Management Information System

The Emergence of the Digital World

Over the past decades, the advent of powerful, relatively inexpensive, easy-to-use
computers has had a major impact on business and society. When you stop and think
about it, it is easy to see why information systems are important. Increasing global
competitiveness has forced companies to find ways to be better and to do things less
expensively. The answer for many firms continues to be to use information systems to
do things better, faster, and cheaper.

Many organizations use information systems to support innovative business models, or

build their entire business models around technological innovations. Likewise, using
global telecommunications networks, companies can more easily integrate their
operations to access new markets for their products and services as well as access a large
pool of talented labor in countries with lower wages.

Changes in technology have enabled new ways of working and socializing; whereas
traditionally, people were bound to a stationary PC to do essential tasks, they can now
perform such tasks from almost anywhere they have a cell phone signal. Likewise,
workdays traditionally had a clear beginning and a clear end—from when you powered
your computer on to when you turned it off at night. Today, many tasks (especially more
casual tasks such as reading or sending e-mails) can be done at any time, often in small
chunks in between other tasks, such as when waiting in line at the supermarket cashier.

Computing has changed from an activity primarily focused on automating work to

encompass various social and casual activities. Devices such as smartphones or tablets,
paired with mobile broadband networks, allow for instant-on computing experiences,
whenever and wherever; advances in cloud computing (think Gmail, Office Online, or
Dropbox) allow for accessing e-mails, files, notes, and the like, from different devices,
further enhancing portability and mobility the workplace.

KNOWLEDGE WORKERS AND THE KNOWLEDGE SOCIETY

In 1959, Peter Drucker predicted that information and information systems would
become increasingly important, and at that point, more than half a century ago, he
coined the term knowledge worker. Knowledge workers are typically professionals
who are relatively well educated and who create, modify, or synthesize knowledge as a
fundamental part of their jobs.
Drucker’s predictions about knowledge workers were accurate. As he predicted, they
are generally paid better than their prior agricultural and industrial counterparts; they
rely on and are empowered by formal education, yet they often also possess valuable
real-world skills; they are continually learning how to do their jobs better,
Drucker also predicted that, with the growth in the number of knowledge workers
and with their rise in importance and leadership, a knowledge society would emerge.
Knowledge society is a society where knowledge rather than capital or labor is the
primary resource and driver of economic and social development .
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He reasoned that, given the importance of education and learning to knowledge workers
and the firms that need them, education would become the cornerstone of the
knowledge society. Possessing knowledge, he argued, would be as important as
possessing land, labor, or capital (if not more so). Indeed, research shows that people
equipped to prosper in the knowledge society, such as those with a college education,
earn far more on average than people without a college education,
People generally agree that Drucker was accurate about knowledge workers
and the evolution of society. While people have settled on Drucker’s term
knowledge worker, there are many alternatives to the term knowledge
society. Others have referred to this phenomenon as the knowledge economy, the new
economy, the digital society, the network era, the Internet era, and other names. We
simply refer to this as the digital world. All these ideas have in common the premise that
information and related technologies and systems have become indispensable and that
knowledge workers are vital.

Example : package delivery person using global positioning system (GPS) technology
to take the best route to deliver parcels to the farmer in Iowa who uses precision
agriculture to plan the use of fertilizers to increase crop yield. In essence, (almost) every
organization can now be considered an e-business. An e-business is an organization that
uses information technologies or systems to support nearly every part of its business.

THE DIGITAL DIVIDE

Definition: The digital divide is a term that refers to the gap between demographics
and regions that have access to modern information and communications technology
(ICT), and those that don't or have restricted access.
It refers to the socioeconomic differences among people and the impact on their ability
to afford the devices necessary to get online. In developing countries, many people have
limited access to technology or the internet and do not have the skills necessary to use it
effectively.
Some have argued, however, that there is a downside to being a knowledge worker and
to living in the digital world.
For example,
 some have argued that knowledge workers will be the first to be replaced by
automation with information systems.
 Others have argued that in the new economy there is a digital divide,
where those with access to information systems have great advantages over those
without access to information systems. The digital divide refers to the difference in
access to and utilization of digital technologies including information system and
internet, among different individuals, group or organizations . It is basically the
separation between those who access the global networks and those who do not. The
digital divide is one of the major ethical challenges facing society today when you
consider the strong linkage between computer literacy and a person’s ability to compete
in the digital world.
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Globalization and Societal Issues in the Digital World

The past decades have brought about a number of dramatic global changes, many of
which will continue to influence individuals, businesses, economies, and societies well
into the future.

