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CHAPTER TWO
CLOSING MATERIAL
OPENING CASE TWO QUESTIONS
BUSINESS IS BOOMING FOR WEARABLE TECHNOLOGIES
1. Knowledge: Dene the three primary types of decision-making systems
and how wearable technologies in the workplace could aect each.
a. Decision-making skills are essential for all business professionals, at
every company level, who make decisions that run the business. At
the operational level, employees develop, control, and maintain
core business activities required to run the day-to-day operations.
b. At the managerial level, employees are continuously evaluating
company operations to hone the rm’s abilities to identify, adapt to,
and leverage change. Managerial decisions cover short- and
medium-range plans, schedules, and budgets along with policies,
procedures, and business objectives for the rm. These types of
c. At the strategic level, managers develop overall business strategies,
goals, and objectives as part of the company’s strategic plan. They
also monitor the strategic performance of the organization and its
overall direction in the political, economic, and competitive business
2. Comprehension: Describe the dierence between transactional and
analytical information, and determine how wearable technology could
aect each for a grocery store.
Transactional information encompasses all of the information contained
within a single business process or unit of work, and its primary purpose is
to support the performing of daily operational tasks. Analytical
information encompasses all organizational information, and its primary
3. Application: Illustrate the business process model used by a customer
service repair technician using wearable technology glasses to x a
broken computer.
Student answers to this question will vary. Be sure they included the
following in their business process model
Gather data by scanning computer with glasses
Identify issues with computer and log issues with glasses
4. Analysis: Explain business process reengineering and how wearable
technology might dramatically change the current sales process.
Business process improvement attempts to understand and measure the
current process and make performance improvements accordingly.
Streamlining improves business process e-ciencies by simplifying or
eliminating unnecessary steps. Bottlenecks occur when resources reach
full capacity and cannot handle any additional demands; they limit
5. Synthesis: Formulate dierent metrics that a wearable technology for
tness could provide a customer.
Potential metrics include:
- Number of calories burned
- Number of steps taken
6. Evaluation: Argue for or against the following statement: Wearable
devices invade consumer privacy.
REVIEW QUESTIONS
1. Why must business professionals understand how MIS
supports decision making and problem solving?
Decision making is one of the most important and challenging aspects
of management. Decisions range from routine choices, such as how
many items to order or how many people to hire, to unexpected ones
such as what to do if a key employee suddenly quits or needed
2. What is the relationship between critical success factors and
key performance indicators? How can a manager use them to
understand business operations?
Critical success factors (CSFs) are the crucial steps companies perform
to achieve their goals and objectives and implement their strategies.
Key performance indicators (KPIs) are the quantiable metrics a
company uses to evaluate progress toward critical success factors. KPIs
3. What are the three di2erent levels found in a company? What
types of decisions are made at each level?
A few key concepts about organizational structure will help our
discussion of MIS decision-making tools. The structure of a typical
organization is similar to a pyramid, and the dierent levels require
4. De5ne transaction processing systems and describe the role
they play in a business.
Transactional information encompasses all the information contained
within a single business process or unit of work, and its primary
purpose is to support the performance of daily operational or
5. De5ne decision support systems and describe the role they
play in a business.
Decision support systems (DSSs) model information using OLAP, which
provides assistance in evaluating and choosing among dierent
6. De5ne expert systems and describe the role they play in a
business.
Expert systems are computerized advisory programs that imitate the
reasoning processes of experts in solving di-cult problems. Typically,
they include a knowledge base containing various accumulated
7. What are the capabilities associated with digital dashboards?
Executive information systems use visualization to deliver specic key
information to top managers at a glance, with little or no interaction
8. What are the common DSS analysis techniques?
Consolidation is the aggregation of data from simple roll-ups to
complex groupings of interrelated information. For example, data for
dierent sales representatives can then be rolled up to an o-ce level,
then a state level, then a regional sales level. Drill-down enables users
to view details, and details of details, of information. This is the reverse
of consolidation; a user can view regional sales data and then drill
down all the way to each sales representative’s data at each o-ce.
9. How does an electronic spreadsheet program, such as Excel,
provide decision support capabilities?
Excel can create DSS that can logically answer di-cult optimization
10. What is the di2erence between the ability of a manager
to retrieve information instantly on demand using an MIS and
the capabilities provided by a DSS?
Managers can retrieve information from an MIS system however they
11. What is arti5cial intelligence? What are the 5ve types of
AI systems? What applications of AI o2er the greatest business
value?
Articial intelligence (AI) simulates human thinking and behavior, such
as the ability to reason and learn. Its ultimate goal is to build a system
that can mimic human intelligence. AI systems increase the speed and
12. What is a business process and what role does it play in
an organization?
A business process is a standardized set of activities that accomplish a
specic task, such as processing a customer’s order. Business
processes transform a set of inputs into a set of outputs—goods or
13. Why do managers need to understand business
processes? Can you make a correlation between systems
thinking and business processes?
Some processes, such as a programming process, may be contained
wholly within a single department. However, most, such as ordering a
product, are cross-functional or cross-departmental processes and span
the entire organization. The process of “order to delivery” focuses on
the entire customer order process across functional departments.
14. Why would a manager need to review an As-Is and To-Be
process model?
