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Library of Congress Cataloging-in-Publication Data Laudon, Kenneth C., 1944- author.

Essentials of management information systems / Kenneth C. Laudon, New York University, Jane P. Laudon, Azimuth Information Systems.—Twelveth edition. pages cm Includes bibliographical references and index.

ISBN 978-0-13-423824-1—ISBN 0-13-423824-9 1. Management information systems. I. Laudon, Jane P. (Jane Price), author. II. Title.

T58.6.L3753 2017 658.4'038011—dc23 2015027175 10 9 8 7 6 5 4 3 2 1

ISBN 10: 0-13-423824-9 ISBN 13: 978-0-13-423824-1

About the Authors

Kenneth C. Laudon is a Professor of Information Systems at New York

University’s Stern School of Business. He holds a B.A. in Economics from Stanford and a Ph.D. from Columbia University. He has authored twelve books dealing with electronic commerce, information systems, organizations, and society. Professor Laudon has also written over forty articles concerned with the social, organizational, and management impacts of information systems, privacy, ethics, and multimedia technology.

Professor Laudon’s current research is on the planning and management of largescale information systems and multimedia information technology. He has received grants from the National Science Foundation to study the evolution of national information systems at the Social Security Administration, the IRS, and the FBI. Ken’s research focuses on enterprise system implementation, computer-related organizational and occupational changes in large organizations, changes in management ideology, changes in public policy, and understanding productivity change in the knowledge sector.

Ken Laudon has testified as an expert before the United States Congress. He has been a researcher and consultant to the Office of Technology Assessment (United States Congress), Department of Homeland Security, and to the Office of the President, several executive branch agencies, and Congressional Committees.

Professor Laudon also acts as an in-house educator for several consulting firms and as a consultant on systems planning and strategy to several Fortune 500 firms.

At NYU’s Stern School of Business, Ken Laudon teaches courses on Managing the Digital Firm, Information Technology and Corporate Strategy, Professional Responsibility (Ethics), and Electronic Commerce and Digital Markets. Ken Laudon’s hobby is sailing.

Jane Price Laudon is a management consultant in the information systems

area and the author of seven books. Her special interests include systems analysis, data management, MIS auditing, software evaluation, and teaching business professionals how to design and use information systems.

Jane received her Ph.D. from Columbia University, her M.A. from Harvard University, and her B.A. from Barnard College. She has taught at Columbia University and the New York University Stern School of Business. She maintains a lifelong interest in Oriental languages and civilizations.

The Laudons have two daughters, Erica and Elisabeth, to whom this book is dedicated.

vii

Brief Contents Preface

I

xvi

Information Systems in the Digital Age

1

1

Business Information Systems in Your Career

2

Global E-Business and Collaboration

3

Achieving Competitive Advantage with Information Systems

4

Ethical and Social Issues in Information Systems

2

38 76

110

II Information Technology Infrastructure

149

5

IT Infrastructure: Hardware and Software

6

Foundations of Business Intelligence: Databases and Information Management 190

7

Telecommunications, the Internet, and Wireless Technology

8

Securing Information Systems

150 226

268

III Key System Applications for the Digital Age 9

Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 308

10

E-Commerce: Digital Markets, Digital Goods

11

Improving Decision Making and Managing Knowledge

IV Building and Managing Systems 12

340

Index 479

382

421

Building Information Systems and Managing Projects

Glossary 462

viii

307

422

Complete Contents Preface

xvi

I

Information Systems in the Digital Age 1

1

Business Information Systems in Your Career 2

Chapter-Opening Case: The San Francisco Giants Keep Winning with Information Technology 3 1-1 Why are information systems so essential for running and managing a business today? 5

How Information Systems Are Transforming Business 5 • What’s New in Management Information Systems? 6 • Globalization Challenges and Opportunities: A Flattened World 8

Interactive Session: People The Mobile Pocket Office 9

Business Drivers of Information Systems 11

1-2 What exactly is an information system? How does it work? What are its people, organizational, and technology components? 13 What Is an Information System? 13 • It Isn’t Simply Technology: The Role of People and Organizations 15 • Dimensions of Information Systems 16

Interactive Session: Technology UPS Competes Globally with Information Technology 19 1-3 How will a four-step method for business problem solving help you solve information system–related problems? 21

The Problem-Solving Approach 21 • A Model of the Problem-Solving Process 21 • The Role of Critical Thinking in Problem Solving 24 • The Connections Among Business Objectives, Problems, and Solutions 24

1-4 How will information systems affect business careers, and what information systems skills and knowledge are essential? 25

How Information Systems Will Affect Business Careers 25 • Information Systems and Your Career: Wrap-Up 28 • How This Book Prepares You For the Future 29

Review Summary 30 • Key Terms 30 • Review Questions 31 • Discussion Questions 31 • Hands-On MIS Projects 32 Management Decision Problems 32 • Improving Decision Making: Using Databases to Analyze Sales Trends 32 • Improving

Decision Making: Using the Internet to Locate Jobs Requiring Information Systems Knowledge 33

Collaboration and Teamwork Project 33 Business Problem-Solving Case Home Depot Renovates Itself with New Systems and Ways of Working 34

2

Global E-Business and Collaboration

38

Chapter-Opening Case: Enterprise Social Networking Helps ABB Innovate and Grow 39 2-1 What major features of a business are important for understanding the role of information systems? 41

Organizing a Business: Basic Business Functions 41 • Business Processes 42 • Managing a Business and Firm Hierarchies 44 • The Business Environment 45 • The Role of Information Systems in a Business 46

2-2 How do systems serve different management groups in a business and how do systems that link the enterprise improve organizational performance? 46 Systems for Different Management Groups 47 • Systems for Linking the Enterprise 51

Interactive Session: Organizations New Systems Help Plan International Manage Its Human Resources 52 E-Business, E-Commerce, and E-Government 55

2-3 Why are systems for collaboration and social business so important and what technologies do they use? 56

What Is Collaboration? 56 • What Is Social Business? 57 • Business Benefits of Collaboration and Social Business 58 • Building a Collaborative Culture and Business Processes 60 • Tools and Technologies for Collaboration and Social Business 60

Interactive Session: People Is Social Business Working Out? 64 2-4 What is the role of the information systems function in a business? 66 The Information Systems Department 66 • Information Systems Services 67

Review Summary 68 • Key Terms 69 • Review Questions 69 • Discussion Questions 70 • Hands-On MIS Projects 70 ix

Management Decision Problems 70 • Improving Decision Making: Using a Spreadsheet to Select Suppliers 71 • Achieving Operational Excellence: Using Internet Software to Plan Efficient Transportation Routes 71

Collaboration and Teamwork Project 71 Business Problem-Solving Case How Much Does Data-Driven Planting Help Farmers? 72

3

Achieving Competitive Advantage with Information Systems 76

Chapter-Opening Case: Should T.J. Maxx Sell Online? 77 3-1 How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage? 79 Porter’s Competitive Forces Model 79 • Information System Strategies for Dealing with Competitive Forces 81

Interactive Session: Technology Nike Becomes a Technology Company

83

The Internet’s Impact on Competitive Advantage 86 • The Business Value Chain Model 87 • Synergies, Core Competencies, and Network-Based Strategies 89 • Disruptive Technologies: Riding the Wave 91

3-2 How do information systems help businesses compete globally? 92

The Internet and Globalization 93 • Global Business and System Strategies 93 • Global System Configuration 94

3-3 How do information systems help businesses compete using quality and design? 95 What Is Quality? 95 • How Information Systems Improve Quality 96

3-4 What is the role of business process management (BPM) in enhancing competitiveness? 97 What is Business Process Management? 98

Interactive Session: Organizations

Datacard Group Redesigns the Way It Works 100 Review Summary 102 • Key Terms 103 • Review Questions 103 • Discussion Questions 104 • Hands-On MIS Projects 104 Management Decision Problems 104 • Improving Decision Making: Using a Database to Clarify Business Strategy 105 • Improving Decision Making: Using Web Tools to Configure and Price an Automobile 105 x

Collaboration and Teamwork Project 105 Business Problem-Solving Case Will Technology Save Sears? 106

4

Ethical and Social Issues in Information Systems 110

Chapter-Opening Case: The Dark Side of Big Data 111 4-1 What ethical, social, and political issues are raised by information systems? 113 A Model for Thinking About Ethical, Social, and Political Issues 114 • Five Moral Dimensions of the Information Age 115 • Key Technology Trends That Raise Ethical Issues 116

4-2 What specific principles for conduct can be used to guide ethical decisions? 118

Basic Concepts: Responsibility, Accountability, and Liability 118

Interactive Session: Organizations Edward Snowden: Traitor or Protector of Privacy? 119 Ethical Analysis 120 • Candidate Ethical Principles 121 • Professional Codes of Conduct 122 • Some Real-World Ethical Dilemmas 122

4-3 Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 122

Information Rights: Privacy and Freedom in the Internet Age 122 • Property Rights: Intellectual Property 129

4-4 How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 132

Computer-Related Liability Problems 132 • System Quality: Data Quality and System Errors 133 • Quality of Life: Equity, Access, and Boundaries 134 • Health Risks: RSI, CVS, and Cognitive Decline 137

Interactive Session: People Are We Relying Too Much on Computers to Think for Us? 138 Review Summary 140 • Key Terms 141 • Review Questions 141 • Discussion Questions 142 • Hands-On MIS Projects 142 Management Decision Problems 142 • Achieving Operational Excellence: Creating a Simple Blog 143 • Improving Decision Making: Analyzing Web Browser Privacy 143

Collaboration and Teamwork Project 143 Business Problem-Solving Case Facebook Privacy: What Privacy? 144

Business Problem-Solving Case BYOD: Business Opportunity or Big Headache? 186

II Information Technology Infrastructure 149

6

5

IT Infrastructure: Hardware and Software

Chapter-Opening Case: EasyJet Flies High with Cloud Computing 5-1 What are the components of IT infrastructure? 153 Infrastructure Components

150

151

153

5-2 What are the major computer hardware, data storage, input, and output technologies used in business and the major hardware trends? 155 Types of Computers 155 • Storage, Input, and Output Technology 157 • Contemporary Hardware Trends 158

Interactive Session: Technology Wearable Computers Go to Work 160 Interactive Session: Organizations Cloud Computing Takes Off 165 5-3 What are the major types of computer software used in business and the major software trends? 169 Operating System Software 169 • Application Software and Desktop Productivity Tools 171 • HTML and HTML5 173 • Web Services 174 • Software Trends 175

5-4 What are the principal issues in managing hardware and software technology? 177