GLOBALIZATION: OPPORTUNITIES AND CHALLENGES

Globalization Definition: The process by which businesses or other organizations
develop international influence or start operating on an international scale. It is a term
used to refer to the integration of goods , services and culture among the nations of
world . It is used to describe how technology have made the world into more connected
and interdependent place.
You can see the effects of globalization in many ways, such as the greater international
movement of commodities, money, information, and labor as well as the development of
technologies, standards, and processes to facilitate this movement.
The rapid rise of a new middle class in many developing countries has enabled
established companies to reach new markets, enabling them to sell their products to
literally millions of new customers. At the same time, with the decrease in
communication costs, companies can now draw on a large pool of skilled professionals
from all over the globe.

Opportunities:

1. Economic Growth: Globalization has facilitated the movement of goods, services,

and capital across borders, leading to increased economic growth and prosperity in
many countries. It has allowed businesses to access larger markets and tap into global
supply chains.

2. Increased Trade: Open borders and reduced trade barriers have led to an increase
in international trade, which can boost a country's economic development and create
jobs.

3. Technological Advancements: The exchange of ideas and technology across

borders has accelerated innovation and technological advancements, leading to
improved standards of living and increased productivity.

4. Access to Information: The internet and digital technologies have made

information more accessible to people around the world, fostering greater knowledge
sharing and cultural exchange.

5. Cultural Exchange: Globalization has allowed for greater cultural exchange,

leading to a richer and more diverse cultural landscape. People can experience and learn
from different cultures more easily.
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6. Reduced Poverty: In some parts of the world, globalization has helped reduce
poverty by creating jobs and increasing access to goods and services.

Challenges:

1. Income Inequality: While globalization has contributed to economic growth, it has

also exacerbated income inequality within and between countries. The benefits of
globalization often accrue to the wealthy, leaving many disadvantaged individuals and
communities behind.

2. Loss of Jobs: The outsourcing of jobs to countries with lower labor costs can lead to
job displacement in higher-cost countries, causing unemployment and social unrest.

3. Cultural Homogenization: There is a concern that globalization can lead to the

loss of unique cultural identities as Western culture and values become more dominant
worldwide.

4. Environmental Degradation: The increased movement of goods and services

across borders has contributed to environmental challenges, including pollution,
deforestation, and climate change.

5. Dependency on Global Markets: Countries that heavily rely on global markets

for their economic well-being can be vulnerable to economic crises and market
fluctuations.

6. Political Challenges: Globalization can strain political systems, as international

issues become more complex and interconnected. National sovereignty may be
challenged by international agreements and organizations.

7. Health Risks: The rapid movement of people and goods has also facilitated the
spread of diseases and pandemics, as witnessed with the COVID-19 pandemic.

8. Crisis Transmission: Economic crises in one part of the world can quickly spread
to other regions due to global financial interconnectedness.

Outsourcing:
The tremendous decrease in communication costs has increased outsourcing.
Outsourcing is a business practice of hiring a party outside a company to perform
services or create goods that were before performed by the company’s own employees
and staff . It is basically the moving of business processes or tasks to another company
or country.
Countries such as Russia, China, and India offer high-quality education, leading to an
ample supply of well-trained people at low cost.
Companies are choosing to outsource business activities for a variety of reasons; the
most important reasons include the following:

■ To reduce or control costs

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■ To free up internal resources
■ To gain access to world-class capabilities
■ To increase the revenue potential of the organization
■ To reduce time to market
■ To increase process efficiencies
■ To be able to focus on core activities
■ To compensate for a lack of specific capabilities or skills

Often, companies located in countries such as India can provide certain services much
cheaper because of lower labor costs, or companies perform certain functions in a
different country to reduce costs or harness skilled labor

SOCIETAL ISSUES IN THE DIGITAL WORLD

The rapid development of transportation and telecommunication technologies, national
and global infrastructures, and information systems as well as a host of other factors has
created a number of pressing societal issues that will tremendously influence the world
we live in.

