EXAM 1: ch 3 & 4

4a.) Explain why it is so difficult to hold software services liable for failure or injury.

"In general, it is very difficult (if not impossible) to hold software producers liable for their software products that are considered to be like books, regardless of the physical or economic harm that results." The kind of harm caused by software failures is rarely fatal and typically inconveniences users but does not physically harm them (the exception being medical devices). If a software service, like an ATM, fails the individual will be harmed economically and inconvenienced if funds cannot be accessed. "Software is less easily inspected than a book and it's more difficult to compare with other software products for quality.

3c) List and describe four competitive strategies enabled by information systems that firms can pursue.

-Low-Cost Leadership: use information systems to achieve the lowest operational costs and the lowest prices. -Product Differentiation: use information systems to enable new products and services, or greatly change customer convenience in using your existing products and services. -Focus on Market Niche: use information systems to enable a specific market focus, and serve this narrow target market better than competitors -Strengthen Customer and Supplier Intimacy: use information systems to tighten linkages with suppliers and develop intimacy with customers, creating loyalty to your firm from both customers and suppliers.

1a) What ethical, social, and political issues are raised by information systems?

-More organizations depend on computer systems for critical operations -organizations can easily maintain detailed databases on individuals -companies can analyze vast quantities of data gathered on individuals to develop detailed profiles of individual behavior

2a) List and describe the five steps in an ethical analysis.

1. Identify and describe the facts clearly - find out who did what to whom, and where, when, and how. 2. Define the conflict or dilemma and identify the higher-order values involved - these issues always reference higher order values. (e.g. freedom, privacy, protection of property, and the free enterprise system. 3. Identify the stakeholders - every ethical, social, and political issue has stake holders: players in the game, who have interest in the outcome, or invested in the situation. 4. Identify the options that you can reasonably take - find the option that does the best job at arriving at a good or ethical solution. 5. Identify the potential consequences of your options - some options may be ethically correct but disastrous from other points of view.

4a) List and describe the management challenges posed by strategic information systems.

1. Sustaining Competitive Advantage: On top of being costly to implement, strategic systems are easily copied so is is difficult to maintain a strategic, competitive advantage. 2. Aligning IT With Business Objectives: If businesses do not take an active role in shaping IT, IT can take on a life of its own and it doesn't serve management or the shareholders well. 3.Managing Strategic Transitions: Implementing strategic systems often requires extensive organizational change and a transition from one sociotechnical level to another.

3d) List and define three different regimes that protect intellectual property rights?

1. Trade Secrets: Any intellectual work product (formula, device, pattern, or compilation of data) used for a business purpose that is not based on information in the public domain. Generally, trade secrets grant a monopoly on the ideas behind a work product. 2. Copyright: statutory grant that protects creators of intellectual property from having their work copied by others for any purpose during the life of the author plus an additional 70 years after the authors death. 3. Patents: grants owner an exclusive monopoly on the ideas behind an invention for 20 years. The intent is to allow the creator of the new machines, devices, or methods receive the full financial and other rewards of their labor while allowing widespread use of the invention by providing licenses from the patents owner.

4b) p.150 List and describe the principal causes of system quality problems:

1.) Software Bugs and Errors 2.) Hardware or Facility Failures caused by natural or other causes 3.) Poor input data quality Perfect software performance has yet to be achieved. Regardless of how diligently a firm monitors its software's performance, defects and bugs cannot always be detected or fixed before a failure occurs. Until perfect software is created, users will need to be prepared for the possibility of system failures.

3n) Define and describe a virtual company and the benefits of pursuing a virtual company strategy.

A virtual company, also known as a virtual organization, uses networks to link people, assets, and ideas, enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. One company can use the capabilities of another company with b eing physically tied to that company. This model is useful when a company finds it cheaper to acquire products, services, or capabilities from an external vendor or when it needs to move quickly to exploit new marktet opportunities and lacks the time and resources to respond on its own.

3b) Explain how the internet challenges the protection of individual privacy and intellectual property.

An individual's information sent over this vast network of networks may pass through many different computer systems before it reaches its final destination. Each of these systems is capturing and collecting all of the individual's information without them knowing.

3h) Define the value web and show how it is related to the value chain.

Because of the network, each value chain intersects with other chains, creating a web. What this means is that a new value chain can intersect with a current value chain at any point and divert unknown amounts of value away unexpectedly. As businesses think about value chains, they find, a more useful model is the value web — an interconnected, unpredictable, multimodal, and byzantine set of relationships. And while "value chains" were created to generate an end product, value webs are apparently designed to put a customer at the middle. Whoever is closer to the center is likely better positioned.

