Chapter 3, Problem 2RQ

Explanation of Solution

Major economic theories that helps explaining the affect of information system:

• There are two main theories are used to explain the affect of information system in an organization. They are as follows.
  • Cost theory:
    • It is based on the notation that an organization incurs transaction costs when it buys goods in marketplace rather than making products for their own.
    • Traditionally, an organization pursue to reduce transaction costs by getting bigger, hiring more employees, and using vertical and horizontal integration.
    • The information system helps to reduce the cost of market participation and helps firms shrink in size while producing the same or greater amount of output...

Explanation of Solution

Major behavioral theories that helps explaining the affect of information system:

• Behavioral theories are origin from sociology, psychology, and political science which is useful to define the individual organization’s behavior.
• Researchers with the background of behavioral theory assumes that information technology changes the decision making order with minimizing the information acquisition and cost of distribution...

Explanation of Solution

Reasons behind the organizational resistance to the introduction of information system:

• It is possible to make changes on organizational structure, culture, business process, politics and work.
• There are different methods used to visualize the organizational resistance.
• They are as follows...

Explanation of Solution

Impact of Internet and disruptive technologies:

• Internet raises to ease of access, storage, and sharing the information and knowledge for organization.
• This radically reduces the cost like transaction cost, informat...