Laudon PPT ch01 Cut

Management Information Systems:
Managing the Digital Firm

Seventeenth Edition, Global Edition
Chapter 1
Information Systems in Global
Business Today
Dr Natheer Gharaibeh
https://www.youtube.com/playlist?list=PLp-
GLxmbWefD_Wk5jFJ2u3BEgRakhCKQK
Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved
Learning Objectives Back
1.1 How are information systems transforming business, What’s New in Management Information
Systems 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 Dimensions: management,
organization, and technology components? It Isn’t Just Technology: A Business
Perspective on Information Systems .
1.3 What academic disciplines are used to study information systems, and how does each contribute to
an understanding of information systems?
1.1 ‫ ما الجديد في أنظمة المعلومات اإلدارية ولماذا هي ضرورية جدًا لتشغيل وإدارة األعمال اليوم؟‬،‫كيف تعمل أنظمة المعلومات على تحويل األعمال‬
1.2 ‫ما هو نظام المعلومات؟ كيف يعمل؟ وما هي أبعادها‬: ‫مكونات اإلدارة والتنظيم والتكنولوجيا؟ إنها ليست مجرد تكنولوجيا‬: ‫منظور األعمال في نظم‬
‫المعلومات‬.
1.3 ‫ وكيف يساهم كل منها في فهم نظم المعلومات؟‬،‫ما هي التخصصات األكاديمية المستخدمة لدراسة نظم المعلومات‬
Strategic Business Objectives of Back
Information Systems >>Why…

• What makes information systems so essential today? Why are businesses
investing so much in information systems and technologies?
• Information systems are essential for conducting day-to-day business in

most advanced countries as well as achieving strategic business objectives.
• E-commerce firms such as Amazon, eBay, Google, and ETrade simply would
not exist. Today’s service industries— finance, insurance, and real estate as
well as personal services such as travel, medicine, and education—could not
operate without information systems. Similarly, retail firms such as Walmart
and Tesco and manufacturing firms such as General Motors and Siemens
require information systems to survive and prosper.
Information Systems (1 of 2)
What a business would like
• Growing interdependence between: to do in five years often
– Ability to use information technology depends on what
systems will be able to do
its
– Ability to implement corporate strategies and achieve

corporate goals >> (see Figure 1.2)
The more you understand about this relationship, the more
valuable you will be as a manager. Specifically, business
firms invest heavily in information systems to achieve six
strategic business objectives:
Figure 1.2 The Interdependence Between Back
Organizations and Information Systems

Increasing market share,
becoming the high-quality
or low-cost producer,
developing new
products,
and increasing
employee productivity
depend more and more on the kinds and quality of information systems in the
organization.
Information Systems (2 of 2)
• Firms invest heavily in information systems to achieve six
strategic business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
1- Operational Excellence Back
• Improved efficiency results in higher profits

• Information systems and technologies help improve
efficiency and productivity
• Example: Walmart
– Power of combining information systems and best
business practices to achieve operational efficiency—
and over $524 billion in sales in 2019
– Most efficient retail store in world as result of digital
links between suppliers and stores
2- New Products, Services, and Back
Business Models
• Information systems and technologies enable firms to create
new products, services, and business models
• Business model: how a company produces, delivers, and sells
its products and services
• Example: Apple
– Transformed old model of music distribution with iTunes
– Constant innovations—iPod, iPhone, iPad, etc.
3-Customer and Supplier Intimacy Back
• Customers who are served well become repeat customers who

purchase more
– Example: Mandarin Oriental Hotel
– Uses IT to foster an intimate relationship with its customers,
keeping track of preferences, etc.
• Close relationships with suppliers result in lower costs
– Examples: Mandarin Oriental Hotel and JC Penney (in text)
– JC Penney uses IT to enhance relationship with supplier in
Hong Kong
4- Improved Decision Making Back
• Without accurate information, managers must use

forecasts, best guesses, and luck, resulting in
misallocation of resources, inventory, employees
• Real-time data improves ability of managers to make
decisions
– Example: Verizon’s web-based digital dashboard to
provide managers with real-time data on customer
complaints, network performance, line outages, etc.
5- Competitive Advantage Back
• Often results from achieving previous business objectives

• Advantages over competitors
– Charging less for superior products, better performance,
and better response to suppliers and customers
– Examples: Apple, Walmart, UPS are industry leaders
because they know how to use information systems for this
purpose
6- Survival Back
• Businesses may need to invest in information systems out

of necessity; it is simply the cost of doing business
• Keeping up with competitors
– Citibank’s introduction of ATM
– Federal and state regulations and reporting requirements
– Toxic Substances Control Act and the Sarbanes-Oxley
Act
What Is an Information System? (1 of 3) Back
• Information technology: the hardware and software a

business uses to achieve objectives
• Information system: interrelated components that manage
information to:
• Support decision making and control (as in ch2:TPS ,MIS, DSS and
ESS , in addition to the new Systems that Link all the Enterprise :
Enterprise Systems , SCM , CRM and KMS )
– Help with analysis, visualization, and product creation
• Data: streams of raw facts
• Information: data shaped into meaningful, useful form
Figure 1.3 Data and Information Back
What Is an Information System? Back
(2 of 3)
• Activities in an information system that produce
information:
– Input
– Processing
– Output
– Feedback
• Sharp distinction between computer or computer program
versus information system
What is an Information System? Back
(3 of 3)
• Feedback
– Output is returned to appropriate members of
organization to help evaluate or correct input stage
• Computer/computer program vs. information system
– Computers and software are technical foundation and
tools, similar to the material and tools used to build a
house
Figure 1.4 Functions of an Back
Information System
Smart Shelf by AWM
Dimensions of Information Systems Back
• To fully understand information systems, you must

