• New! Real-world business cases and examples with global content from Europe, the Middle East, and Asia help to put theory into practice. • New! Video cases collection covering key concepts and experiences in the MIS world.

Pearson International Edition

Laudon Laudon

This is a special edition of an established title widely used by colleges and universities throughout the world. Pearson published this exclusive edition for the benefit of students outside the United States and Canada. If you purchased this book within the United States or Canada you should be aware that it has been imported without the approval of the Publisher or Author.

THIRTEENTH EDITION

• More! Interactive assignments where you can work with real-world business scenarios and data, and learn firsthand what MIS is all about.

Management Information Systems

This Global Edition has been edited to include enhancements making it more relevant to students outside the United States. The editorial team at Pearson has worked closely with educators around the globe to include:

Managing the Digital Firm

The thirteenth edition of Management Information Systems includes updated coverage on social business, cloud computing, and ethical and social issues and continues to develop the practical skills you will need for problem solving and decision making in today’s business firms.

GLOBAL EDITION

GLOBAL EDITION

GLOBAL EDITION

Management Information Systems Managing the Digital Firm THIRTEENTH EDITION

Kenneth C. Laudon • Jane P. Laudon

Editor in Chief: Stephanie Wall Executive Editor: Bob Horan Editorial Assistant: Ashlee Bradbury International Publisher: Laura Dent International Programme Editor: Leandra Paoli Director of Marketing: Maggie Moylan Executive Marketing Manager: Anne Fahlgren International Marketing Manager: Dean Erasmus Senior Managing Editor: Judy Leale

Senior Production Project Manager: Karalyn Holland Senior Manufacturing Controller, Production, International: Trudy Kimber Creative Director: Blair Brown Senior Art Director: Janet Slowik Cover Designer: Jodi Notowitz Cover Image: Marco Rosario Venturini Autieri/Getty Media Editor: Denise Vaughn Media Project Manager: Lisa Rinaldi Full-Service Project Management: Azimuth Interactive, Inc.

Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearson.com/uk © Pearson Education Limited 2014 The rights of Kenneth C. Laudon and Jane P. Laudon to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Authorised adaptation from the United States edition, entitled Management Information Systems: Managing the Digital Firm, 13th Edition, ISBN: 978-0-13-305069-1 by Kenneth C. Laudon and Jane. P. Laudon, published by Pearson Education © 2014. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. Microsoft and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published as part of the services for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Microsoft and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all warranties and conditions of merchantability, whether express, implied or statutory, fitness for a particular purpose, title and non-infringement. In no event shall Microsoft and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from the services. The documents and related graphics contained herein could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Microsoft and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time. Partial screen shots may be viewed in full within the software version specified. Microsoft® and Windows® are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation.. Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within the text. ISBN 13: 978-0-273-78997-0 ISBN 10: 0-273-78997-X British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library 10 9 8 7 6 5 4 3 2 1 17 16 15 14 13 Typeset in 10.5/13 ITC Veljovic Std Book by Azimuth Interactive, Inc. Printed and bound by Courier/Kendallville in The United States of America The publisher's policy is to use paper manufactured from sustainable forests.

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Management Information Systems, Global Edition Table of Contents Cover Complete Contents Part One Organizations, Management, and the Networked Enterprise Chapter 1 Information Systems in Global Business Today Opening Case: Efficiency in Wood Harvesting with Information Systems 1.1 The Role of Information Systems in Business Today How Information Systems are Transforming Business Whats Newin Management Information Systems? Globalization Challenges and Opportunities: A Flattened World Interactive Session: Management Running the Business from the Palm of Your Hand The Emerging Digital Firm Strategic Business Objectives of Information Systems

1.2 Perspectives on Information Systems What Is an Information System? Dimensions of Information Systems It Isnt Just Technology: A Business Perspective on Information Systems Interactive Session: Technology UPS Competes Globally with Information Technology Complementary Assets: Organizational Capital and the Right Business Model

