For this assignment, review four case studies—two from Chapter 1 and two from Chapter 2. Then, in an essay, evaluate the studies and respond to each of the questions below, using both critical thinking and theory as well as supporting documentation.
In formatting your case analysis, do not use the question-and-answer format; instead, use an essay format with subheadings. Your APA-formatted case study must be at least four pages in length (not counting the title and reference pages).
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The Interactive Session on Technology describes some of the typical technologies used in computer-based information systems today. UPS invests heavily in information systems technology to make its business more efficient and customer oriented. It uses an array of information technologies, including bar code scanning systems, wireless networks, large mainframe computers, handheld computers, the Internet, and many different pieces of software for tracking packages, calculating fees, maintaining customer accounts, and managing logistics.
Let’s identify the organization, management, and technology elements in the UPS package tracking system we have just described. The organization element anchors the package tracking system in UPS’s sales and production functions (the main product of UPS is a service—package delivery). It specifies the required procedures for identifying packages with both sender and recipient information, taking inventory, tracking the packages en route, and providing package status reports for UPS customers and customer service representatives.
The system must also provide information to satisfy the needs of managers and workers. UPS drivers need to be trained in both package pickup and delivery procedures and in how to use the package tracking system so that they can work efficiently and effectively. UPS customers may need some training to use UPS in-house package tracking software or the UPS website.
UPS’s management is responsible for monitoring service levels and costs and for promoting the company’s strategy of combining low cost and superior service. Management decided to use computer systems to increase the ease of sending a package using UPS and of checking its delivery status, thereby reducing delivery costs and increasing sales revenues.
The technology supporting this system consists of handheld computers, bar code scanners, desktop computers, wired and wireless communications networks, UPS’s data center, storage technology for the package delivery data, UPS in-house package tracking software, and software to access the World Wide Web. The result is an information system solution to the business challenge of providing a high level of service with low prices in the face of mounting competition.
United Parcel Service (UPS) started out in 1907 in a closet-sized basement office. Jim Casey and Claude Ryan—two teenagers from Seattle with two bicycles and one phone—promised the “best service and lowest rates.” UPS has used this formula successfully for more than a century to become the world’s largest ground and air package-delivery company. It’s a global enterprise with more than 454,000 employees, over 112,000 vehicles, and the world’s ninth-largest airline.
Today, UPS delivers 5.1 billion packages and documents in more than 220 countries and territories. The firm has been able to maintain leadership in small-package delivery services despite stiff competition from FedEx and the U.S. Postal Service by investing heavily in advanced information technology. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations.
It all starts with the scannable bar-coded label attached to a package, which contains detailed information about the sender, the destination, and when the package should arrive. Customers can download and print their own labels using special software provided by UPS or by accessing the UPS website. Before the package is even picked up, information from the “smart” label is transmitted to one of UPS’s computer centers in Mahwah, New Jersey, or Alpharetta, Georgia, and sent to the distribution center nearest its final destination.
Dispatchers at this center download the label data and use special routing software called ORION to create the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. Each UPS driver makes an average of 100 stops per day. In a network with 55,000 routes in the United States alone, shaving even one mile off each driver’s daily route translates into big savings: $50 million per year. These savings are critical as UPS tries to boost earnings growth as more of its business shifts to less-profitable e-commerce deliveries. UPS drivers who used to drop off several heavy packages a day at one retailer now make many stops scattered across residential neighborhoods, delivering one lightweight package per household. The shift requires more fuel and more time, increasing the cost to deliver each package.
The first thing a UPS driver picks up each day is a handheld computer called a Delivery Information Acquisition Device (DIAD), which can access a wireless cell phone network. As soon as the driver logs on, his or her day’s route is downloaded onto the handheld. The DIAD also automatically captures customers’ signatures along with pickup and delivery information. Package tracking information is then transmitted to UPS’s computer network for storage and processing. From there, the information can be accessed worldwide to provide proof of delivery to customers or to respond to customer queries. It usually takes less than 60 seconds from the time a driver presses “complete” on the DIAD for the new information to be available on the web.
Through its automated package tracking system, UPS can monitor and even reroute packages throughout the delivery process. At various points along the route from sender to receiver, bar code devices scan shipping information on the package label and feed data about the progress of the package into the central computer. Customer service representatives are able to check the status of any package from desktop computers linked to the central computers and respond immediately to inquiries from customers. UPS customers can also access this information from the company’s website using their own computers or mobile phones. UPS now has mobile apps and a mobile website for iPhone, BlackBerry, and Android smartphone users.
