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62 Part One Organizations, Management, and the Networked Enterprise

Review Summary

1. How are information systems transforming business, and what is their relationship to globalization?
E-mail, online conferencing, smartphones, and tablet computers have become essential tools for
conducting business. Information systems are the foundation of fast-paced supply chains. The Internet
allows many businesses to buy, sell, advertise, and solicit customer feedback online. Organizations are
trying to become more competitive and efficient by digitally enabling their core business processes
and evolving into digital firms. The Internet has stimulated globalization by dramatically reducing the
costs of producing, buying, and selling goods on a global scale. New information system trends include
the emerging mobile digital platform, online software as a service, and cloud computing.

2. Why are information systems so essential for running and managing a business today?
Information systems are a foundation for conducting business today. In many industries, survival
and the ability to achieve strategic business goals are difficult without extensive use of information
technology. Businesses today use information systems to achieve six major objectives: operational
excellence; new products, services, and business models; customer/supplier intimacy; improved
decision making; competitive advantage; and day-to-day survival.

3. What exactly is an information system? How does it work? What are its management, organization,
and technology components?
From a technical perspective, an information system collects, stores, and disseminates information
from an organization’s environment and internal operations to support organizational functions and
decision making, communication, coordination, control, analysis, and visualization. Information
systems transform raw data into useful information through three basic activities: input, processing,
and output.
From a business perspective, an information system provides a solution to a problem or challenge
facing a firm and represents a combination of management, organization, and technology elements.
The management dimension of information systems involves issues such as leadership, strategy, and
management behavior. The technology dimension consists of computer hardware, software, data
management technology, and networking/telecommunications technology (including the Internet).
The organization dimension of information systems involves issues such as the organization’s
hierarchy, functional specialties, business processes, culture, and political interest groups.

4. What are complementary assets? Why are complementary assets essential for ensuring that information
systems provide genuine value for an organization?
In order to obtain meaningful value from information systems, organizations must support their
technology investments with appropriate complementary investments in organizations and manage-
ment. These complementary assets include new business models and business processes, supportive
organizational culture and management behavior, appropriate technology standards, regulations, and
laws. New information technology investments are unlikely to produce high returns unless businesses
make the appropriate managerial and organizational changes to support the technology.

5. What academic disciplines are used to study information systems? How does each contribute to an
understanding of information systems? What is a sociotechnical systems perspective?
The study of information systems deals with issues and insights contributed from technical and
behavioral disciplines. The disciplines that contribute to the technical approach focusing on formal
models and capabilities of systems are computer science, management science, and operations
research. The disciplines contributing to the behavioral approach focusing on the design, implementa-
tion, management, and business impact of systems are psychology, sociology, and economics. A
sociotechnical view of systems considers both technical and social features of systems and solutions
that represent the best fit between them.

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