understand the broader Dimensions of
1. Organizations
2. Management
3. Technology
MIS deals with behavioral issues as well as technical issues

surrounding the development, use, and impact of information systems
used by managers and employees in the firm.
Figure 1.5 Information Systems Are Back
More Than Computers
Dimensions of Information Systems: Back
1- Organizations (1 of 2)
• Hierarchy of authority, responsibility
– Senior management
– Middle management
– Operational management
– Knowledge workers
– Data workers
– Production or service workers
Figure 1.6 Levels in a Firm Back
makes long-range strategic

decisions about products and
services as well as ensures
financial performance of the
firm
rries out the
ograms and Knowledge workers, such as engineers,
ans of senior scientists, or architects, design products or services
anagement, and create new knowledge for the firm
data workers, such as secretaries or clerks,
is responsible for
monitoring the daily assist with scheduling and communications at
activities of all levels of the firm.
the business. Production or service workers actually produc
the product and deliver the service
as in ch2:TPS ,MIS, DSS and ESS , in Back
addition to the new Systems that Link all
the Enterprise : Enterprise Systems , SCM
, CRM and KMS
1- Organizations (2 of 2)
• Separation of business functions
– Sales and marketing
– Human resources
– Finance and accounting
– Manufacturing and production
• Unique business processes
• Unique business culture
• Organizational politics
24
Figure 1-1 Management Pyramid with Information Requirements Back
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Quiz2 – 5 mins
So what are the functional area’s?
Back
1. This functional area is typically responsible for recruitment and the

well being of it’s employees______
2. This functional area is responsible for defining the strategy and
steering the direction of the company ______
3. This functional area is responsible for ensuring that communication
and computer equipment is provided and supported ______
4. This functional area is responsible for promoting the company’s
services and attracting customers ______
5. This functional area is responsible for running and/or producing the
company’s services and products ______
Operations
Management / Administration
Marketing
Human Resources (HR)
Information Communication Technology (ICT)or IT
Quiz – 5 mins Back
So what are the functional area’s?

1. This functional area is typically responsible for recruitment and the well being
of it’s employeesHuman
______Resources
(HR)
2. This functional area is responsible for defining the strategy and steering the
direction of the company ______
Management /
Administration
3. This functional area is responsible for ensuring that communication and
computer equipment is provided and supported ______
Information Communication
Technology (ICT)or IT
4. This functional area is responsible for promoting the company’s services and
attracting customers ______
Marketing
5. This functional area is responsible for running and/or producing the

company’s services and products Operations
______ Operations
Management / Administration
Marketing
Human Resources (HR)
Information Communication Technology (ICT)or IT
2-Management
• Managers set organizational strategy for responding to
business challenges
• In addition, managers must act creatively
– Creation of new products and services
– Occasionally re-creating the organization
3-Information Technology
• Computer hardware and software
• Data management technology
• Networking and telecommunications technology
– Networks, the Internet, intranets and extranets, World
Wide Web
• IT infrastructure: provides platform that system is built on
It Isn’t Just Technology: A Business Back
Perspective on Information Systems

(1 of 3)
• Information system is instrument for creating value
• Investments in information technology should result in
superior returns
– Productivity increases
– Revenue increases
– Superior long-term strategic positioning

(2 of 3)
• Business information value chain
– Raw data acquired and transformed through stages that add

value to that information
– Value of information system determined in part by extent to which
it leads to better decisions, greater efficiency, and higher profits
• Business perspective
– Calls attention to organizational and managerial nature of
information systems

(3 of 3)
• Investing in information technology does not guarantee good
returns
• There is considerable variation in the returns firms receive from
systems investments
• Factors
– Adopting the right business model
– Investing in complementary assets (organizational
and management capital)
Figure 1.7 The Business Information Back
Value Chain
Figure 1.9 Contemporary Approaches Back
to Information Systems
Technical Approach Back
• Emphasizes mathematically based models

• Computer science, management science, operations
research
Behavioral Approach Back
• Behavioral issues (strategic business integration,

implementation, etc.)
• Psychology, economics, sociology
Approach of This Text: Back
Sociotechnical Systems (1 of 2)
• Management information systems
– Combine computer science, management science,
operations research, and practical orientation with
behavioral issues
• Four main actors
– Suppliers of hardware and software
– Business firms
– Managers and employees
– Firm’s environment (legal, social, cultural context)
Approach of This Text: Back
Sociotechnical Systems (2 of 2)
• Sociotechnical view
– Optimal organizational performance achieved by jointly
optimizing both social and technical systems used in
production
– Helps avoid purely technological approach
Figure 1.10 A Sociotechnical Back

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Management Information Systems:

Managing the Digital Firm

Information Systems >>Why…

• Information systems are essential for conducting day-to-day business in

– Ability to implement corporate strategies and achieve

Organizations and Information Systems

• Improved efficiency results in higher profits

• Customers who are served well become repeat customers who

• Without accurate information, managers must use

• Often results from achieving previous business objectives

• Businesses may need to invest in information systems out

• Information technology: the hardware and software a

Smart Shelf by AWM

• To fully understand information systems, you must

MIS deals with behavioral issues as well as technical issues

More Than Computers

makes long-range strategic

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

1. This functional area is typically responsible for recruitment and the

So what are the functional area’s?

5. This functional area is responsible for running and/or producing the

Perspective on Information Systems

Perspective on Information Systems

– Raw data acquired and transformed through stages that add

Perspective on Information Systems

• Emphasizes mathematically based models

• Behavioral issues (strategic business integration,

Perspective on Information Systems

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