infrastructure
2. Human resources
3. Technological development
4. Procurement
Term
How are organizational strategy and industry structure related?
Definition
- Organizational Strategy reflects organization’s goals and objectives
- Developed from organizational structure
- Creates the value chain for organization
- Establishes the structure, features, and functions of information systems
- A company’s strategy is influenced by the competitive structure of the industry the company is in
Term
Porter's 5 Competitive Forces
Definition
These 5 competitive forces determine industry profitability:

1. Bargaining power of customers
2. Threat of substitution
3. Bargaining power of suppliers
4. Threat of new entrants
5. Rivalry among existing firms
Term
Competitive strategy
Definition
An organization’s response to structure of its industry (determined by the 5 competitive forces)
Term
Porter's 4 Competitive Strategies
Definition
- Cost leadership across industry
- Cost leadership focused on particular industry segment
- Differentiation across industry
- Differentiation focused on particular industry segment
Term
According to Porter, what 4 things must be consistent with strategy?
Definition
Goals, objectives, culture, and activities
Term
Bower and Christensen's 2 General Types of Technology Innovations
Definition
- Sustaining technologies: changes in technology that maintain the rate of improvement in customer value
Ex. The vulcanization of rubber allowed tire manufacturers to produce tires that facilitated faster and comfier rides - this innovation improved the experience of driving a car and helped sustain the original innovation

- Disruptive technologies: introduce a very new package of attributes to the accepted mainstream products
Ex. The advent of the MP3 - changed teh way people listened to music
Term
Rogers' 5 Stages of Diffusion of Innovation
Definition
1. Knowledge - when you first hear about an innovation but lack specific info about it
2. Persuasion - when you become interested in the innovation and find out more about it
3. Decision - when you consider the pros and cons of adopting it and choose to adopt or reject it
4. Implementation - if you choose to adopt it, here you use the innovation and figure out whether you will continue to use it
5. Confirmation - when you use the innovation to its full potential
Term
8 Principles of Competitive Advantage
Definition
Related to products/services, organizations can engage in...:

1. Creating new products or services
2. Enhancing existing products or services
3. Differentiating their products and services from those of their competitors

Related to business processes, organizations can engage in...
4. Locking in customers - High switching costs
5. Locking in suppliers - Making it easy to connect to and work with organization
6. Create entry barriers - Making it expensive for new competition to enter market
7. Establish alliances - Establish standards, Promote product awareness
8. Reducing costs - Increased profitability
Term
Can a competitive advantage through Information Systems be sustained?
Definition
- Yes! While competitors might be able to purchase the technology, it takes time for people to gain the necessary experience and skill
- Matching the entire set of information systems is a high barrier for companies with less experience and success in integrating people and technology
- With IT, the more ubiquitous iT becomes, the less competitive advantage it has - however with IS the story is different
- Long term advantages lie not with the technology but in how a company and its people adopt the technology
- With IT, people make all the difference
Term
T or F?

Canada has been doing very well in increasing its labour productivity
Definition
False: Canada has not been doing well in increasing its labour productivity
Term
T or F?

Increasing productivity in our current global economy is about just working harder.
Definition
False: it is about working smarter.
Term
What are some possible reasons to explain the productivity paradox?
Definition
- The difficulty in measuring productivity in an increasingly service-based economy has made it hard to find productivity increases from IT
- Many of the benefits are often invisible or intangible
- We should carefully consider the value of what can be derived from IT investment
Term
"Technology for technology's sake"
Definition
A strategy in which organizations invest in IT only because everyone else is doing it
This strategy does not work
We should understand what business value we are seeking and how iT can help secure that value
Term
T or F?

The ICT industry sector is often referred to as the invisible industry
Definition
True: it does not produce as much direct output as other industries like forestry, mining or auto manufacturing. Rather, it indirectly supports activities in other industries with tools that make other industries more productive
Term
The Canadian Coalition for Tomorrow's ICT Skills (CCICT)
Definition
- Founded by Bell Canada in 2007
- Created an industry-led group of Canadian employees, institutions and industries that could ensure the ability of organizations to hire ICT pros for the 21st century workforce
- In 2009, designed a new set of learning outcomes for a new program called Business Technology Management
- These outcomes draw from skills frameworks like the Skills Framework for the Information Age (SFIA)
Term
T or F?

The CCICT is now developing a certification program to follow BTM programs
Definition
True: The certification will occur through the Canadian Information Processing Society (CIPS)
Term
Backward integration (moving upstream on the value chain)
Definition
Describes organizations that expand into activities that affect raw materials
ex. a tire company that decides to manufacture its own rubber or a coffee store that decides to grow its own coffee
Term
Forward integration (Moving downstream on the value chain)
Definition
Organizations that expand into activities that move them closer to end customers ex. a mining company that starts to cut/finish its own diamonds
Term
T or F?

Generally, the more value a company adds to a good/service in its value chain, teh higher the price they can charge for the final product
Definition
Term
Margin
Definition
The difference between the price the customer is willing to pay and the cost the company incurs in moving the goods/services through the value chain

Ex. Raw diamonds are sold at a much lower margin than finished diamonds. The greater the margin, the greater the profit per unit for the company
Term
2 ways information systems can increase productivity
Definition
1) They enable the development of more efficient or more effective supporting activities (ex. applications like accounting systems, HR systems, etc.)
2) Information systems also increase productivity by offering new/improved services, primary activities that would not be avaialble without IT (ex. online shopping, 24/7 customer support, etc.)
Term
Sustained competitive advantage
Definition
- Requires companies to find a distinctive way to compete, which will change over time
- Companies who have this will work to integrate many activities like marketing, customer service, product design and product delivery
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