Essentials of Management Information Systems

505 Pages·2012·11.638 MB·English

by  Kenneth Laudon, Jane Laudon

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.
Chapter 7: Securing Information Systems
Demonstrates both business knowledge and proficiency in spreadsheet, database, and Web page/blog creation tools.
You're On Facebook? Watch Out!
Internet skills: Ability to use Internet tools to access information, conduct research, or perform online calculations
Stuxnet and the Changing Face of Cyberwarfare
and analysis.
How Secure Is Your Smartphone?
Analytical, writing and presentation skills: Ability to research a specific topic, analyze a problem, think creatively, Sony: The World's Largest Data Breach?
suggest a solution, and prepare a clear written or oral presentation of the solution, working either individually or with
others in a group.
Chapter 8: Achieving Operational Excellence and
* Dirt Bikes Running Case in MyMISLab Customer Intimacy: Enterprise Applications
Cannondale Learns to Manage a Global Supply Chain
Southwest Airlines Takes Off With Better Supply Chain Management
Business Application Skills
Customer Relationship Management Heads to the Cloud
Business Skills Software Skills Chapter Summit Electric Lights Up with a New ERP System
Finance and Accounting
Chapter 9: E-commerce: Digital Markets, Digital Goods
Financial statement analysis Spreadsheet charts Chapter 2*
Groupon's Business Model: Social and Local
Spreadsheet formulas Chapter 9
Spreadsheet downloading and formatting Walmart, Amazon, eBay: Who Will Dominate Internet Retailing?
Social Commerce Creates New Customer Relationships
Pricing hardware and software Spreadsheet formulas Chapter 4
To Pay or Not to Pay: Zagat's Dilemma
Technology rent vs. buy decision Spreadsheet formulas Chapter 4*
Total Cost of Ownership (TCO) Analysis
Analyzing telecommunications services and costs Spreadsheet formulas Chapter 6 Chapter 10: Improving Decision Making and Managing Knowledge
Risk assessment Spreadsheet charts and formulas Chapter 7 What to Sell? What Price to Charge? Ask the Data
Colgate-Palmolive Keeps Managers Smiling with Executive Dashboards
Human Resources
IBM's Watson: Can Computers Replace Humans?
Employee training and skills tracking Database design Chapter 11* Zynga Wins with Business Intelligence
Database querying and reporting
Manufacturing and Production Chapter 11: Building Information Systems and Managing Projects
Analyzing supplier performance and pricing Spreadsheet date functions Chapter 2
A New Ordering System for Girl Scout Cookies
Data fi ltering
Honam Petrochemical's Quest for Better Management Reports
Database functions
DST Systems Scores with Scrum and Application Lifecycle Management
Inventory management Importing data into a database Chapter 5 JetBlue and WestJet: A Tale of Two IS Projects
Database querying and reporting
Bill of materials cost sensitivity analysis Spreadsheet data tables Chapter 10*
Spreadsheet formulas Chapter 12: Ethical and Social Issues in Information Systems
Behavioral Targeting and Your Privacy: You’re the Target
Sales and Marketing
Life on the Grid: iPhone Becomes iTrack
Sales trend analysis Database querying and reporting Chapter 1
Too Much Information?