Anyone with a package to ship can access the UPS website to track packages, check delivery routes, calculate shipping rates, determine time in transit, print labels, and schedule a pickup. The data collected at the UPS website are transmitted to the UPS central computer and then back to the customer after processing. UPS also provides tools that enable customers, such Cisco Systems, to embed UPS functions, such as tracking and cost calculations, into their own websites so that they can track shipments without visiting the UPS site.
UPS is now leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. It created a UPS Supply Chain Solutions division that provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure. These services include supply chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services in addition to logistics services. CandleScience, based in Durham, North Carolina, is an industry leader in the candle and soap supply industry, providing raw materials such as waxes, wicks, and fragrances to candle makers around the world. UPS worked with CandleScience to accurately model shipping rates for the company and its customers and to add a freight shipping option capability to its website. UPS also helped CandleScience identify the optimal location for a new warehouse for its West Coast customers. The new West Coast warehouse in Sparks, Nevada lets the company reach some of its largest customers faster, more efficiently and less expensively.
UPS provides both financial and shipping advice and services to Flags of Valor, a small business based in Ashton, Virginia, which sells hundreds of hand-crafted wooden flags each day to online customers. Using UPS Quantum View Manage® technology, the staff can view and monitor outbound packages and immediately respond to customer questions about order status. UPS Capital®, the financial service division of UPS, showed the company how to protect its cash flow and assets by moving to a comprehensive insurance plan.
Chapter 2
Data Changes How NFL Teams Play the Game and How Fans See It
All professional sports teams today collect detailed data on player and team performance, fan behavior, and sales, and increasingly use these data to drive decisions about every aspect of the business—marketing, ticketing, player evaluation, and TV and digital media deals. This includes the National Football League (NFL), which is increasingly turning to data to improve how its players and teams perform and how fans experience the game.
Since 2014 the NFL has been capturing player movement data on the field by putting nickel-sized radio frequency identification (RFID) tags beneath players’ shoulder pads to track every move they make. The information the sensors gather is used by NFL teams to improve their training and strategy, by commentators on live game broadcasts, and by fans attending games or using the NFL app on the Xbox One.
The NFL’s player tracking system is based on the Zebra Sports Solution developed by Zebra Technologies, a Chicago-based firm specializing in tracking technology that includes the bar codes on groceries and other consumer goods and radio frequency identification (RFID) technology. The Zebra Sports Solution system records players’ speed, direction, location on the field, how far they ran on a play, and how long they were sprinting, jogging, or walking. The system can also determine what formation a team was in and how players’ speed or acceleration affects their on-field performance. Want to know how hard Eli Manning is throwing passes or the force with which a ball arrives in the hands of receiver Odell Beckham? The system knows how to do all that.
NFL players have RFID chips in their left and right shoulder pads that transmit data to 20 radio receivers strategically located in the lower and upper levels of stadiums to collect data about how each player moves, using metrics such as velocity, speed in miles per hour, and distance traveled. From there the data are transmitted to an on-site server computer, where Zebra’s software matches an RFID tag to the correct player or official. The football also has a sensor transmitting location data. The data are generated in real-time as the game is being played. Each sensor transmits its location about 25 times per player.
It takes just two seconds for data to be received by the motion sensors, analyzed, and pushed out to remote cloud computers run by Amazon Web Services for the NFL. From the NFL cloud computers, the data are shared with fans, broadcasters, and NFL teams. The data captured by the NFL are displayed to fans using the NFL Next Gen Stats website, NFL social media channels, and the NFL app on Windows 10 and the Xbox One. The data are also transmitted to the giant display screens in the arena to show fans during the game.
The data have multiple uses. NFL teams use them to evaluate player and team performance and to analyze tactics, such as whether it might be better to press forward or to punt in a particular fourth-down situation. Data transmitted to broadcasters, to stadium screens, to Next Gen Stats, and to the Next Gen Stats feature of Microsoft’s Xbox One NFL app help create a deeper fan experience that gets fans more involved in the game.
Some of the statistics fans can now see on Next Gen Stats include Fastest Ball Carriers, Longest Tackles, Longest Plays, Passing Leaders, Rushing Leaders, and Receiving Leaders. Next Gen Stats also features charts for individual players and videos that explain the differences and similarities between players, teams, and games based on the data.
While the data may be entertaining for fans, they could prove strategic for the teams. Data markers for each play are recorded, including type of offense, type of defense, whether there was a huddle, all movement during the play, and the yard line where the ball was stopped. The NFL runs custom-created analytics to deliver visualizations of the data to each team within 24 hours of the game, via a custom-built web portal. The system displays charts and graphs as well as tabular data to let teams have more insight. Each NFL team may also hire its own data analyst to wring even more value from the data. The data are giving NFL fans, teams, coaches, and players a deeper look into the game they love.