Capacity Planning and Scalability 177 • Total Cost of Ownership (TCO) of Technology Assets 177 • Using Technology Service Providers 178 • Managing Mobile Platforms 179 • Managing Software Localization for Global Business 180

Review Summary 180 • Key Terms 182 • Review Questions 182 • Discussion Questions 183 • Hands-On MIS Projects 183 Management Decision Problems 183 • Improving Decision Making: Using a Spreadsheet to Evaluate Hardware and Software Options 184 • Improving Decision Making: Using Web Research to Budget for a Sales Conference 184

Collaboration and Teamwork Project

185

Foundations of Business Intelligence: Databases and Information Management 190

Chapter-Opening Case: Better Data Management Helps the US Postal Service Rebound 191 6-1 What is a database and how does a relational database organize data? 193 Entities and Attributes 194 • Organizing Data in a Relational Database 194 • Establishing Relationships 196

6-2 What are the principles of a database management system? 199

Operations of a Relational DBMS 200 • Capabilities of Database Management Systems 202 • Nonrelational Databases and Databases in the Cloud 203

6-3 What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 204

The Challenge of Big Data 204 • Business Intelligence Infrastructure 205

Interactive Session: People New York City Embraces Data-Driven Crime Fighting 206 Interactive Session: Technology Driving ARI Fleet Management with Real-Time Analytics 209 Analytical Tools: Relationships, Patterns, Trends 210 • Databases and the Web 214

6-4 Why are information policy, data administration, and data quality assurance essential for managing the firm’s data resources? 215 Establishing an Information Policy 215 • Ensuring Data Quality 215

Review Summary 216 • Key Terms 217 • Review Questions 218 • Discussion Questions 219 • Hands-On MIS Projects 219 Management Decision Problems 219 • Achieving Operational Excellence: Building a Relational Database for Inventory Management 220 • Improving Decision Making: Searching Online Databases For Overseas Business Resources 220 Collaboration and Teamwork Project 221 xi

Business Problem-Solving Case Can We Trust Big Data? 222

7

Telecommunications, the Internet, and Wireless Technology 226

Chapter-Opening Case: Wireless Technology Makes Dundee Precious Metals Good as Gold 227 7-1 What are the principal components of telecommunications networks and key networking technologies? 229

Securing Information Systems

268

Chapter-Opening Case: Target Becomes the Target for Massive Data Theft 269 8-1 Why are information systems vulnerable to destruction, error, and abuse? 271

Why Systems Are Vulnerable 271 • Malicious Software: Viruses, Worms, Trojan Horses, and Spyware 274 • Hackers and Computer Crime 276 • Internal Threats: Employees 280 • Software Vulnerability 280

Networking and Communication Trends 229 • What is a Computer Network? 230 • Key Digital Networking Technologies 231

8-2 What is the business value of security and control? 281

Signals: Digital vs. Analog 234 • Types of Networks 235 • Transmission Media and Transmission Speed 236

8-3 What are the components of an organizational framework for security and control? 283

7-2 What are the different types of networks? 234

7-3 How do the Internet and Internet technology work and how do they support communication and e-business? 236 What Is the Internet? 236 • Internet Addressing and Architecture 237

Interactive Session: Organizations The Battle over Net Neutrality 240

Internet Services and Communication Tools 241

Interactive Session: People Monitoring Employees on Networks: Unethical or Good Business? 244 The Web 246

7-4 What are the principal technologies and standards for wireless networking, communication, and Internet access? 253 Cellular Systems 253 • Wireless Computer Networks and Internet Access 254 • RFID and Wireless Sensor Networks 256

Review Summary 259 • Key Terms 260 • Review Questions 261 • Discussion Questions 261 • Hands-On MIS Projects 261 Management Decision Problems 262 • Improving Decision Making: Using Spreadsheet Software to Evaluate Wireless Services 262 • Achieving Operational Excellence: Using Web Search Engines for Business Research 262

Collaboration and Teamwork Project 263 Business Problem-Solving Case Google, Apple, and Facebook Struggle for Your Internet Experience 264 xii

8

Legal and Regulatory Requirements for Electronic Records Management 282 • Electronic Evidence and Computer Forensics 283

Information Systems Controls 283 • Risk Assessment 284

Interactive Session: People The Flash Crash: A New Culprit

285

Security Policy 287 • Disaster Recovery Planning and Business Continuity Planning 288 • The Role of Auditing 289

8-4 What are the most important tools and technologies for safeguarding information resources? 289

Identity Management and Authentication 290 • Firewalls, Intrusion Detection Systems, and Antivirus Software 291 • Securing Wireless Networks 293 • Encryption and Public Key Infrastructure 293 • Ensuring System Availability 295 • Security Issues for Cloud Computing and the Mobile Digital Platform 295 • Ensuring Software Quality 296

Interactive Session: Technology BYOD: A Security Nightmare? 297 Review Summary 299 • Key Terms 300 • Review Questions 300 • Discussion Questions 301 • Hands-On MIS Projects 301 Management Decision Problems 301 • Improving Decision Making: Using Spreadsheet Software to Perform a Security Risk Assessment 302 • Improving Decision Making: Evaluating Security Outsourcing Services 302

Collaboration and Teamwork Project Business Problem-Solving Case Sony Hacked Again: Bigger Than Ever

302 303

III Key System Applications for the Digital Age 307 9

Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 308

Chapter-Opening Case: ACH Food Companies Transforms Its Business with Enterprise Systems 309 9-1 How do enterprise systems help businesses achieve operational excellence? 311 What are Enterprise Systems? 311 • Enterprise Software 312 • Business Value of Enterprise Systems 313

9-2 How do supply chain management systems coordinate planning, production, and logistics with suppliers? 314

The Supply Chain 314 • Information Systems and Supply Chain Management 316 • Supply Chain Management Software 317

10 E-Commerce: Digital Markets, Digital Goods

340

Chapter-Opening Case: Uber Digitally Disrupts the Taxi Industry 341 10-1 What are the unique features of e-commerce, digital markets, and digital goods? 343 E-Commerce Today 344 • The New E-Commerce: Social, Mobile, Local 345 • Why E-commerce is Different 347 • Key Concepts in E-commerce: Digital Markets and Digital Goods in a Global Marketplace 349

10-2 What are the principal e-commerce business and revenue models? 353 Types of E-Commerce 353 • E-Commerce Business Models 353 • E-Commerce Revenue Models 356

Interactive Session: Organizations Scotts Miracle-Gro Cultivates Supply Chain Proficiency 319 Global Supply Chains and the Internet 320 • Business Value of Supply Chain Management Systems 321

9-3 How do customer relationship management systems help firms achieve customer intimacy? 322

What Is Customer Relationship Management? 322 • Customer Relationship Management Software 323 • Operational and Analytical CRM 325 • Business Value of Customer Relationship Management Systems 327

9-4 What are the challenges that enterprise applications pose and how are enterprise applications taking advantage of new technologies? 327

10-3 How has e-commerce transformed marketing? 358

Behavioral Targeting 358 • Social E-commerce and Social Network Marketing 361

Interactive Session: People Getting Social with Customers 364 10-4 How has e-commerce affected Businessto-Business transactions? 365

Electronic Data Interchange (EDI) 366 • New Ways of B2B Buying and Selling 366

10-5 What is the role of m-commerce in business, and what are the most important m-commerce applications? 368 Location-Based Services and Applications 369

Interactive Session: Organizations Can Instacart Deliver? 370

Enterprise Application Challenges 327 • NextGeneration Enterprise Applications 328

Interactive Session: Technology Unilever Unifies Globally with Enhanced ERP

Collaboration and Teamwork Project 335 Business Problem-Solving Case Customer Relationship Management Helps Celcom Become Number One 336

Other Mobile Commerce Services 371

330

Review Summary 331 • Key Terms 332 • Review Questions 333 • Discussion Questions 333 • Hands-On MIS Projects 334 Management Decision Problems 334 • Improving Decision Making: Using Database Software to Manage Customer Service Requests 334 • Achieving Operational Excellence: Evaluating Supply Chain Management Services 335

10-6 What issues must be addressed when building an e-commerce presence? 372 Develop an E-commerce Presence Map 372 • Develop a Timeline: Milestones 373

Review Summary 374 • Key Terms 375 • Review Questions 375 • Discussion Questions 376 • Hands-On MIS Projects 376 Management Decision Problems 376 • Improving Decision Making: Using Spreadsheet Software to Analyze a Dot-Com Business 376 • Achieving xiii

Operational Excellence: Evaluating E-Commerce Hosting Services 377

Collaboration and Teamwork Project 377 Business Problem-Solving Case Walmart and Amazon Duke It Out for E-Commerce Supremacy 378

11 Improving Decision Making and Managing Knowledge

382

Chapter-Opening Case: Germany Wins the World Cup with Big Data at Its Side 383 11-1 What are the different types of decisions, and how does the decision-making process work? 385

Collaboration and Teamwork Project 416 Business Problem-Solving Case What’s Up with IBM’s Watson? 416

IV Building and Managing Systems 421 12 Building Information Systems and Managing Projects

422

Business Value of Improved Decision Making 385 • Types of Decisions 386 • The Decision-Making Process 387 • High-Velocity Automated Decision Making 387 • Quality of Decisions and Decision Making 388

Chapter-Opening Case: Girl Scout Cookie Sales Go Digital 423 12-1 What are the core problem-solving steps for developing new information systems? 425

What is Business Intelligence? 389 • The Business Intelligence Environment 389 • Business Intelligence and Analytics Capabilities 390

12-2 What are the alternative methods for building information systems? 431

11-2 How do business intelligence and business analytics support decision making? 388

Interactive Session: Technology America’s Cup: The Tension Between Technology and Human Decision Makers 394 Business Intelligence Users 396 • Group DecisionSupport Systems 399

11-3 What are the business benefits of using intelligent techniques in decision making and knowledge management? 400

Expert Systems 400 • Case-Based Reasoning 401 • Fuzzy Logic Systems 402 • Neural Networks 403 • Genetic Algorithms 404

Interactive Session: People Facial Recognition Systems: Another Threat to Privacy? 405 Intelligent Agents 407

11-4 What types of systems are used for enterprisewide knowledge management and knowledge work, and how do they provide value for businesses? 408

Enterprise-Wide Knowledge Management Systems 408 • Knowledge Work Systems 410

Review Summary 412 • Key Terms 414 • Review Questions 414 • Discussion Questions 415 • Hands-On MIS Projects 415 xiv

Management Decision Problems 415 • Improving Decision Making: Using Pivot Tables to Analyze Sales Data 416 • Improving Decision Making: Using Intelligent Agents for Comparison Shopping 416

