Chapter 17: Managing Information
388
2. How important is it that the medical records system you select for your practice reflects the industry
standard?
On one hand, conforming to an industry standard is not crucial. By deciding to switch to the iPad, the
medical office will be looking to create a sustainable competitive advantage by using information
3. Do the benefits of having a computerized medical records system outweigh the costs involved in
setting that system up?
Management Team Decision
HOW MUCH SHOULD WE TELL?
Purpose
In this case, students are given an opportunity to think about how a company should share information
with consumers about their products.
Setting It Up
You can introduce the case to students by asking them how they would share bad news about a
Questions
1. What are the advantages and disadvantages of releasing information about the signal reliability of your
phones to the public?
One of the clear advantages is that it gives consumers a level of peace of mind, knowing that your
company is being forthright about the performance reliability of its products. By releasing to the public
2. How could you use this information to gain a competitive advantage over other manufacturers who do
not publicize?
By releasing this data, the company makes a very public commitment to the quality of its phones. While
competitors only give vague assurances that their phones are “good,” your company can release credible
Chapter 17: Managing Information
389
Practice Being a Manager
INFORMATION PIPELINE
Exercise Overview and Objective
This exercise requires students to work with a partner to develop an appealing concept for starting a new
Preparation
No student preparation is required for this exercise. One option, however, is to assign students to their
pairs a session or two prior to conducting the exercise, and to encourage the pairs to explore and
brainstorm ideas for new business ventures. Some students may want to interview one or two
entrepreneurs, or to consult some demographic research in search for important patterns or trends.
You should decide how much detail to require on each of the tasks listed in Step 1. For example, at a
general level students may simply brainstorm about what permits, licenses, and regulatory approvals
might be necessary to start their business. At a more specific level, you might require students to research
In-Class Use
You may want to invite a local entrepreneur and/or a CIS faculty member to the debriefing of this
exercise. These experts should play a constructive role as coaches, perhaps roaming around as pairs are
working on their plans and raising questions or making suggestions.
Once all pairs have had adequate time to develop their concept and complete the tasks in Steps 1 and
2, you should move directly to class discussion. The questions that might frame this discussion are
included in Step 3:
• “What are the major challenges in creating and maintaining a sustainable competitive advantage?
• What role does information and information technology play in successfully competing with
Chapter 17: Managing Information
390
concern).” The problem should be accessible to students (vs. a technical problem wrapped in industry
jargon). Experts are naturally excited about their area(s) of expertise, and this enthusiasm is often quite
contagious—so long as it does not overwhelm.
In debriefing this exercise you should look for evidence that students have learned at least one or two
Develop Your Career Potential
LEARN TO TALK TECH
Purpose
To encourage students to become computer literate and to help them see the connection between
computer literacy and successful management.
Setting It Up
There are several ways to handle this assignment. One way is to assign it as a journal exercise. Students
consult subscribe to the Webopedia “Term of the Day” and make a journal entry for each term, indicating
Activities
1. If you are completely new to IT, you might be more comfortable reading about it in the context of
your favorite business publication. Walter Mossberg has a regular technology column in the Wall
Street Journal, and Peter Lewis has a column titled “Gadgets,” which can always be found in the so–
called First section of Fortune magazine. Articles in both publications are on the shorter side, so take
an hour and read through a few weeks’ worth of each.
For this question, have students read a sampling of articles and then bring to class a summary of the
Reel to Real – Biz Flix
Because they are so short, the Biz Flix videos are best used to supplement your lesson plans. They are
designed to illustrate the content rather than convey all of the chapter concepts.
Video: The Good Shepherd
Chapter 17: Managing Information
391
Segment Summary:
In the 2006 film The Good Shephard, Edward Wilson (Matt Damon) is an idealistic young man who
values honor, morality, and discretion. As the head of the CIA counterintelligence, Wilson is in charge of
Discussion Questions from Text:
1. Which parts of the scene show data?
Whereas raw data consist of facts and figures, information is useful data that can influence someone’s
choices and behavior. This scene makes of mention numerous pieces of data. For example, the phrase
2. Which parts of the scene show information?
Whereas raw data consist of facts and figures, information is useful data that can influence someone’s
3. These film scenes show the information technology used during the 1960s at the CIA. In what ways
do you think this investigation might progress differently with modern technology?