1.3 Contemporary Approaches to Information Systems Technical Approach Behavioral Approach Approach of This Text:Sociotechnical Systems Learning Track Modules: How Much Does IT Matter?, Information Systems and Your Career, The Mobile Digital Platform Review Summary Key Terms Review Questions Discussion Questions Hands-On MIS Projects Video Cases Collaboration and Teamwork Project Case Study: Mashaweer

Chapter 2 Global E-business and Collaboration Opening Case: Telus Embraces Social Learning 2.1 Business Processes and Information Systems Business Processes How Information Technology Improves Business Processes

2.2 Types of Information Systems Systems for Different Management Groups Interactive Session: Technology Schiphol International Hub Systems for Linking the Enterprise Interactive Session: Management Piloting Procter & Gamble from Decision Cockpits

Table of Contents E-Business, E-Commerce, and E-Government

2.3 Systems for Collaboration and Social Business What is Collaboration? What Is Social Business? Business Benefits of Collaboration and Social Business Building a Collaborative Culture and Business Processes Tools and Technologies for Collaboration and Social Business

2.4 The Information Systems Function in Business The Information Systems Department Organizing the Information Systems Function Learning Track Modules Review Summary Key Terms Review Questions Discussion Questions Hands-On MIS Projects Video Cases Collaboration and Teamwork Project Case Study: Modernization of NTUC Income

Chapter 3 Information Systems, Organizations, and Strategy Opening Case: Will Searss Technology Strategy Work This Time? 3.1 Organizations and Information Systems What Is an Organization? Features of Organizations

3.2 How Information Systems Impact Organizations and Business Firms Economic Impacts Organizational and Behavioral Impacts The Internet and Organizations Implications for the Design and Understanding of Information Systems

3.3 Using Information Systems to Achieve Competitive Advantage Porters Competitive Forces Model Information System Strategiesfor Dealing with Competitive Forces The Internets Impact on Competitive Advantage Interactive Session: Organizations Technology Helps Starbucks Find New Ways to Compete The Business Value Chain Model Interactive Session: Technology Automakers Become Software Companies Synergies, Core Competencies, and Network-Based Strategies

3.4 Using Systems for Competitive Advantage: Management Issues Sustaining Competitive Advantage Aligning IT with Business Objectives Managing Strategic Transitions Learning Track Module: The Changing Business Environment for Information Technology Review Summary Key Terms

Table of Contents Review Questions Discussion Questions Hands-On MIS Projects Video Cases Collaboration and Teamwork Project Case Study: Can This Bookstore Be Saved?

Chapter 4 Ethical and Social Issues in Information Systems Opening Case: Ethical Issues Facing the Use of Technologies for the Aged Community 4.1 Understanding Ethical and Social Issues Related to Systems A Model for Thinking About Ethical, Social, and Political Issues Five Moral Dimensions of the Information Age Key Technology TrendsThat Raise Ethical Issues

4.2 Ethics in an Information Society Basic Concepts: Responsibility, Accountability, and Liability Ethical Analysis Candidate Ethical Principles Professional Codes of Conduct Some Real-World Ethical Dilemmas

4.3 The Moral Dimensions of Information Systems Information Rights: Privacy and Freedom in the Internet Age Property Rights: Intellectual Property Interactive Session: Technology Life on the Grid: iPhone Becomes iTrack Accountability, Liability, and Control System Quality: Data Quality and System Errors Quality of Life: Equity, Access, and Boundaries Interactive Session: Organizations Monitoring in the Workplace Learning Track Module: Developing a Corporate Code of Ethics for Information Systems Review Summary Key Terms Review Questions Discussion Questions Hands-On MIS Projects Video Cases Collaboration and Team work Project Case Study: Facebook: Its About the Money

Part Two Information Technology Infrastructure Chapter 5 IT Infrastructure and Emerging Technologies Opening Case: Reforming the Regulatory System for Construction Permits 5.1 IT Infrastructure Defining IT Infrastructure Evolution of IT Infrastructure Technology Drivers of Infrastructure Evolution