4b) Explain how to perform a strategic systems analysis.

Firms should examine the industry they are in, specifically targeting competitive forces and the level of barriers to entry, the basis on which they can compete, the direction of change in the industry, and how the industry is organized around information technology. Once a firm identified this it can proceed to asking about value. Analyzing things such as how it is creating value for its customer base and if its creating the proper amount of value, if its operating efficiently within its supply chain, if it is making use of core competencies, if the supply chain and customer base are changing in positive or negative ways, and if information technology can benefit the value the firm gains from operating allow firms to analyze their current position in an industry. Finally, a firm can analyze if the information technology aligns with their business goals.

1b) Identify and describe the features of organizations that help explain differences in organizations' use of information systems.

How information systems are implemented are contingent upon the specific needs and processes of an organization. Organizations can be inherently different from one another due to these features (e.g. Hilton has different organizational goals than Amazon). Nevertheless, there are features that can be identified across organizations that can explain the differences in an organization's use of information systems. Routines and Business Processes: every organization develops routines or standard operating procedures over time that allow that particular organization to operate most efficiently. Organizational Politics: Because people make up organizations, and people have vastly different views of the world and political beliefs, so too will the organizations they are a part of. Organizational Culture: All organizations have bedrock, unassailable, unquestioned assumptions that define their goals and products. Organizational Environments: Organizations reside in environments from which they draw resources and to which they supply goods and services. Organizational Structure: Every organization has its own structure or shape. Other Organizational Features: Organizations have goals and use different means to achieve them.

3e) Explain why aligning IT with business objectives is essential for strategic use of systems.

Information systems take on a life of its own and do not serve management and shareholders interest very well. As a result, employees must take an active role in shaping their system to align with the business objectives. If you can match your information system and objectives you will develop a competitive advantage that can account for nearly half of the profits. If you can't do so, then a lot of time, money, and man power can be wasted. additionally, you can lose your advatage in the market if a rival company is better at implementing their information system.

3c) Explain how informed consent, legislation, industry self-regulation, and technology tools help protect the individual privacy of Internet users.

Informed consent is defined as consent given with knowledge of all the facts needed to make a rational decision. Requiring the informed consent of a customer before a company can legally use their data helps individuals choose their own level of privacy regarding their personal information. It also allows customers to access, verify, and correct their data, as well as request no further data be collected. Legislation is a major component of protecting individual privacy, by requiring companies to adhere to informed consent laws and providing a penalty system for those that don't. Legislation can also place limits on what data is collected, and how it is used (similar to HIPAA in the medical profession). Industry Self-Regulation promotes the use of online seals such as TRUSTe, to certify trusted websites. Browsers have made it easier to opt-out of tracking, or block tracking. Google has reduced data retention time. Technology tools such as encryption software and spyware blockers can help protect the privacy of individuals, but "for the most part, technical solutions have failed to protect users from being tracked as they move from one site to another." (144)

3j) Describe how the Internet has changed competitive forces and competitive advantage.

Internet technology has made it possible to create highly synchronized industry value chains called value webs. A value web is a collection of independent firms that use information technology to coordinate their value their value chains to produce a product or service for a market collectively. It has changed competitor forces and has a competitive advantage because it is more customer driven and operates in a less linear fashion than the traditional value chain.

3d) Describe how information systems can support each of these competitive strategies and give examples

Low-cost leadership- information systems can help achieve the lowest operational costs and the lowest prices. For example it enables Walmart to replenish inventory so they don't have to spend much money on maintaining large inventories. Product Differentiation- information systems helps enable new products and services or can greatly change the customer convenience in using your existing products and services. Focus on Market Niche- information systems gets used to enable a specific focus, and serve this narrow target market better than competitors.

3a) Define Porter's competitive forces model and explain how it works.

Michael Porter's competitive forces model is arguably the most widely used model for understanding competitive advantage. This model provides a general view of the firm, its competitors, and the firm's general business environment. There are five competitive forces that shape the fate of the firm: 1. Traditional Competitors: Those who the firm shares market space with. These competitors are continuously devising new, more efficient ways to produce by introducing new products and services, and attempting to attract customers by developing their brands and imposing switching costs on their customers. 2. New Market Entrants: Since we have a free economy, there are new companies always entering the marketplace. 3. Substitute Products and Services: In almost all industries, there are substitutes that your customers might use if your prices become too high. As technology grows, more substitutes are created. 4. Customers: Companies depend largely on their ability to attract and retain customers. 5. Suppliers: The more different suppliers a firm has, the greater control it can exercise over suppliers in terms of price, quality, and delivery schedules.