Customer reservation system Database querying and reporting Chapter 3 When Radiation Therapy Kills
Customer sales analysis Database design
Marketing decisions Spreadsheet pivot tables Chapter 10
Customer profi ling Database design Chapter 5*
Database querying and reporting
Customer service analysis Database design Chapter 8
Database querying and reporting
Sales lead and customer analysis Database design Chapter 11
Database querying and reporting
Blog creation and design Blog creation tool Chapter 12
Internet Skills
Using online software tools for job hunting and career development Chapter 1
Using online interactive mapping software to plan effi cient Chapter 2
transportation routes
Researching product information Chapter 3
Evaluating Web sites for auto sales
Researching travel costs using online travel sites Chapter 4
Searching online databases for products and services Chapter 5
Using Web search engines for business research Chapter 6
Researching and evaluating business outsourcing services Chapter 7
Researching and evaluating supply chain management services Chapter 8
Evaluating e-commerce hosting services Chapter 9
Using shopping bots to compare product price, features, and Chapter 10
availability
Analyzing Web site design Chapter 11
Using Internet newsgroups for marketing Chapter 12
Analytical, Writing, and Presentation Skills *
Business Problem Chapter
Management analysis of a business Chapter 1
Value chain and competitive forces analysis Chapter 3
Business strategy formulation
Employee productivity analysis Chapter 6
Disaster recovery planning Chapter 7
Locating and evaluating suppliers Chapter 8
Developing an e-commerce strategy Chapter 9
Formulating a corporate privacy policy Chapter 12
Essentials of
Management
Information Systems
Tenth Edition
Kenneth C. Laudon
New York University
Jane P. Laudon
Azimuth Information Systems
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Library of Congress Cataloging-in-Publication Information is Available
10 9 8 7 6 5 4 3 2 1
ISBN 10: 0-13-266855-6
ISBN 13: 978-0-13-266855-2
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 infor-
mation 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 enter-
prise system implementation, computer-related organizational and occupational changes in
large organizations, changes in management ideology, changes in public policy, and under-
standing 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 manage-
ment, 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 lan-
guages and civilizations.
The Laudons have two daughters, Erica and Elisabeth, to whom this book is dedicated.
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Brief Contents
Preface xi
I Information Systems in the Digital Age 1
1 Business Information Systems in Your Career 2
2 Global E-Business and Collaboration 36
3 Achieving Competitive Advantage with Information Systems 74
II Information Technology Infrastructure 107
4 IT Infrastructure: Hardware and Software 108
5 Foundations of Business Intelligence: Databases and Information Management 146
6 Telecommunications, the Internet, and Wireless Technology 178
7 Securing Information Systems 220
III Key System Applications for the Digital Age 259
8 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 260
9 E-commerce: Digital Markets, Digital Goods 290
10 Improving Decision Making and Managing Knowledge 330
IV Building and Managing Systems 367
11 Building Information Systems and Managing Projects 368
12 Ethical and Social Issues in Information Systems 404
Glossary G-1
References R-1
Index I-1
iv
Complete Contents
I Information Systems in the Internet to Locate Jobs Requiring Information Systems
Knowledge 33
Digital Age 1
Video Cases 33 • Collaboration and Teamwork: Creating
a Web Site for Team Collaboration 33
1 Business Information Systems in Your
Business Problem-Solving Case
Career 2
Are Electronic Medical Records a Cure for Health
Chapter-Opening Case: Care? 33
Shortening Lines at Disney World: Technology to the
Rescue 3 2 Global E-Business and Collaboration 36
Chapter-Opening Case:
1.1 The Role of Information Systems in Business
America's Cup 2010: USA Wins with Information
Today 5
Technology 37
How Information Systems Are Transforming Business 5
• What’s New In Management Information Systems? 6
2.1 Components of a Business 39
Interactive Session: Organizations
Organizing a Business: Basic Business Functions 39
Running the Business from the Palm of Your Business Processes 40 • Managing a Business and Firm
Hand 8 Hierarchies 42 • The Business Environment 43 • The