5.2 Infrastructure Components

Table of Contents Computer Hardware Platforms Operating System Platforms Enterprise Software Applications Data Management and Storage Networking/Telecommunications Platforms Internet Platforms Consulting and System Integration Services

5.3 Contemporary Hardware Platform Trends The Mobile Digital Platform Consumerization of IT and BYOD Grid Computing Virtualization Interactive Session: Management Should You Use Your iPhone for Work? Cloud Computing Green Computing High-Performance andPower-Saving Processors Interactive Session: Organizations Nordea Goes Green with IT Autonomic Computing

5.4 Contemporary Software Platform Trends Linux and Open Source Software Software for the Web: Java, HTML,and HTML5 Web Services and Service-Oriented Architecture Software Outsourcing and Cloud Services

5.5 Management Issues Dealing with Platform and Infrastructure Change Management andGovernance Making Wise Infrastructure Investments Learning Track Modules: Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: Should Businesses Move to the Cloud?

Chapter 6 Foundations of Business Intelligence: Databases andInformation Management Opening Case: BAE Systems 6.1 Organizing Data in a Traditional File Environment File Organization Terms and Concepts Problems with the TraditionalFile Environment

6.2 The Database Approach to Data Management Database Management Systems Capabilities of Database ManagementSystems Designing Databases

Table of Contents 6.3 Using Databases to Improve Business Performance and DecisionMaking The Challenge of Big Data Business Intelligence Infrastructure Analytical Tools: Relationships, Patterns, Trends Interactive Session: Technology Big Data, Big Rewards Databases and the Web Interactive Session: Organizations Controversy Whirls Around the ConsumerProduct Safety Database

6.4 Managing Data Resources Establishing an Information Policy Ensuring Data Quality Learning Track Modules: Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: Lego: Embracing Change by Combining BI with a FlexibleInformation System

Chapter 7 Telecommunications, the Internet, and WirelessTechnology Opening Case: RFID and Wireless Technology Speed Up Production atContinental Tires 7.1 Telecommunications and Networking in Todays Business World Networking and Communication Trends What Is a ComputerNetwork? Key Digital Networking Technologies

7.2 Communications Networks Signals: Digital vs. Analog Types of Networks TransmissionMedia and Transmission Speed

7.3 The Global Internet What Is the Internet? Internet Addressing and Architecture Interactive Session: Organizations The Battle over Net Neutrality Internet Services and Communication Tools Interactive Session: Management Monitoring Employees on Networks:Unethical or Good Business? The Web

7.4 The Wireless Revolution Cellular Systems Wireless Computer Networks and InternetAccess RFID and Wireless Sensor Networks Learning Track Modules: Review Summary Key Terms

Table of Contents Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: Apple, Google, and Microsoft Battle for Your InternetExperience

Chapter 8 Securing Information Systems Opening Case: Youre on LinkedIn? Watch Out! 8.1 System Vulnerability and Abuse Why Systems Are Vulnerable Malicious Software: Viruses, Worms,Trojan Horses, and Spyware Hackers and Computer Crime Internal Threats: Employees Software Vulnerability Interactive Session: Organizations Stuxnet and the Changing Face ofCyberwarfare

8.2 Business Value of Security and Control Legal and Regulatory Requirements for Electronic RecordsManagement Electronic Evidence and Computer Forensics

8.3 Establishing a Framework for Security and Control Information Systems Controls Risk Assessment SecurityPolicy Disaster Recovery Planning and Business ContinuityPlanning The Role of Auditing

8.4 Technologies and Tools for Protecting Information Resources Identity Management and Authentication Firewalls, IntrusionDetection Systems, and Antivirus Software Securing WirelessNetworks Encryption and Public Key Infrastructure EnsuringSystem Availability Security Issues for Cloud Computing and theMobile Digital Platform Ensuring Software Quality Interactive Session: Technology MWEB Business: Hacked Learning Track Modules: Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: Information Security Threats and Policies in Europe

