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Questions and Answers

What defines a fully digital firm?

Significant business relationships digitally enabled and mediated (correct)

Business relationships that are primarily face-to-face

Heavy reliance on traditional marketing methods

Core business processes accomplished through physical networks

How has globalization affected businesses?

Decreased outsourcing opportunities

Growing interdependence of global economics (correct)

Reduced foreign trade due to increased local markets

Increased costs of operating on a global scale

Which of the following is a strategic business objective of information systems?

Reduction in product diversity

Elimination of traditional business models

Operational excellence (correct)

Increased reliance on manual processes

What is the impact of e-commerce expanding on business models?

The focus has shifted to selling services in addition to goods Signup and view all the answers

What advantage does operational excellence provide to firms like Walmart?

Improved efficiency leading to higher profitability Signup and view all the answers

What is one way information systems can enhance customer and supplier intimacy?

Improving return rates through better service Signup and view all the answers

What does the term 'digital networks' refer to in relation to strategic business objectives?

The internet and communication technologies that enable information systems Signup and view all the answers

Why do firms invest heavily in information systems?

To achieve competitive advantage and survival Signup and view all the answers

What is the primary function of an information system (IS)?

To support decision-making, coordination, and control Signup and view all the answers

Which company is cited as an example of employing real-time data for improved decision-making?

Verizon Signup and view all the answers

What is one common factor that affects the returns firms receive from IT investments?

The adoption of the right business model Signup and view all the answers

What distinguishes information from data?

Information is processed data that provides meaning, while data are raw facts Signup and view all the answers

Which of the following is a characteristic of the behavioral approach to information systems?

Consideration of strategic business integration and implementation Signup and view all the answers

What role does personalization play in high-end hotels, such as the Mandarin Oriental?

It allows customization of room settings like temperature and lighting Signup and view all the answers

What can result from managers lacking the right information at the right time?

Misallocation of resources and poor response times Signup and view all the answers

Which of the following is NOT a dimension related to information systems?

Human Resources Signup and view all the answers

Why is IT considered a necessity for business survival?

It enables firms to keep pace with competitors and meet regulations Signup and view all the answers

What is the focus of the technical approach to information systems?

Utilizing mathematically based models Signup and view all the answers

Study Notes

Technology's Impact on Business and Life

Information technology (IT) fundamentally alters various aspects of life, from personal relationships to work.

Management Information Systems (MIS) Innovations

IT Innovations: Artificial intelligence (AI) is a key innovation.
New Business Models: Digital-only models (e.g., Netflix) are replacing traditional models.
E-commerce Growth: Expanding beyond selling goods to services.
Management Changes: Online collaboration, business intelligence, virtual meetings are common.
Organizational Changes: Companies are becoming more collaborative, leveraging social media for customer feedback.
Globalization: The internet dramatically reduced global business costs, impacting foreign trade and outsourcing. This creates interdependence among global economies.

Digital Firms

Digital Enablement: Digital technologies drive business relationships.
Core Processes: Digital networks are central to business operations.
Digital Assets: Businesses manage key assets digitally.

Strategic Business Objectives of IS

Operational Excellence: Improving efficiency for higher profitability; IT is crucial for this.
- Example: Walmart's retail link system enhances supplier-store relationships for better replenishment.
New Products & Services/Business Models: IT enables the creation of entirely new offerings.
Customer & Supplier Intimacy: Relationship cultivation improves profitability.
- Example: Personalized services in high-end hotels (e.g., Mandarin Oriental).
Improved Decision-Making: Accurate, real-time data improves business decisions.
- Example: Verizon's digital dashboard delivers real-time data on network and customer performance.
Competitive Advantage: Superior performance, pricing, and customer/supplier responsiveness.
- Examples: Industry leaders (Apple, Walmart, UPS) utilize IT strategically.
Survival: IT is essential for businesses facing industry changes and regulations.
- Examples: Citibank's adoption of ATMs and compliance with regulations.

Information Systems (IS) Fundamentals

IS Components: IS collect, process, store, and distribute information, enabling decision-making and control.
Information vs. Data: Information is data transformed into meaningful context. Data are raw, unprocessed facts.
IS Functions: Input, processing, output, and feedback are essential parts of any IS.

IS Dimensions

Organizational Dimension: Authority structure, processes, culture, and politics affect IS use.
Management Dimension: Managers shape organizational strategies using IS.
Technological Dimension: Hardware, software, and infrastructure.

IT Investments

Varied Returns: IT investments don't always guarantee optimal returns.
Key Factors: The right business model and complementary assets (e.g., human capital, infrastructure) are crucial for success.