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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-GLxmb
WefD_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?
How Information Systems Are Back
Transforming Business
• Global spending on information technology (IT) and IT
services: nearly $3.8 trillion in 2019; $160 billion spent on
management consulting and services
• Organizational, management, and cultural changes are
often required for firms to derive full business value from IT
investments
What’s New in Management Back
Information Systems (1 of 3)
• I T Innovations are transforming the traditional business world.
– Cloud computing, big data, Internet of Things
– Mobile digital platform These are enabling entrepreneurs and innovative traditional firms
to create new products and services, transform the day-to-day
– AI and machine learning conduct of business. , some old businesses, even industries, are
being destroyed while new businesses are springing up.
– Use of social networks for business objectives

• New Business Models (pp 38)
– Online streaming and downloadable video
▪ Examples: Netflix, Apple TV Channels, Amazon
• E-commerce Expansion
– E-commerce worldwide expands to nearly $3.6 trillion in 2019
– Growth in social commerce spurred by growth of mobile platform
– Mobile retail e-commerce growing more than 20 percent a year,
reaching almost $300 billion in 2020
• Management Changes
– Managers becoming more mobile
– Managers use social networks, collaboration tools
– Business intelligence applications accelerate
• Firms and Organizations Change
– More collaborative, less emphasis on hierarchy and
structure
– Greater emphasis on competencies and skills
– Higher-speed/more accurate decision making based on data
and analysis
– More willingness to interact with consumers (social media)
– Better understanding of the importance of I T
Globalization Challenges and Back
Opportunities: A Flattened World

• Prior to AD 1500, there was no truly global economic system of trade that connected all
the continents on earth although there were active regional trade markets. After the
sixteenth century, a global trading system began to emerge based on advances in
navigation and ship technology. The world trade that ensued after these developments has
brought the peoples and cultures of the world much closer together.
• The Industrial Revolution was really a worldwide phenomenon energized by expansion of

trade among nations, making nations both competitors and collaborators in business. The
Internet has greatly heightened the competitive tensions among nations as global trade
expands..
• From Quora: shorturl.at/fyKOW
Back
Timeline of industrial progress

• What is industry 4.0?
Back
Globalization Challenges and
• In 2005, journalist Thomas Friedman wrote an influential book
declaring the world was now “flat,” by which he meant that the Internet
and global communications had greatly reduced the economic and
cultural advantages of developed countries. Friedman argued that the
United States and European countries were in a fight for their
economic lives, competing for jobs, markets, resources, and even
ideas with highly educated, motivated populations in low-wage areas
in the less-developed world (Friedman, 2007). This “globalization”
presents both challenges and opportunities for business firms.
• What does globalization have to do with management

information systems?
• That’s simple: everything. The emergence of the Internet into a

full-blown international communications system has drastically
reduced ..
Globalization Challenges and Back

• Internet and global communications have greatly changed
how and where business is done
– Drastic reduction of costs of operating and transacting
on global scale
– Competition for jobs, markets, resources, ideas
– Growing interdependence of global economies
– Requires new understandings of skills, markets,
opportunities
Briefly, information systems enable globalization
Pp 12
The Emerging Digital Firm Back
• In a fully digital firm:

– Significant business relationships are digitally enabled
and mediated
– Core business processes are accomplished through
digital networks PP 42 (A detailed discussion of business
processes can be found in Chapter 2.)
– Key corporate assets are managed digitally

▪ Key corporate assets—intellectual property, core competencies,
and financial and human assets— are managed through digital
means.
The Emerging Digital Firm Back
• Digital firms sense and respond to their environments far more rapidly
than traditional firms, giving them more flexibility to survive in turbulent
times.
• Digital firms offer greater flexibility in organization and management
– Time shifting, space shifting
▪ Time shifting refers to business being conducted continuously, 24/7, rather
than in narrow “work day” time bands of 9 a.m. to 5 p.m. Space shifting means
that work takes place in a global workshop as well as within national
boundaries. Work is accomplished physically wherever in the world it is best
accomplished
• Many firms, such as Cisco Systems, 3M, and GE, are

close to becoming digital firms,
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.
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.
• 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 I T 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 J C Penney (in text)
– J C Penney uses I T 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, U P S 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 A T Ms
• Federal and state regulations and reporting requirements
– Toxic Substances Control Act and the Sarbanes-Oxley
Act
What Is an Information System? Back
(1 of 3)
• 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
– 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
carries out the
programs and Knowledge workers, such as engineers,
plans of senior scientists, or architects, design products or service
management, 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
32
Figure 1-1 Management Pyramid with Information Requirements Back
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Back
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
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
• I T 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
Management Information Systems:
Managing the Digital Firm
Seventeenth Edition, Global Edition
Chapter 2
Global E-Business and
Collaboration
Dr Natheer Gharaibeh
Learning Objectives Back
2.1 What are business processes? How are they related to

information systems?
2.2 How do systems serve the different management groups
in a business, and how do systems that link the
enterprise improve organizational performance?
2.3 Why are systems for collaboration and social business
so important, and what technologies do they use?
Enterprise Social Networking Transforms Sharp Back
Corporation into a More Innovative Connected