As-Is process models represent the current state of the operation that
has been mapped, without any specic improvements or changes to
existing processes. The next step is to build a To-Be process model that
displays how the process problem will be solved or implemented. To-Be
15. How can a manager use automation, streamlining, and
business process reengineering to gain operational eAciency
and e2ectiveness?
Automation is the process of computerizing manual tasks, making
them more e-cient and eective and dramatically lowering
operational costs. Streamlining improves business process e-ciencies
by simplifying or eliminating unnecessary steps. As the rate of change
increases, companies looking for rapid change and dramatic
improvement are turning to business process reengineering (BPR), the
analysis and redesign of work'ow within and between enterprises. A
business process reengineering eort begins with dening the scope
16. Explain the di2erence between customer-facing
processes and business-facing processes. Which one is more
important to an organization?
Customer-facing processes, also called front-o-ce processes, result in
a product or service received by an organization’s external customer.
They include fullling orders, communicating with customers, and
17. Explain how 5nding di2erent ways to travel the same
road relates to automation, streamlining, and business process
reengineering.
Better, faster, cheaper is the path taken by automation, streamlining,
and business process reengineering. Automation and streamlining are
CLOSING CASE ONE QUESTION
POLITICAL MICRO-TARGETING
1. De5ne the three primary types of decision-making systems, and
explain how Obama’s campaign team used them to win votes.
a. Decision-making skills are essential for all business professionals, at
every company level, who make decisions that run the business. At
the operational level, employees develop, control, and maintain
b. At the managerial level, employees are continuously evaluating
company operations to hone the rm’s abilities to identify, adapt to,
and leverage change. Managerial decisions cover short- and
medium-range plans, schedules, and budgets along with policies,
c. At the strategic level, managers develop overall business strategies,
goals, and objectives as part of the company’s strategic plan. They
also monitor the strategic performance of the organization and its
overall direction in the political, economic, and competitive business
2. Describe the di2erence between transactional and analytical
information, and determine which types Spotlight Analysis used
to identify its 10 tribes.
Transactional information encompasses all of the information contained
within a single business process or unit of work, and its primary purpose is
to support the performing of daily operational tasks. Analytical
information encompasses all organizational information, and its primary
3. Illustrate the business process model used to identify the 10
tribes.
Student answers to this question will vary. Be sure they included the
following in their business process model
Gather data – neighborhood details, family sizes, spending patterns
Identify persons of voting age – 175 million people
4. Explain business process reengineering and how Obama’s team
used it to develop political micro-targeting.
Business process improvement attempts to understand and measure the
current process and make performance improvements accordingly.
Streamlining improves business process e-ciencies by simplifying or
eliminating unnecessary steps. Bottlenecks occur when resources reach
full capacity and cannot handle any additional demands; they limit
throughput and impede operations. Streamlining removes bottlenecks, an
important step if the e-ciency and capacity of a business process are
5. Formulate di2erent metrics the Obama team used to measure the
success of political micro-targeting.
Analyzing data was at the core of the Obama campaign and without
metrics the campaign would not have been able to tell if they were on
track or not. Potential metrics include:
- Number of democratic voters targeted to vote democratic
6. Argue for or against the following statement: Political
micro-targeting signals the dehumanization of politics.
Student answer to this question will vary. Some of the students will feel
that by specically targeting swing voters the Presidential candidate is
OPENING CASE TWO QUESTIONS
ACTIONLY
1. De5ne the three primary types of decision-making systems, and
explain how a customer of Actionly might use them to 5nd
business intelligence.
a. Decision-making skills are essential for all business professionals, at
every company level, who make decisions that run the business. At
the operational level, employees develop, control, and maintain
core business activities required to run the day-to-day operations.
b. At the managerial level, employees are continuously evaluating
company operations to hone the rm’s abilities to identify, adapt to,
and leverage change. Managerial decisions cover short- and
medium-range plans, schedules, and budgets along with policies,
procedures, and business objectives for the rm. These types of
c. At the strategic level, managers develop overall business strategies,
goals, and objectives as part of the company’s strategic plan. They
also monitor the strategic performance of the organization and its
overall direction in the political, economic, and competitive business
2. Describe the di2erence between transactional and analytical
information, and determine which types Actionly uses to create a
customer’s digital dashboard.
Transactional information encompasses all of the information contained
within a single business process or unit of work, and its primary purpose is
to support the performing of daily operational tasks. Analytical
information encompasses all organizational information, and its primary
3. Illustrate the business process model used by a customer of
Actionly following Twitter tweets.
Student answers to this question will vary. Be sure they included the
following in their business process model
Gather data
Identify followers
4. Explain business process reengineering and how Actionly used it
to create its unique business model.
Business process improvement attempts to understand and measure the
current process and make performance improvements accordingly.
Streamlining improves business process e-ciencies by simplifying or
eliminating unnecessary steps. Bottlenecks occur when resources reach
5. Formulate di2erent metrics Actionly uses to measure the success
of a customer’s marketing campaign.
Analyzing data is at the core of Actionly’s business model and without
metrics the company would not have function. Potential metrics include:
- Number of followers
- Number of Tweets
6. Argue for or against the following statement: Actionly invades
customer privacy by taking data from di2erent websites such as
Twitter and Flickr without the consent of the customer that posed the
information.
CRITICAL BUSINESS THINKING
Instructor Note: There are few right or wrong answers in the business