ISSUES
1. demographic changes: Changes in the structure of populations such as related
to age, birth rates, and migration. While many countries in the developed world
see rapidly aging populations, developing regions such as Africa are expected to
rapidly rise in population, fueling a massive global population growth. These
differences in demographic changes will also shift the balance of demand and
supply of the labor.
2. Urbanization: The movement of rural populations to urban areas, to a point
where 50 percent of the world’s population is now living in cities. Intensive urban
growth can lead to greater poverty with local government unable to provide
services to all people .
3. Shifts in economic power: Economic shift can be defined as a shift in
structure , policy or growth in the economy and can be considered as one of the
external factors that effect business decision making. Changes in countries’
purchasing power and control over natural resources—where established
economies are losing the inhabitants will pose major challenges. Where
established economies are losing their dominating positions in the world’s
economy, resulting in the need to resolve political struggle.
4. Resource Scarcity: It is due to availability of fossil fuels and natural resources
.Resource scarcity has both economic and environmental effect. When a god
become less , the price increases causing economic problems. It means that
demand of goods and services is greater than their availability.
5. Climate change: large-scale and long-term regional and global changes in
temperatures and weather patterns. Population growth, global trade,
consumerism, and other factors contribute to increasing waste and pollution.
6. Sustainable development: “development that meets the needs of the present
without compromising the ability of future generations to meet their own
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needs”—will become an ever increasingly important aspect. In addition to these
societal issues, we have witnessed a number of breakthroughs and
transformations enabled by technology; these breakthroughs are disrupting
traditional business models but can also help address pressing societal issues.

Five IT Megatrends That Shape the

Digital Future
In most developed societies, information
technologies have become pervasive—information
technologies are in fact used throughout society,
and the speed of innovations is increasing at a
tremendous pace, with many radical innovations
marginalizing or displacing existing products or
industries.

For example, within just a few years, drones evolved from being primarily used by the
military to being used by farmers, aerial photographers, filmmakers, and hobbyists
alike. Self-parking systems are already available in many vehicles, self-driving cars and
trucks are being actively tested by various companies, and autonomous Caterpillar
mining trucks are already in use.

MOBILE

The term "MOBILE mega trend" likely refers to the significant and ongoing trends
related to mobile technology and its impact on various aspects of our lives. Mobile
technology has been rapidly evolving over the years, and it continues to shape the way
we communicate, work, play, and conduct business. In most developed countries the
vast majority of adults have mobile phones and people have their reach 24/7 . For
organizations , this increase in mobility has wide range of implications from increased
collaboration to ability to manage business in real time –at any time , from anywhere –
to changes in the way new customers can be reached. Here are some key aspects of the
mobile mega trend:
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1. Smartphones: Smartphones have become ubiquitous, with billions of people
worldwide owning these powerful handheld devices. They have transformed the
way we access information, communicate, and perform various tasks.

2. Mobile Apps: The proliferation of mobile apps has created new opportunities
for businesses and individuals alike. App stores offer a wide range of applications
for entertainment, productivity, health, and more.

3. Mobile Internet: Faster mobile internet connectivity, including 4G and 5G

networks, has enabled seamless streaming, video conferencing, and online
gaming on mobile devices.

4. AI and Mobile: Mobile apps increasingly incorporate artificial intelligence and

machine learning, enhancing user experiences and providing personalized
services.

5. Bring Your Own Device ( BYOD): Today employees are using their own
devices for work related purposes or are using software they are used to in work
place. They use mobile devices for various purposes including customer
relationship management, checking emails or visiting social sites.

6. Sustainability: The environmental impact of mobile technology is a growing

concern. Manufacturers and consumers are seeking more sustainable practices,
including recycling and energy-efficient devices.

7. Privacy and Security: As mobile technology advances, so do concerns about

privacy and security. Protecting personal data and securing mobile devices
against cyber threats are ongoing challenges.

SOCIAL MEDIA
A second megatrend, as you have undoubtedly noticed, is social media. The rise of
social media is largely based on the network effect—referring to the notion that the value
of a network increases with the number of other users.
• Over 4.6 billion (and growing) Facebook users share status updates or pictures
with friends and family
• Companies harness the power of the crowd by using social media to get people to
participate in innovation and other activities
• Organizations use social media to encourage employee collaboration

1. E-Commerce and Social Media: Social media platforms have become

integral to e-commerce. Many businesses use social media to promote their
products or services, interact with customers, and drive sales. Platforms like
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Facebook, Instagram, and Pinterest have implemented shopping features that
allow users to purchase products directly through the app.

2. Influencer Marketing: Influencers on social media have a significant impact

on consumer behavior. Brands collaborate with influencers to promote their
products, which can lead to increased sales and brand visibility.

3. Market Research: Social media provides a wealth of data about consumer

preferences and trends. This information can be valuable for businesses looking
to make informed decisions about product development and market strategy.

4. Global Reach: Social media allows businesses to reach a global audience,

facilitating international trade and expansion. Companies can target specific
demographics and regions through social media advertising.

5. Customer Engagement: Social media offers a direct line of communication

between businesses and customers. This can be used for customer support,
feedback collection, and building brand loyalty.