3a) Define privacy and fair information practices.

Privacy - the claim of individuals to be left alone, free from surveillance, or interference from other individuals or organizations, including the state. Fair Information Practices (FIP) - a privacy law which is a set of principles governing the collection and use of information about individuals.

4d) Define and describe technostress and RSI and explain their relationship to information technology.

RSI (repetitive stress injury) pg. 155: is a common occupational disease that occurs when muscle groups are forced through repetitive actions; often with high-impact loads such as tennis, or tens of thousands of repetitions under low-impact loads such as working at a keyboard. Computer keyboards makes up the single highest source of RSI. Carpal tunnel syndrome (CTS) is a form of RSI that produces pain in the hands of millions of workers. However, measures can be taken to avoid RSI such as implementing wrist support, footrests, monitor stands, rest breaks, and employee rotation. Technostress pg. 156: the newest computer related malady in which stress is induced by computer and cell phone use causing aggravation, hostility towards humans, impatience, and fatigue. Technostress causes individuals to to treat other humans as they would their electronic devices, expecting immediate results and solutions. It is thought to be related to high levels of job turnover in the computer industry, high levels of retirement from computer-intense occupations, and elevated levels of drug and alcohol abuse.

3i) Explain how the value web helps businesses identify opportunities for strategic information systems.

The value web is more customer driven and operates in a less linear fashion than the traditional value chain. These value webs are flexible and adaptive to changes in supply and demand. Firms will accelerate time to market and to customers by optimizing their value web relationships to make quick decisions on who can deliver the required products or services at the right price and location.

1c) Differentiate between responsibility, accountability, and liability.

Responsibility- accepting the potential cost, duties, and obligations for the decision one makes Accountability- the mechanisms for assessing responsibility for decisions made and actions taken Liability- the existence of laws that permit individuals to recover damages done to them by other actors, systems, or organizations

2b) Identify and describe six ethical principles

Rule 1: The Golden Rule. Do on to others as you would have them do unto you. This rule means to put yourself in someone's place, thinking of yourself as an object of the decision so you may make a fair decision. Rule 2: Immanuel Kant's Categorical Imperative. If an action is not right for some, it is not right for all. This rule states you need to think if everyone was doing this, would your organization or society survive. Rule 3: Slippery-Slope Rule. If an action cannot be taken repeatedly, it is not right to take at all. If one action causes a small change in the business that is acceptable, but if done repeatedly could lead to woe, it should be stopped. Rule 4: Utilitarian Principle. Take the action that produces the higher or greater value. Prioritize values in a rank order and understand the consequences of various courses of action. Rule 5: Risk Aversion Principle. Take the action that produces the least harm or the least potential cost. Avoid High cost actions. Rule 6: No Free Lunch. Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise.

3b) Describe what the competitive forces model explains about competitive advantage.

The competitive forces model provides a general view of the firm, its competitors, and the firm's environment. Five competitive forces shape the fate of the firm: traditional competitors, new market entrants, substitute products/services, customers, and suppliers. All of these are used to determine the principle competitive influence in a market.

3k) Explain how information systems promote synergies and core competencies.

The Idea of synergies is that when the output of some units can be used as inputs to other units, or 2 organizations pool markets and expertise, these relationships lower costs and generate profits. ~information systems would help the merged companies consolidate operations, lower retailing costs, and increase cross- marketing of financial products. Core Competency: is an activity for which a firm is a world- class leader. ~any information systems that encourages the sharing of knowledge across business units enhances competency. Such systems might encourage or enhance existing competencies and help employees become aware of new external knowledge; such systems might also help a business leverage existing competencies to related markets

2d) Describe the impact of the Internet and disruptive technologies on organizations.

The Internet, especially the World Wide Web, has an important impact on the relationships between many firms and external entities, and even on the organization of business processes inside a firm. The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations. In essence, the Internet is capable of dramatically lowering the transaction and agency costs facing most organizations. The Internet is causing businesses to make this technology a key component of their IT infrastructures. There will be simpler business processes, fewer employees, and much flatter organizations than in the past thanks to the Internet.

4c) Name and describe four quality-of-life impacts of computers and information systems.