Sources: Jason Hiner, “How the NFL and Amazon Unleashed ‘Next Gen Stats’ to Grok Football Games,” TechRepublic, February 2, 2018; Teena Maddox, “Super Bowl 52: How the NFL and US Bank Stadium Are Ready to Make Digital History,” TechRepublic, February 1, 2018; Brian McDonough, “How the NFL’s Data Operation Tracks Every Move on the Field,” Information Management, December 7, 2016; www.zebra.com, accessed March 15, 2017; and Mark J. Burns, “Zebra Technologies, NFL Revamp Partnership For Third Season,” SportTechie, September 6, 2016.
Enterprise Systems
Firms use enterprise systems, also known as enterprise resource planning (ERP) systems, to integrate business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources into a single software system. Information that was previously fragmented in many different systems is stored in a single comprehensive data repository where it can be used by many different parts of the business.
For example, when a customer places an order, the order data flow automatically to other parts of the company that are affected by them. The order transaction triggers the warehouse to pick the ordered products and schedule shipment. The warehouse informs the factory to replenish whatever has been depleted. The accounting department is notified to send the customer an invoice. Customer service representatives track the progress of the order through every step to inform customers about the status of their orders. Managers are able to use firmwide information to make more-precise and timely decisions about daily operations and longer-term planning.
Supply Chain Management Systems
Firms use supply chain management (SCM) systems to help manage relationships with their suppliers. These systems help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so they can source, produce, and deliver goods and services efficiently. The ultimate objective is to get the right amount of their products from their source to their point of consumption in the least amount of time and at the lowest cost. These systems increase firm profitability by lowering the costs of moving and making products and by enabling managers to make better decisions about how to organize and schedule sourcing, production, and distribution.
Supply chain management systems are one type of interorganizational system because they automate the flow of information across organizational boundaries. You will find examples of other types of interorganizational information systems throughout this text because such systems make it possible for firms to link digitally to customers and to outsource their work to other companies.
Customer Relationship Management Systems
Firms use customer relationship management (CRM) systems to help manage their relationships with their customers. CRM systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales.
Knowledge Management Systems
Some firms perform better than others because they have better knowledge about how to create, produce, and deliver products and services. This firm knowledge is unique, is difficult to imitate, and can be leveraged into long-term strategic benefits. Knowledge management systems (KMS) enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the firm and make it available wherever and whenever it is needed to improve business processes and management decisions. They also link the firm to external sources of knowledge.
We examine enterprise systems and systems for supply chain management and customer relationship management in greater detail in Chapter 9. We discuss collaboration systems that support knowledge management in this chapter and cover other types of knowledge management applications in Chapter 11.
Intranets and Extranets
Enterprise applications create deep-seated changes in the way the firm conducts its business, offering many opportunities to integrate important business data into a single system. They are often costly and difficult to implement. Intranets and extranets deserve mention here as alternative tools for increasing integration and expediting the flow of information within the firm and with customers and suppliers.
Intranets are simply internal company websites that are accessible only by employees. The term intranet refers to an internal network, in contrast to the Internet, which is a public network linking organizations and other external networks. Intranets use the same technologies and techniques as the larger Internet, and they often are simply a private access area in a larger company website. Likewise with extranets, which are company websites that are accessible to authorized vendors and suppliers and are often used to coordinate the movement of supplies to the firm’s production apparatus.
For example, Six Flags, which operates 18 theme parks throughout North America, maintains an intranet for its 1900 full-time employees that provides company-related news and information on each park’s day-to-day operations, including weather forecasts, performance schedules, and details about groups and celebrities visiting the parks. The company also uses an extranet to broadcast information about schedule changes and park events to its 30,000 seasonal employees. We describe the technology for intranets and extranets in more detail in Chapter 7.
Chapter 4 Case study
Cars today have become sophisticated listening posts on wheels. They can track phone calls and texts, record what radio stations you listen to, monitor the speed at which you drive and your braking actions, and even tell when you are breaking the speed limit, often without your knowledge.
Tens of millions of drivers in the United States are currently being monitored, with that number rising every time a new vehicle is sold or leased. There are 78 million cars on the road with an embedded cyber connection that can be used for monitoring drivers. According to research firm Gartner Inc., 98 percent of new cars sold in the United States and Europe will be connected by 2021.
Since 2014, every new car in the United States comes with an event data recorder (EDR), which records and stores over a dozen data points, including vehicle speed, seat belt use, and braking activation. EDR data are available to any auto maker as well as to insurance companies, which use these stored EDR data to help establish responsibility for an accident or to detect fraud.