Defining and Understanding the Problem 425 • Developing Alternative Solutions 427 • Evaluating and Choosing Solutions 427 • Implementing the Solution 428

Traditional Systems Development Life Cycle 431 • Prototyping 432 • End-User Development 433 • Purchasing Solutions: Application Software Packages and Outsourcing 433 • Mobile Application Development: Designing for a Multi-Screen World 435 • Rapid Application Development for E-Business 436

Interactive Session: Technology The Challenge of Mobile Application Development 437 12-3 What are the principal methodologies for modeling and designing systems? 438

Structured Methodologies 438 • Object-Oriented Development 440 • Computer-Aided Software Engineering (CASE) 442

12-4 How should information systems projects be selected and managed? 442 Project Management Objectives 442

Interactive Session: Organizations Britain’s National Health Service Jettisons Choose and Book System 443 Selecting Projects: Making the Business Case for a New System 445 • Managing Project Risk and System-Related Change 448

Review Summary 452 • Key Terms 454 • Review Questions 454 • Discussion Questions 455 • Hands-On MIS Projects 455 Management Decision Problems 455 • Improving Decision Making: Using Database Software to Design a Customer System for Auto Sales 456 • Achieving Operational Excellence: Analyzing Web Site Design and Information Requirements 456

Collaboration and Teamwork Project 456 Business Problem-Solving Case A Shaky Start for Healthcare.gov 457

Glossary 462 Index 479

xv

Preface We wrote this book for business school students who wanted an in-depth look at how today’s business firms use information technologies and systems to achieve corporate objectives. Information systems are one of the major tools available to business managers for achieving operational excellence, developing new products and services, improving decision making, and achieving competitive advantage. Students will find here the most up-to-date and comprehensive overview of how business firms use information systems to achieve these objectives. After reading this book, we expect students will be able to participate in, and even lead, management discussions of information systems for their firms.

When interviewing potential employees, business firms often look for new hires who know how to use information systems and technologies for achieving bottom-line business results. Regardless of whether you are an accounting, finance, management, operations management, marketing, or information systems major, the knowledge and information you find in this book will be valuable throughout your business career.

What’s New in This Edition CuRRENCy The 12th edition features all new opening, closing, and Interactive Session cases. The text, figures, tables, and cases have been updated through September 2015 with the latest sources from industry and MIS research.

NEW FEATuRES • Assisted-graded Writing Questions at the end of each chapter with prebuilt grading rubrics and computerized essay scoring help instructors prepare, deliver, and grade writing assignments.

• A new Video Cases collection contains 31 video cases (2 or more per chapter) and 13 additional instructional videos covering key concepts and experiences in the MIS world.

• The text contains 47 Learning Tracks in MyMISLab for additional coverage of selected topics.

• Video Cases and Chapter Cases are listed at the beginning of each chapter.

NEW TOPICS

xvi

• Big data and the Internet of Things: In-depth coverage of big data, big data analytics, and the Internet of Things (IoT) are included in Chapters 1, 6, 7, and 11.

Coverage includes big data analytics, analyzing IoT data streams, Hadoop, in-memory computing, nonrelational databases, and analytic platforms.

• Cloud computing:Updated and expanded coverage of cloud computing appears in Chapter 5 (IT Infrastructure) with more detail on types of cloud services, private and public clouds, hybrid clouds, managing cloud services, and a new Interactive Session on using cloud services. Cloud computing is also covered in Chapter 6 (databases in the cloud), Chapter 8 (cloud security), Chapter 9 (cloud-based CRM and ERP), Chapter 10 (e-commerce), and Chapter 12 (cloud-based systems development).

• Social, mobile, local: New e-commerce content in Chapter 10 describes how social tools, mobile technology, and location-based services are transforming marketing and advertising.

• Social business: Expanded coverage of social business is introduced in Chapter 2 and discussed throughout the text. Detailed discussions of enterprise (internal corporate) social networking as well as social networking in e-commerce are included.

• BYOD and mobile device management • Wearable computers • Smart products • Internet of Things (IoT) • Mobile application development, mobile and native apps • Operational intelligence • Expanded coverage of business analytics, including big data analytics • On-demand business • Windows 10 • Microsoft Office 365 • Zero-day vulnerabilities • Two-factor authentication • Ransomware • Chief data officer • MOOCs in business firms

What’s New in MIS? Plenty. In fact, there’s a whole new world of doing business using new technologies for managing and organizing. What makes the MIS field the most exciting area of study in schools of business is the continuous change in technology, management, and business processes. (Chapter 1 describes these changes in more detail.)

IT INNOVATIONS A continuing stream of information technology innovations is transforming the traditional business world. Examples include the emergence of cloud computing, the growth of a mobile digital business platform based on smartphones and tablet computers, big data, and the use of social networks by managers to achieve business objectives. Most of these changes have occurred in the past few years. These innovations enable entrepreneurs and innovative traditional firms to create new products and services, develop new business models, and transform the day-to-day conduct of business. In the process, some old businesses, even industries, are being destroyed while new businesses are springing up.

NEW BuSINESS MODELS For instance, the emergence of online video services such as Netflix for streaming, Apple iTunes, Amazon, and many others for downloading video, has forever changed how premium video is distributed and even created. Netflix in 2015 attracted 62 million subscribers worldwide to what it calls the Internet TV revolution. Netflix has moved into premium TV show production with nearly 30 original shows such as House of Cards and Orange is the New Black challenging cable and broadcast producers of TV shows and potentially disrupting cable network dominance of TV show production. Apple’s iTunes now accounts for 67 percent of movie and TV show downloads and has struck deals with major Hollywood studios for recent movies and TV shows. A growing trickle of viewers are unplugging from cable and using only the Internet for entertainment.

E-COMMERCE ExPANDINg E-commerce generated about $531 billion in revenues in 2015 and is estimated to grow to nearly $800 billion by 2019. E-commerce is changing how firms design, produce, and

xvii

deliver their products and services. E-commerce has reinvented itself again, disrupting the traditional marketing and advertising industry and putting major media and content firms in jeopardy. Facebook and other social networking sites such as YouTube, Twitter, and Tumblr, along with Netflix, Apple Beats music service, and many other media firms exemplify the new face of e-commerce in the 21st century. They sell services. When we think of e-commerce, we tend to think of selling physical products.

Although this iconic vision of e-commerce is still very powerful and the fastest growing form of retail in the U.S., growing up alongside is a whole new value stream based on selling services, not goods. It’s a services model of e-commerce. Growth in social commerce is spurred by powerful growth of the mobile platform; 80 percent of Facebook’s users access the service from mobile phones and tablets. Information systems and technologies are the foundation of this new services-based e-commerce.

MANAgEMENT CHANgES Likewise, the management of business firms has changed: With new mobile smartphones, high-speed wireless Wi-Fi networks, and wireless laptop computers, remote salespeople on the road are only seconds away from their managers’ questions and oversight. Business is going mobile, along with consumers. Managers on the move are in direct, continuous contact with their employees. The growth of enterprise-wide information systems with extraordinarily rich data means that managers no longer operate in a fog of confusion but, instead, have online, nearly instant access to the really important information they need for accurate and timely decisions. In addition to their public uses on the web, wikis and blogs are becoming important corporate tools for communication, collaboration, and information sharing.

CHANgES IN FIRMS AND ORgANIzATIONS Compared to industrial organizations of the previous century, new, fast-growing, 21st-century business firms put less emphasis on hierarchy and structure and more emphasis on employees taking on multiple roles and tasks. They put greater emphasis on competency and skills than on position in the hierarchy. They emphasize higher speed and more accurate decision making based on data and analysis. They are more aware of changes in technology, consumer attitudes, and culture. They use social media to enter into conversations with consumers and demonstrate a greater willingness to listen to consumers, in part because they have no choice. They show better understanding of the importance of information technology in creating and managing business firms and other organizations. To the extent that organizations and business firms demonstrate these characteristics, they are 21st-century digital firms.

The 12th Edition: The Comprehensive Solution for the MIS Curriculum

xviii

Since its inception, this text has helped define the MIS course around the globe. This edition continues to be authoritative but is also more customizable, flexible, and geared to meeting the needs of different colleges, universities, and individual instructors. Many of its learning tools are now available in digital form. This book is now part of a complete learning package that includes the core text, Video Case Study Package, and Learning Tracks.

The core text consists of 12 chapters with hands-on projects covering the most essential topics in MIS. An important part of the core text is the Video Case Study and Instructional Video Package: 31 video case studies (2 to 3 per chapter) plus 13 instructional videos that illustrate business uses of information systems, explain new technologies, and explore concepts. Videos are keyed to the topics of each chapter.

A diagram accompanying each chapter-opening case graphically illustrates how people, organization, and technology elements work together to create an information system solution to the business challenges discussed in the case.

Business

Challenges

• Monitor games and ticket sales

• Revise business

People

• Highly competitive sport • Opportunities from new technology

strategies

• Redesign job functions and workflows

Organization

Information System

Business Solutions

Ticketing systems • Increase revenue • Optimize ticket sales • Provide secondary ticket market Performance analysis system

• Fieldf/x • Qcue dynamic

• Analyze player and team performance Technology

ticketing software • Secondary ticketing platform • Wi-Fi network

Interactive Services

In addition, for students and instructors who want to go deeper into selected topics, 47 Learning Tracks in MyMISLab cover a variety of MIS topics in greater depth.

THE CORE TExT The core text provides an overview of fundamental MIS concepts by using an integrated framework for describing and analyzing information systems. This framework shows information systems composed of people, organization, and technology elements and is reinforced in student projects and case studies.

CHAPTER ORgANIzATION Each chapter contains the following elements: • A Chapter Outline based on Learning Objectives • Lists of all the Case Studies and Video Cases for each chapter • A chapter-opening case describing a real-world organization to establish the theme and importance of the chapter • A diagram analyzing the opening case in terms of the people, organization, and technology model used throughout the text • Two Interactive Sessions with Case Study Questions • A Review Summary keyed to the Student Learning Objectives • A list of Key Terms that students can use to review concepts • Review questions for students to test their comprehension of chapter material • Discussion questions the broader themes of the chapter raise.

• A series of Hands-on MIS Projects consisting of two Management Decision Problems, a hands-on application software project, and a project to develop Internet skills • A Collaboration and Teamwork Project to develop teamwork and presentation skills, with options for using open source collaboration tools • A chapter-ending case study for students to apply chapter concepts • Two assisted-graded writing questions with prebuilt grading rubrics • Chapter references

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KEy FEATuRES We have enhanced the text to make it more interactive, leading-edge, and appealing to both students and instructors. The features and learning tools are described in the following sections:

Business-Driven with Real-World Business Cases and Examples

The text helps students see the direct connection between information systems and business performance. It describes the main business objectives driving the use of information systems and technologies in corporations all over the world: operational excellence, new products and services, customer and supplier intimacy, improved decision making, competitive advantage, and survival. In-text examples and case studies show students how specific companies use information systems to achieve these objectives.

