Type:
Solution Manual
Information Technology for Management Transforming Resource: Organizations in the Digital Economy Edition:
7th Edition
Author(s):
Linda Volonino Efraim Turban
Chapter 1 IT Supports Organizational Performance in Turbulent Business Environments Goals of the Chapter This chapter focuses on the environmental business pressures impacting organizational performance and the role of Information Technology in overcoming these pressures. There are seven learning objectives to the first chapter, and upon completion of the chapter material, students should be able to understand the concept of the digital economy and of digital enterprises, the impact business pressures play on the organization and their responses and adaptations to these pressures. They will also understand the role information technology plays both within and outside of the organization. An Overview Chapter 1 is designed to give the student an understanding of how business processes and activities have been fundamentally altered with the advent of the digital economy. Information technology has become a major facilitator in organizations, changing how, why, and where we do business. The “New Versus the Old” sections of the chapter are ideal for showing students how topics that are taken for granted (for example, buying or renting a movie online) have been changed through technology. This is often an excellent place for a class discussion where the students give examples of things that have been dramatically changed through technology. Banking, ticket sales, education, testing, movies special effects, job searches, and access to libraries are good examples. If you can excite your students with web searches and activities, they will appreciate the course more. I often divide them into teams and give ten minutes to research a topic, often pulled from a recent magazine or newspaper article, and have them return with an answer. At some point early in the course, I usually have them create a two- or three-page personal website. There are many free hosting services that will assist the student with the construction of their site like geocities.com, tripod.com, and angelfire.com. Not only does this tend to give them a sense of accomplishment, but because they are expandable, I often find that students continue to add to their site, and distribute their URLs to their friends. Perhaps an ideal starting point for the course is the section “What is ‘new’ about Information Technology and the business environment?” which covers understanding knowledge management, finding employment opportunities in IT, and using IT to become a more successful manager, what the ‘digital economy’ is, and how IT is changing the commercial landscape. Students are interested in anything that can help them to find a job once they graduate and to earn as much money as possible. Section 1.1 - Doing Business in the Digital Economy – This section gives the student a 1
basic understanding of the importance of information technology as a facilitator of business activities. It show organizations using IT to engage customers more effectively, boost employee productivity and improve employee efficiency. It discusses what the digital economy is and looks at future opportunities for Entrepreneurs. This section also compares and contrasts the old economy with the new and explores various business models in the digital economy. Section 1.2 – Information Systems and Information Technology – This section explains the difference between an Information System and Information Technology. The section also discusses what a Computer based information system is and also discussed its components. Section 1.3 – Business Performance Management, Business Pressures, Organizational Responses and IT Support – This section centers on various drivers: market pressures, technological advancements, social and political pressures, as well as the contemporary organizational responses. Selecting a current ethical or business problem (for example, outsourcing overseas, exchange rate fluctuations, free trade agreements, local and global competition, business alliances, or the dot-com failures) for small group discussion can be useful. Section 1.4 – Strategy for Competitive Advantage and IT Support – This section focuses on the need for an organization to have a defined strategy for success and to increase its competitive edge. It also discusses the Porter’s Competitive Forces Model and also Porter’s Value Chain Model. With the ever-changing world of Information Technology, companies need to be very adaptive to this change and remain competitive by having a scalable and appropriate IT infrastructure. Section 1.5 – Social Computing and Networking and Virtual Worlds – This section explores the world of social computing (for example blogs and instant messaging) and social networking services (for example myspace.com and facebook.com). It also discusses Virtual worlds and “Second Life” which is computer based simulated environments intended for its users to inhabit and interact with other users via avatars. The section discusses how businesses can take advantage of these technological changes to stay competitive. Section 1.6 - Why Should You Learn About Information Technology? – This section explains why information technology is an important facilitator of organizational practices. It explains that its exploitation will make the student more effective and successful in their future careers. Section 1.7 - Plan of the Book – This section explains the layout of the chapters to students, so that they can have a more enriching experience. Section 1.8 – Managerial Issues – A focus on the special concerns a manager will face throughout the adaptation process of organization to technology and vice versa. 2
Questions for Review 1. Define a digital enterprise. A digital enterprise refers to an organization that uses computers and information systems (ISs) to perform or support its activities. 2. Define and describe digital economy. The term digital economy refers to an economy based on digital technologies and whose members are better informed and able to communicate because of IT. The term digital economy emphasizes the convergence of computing and telecommunications via the Internet and the resulting flow of information that’s stimulating e-commerce, online transactions, and organizational changes. In this economy, wired and wireless networking and communication infrastructures provide the platform over which people and organizations devise strategies, interact, communicate, collaborate, and search for information. 3. Define electronic commerce. Electronic commerce (e-commerce or EC) is the process of buying, selling, transferring, or exchanging products, services, or information via the Internet or other networks. 4. Define Networked Computing Networked computing enables computers and other electronic devices to be connected via telecommunication networks like the internet, private value added networks or company intranets, giving users access to remote information. 5. Define a business model. A business model is the method of doing business by which a company can sustain itself by generating revenue through the sale of some service or product. The business model determines how a company makes money by specifying where it is positioned in the value chain. 6. Define an Information System. An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. An information System includes inputs (data, instructions) and outputs (reports, calculations). It processes the inputs by using technology such as PCs and produces outputs that are sent to users or to other systems via electronic networks. 7. Describe a Computer Based Information System. A computer-based information system (CBIS) uses computer technology to perform some or all of its intended tasks. Such a system can include a personal computer and software, or it may 3
include several thousand computers of various sizes with hundreds of printers, plotters, and other devices, as well as communication networks databases, and in most cases, people. 8. Define information technology. Information technology refers to the technical (as opposed to the social) side of an information system including hardware, software, networks, and other devices. 9. Describe the impact of the business environment and list some of its components. Companies need to respond frequently and quickly to both the threats and the opportunities resulting from changes in their business environment. With the pace of the change and degree of uncertainty in competitive environments accelerating, organizations are under increasing pressures to produce more, using fewer resources. In order to succeed, companies must take traditional actions, such as lowering costs, and also undertake innovative activities, such as changing organization structure, business processes, or devise a competitive strategy. These reactions are known as critical response activities. Components 1. The company: core competencies, business processes, critical responses solutions 2. IT: support, infrastructure and applications 3. Performance and the feedback to mission, goals, strategies and plans 4. The environment and problems, pressures and opportunities. 10. What is Green IT and why has it become important. With an increased awareness about the damage to the physical environment and ecosystem, organizations and individuals are looking at potential improvements and savings that can be made in the IT industry. These efforts are known as Green IT. 11. List some environmental issues of data centers. 1. Data center servers are known to consume a lot of energy and generate a lot of heat 2. PCs generate CO2 (carbon dioxide) that damages the atmosphere 3. Discarded PCs and other computer equipment cause waste disposal problems 12. Describe organizational responses. Organizations can respond in many different ways by developing innovative products, developing strategic systems, introducing customer focused systems and restructuring business processes among others. 13. Define Ethics
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