Most pre-1990 literature on businesses' use of information technology

Hi,

The correct line to refer is "According to a recent study of retail firms, which confirmed that IT has become pervasive and relatively easy to acquire, IT by itself appeared to have conferred little advantage. In fact, though little evidence of any direct effect was found, the frequent negative correlations between IT and performance suggested that IT had probably weakened some firms' competitive positions. However, firms' human resources, in and of themselves, did explain improved performance, and some firms gained IT-related advantages by merging IT with complementary resources, particularly human resources."

First bold - negates D
Second bold - supports A

Hope this helps!

Could you please explain question 6 here?

Hi simran2505, AbhishekDhanraJ72,

Let me know if this helps.


6. The passage suggests that the recent study of retail firms discussed in the second paragraph supports which of the following conclusions regarding a firm's competitive advantage?

A. Human resources alone are more likely to contribute to competitive advantage than is IT alone.
B. Human resources combined with IT are more likely than human resources alone to have a negative effect on competitive advantage.
C. Human resources combined with IT often have a negative effect on competitive advantage.
D. IT by itself is much more likely to have a positive effect than a negative effect on competitive advantage.
E. The positive effect of IT on competitive advantage increases with time.

Explanation: The study of the retail firms discussed in the 2nd paragraph revealed that IT was very much prevalent and easy to acquire, but it was of very little advantage to the firms when used alone. Infact , author even show evidence to prove the same, mentioned as: "In fact, though little evidence of any direct effect was found, the frequent negative correlations between IT and performance suggested that IT had probably weakened some firms' competitive positions.".
Some firms gained advantages by merging Human Resources with the IT, can be inferred from the lines: "However, firms' human resources, in and of themselves, did explain improved performance, and some firms gained IT-related advantages by merging IT with complementary resources, particularly human resources."
Other options can easily eliminated as the opposite of same is mentioned in the passage.


Thanks.

Proponents of IT argued that it takes
both time and a critical mass of investment for IT
⠀⠀⠀ to yield benefits, and some suggested that growth
⠀⠀⠀ figures for the 1990s proved these benefits were
⠀⠀⠀ finally being realized.

One of the advocates also speak about 'the time factor', the question doesn't specifically so why can't be 'E' the answer?

You are right, but the question asked is with respect to the study and no such conclusion can drawn from that.

Hope that Helps.
Thanks.

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Question #3

To rule out (E) for question #3, take another look at the exact language of the question:

The question doesn't ask us which answer choice is true. Instead, it asks us WHY the author chose to discuss productivity in the retail industry.

Looking at the passage as a whole, the author:

-Introduces a paradox
-Discusses the retail industry as an example of the paradox
-Provides one viewpoint to explain the paradox
-Provides a second viewpoint to explain the paradox

From this, it is clear that the author discusses the retail industry primarily in order to 'provide an illustration of the "productivity paradox.'"

So, while this discussion may ALSO happen to "counter the argument that IT could potentially create competitive advantage," that's not why the author included it in the passage.

By closely reading the actual question, you can eliminate (E) and go with (B) as the answer to question #3.

I hope that helps!

Question #6

Lots of discussion of question #6, but we'll add our two cents in case it's useful.


To answer this question, let's first go back to the passage to see what it says about the study:

"According to a recent study of retail firms, which confirmed that IT has become pervasive and relatively easy to acquire, IT by itself appeared to have conferred little advantage. In fact, though little evidence of any direct effect was found, the frequent negative correlations between IT and performance suggested that IT had probably weakened some firms' competitive positions. However, firms' human resources, in and of themselves, did explain improved performance, and some firms gained IT-related advantages by merging IT with complementary resources, particularly human resources."

From this we know that:

1) IT by itself didn't result in a competitive advantage, and in fact may have worsened some firms' competitive positions
2) Human resources by themselves DID explain improved performance
3) By combining IT and human resources, some firms gained an advantage

So, which answer choice aligns with this information?


This one looks good! Human resources by themselves DID explain improved performance, while IT alone did not. From this, we can say that human resources alone were more likely to lead to competitive advantage than IT alone.