EDRs are mandated and regulated by the U.S. government, but other data-gathering software in today’s cars is not. Such software underlies numerous sensors, diagnostic systems, in-dash navigation systems, and built-in cellular connections, as well as driver-assistance systems to help drivers park, stay in their lane, avoid rear-ending another car, and steer for short time periods. All of this software keeps track of what drivers are doing. Newer cars may record driver eye movements, the weight of people in the front seats, and whether the driver’s hands are on the wheel. Smartphones, whether connected to the car or not, can also track your activities, including any texting while driving. Auto makers are able to mine all this information, as are app developers and companies such as Google or Spotify.
With the exception of medical information, the United States has few regulations governing what data companies can gather and how they can use the data. Companies generally are not required to conceal names or other personal details. In most cases the driver must consent to allowing his or her personal information to be tracked or monitored. Many people unwittingly provide this consent when they check off a box on one of the lengthy service agreement forms required to register a car’s in-dash system or navigation app.
Collecting such large amounts of personal data generated by drivers has raised concerns about whether automakers and others are doing enough to protect people’s privacy. Drivers may welcome the use of information to relay helpful diagnostic information or updates on nearby traffic jams. But they do not necessarily endorse other uses, and automakers have refrained from commenting on future data collection plans and policies.
Automakers argue that the data are valuable for improving vehicle performance and vehicle safety and soon will be able to reduce traffic accidents and fatalities. Amassing detailed data about human driving behavior is also essential for the development of self-driving cars. But privacy experts believe the practice is dangerous. With enough data about driver behavior, individual profiles as unique as fingerprints could be developed. Trips to businesses reveal buying habits and relationships that could be valuable to corporations, government agencies, or law enforcement. For example, frequent visits to a liquor store or mental health clinic could reveal information about someone’s drinking habits or health problems. People obviously would not want such confidential data shared with others.
Sources: Peter Holley, “Big Brother on Wheels: Why Your Car Company May Know More About You Than Your Spouse.” Washington Post, January 15, 2018; Christina Rogers, “What Your Car Knows about You,” Wall Street Journal, August 18, 2018; John R. Quain, “Cars Suck Up Data About You. Where Does It All Go?” New York Times, July 27, 2017; and Russ Heaps, “Data Collection for Self-Driving Cars Could Be Risking Your Privacy,” Autotrader, September 2016.
The challenges that connected vehicles and big data pose to privacy, described in the chapter-opening case, show that technology can be a double-edged sword. It can be the source of many benefits, including the capability to make driving safer and more efficient. At the same time, digital technology creates new opportunities for invading privacy and using information that could cause harm.
The chapter-opening diagram calls attention to important points this case and this chapter raise. Developments in data management technology, the Internet of Things (IoT), and analytics have created opportunities for organizations to use big data to improve operations and decision making. Big data analytics are now being applied to all the data generated by motor vehicles, especially those with Internet connections. The auto makers and other organizations described here are benefiting from using big data to monitor vehicle performance and driver behavior and to provide drivers with helpful tools for driving safely and caring for their cars. However, the use of big data from motor vehicles is also taking benefits away from individuals. Individuals might be subject to job discrimination or higher insurance rates because organizations have new tools to assemble and analyze huge quantities of data about their driving behavior. There are very few privacy protections for all the personal data gathered from car driving. New privacy protection laws and policies need to be developed to keep up with the technologies for assembling and analyzing big data.
This case illustrates an ethical dilemma because it shows two sets of interests at work, the interests of organizations that have raised profits or even helped many people with the data generated by connected vehicles and those who fervently believe that businesses and public organizations should not use big data analysis to invade privacy or harm individuals. As a manager, you will need to be sensitive to both the positive and negative impacts of information systems for your firm, employees, and customers. You will need to learn how to resolve ethical dilemmas involving information systems.
Chapter 3 Case study
Smart Products—Coming Your Way
If you don’t use a smart product yet, you soon will. Your shoes, your clothing, your watch, your water bottle, and even your toothbrush are being redesigned to incorporate sensors and metering devices connected to the Internet so that their performance can be monitored and analyzed. Your home will increasingly use smart devices such as smart thermostats, smart electrical meters, smart security systems, and smart lighting systems.
Under Armour, noted for performance clothing, spent $710 million to scoop up mobile apps such as MyFitnessPal, Map My Fitness, and Endomondo, which enable it to tap into the world’s largest digital health and fitness community, with more than 225 million registered users. According to company data, Under Armour’s connected fitness users have logged more than 500 million workouts and taken 7 trillion steps since the company started tracking the data. Analyzing these data has provided insights such as 3.1 miles being the average distance for a run and that May is the most active month for exercise.
