Chapter 1

Information Systems in Global Business Today

1. How are information systems transforming business and what is their relationship to globalization?

Describe how information systems have changed the way businesses operate and their products and
services.

Wireless communications, including computers and mobile hand-held computing devices, are keeping
managers, employees, customers, suppliers,
suppliers, and business partners connected in every way possible. Email,
online conferencing, the Web, and the Internet, are providing new and diverse lines of communication for
all businesses, large and small. Through increased communication channels and decreased costs of the
communications, customers are demanding more of bu sinesses in terms of service and product, at lo wer
costs. E-commerce is changing the way
wa y businesses must attract and respond to customers.

Identify three major new information system trends.

Three information system trends that are influencing the way businesses interact with emplo yees,
customers, suppliers, and business partners include emerging mobile digital platforms, growth of online
software-as-a-service, and the growth of cloud computing.

Describe the characteristics of a digital firm.

 Significant business relationships with customers, suppliers, and employees are digitally enabled and
mediated.
 Core business processes are accomplished through digital networks spanning the entire organization
or linking multiple organizations.
 Key corporate assets – 
assets –  intellectual
 intellectual property, core competencies, and financial and human assets – 
assets –  are
 are
managed through digital means.
 They sense and respond to their environments far more rapidly than traditional firms.
 They offer extraordinary opportunities for more flexible global organization and mana gement,
 practicing time-shifting and space-shifting.
space-shifting.

Describe the challenges and opportunities of globalization in a “flattened” world.

Customers no longer need to rely

rely on local businesses for products and services. They can shop 24/7 for
virtually anything and have it delivered
delivered to their door or desktop.
desktop. Companies can operate 24/7 from any
geographic location around the world. Jobs can just as easily move across
ac ross the state or across the ocean.
Employees must continually develop high-level skills through education and on-the-job experience that
cannot be outsourced. Business must avoid markets for goods and serves that can be produced offshore
much cheaper. The emergence of the Internet into a full-blown international communications s ystem has
drastically reduced the costs of operating and transacting business on a global scale.

2. Why are information systems so essential for running and managing a business today?

List and describe six reasons why information systems are so important for business today.

Six reasons why information systems are so important for business today include:
(1) Operational excellence
(2) New
(2)  New products, services, and business models
(3) Customer and supplier intimacy
 (4) Improved decision making
(5) Competitive advantage
(6) Survival

Information systems are the foundation for conducting business today. In many industries, survival and
even existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing
 productivity. Although information technology has become more of a commodity, when coupled with
complementary changes in organization and management, it can provide the foundation for new products,
services, and ways of conducting business that pr ovide firms with a strategic advantage.

3. What exactly is an information system? How does it work? What are its management, organization
and technology components?

Define an information system and describe the activities it performs.

An information system is a set of interrelated components that work together to collect, process, store, and
disseminate information to support decision making, coordination, control, anal ysis, and visualization in an
organization. In addition to supporting decision making, information systems may also help managers and
workers analyze problems, visualize complex subjects, and create new products.

List and describe the organizational, management, and technology dimensions of information
systems.

Organization: The organization dimension of information systems involves issues such as the
organization’s hierarchy, functional specialties, business processes, culture, and political interest
groups.
Management: The management dimension of information systems involves setting organizational
strategies, allocating human and financial resources, creating new products and services and re-
creating the organization if necessary.
Technology: The technology dimension consists of computer hardware, software, data management
technology, and networking/telecommunications technology.

Distinguish between data and information and between information systems literacy and computer
literacy.

Data are streams of raw facts representing events occurring in organ izations or the physical
environment before they have been organized and arranged into a form that people can understand
and use.
Information is data that has been shaped into a form that is meaningful and useful to human beings.
Information systems literacy is a broad-based understanding of information systems. It includes a
 behavioral as well as a technical approach to studying information systems.
In contrast, computer literacy focuses primarily on knowledge of information technology. It is
limited to understanding how computer hardware an d software works.

Explain how the Internet and the World Wide Web are related to the other technology components of
information systems.

The Internet and World Wide Web have had a tremendous impact on the role information systems play in
organizations. These two tools are responsible for the increased connectivity and collaboration within and
outside the organization. The Internet, World Wide Web, and other technologies have led to the redesign
 and reshaping of organizations. They have helped transform the organization’s structure, scope of
operations, reporting and control mechanisms, work practices, work flows, and products and services.

