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www.downloadslide.net GLOBAL EDITION Management Information Systems Managing the Digital Firm For these Global Editions, the editorial team at Pearson has collaborated with educators across the world to address a wide range of subjects and requirements, equipping students with the best possible learning tools. This Global Edition preserves the cutting-edge approach and pedagogy of the original, but also features alterations, customization, and adaptation from the North American version. GLOBAL EDITION Management Information Systems Managing the Digital Firm FIFTEENTH EDITION Kenneth C. Laudon • Jane P. Laudon FIFTEENTH EDITION Laudon Laudon G LO B A L EDITION This is a special edition of an established title widely used by colleges and universities throughout the world. Pearson published this exclusive edition for the benefit of students outside the United States and Canada. If you purchased this book within the United States or Canada, you should be aware that it has been imported without the approval of the Publisher or Author. Pearson Global Edition Laudon_15_129221175X_Final.indd 1 27/04/17 1:42 PM www.downloadslide.net MANAGEMENT INFORMATION SYSTEMS MANAGING THE DIGITAL FIRM FIFTEENTH EDITION GLOBAL EDITION Kenneth C. Laudon New York University Jane P. Laudon Azimuth Information Systems www.downloadslide.net VP Editorial Director: Andrew Gilfillan Senior Portfolio Manager: Samantha Lewis Content Development Team Lead: Laura Burgess Program Monitor: Ann Pulido/SPi Global Editorial Assistant: Michael Campbell Managing Editor, Global Edition: Steven Jackson Senior Project Editor, Global Edition: Daniel Luiz Manager, Media Production, Global Edition: M. 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Printed and bound by Vivar, Malaysia. www.downloadslide.net 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 12 books dealing with electronic commerce, information systems, organizations, and society. Professor Laudon has also written more than 40 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 large-scale 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), the Department of Homeland Security, and 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 Graduate 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. 3 www.downloadslide.net Brief Contents PART ONE Organizations, Management, and the Networked Enterprise 29 Chapter 1 Chapter 2 Chapter 3 Chapter 4 Information Systems in Global Business Today 30 PART TWO Information Technology Infrastructure 191 Chapter 5 Chapter 6 IT Infrastructure and Emerging Technologies 192 Chapter 7 Chapter 8 Telecommunications, the Internet, and Wireless Technology 276 PART THREE Key System Applications for the Digital Age 363 Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 364 Chapter 10 Chapter 11 Chapter 12 E-commerce: Digital Markets, Digital Goods 398 PART FOUR Building and Managing Systems 513 Chapter 13 Chapter 14 Chapter 15 Building Information Systems 514 Glossary Indexes 4 Global E-business and Collaboration 68 Information Systems, Organizations, and Strategy 106 Ethical and Social Issues in Information Systems 150 Foundations of Business Intelligence: Databases and Information Management 238 Securing Information Systems 320 619 631 Managing Knowledge 444 Enhancing Decision Making 480 Managing Projects 554 Managing Global Systems 588 www.downloadslide.net Complete Contents PART ONE Organizations, Management, and the Networked Enterprise 29 Chapter 1 Information Systems in Global Business Today 30 Opening Case: Rugby Football Union Tries Big Data 31 1-1 How are information systems transforming business, and why are they so essential for running and managing a business today? 33 How Information Systems Are Transforming Business 34 • What's New in Management Information Systems? 35 Interactive Session: Management The Mobile Pocket Office 37 Globalization Challenges and Opportunities: A Flattened World 39 • The Emerging Digital Firm 40 • Strategic Business Objectives of Information Systems 41 1-2 What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 44 What Is an Information System? 44 • Dimensions of Information Systems 46 Interactive Session: Technology Digital Transformation of Healthcare at Singapore's JurongHealth Services 51 It Isn't Just Technology: A Business Perspective on Information Systems 52 • Complementary Assets: Organizational Capital and the Right Business Model 54 1-3 What academic disciplines are used to study information systems, and how does each contribute to an understanding of information systems? 