Under Armour is trying to enhance its performance clothing with digital technology. The company now sells connected running shoes. The shoes come in several models and feature a built-in wireless Bluetooth sensor that tracks cadence, distance, pace, stride length, and steps, even if the runner does not bring a smartphone along. The data are stored on the shoe until they can sync wirelessly to Under Armour’s Map My Run app for iPhone, iPad, and Android devices. Users can also connect to the app on third-party devices such as AppleWatch, Garmin, or Fitbit, to incorporate metrics such as heart rate that can’t be tracked by the shoes. The shoe’s analytics will let users know when it’s time to purchase new shoes and sensor batteries have to be charged.
Under Armour has recently added a digital coaching feature for the connected running shoes and Map My Run app. Runners will be able to monitor their gait and stride length mile after mile, and see how that impacts their pace and cadence. By analyzing these data, along with data about the runner’s gender, age, weight, and height, Map My Run will be able to provide a runner with tips on how to improve his or her pace and splits, by taking shorter or longer strides while running, for instance.
Under Armour can generate revenue from in-app ads, including ads from other companies, and purchases from app users referred to its products. The platform delivers unprecedented depth of information and insight about fitness- and health-oriented consumers, creating numerous opportunities for Under Armour and other brands to engage with potential and existing customers. For example, Map My Fitness collects data about a user’s name, e-mail address, birth date, location, performance, and profile if the user connects to the app using social media. Under Armour does not sell identifiable personal data about individuals to third parties but does provide advertisers with aggregate information about app users. Under Armour is hoping that daily use of its smartphone apps will build stronger ties to customers that will lead to stronger sales of its own apparel, footwear, and other athletic gear. The company is clearly benefiting from bringing the power of software to its physical products.
Smart products are also finding their way into people’s homes. Between 2017 and 2022, Con Edison, which supplies electrical power and natural gas to the New York City metropolitan area, is installing 3.6 million new electric smart meters and 1.2 million new gas smart meters in all its customers’ homes and businesses. A smart meter is a digital meter that communicates between a residence or business and Con Edison through a secure wireless communication network. The smart meter records and transmits each customer’s energy consumption regularly throughout the day. The smart meter transmits data to a system of access points on utility poles, which send the usage information to Con Edison.
The smart meter will let the company know when a customer loses service, resulting in faster repairs, and will also provide real-time billing information to customers based on energy usage, enabling them to pinpoint areas for energy savings. They will also permit more definitive voltage regulation, enhancing electric distribution-system efficiency, reducing costs, and providing savings that ultimately get reflected in lower customer bills. Data from the new meters will let Con Ed set prices based on customers’ time and level of use. Rates might jump during summer hours when hot weather makes people turn on their air conditioners, or drop overnight when power use is lowest.
Con Ed customers can use an online My Account dashboard with tools to track their daily energy consumption down to 15-minute increments. They can analyze their usage by comparing hour to hour, weekday versus weekend, or day versus evening use to see where they can save, and they can receive high bill alerts if they are using more energy than usual. Con Ed also offers a mobile app for iPhone and Android smartphone users so that they can track their detailed energy usage while they are on the go.
Sources: Jen Booton, “Under Armour’s New HOVR Smart Shoe Will Automatically Track Your Run,” SportTechie, January 26, 2018; Edgar Alvarez, “Under Armour’s HOVR smart running shoes are more than just a gimmick,” Engadget, February 9, 2018; www.coned.com, accessed March 28, 2018; Edward C. Baig, “Under Armour and HTC Team Up on Connected Fitness,” USA Today, January 5, 2016; www.underarmour.com, accessed April 20, 2018; and John Kell, “Why Under Armour Is Making a Costly Bet on Connected Fitness,” Fortune, April 21, 2016.
Instructions
It is important to understand what information systems are and why they are essential for running and managing a business. It is also important to understand the different systems that support different groups or levels of management. In addition, digital technology and the Internet play a key role in executing major business processes in the enterprise. Also, it is important to understand the ethical, social, and political issues raised by information systems.
The case studies below provide you with an opportunity to critically analyze events that are taking place in real-life businesses. This helps to develop your critical thinking and research skills as you research each of these scenarios.
For this assignment, review four case studies—two from Chapter 1 and two from Chapter 2. Then, in an essay, evaluate the studies and respond to each of the questions below, using both critical thinking and theory as well as supporting documentation.
In Chapter 1, read the case study “UPS Competes Globally with Information Technology” on pages 23–24 of the textbook. Then, answer the questions below.