INTERNET OF THINGS
The "Internet of Things" (IOT) represents a transformative mega trend that has been
shaping various industries and aspects of daily life. IOT refers to the network of
interconnected physical devices and objects, such as sensors, appliances, vehicles, and
industrial machines, that can collect and exchange data over the internet.

1. Industrial IOT (IOT): IOT is revolutionizing industries like manufacturing,

energy, agriculture, and healthcare. It involves the integration of sensors and
connected devices to optimize production processes, monitor equipment health,
reduce downtime, and enhance supply chain management.

2. Smart Cities: IOT is instrumental in creating smart cities by improving urban

infrastructure, transportation systems, and public services. Smart sensors and
data analytics are used for traffic management, waste collection, energy
efficiency, and enhancing overall urban livability.

3. Healthcare IOT (IOMT): IOT is driving innovations in healthcare, with

applications in remote patient monitoring, wearable health devices, medication
adherence, and healthcare facility management. These technologies aim to
improve patient outcomes and reduce healthcare costs.

4. Connected Vehicles: IOT is transforming the automotive industry with

connected cars. Features like real-time vehicle data monitoring, predictive
maintenance, and autonomous driving capabilities are being developed using IoT
technology.
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5. Security and Surveillance: IOT-based security systems and surveillance
cameras are becoming more sophisticated, providing real-time monitoring and
alerts for homes, businesses, and public spaces.

CLOUD COMPUTING
The fourth megatrend is cloud computing. Whereas traditionally each user would
install a number of different applications for various tasks—from creating documents to
listening to music—as well as store documents, pictures, and other data on his or her
computer, web technologies enable using the Internet as the platform for applications
and data. Now, much of the functionality previously offered by applications installed on
each individual computer is offered by applications “in the cloud,” accessed via a web
browser. Increasingly, not only the applications but also the data reside in the cloud, to
be accessed at any time from anywhere
• Web technologies enable using the Internet as the platform for
applications and data
• Applications that use to be installed on individual computers are
increasingly kept in the cloud e.g., Gmail, Google Docs, Google Calendar
• Can enabled advanced analytics of massive amounts of Big Data
Simply put, cloud computing is the delivery of computing services—including servers,
storage, databases, networking, software, analytics, and intelligence—over the internet
(“the cloud”) to offer faster innovation/

BIG DATA
Big Data is a collection of data that is huge in volume, yet growing exponentially with
time. It is a data with so large size and complexity that none of traditional data
management tools can store it or process it efficiently. Big data is also a data but with
huge size. Big Data are typically described as extremely large and complex datasets,
which are characterized as being of high volume, variety (i.e., many different types of
data), and velocity (i.e., the data are being collected and analyzed at ever-increasing
rates). Following the old adage that information is power, organizations are
continuously seeking to get the right information to make the best business decisions.
Yet organizations are generating and collecting ever more data from internal and
external sources. The rise of social media has further increased the amount of
unstructured data available to organizations; for example, people frequently voice their
thoughts about products or companies on blogs or social networks. In addition, the
Internet of Things, allowing for connecting devices and sensors to the Internet, further
contributes to the growth of data available to organizations and individuals. With
decreasing costs for capturing and storing data, data are now not only ubiquitous but
also cheap.

EXAMPLES:
 The New York Stock Exchange is an example of Big Data
that generates about one terabyte of new trade data per day.
 The statistic shows that 500+terabytes of new data get ingested into the
databases of social media site Facebook, every day. This data is mainly
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generated in terms of photo and video uploads, message exchanges,
putting comments etc.
 A single Jet engine can generate 10+terabytes of data in 30
minutes of flight time. With many thousand flights per day, generation of
data reaches up to many Petabytes.

Information Systems Defined

Information system is an integrated system that helps the management with relative
information needed to run their business effectively and efficiently.

An information system (IS) is the combination of people and information technology

that create, collect, process, store, and distribute useful data. Information technology
(IT) includes hardware, software, and telecommunications networks.
1. Hardware : Hardware refers to physical
computer equipment, such as a
computer, tablet, or printer, as well as
components like a computer monitor or
keyboard.
2. Software : Software refers to a program
or set of programs that tell the computer
to perform certain tasks
3. Telecommunications networks :
Telecommunications networks refer to a
group of two or more computer systems
linked together with communications equipment.
 Data: The Root and Purpose of Information Systems
 Hardware, Software, and Telecommunications Networks: The
Components of Information Systems
 People: The Builders, Managers, and Users of Information Systems
 Organizations: The Context of Information Systems

Data: The Root and Purpose of Information Systems

Earlier, we defined information systems as the combination of people and information

technology that create, collect, process, store, and distribute useful data. We begin by
talking about data, the most basic element of any information system.
Before you can understand how information systems work, it is important to distinguish
between raw, unformatted data, information, and knowledge.