Keep (A), and let's look at the other options.


We know that some firms gained a competitive advantage by combining IT and HR. We also know that HR alone provided an advantage.

The passage says good things about both of these options, but doesn't provide a clear comparison between the two -- we don't know how often either option led to negative effects on competitive advantage.

Because of this, we can rule out (B).


Nope! We know that some firms gained a competitive advantage by combining IT and HR. The study doesn't suggest in any way that this combination led to a negative effect on competitive advantage.

Eliminate (C).


The study actually suggests the opposite of (C) -- IT alone "conferred little advantage," and actually sometimes WORSENED a firm's competitive advantage.

(D) is out.


Hmm, the study doesn't mention any changes of competitive advantage with time. Instead, the study just says that IT can have a positive effect when combined with other complementary resources, such as HR.

(E) is out, and (A) is the answer to question #6.

I hope that helps!

bm2201 @SajjadAhmad- Dear Sir- I took 13 minutes to read this passage, which has 8 Q. I got only 1 wrong.
Is this time ok to read the RC passage since I am thinking that 2 mins per Q means I had 16 minutes with me but I managed to do it in 13 minute.
Let me know if thinking this is ok or should I reduce my time drastically to get a good score. Thanks in advance.

Hello Gauriii

RC is the most cruel section of the GMAT verbal I think and SC is the most kind. You can save time from SC questions and can invest that time in the RC section. CR is in between the both. So 13 minutes is excellent time for 8 questions. Even 15-16 minutes is fine for this RC passage with the medium difficulty level. Reducing your time drastically means you will not catch up 100% of the RC passage and the result could be havoc so don't go to gimmicks instead hold your natural pace.

Good Luck

Need help in getting Q#6:

6. The passage suggests that the recent study of retail firms discussed in the second paragraph supports which of the following conclusions regarding a firm's competitive advantage?

A. Human resources alone are more likely to contribute to competitive advantage than is IT alone.
B. Human resources combined with IT are more likely than human resources alone to have a negative effect on competitive advantage.
C. Human resources combined with IT often have a negative effect on competitive advantage.
D. IT by itself is much more likely to have a positive effect than a negative effect on competitive advantage.
E. The positive effect of IT on competitive advantage increases with time.

Any explanation for Q5 ? Didn't find any in above comments.

I was confused between D and E. Even though I chose right, but I ain't sure how to reject D as it seems pretty close too.

Hi jack0997

Please refer the complete explanation by expert for Question 6 here:
https://gmatclub.com/forum/most-pre-1990-literature-on-businesses-use-of-information-technology-16566-20.html#p2593649


Let us know if you still have doubts.
Thanks.

General topic : Does IT give provide competetive advantage

Q1) General
(A) describing a resource and indicating various methods used to study it - Incorrect ( The passage doesnt describe a resource nor indicate various methods used to study it)
(B) presenting a theory and offering an opposing point of view - Incorrect ( The passage brings forward a paradox, and an explanation for that paradox is provided
(C) providing an explanation for unexpected findings - Correct ( The paradox stated is the unexpected finding and an explanation is provided by the resource based theory )
(D) demonstrating why a particular theory is unfounded - Incorrect ( The passage does not imply anything to be unfounded)
(E) resolving a disagreement regarding the uses of a technology - Incorrect (The passage is explaining a paradox not resolving a disagreement)

Q2) Specific
(A) IT is not a resource that is difficult to obtain - Correct - (Stated in the passage: Resource-based theory offers an answer, asserting that, in general, firms gain competitive advantages by accumulating resources that are economically valuable, relatively scarce, and not easily replicated)
(B) IT is not an economically valuable resource - Incorrect ( Not found in the passage)
(C) IT is a complex, intangible resource - Incorrect ( intangible resource brings competive advantage)
(D) economic progress has resulted from IT only in the service sector - Incorrect(The passage does not state this)
(E) changes brought about by IT cannot be detected by macroeconomic measures - Incorrect (Not specified in the passage)