56 Technical Approach 56 • Behavioral Approach 57 • Approach of This Text: Sociotechnical Systems 58 Review Summary 59 • Key Terms 60 • Review Questions 60 • Discussion Questions 61 Hands-On MIS Projects 61 Collaboration and Teamwork Project 62 Case Study: Are Farms Becoming Digital Firms? 62 References: 66 5 www.downloadslide.net 6 Contents Chapter 2 Global E-business and Collaboration 68 Opening Case: Enterprise Social Networking Helps ABB Innovate and Grow 69 2-1 What are business processes? How are they related to information systems? 71 Business Processes 71 • How Information Technology Improves Business Processes 73 2-2 How do systems serve the different management groups in a business, and how do systems that link the enterprise improve organizational performance? 74 Systems for Different Management Groups 74 • Systems for Linking the Enterprise 79 Interactive Session: Organizations New Systems Help Plan International Manage Its Human Resources 80 E-business, E-commerce, and E-government 84 2-3 Why are systems for collaboration and social business so important, and what technologies do they use? 85 What Is Collaboration? 85 • What Is Social Business? 86 • Business Benefits of Collaboration and Social Business 87 • Building a Collaborative Culture and Business Processes 87 • Tools and Technologies for Collaboration and Social Business 89 Interactive Session: Technology Collaborating the Glasscubes Way 91 2-4 What is the role of the information systems function in a business? 95 The Information Systems Department 96 • Organizing the Information Systems Function 97 Review Summary 98 • Key Terms 99 • Review Questions 99 • Discussion Questions 100 Hands-On MIS Projects 100 Collaboration and Teamwork Project 101 Case Study: Social Business: Full Speed Ahead or Proceed with Caution? 101 References: 104 Chapter 3 Information Systems, Organizations, and Strategy 106 Opening Case: Tate & Lyle Devise a Global IT Strategy 107 3-1 Which features of organizations do managers need to know about to build and use information systems successfully? 109 What Is an Organization? 110 • Features of Organizations 112 3-2 What is the impact of information systems on organizations? 117 Economic Impacts 117 • Organizational and Behavioral Impacts 118 Interactive Session: Management Can Technology Replace Managers? 120 The Internet and Organizations 122 • Implications for the Design and Understanding of Information Systems 122 www.downloadslide.net Contents 3-3 7 How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems? 123 Porter's Competitive Forces Model 123 • Information System Strategies for Dealing with Competitive Forces 125 • The Internet's Impact on Competitive Advantage 128 • The Business Value Chain Model 129 Interactive Session: Technology Smart Products, Smart Companies 130 Synergies, Core Competencies, and Network-Based Strategies 134 3-4 What are the challenges posed by strategic information systems, and how should they be addressed? 138 Sustaining Competitive Advantage 138 • Aligning IT with Business Objectives 139 • Managing Strategic Transitions 140 Review Summary 140 • Key Terms 141 • Review Questions 141 • Discussion Questions 142 Hands-On MIS Projects 142 Collaboration and Teamwork Project 143 Case Study: Deutsche Bank: The Cost of Legacy Systems 144 References: 147 Chapter 4 Ethical and Social Issues in Information Systems 150 Opening Case: The Dark Side of Big Data 151 4-1 What ethical, social, and political issues are raised by information systems? 153 A Model for Thinking About Ethical, Social, and Political Issues 155 • Five Moral Dimensions of the Information Age 156 • Key Technology Trends that Raise Ethical Issues 156 4-2 What specific principles for conduct can be used to guide ethical decisions? 158 Basic Concepts: Responsibility, Accountability, and Liability 159 • Ethical Analysis 160 • Candidate Ethical Principles 160 • Professional Codes of Conduct 161 • Some Real-World Ethical Dilemmas 161 4-3 Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property? 162 Information Rights: Privacy and Freedom in the Internet Age 162 • Property Rights: Intellectual Property 169 4-4 How have information systems affected laws for establishing accountability and liability and the quality of everyday life? 172 Computer-Related Liability Problems 173 • System Quality: Data Quality and System Errors 174 • Quality of Life: Equity, Access, and Boundaries 174 Interactive Session: Technology Monitoring in the Workplace 178 Health Risks: RSI, CVS, and Cognitive Decline 180 Interactive Session: Organizations Are We Relying Too Much on Computers to Think for Us? 181 Review Summary 183 • Key Terms 184 • Review Questions 184 • Discussion Questions 185 Hands-On MIS Projects 185 www.downloadslide.net 8 Contents Collaboration and Teamwork Project 186 Case Study: Facebook Privacy: What Privacy? 