4. What are complementary assets? Why are complementary assets essential for ensuring that
information systems provide genuine value for an organization?

Define complementary assets and describe their relationship to information technology.

Complementary assets are those assets required to derive value from a primary investment. Firms must rely
on supportive values, structures, and behavior pat terns to obtain a greater value from their IT investments.
Value must be added through complementary assets such as new business processes, management behavior,
organizational culture, and training.

Describe the complementary social, managerial, and organizational assets required to optimize
returns from information technology investments.

Here are a few of them:

Organizational assets:
 Supportive culture that values efficiency and effectiveness
 Appropriate business model
 Efficient business processes
 Decentralized authority

Managerial assets:
 Strong senior management support for technology investment and change
 Incentives for management innovation
 Teamwork and collaborative work environments

Social assets:
 The Internet and telecommunications infrastructure
 IT-enriched educational programs raising labor force computer literacy
 Standards (both government and private sector)

5. What academic disciplines are used to study information systems? How does each contribute to an
understanding of information systems? What is a sociotechnical systems perspective?

List and describe each discipline that contributes to a technical approach to information systems.

A technical approach to information systems emphasizes mathematically-based mode ls to study information

systems and the physical technology and formal capabilities of information systems. Students should know
the differences between computer science (theories of computability, computation methods, and data storage
and access methods), management science (development of models for decision making and managerial
 practice), and operations research (mathematical techniques for optimizing organizational parameters such
as transportation, inventory control and transaction costs).

List and describe each discipline that contributes to a behavioral approach to information systems.

A behavioral approach to information systems focuses on questions such as strategic business integration,
 behavioral problems of systems utilization, system design and implementation, social and organizational
impacts of information systems, political impacts of information systems, and individual responses to
information systems. Solutions to problems created by information technology are primarily changes in
attitudes, management, organizational policy, and behavior.

Describe the sociotechnical perspective on information systems.

A sociotechnical perspective combines the technical approach and behavior approach to achieve optimal
organizational performance. Technology must be changed and designed to fit organizational and individual
needs and not the other way around. Organizations and individuals must also change through training,
learning, and allowing technology to operate and prosper.
 Chapter 2
Global E-Business and Collaboration

1. What are business processes? How are they related to information systems?

Define business processes and describe the role they play in organizations.

A business process is a logically related set of activities that define how specific business tasks are
 performed. Business processes are the ways in which organizations coordinate and organize work activities,
information, and knowledge to produce their valuable products or services.

How well a business performs depends on how well its business processes are designed and coordinated.
Well-designed business processes can be a source of competitive strength for a company if it can use the
 processes to innovate or perform better than its rivals. Conversely, poorly designed or executed business
 processes can be a liability if they are based on outdated ways of working and impede responsiveness or
efficiency.

Describe the relationship between information systems and business processes.

Information systems automate manual business processes and make an organization more efficient. Data
and information are available to a wider range of decision-makers more quickly when information systems
are used to change the flow of information. Tasks can be performed simultaneously rather than sequentially,
speeding up the completion of business processes. Information systems can also drive new business models
that perhaps wouldn’t be possible without the techno logy.

2. How do systems serve the various levels of management in a business?

Describe the characteristics of transaction processing systems (TPS) and the roles they play in a
business.

Transaction processing systems (TPS) are computerized systems that perform and record dail y routine
transactions necessary in conducting business; they serve the organization’s operational level. The
 principal purpose of systems at this level is to answer routine questions and to track the flow of transactions
through the organization.
 At the operational level, tasks, resources, and goals are predefined and highly structured.
 Managers need TPS to monitor the status of internal operations and the firm’s relationship with its
external environment.
 TPS are major producers of information for other types of s ystems.
 Transaction processing systems are often so central to a business that TPS failure for a few hours can
lead to a firm’s demise and perhaps that of other firms linked to it.

Describe the characteristics of management information systems (MIS) and explain how MIS differ
from TPS and from DSS.

Middle management needs systems to help with monitoring, controlling, decision-making, and
administrative activities.
 MIS provide middle managers with reports on the organization’s current performance. This
information is used to monitor and control the bu siness and predict future performance.
 Chief knowledge officer (CKO) helps design programs and s ystems to find new sources of knowledge
or to make better use of existing knowledge in organizational and management processes.