Q3)The author of the passage discusses productivity in the retail industry in the first paragraph primarily in order to
Type : Specific
(A) suggest a way in which IT can be used to create a competitive advantage - Incorrect ( Does not show in anyway how IT provides competetive advantage)
(B) provide an illustration of the "productivity paradox" - Correct ( Basically giving an example productivity paradox)
(C) emphasize the practical value of the introduction of IT - Incorrect ( The sentence was basically focusing on how introducting IT has not increased productivity)
(D) cite an industry in which productivity did not stagnate during the 1980's - Incorrect ( The sentence was basically focusing on how introducting IT has not increased productivity)
(E) counter the argument that IT could potentially create competitive advantage - Incorrect ( That only happens later in the passage)

Q4) According to the passage, most pre-1990 literature on businesses' use of IT included which of the following?
Type : Specific
(A) Recommendations regarding effective ways to use IT to gain competitive advantage - Incorrect (No reccommendations on effective ways to use IT to gain competitive advantage in the passage)
(B) Explanations of the advantages and disadvantages of adopting IT - Incorrect (Advantages and disadvantages are not stated in the passage)
(C) Information about ways in which IT combined with human resources could be used to increase competitive advantage - Incorrect (The passage states that combining HR and IT increased competetive advantage but doesnt discuss the ways)
(D) A warning regarding the negative effect on competitive advantage that would occur if IT were not adopted - Incorrect (not stated in the passage)
(E) A belief in the likelihood of increased competitive advantage for firms using IT - Correct (Stated in the first sentence of the passage.

Question 5

Let’s think about the author’s purpose throughout the first paragraph:

• First, the author introduces IT and describes the typical pro-IT approach in pre-1990 literature.
• Then, he/she describes an alternative, less-optimistic view (anti-IT) on the impact of IT and gives an example.
• Finally, the author describes the response of the pro-IT group to the anti-IT group.

With that in mind, the question asks that we identify an answer choice describing the content of the first paragraph. Here’s (D):


The biggest problem with (D) is that the first paragraph does NOT demonstrate the effect of IT on productivity. Rather, it debates the effect of IT on productivity. For the paragraph to demonstrate IT’s effect on productivity, it would have to show what effect IT has. But the paragraph does not show the impact of IT. Instead, it introduces a debate on what impact IT has had. This is different than actually demonstrating or showing the impact. And the first paragraph does not show what impact IT ACTUALLY had. It merely discusses what effect IT MAY have had. Eliminate (D).

I hope that helps!

Hi GMATNinja AndrewN sir
I am trying to figure out the difference between retail firms mention in 1st para vs retail firms mention in 2nd para. Please check my understanding.

Para1 : The passage talks about overall in general about retail firms from preceding 25 years of 1980s till 1990.
1. During this period, retail firms had gained competitive advantages
2. Favored by some economists and Resource-based theorists
3. author shows positive side


Para2: The passage talks about study of individual recent retails firms ( another perspective) especially of those some firms whose competitive positions is weakened
1. individual retail firms appeared to have conferred little advantage and even negative effect as per relationship suggested between IT and performance.
2: negative by some observers
3. author shows negative side


In the end author just displays both views: +ve side in 1st para and 2nd para who were against with perspective in 1st view
The author concludes that competitive advantages come from complex, intangible resources not from rom easily replicated resources.

Questions:
Is my understanding correct?
Please check bold words ? Are they correct or I missed something?

I think you have it, imSKR. In the end, the passage (author) seems to favor an alternative explanation for the competitive advantages mentioned earlier, namely that human resources add a major component to the equation. The penultimate line tells us as much:

[F]irms' human resources, in and of themselves, did explain improved performance, and some firms gained IT-related advantages by merging IT with complementary resources, particularly human resources

It is this complex interaction between human resources and technology that the author stands behind.

Well done with your reading. Did you answer the questions correctly?

- Andrew

I did 6th wrong . In my initial reading, I biased IT and missed that HR > IT in bringing competitiveness.
I chose D and took long time and understanding as in above post to eliminate D and choose A:)