We use only current (2015) examples from business and public organizations throughout the text to illustrate the important concepts in each chapter. All the case studies describe companies or organizations that are familiar to students, such as the San Francisco Giants, Facebook, Walmart, Google, Target, and Home Depot.

Interactivity

There’s no better way to learn about MIS than by doing MIS! We provide different kinds of hands-on projects by which students can work with real-world business scenarios and data and learn firsthand what MIS is all about. These projects heighten student involvement in this exciting subject.

• Online Video Case Package: Students can watch short videos online, either in class or at home or work, and then apply the concepts of the book to the analysis of the video. Every chapter contains at least two business video cases that explain how business firms and managers are using information systems and explore concepts discussed in the chapter. Each video case consists of a video about a real-world company, a background text case, and case study questions. These video cases enhance students’ understanding of MIS topics and the relevance of MIS to the business world. In addition, 13 Instructional Videos describe developments and concepts in MIS keyed to respective chapters.

• Interactive Sessions: Two short cases in each chapter have been redesigned as Interactive Sessions to be used in the classroom (or on Internet discussion boards) to stimulate student interest and active learning. Each case concludes with case study questions. The case study questions provide topics for class discussion, Internet discussion, or written assignments.

INTERACTIVE SESSION: PEOPLE Each chapter contains two Interactive Sessions on People, Organizations, or Technology using real-world companies to illustrate chapter concepts and issues.

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Getting Social with Customers

Businesses of all sizes are finding Facebook, Twitter, and other social media to be powerful tools for engaging customers, amplifying product messages, discovering trends and influencers, building brand awareness, and taking action on customer requests and recommendations. Half of all Twitter users recommend products in their tweets.

About 1.4 billion people use Facebook, and more than 30 million businesses have active brand pages enabling users to interact with the brand through blogs, comment pages, contests, and offerings on the brand page. The Like button gives users a chance to share with their social network their feelings about content and other objects they are viewing and websites they are visiting. With Like buttons on millions of websites, Facebook can track user behavior on other sites and then sell this information to marketers. Facebook also sells display ads to firms that show up in the right column

In addition to monitoring people’s chatter on Twitter, Facebook, and other social media, some companies are using sentiment analysis (see Chapter 6) to probe more deeply into their likes and dislikes. For example, during the 2014 Golden Globe Awards, thousands of women watching the ceremony tweeted detailed comments about Hayden Panettiere and Kelly Osborne’s slickedback hairdos. Almost instantaneously, the Twitter feeds of these women received instructions from L’Oréal Paris showing them how to capture various red-carpet looks at home, along with promotions and special deals for L’Oréal products.

L’Oreal had worked with Poptip, a real-time market research company to analyze what conversations about hairstyling connected to Golden Globe hashtags and other key phrases were appearing on Twitter. When the Golden Globe red-carpet events began, Poptip’s software looked for similar

CASE STUDY QUESTIONS 1. Assess the people, organization, and technology issues for using social media to engage with customers.

3. Give some examples of business decisions in this case study that were facilitated by using social media to interact with customers.

2. What are the advantages and disadvantages of using social media for advertising, brand building, market research, and customer service?

4. Should all companies use Facebook and Twitter for customer service and marketing?

Why or why not? What kinds of companies are best suited to use these platforms?

Case Study Questions encourage students to apply chapter concepts to real-world companies in class discussions, student presentations, or writing assignments.

• Hands-on MIS Projects: Every chapter concludes with a Hands-on MIS Projects section containing three types of projects: two Management Decision problems; a hands-on application software exercise using Microsoft Excel, Access, or web page and blog creation tools; and a project that develops Internet business skills.

A Dirt Bikes USA running case in MyMISLab provides additional hands-on projects for each chapter.

11-9 Applebee’s is the largest casual dining chain in the world, with more than 1800 locations throughout the United States and 20 other countries. The menu features beef, chicken, and pork items as well as burgers, pasta, and seafood. Applebee’s CEO wants to make the restaurant more profitable by developing menus that are tastier and contain more items that customers want and are willing to pay for despite rising costs for gasoline and agricultural products. How might business intelligence help management implement this strategy? What pieces of data would Applebee’s need to collect? What kinds of reports would be useful to help management make decisions about how to improve menus and profitability?

Two real-world business scenarios per chapter provide opportunities for students to apply chapter concepts and practice management decision making.

Students practice using software in real-world settings for achieving operational excellence and enhancing decision making.

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IMPROVING DECISION MAKING: USING WEB TOOLS TO CONFIGURE AND PRICE AN AUTOMOBILE

Software skills: Internet-based software Business skills: Researching product information and pricing Each chapter features a project to develop Internet skills for accessing information, conducting research, and performing online calculations and analysis.

3-11 In this exercise, you will use software at car-selling websites to find product information about a car of your choice and use that information to make an important purchase decision. You will also evaluate two of these sites as selling tools.

You are interested in purchasing a new Ford Escape (or some other car of your choice). Go to the website of CarsDirect (www.carsdirect.com) and begin your investigation. Locate the Ford Escape. Research the various Escape models; choose one you prefer in terms of price, features, and safety ratings. Locate and read at least two reviews. Surf the website of the manufacturer, in this case Ford (www.ford.com).

Compare the information available on Ford’s website with that of CarsDirect for the Ford Escape. Try to locate the lowest price for the car you want in a local dealer’s inventory. Suggest improvements for CarsDirect.com and Ford.com.

• Collaboration and Teamwork Projects: Each chapter features a collaborative project that encourages students working in teams to use Google Drive, Google Docs, or other open-source collaboration tools. The first team project in Chapter 1 asks students to build a collaborative Google site.

Assessment and AACSB Assessment Guidelines

The Association to Advance Collegiate Schools of Business (AACSB) is a not-for-profit corporation of educational institutions, corporations and other organizations that seek to improve business education primarily by accrediting university business programs. As part of its accreditation activities, the AACSB has developed an Assurance of Learning Program designed to ensure that schools do in fact teach students what they promise.

Schools are required to state a clear mission, develop a coherent business program, identify student learning objectives, and then prove that students do in fact achieve the objectives.

We have attempted in this book to support AACSB efforts to encourage assessment-based education. The front end papers of this edition identify student learning objectives and anticipated outcomes for our Hands-on MIS projects. The authors will provide custom advice on how to use this text in their colleges with different missions and assessment needs. Please email the authors or contact your local Pearson representative for contact information.

For more information on the AACSB Assurance of Learning Program, and how this text supports assessment-based learning, please visit the website for this book.

Customization and Flexibility: New Learning Track Modules

Our Learning Tracks feature gives instructors the flexibility to provide in-depth coverage of the topics they choose. Forty-seven Learning Tracks in MyMISLab are available to instructors and students. This supplementary content takes students deeper into MIS topics, concepts, and debates; reviews basic technology concepts in hardware, software, database design, telecommunications, and other areas; and provides additional hands-on software instruction. The 12th edition includes new Learning Tracks on e-commerce payment systems, including Bitcoin, and Occupational and Career Outlook for Information Systems Majors 2012–2020.

Author-certified test bank and supplements

• Author-certified test bank: The authors have worked closely with skilled test item writers to ensure that higher-level cognitive skills are tested. Test bank multiple choice questions include questions on content but also include many questions that require analysis, synthesis, and evaluation skills.

xxii

• Annotated slides: The authors have prepared a comprehensive collection of 50 PowerPoint slides to be used in your lectures. Many of these slides are the same as Ken Laudon uses in his MIS classes and executive education presentations. Each of the slides is annotated with teaching suggestions for asking students questions, developing in-class lists that illustrate key concepts, and recommending other firms as examples in addition to those provided in the text. The annotations are like an instructor’s manual built into the slides and make it easier to teach the course effectively.

Student Learning Focused

Student Learning Objectives are organized around a set of study questions to focus student attention. Each chapter concludes with a Review Summary and Review Questions organized around these study questions, and each major chapter section is based on a Learning Objective.

Career Resources

The instructor resources for this text include extensive career resources, including job-hunting guides and instructions on how to build a digital portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a résumé or job application or used as a learning assessment tool for instructors.

INSTRuCTOR RESOuRCES At the Instructor Resource Center, www.pearsonhighered.com/irc, instructors can easily register to gain access to a variety of instructor resources available with this text in downloadable format.

If assistance is needed, our dedicated technical support team is ready to help with the media supplements that accompany this text. Visit http://247.pearsoned.com for answers to frequently asked questions and toll-free user support phone numbers.

The following supplements are available with this text: • Instructor’s Resource Manual • Test Bank • TestGen® Computerized Test Bank • PowerPoint Presentation • Image Library • Lecture Notes

Video Cases and Instructional Videos

Instructors can download step-by-step instructions for accessing the video cases from the Instructor Resources Center. All Video Cases and Instructional Videos are listed at the beginning of each chapter as well as in the Preface.

Learning Tracks Modules

Forty-seven Learning Tracks in MyMISLab provide additional coverage topics for students and instructors. See page xxv for a list of the Learning Tracks available for this edition.

