Chapter 1
Information Systems in Global Business Today
Student Learning Objectives
1-1 How are information systems transforming business and why are they so
essential for running and managing a business today?
1-2 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
1-3 What academic disciplines are used to study information systems and how does
each contribute to an understanding of information systems?
Learning Catalytics is a “bring your own device” student engagement, assessment, and
classroom intelligence system. It allows instructors to engage students in class with real-
time diagnostics. Students can use any modern, web-enabled device (smartphone, tablet, or
laptop) to access it. For more information on using Learning Catalytics in your course,
contact your Pearson Representative.
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, 19 Information technology (IT) infrastructure, 22
Business model, 14 Input, 17
Business processes, 12 Internet, 21
Complementary assets, 26 Intranets, 22
Computer hardware, 21 Knowledge workers, 19
Computer literacy, 18 Management information systems (MIS), 18
Computer software, 21 Middle management, 19
Culture, 20 Network, 21
,Data, 16 Networking and telecommunications technology, 21
Data management technology, 21 Operational management, 19
Data workers, 19 Organizational and management capital, 27
Digital firm, 12 Output, 18
Extranets, 22 Processing, 17
Feedback, 18 Production or service workers, 19
Information, 16 Senior management, 19
Information system, 16 Sociotechnical view, 30
Information systems literacy, 18 World Wide Web, 22
Information technology (IT), 16
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.
After going over any requirements you may have for the course, try to give an overview of
the course stressing that this is not a technical course. Usually, you can’t do enough to put
non-technical types at ease.
The opening case, “The Grocery Store of the Future: Look at Kroger,” shows students that
even some of the most successful businesses must continually embrace technology
upgrades and improvements as a way to enhance customer value and increase a business’s
competitive advantage. Students will become familiar with the idea that many different
kinds of businesses have had to change the way they operate.
By collecting data about customer shopping patterns, purchase transactions, staffing levels,
and store layouts, Kroger can predict ways to meet customer demands and workloads more
efficiently and effectively.
,Stores have considerably reduced food waste by using technology to measure cold food
storage temperature changes that previously were done by workers. New sensor-based
systems cut down the number of cold products that go bad and have to be thrown out,
reduce labor, and save energy.
Because the grocery business is extremely competitive and low-margin, customer loyalty is
especially critical. Enhancing the mundane tasks of grocery shopping through enhanced
services made possible by technology goes a long way towards improving Kroger’s
competitive advantage over its rivals.
Section 1-1, “How are information systems transforming business and why are they so
essential for running and managing a 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.
Table 1-1 is a great way to introduce students to much of the new IT jargon that has
developed over the last several years. Most of the technologies will be discussed in future
chapters. Ask students how much hands-on experience they’ve had with some of the new
business tools as either an employee or a customer.
Globalization is affecting virtually every country in the world. The most striking
evidence of this trend is the increasing presence of cell phones in the very small villages
of Africa. As technology becomes more pervasive and, in some cases easier to use,
globalization will continue its steady march. China, Singapore, and Russia are good
examples of how globalization has flattened the world. They have become major
exporters to other countries, especially industrialized and advanced countries like the
United States and many European countries. Emerging countries like Poland, the
Ukraine, and Ireland, are excellent examples of increasing globalization.
, 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.
Review the six strategic business objectives: operational excellence; new products, services,
and business models; customer and supplier intimacy; improved decision making;
competitive advantage; and survival. The rest of the text will continually refer back to these
six objectives as reasons why firms should incorporate and integrate business processes
with information systems.
Interactive Session: Management: The Mobile Pocket Office
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, location-based
services, and communications with colleagues. These applications improve operational
efficiency and decision making by allowing people to communicate from wherever they are.
They are no longer tethered to one place or one machine. They can receive information and
data instantaneously that allows them to make better, faster decisions.
2. Identify the problems that businesses in this case study solved by using mobile
digital devices.
Sonic Automotive uses mobile device apps to speed up sales and service. Sales associates
have immediate access to vehicle information, pricing, trade-in values, interest rates, special
promotions, financing, and what competitors are charging for identical vehicles. The apps
have speeded up and simplified trade-in appraisals and pricing.