186 References: 190 PART TWO Information Technology Infrastructure 191 Chapter 5 IT Infrastructure and Emerging Technologies 192 Opening Case: EasyJet Flies High with Cloud Computing 193 5-1 What is IT infrastructure, and what are the stages and drivers of IT infrastructure evolution? 195 Defining IT Infrastructure 195 • Evolution of IT Infrastructure 197 • Technology Drivers of Infrastructure Evolution 201 5-2 What are the components of IT infrastructure? 206 Computer Hardware Platforms 207 • Operating System Platforms 208 • Enterprise Software Applications 208 • Data Management and Storage 209 • Networking/Telecommunications Platforms 209 • Internet Platforms 209 • Consulting and System Integration Services 210 5-3 What are the current trends in computer hardware platforms? 210 The Mobile Digital Platform 210 Interactive Session: Technology Wearable Computers Change How We Work 211 Consumerization of IT and BYOD 212 • Quantum Computing 213 • Virtualization 213 • Cloud Computing 213 Interactive Session: Organizations Glory Finds Solutions in the Cloud 216 Green Computing 219 • High-Performance and Power-Saving Processors 220 5-4 What are the current computer software platforms and trends? 220 Linux and Open Source Software 220 • Software for the Web: Java, HTML, and HTML5 221 • Web Services and Service-Oriented Architecture 222 • Software Outsourcing and Cloud Services 224 5-5 What are the challenges of managing IT infrastructure and management solutions? 226 Dealing with Platform and Infrastructure Change 226 • Management and Governance 227 • Making Wise Infrastructure Investments 227 Review Summary 230 • Key Terms 231 • Review Questions 232 • Discussion Questions 232 Hands-On MIS Projects 232 Collaboration and Teamwork Project 233 Case Study: BYOD: Business Opportunity or Big Headache? 234 References: 237 Chapter 6 Foundations of Business Intelligence: Databases and Information Management 238 Opening Case: BAE Systems 239 6-1 What are the problems of managing data resources in a traditional file environment? 241 www.downloadslide.net Contents 9 File Organization Terms and Concepts 242 • Problems with the Traditional File Environment 243 6-2 What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful? 245 Database Management Systems 245 • Capabilities of Database Management Systems 248 • Designing Databases 250 • Non-relational Databases and Databases in the Cloud 253 6-3 What are the principal tools and technologies for accessing information from databases to improve business performance and decision making? 254 The Challenge of Big Data 254 • Business Intelligence Infrastructure 255 Interactive Session: Organizations Data-Driven Crime Fighting Goes Global 256 Analytical Tools: Relationships, Patterns, Trends 260 • Databases and the Web 263 6-4 Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources? 264 Establishing an Information Policy 264 • Ensuring Data Quality 265 Interactive Session: Management Societe Generale Builds an Intelligent System to Manage Information Flow 267 Review Summary 268 • Key Terms 269 • Review Questions 270 • Discussion Questions 270 Hands-On MIS Projects 270 Collaboration and Teamwork Project 272 Case Study: Lego's Enterprise Software Spurs Growth 272 References: 275 Chapter 7 Telecommunications, the Internet, and Wireless Technology 276 Opening Case: Wireless Technology Makes Dundee Precious Metals Good as Gold 277 7-1 What are the principal components of telecommunications networks and key networking technologies? 279 Networking and Communication Trends 279 • What is a Computer Network? 280 • Key Digital Networking Technologies 282 7-2 What are the different types of networks? 285 Signals: Digital Versus Analog 285 • Types of Networks 285 • Transmission Media and Transmission Speed 287 7-3 How do the Internet and Internet technology work, and how do they support communication and e-business? 287 What is the Internet? 288 • Internet Addressing and Architecture 288 Interactive Session: Organizations The Battle over Net Neutrality 291 Internet Services and Communication Tools 293 Interactive Session: Management Monitoring Employees on Networks: Unethical or Good Business? 296 The Web 298