DATA:
Unformatted data, or simply data, are raw symbols, such as characters and numbers.
Data have no meaning in and of themselves and are of little value until processed .
For example, if we asked you what 465889727 meant or stood for, you could not tell
us (Figure 1.13). However, if we presented the same data as 465-88-9727 and told you it
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was located in a certain database, a key consideration of assessing whether data are
reliable for making decisions is data quality, consisting of completeness, accuracy,
timeliness, validity, and consistency.

INFORMATION:
Data can be formatted, organized, or processed to
be useful; they are transformed into information,
which can be defined as a representation of reality,
and can help to answer questions about who, what,
where, and when.
In the previous example, 465-88-9727 was used to
represent and identify an individual person. A list of
all the transactions at a bank’s ATMs over the
course of a month would be fairly useless data.
However, a table that divided ATM users into two categories, bank customers and non-
bank customers, and compared the two groups’ use of the machine—their purpose for
using the ATMs and the times and days on which they use them—would be incredibly
useful information. A bank manager could use this information to create marketing
mailings to attract new customers. Without information systems, it would be difficult to
transform raw data into useful information.

KNOWLEDGE:
In order to actually use information, knowledge is needed. Knowledge is the ability to
understand information, form opinions, and make decisions or predictions based on the
information. For example, you must have knowledge to be aware that only one Social
Security number can uniquely identify each individual . Knowledge is a body of
governing procedures, such as guidelines or rules, that are used to organize or
manipulate data to make them suitable for a given task.

Hardware, Software, and Telecommunications Networks: The Components

of Information Systems

Ever since the dawn of humankind, there was a need to transform data into useful
information for people, and people have invented various calculating devices, such as
the abacus or the slide rule. Before the introduction of the first computers (which
worked on a mechanical basis using punch cards), almost all business and government
information systems consisted of file folders, filing cabinets, and document repositories.

Computer hardware has replaced these physical artifacts, providing the technologies
to input and process data and output useful information; today, hardware includes not
only “traditional” computer components but a variety of other input and output devices,
including sensors, cameras, actuators, and the like.

Computer Software enables organizations to utilize the hardware to execute their

business processes and competitive strategy by providing the computer hardware with
instructions on what processing functions to perform. Finally,
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The telecommunications networks allow computers to share data and services,

enabling the global collaboration, communication, and commerce we see today.

People: The Builders, Managers, and Users of Information Systems

If you are choosing a career in the IS field, you will find countless opportunities. With the
growing value of data for competitive advantage, every company can now be considered a
technology company, needing people with the right skill set to help optimize its business
processes. The career opportunities for a person with IS training continue to be strong, and they
are expected to continue to improve over the next 10 years.
For example, the 2016–17 edition of the Occupational Outlook Handbook published by the U.S.
Bureau of Labor Statistics predicted that employment for computer and IS managers will grow
15 percent through 2024, much faster than the average for all occupations.

Careers in Information Systems

TABLE 1.2: Some IS Management Job Titles and Brief Job Descriptions
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TABLE 1.3 IS Professional Core Competencies

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What Makes IS Personnel So Valuable

Technical Competency The technical competency area includes knowledge and skills
in hardware, software, networking, and security. In a sense, this is the “nuts and bolts”
of information systems. The technical area of competency is, perhaps, the most difficult
to maintain because of the rapid pace of technological innovation in the digital world.
Business Competency The business competency area is one that sets the IS
professional apart from others who have only technical knowledge and skills, and in an
era of increased outsourcing, it may well save a person’s job. For example, even though
some low-level technology jobs may be outsourced, the Bureau of Labor Statistics
recently reported that there is an increased need for IS managers as organizations
embrace mobility and cloud computing.
Systems Competency Systems competency is another area that sets the IS
professional apart from others with only technical knowledge and skills. Those who
understand how to build and integrate systems and how to solve problem will ultimately
manage large , complex systems projects as well as manage those in firms who have only
technical knowledge and skills.
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The Dual Nature of Information Systems

Information technology is like a sword—you can use it effectively as a competitive
weapon, but, as the old saying goes, those who live by the sword sometimes die by the
sword. The two following cases illustrate this dual nature of information systems.
Case in Point: An Information System Gone Awry: Outages Outrage Gamers

