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INTEGRATING BUSINESS WITH TECHNOLOGY By completing the projects in this text, students will be able to demonstrate business knowledge, application software proficiency, and Internet skills.these projects can be used by instructors as learning assessment tools and by students as demonstrations of business, software, and problem-solving skills to future employers. Here are some of the skills and competencies students using this text will be able to demonstrate: Business Application skills: Use of both business and software skills in real-world business applications. Demonstrates both business knowledge and proficiency in spreadsheet, database, and Web page/blog creation tools. Internet skills: Ability to use Internet tools to access information, conduct research, or perform online calculations and analysis. Analytical, writing and presentation skills: Ability to research a specific topic, analyze a problem, think creatively, suggest a solution, and prepare a clear written or oral presentation of the solution, working either individually or with others in a group. Business Application Skills BUSINESS SKILLS Finance and Accounting Financial statement analysis Pricing hardware anrj software Technology rent vs. buy decision Total Cost of Ownership (TCO) analysis Analyzing telecommunications services anrj costs Risk assessment Retirement planning Capital budgeting Human Resources Employee training and skills tracking Job posting database and Web page Manufacturing and Production Analyzing supplier performance and pricing Inventory management Bill of materials cost sensitivity analysis Sales and Marketing Sales trend analysis SOFTWARE SKILLS Spreadsheet charts Spreadsheet downloading and formatting Spreadsheet charts and formulas and logical functions Database design Database design Web page design and creation Spreadsheet date functions Database functions Data filtering Importing data into a database Spreadsheet data tables CHAPTER Chapter 2* Chapter 10 Chapter 5 Chapter 5* Chapter 7 Chapter 8 Chapter 11 Chapter 14 Chapter 14* Chapter 13* Chapter 15 Chapter 2 Chapter 6 Chapter 12* Chapter 1
Customer reservation system Improving marketing decisions Customer profiling Customer service analysis Sales lead and customer analysis Blog creation and design Spreadsheet pivot tables Database design Database design Database design Blog creation tool Chapter 3 Chapter 12 Chapter 6* Chapter 9 Chapter 13 Chapter 4 1IIICI MCI <3IVMI» Using online software tools to calculate shipping costs Using online interactive mapping software to plan efficient transportation routes Researching product information and evaluating Web sites for auto sales Using Internet newsgroups for marketing Researching travel costs using online travel sites Searching online databases for products and services Using Web search engines for business research Researching and evaluating business outsourcing services Researching and evaluating supply chain management services Evaluating e-commerce hosting services Using shopping bots to compare product price, features, and availability Using online software tools for retirement planning Redesigning business processes for Web procurement Researching real estate prices Researching international markets and pricing Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 A n?tlvtif*5il \A/ pit inn a rih Pcocontatinn Qlf i 1 Ic"^ MMcnyniiCH, w riniiy cti lu rrociiidiiuii OI\M o BUSINESS PROBLEM Management analysis of a business Value chain and competitive forces analysis Business strategy formulation Formulating a corporate privacy policy Employee productivity analysis Disaster recovery planning Locating and evaluating suppliers Developing an e-commerce strategy Identifying knowledge management opportunities Identifying international markets CHAPTER Chapter 1 Chapter 3 Chapter 4 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 15 *Dirt Bikes Running Case on MyMISLab
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Management Information Systems MANAGING THE DIGITAL FIRM TWELFTH EDITION Kenneth C. Laudon New York University Jane P. Laudon Azimuth Information Systems Prentice Hall Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