SKF, a global engineering company, uses mobile devices and apps to monitor factory
production lines. Operators using the apps are able to use secure instant messaging to
Information Systems in Global Business Today
Student Learning Objectives
1-1 How are information systems transforming business and why are they so
essential for running and managing a business today?
1-2 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
1-3 What academic disciplines are used to study information systems and how does
each contribute to an understanding of information systems?
Learning Catalytics is a “bring your own device” student engagement, assessment, and
classroom intelligence system. It allows instructors to engage students in class with real-
time diagnostics. Students can use any modern, web-enabled device (smartphone, tablet, or
laptop) to access it. For more information on using Learning Catalytics in your course,
contact your Pearson Representative.
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, 19 Information technology (IT) infrastructure, 22
Business model, 14 Input, 17
Business processes, 12 Internet, 21
Complementary assets, 26 Intranets, 22
Computer hardware, 21 Knowledge workers, 19
Computer literacy, 18 Management information systems (MIS), 18
Computer software, 21 Middle management, 19
Culture, 20 Network, 21
,Data, 16 Networking and telecommunications technology, 21
Data management technology, 21 Operational management, 19
Data workers, 19 Organizational and management capital, 27
Digital firm, 12 Output, 18
Extranets, 22 Processing, 17
Feedback, 18 Production or service workers, 19
Information, 16 Senior management, 19
Information system, 16 Sociotechnical view, 30
Information systems literacy, 18 World Wide Web, 22
Information technology (IT), 16
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.
After going over any requirements you may have for the course, try to give an overview of
the course stressing that this is not a technical course. Usually, you can’t do enough to put
non-technical types at ease.
The opening case, “The Grocery Store of the Future: Look at Kroger,” shows students that
even some of the most successful businesses must continually embrace technology
upgrades and improvements as a way to enhance customer value and increase a business’s
competitive advantage. Students will become familiar with the idea that many different
kinds of businesses have had to change the way they operate.
By collecting data about customer shopping patterns, purchase transactions, staffing levels,
and store layouts, Kroger can predict ways to meet customer demands and workloads more
efficiently and effectively.
,Stores have considerably reduced food waste by using technology to measure cold food
storage temperature changes that previously were done by workers. New sensor-based
systems cut down the number of cold products that go bad and have to be thrown out,
reduce labor, and save energy.
Because the grocery business is extremely competitive and low-margin, customer loyalty is
especially critical. Enhancing the mundane tasks of grocery shopping through enhanced
services made possible by technology goes a long way towards improving Kroger’s
competitive advantage over its rivals.
Section 1-1, “How are information systems transforming business and why are they so
essential for running and managing a 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.
Table 1-1 is a great way to introduce students to much of the new IT jargon that has
developed over the last several years. Most of the technologies will be discussed in future
chapters. Ask students how much hands-on experience they’ve had with some of the new
business tools as either an employee or a customer.
Globalization is affecting virtually every country in the world. The most striking
evidence of this trend is the increasing presence of cell phones in the very small villages
of Africa. As technology becomes more pervasive and, in some cases easier to use,
globalization will continue its steady march. China, Singapore, and Russia are good
examples of how globalization has flattened the world. They have become major
exporters to other countries, especially industrialized and advanced countries like the
United States and many European countries. Emerging countries like Poland, the
Ukraine, and Ireland, are excellent examples of increasing globalization.
, 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.
Review the six strategic business objectives: operational excellence; new products, services,
and business models; customer and supplier intimacy; improved decision making;
competitive advantage; and survival. The rest of the text will continually refer back to these
six objectives as reasons why firms should incorporate and integrate business processes
with information systems.
Interactive Session: Management: The Mobile Pocket Office
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, location-based
services, and communications with colleagues. These applications improve operational
efficiency and decision making by allowing people to communicate from wherever they are.
They are no longer tethered to one place or one machine. They can receive information and
data instantaneously that allows them to make better, faster decisions.
2. Identify the problems that businesses in this case study solved by using mobile
digital devices.
Sonic Automotive uses mobile device apps to speed up sales and service. Sales associates
have immediate access to vehicle information, pricing, trade-in values, interest rates, special
promotions, financing, and what competitors are charging for identical vehicles. The apps
have speeded up and simplified trade-in appraisals and pricing.
SKF, a global engineering company, uses mobile devices and apps to monitor factory
production lines. Operators using the apps are able to use secure instant messaging to