Sony introduced the PlayStation Network in 2006 to accompany its successful PlayStation
game consoles. In 2010, Sony added a service named PlayStation Plus, offering subscription-
based premium services. In the war of the game consoles, PlayStation Plus was regarded as a
way for Sony to get ahead of the competition from Microsoft’s Xbox and Nintendo’s Wii.
However, since its inception, the PlayStation Network has been plagued with all-too-frequent
system outages. Most notably, in 2011, a system outage following a malicious attack lasted 23
days. On Christmas Day 2014, a denial-of-service caused the PlayStation Network to be
unavailable, ruining the holidays for many users. In 2016, the first outage happened only a
few days into the new year, with further outages following just a few weeks later.
Built to help achieve competitive advantage, the PlayStation Network continues to
be Sony’s Achilles heel.
Case in Point: An Information System That Works: FedEx

FedEx, a US$47.5 billion family of companies (2016 data), is the world’s largest express
transportation company, delivering millions of packages and millions of pounds of freight to
220 countries and territories each business day. FedEx uses extensive, interconnected
information systems to coordinate more than 340,000 employees, hundreds of aircraft,
and more than 100,000 ground vehicles worldwide. To improve its services and sustain
a competitive advantage, FedEx continuously updates and fine-tunes its systems
For example, FedEx.com has more than 50 million unique visitors per month and more than
50 million tracking requests per day, and FedEx strives to provide the most accurate tracking
information to each visitor. its destination, each package typically travels through at least one
sorting facility, where it is routed to its intermediate and final destinations.

Information Systems for Competitive Advantage

The PlayStation Network and FedEx systems are typical of systems that are pervasive in
today’s life or used in large, complex organizations. These systems are so large in scale
and scope that they are difficult to build. It is important to handle the development of
such systems the right way the first time around.
Example, Not only were these systems large and complicated, but they were—and
continue to be— critical to the success of the organizations that built them. The choices
made in developing the systems at Sony and FedEx were strategic in their intent. Both
Sony’s PlayStation Network and FedEx’s systems were developed and are continuously
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updated to help the companies gain or sustain some competitive advantage (Porter,
1985; Porter & Millar, 1985) over their rivals.
Although we described the use of information systems at two very large organizations,
firms of all types and sizes can use information systems to gain or sustain a competitive
advantage over their rivals. Whether it is a small mom-and-pop boutique or a large
government agency, every organization can find a way to use information technology to
beat its rivals.

Organizations: The Context of Information System:

We have talked about data versus information, the technology side of information
systems, and the people side of information systems. Information systems do not exist
in a vacuum; they are built and/or used within a certain context. Organizations use
information systems to become more productive and profitable, to gain competitive
advantage, to reach more customers, or to improve customer service. This holds true for
all types of organizations—professional, social, religious, educational, and
governmental—and for all types of industries—medical, legal, manufacturing, and so on.
• Information systems can help organizations – Be more productive and profitable –
Gain competitive advantage – Reach more customers – Improve customer service

 ORGANIZING THE IS FUNCTION

Old-school IS personnel believed that they owned and controlled the computing
resources, that they knew better than users did, and that they should tell users what they
could and could not do with the computing resources; in addition, early IS departments
typically had huge project backlogs, and IS personnel would often deliver systems that
were over budget, were completed much too late, were difficult to use, and did not
always work well. The increasing pervasiveness of technology in businesses and societies
has led to a shifting mindset about information systems within organizations. Many
organizations, for example, have realized that some of the best ideas for solving business
problems come from the employees using the system; as a result, personnel within many
IS units have taken on more of a consulting relationship with their users, helping the
users solve problems, implement ideas, and be more productive. IS personnel are
increasingly reaching out to their internal customers and proactively seek their input
and needs rather than waiting for customers to come in with systems complaints. They
modify the systems at a moment’s notice just to meet customer needs quickly and
effectively. They celebrate the customers’ new systems ideas rather than putting up
roadblocks and giving reasons that the new ideas cannot or will not work. They
fundamentally believe that the customers own the technology and the information and
that the technology and information are there for the customers, not for the systems
personnel. They create help desks, hotlines, information centers, and training centers to
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support customers. These service-oriented IS units structure the IS function so that it
can better serve the customer.
 THE SPREAD OF TECHNOLOGY IN ORGANIZATIONS.
Another phenomenon that shows how integral and vital information systems and their
proper management have become to organizations is the extent to which the technology
is firmly integrated and entrenched within the various business units (such as
accounting, sales, and marketing). In many organizations today, you will find that the
builders and managers of a particular information system or subsystem spend most of
their time out in the business unit, along with the users of that particular system. Many
times, these systems personnel are permanently placed—with an office, desk, phone,
and PC—in the business unit along with the users. In addition, it is not uncommon for
systems personnel to have formal education, training, and work experience in
information systems as well as in the functional area that the system supports, such as
finance. It is becoming increasingly more difficult to separate the technology from the
business or the systems staff from the other people in the organization systems are
managed is important to you, no matter what career option you pursue. As information
systems are used more broadly throughout organizations, IS personnel often have dual-
reporting relationships—reporting both to the central IS group and to the business
function they serve. Therefore, at least some need for centralized IS planning,
deployment, and management continues—particularly with respect to achieving
economies of scale in systems acquisition and development and in optimizing systems
integration, enterprise networking, and the like. Even in organizations that are
decentralizing technology and related decisions, a need to coordinate technology and
related decisions across the firm still persist.

