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competitive 
advantage
may be missed. Any new technology or application devised by the third party is likely 
to be available to competitors.
 
(d) 
An organisation may find itself 
locked in 
to an unsatisfactory contract. The decision may be very 
difficult to reverse. If the service provider supplies unsatisfactory levels of service, the effort and 
expense the organisation would incur to rebuild its own computing function or to move to another 
provider could be substantial.
(e) 
The use of an outside organisation does not encourage awareness of the potential 
costs
and 
benefits
 
of IS/IT within the organisation. If managers cannot manage in-house IS/IT resources 
effectively, then it could be argued that they will not be able to manage an arrangement to 
outsource effectively either. 
 
10
Environmental factors 
There is increasing concern about businesses' relationship with the natural environment. Businesses may 
suffer 
significant costs
and a 
loss of reputation
if problems arise.
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CHAPTER 2
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THE BUSINESS ENVIRONMENT 
 
45 
10.1 Significance of environmental effects 
There is a general issue for society of whether environmental problems, such as climate change, actually 
exist. There are some who believe that environmental changes are just natural events in the lifecycle of 
the planet. If environmental problems do exist, the issue is how serious are they? There is an additional 
issue of whether business activities have contributed to environmental change. Clearly there are 
concerns which need to be closely examined. 
10.2 Impact on environment of economic activities