BMGT301 Final Review Material From Midterm What s wrong with Nicolas Carr s argument o Carr says IT has become a commodity citing that once every business has it the value of IT will diminish NOT TRUE only focused on its hardware part he has a narrow definition of IT Provides platform for movement it s a platform of innovation rather than just a cost Organization design Market price mechanism Organization Hierarchy Coordination Motivation Supply Demand Giving Dividing Jobs Price Promotion motivation and coordination o How organization achieves the 2 goals hierarchy Decision rights and centralization o hierarchy is associated with different decision rights o efficiency principle to achieve decision rights collocate decision rights with necessary information knowledge centralization more knowledge to decision maker UPS Fedex Amazon decentralization Delegate decision rights to knowledge owner open source software Two types of knowledge o general scientific easily communicated o specific difficult to communicate o Principles for designing good incentive plan Look at quality instead of quantity Focuses on the bottom line Includes factors that relate Is accurate uses good indicators for performance to productivity Is understandable Resists gaming Definition of complementarities o Marginal value of one activity is increasing in the amount of another activity o Things go together components are correlated Synergies o Example hardware and software o More complex example robots product differentiation customer information Complementarities in organizational design o Implications cant mix and match can t change just one dimension justification for reengineering Moore s law the number of transistors that can be placed on a semiconductor chip doubles every 18 months This means that they continually get faster and cheaper Increase Product Lower Price Metcalfe s law the value of a network increases with the square of the number of users In turn this means that the as more connections become available in a network the higher the value of the network will be Simple example would be that two heads are always better than one network externality Binary value system using symbols o or 1 Bit b a binary digit representing 0 or 1 Byte B composed of 8 bits one byte can represent a single character Common sizes of things unit for the memory and hard drives Memory megabyte millions Hard Drive gigabytes billions Difference b w the Internet and the Web Internet is a massive network of networks which connects millions of computers with each other as long as they are connected to it Internet is older than the web Web is a way of accessing information over medium of internet It is built on top of the internet Or it is a big collection of HTML pages on the internet The concept of network neutrality There is currently no way of prioritizing certain information on the web over other information He gave the example in class of a surgeon operating through a webcam having the same priority as an email of a dog eating a baseball Chp 7 10 Final Review 7 Disruptive Technology innovation that disrupts an existing market Disruptive at two levels o Product Level The new technology is superior to the old one Ex Steam boat Encarta Flash drive o Business Model Level new technology The existing business model is NOT compatible with Ex telegraph to the local exchange market Netflix Innovator s dilemma why leading companies fail when facing disruptive technology o Only sustaining technological advances make incumbents stronger where disruptive tech tends to drive them out of o New technologies may have no market o Satisfy current customers or look for new growth in new business market Staying close to your customers usually reaps competitive advantages But sometimes it can make your company When it comes to discovering the Next Big Thing your best customers may be giving you the worst obsolete advice Why can t incumbent firms adjust to new technology o Sustaining tech advances to make incumbents stronger o Disruptive tech advances to drive incumbents out of business because it comes from newly emerging firms not valued by main stream customers at first o Why do incumbent firms miss the boat listen to their existing customers no demand for new products from these customers want only sustaining technology 8 Database You should have a sense of what are field record table and database after the lab session and problem set o Table refers to a list of data ex product list customer information orders or purchases collection of rows records database is either a single table or a collection of related tables o Field defines the data that a table can hold basically the titles for the columns in the table so for the customer table the fields would be First Name Last name address phone number birthday attributes of an entity o Record represents a single instance of whatever the table keeps track of Each row in a table ex you would have a record row of specific data information for each product you have to sell a collection of fields that describe an instance of an entity in customer table o Key the field used to relate tables in a database DATABASE collection of tables each table is one entity of your business Relational database o How relational database link tables together Relates different tables through the use of a common data element or field in those tables o Key the field used to relate tables in a database Concept of primary key and foreign key Primary Key an attribute or group of attributes that uniquely identifies a row record in a relation Every record MUST have a primary key Foreign Key a non key attribute in one relation that appears as the primary key in another relation 9 The Digital Enterprise The history of business value of computers 1950 s to 2000s o 1950s But what is it good for I think there is a worldwide market for maybe 10 computers TJ Watson Sr first supercomputer by IBM no place in business expensive hard to maintain o 1960 early 1970s Back office automation IT Management Control costs Counting survey results First adopted by finance NYSE o Late 1970s early 1980s Enterprise Computing There is no reason for anyone to have a computer in Multiple people access applications and data stored on a their home Ken Olson server Calculating inventory o Mid 1980s Hustle your way to competitive advantage Competitive advantage through operational efficiency A lot of companies use personal computer o Late 1980s First
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