IS Ethics :
A broad range of ethical issues have emerged through the use and proliferation of
computers. Especially with the rise of companies such as Google, which generate
tremendous profits by collecting, analyzing, and using their customers’ data, and the
emergence of social networks such as Facebook, many people fear negative impacts such
as social decay, increased consumerism, or loss of privacy. Computer ethics is used to
describe moral issues and standards of conduct as they pertain to the use of information
systems. In 1986, Richard O. Mason wrote a classic and very insightful article on the
issues central to this debate—information privacy, accuracy, property, and accessibility
(aka “PAPA”). These issues focus on what information an individual should have to
reveal to others in the workplace or through online transactions, ensuring the
authenticity and fidelity of information, who owns information about individuals and
how that information can be sold and exchanged, and what information a person or
organization has the right to obtain about others and how this information can be
accessed and used. With the societal changes brought about by information systems, the
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issues surrounding privacy have moved to the forefront of public concern; in addition,
the ease of digitally duplicating and sharing information has raised not only privacy
concerns but also issues related to intellectual property. Next, we examine these issues.

1. Information privacy : Information privacy is concerned with what information an

individual should have to reveal to others in the workplace or through other transactions,
such as online shopping. If you use the Internet regularly, sending e-mail messages,
posting status updates on Facebook, or just visiting websites, you may have felt that your
personal privacy is at risk. Several e-commerce websites where you like to shop greet you
by name and seem to know which products you are most likely to buy ; other websites
provide you with advertising that appears to be targeted accurately at you. As a result,
you may feel as though eyes are on you every time you go online. Although the
Information Age has brought widespread access to information, the downside is that
others may now have access to personal information that you would prefer to keep
private. Personal information, such as Social Security numbers, credit card numbers,
medical histories, and even family histories, is now available on the Internet. Using
search engines, your friends, coworkers, spouse, or even current or future employers can
find out almost anything that has been posted by or about you on the Internet. For
example, it is very easy to locate your personal blog, your most recent party pictures
posted on Facebook, or even sensitive questions you asked in a public discussion forum
about drug use or mental health. Moreover, many of these pages are stored in the search
engines’ long-term cache, so they remain accessible for a long time even after they have
been taken off the web. Yet some countries are seeking to protect their citizens from this.
In 2014, the European Court of Justice ruled that individuals have the “right to be
forgotten” and that search engines may have to remove links with personal information
if the “information is inaccurate, inadequate, irrelevant or excessive for the purposes of
the data processing” (European Commission, n.d.).

