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Value Configurations of Organizations
Abstract
To comprehend the value that information technology provides to organizations, we must first understand the way a particular organization conducts business and how information systems affect the performance of various component activities within the organization. Understanding how organizations differ is a central challenge for both theory and practice of management. For a long time, Porter’s (1985) value chain was the only value configuration known to managers. Stabell and Fjeldstad (1998) have identified two alternative value configurations. A value shop schedules activities and applies resources in a fashion that is dimensioned and appropriate to the needs of the client’s problem, while a value chain performs a fixed set of activities that enables it to produce a standard product in large numbers. Examples of value shops are professional service organizations, as found in medicine, law, architecture and engineering. A value network links clients or customers who are or wish to be interdependent. Examples of value networks are telephone companies, logistic and postal services, retail banks and insurance companies.
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