· How does UPS use information systems technology to achieve its strategic goals of being more efficient and customer oriented?
· What would happen if the automated package tracking system was not available?
· Discuss how globalization has “flattened” the world.
In Chapter 2, read the case study “Data Changes How NFL Teams Play the Game and How Fans See It” on pages 52–53 of the textbook. The, address the prompts below.
· Analyze how information systems are transforming business.
· What types of systems does the NFL and its teams use?
· What is the role that these systems play in improving both operations and decision-making?
In Chapter 3, read the case study “Smart Products—Coming Your Way” on pages 102–103 of the textbook. Then, address the prompts below.
· Explain the importance of collaboration and information sharing for businesses.
· Explain what a “smart” product is, and use an example.
· How do smart products increase rivalry among firms?
In Chapter 4, read the case study “Are Cars Becoming Big Brother on Wheels?” on pages 121–122 of the textbook. Then, address the prompts below.
· Describe how new technology trends may cause ethical dilemmas.
· Discuss at least one ethical, social, and political issue raised by embedded cyber connections in cars.
· Discuss how big data analytics are being applied to all of the data generated by motor vehicles.
In formatting your case analysis, do not use the question-and-answer format; instead, use an essay format with subheadings. Your APA-formatted case study must be at least four pages in length (not counting the title and reference pages).
You are required to use a minimum of three peer-reviewed, academic sources that are no more than 5 years old (one may be your textbook). All sources used, including the textbook, must be referenced; all paraphrased material must have accompanying in-text citations.
MBA 5401, Management Information Systems 1
Course Learning Outcomes for Unit II
Upon completion of this unit, students should be able to:
3. Explain how information technology systems influence organizational strategies.
3.1 Explain an organization’s ability to use information technology to achieve strategic goals.
4. Evaluate the prevailing ethical issues of information systems.
4.1 Describe how new technology trends may cause ethical dilemmas.
Course/Unit
Learning Outcomes
Learning Activity
3.1
Unit Lesson
Chapter 3, pp. 78–111, 116–118
Unit II Case Study
4.1
Unit Lesson
Video: How Does Internet Surveillance Program PRISM Work?
Video: FBI Director, Apple CEO Talk Privacy and Security
Chapter 4, pp. 120–152, 157–159
Unit II Case Study
Required Unit Resources
Chapter 3: Information Systems, Organizations, and Strategy, pp. 78–111, 116–118
Chapter 4: Ethical and Social Issues in Information Systems, pp. 120–152, 157–159
In order to access the following resources, click the links below.
CBS Evening News. (2016, February 17). FBI director, Apple CEO talk privacy and security [Video file].
Retrieved from https://www.youtube.com/watch?v=VhaRR22s-bY
Transcript for FBI Director, Apple CEO Talk Privacy and Security video
CBS News. (2013, June 7). How Does Internet Surveillance Program PRISM Work? [Video file]. Retrieved
from https://www.youtube.com/watch?v=JR6YyYdF8ho
Transcript for How Does Internet Surveillance Program PRISM Work? video
Unit Lesson
Information Systems: What This Means to Your Organization
For most of us, it is not that difficult to understand certain information technology (IT) concepts. Most of us
use our hardware and equipment fairly well. We know how to download apps on our smartphones. We know
about the systems and applications that we use at work. We may not know all of the details or inner workings
of what information flows where, but we have a good idea of how things work. If we were clueless, we would
not be of much value to our organizations, would we?
UNIT II STUDY GUIDE
Organizations, Strategy, Ethics, and
Social Issues in Information Systems
Let’s take this to a more abstract level. How would you answer this question: How is IT used toward the
success of your organization? You might rattle off some reasons relating to the availability of the Internet,
which allows e-mails to flow so that there is connectivity between customers and service representatives. You
might say that your organization has several servers and databases that house data and a security team with
security tools that ensure the safety of the data. You might mention that all the applications allow you to
service your customers in faster, more efficient ways. If you are a little more tech savvy at your organization,
you might even bring up more advanced topics or newer innovations, such as the ones listed below:
e-commerce;
supply chain management systems (SCM);
customer relation management systems (CRM);
SharePoint;
cloud collaboration;
enterprise resource planning (ERP);
Systems, Applications, and Products (SAP);
big data;
data mining; or
expert systems.
Are the items described here IT tools? Yes, they are used to help make everyone’s lives and jobs easier,
faster, more efficient, and more effective, but let’s ask the question again: How is IT used toward the success
of your organization?
