Explain Why It Is Both A Business Practice

Explain Why It Is Both A Business Pr

1. Explain why IT is both a business pressure and an enabler of response activities that counter business pressures.

2. What does a flat world mean to you in your choice of a major? In your choice of a career? Will you have to be a “lifelong learner”? Why or why not?

3. What might the impact of a flat world be on your standard of living?

4. Is IT a strategic weapon or a survival tool? Discuss.

5. Why might it be difficult to justify a strategic information system?

6. Describe the five forces in Porter’s competitive forces model and explain how increased access to high-speed internet has affected each one.

7. Describe Porter’s value chain model. What is the relationship between the competitive forces model and the value chain model?

8. Describe how IT can be used to support different value chains for different companies.

9. Discuss the idea that an information system by itself can rarely provide a sustainable competitive advantage.

Paper For Above instruction

Information technology (IT) has become fundamental to the modern business environment. It functions both as a source of pressure and as an enabler for response activities. The pressures originate from rapid technological changes, globalization, and heightened competition, forcing businesses to innovate continuously. For instance, the shift towards digital platforms has increased market competition, compelling companies to adopt new IT solutions to remain relevant (Rainer, Prince, & Watson, 2019). Simultaneously, IT enables organizations to counter these pressures by streamlining operations, improving communication, and fostering innovation. For example, enterprise resource planning (ERP) systems have enhanced supply chain management, allowing companies to respond swiftly to market demands (Rainer, Prince, & Watson, 2019). Thus, IT is both a challenge and an opportunity that businesses must manage strategically.

A "flat world," a term popularized by Thomas Friedman, refers to the interconnectedness and equalizing effect of technology and globalization that diminish geographical and organizational boundaries. For students choosing a major or a career, understanding the implications of a flat world underscores the importance of adaptability and continuous learning. The globalization of markets driven by rapid internet access means that skills and knowledge are more widely accessible than ever before. Consequently, individuals must embrace lifelong learning to stay relevant in their chosen fields (Friedman, 2005). For example, a computer science major might need to learn new programming languages regularly to keep pace with technological progress, while a marketing professional must understand emerging digital platforms.

The impact of a flat world on standards of living can be significant. Increased access to information and global markets offers more opportunities for economic growth and individual wealth creation. Conversely, it can also intensify competition, leading to job displacement in certain sectors. Developing countries may benefit from new markets and investments, improving living standards, while developed nations might face greater challenges in maintaining employment levels (Friedman, 2005). Ultimately, whether the impact results in improved standards of living depends on a country's ability to adapt and leverage technology effectively.

IT can be seen both as a strategic weapon and a survival tool. When used strategically, IT provides a competitive advantage by enabling differentiation, cost leadership, or innovation. For example, Amazon's sophisticated logistics system exemplifies IT as a strategic weapon that creates barriers to entry and sustains its market dominance (Rainer, Prince, & Watson, 2019). Conversely, for many organizations, IT is essential survival equipment—necessary to meet regulatory requirements, maintain operations, or support customer expectations. Without robust IT infrastructure, businesses risk obsolescence in today's digital economy (Rainer, Prince, & Watson, 2019). Consequently, the role of IT depends on the organizational context and strategic intent.

Justifying strategic information systems (SIS) can be challenging because of their substantial costs and uncertain benefits. Unlike standard IT investments, SIS often involve long-term commitments and complex integration across business units. Demonstrating direct financial return may be difficult, especially when benefits manifest as intangible improvements like customer satisfaction or brand reputation. Additionally, rapid technological changes can render systems obsolete before full realization of benefits (Rainer, Prince, & Watson, 2019). Hence, executives must carefully evaluate the strategic value and alignment with organizational goals to justify SIS investments.

The Porter’s Five Forces model helps analyze industry competitiveness by examining five forces: the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and industry rivalry. Increased access to high-speed internet has notably impacted these forces. For instance, ease of entry has risen as start-ups can leverage online platforms with lower capital expenditure, intensifying competition (Porter, 1980). Suppliers and buyers gain more power due to real-time information availability, enabling better bargaining positions. Substitutes are more accessible through digital channels, and rivalry has intensified as firms compete globally, often on speed and innovation (Porter, 1980).

Porter’s value chain model decomposes a firm’s activities into primary and support activities, illustrating how value is added at each stage. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and after-sales service. Support activities, like procurement, technology development, human resources, and firm infrastructure, underpin primary processes. The relationship between the competitive forces and value chain is that each force influences how a firm should configure its value chain. For example, high supplier bargaining power may require stronger supplier relationships or vertical integration to reduce dependence (Porter, 1985). Understanding this relationship helps firms craft strategies that mitigate competitive threats and enhance value creation.

IT plays a vital role in supporting different value chains tailored to individual companies' needs. For instance, manufacturing firms use IT to automate production lines, enhancing efficiency, while service firms deploy customer relationship management (CRM) systems to improve client interactions. Retailers rely on point-of-sale (POS) systems and inventory management to optimize operations, demonstrating how technology aligns with specific value chain activities (Rainer, Prince, & Watson, 2019). Customizing IT solutions enables companies to strengthen their competitive position, respond faster to market changes, and deliver higher value to customers.

While information systems are critical, they rarely provide a sustainable competitive advantage alone. Often, the true competitive edge derives from how organizations combine IS with other resources—such as skilled personnel, innovative culture, and business processes. For example, a unique organizational culture may enable a company to leverage its IT investments more effectively than competitors (Barney, 1991). Additionally, the rapid pace of technological change means that a system that offers advantage today may become obsolete tomorrow. Therefore, organizations must integrate IT strategically within a broader resource and capability framework to achieve lasting advantage (Rainer, Prince, & Watson, 2019).

References

  • Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
  • Friedman, T. L. (2005). The World is Flat: A Brief History of the Twenty-First Century. Farrar, Straus and Giroux.
  • Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.
  • Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
  • Rainer, R. K., Prince, B., & Watson, H. J. (2019). Management Information Systems (3rd ed.). John Wiley & Sons.
  • Friedman, T. L. (2005). The World is Flat: A Brief History of the Twenty-First Century. Farrar, Straus and Giroux.
  • Friedman, T. L. (2006). The Lexus and the Olive Tree: Understanding Globalization. Farrar, Straus and Giroux.
  • Chen, H., & Popovich, K. (2003). Understanding customer relationship management (CRM): People, process and technology. Business Process Management Journal, 9(5), 672-688.
  • Hitt, L. M., & Brynjolfsson, E. (1996). Productivity, business profitability, and consumer surplus: Three different measures of information technology value. MIS Quarterly, 20(2), 121-142.
  • Friedman, T. L. (2005). The World is Flat: A Brief History of the Twenty-First Century. Farrar, Straus and Giroux.

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