Students may be surprised that technology was advanced enough to lead this type of investigation in
Additional Discussion Questions:
1. Assess the characteristics of the information presented in this video scene.
Information is useful when it is accurate, complete, relevant, and timely. The CIA operatives work
carefully to identify accurate information. For example, they say that the curtain pattern is “typically
2. Assess the costs of the information gathered and presented in this video scene.
Chapter 17: Managing Information
392
There can be significant acquisition, processing, storage, retrieval, and communication costs
associated with useful information. Acquisition cost is the cost of obtaining data that you don’t have.
Reel to Real – Management Workplace
Management Workplace videos can support several in-class uses. In most cases you can build an entire
50-minute class around them. Alternatively, they can provide a springboard into a group lesson plan. The
Management Workplace video for Chapter 17 would be a nice companion to your introduction to the
course on the first day teaching this chapter.
Video: Numi Organic Tea
The Value Chain, IT, and E-Business: Sustainable Supply Chain
Summary:
When Brian Durkee shows up at Numi Organic Tea every day to work as the director of operations, he’s
on a mission to make his company a worldwide leader in sustainable supply chain management. Setting
Discussion Questions from Text:
1. What kinds of challenges does Numi face in managing information?
Numi faces several challenges in managing information. First, it has the challenge of ensuring that all
of its employees and suppliers are creating quality products using sustainable, fair trade practices.
2. Why was it no longer sufficient for Numi to use programs like Excel and Quickbooks to manage its
information?
Brian indicated that in the early days, Numi operated using Excel and Quickbooks to manage its
information, which is what small business did in those days. Once the company began distributing to
Chapter 17: Managing Information
393
3. What are some of the advantages Durkee mentions that have come with using the ERP system?
Numi uses an ERP system to account for and manage inventories in multiple countries. The first
Workplace Video Quiz
Video Segment 1
Video segment title
Information
Start time (in sec)
0:00
Stop time (in sec)
3:07
Quiz Question 1
For Numi, all of the following represents information that is relevant to
sourcing tea from Chinese suppliers except:
Option a
The cost of labor in China
Option b
The cost of shipping from China
Option c
Regulatory and legal requirements for importing Chinese products
Option d
Tea supplies in South America
Correct option
d: tea supplies in South America
Quiz Question 2
In order to find out which suppliers in China are committed to sustainable
and fair trade practices, Numi has hired an independent certification
company to examine potential suppliers. The cost of hiring this company is
an example of:
Option a
Storage cost
Option b
Acquisition cost
Option c
Retrieval cost
Option d
Processing cost
Correct option
b: acquisition cost
Feedback for option a
Feedback for option b
Feedback for option c
Feedback for option d
Quiz Question 3
One reason many companies, like Numi, meet with their partners to share
knowledge and expertise is because knowledge:
Option a
Can only be shared face-to-face
Chapter 17: Managing Information
394
Option b
Is temporary
Option c
Resides in people
Video Segment 2
Video segment title
Sharing Information
Start time (in sec)
3:08
Stop time (in sec)
7:00
Quiz Question 1
Because Numi must share information with partner firms that are located
all around the world, it is likely to experience high:
Option a
Processing costs
Option b
Communication costs
Option c
Scanning costs
Option d
Regulatory costs
Correct option
b: communication costs
Correct. Communication cost is the cost of transmitting information from
Incorrect. . Communication cost is the cost of transmitting information
from one place to another.
Quiz Question 2
Which of the following systems would allow Numi to communicate its
ordering information efficiently with its partner companies?
Option a
ECG
Option b
EKG
Option c
EDI
Option d
EMO
Correct option
c: EDI
Feedback for option a
Incorrect. EDI, or electronic data interchange, allows two companies to
cover purchase and ordering information to a standard format to enable
electronic sharing of that information from one system to another.
Feedback for option b
Feedback for option d
Incorrect. EDI, or electronic data interchange, allows two companies to
Incorrect. EDI, or electronic data interchange, allows two companies to
cover purchase and ordering information to a standard format to enable
Correct option
c: resides in people.
Feedback for option a
Incorrect. Knowledge does not reside in information, but people.
Feedback for option b
Incorrect. Knowledge does not reside in information, but people.