Organizations must deal with a lot of information about every aspect of the business—from customers to
vendors, employees, invoices, payments, inventory, and services. Our information systems make it possible
to organize this information and keep up with it all. Business processes deal with the work that is performed in
our organizations so that we can produce something of value. The performance of our business depends on
how well our business processes work. Our business processes can add extreme value to our organization
because they can be a competitive strength. They can also drag our value down if they are not working well
for the organization. Thus, IT can work in many ways to improve our business processes by introducing
better, faster, and more efficient methods of performing tasks in our business processes.
Imagine how much time and money is saved if a thousand invoices are e-mailed to customers rather than
being mailed via the postal mail. How much time does it take a person to stuff and stamp 1,000 envelopes?
Now, if you look at how technology supports not only business processes but also management groups and
functional groups, you can start to see that they link together in a way that serves to improve organizational
performance.
Value in improved performance: Organizations search every day for ways to improve their performance,
production output, and transaction processing. In recent years, technology has advanced to the point that it
supports enterprise-level systems, applications, networks, collaboration, and so on. There are even enterprise
social networking tools now.
Influence of IT on business-level strategy: Basically, a strategy addresses what needs to be accomplished.
With any organization, the strategic objectives will be similar. The organizational leaders will want to be
number one in their market, increase sales revenue, decrease costs, or strengthen their customer base. It is
certainly not a stretch to understand that a business wants to be the best, the fastest, the most profitable, the
most efficient, the most customer-friendly, and so on.
You must also have a good understanding of what influences organizations. Organizations have a culture.
They have politics, social structure, rules, values, norms, and people. The reality is that technology affects all
aspects of organizations. For example, information systems can have a huge economic impact on an
organization. IT is very costly, but the benefits can influence big increases in revenue or substantial
decreases in costs.
MBA 5401, Management Information Systems 3
UNIT x STUDY GUIDE
Title
IT can have cultural and social impacts on organizations as well. A large technology implementation can
mean a change in the mindset for many employees who are resistant to change. Imagine that you know
technology implementation will increase the efficiency of operations by 50%, but this may also mean that
fewer employees will be needed. Imagine that you are one of the employees whose job is at risk due to a new
automation. This realization may cause a lot of doubt, uncertainty, and anxiety for employees. All of these
factors play an important part in understanding the role that IT plays in organizations. For IT to be beneficial
and for organizations to be successful, organizations have to have clear strategies. Organizations have to
take full advantage of any competitive advantages and understand models such as Porter’s competitive
forces model. Once organizational leaders understand where the business needs to be, they can set clear,
actionable steps to get there. Those steps will involve technology because organizations need to have IT
resources and IT capabilities. It will also involve an organization’s ability to utilize its IT resources and create
value in conjunction with its other assets and resources.
Finally, it is important to note that organizations have to be able to align their technologies with their business
strategies and goals. It does the organization no good to have a well-defined strategy if it does not have the IT
resources and capabilities to meet its goals. On the other hand, if the organization does not have a well-
defined strategy that is appropriate for the business, IT tools will be of little help to reach meaningless goals.
The following videos display the challenges to individual privacy.
View the video How Does Internet Surveillance Program PRISM Work? (Transcript for How Does Internet
Surveillance Program PRISM Work? video).
View the video FBI Director, Apple CEO Talk Privacy and Security (Transcript for FBI Director, Apple CEO
Talk Privacy and Security video).
Ethical and Social Issues in Information Systems
As Laudon and Laudon (2020) note, “ethics refers to the principles of right and wrong that individuals, acting
as free moral agents, use to make choices to guide their behavior” (p. 124). The fact is that information
systems open the door for many opportunities to make ethical choices—probably as many, if not more, than
any other area in business.
Why is this statement true? Think about it. IT professionals will likely have access to information more than
anyone else in the organization. Information such as employee information, customer information, and sales
transactions are stored in database tables. A human resources (HR) representative will have access to
employee information. A salesperson or customer service representative will have access to sales information
or basic customer information. An accounts receivable person will have access to customers’ financial
information.
Some IT professionals will have access to all information. Additionally, many organizations have personal
usage rules regarding the personal use of company website, Internet, and e-mail assets. This usually means
that organizations will have applications that log usage into databases. Most of the time, employees’ actual e-
mail text is stored as well. Managers can request reports if they feel an employee is abusing the usage rules,
but who has access to the data at any given time? Some IT professionals will.
Who should have access to this information? Can you imagine what would happen if anyone could access all
of this information? Imagine the unethical, disgruntled employee who was passed over for a promotion
accessing the web logs and seeing that the newly promoted coworker who is married has been researching
dating websites.