Library of Congress Cataloging-in-Publication Information is available. Executive Editor: Bob Horan Editorial Director: Sally Yagan Editor in Chief: Eric Svendsen Product Development Manager: Ashley Santora Editorial Assistant: Jason Calcano Editorial Project Manager: Kelly Loftus Senior Marketing Manager: Anne Fahlgren Senior Managing Editor: Judy Leale Senior Production Project Manager: Karalyn Holland Senior Operations Specialist: Arnold Vila Operations Specialist: Cathleen Petersen Senior Art Director: Janet Slowik Cover Designer: Jill Lehan Cover Illustration/Photo: Merve Poray/Shutterstock Images Manager, Rights and Permissions: Hessa Albader Media Editor: Denise Vaughn Media Project Manager: Lisa Rinaldi Composition: Azimuth Interactive, Inc. Full-Service Project Management: Azimuth Interactive, Inc. Printer/Binder: Courier/Kendallville Typeface: 10.5/13 ITC Veljovic Std Book Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within the text (or on page P1). Microsoft and Windows are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. Screen shots and icons reprinted with permission from the Microsoft Corporation. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation. Copyright 2012, 2010, 2007, 2006 by Pearson Education, Inc., Upper Saddle River, New Jersey, 07458. Pearson Prentice Hall. All rights reserved. Printed in the United States of America. This publication is protected by Copyright and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department. Pearson Prentice Hall is a trademark of Pearson Education, Inc. Pearson is a registered trademark of Pearson plc Prentice Hall is a registered trademark of Pearson Education, Inc. Pearson Education Ltd., London Pearson Education Singapore, Pte. Ltd Pearson Education, Canada, Ltd Pearson Education-Japan Pearson Education Australia PTY, Limited Pearson Education North Asia, Ltd., Hong Kong Pearson Educación de Mexico, S.A. de C.V. Pearson Education Malaysia, Pte. Ltd. Pearson Education Upper Saddle River, New Jersey About the Authors 10 9 8 7 6 5 4 3 2 1 ISBN-13: 978-0-13-214285-4 ISBN-10: 0-13-214285-6
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 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), 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 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. iii
Brief Contents Part One Organizations, Management, and the Networked Enterprise 1 Chapter 1 Information Systems in Global Business Today 2 Chapter 2 Global E-Business and Collaboration 40 Chapter 3 Information Systems, Organizations, and Strategy 78 Chapter 4 Ethical and Social Issues in Information Systems 120 Part Two Information Technology Infrastructure 161 Chapter 5 IT Infrastructure and Emerging Technologies 162 Chapter 6 Foundations of Business Intelligence: Databases and Information Management 206 Chapter 7 Telecommunications, the Internet, and Wireless Technology 244 Chapter 8 Securing Information Systems 290 Part Three Key System Applications for the Digital Age 333 Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 334 Chapter 10 E-Commerce: Digital Markets, Digital Goods 370 Chapter 11 Managing Knowledge 414 Chapter 12 Enhancing Decision Making 452 Part Four Building and Managing Systems 485 Chapter 13 Building Information Systems 486 Chapter 14 Managing Projects 526 Chapter 15 Managing Global Systems 558 (available on the Web at www.pearsonhighered.com/laudon) References R 1 Glossary G 1 Photo and Screen Shot Credits P 1 Indexes I 1 iv
Complete Contents Part One Organizations, Management, and the Networked Enterprise 1 Chapter 1 Information Systems in Global Business Today 2 Opening Case: The New Yankee Stadium Looks to the Future 3 1.1 The Role of Information Systems in 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: Management MIS in Your Pocket 10 The Emerging Digital Firm 11 Strategic Business Objectives of Information Systems 12 1.2 Perspectives on Information Systems 15 What is an Information System? 15 Dimensions of Information Systems 17 Interactive Session: Technology UPS Competes Globally with Information Technology 22 It Isn t Just Technology: A Business Perspective on Information Systems 24 Complementary Assets: Organizational Capital and the Right Business Model 26 1.3 Contemporary Approaches to Information Systems 28 Technical Approach 29 Behavioral Approach 29 Approach of This Text: Sociotechnical Systems 29 1.4 Hands-on MIS Projects 31 Management Decision Problems 31 Improving Decision Making: Using Databases to Analyze Sales Trends 31 Improving Decision Making: Using the Internet to Locate Jobs Requiring Information Systems Knowledge 32 Learning Track Modules: How Much Does IT Matter?; Information Systems and Your Career, The Emerging Mobile Digital Platform 32 Review Summary 33 Key Terms 34 Review Questions 34 Discussion Questions 35 Video Cases 35 Collaboration and Teamwork: Creating a Web Site for Team Collaboration 35 Case Study: What s the Buzz on Smart Grids? 36 Chapter 2 Global E-Business and Collaboration 40 Opening Case: America s Cup 2010: USA Wins with Information Technology 41 2.1 Business Processes and Information Systems 43 Business Processes 43 How Information Technology Enhances Business Processes 44 v