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GWD-5-Q22 to GWD-5-Q25: Most pre-1990 literature on busi- nesses’ use of information technology (IT)—defined as any form of computer- Line based information system—focused on (5) spectacular IT successes and reflected a general optimism concerning IT’s poten- tial as a resource for creating competitive advantage. But toward the end of the 1980’s, some economists spoke of a (10) “productivity paradox”: despite huge IT investments, most notably in the service sectors, productivity stagnated. In the retail industry, for example, in which IT had been widely adopted during the (15) 1980’s, productivity (average output per hour) rose at an average annual rate of 1.1 percent between 1973 and 1989, com- pared with 2.4 percent in the preceding 25-year period.   roponents of IT argued (20) that it takes both time and a critical mass of investment for IT to yield benefits, and some suggested that growth figures for the 1990’s proved these benefits were finally being realized. They also argued (25) that measures of productivity ignore what would have happened without investments in IT—productivity gains might have been even lower. There were even claims that IT had improved the performance of the (30) service sector significantly, although mac- roeconomic measures of productivity did not reflect the improvement. But some observers questioned why, if IT had conferred economic value, it did (35) not produce direct competitive advantages for individual firms. Resource-based theory offers an answer, asserting that, in general, firms gain competitive advan- tages by accumulating resources that are (40) economically valuable, relatively scarce, and not easily replicated. According to a recent study of retail firms, which con- firmed that IT has become pervasive and relatively easy to acquire, IT by (45) itself appeared to have conferred little advantage. In fact, though little evidence of any direct effect was found, the fre- quent negative correlations between IT and performance suggested that IT had (50) probably weakened some firms’ compet- itive positions. However, firms’ human resources, in and of themselves, did explain improved performance, and some firms gained IT-related advan- (55) tages by merging IT with complementary resources, particularly human resources. The findings support the notion, founded in resource-based theory, that competi- tive advantages do not arise from easily (60) replicated resources, no matter how impressive or economically valuable they may be, but from complex, intan- gible resources. -------------------------------------------------------------------------------- GWD-5-Q22: The passage is primarily concerned with describing a resource and indicating various methods used to study it presenting a theory and offering an opposing point of view providing an explanation for unexpected findings demonstrating why a particular theory is unfounded resolving a disagreement regarding the uses of a technology
-------------------------------------------------------------------------------- GWD-5-Q23: The passage suggests that proponents of resource-based theory would be likely to explain IT’s inability to produce direct competitive advantages for individual firms by pointing out that IT is not a resource that is difficult to obtain IT is not an economically valuable resource IT is a complex, intangible resource economic progress has resulted from IT only in the service sector changes brought about by IT cannot be detected by macroeconomic measures
-------------------------------------------------------------------------------- GWD-5-Q24: The author of the passage discusses productivity in the retail industry in the first paragraph primarily in order to suggest a way in which IT can be used to create a competitive advantage provide an illustration of the “productivity paradox” emphasize the practical value of the introduction of IT cite an industry in which productivity did not stagnate during the 1980’s counter the argument that IT could potentially create competitive advantage
-------------------------------------------------------------------------------- GWD-5-Q25: According to the passage, most pre-1990 literature on businesses’ use of IT included which of the following?
Recommendations regarding effective ways to use IT to gain competitive advantage Explanations of the advantages and disadvantages of adopting IT Information about ways in which IT combined with human resources could be used to increase competitive advantage A warning regarding the negative effect on competitive advantage that would occur if IT were not adopted A belief in the likelihood of increased competitive advantage for firms using IT |
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