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Video Cases and Instructional Videos Chapter

Video

Chapter 1: Business Information Systems in Your Career

Case 1: UPS Global Operations with the DIAD Case 2: Google Data Center Efficiency Best Practices Instructional Video 1: Green Energy Efficiency in a Data Center Using Tivoli Architecture (IBM) Instructional Video 2: Tour IBM’s Raleigh Data Center

Chapter 2: Global E-Business and Collaboration

Case 1: Walmart’s Retail Link Supply Chain Case 2: CEMEX - Becoming a Social Business Instructional Video 1: US Foodservice Grows Market with Oracle CRM on Demand

Chapter 3: Achieving Competitive Advantage with Information Systems

Case 1: National Basketball Association: Competing on Global Delivery with Akamai OS Streaming Case 2: IT and Geo-Mapping Help a Small Business Succeed Case 3: Materials Handling Equipment Corp: Enterprise Systems Drive Corporate Strategy for a Small Business Instructional Video 1: SAP BusinessOne ERP: From Orders to Final Delivery and Payment

Chapter 4: Ethical and Social Issues in Information Systems

Case 1: What Net Neutrality Means for You Case 2: Facebook Privacy: Social Network Data Mining Case 3: Data Mining for Terrorists and Innocents Instructional Video 1: Viktor Mayer Schönberger on the Right to Be Forgotten

Chapter 5: IT Infrastructure: Hardware and Software

Case 1: Rockwell Automation Fuels the Oil and Gas Industry with the Internet of Things Case 2: ESPN.com: Getting to eXtreme Scale on the Web Instructional Video 1: IBM Blue Cloud Is Ready-to-Use Computing

Chapter 6: Foundations of Business Intelligence: Databases and Information Management

Case 1: Dubuque Uses Cloud Computing and Sensors to Build a Smarter City Case 2: Brooks Brothers Closes in on Omnichannel Retail Case 3: Maruti Suzuki Business Intelligence and Enterprise Databases

Chapter 7: Telecommunications, the Internet, and Wireless Technology

Case 1: Telepresence Moves Out of the Boardroom and into the Field Case 2: Virtual Collaboration with Lotus Sametime

Chapter 8: Securing Information Systems

Case 1: Stuxnet and Cyberwarfare Case 2: Cyberespionage: The Chinese Threat Case 3: IBM Zone Trusted Information Channel Instructional Video 1: Sony PlayStation Hacked; Data Stolen from 77 Million Users Instructional Video 2: Zappos Working to Correct Online Security Breach Instructional Video 3: Meet the Hackers: Anonymous Statement on Hacking Sony

Chapter 9: Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

Case 1: Workday: Enterprise Cloud Software-as-a-Service (SaaS) Case 2: Evolution Homecare Manages Patients with Microsoft Dynamics CRM Instructional Video 1: GSMS Protects Patients by Serializing Every Bottle of Drugs

Chapter 10: E-Commerce: Digital Markets, Digital Goods

Case 1: Groupon: Deals Galore Case 2: Etsy: A Marketplace and Community Case 3: Ford Manufacturing Supply Chain: B2B Marketplace

Chapter 11: Improving Decision Making and Managing Knowledge

Case 1: How IBM’s Watson Became a Jeopardy Champion Case 2: Alfresco: Open Source Document Management and Collaboration Case 3: FreshDirect Uses Business Intelligence to Manage Its Online Grocery Case 4: Business Intelligence Helps the Cincinnati Zoo Instructional Video 1: Analyzing Big Data: IBM Watson: After Jeopardy

Chapter 12: Building Information Systems and Managing Projects

Case 1: IBM: BPM in a Service-Oriented Architecture Case 2: IBM Helps the City of Madrid with Real-Time BPM Software Instructional Video 1: BPM: Business Process Management Customer Story Instructional Video 2: Workflow Management Visualized

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Learning Tracks Chapter

Learning Tracks

Chapter 1: Business Information Systems in Your Career

How Much Does IT Matter?

The Changing Business Environment for IT The Business Information Value Chain The Mobile Digital Platform Occupational and Career Outlook for Information Systems Majors 2012–2020

Chapter 2: Global E-Business and Collaboration

Systems from a Functional Perspective IT Enables Collaboration and Teamwork Challenges of Using Business Information Systems Organizing the Information Systems Function

Chapter 3: Achieving Competitive Advantage with Information Systems

Challenges of Using Information Systems for Competitive Advantage Primer on Business Process Design and Documentation Primer on Business Process Management

Chapter 4: Ethical and Social Issues in Information Systems

Developing a Corporate Code of Ethics for IT

Chapter 5: IT Infrastructure: Hardware and Software

How Computer Hardware and Software Work Service Level Agreements Cloud Computing The Open Source Software Initiative The Evolution of IT Infrastructure Technology Drivers of IT Infrastructure Fourth Generation Languages

Chapter 6: Foundations of Business Intelligence: Databases and Information Management

Database Design, Normalization, and Entity-Relationship Diagramming Introduction to SQL Hierarchical and Network Data Models

Chapter 7: Telecommunications, the Internet, and Wireless Technology

Broadband Network Services and Technologies Cellular System Generations Wireless Applications for Customer Relationship Management, Supply Chain Management, and Health Care Introduction to Web 2.0 LAN Topologies

Chapter 8: Securing Information Systems

The Booming Job Market in IT Security The Sarbanes-Oxley Act Computer Forensics General and Application Controls for Information Systems Management Challenges of Security and Control Software Vulnerability and Reliability

Chapter 9: Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

SAP Business Process Map Business Processes in Supply Chain Management and Supply Chain Metrics Best-Practice Business Processes in CRM Software

Chapter 10: E-Commerce: Digital Markets, Digital Goods

E-Commerce Challenges: The Story of Online Groceries Build an E-Commerce Business Plan Hot New Careers in E-Commerce E-Commerce Payment Systems Building an E-Commerce Website

Chapter 11: Improving Decision Making and Managing Knowledge

Building and Using Pivot Tables The Expert System Inference Engine Challenges of Knowledge Management Systems

Chapter 12: Building Information Systems and Managing Projects

Capital Budgeting Methods for Information Systems Investments Enterprise Analysis: Business Systems Planning and Critical Success Factors Unified Modeling Language Information Technology Investments and Productivity xxv

Acknowledgements The production of any book involves valued contributions from a number of persons.

We would like to thank all of our editors for encouragement, insight, and strong support for many years. We thank our editor Nicole Sam, Program Manager Denise Weiss, and Project Manager Karalyn Holland for their role in managing the project.

We remain grateful to Bob Horan for all his years of editorial guidance.

Our special thanks go to our supplement authors for their work, including the following MyLab content contributors: John Hupp, Columbus State University; Robert J. Mills, Utah State University; J.K. Sinclaire, Arkansas State University; and Michael L. Smith, SUNY Oswego. We are indebted to Robin Pickering for her assistance with writing and to William Anderson and Megan Miller for their help during production. We thank Diana R. Craig for her assistance with database and software topics.

Special thanks to colleagues at the Stern School of Business at New York University; to Professor Werner Schenk, Simon School of Business, University of Rochester; to Professor Mark Gillenson, Fogelman College of Business and Economics, University of Memphis; to Robert Kostrubanic, CIO and Director of Information Technology Services Indiana-Purdue University Fort Wayne; to Professor Lawrence Andrew of Western Illinois University; to Professor Detlef Schoder of the University of Cologne; to Professor Walter Brenner of the University of St. Gallen; to Professor Lutz Kolbe of the University of Gottingen; to Professor Donald Marchand of the International Institute for Management Development; and to Professor Daniel Botha of Stellenbosch University who provided additional suggestions for improvement. Thank you to Professor Ken Kraemer, University of California at Irvine, and Professor John King, University of Michigan, for more than a decade’s long discussion of information systems and organizations. And a special remembrance and dedication to Professor Rob Kling, University of Indiana, for being my friend and colleague over so many years.

We also want especially to thank all our reviewers whose suggestions helped improve our texts. Reviewers for this edition include the following: Brad Allen, Plymouth State University Dawit Demissie, University of Albany Anne Formalarie, Plymouth State University Bin Gu,University of Texas–Austin Essia Hamouda, University of California–Riverside Linda Lau, Longwood University Kimberly L. Merritt, Oklahoma Christian University James W. Miller, Dominican University Fiona Nah, University of Nebraska–Lincoln M. K. Raja, University of Texas Arlington Thomas Schambach, Illinois State University Shawn Weisfeld, Florida Institute of Technology

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K.C.L. J.P.L.

Information Systems in the Digital Age

I

P A R T

1 Business Information Systems in Your Career 2 Global E-Business and Collaboration 3 Achieving Competitive Advantage with Information Systems 4 Ethical and Social Issues in Information Systems

Part I introduces the major themes and the problem-solving approaches that are used throughout this book. While surveying the role of information systems in today’s businesses, this part raises a series of major questions: What is an information system? Why are information systems so essential in businesses today? How can information systems help businesses become more competitive? What do I need to know about information systems to succeed in my business career? What ethical and social issues do widespread use of information systems raise?

1

Business Information Systems in Your Career

1

C h A p t E r

LearnIng ObjectIves after reading this chapter, you will be able to answer the following questions:

2

1-I

Why are information systems so essential for running and managing a business today?

1-2

What exactly is an information system? How does it work? What are its people, organizational, and technology components?

1-3

How will a four-step method for business problem solving help you solve information system-related problems?

1-4

How will information systems affect business careers, and what information systems skills and knowledge are essential?

ChAptEr CASES

VIDEo CASES

The San Francisco Giants Keep Winning with Information Technology The Mobile Pocket Office UPS Competes Globally with Information Technology Home Depot Renovates Itself with New Systems and Ways of Working

Case 1: UPS Global Operations with the DIAD Case 2: Google Data Center Efficiency Best Practices Instructional Videos Green Energy Efficiency in a Data Center, Using Tivoli Architecture (IBM) Tour IBM’s Raleigh Data Center

The SAn FRAnciSco GiAnTS KeeP WinninG WiTh inFoRmATion TechnoloGy

the San Francisco Giants have won the most games of any team in the history

of American baseball. They have captured 23 National League pennants and appeared in 20 World Series competitions—both records in the National League.

The Giants have outstanding players (with the most Hall of Fame players in all of professional baseball) and coaches, but some of their success, both as a team and as a business, can be attributed to their use of information technology.

Baseball is very much a game of statistics, and all the major teams are constantly analyzing their data on player performance and optimal positioning on the field, but the Giants are doing more. They have started to use a video system from Sportsvision called Fieldf/x, which digitally records the position of all players and hit balls in real time. The system generates defensive statistics such as the difficulty of a catch and the probability of a particular fielder making that catch. Information the system produces on player speed and response time, such as how quickly an outfielder comes in for a ball or reacts to line drives, enables the Giants to make player data analysis much more precise. In some cases, it provides information that didn’t exist before on players’ defensive skills and other skills. Fieldf/x generates a million records per game. That amounts to 5 billion records in three years, the length of time required to provide a high level of confidence in the data. In addition to player and team statistics, the Giants are starting to collect data about fans, including ticket purchases and social media activity.

© Cynthia Lindow/Alamy.

3

4

Part I: Information systems in the Digital age

Under the leadership of chief information officer (CIO) Bill Schlough, the San Francisco Giants have pioneered in dynamic ticket pricing, based on software from Qcue, in which the price of a ticket fluctuates according to the level of demand for a particular ball game. It’s similar to the dynamic ticket pricing used in the airline industry. If a game is part of a crucial series, the Giants are playing an in-division rival, or the game appears to be selling out especially fast, ticket prices will rise. If the game isn’t a big draw, ticket prices fall. Since implementing dynamic pricing, the Giants have increased ticket sales 7 percent each year.

Season ticket-holders don’t normally attend every game, and this can lose revenue for a team. Every time a fan with a season ticket decides to stay home from a game, the sports franchise loses an average of $20 in concession and merchandise sales.