Feedback for option c
Correct. Knowledge does not reside in information, but people.
Feedback for option d
Incorrect. Knowledge does not reside in information, but people.
cover purchase and ordering information to a standard format to enable
electronic sharing of that information from one system to another.
Quiz Question 3
Which of the following would help Numi’s partners put into practice
Numi’s specialized knowledge on sustainable practice?
Option a
Expert system
Option b
Decision support system
Option c
Corporate portal
Option d
Electronic data interchange
Correct option
a: expert system
nonexperts can draw on this knowledge base to make decisions.
specialized knowledge and decision rules used by experts so that
Review Questions
1. What is the difference between data and information? Why is the distinction important?
2. Discuss the strategic importance of information.
In today’s hypercompetitive business environments, information is critical for business success.
Businesses can’t survive and grow without the right information. Information has strategic
3. Identify and describe the characteristics and costs of useful information.
Raw data are facts and figures. Raw data do not become information until they are in a form that can
affect decisions and behavior. For information to be useful, it has to be reliable and valid (accurate),
Chapter 17: Managing Information
396
4. How do companies capture information?
There are two basic methods of capturing information: manual and electronic. Manual capture of
identification tags, and document scanners are methods of electronically capturing data.
5. Describe ways that managers can process the information they collect.
Processing information means transforming raw data into meaningful information that can be
applied to business decision making. With automated, electronic capture of data, increased processing
power, and cheaper and more plentiful ways to store data, managers no longer worry about getting
6. What kinds of security threats to information do managers contend with routinely?
Exhibit 17.3 details the following threats to information:
Security Problem
Source
Affects
The Threat
Trojan horses, and
rootkits
downloaded
and distributed
compromise security by sometimes concealing their
presence.
Denial of service
web server attacks
and corporate
Internet
hackers
All servers
Loss of data, disruption of service, and theft of service
software
Spyware, adware,
malicious scripts
and applets
Rogue web
pages
All users
Invade privacy, intercept passwords, and damage files
or file system.
E-mail snooping
& Internet
to PCs
Hackers on
your network
All users
People read your email from intermediate servers or
packets, or they physically access your machine.
Chapter 17: Managing Information
397
7. How do managers protect their information?
Protecting information ensures that data are reliably and consistently retrievable in a usable format by
8. How can companies use information technology to improve access to and sharing of information
within the organization?
Executives, managers, and workers inside the company use three kinds of information technology to
access and share information: executive information systems, intranets, and portals. An executive
9. How can companies use information technology to improve access to and sharing of information with
external organizations (e.g., customers, suppliers, etc.)?
A number of information technologies—electronic data interchange, extranets, Web services, and the
Internet—are making it easier to share company data with external groups like suppliers and
10. What is knowledge and how can it be shared throughout an organization.
Raw data consist of facts and figures, and information consists of useful data that influence
someone’s choices and behavior. But neither data nor information is the same as knowledge.
Additional Assignments and Activities
Out-of-Class Project: “Technology Case Study.” Divide the class into small groups. Each group should
research a real company (local, national or global) and provide ten ways in which the company uses
technology. This project should culminate in a paper and/or presentation given to the entire class.
In–Class Activity: “Classroom Technology.” Divide the class into small groups (3-4 students). Ask
bookstores, including: 1) the number of titles in print; 2) the prices; 3) delivery options, including
shipping prices; 4) the number of international titles; 5) the ease of searching for titles; and 6) anything
else that would be important to you as a customer. Does Amazon still have the first-mover advantage?
Which online bookstore would you be more likely to use? Why?
Select one car, which you would potentially be interested in purchasing. Discuss the importance of certain
characteristics of information in selecting your car: 1) accuracy; 2) completeness; 3) relevance; and 4)
timeliness. Give examples of each from this Web site.
has a privacy policy? Exactly what is guaranteed protection in this policy?
stops?), and prices of each of these airlines. Compare that information with what you find for the same
flight on Expedia.com, Travelocity, or Orbitz. Finally, call one or two travel agencies and see what they
can do. What are the advantages of using the Internet to reserve and purchase your tickets? What are the
disadvantages?
Computer Viruses. Use the Internet to get information about three types of antivirus software programs.
Compare the features and prices of each program. Which of these would you be most likely to buy? Why?
Which do you have now?