The four quality-of-life impacts of computers and information systems are 1. Balancing power: center versus periphery - power has become more centralized into the hands of a few private oligopolies and large government agencies. 2. Rapidity of change: Reduced response time to competition- the business you work for may not have enough time to respond to global competitors and may be wiped out in a year, along with your job. 3. Maintaining boundaries: family, work, and leisure- the traditional boundaries that separate work and family have been weakened. 4. Dependence and Vulnerability- the absence of and the criticality of some system applications will probably call forth demands for national standards and regulatory oversight.

3l) Describe how promoting synergies and core competencies enhances competitive advantages.

The idea of synergies is that when the output of some units can be used as inputs to other units or two organizations pool markets and expertise, these relationships lower cost and generate profits. One use of information technology in these synergy situations is to tie together the operations of disparate business units so that they can act as a whole. The argument is that the performance of all business units will increase insofar as these business units develop or create a central core of competencies. Any information systems that encourages the sharing of knowledge across business units enhance competency. Such systems might encourage or enhance existing competence and help employees become aware of new external knowledge; such systems might also help a business leverage existing competencies to related markets.

3m.) Explain how businesses benefit by using network economics.

The larger the number of participants in a network, the greater the value to to all participants because each user can interact with more people. The internet and advancing technology makes it possible for firms to create new ways to network, such as social media for example. Internet sites can be used by firms to create customer loyalty and loyalty between their firms' suppliers and business partners. In a network economy, information systems facilitate business models based on large networks of users or subscribers that can take advantage of work economies.

1a) Define an organization and compare the technical definition of an organization to the behavioral definition.

The technical definition of a organization is a stable, formal, social structure that takes resources from the environment and processes them to produce outputs. The behavioral definition is a collection of rights, privileges, obligations, and responsibilities, that are delicately balanced over a period of time through conflicts and conflict resolution.

3g.) Explain how the value chain model can be used to identify opportunities for information systems.

The value chain model categorizes activities based on the level of value each activity has within the firm. This model can also reveal where information systems are most likely to have the most strategic impact on the efficiency of the firm. By linking primary and support activities, a value chain model user can identify how information systems might increase the level of efficiency between the two categories of activities. Rather than linking the primary and support categories manually, information systems can help users become more efficient within the production process.

3f.) Define and describe the value chain model.

The value chain model highlights specific activities in the business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact. This model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position. The value chain model views the firm as a series of chain of basic activities that add a margin of value to a firm's products or services.

1b) List and describe the key technological trends that heighten ethical concerns.

There are currently five key technological trends that are heightening ethical concerns: Computing power doubles every 18 months: More organizations depend on computer systems for critical operations. Data storage costs rapidly decline: Organizations can easily maintain detailed databases on individuals. Data analysis advances: Companies can analyze vast quantities of data gathered on individuals to develop detailed profiles of individual behavior. Networking advances: The cost of moving data and making it accessible from anywhere falls exponentially. Mobile device growth impact: Individual cell phones may be tracked without user content or knowledge.

2b) Describe the major behavioral theories that help explain how information systems affect organizations.

Transaction cost theory which allows for firms and individuals seek to economize on transaction costs, much as they do on productive costs. This can help firms contract in size because it can reduce transaction costs. Agency theory the firm is viewed as a "nexus of contracts" among self-interested individuals rather than as a unified, profit maximizing entity. This can reduce internal management costs.

2a) Describe the major economic theories that help explain how information systems affect organizations.

Transaction cost theory: firms and individuals seek to economize on transaction costs as they do on production costs. Traditionally, firms try to reduce transaction costs through vertical integration, by getting bigger, hiring more employees, and buying their own suppliers and distributors. Agency theory: firm is viewed as a "nexus of contracts" among self-interested individuals rather than as a unified, profit-maximizing entity to perform work on their behalf. As firms grow in size and scope agency costs/coordination costs rise because owners must expend more and more effort supervising or managing employees. Impact on organizations: flatten organizations - downsize, reducing number of employees/levels in organizational hierarchies economically - changes the relative costs of capital and costs of information. As the cost of IT decreases, it is substituted for labor and other forms of capital.

2c) Explain why there is considerable organizational resistance to the introduction of information systems.

When trying to introduce information systems there is resistance because it requires change in personal, individual routines that can be painful for those involved and require retraining and additional effort that may not be compensated. Information systems change an org. structure, culture, business processes, and strategy, there is often considerable resistance to them.