Page 56 - DMGT505_MANAGEMENT_INFORMATION_SYSTEM

Unit 3: IT Impacts

3.6 Summary Notes

 Information technology helps firms contract in size, because it can reduce transaction
costs—the costs incurred when a firm buys on the marketplace what it cannot make itself.

 Behavioral researchers have theorized that information technology could change the
hierarchy of decision making in organizations by lowering the costs of information
acquisition and broadening the distribution of information.
 Decision-making increasingly happens at all levels of a business. The Board of Directors
may make the grand strategic decisions about investment and direction of future growth,
and managers may make the more tactical decisions about how their own department
may contribute most effectively to the overall business objectives.

 Information systems can help managers and employees work more efficiently and
effectively in this new environment by increasing the amount of information available to
all employees.
 At the business level the most common analytic tool is value chain analysis. The value
chain model highlights specific activities in the business where competitive strategies can
be best applied and where information systems are most likely to have a strategic impact.
 Management Information Systems (MIS) is the term given to the discipline focused on the
integration of computer systems with the aims and objectives on an organization.
 A Strategic Information System (SIS) is a system that helps companies change or otherwise
alter their business strategy and/or structure.

 The Strategic Information Systems (SIS) can give a business a competitive advantage.
Strategic position is recognized by observing competitive indicators.

3.7 Keywords

Management Information Systems (MIS): MIS is the term given to the discipline focused on the
integration of computer systems with the aims and objectives on an organization.
Strategic Information System (SIS): A Strategic Information System (SIS) is a system that helps
companies change or otherwise alter their business strategy and/or structure.
Value Chain: The value chain model highlights specific activities in the business where
competitive strategies can be best applied and where information systems are most likely to
have a strategic impact.

3.8 Review Questions

1. Illustrate how Information technology is used to reduce internal management costs.

2. Behavioral researchers have theorized that information technology could change the
hierarchy of decision making in organizations by lowering the costs of information
acquisition and broadening the distribution of information. Comment.

3. Elucidate the impact of IT on decision making.
4. Enlighten the inferences for System Design.
5. What is value chain model? Explain the concept of leveraging technology in the Value
Chain.

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