There is a lot of trust placed in IT professionals to house and manage all kinds of sensitive information and
not abuse it themselves. This is where the basics of ethics for IT professionals starts. Even within IT, there
are access controls that limit what can be done to the data. In other words, most IT professionals could not
delete their web logs. This is all a part of having good security policies, which we will discuss later.
Even if you, as an IT professional, accidentally view confidential or sensitive information, you have to know
what your ethical responsibility is with regard to that information. Should you inform management that you
saw that information? Another example might be knowing the company’s financial information. It is unethical
and potentially illegal to use that information for your own financial gain.
Ethical Challenges
Let’s examine how technology has advantages and disadvantages by examining the opening case in Chapter
4, “Are Cars Becoming Big Brother on Wheels?”. Technology can create new opportunities to enhance
people’s lives, but it can also be a detriment to improving lives. Technology, such as the Internet, has
challenged our understanding of ethical and privacy issues. Improvements in communications technology,
such as high-speed broadband and globalization, have brought the topic of ethics and privacy to the forefront.
As the scenario demonstrates, data collected by smart cars can be used by auto insurance companies to
monitor the insured’s driving habits and use the data to justify increasing insurance rates. This software can
monitor driver activities such as texting while driving, traveling speeds, alertness, and other driving patterns.
This information can then be used by law enforcement against offenders to support traffic violation charges,
especially if the driver was involved in an accident.
Your driving habits can become a valuable commodity, just like your individual shopping profile is on your
favorite online shopping website. Your trips to a theater, grocery store, or shopping center reveal your
shopping habits and associations that are valuable to corporations, government agencies, or other entities
that use the data to advertise. For example, frequent visits to a movie theater reveal information about your
entertainment habits. However, frequent visits to a hospital or care facility would also reveal information about
private medical data that you would not want to share with the rest of the world.
Summary
This unit does a great job of covering many of the ethical considerations that you may face at home and in the
workplace. In the workplace, there is always more to consider, so most organizations have ethics training for
this purpose. At home, individuals will need to be knowledgeable about how information is gathered and to
whom that information is given.
Reference
Laudon, K. C., & Laudon, J. L. (2020). Management information systems: Managing the digital firm (16th ed.).
Upper Saddle River, NJ: Pearson.
Suggested Unit Resources
In order to access the following resources, click the links below.
To reinforce the concepts from this unit, view the Chapter 3 Presentation (PDF for Chapter 3 Presentation).
To reinforce the concepts from this unit, view the Chapter 4 Presentation (PDF for Chapter 4 Presentation).
The following article brings some interesting reading about ethical issues in information systems, which
correlates to issues discussed in the textbook and the unit lesson.
Mason, R. O. (1986). Four ethical issues of the information age. MIS Quarterly, 10(1), 5–12. Retrieved from
The following article also brings some interesting reading about how organizational value is created through
IT governance mechanisms.
Wu, S. P.-J., Straub, D. W., & Liang, T.-P. (2015). How information technology governance mechanisms and
strategic alignment influence organizational performance: Insights from a matched survey of business
and IT managers. MIS Quarterly, 39(2), 497–519. Retrieved from
https://libraryresources.columbiasouthern.edu/login?url=http://search.ebscohost.com/login.aspx?direc
t=true&db=bsu&AN=102375761&site=ehost-live&scope=site
Your textbook has video cases that correlate with the information being presented in the assigned chapter
readings. You are encouraged to review the video cases relating to Chapter 3 below.
Akamai Technologies. (2012, November 16). Akamai customer testimonial: NBA [Video file]. Retrieved from
http://www.youtube.com/watch?v=OZkyz-gChnI
Transcript for Akamai Customer Testimonial: NBA video
CNET. (2015, February 25). What the FCC net neutrality rules will mean for Internet users [Video file].
Retrieved from https://www.youtube.com/watch?v=84r3qd19tZU
Transcript for What the FCC Net Neutrality Rules Will Mean for Internet Users video
Vox. (2015, February 26). The FCC’s new net neutrality rules, explained in 172 seconds [Video file].
Retrieved from https://www.youtube.com/watch?v=sBKPacCuXsw
Transcript for The FCC’s New Net Neutrality Rules, Explained in 172 Seconds video
You are encouraged to review the video cases relating to Chapter 4 below
Consumer Reports. (2013, June 6). Setting Facebook privacy controls [Video file]. Retrieved from
https://www.youtube.com/watch?v=IWlyut4zsko
Transcript for Setting Facebook Privacy Controls video
Wall Street Journal. (2012, January 25). Google, privacy and what it means for you [Video file]. Retrieved
from https://www.youtube.com/watch?v=V7M_FOhXXKM
Transcript for Google, Privacy and What It Means for You video
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