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Chapter 1
Information Systems in Global Business Today
Learning Objectives
1. How are information systems transforming business and what is their relationship
to globalization?
2. Why are information systems so essential for running and managing a business
Chapter Outline
1.1 The Role of Information Systems in Business Today
How Information Systems Are Transforming Business
What’s New in Management Information Systems?
1.2 Perspectives on Information Systems
What Is an Information System?
1.3 Contemporary Approaches to Information Systems
Technical Approach
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
Business functions, 49
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Complementary assets, 57
Computer hardware, 51
Computer literacy, 48
Computer software, 51
Information technology (IT), 45
Information technology (IT) infrastructure, 51
Input, 46
Internet, 51
Intranets, 51
Senior management, 49
Sociotechnical view, 60
World Wide Web, 51
Teaching Suggestions
You are probably meeting in the first class session to introduce yourself, the course, and
to meet the students. It is good to get to the classroom early and meet the students as they
come in. Learn a few names as the students enter.
customer value and increase the business’s competitive advantage. Students will start to
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become familiar with the idea that many different kinds of businesses have had to change
the way they operate, even forest machines manufacturers. Not only does the technology
used by Ponsse create cutting plans to optimize the yield for a particular logging area, it
Section 1.1, “The Role of Information Systems in Business Today,” gives students a
feel for the importance of information systems in business today and how they have
transformed businesses on the world stage. A good discussion of the six important
business objectives outlined in this section allows the instructor and students to discuss
why businesses have become so dependent on information systems today and the
importance of these systems for the survival of a firm. Stress to students that information
systems are not a luxury. In most businesses they are the core to survival. This would be
a good time to ask students to discuss how their own schools are using information
systems to enhance their product offering.
Ask students to provide examples of truly digital firms (Cisco Systems and Dell
Computers) as opposed to those businesses (local mom-and-pop stores or a local doctor’s
office) that still perform many business processes outside of integrated information
systems.
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Interactive Session: Organizations: Running the Business from the Palm of Your
Hand
Case Study Questions
1. What kinds of applications are described here? What business functions do they
support? How do they improve operational efficiency and decision making?
Email, messaging, social networking, and salesforce management are described in
this case study. The applications support business functions including collaboration,
2. Identify the problems that businesses in this case study solved by using mobile
digital devices.
Jackson Kayak’s CEO, Eric Jackson monitors industry trends in the field and meets
directly with dealers and customers to maintain a strong customer focus. He uses an
iPhone and iPad to run his entire 120-person company from afar. His iPad gives him
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3. What kinds of businesses are most likely to benefit from equipping their
employees with mobile digital devices such as iPhones, iPads, and BlackBerrys?
Any business with a need to communicate with customers, suppliers, and business
colleagues can benefit from equipping employees with mobile digital devices.
4. One company deploying iPhones has said, “The iPhone is not a game changer,
it’s an industry changer. It changes the way that you can interact with your
customers and with your suppliers.” Discuss the implications of this statement.
First and foremost, those that effectively and efficiently deploy mobile digital device
technology gain a huge competitive advantage over those who do not use the
Section 1.2, “Perspectives on Information Systems,” gives students the facts and
definitions that underpin information systems and allow students to knowledgeably
discuss information systems. Students do not need the knowledge of a technical person,
but they do need to understand the role of information technology and how it must
support the organization’s business strategy. They must also understand how information
technology can be used to help transform a business. Note that the chapter’s definitions
and terms help prepare students to discuss information systems as an intricate part of
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Ask students why some companies can achieve much better results using information
systems while others cannot. That will help them understand the concept of
complementary assets and show that there is much more to building a digital firm than
simply buying the latest, greatest hardware and software. It will also help them
understand the delicate relationship between technology, management, and organizations
assets.
Interactive Session: Technology: UPS Competes Globally with Information
Technology
Case Study Questions
1. What are the inputs, processing, and outputs of UPS’s package tracking system?
Inputs: The inputs include package information, customer signature, pickup,
delivery, time-card data, current location (while en route), and billing and customer
2. What technologies are used by UPS? How are these technologies related to
UPS’s business strategy?
Technologies include handheld computers (DIADs), barcode scanning systems, wired
and wireless communications networks, desktop computers, UPS’s central computer
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3. What strategic business objectives do UPS’s information systems address?
• Operational excellence: UPS has maintained leadership in small-package deliver
4. What would happen if UPS’s information systems were not available?
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Arguably, UPS might not be able to compete effectively without technology. If the
technology were not available, then UPS would, as it has through most of its history,
Section 1.3, “Contemporary Approaches to Information Systems”
Too often, information systems are thought to be all about hardware and software. Issues
that focus on human behavioral aspects of information systems are overlooked or
minimized. That can lead to disaster. Figure 1-9 (page 59) may help you explain
contemporary approaches to information systems.