To make sure stadium seats are always filled, the Giants created a secondary online ticket market on which season ticket holders can resell tickets they are not using. The Giants’ information technology specialists found a way to activate and deactivate the bar codes on tickets so that they can be resold. The system is also a way for the Giants to provide additional service to customers.

The Giants have also taken advantage of wireless technology to enhance their fans’ experience. A network extends from the seats to the concession stands to areas outside the stadium and is one of the largest public wireless networks in the world.

The stadium, AT&T Park, has a giant high-speed wireless network, which fans can use to check scores and video highlights, update their social networks, and do email.

Sources: Ed Burns, “Data Analytics Applications Let Teams Call New Ticket-pricing Plays,” Search Business Analytics, March 19, 2015; www/qcue.net, accessed March 5, 2015; http://www.sportvision.com, accessed March 5, 2015; http://mlb.mlb.com/sf/team/frontoffice_bios/schlough_bill.jsp, accessed February 1, 2015; Peter High, “Interview with World Champion San Francisco Giants CIO and San Jose Giants Chairman, Bill Schlough,” Forbes, February 4, 2013; and Fritz Nelson, “Chief of the Year,” Information Week, December 17, 2012.

T he challenges facing the San Francisco Giants and other baseball teams show why

information systems are so essential today. Major League Baseball is a business as well as a sport, and teams such as the Giants need to take in revenue from games to stay in business. Major League Baseball is also a business in which what matters above all is winning, and any way of using information to improve player performance is a competitive edge.

The chapter-opening diagram calls attention to important points this case and this chapter raise. To increase stadium revenue, the San Francisco Giants developed a dynamic ticket pricing system designed to adjust ticket prices to customer demand and to sell seats at the optimum price. The team developed another ticketing system that enables existing ticketholders to sell their tickets easily online to someone else. An additional way of cultivating customers is to deploy modern information technology at AT&T Park, including a massive Wi-Fi wireless network with interactive services. To improve player performance, the Giants implemented a system that captures video on players and then uses the data to analyze player defensive statistics, including speed and reaction times.

Here are some questions to think about: What role does technology play in the San Francisco Giants’ success as a baseball team? Assess the contributions of the systems described in this case study.

chapter 1: business Information systems in Your career

5

Business

Challenges

• Monitor games and ticket sales

• Revise business

People

• Highly competitive sport • Opportunities from new technology

strategyes

• Redesign job functions and workflows

Organization

Information System

Business Solutions

• Increase revenue Ticketing systems • Optimize ticket sales • Provide secondary ticket market Performance analysis system

• Fieldf/x • Qcue dynamic ticketing software • Secondary ticketing platform • Wi-Fi network

• Analyze player and team performance Technology

Interactive Services

1-1 Why are information systems so essential for running and managing a business today?

It’s not business as usual in America, or the rest of the global economy, any more. In 2015, American businesses will invest nearly $600 billion in information systems hardware, software, and telecommunications equipment—about one quarter of all capital investment in the United States. In addition, they will spend another $400 billion on business and management consulting and information technology services, much of which involves redesigning firms’ business operations to take advantage of these new technologies. Together, investments in technology and management consulting added up to more than $1 trillion being invested in information systems in 2014.

These expenditures grew at around 4 percent in 2014, far faster than the economy as a whole (BEA, 2014). Worldwide, expenditures for information technology exceeded $3.8 trillion (Gartner, 2015).

hoW InformAtIon SYStEmS ArE trAnSformInG BuSInESS You can see the results of this spending around you every day by observing how people conduct business. Cell phones, smartphones, tablet computers, email, and online conferencing over the Internet have all become essential tools of business. In 2015, more than 118 million businesses had registered dot-com Internet sites. Approximately 227 million adult Americans are online, 170 million people buy something online, 205 million research a product, and 220 million use a search engine. What this means is that if you and your business aren’t connected to the Internet and wireless networks, chances are you are not being as effective as you could be (Pew Internet and American Life, 2015; eMarketer, 2015).

Despite the economic downturn, in 2014 FedEx moved more than one billion packages in the United States, mostly overnight, and United Parcel Service (UPS) moved more than 4 billion packages, as businesses sought to sense and respond to rapidly changing customer demand, reduce inventories to the lowest possible levels, and achieve higher levels of operational efficiency. The growth of e-commerce has had a significant impact on UPS’s shipping volume; UPS delivers about 42 percent

6

Part I: Information systems in the Digital age

of all e-commerce shipments, representing about 22 percent of its revenue. Supply chains have become faster paced, with companies of all sizes depending on the delivery of just-in-time inventory to help them compete. Companies today manage their inventories in near real time to reduce their overhead costs and get to market faster.

If you are not part of this new supply chain management economy, chances are your business is not as efficient as it could be.

As newspaper readership continues to decline, 150 million people read at least some of their news online, 110 million read actual newspapers online, and 180 million use a social networking site such as Facebook, Tumblr, or Google+. More than 135 million bank online, and around 79 million now read blogs, creating an explosion of new writers, readers, and new forms of customer feedback that did not exist before. At 39 of the top 50 news sites, more than half of the visitors come from mobile devices. Adding to this mix of new social media, about 300 million people worldwide use Twitter (about 60 million in the United States), including 80 percent of Fortune 500 firms communicating with their customers. This means your customers are empowered and able to talk to each other about your business products and services. Do you have a solid online customer relationship program in place? Do you know what your customers are saying about your firm? Is your marketing department listening?

E-commerce and Internet advertising spending will reach $58 billion in 2015, growing at around 15 percent at a time when traditional advertising and commerce have been flat. Facebook’s ad revenue hit $12 billion in 2014, and Google’s online ad revenues surpassed $60 billion in 2014. Is your advertising department reaching this new web-based customer?

New federal security and accounting laws require many businesses to keep email messages for 5 years. Coupled with existing occupational and health laws requiring firms to store employee chemical exposure data for up to 60 years, these laws are spurring the growth of digital information now estimated to be 1.8 zettabytes (1.8 trillion gigabytes), equivalent to more than 50,000 Libraries of Congress. This trove of information is doubling every year thanks in part to more than 200 billion Internet sensors and data generators. Does your compliance department meet the minimal requirements for storing financial, health, and occupational information? If they don’t, your entire business may be at risk.

Briefly, it’s a new world of doing business, one that will greatly affect your future business career. Along with the changes in business come changes in jobs and careers.

No matter whether you are a finance, accounting, management, marketing, operations management, or information systems major, how you work, where you work, and how well you are compensated will all be affected by business information systems. The purpose of this book is to help you understand and benefit from these new business realities and opportunities.

WhAt’S nEW In mAnAGEmEnt InformAtIon SYStEmS? Lots! What makes management information systems the most exciting topic in business is the continual change in technology, management use of the technology, and the impact on business success. New businesses and industries appear, old ones decline, and successful firms are those that learn how to use the new technologies. Table 1.1 summarizes the major new themes in business uses of information systems. These themes will appear throughout the book in all the chapters, so it might be a good idea to take some time now to discuss these with your professor and other students.

In the technology area are three interrelated changes: (1) the mobile digital platform composed of smartphones and tablet devices, (2) the growing business use of big data, including the Internet of Things (IoT) driven by billions of data-producing sensors, and (3) the growth in cloud computing, by which more and more business software runs over the Internet.

chapter 1: business Information systems in Your career

change

Business impact

Technology Cloud computing platform emerges as a major business area of innovation

A flexible collection of computers on the Internet begins to perform tasks traditionally performed on corporate computers. Major business applications are delivered online as an Internet service (software as a service [SaaS]).

Big data and the Internet of Things (IoT)

Businesses look for insights in huge volumes of data from web traffic, email messages, social media content, and Internet-connected machines (sensors).

A mobile digital platform emerges to compete with the PC as a business system

The Apple iPhone and Android mobile devices can download hundreds of thousands of applications to support collaboration, location-based services, and communication with colleagues. Small tablet computers, including the iPad, Samsung Galaxy, and Kindle Fire, challenge conventional laptops as platforms for consumer and corporate computing.

ManageMenT Managers adopt online collaboration and social networking software to improve coordination, collaboration, and knowledge sharing.

More than 100 million business professionals worldwide use Google Apps, Google Drive, Microsoft SharePoint, and IBM Connections to support blogs, project management, online meetings, personal profiles, and online communities.

Business intelligence applications accelerate.

More powerful data analytics and interactive dashboards provide realtime performance information to managers to enhance decision making.

Virtual meetings proliferate.

Managers adopt telepresence, video conferencing, and web conferencing technologies to reduce travel time and cost, improving collaboration and decision making.

organizaTions Social business

Businesses use social networking platforms, including Facebook, Twitter, Instagram, and internal corporate social tools, to deepen interactions with employees, customers, and suppliers. Employees use blogs, wikis, email, texting, and messaging to interact in online communities.

Telework gains momentum in the workplace.

The Internet, wireless laptops, smartphones, and tablet computers make it possible for growing numbers of people to work away from the traditional office. Fifty-five percent of U.S. businesses have some form of remote work program.

Co-creation of business value

Sources of business value shift from products to solutions and experiences and from internal sources to networks of suppliers and collaboration with customers. Supply chains and product development become more global and collaborative; customer interactions help firms define new products and services.

IPhones, Android phones, and high-definition tablet computers are not just gadgets or entertainment outlets. They represent new emerging computing and media platforms based on an array of new hardware and software technologies.

More and more business computing is moving from PCs and desktop machines to these mobile devices. Managers are increasingly using these devices to coordinate work, communicate with employees, and provide information for decision making. In 2015, more than 60 percent of Internet users will access the web through mobile devices. To a large extent, these devices change the character of corporate computing.

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DANCE ON STILTS AT THE GIRLS’ UNYAGO, NIUCHI

Newala, too, suffers from the distance of its water-supply—at least the Newala of to-day does; there was once another Newala in a lovely valley at the foot of the plateau. I visited it and found scarcely a trace of houses, only a Christian cemetery, with the graves of several missionaries and their converts, remaining as a monument of its former glories. But the surroundings are wonderfully beautiful. A thick grove of splendid mango-trees closes in the weather-worn crosses and headstones; behind them, combining the useful and the agreeable, is a whole plantation of lemon-trees covered with ripe fruit; not the small African kind, but a much larger and also juicier imported variety, which drops into the hands of the passing traveller, without calling for any exertion on his part. Old Newala is now under the jurisdiction of the native pastor, Daudi, at Chingulungulu, who, as I am on very friendly terms with him, allows me, as a matter of course, the use of this lemon-grove during my stay at Newala.