Organization (1 of 2)
• Problem
– Hierarchical top-down processes
– New competitors
– Lack of collaboration and idea sharing
• Solutions
– Develop knowledge-sharing strategy and goals
– Redesign knowledge-sharing and collaboration processes
– Change organizational culture
– Implement Microsoft Yammer collaboration software
Enterprise Social Networking Transforms Sharp Back
Corporation into a More Innovative Connected

Organization (2 of 2)
• Use of new information systems to improve performance
and remain competitive
• Demonstrates importance of teamwork and collaboration
for innovation and profit growth
• Illustrates importance of organizational culture and
business processes for knowledge dissemination
Back
Business Processes (1 of 2) Back
• Business processes
– Flows of material, information, knowledge
– Logically related set of tasks that define how specific
business tasks are performed
– May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business
processes Intangible assets,
also known as
• Business processes may be assets or liabilities organizational
capabilities are
goods of a
non-physical
Processes Back
Processes are easy to understand as a concept, they are
simply the entire set of things a company does to deliver
actionable items.
“Invoicing a client” would be a simple example of a
process.
Activities, it’s best to think of them as the set of tasks
that lead to a milestone in a process.
Tasks : is a step-by-step instructions you’d give
someone if you wanted them to complete an activity.
From invoicing example, we said that collecting the
client’s info is an activity that is part of the invoicing
process, but from the task perspective, it will involve
steps: ask the client for their info, enter it into the system,
submit it to the client database.
Back
• If you can't describe what

you are doing as a
process, you don't know
what you're doing.
- Edwards Deming
Business Processes (2 of 2) Back
• Examples of functional business processes

– Manufacturing and production
▪ Assembling the product
– Sales and marketing
▪ Identifying customers
– Finance and accounting
▪ Creating financial statements
– Human resources
▪ Hiring employees
Back
TABLE 2.1 EXAMPLES OF FUNCTIONAL BUSINESS PROCESSES
• Table 2.1 describes some typical business processes for each of the
functional areas of business.
Figure 2.1 The Order Fulfillment Process Back
cross many different functional areas

and require coordination across
departments.
How Information Technology Improves Back
Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes
– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models
Systems for Different Management Back
Groups (1 of 2)
• Transaction processing systems
– Serve operational managers and staff
– Perform and record daily routine transactions necessary to
conduct business
▪ Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations and
relations with external environment
– Serve predefined, structured goals and decision making
Figure 2.2 A Payroll T P S Back
Systems for Different Management Back
Groups (2 of 2)
• Systems for business intelligence
– Data and software tools for organizing and analyzing
data
– Used to help managers and users make improved
decisions
• Management information systems
• Decision support systems
• Executive support systems
Management Information Systems Back
• Serve middle management

• Provide reports on firm’s current performance, based on
data from T P S
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability
Figure 2.3 How Management Information Back
Systems Obtain Their Data from the

Organization’s T P S
Figure 2.4 Sample M I S Report Back
Consolidated Consumer Products Corporation Sales by Product and Sales Region: 2020
Decision Support Systems Back
• Serve middle management

• Support nonroutine decision making
– Example: What is the impact on production schedule if
December sales doubled?
• May use external information as well as T P S / M I S data
• Model driven D S S
– Voyage-estimating systems
• Data driven D S S
– Intrawest’s marketing analysis systems
Figure 2.5 Voyage-Estimating Back
Decision-Support System
Executive Support Systems Back
• Support senior management

• Address nonroutine decisions
– Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g., new tax laws
or competitors) as well as summarized information from
internal M I S and D S S
• Example: Digital dashboard with real-time view of firm’s
financial performance
Enterprise Applications Back
• Systems for linking the enterprise

• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems
Figure 2.6 Enterprise Application Architecture Back
Enterprise Systems Back
• Also called enterprise resource planning (E R P) systems