After contrasting the technical and behavioral approaches, you should stress to your
students that the sociotechnical approach does not ignore the technical, but considers it as
a part of the organization.
Review Questions
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
Identify three major new information system trends.
Three information system trends that are influencing the way businesses interact with
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Describe the characteristics of a digital firm.
• Significant business relationships with customers, suppliers, and employees
are digitally enabled and mediated.
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Describe the challenges and opportunities of globalization in a “flattened” world.
Customers no longer need to rely on local businesses for products and services. They
can shop 24/7 for virtually anything and have it delivered to their door or desktop.
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
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,
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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
Distinguish between data and information and between information systems
literacy and computer literacy.
• Data are streams of raw facts representing events occurring in organizations or
the physical environment before they have been organized and arranged into a
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 that
information systems play in organizations. These two tools are responsible for the
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.
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Describe the complementary social, managerial, and organizational assets
required to optimize returns from information technology investments.
Table 1-3 (page 57) lists the complementary social, managerial, and organization
assets required to optimize returns from information technology investments. Here
are a few of them:
Organizational assets:
Managerial assets:
• Strong senior management support for technology investment and change
Social assets:
• The Internet and telecommunications infrastructure
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
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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
Describe the sociotechnical perspective on information systems.
A sociotechnical perspective combines the technical approach and behavioral
Discussion Questions
1. Information systems are too important to be left to computer specialists. Do you
agree? Why or why not?
Although student answers will vary, this is a good place to reiterate that information
systems are more than just technology. Information systems development and usage
2. If you were setting up the Web site for Disney World visitors, what management,
organization, and technology issues might you encounter?
Answers will vary, however a good starting point is to use Table 1-2 (page 50) to
flush out some suggestions.
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Technology—typical problems include:
• Insufficient or aging hardware
Management—typical problems include:
• Lack of employee training
3. What are some of the organizational, managerial, and social complementary
assets that help make UPS’s information systems so successful?
Table 1-3 (page 57) of the text provides a list of complementary social, managerial,
and organizational assets required to optimize returns from information technology
investments.
Organizational assets:
• Supportive organizational culture that values efficiency and effectiveness
Managerial assets:
• Strong senior management support for technology investment and change
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Social assets:
• The Internet and telecommunications infrastructure
Hands-On MIS Projects
This section gives students an opportunity to analyze real world information systems
needs and requirements. It provides several exercises you can use to determine if students
are grasping the material in the chapter.
Management Decision Problems
1. Snyder’s of Hanover: The financial department uses spreadsheets and manual
2. Dollar General Corporation: Wants to keep costs as low as possible so it does not
use an automated method for keeping track of inventory at each store. What decisions
have to be made before investing in an information system solution?
• Determine business problems—mismanagement of inventory, too little or too
Improving Decision Making: Using Databases to Analyze Sales Trends:
Software skills: Database querying and reporting
Business skills: Sales Trend Analysis
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• Which products should be restocked?
• Which stores and sales regions would benefit from a promotional campaign
and additional marketing?
• Which times of the year should products be offered at full price?
• Which times of the year should products be discounted?
The answers to these questions can be found in the Microsoft Access File named:
MIS13ch01_solutionfile.mdb
Video Case Questions
You will find a video case illustrating some of the concepts in this chapter on the Laudon
Collaboration and Teamwork: Creating a Web Site for
Team Collaboration
Form a team with three or four classmates. Then use the tools at Google Sites to
create a Web site for your team. You will need to create a Google account for the
projects.
Use this checklist to ensure all elements of the Web site have been created:
• Create a Google account
• Specify collaborators
• Specify your professor as site viewer
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Use this checklist to evaluate the elements of the Web site:
• Are the page contents fairly well-organized?
Case Study: Mashaweer
1. What kinds of information systemsare described in this case? What business
functions do they support?
There are a number of information systems in this case—Mashaweer server,
2. What are the benefits from equipping Mashaweerriders with PDAs?
PDAs play a crucial role in helping the rider to reach the customer destination, and
3. Was expansion into Cairo a good decision?
(Student answers may vary.This sample answer supports the decision.)Mashaweer
chose the right time to enter Cairo during the recession period after the January
4. Do you think that Mashaweer will be able to accomplish its future strategy and
sustain its market share?
Mashaweer’smarket share was 100% at the beginning because it was the first
personal service company in Egypt to offer personal assistant services 24 hours a day.
5. In the near future, do you think the competition between Mashaweer and Wassaly
will become aggressive? Why or why not?
Although both companies are in the same industry, targeting the same-day delivery
objective, Mashaweer has several advantages. First, it invested heavily in