FEET MUTILATED BY THE RAVAGES OF THE “JIGGER” (Sarcopsylla penetrans)

The water-supply of New Newala is in the bottom of the valley, some 1,600 feet lower down. The way is not only long and fatiguing, but the water, when we get it, is thoroughly bad. We are suffering not only from this, but from the fact that the arrangements at Newala are nothing short of luxurious. We have a separate kitchen—a hut built against the boma palisade on the right of the baraza, the interior of which is not visible from our usual position. Our two cooks were not long in finding this out, and they consequently do—or rather neglect to do—what they please. In any case they do not seem to be very particular about the boiling of our drinking-water—at least I can attribute to no other cause certain attacks of a dysenteric nature, from which both Knudsen and I have suffered for some time. If a man like Omari has to be left unwatched for a moment, he is capable of anything. Besides this complaint, we are inconvenienced by the state of our nails, which have become as hard as glass, and crack on the slightest provocation, and I have the additional infliction of pimples all over me. As if all this were not enough, we have also, for the last week been waging war against the jigger, who has found his Eldorado in the hot sand of the Makonde plateau. Our men are seen all day long—whenever their chronic colds and the dysentery likewise raging among them permit—occupied in removing this scourge of Africa from their feet and trying to prevent the disastrous consequences of its presence. It is quite common to see natives of this place with one or two toes missing; many have lost all their toes,

or even the whole front part of the foot, so that a well-formed leg ends in a shapeless stump. These ravages are caused by the female of Sarcopsylla penetrans, which bores its way under the skin and there develops an egg-sac the size of a pea. In all books on the subject, it is stated that one’s attention is called to the presence of this parasite by an intolerable itching. This agrees very well with my experience, so far as the softer parts of the sole, the spaces between and under the toes, and the side of the foot are concerned, but if the creature penetrates through the harder parts of the heel or ball of the foot, it may escape even the most careful search till it has reached maturity.

Then there is no time to be lost, if the horrible ulceration, of which we see cases by the dozen every day, is to be prevented. It is much easier, by the way, to discover the insect on the white skin of a European than on that of a native, on which the dark speck scarcely shows. The four or five jiggers which, in spite of the fact that I constantly wore high laced boots, chose my feet to settle in, were taken out for me by the all-accomplished Knudsen, after which I thought it advisable to wash out the cavities with corrosive sublimate. The natives have a different sort of disinfectant—they fill the hole with scraped roots. In a tiny Makua village on the slope of the plateau south of Newala, we saw an old woman who had filled all the spaces under her toe-nails with powdered roots by way of prophylactic treatment. What will be the result, if any, who can say?

The rest of the many trifling ills which trouble our existence are really more comic than serious. In the absence of anything else to smoke, Knudsen and I at last opened a box of cigars procured from the Indian store-keeper at Lindi, and tried them, with the most distressing results. Whether they contain opium or some other narcotic, neither of us can say, but after the tenth puff we were both “off,” three-quarters stupefied and unspeakably wretched. Slowly we recovered—and what happened next? Half-an-hour later we were once more smoking these poisonous concoctions—so insatiable is the craving for tobacco in the tropics.

Even my present attacks of fever scarcely deserve to be taken seriously. I have had no less than three here at Newala, all of which have run their course in an incredibly short time. In the early afternoon, I am busy with my old natives, asking questions and making notes. The strong midday coffee has stimulated my spirits to

an extraordinary degree, the brain is active and vigorous, and work progresses rapidly, while a pleasant warmth pervades the whole body. Suddenly this gives place to a violent chill, forcing me to put on my overcoat, though it is only half-past three and the afternoon sun is at its hottest. Now the brain no longer works with such acuteness and logical precision; more especially does it fail me in trying to establish the syntax of the difficult Makua language on which I have ventured, as if I had not enough to do without it. Under the circumstances it seems advisable to take my temperature, and I do so, to save trouble, without leaving my seat, and while going on with my work. On examination, I find it to be 101·48°. My tutors are abruptly dismissed and my bed set up in the baraza; a few minutes later I am in it and treating myself internally with hot water and lemon-juice.

Three hours later, the thermometer marks nearly 104°, and I make them carry me back into the tent, bed and all, as I am now perspiring heavily, and exposure to the cold wind just beginning to blow might mean a fatal chill. I lie still for a little while, and then find, to my great relief, that the temperature is not rising, but rather falling. This is about 7.30 p.m. At 8 p.m. I find, to my unbounded astonishment, that it has fallen below 98·6°, and I feel perfectly well. I read for an hour or two, and could very well enjoy a smoke, if I had the wherewithal—Indian cigars being out of the question.

Having no medical training, I am at a loss to account for this state of things. It is impossible that these transitory attacks of high fever should be malarial; it seems more probable that they are due to a kind of sunstroke. On consulting my note-book, I become more and more inclined to think this is the case, for these attacks regularly follow extreme fatigue and long exposure to strong sunshine. They at least have the advantage of being only short interruptions to my work, as on the following morning I am always quite fresh and fit.

My treasure of a cook is suffering from an enormous hydrocele which makes it difficult for him to get up, and Moritz is obliged to keep in the dark on account of his inflamed eyes. Knudsen’s cook, a raw boy from somewhere in the bush, knows still less of cooking than Omari; consequently Nils Knudsen himself has been promoted to the vacant post. Finding that we had come to the end of our supplies, he began by sending to Chingulungulu for the four sucking-pigs which we had

bought from Matola and temporarily left in his charge; and when they came up, neatly packed in a large crate, he callously slaughtered the biggest of them. The first joint we were thoughtless enough to entrust for roasting to Knudsen’s mshenzi cook, and it was consequently uneatable; but we made the rest of the animal into a jelly which we ate with great relish after weeks of underfeeding, consuming incredible helpings of it at both midday and evening meals. The only drawback is a certain want of variety in the tinned vegetables. Dr. Jäger, to whom the Geographical Commission entrusted the provisioning of the expeditions—mine as well as his own—because he had more time on his hands than the rest of us, seems to have laid in a huge stock of Teltow turnips,[46] an article of food which is all very well for occasional use, but which quickly palls when set before one every day; and we seem to have no other tins left. There is no help for it—we must put up with the turnips; but I am certain that, once I am home again, I shall not touch them for ten years to come.

Amid all these minor evils, which, after all, go to make up the genuine flavour of Africa, there is at least one cheering touch: Knudsen has, with the dexterity of a skilled mechanic, repaired my 9 × 12 cm. camera, at least so far that I can use it with a little care.

How, in the absence of finger-nails, he was able to accomplish such a ticklish piece of work, having no tool but a clumsy screw-driver for taking to pieces and putting together again the complicated mechanism of the instantaneous shutter, is still a mystery to me; but he did it successfully. The loss of his finger-nails shows him in a light contrasting curiously enough with the intelligence evinced by the above operation; though, after all, it is scarcely surprising after his ten years’ residence in the bush. One day, at Lindi, he had occasion to wash a dog, which must have been in need of very thorough cleansing, for the bottle handed to our friend for the purpose had an extremely strong smell. Having performed his task in the most conscientious manner, he perceived with some surprise that the dog did not appear much the better for it, and was further surprised by finding his own nails ulcerating away in the course of the next few days. “How was I to know that carbolic acid has to be diluted?” he mutters indignantly, from time to time, with a troubled gaze at his mutilated finger-tips.

Since we came to Newala we have been making excursions in all directions through the surrounding country, in accordance with old habit, and also because the akida Sefu did not get together the tribal elders from whom I wanted information so speedily as he had promised. There is, however, no harm done, as, even if seen only from the outside, the country and people are interesting enough.

The Makonde plateau is like a large rectangular table rounded off at the corners. Measured from the Indian Ocean to Newala, it is about seventy-five miles long, and between the Rovuma and the Lukuledi it averages fifty miles in breadth, so that its superficial area is about two-thirds of that of the kingdom of Saxony. The surface, however, is not level, but uniformly inclined from its south-western edge to the ocean. From the upper edge, on which Newala lies, the eye ranges for many miles east and north-east, without encountering any obstacle, over the Makonde bush. It is a green sea, from which here and there thick clouds of smoke rise, to show that it, too, is inhabited by men who carry on their tillage like so many other primitive peoples, by cutting down and burning the bush, and manuring with the ashes. Even in the radiant light of a tropical day such a fire is a grand sight.

Much less effective is the impression produced just now by the great western plain as seen from the edge of the plateau. As often as time permits, I stroll along this edge, sometimes in one direction, sometimes in another, in the hope of finding the air clear enough to let me enjoy the view; but I have always been disappointed.

Wherever one looks, clouds of smoke rise from the burning bush, and the air is full of smoke and vapour. It is a pity, for under more favourable circumstances the panorama of the whole country up to the distant Majeje hills must be truly magnificent. It is of little use taking photographs now, and an outline sketch gives a very poor idea of the scenery. In one of these excursions I went out of my way to make a personal attempt on the Makonde bush. The present edge of the plateau is the result of a far-reaching process of destruction through erosion and denudation. The Makonde strata are everywhere cut into by ravines, which, though short, are hundreds of yards in depth. In consequence of the loose stratification of these beds, not only are the walls of these ravines nearly vertical, but their upper end is closed by an equally steep escarpment, so that the

western edge of the Makonde plateau is hemmed in by a series of deep, basin-like valleys. In order to get from one side of such a ravine to the other, I cut my way through the bush with a dozen of my men.

It was a very open part, with more grass than scrub, but even so the short stretch of less than two hundred yards was very hard work; at the end of it the men’s calicoes were in rags and they themselves bleeding from hundreds of scratches, while even our strong khaki suits had not escaped scatheless.

NATIVE PATH THROUGH THE MAKONDE BUSH, NEAR MAHUTA

I see increasing reason to believe that the view formed some time back as to the origin of the Makonde bush is the correct one. I have no doubt that it is not a natural product, but the result of human occupation. Those parts of the high country where man—as a very slight amount of practice enables the eye to perceive at once—has not yet penetrated with axe and hoe, are still occupied by a splendid timber forest quite able to sustain a comparison with our mixed forests in Germany. But wherever man has once built his hut or tilled his field, this horrible bush springs up. Every phase of this process

may be seen in the course of a couple of hours’ walk along the main road. From the bush to right or left, one hears the sound of the axe— not from one spot only, but from several directions at once. A few steps further on, we can see what is taking place. The brush has been cut down and piled up in heaps to the height of a yard or more, between which the trunks of the large trees stand up like the last pillars of a magnificent ruined building. These, too, present a melancholy spectacle: the destructive Makonde have ringed them— cut a broad strip of bark all round to ensure their dying off—and also piled up pyramids of brush round them. Father and son, mother and son-in-law, are chopping away perseveringly in the background—too busy, almost, to look round at the white stranger, who usually excites so much interest. If you pass by the same place a week later, the piles of brushwood have disappeared and a thick layer of ashes has taken the place of the green forest. The large trees stretch their smouldering trunks and branches in dumb accusation to heaven—if they have not already fallen and been more or less reduced to ashes, perhaps only showing as a white stripe on the dark ground.