• Integrate data from key business processes into single
system
• Speed communication of information throughout firm
• Enable greater flexibility in responding to customer
requests, greater accuracy in order fulfillment
• Enable managers to assemble overall view of operations
Supply Chain Management (S C M) Back
Systems
• Manage relationships with suppliers, purchasing firms,
distributors, and logistics companies
• Manage shared information about orders, production, inventory
levels, and so on
• Goal is to move correct amount of product from source to point
of consumption as quickly as possible and at lowest cost
• Type of interorganizational system: Automating flow of
information across organizational boundaries
Customer Relationship Management Back
(C R M) Systems
• Help manage relationship with customers
• Coordinate business processes that deal with customers in sales,
marketing, and customer service
• Goals:
– Optimize revenue
– Improve customer satisfaction
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales
Knowledge Management Systems Back
(K M S)
• Manage processes for capturing and applying knowledge
and expertise
• Collect relevant knowledge and make it available wherever
needed in the enterprise to improve business processes
and management decisions
• Link firm to external sources of knowledge
Intranets and Extranets Back
• Technology platforms that increase integration and

expedite the flow of information
• Intranets:
– Internal networks based on Internet standards
– Often are private access area in company’s website
• Extranets:
– Company websites accessible only to authorized
vendors and suppliers
– Facilitate collaboration
E-business, E-commerce, and Back
E-government
• E-business
– Use of digital technology and Internet to drive major
business processes
• E-commerce
– Subset of e-business
– Buying and selling goods and services through Internet
• E-government
– Using Internet technology to deliver information and services
to citizens, employees, and businesses
Back
Interactive Session: Organizations: The

City of Mississauga Goes Digital
• Class discussion
– Describe the problems the City of Mississauga hoped to address using
digital technology.
– What technologies did Mississauga employ for a solution? Describe each
of these technologies and the role each played in a solution.
– What management, organization, and technology issues did the City of
Mississauga have to address in developing a solution?.
– How did the technologies in this case improve operations and decision
making at the City of Mississauga?
What is Collaboration? Back
• Collaboration
– Short lived or long term
– Informal or formal (teams)
• Growing importance of collaboration
– Changing nature of work In the past Work was organized into silo
– Growth of professional work—“interaction jobs”

– Changing organization of the firm
– Changing scope of the firm
– Emphasis on innovation
– Changing culture of work
What is Social Business? Back
• Social business
– Use of social networking platforms (internal and
external) to engage employees, customers, and
suppliers
• Aims to deepen interactions and expedite information
sharing
• “Conversations” to strengthen bonds with customers
• Requires information transparency
• Seen as way to drive operational efficiency, spur
innovation, accelerate decision making
Business Benefits of Collaboration Back
and Teamwork
• Investment in collaboration technology can return large
rewards, especially in sales and marketing, research and
development
• Productivity: Sharing knowledge and resolving problems
• Quality: Faster resolution of quality issues
• Innovation: More ideas for products and services
• Customer service: Complaints handled more rapidly
• Financial performance: Generated by improvements in
factors above
Figure 2.7 Requirements for Collaboration Back
Building a Collaborative Culture and Back
Business Processes
• “Command and control” organizations
– No value placed on teamwork or lower-level
participation in decisions
• Collaborative business culture
– Senior managers rely on teams of employees
– Policies, products, designs, processes, and systems
rely on teams
– The managers purpose is to build teams
Tools and Technologies for Back
Collaboration and Social Business

• E-mail and instant messaging (I M)
• Wikis
• Virtual worlds
• Collaboration and social business platforms
– Virtual meeting systems: videoconferencing, telepresence)
– Cloud collaboration services (Google Drive, Google Docs,
etc.)
– Microsoft SharePoint and I B M Notes
– Enterprise social networking tools
Back
Interactive Session: Technology: : Virtual
Education at Ahlia University
• Class discussion
– How does Microsoft Teams promote efficient collaboration in
universities and colleges?
– What management, organization, and technology based issues
did Ahlia University address before pivoting its operations to deal
with the pandemic?
– What advantages has using collaboration tools provided for Ahlia
University?

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Management Information Systems:

Managing the Digital Firm

1.1 How are information systems transforming business, What’s New in

– Use of social networks for business objectives

Opportunities: A Flattened World

• The Industrial Revolution was really a worldwide phenomenon energized by expansion of

• From Quora: shorturl.at/fyKOW

Timeline of industrial progress

• What does globalization have to do with management

• That’s simple: everything. The emergence of the Internet into a

Opportunities: A Flattened World

• In a fully digital firm:

– Key corporate assets are managed digitally

• Many firms, such as Cisco Systems, 3M, and GE, are

Information Systems >>Why…

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

– 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

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

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

2.1 What are business processes? How are they related to

Corporation into a More Innovative Connected

Corporation into a More Innovative Connected

• If you can't describe what

• Examples of functional business processes

cross many different functional areas

• Serve middle management

Systems Obtain Their Data from the

• Serve middle management

• Support senior management

• Systems for linking the enterprise

• Also called enterprise resource planning (E R P) systems

• Technology platforms that increase integration and

Interactive Session: Organizations: The

– Growth of professional work—“interaction jobs”

Collaboration and Social Business

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