Globalization Challenges and Opportunities: A Role of Information Systems in a Business 44
Flattened World 9 • Business Drivers of Information
2.2 Types of Business Information Systems 45
Systems 11
Systems for Management Decision Making and Business
1.2 Perspectives on Information Systems and Intelligence 45
Information Technology 13 Interactive Session: Technology
What Is an Information System? 13 • It Isn’t Simply Can Airlines Solve Their Baggage Handling? 47
Technology: The Role of People and Organizations 15
Systems for Linking the
• Dimensions of Information Systems 16
Enterprise 51
1.3 Understanding Information Systems: A Business Interactive Session:
Problem-Solving Approach 18 Organizations
Interactive Session: Technology Piloting Valero with Real-
UPS Competes Globally with Information Time Management 52
Technology 19
Intranets and Extranets
The Problem-Solving Approach 55 • E-Business,
21 • A Model of the Problem- E-commerce, and E-Government 55
Solving Process 21 • The Role
2.3 Systems for Collaboration and Teamwork 56
of Critical Thinking in Problem
What is Collaboration? 56 • Business Benefits
Solving 23 • The Connection
of Collaboration and Teamwork 57 • Building a
Between Business Objectives,
Collaborative Culture 57 • Tools and Technologies for
Problems, and Solutions 24
Collaboration and Teamwork 59
1.4 Information Systems and Your Career 25
2.4 The Information Systems Function in Business 65
How Information Systems Will Affect Business Careers
The Information Systems Department 65 • Information
25 • Information Systems and Your Career: Wrap-Up 28
Systems Services 66
• How This Book Prepares You For the Future 28
Learning Tracks 66 • Review Summary 66 • Key Terms
Learning Tracks 29 • Review Summary 30 • Key Terms
67 • Review Questions 68 • Discussion Questions 69 •
31 • Review Questions 31 • Discussion Questions 32 •
Hands-on MIS Projects 69
Hands-on MIS Projects 32
Management Decision Problems 69 • Improving
Management Decision Problems 32 • Improving
Decision Making: Using a Spreadsheet to Select
Decision Making: Using Databases to Analyze Sales
Suppliers 69 • Achieving Operational Excellence: Using
Trends 32 • Improving Decision Making: Using the
Internet Software to Plan Efficient Transportation
Routes 70
v
Video Cases 70 • Collaboration and Teamwork: II Information Technology
Describing Management Decisions and Systems 70
Infrastructure 107
Business Problem-Solving Case
Collaboration and Innovation at Procter & Gamble 71
4 IT Infrastructure: Hardware and
Software 108
3 Achieving Competitive Advantage with
Information Systems 74 Chapter-Opening Case:
BART Speeds Up with a New IT Infrastructure 109
Chapter-Opening Case:
Verizon or AT&T: Which Digital Strategy Will
4.1 IT Infrastructure: Computer Hardware 111
Prevail? 75
Infrastructure Components 111 • Types of Computers
3.1 Using Information Systems to Achieve Competitive 113 • Storage, Input, and Output Technology 115 •
Advantage 77 Contemporary Hardware Trends 116
Porter’s Competitive Forces Model 77 • Information Interactive Session: Technology
System Strategies for Dealing with Competitive Forces Green Data Centers: Good for Business? 121
79
4.2 IT Infrastructure: Computer Software 123
Interactive Session: Technology
Operating System Software 123
Technology Helps Starbucks Find New Ways to
Application Software and Desktop Productivity Tools
Compete 82
125 • Software for the Web: Java and HTML 129 •
The Internet’s Impact on HTML5 130 • Web
Competitive Services 130 • Software
Advantage 84 • The Business Value Trends 131
Chain
4.3 Managing Hardware
Model 85 • Synergies, Core
and Software
Competencies, and Network-
Technology 133
Based Strategies 87 • Disruptive
Capacity Planning and
Technologies: Riding the Wave 89
Scalability 133 • Total Cost of Ownership (TCO) of
3.2 Competing on a Global Scale 90
The Internet and Globalization 91 • Global Business Technology Assets 134 • Using Technology Service
and System Strategies 91 • Global System Configuration Providers 135 • Managing Mobile Platforms 136 •
Managing Software Localization for Global Business
92
136
3.3 Competing on Quality and Design 93
Interactive Session: People
What Is Quality? 93 • How Information Systems
Should You Use Your iPhone for Work? 137
Improve Quality 94
Learning Tracks 139 • Review Summary 139 • Key
3.4 Competing on Business Processes 95
Terms 140 • Review Questions 141 • Discussion
What Is Business Process Management? 96
Questions 142 • Hands-on MIS Projects 142
Interactive Session: Organizations Management Decision Problems 142 • Improving