This work of destruction is carried out by the Makonde alike on the virgin forest and on the bush which has sprung up on sites already cultivated and deserted. In the second case they are saved the trouble of burning the large trees, these being entirely absent in the secondary bush.

After burning this piece of forest ground and loosening it with the hoe, the native sows his corn and plants his vegetables. All over the country, he goes in for bed-culture, which requires, and, in fact, receives, the most careful attention. Weeds are nowhere tolerated in the south of German East Africa. The crops may fail on the plains, where droughts are frequent, but never on the plateau with its abundant rains and heavy dews. Its fortunate inhabitants even have the satisfaction of seeing the proud Wayao and Wamakua working for them as labourers, driven by hunger to serve where they were accustomed to rule.

But the light, sandy soil is soon exhausted, and would yield no harvest the second year if cultivated twice running. This fact has been familiar to the native for ages; consequently he provides in time, and, while his crop is growing, prepares the next plot with axe and firebrand. Next year he plants this with his various crops and

lets the first piece lie fallow. For a short time it remains waste and desolate; then nature steps in to repair the destruction wrought by man; a thousand new growths spring out of the exhausted soil, and even the old stumps put forth fresh shoots. Next year the new growth is up to one’s knees, and in a few years more it is that terrible, impenetrable bush, which maintains its position till the black occupier of the land has made the round of all the available sites and come back to his starting point.

The Makonde are, body and soul, so to speak, one with this bush.

According to my Yao informants, indeed, their name means nothing else but “bush people.” Their own tradition says that they have been settled up here for a very long time, but to my surprise they laid great stress on an original immigration. Their old homes were in the south-east, near Mikindani and the mouth of the Rovuma, whence their peaceful forefathers were driven by the continual raids of the Sakalavas from Madagascar and the warlike Shirazis[47] of the coast, to take refuge on the almost inaccessible plateau. I have studied African ethnology for twenty years, but the fact that changes of population in this apparently quiet and peaceable corner of the earth could have been occasioned by outside enterprises taking place on the high seas, was completely new to me. It is, no doubt, however, correct.

The charming tribal legend of the Makonde—besides informing us of other interesting matters—explains why they have to live in the thickest of the bush and a long way from the edge of the plateau, instead of making their permanent homes beside the purling brooks and springs of the low country.

“The place where the tribe originated is Mahuta, on the southern side of the plateau towards the Rovuma, where of old time there was nothing but thick bush. Out of this bush came a man who never washed himself or shaved his head, and who ate and drank but little.

He went out and made a human figure from the wood of a tree growing in the open country, which he took home to his abode in the bush and there set it upright. In the night this image came to life and was a woman. The man and woman went down together to the Rovuma to wash themselves. Here the woman gave birth to a stillborn child. They left that place and passed over the high land into the valley of the Mbemkuru, where the woman had another child, which

was also born dead. Then they returned to the high bush country of Mahuta, where the third child was born, which lived and grew up. In course of time, the couple had many more children, and called themselves Wamatanda. These were the ancestral stock of the Makonde, also called Wamakonde,[48] i.e., aborigines. Their forefather, the man from the bush, gave his children the command to bury their dead upright, in memory of the mother of their race who was cut out of wood and awoke to life when standing upright. He also warned them against settling in the valleys and near large streams, for sickness and death dwelt there. They were to make it a rule to have their huts at least an hour’s walk from the nearest wateringplace; then their children would thrive and escape illness.”

The explanation of the name Makonde given by my informants is somewhat different from that contained in the above legend, which I extract from a little book (small, but packed with information), by Pater Adams, entitled Lindi und sein Hinterland. Otherwise, my results agree exactly with the statements of the legend. Washing?

Hapana—there is no such thing. Why should they do so? As it is, the supply of water scarcely suffices for cooking and drinking; other people do not wash, so why should the Makonde distinguish himself by such needless eccentricity? As for shaving the head, the short, woolly crop scarcely needs it,[49] so the second ancestral precept is likewise easy enough to follow. Beyond this, however, there is nothing ridiculous in the ancestor’s advice. I have obtained from various local artists a fairly large number of figures carved in wood, ranging from fifteen to twenty-three inches in height, and representing women belonging to the great group of the Mavia, Makonde, and Matambwe tribes. The carving is remarkably well done and renders the female type with great accuracy, especially the keloid ornamentation, to be described later on. As to the object and meaning of their works the sculptors either could or (more probably) would tell me nothing, and I was forced to content myself with the scanty information vouchsafed by one man, who said that the figures were merely intended to represent the nembo—the artificial deformations of pelele, ear-discs, and keloids. The legend recorded

by Pater Adams places these figures in a new light. They must surely be more than mere dolls; and we may even venture to assume that they are—though the majority of present-day Makonde are probably unaware of the fact—representations of the tribal ancestress.

The references in the legend to the descent from Mahuta to the Rovuma, and to a journey across the highlands into the Mbekuru valley, undoubtedly indicate the previous history of the tribe, the travels of the ancestral pair typifying the migrations of their descendants. The descent to the neighbouring Rovuma valley, with its extraordinary fertility and great abundance of game, is intelligible at a glance—but the crossing of the Lukuledi depression, the ascent to the Rondo Plateau and the descent to the Mbemkuru, also lie within the bounds of probability, for all these districts have exactly the same character as the extreme south. Now, however, comes a point of especial interest for our bacteriological age. The primitive Makonde did not enjoy their lives in the marshy river-valleys.

Disease raged among them, and many died. It was only after they had returned to their original home near Mahuta, that the health conditions of these people improved. We are very apt to think of the African as a stupid person whose ignorance of nature is only equalled by his fear of it, and who looks on all mishaps as caused by evil spirits and malignant natural powers. It is much more correct to assume in this case that the people very early learnt to distinguish districts infested with malaria from those where it is absent.

This knowledge is crystallized in the ancestral warning against settling in the valleys and near the great waters, the dwelling-places of disease and death. At the same time, for security against the hostile Mavia south of the Rovuma, it was enacted that every settlement must be not less than a certain distance from the southern edge of the plateau. Such in fact is their mode of life at the present day. It is not such a bad one, and certainly they are both safer and more comfortable than the Makua, the recent intruders from the south, who have made USUAL METHOD OF good their footing on the western edge of the CLOSING HUT-DOOR plateau, extending over a fairly wide belt of country. Neither Makua nor Makonde show in their dwellings anything of the size and comeliness of the Yao houses in the plain, especially at Masasi, Chingulungulu and Zuza’s. Jumbe Chauro, a Makonde hamlet not far from Newala, on the road to Mahuta, is the

most important settlement of the tribe I have yet seen, and has fairly spacious huts. But how slovenly is their construction compared with the palatial residences of the elephant-hunters living in the plain.

The roofs are still more untidy than in the general run of huts during the dry season, the walls show here and there the scanty beginnings or the lamentable remains of the mud plastering, and the interior is a veritable dog-kennel; dirt, dust and disorder everywhere. A few huts only show any attempt at division into rooms, and this consists merely of very roughly-made bamboo partitions. In one point alone have I noticed any indication of progress—in the method of fastening the door. Houses all over the south are secured in a simple but ingenious manner. The door consists of a set of stout pieces of wood or bamboo, tied with bark-string to two cross-pieces, and moving in two grooves round one of the door-posts, so as to open inwards. If the owner wishes to leave home, he takes two logs as thick as a man’s upper arm and about a yard long. One of these is placed obliquely against the middle of the door from the inside, so as to form an angle of from 60° to 75° with the ground. He then places the second piece horizontally across the first, pressing it downward with all his might.

It is kept in place by two strong posts planted in the ground a few inches inside the door. This fastening is absolutely safe, but of course cannot be applied to both doors at once, otherwise how could the owner leave or enter his house? I have not yet succeeded in finding out how the back door is fastened.

MAKONDE LOCK AND KEY AT JUMBE CHAURO

This is the general way of closing a house. The Makonde at Jumbe Chauro, however, have a much more complicated, solid and original one. Here, too, the door is as already described, except that there is only one post on the inside, standing by itself about six inches from one side of the doorway. Opposite this post is a hole in the wall just large enough to admit a man’s arm. The door is closed inside by a large wooden bolt passing through a hole in this post and pressing with its free end against the door. The other end has three holes into which fit three pegs running in vertical grooves inside the post. The door is opened with a wooden key about a foot long, somewhat curved and sloped off at the butt; the other end has three pegs corresponding to the holes, in the bolt, so that, when it is thrust through the hole in the wall and inserted into the rectangular opening in the post, the pegs can be lifted and the bolt drawn out.[50]

MODE OF INSERTING THE KEY

With no small pride first one householder and then a second showed me on the spot the action of this greatest invention of the Makonde Highlands. To both with an admiring exclamation of “Vizuri sana!” (“Very fine!”). I expressed the wish to take back these marvels with me to Ulaya, to show the Wazungu what clever fellows the Makonde are. Scarcely five minutes after my return to camp at Newala, the two men came up sweating under the weight of two heavy logs which they laid down at my feet, handing over at the same time the keys of the fallen fortress. Arguing, logically enough, that if the key was wanted, the lock would be wanted with it, they had taken their axes and chopped down the posts—as it never occurred to them to dig them out of the ground and so bring them intact. Thus I have

two badly damaged specimens, and the owners, instead of praise, come in for a blowing-up.

The Makua huts in the environs of Newala are especially miserable; their more than slovenly construction reminds one of the temporary erections of the Makua at Hatia’s, though the people here have not been concerned in a war. It must therefore be due to congenital idleness, or else to the absence of a powerful chief. Even the baraza at Mlipa’s, a short hour’s walk south-east of Newala, shares in this general neglect. While public buildings in this country are usually looked after more or less carefully, this is in evident danger of being blown over by the first strong easterly gale. The only attractive object in this whole district is the grave of the late chief Mlipa. I visited it in the morning, while the sun was still trying with partial success to break through the rolling mists, and the circular grove of tall euphorbias, which, with a broken pot, is all that marks the old king’s resting-place, impressed one with a touch of pathos.

Even my very materially-minded carriers seemed to feel something of the sort, for instead of their usual ribald songs, they chanted solemnly, as we marched on through the dense green of the Makonde bush:—