 INFORMATION PROPERTY ON THE WEB. It happens to all of us. Nearly every day in our
physical or virtual mailboxes, we receive unwanted solicitations from credit card
companies, department stores, magazines, or charitable organizations. Many of these
items are never opened. We ask the same question over and over again: “How did I get
on another mailing list?” Our names, addresses, and other personal data were most likely
sold from one company to another for use in mass mailings. Who owns the computerized
data about people—the data that are stored in thousands of databases by retailers, credit
card companies, and marketing research companies? The answer is the company that
maintains the database of customers or subscribers legally owns the data and is free to
sell them. Your name, address, and other data are all legally kept in a company database
to be used for the company’s future mailings and solicitations, and the company can sell
its customer list or parts of it to other companies who want to send similar mailings.
Companies collect data from credit card purchases (by using a credit card, you indirectly
allow this) or from surveys and questionnaires you fill out when applying for a card. They
also collect data when you fill in a survey at a bar, restaurant, supermarket, or the mall
about the quality of the service or product preferences. By providing these data, you
implicitly agree that the data can be used as the company wishes (within legal limits, of
course). Although more and more people are concerned about their privacy settings on
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social networks such as Facebook, there are things that you may not be able to control.
For example, if one of your friends (or even a stranger) posts a photo of you on
Facebook, it will be there for many others to view, whether you like it or not. By the time
you realize it, most of your friends, coworkers, and family members may have already
seen it. Sometimes, you may forget who’s following your activities at the various social
networking sites, and you may tell people things you never wanted them to know. As
these examples show, there are many more threats to your privacy than you may have
thought.
 HOW TO MAINTAIN YOUR PRIVACY ONLINE.
In general, companies operating in the online world are not required by law to respect
your privacy. In other words, a vendor can track what pages you look at, what products
you examine in detail, which products you choose to buy, what method of payment you
choose to use, and where you have the product delivered. After collecting all those data,
unscrupulous vendors can sell them to others, resulting in more direct mail advertising,
electronic spam in your e-mail inbox, or calls from telemarketers. When surveyed about
concerns related to Internet use, most consumers list issues of information privacy as a
top concern. As a result, governments have pressured businesses to post their privacy
policies on their websites.
widely accepted fair information practices include:
■ Notice/Awareness. Providing information about what data are gathered, what the
data are used for, who will have access to the data, whether provision of the data is
required or voluntary, and how confidentiality will be ensured. Such information is
typically contained in data privacy statements on a website.
■ Choice/Consent. Providing options about what will be done with the data (e.g.,
subscription to mailing lists after a purchase). Typically, consumers are given a choice to
opt in (i.e., signal agreement to the collection/further use of the data, e.g., by checking a
box) or opt out (i.e., signal that data cannot be collected/used in other ways).
■ Access/Participation. Providing customers with means to access data collected
about them, check for accuracy, and request correction of inaccuracies.
■ Integrity/Security. Ensuring integrity of the data (e.g., by using only reputable
sources of data) as well as implementing controls against unauthorized access,
disclosure, or destruction of data (we will discuss these controls in Chapter 10, “Securing
Information Systems”).
■ Enforcement/Redress. Providing means to enforce these practices, and/or for
customers to receive remedies, for example, through self-regulation or appropriate laws
and regulations. Unfortunately, while data privacy statements provide information
about, for example, how data will be used, they often do not protect the privacy of
consumers.

To protect yourself, you should always review the privacy policy of all companies you do
business with and refuse to do business with those that do not have a clear policy or do
not respect your privacy.

2. Intellectual Property :Another set of ethical issues centers around intellectual property
(IP) (i.e., creations of the mind that have commercial value) and the ability to easily
download, copy (and potentially modify), and share or distribute digital information. For
example, back in the days of analog music, it was all but impossible to create a copy of a
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song without sacrificing quality. Nowadays, you can almost effortlessly copy your friend’s
entire digital music library without any quality loss (Figure 1.21); with just a little more
effort, you can share it with your friends or even strangers using peer-to-peer networks.
Alternatively, you may come across a great photograph or article on the web and share it
on Facebook or Instagram without asking for permission from the creator. Similarly,
your school may have licensing agreements with certain vendors, allowing you to install
and use certain software while you are a student; yet you may never uninstall the
software after graduating, or you may lend the software to some friend or family member
for personal use. In other cases, you may not be able to afford certain programs and
download a pirated version from the web. In many non-Western societies, using
someone else’s work is considered praise for the creator . Using another’s work without
purchase or attribution has significant legal and ethical ramifications.

3. The Need for a Code of Ethical Conduct : Not only has the Internet age found
governments playing catch-up to pass legislation pertaining to computer crime, privacy,
and security, but it has also created an ethical conundrum. For instance, the technology
exists to rearrange and otherwise change photographs, but is the practice ethical? If you
can use a computer at your school or workplace for professional purposes but “steal”
computer time to do personal business, is this ethical? Is it ethical for companies to
compile information about your shopping habits, credit history, and other aspects of
your life for the purpose of selling such data to others? Should guidelines be in place to
dictate how businesses and others use information and computers? If so, what should
the guidelines include, and who should write them? Many businesses have devised
guidelines for the ethical use of information technology and computer systems; similarly,
most universities and many public school systems have written guidelines for students,
faculty, and employees about the ethical use of computers. Most organization and school
guidelines encourage all system users to act responsibly, ethically, and legally when
using computers and to follow accepted rules of online etiquette as well as federal and
state laws. RESPONSIBLE COMPUTER USE.
The guidelines prohibit the following:
■ Using a computer to harm others
■ Interfering with other people’s computer work
■ Snooping in other people’s files
■ Using a computer to steal
■ Using a computer to bear false witness
■ Copying or using proprietary software without paying for it
■ Using other people’s computer resources without authorization or compensation
■ Appropriating other people’s intellectual output .

In addition, the guidelines recommend the following:

■ Thinking about social consequences of programs you write and systems you design
■ Using a computer in ways that show consideration and respect for others