Burton Snowboards Speeds Ahead with Nimble
Decision Making: Using a Spreadsheet To Evaluate
Business Processes 99 Hardware and Software Options 142 • Improving
Learning Tracks 100 • Review Summary 100 • Key Decision Making: Using Web Research to Budget for a
Terms 101 • Review Questions 101 • Discussion Sales Conference 143
Questions 102 • Hands-on MIS Projects 102 Video Cases 143 • Collaboration and Teamwork:
Evaluating Server and Mobile Operating Systems 143
Management Decision Problems 102 • Improving
Decision Making: Using a Database to Clarify Business Business Problem-Solving Case
Strategy 103 • Improving Decision Making: Using Web Should Businesses Move to the Cloud? 144
Tools to Configure and Price an Automobile 103
Video Cases 104 • Collaboration and Teamwork: 5 Foundations of Business Intelligence:
Identifying Opportunities for Strategic Information Databases and Information
Systems 104 Management 146
Business Problem-Solving Case Chapter-Opening Case:
Will Technology Save the Publishing Industry? 104 Banco de Credito del Peru Banks on Better Data
Management 147
vi
5.1 The Database Approach to Data Management 149 6.2 Communications Networks 186
Entities and Attributes 149 • Organizing Data in a Signals: Digital vs. Analog 186 • Types of Networks 186
Relational Database 150 • Establishing Relationships • Physical Transmission Media 188
151
6.3 The Global Internet 190
5.2 Database Management Systems 153 What Is the Internet? 190 • Internet Addressing and
Operations of a Relational Architecture 191
DBMS 155 • Capabilities Interactive Session: Organizations
of Database Management The Battle Over Net Neutrality 193
Systems 157 • Object-
Internet Services and Communication Tools 195
Oriented Databases 158 •
Interactive Session: People
Databases in the Cloud 159
Monitoring Employees on Networks: Unethical or Good
5.3 Using Databases Business? 197
to Improve Business Performance and Decision
The Web 200
Making 159
Data Warehouses 159 • What is a Data Warehouse? 160 6.4 The Wireless Revolution 206
Tools for Business Intelligence: Multidimensional Data Cellular Systems 207 • Wireless Computer Networks
Analysis and Data Mining 161 • Data Mining 162 and Internet Access 207 • RFID and Wireless Sensor
Interactive Session: People Networks 209
Asking the Customer by Asking the Database 163 Learning Tracks 212 • Review Summary 212 • Key
Terms 213 • Review Questions 214 • Discussion
Databases and the Web 165
Questions 215 • Hands-on MIS Projects 215
5.4 Managing Data Resources 166 Management Decision Problems 215 • Improving
Establishing an Information Policy 166
Decision Making:
Interactive Session: Organizations Using Spreadsheet
Controversy Whirls Around the Consumer Product Safety Software to Evaluate
Database 167 Wireless Services 215 •
Ensuring Data Quality 168 Achieving Operational
Excellence: Using Web
Learning Tracks 170 • Review Summary 170 • Key
Search Engines for
Terms 171 • Review Questions 171 • Discussion
Business Research 216
Questions 172 • Hands-on MIS Projects 172
Video Cases 216 • Collaboration and Teamwork:
Management Decision Problems 172 • Achieving
Evaluating Smartphones 216
Operational Excellence: Building a Relational
Database for Inventory Management 173 • Improving Business Problem-Solving Case
Apple, Google, and Microsoft Battle for Your Internet
Decision Making: Searching Online Databases for
Experience 217
Overseas Business Resources 173
Video Cases 174 • Collaboration and Teamwork:
7 Securing Information Systems 220
Identifying Entities and Attributes in an Online
Database 174 Chapter-Opening Case:
You're On Facebook? Watch Out! 221
Business Problem-Solving Case
Text Mining For Gold? 174
7.1 System Vulnerability and Abuse 223
Why Systems Are Vulnerable 223 • Malicious Software:
6 Telecommunications, the Internet, and
Viruses, Worms, Trojan Horse, and Spyware 226 •
Wireless Technology 178
Hackers and Computer Crime 228 • Identity
Chapter-Opening Case: Theft 230 • Internal Threats: Employees 232
Hyundai Heavy Industries Creates a Wireless Interactive Session: Organizations
Shipyard 179 Stuxnet and the Changing Face of Cyberwarfare 233
6.1 Telecommunications and Networking in Today’s Software Vulnerability 234
Business World 181 7.2 Business Value of Security and Control 235
Networking and Communication Trends 181 • What Is Legal and Regulatory Requirements for Electronic
a Computer Network? 182 • Key Digital Networking Records Management 235 • Electronic Evidence and
Technologies 184 Computer Forensics 236
vii