Part Three Key System Applications for the Digital Age Chapter 9 Achieving Operational Opening Case: Technology Helps Nvidia Anticipate the Future

Table of Contents 9.1 Enterprise Systems What Are Enterprise Systems? Enterprise Software BusinessValue of Enterprise Systems

9.2 Supply Chain Management Systems The Supply Chain Information Systems and Supply Chain Management Supply Chain Management Software GlobalSupply Chains and the Internet Interactive Session: Organizations DP World Takes Port Management to theNext Level with RFID Business Value of Supply Chain Management Systems

9.3 Customer Relationship Management Systems What Is Customer Relationship Management? Customer Relationship Management Software Operational and Analytical CRM Business Value of Customer Relationship Management Systems

9.4 Enterprise Applications: New Opportunities and Challenges Enterprise Application Challenges Next-Generation Enterprise Applications Interactive Session: Technology Customer Relationship Management Heads tothe Cloud Learning Track Modules: Review Summary Key Terms Review Questions Discussion Questions Hands-On MIS Projects Video Cases Collaboration and Teamwork Project Case Study: Summit Electric Lights Up with a New ERP System

Chapter 10 E-commerce: Digital Markets, Digital Goods Opening Case: Groupons Business Model: Social and Local 10.1 E-commerce and the Internet E-Commerce Today Why E-commerce Is Different KeyConcepts in E-commerce: Digital Markets and Digital Goods in a GlobalMarketplac

10.2 E-commerce: Business and Technology Types of E-Commerce E-Commerce Business Models E-Commerce Revenue Models Interactive Session: Organizations Location-Based Marketing andAdvertising Social Networking and The Wisdom of Crowds E-CommerceMarketing B2B E-commerce: New Efficiencies and Relationships Interactive Session: Management Social Commerce Creates New

Table of Contents CustomerRelationships 10.3 The Mobile Digital Platform and Mobile E-commerce Location-based Services and Applications Other Mobile CommerceServices

10.4 Building an E-commerce Presence Pieces of the Site-Building Puzzle Business Objectives, SystemFunctionality, and Information Requirements Building the Web Site:In-house Versus Outsourcing Learning Track Modules: Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: To Pay or Not to Pay: Zagats Dilemma

Chapter 11 Managing Knowledge Opening Case: Designing Drugs Virtually 11.1 The Knowledge Management Landscape Important Dimensions of Knowledg The Knowledge ManagementValue Chain Types of Knowledge Management Systems

11.2 Enterprise-Wide Knowledge Management Systems Enterprise Content Management Systems Knowledge NetworkSystems Collaboration And Social Tools and Learning ManagementSystems

11.3 Knowledge Work Systems Knowledge Workers and Knowledge Work Requirements ofKnowledge Work Systems Examples of Knowledge Work Systems Interactive Session: Technology Firewire Surfboards Lights Up with CAD

11.4 Intelligent Techniques Capturing Knowledge: Expert Systems Organizational Intelligence:Case-Based Reasoning Fuzzy Logic Systems MachineLearning Interactive Session: Organizations Albassami's Job is not Feasible withoutIT Intelligent Agents Hybrid AI Systems Learning Track Modu Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects

Table of Contents Video Cases Collaborationand Teamwork Project Case Study: Knowledge Management and Collaboration at Tata ConsultingServices

Chapter 12 Enhancing Decision Making Opening Case: Moneyball: Data-Driven Baseball 12.1 Decision Making and Information Systems Business Value of Improved Decision Making Types of Decisions The Decision-Making Process Managers and Decision Making inthe Real World High-Velocity Automated Decision Making

12.2 Business Intelligence in the Enterprise What Is Business Intelligence? The Business IntelligenceEnvironment Interactive Session: Organizations Analytics Help the Cincinnati Zoo Know ItsCustomers Business Intelligence and Analytics Capabilities ManagementStrategies for Developing BI and BA Capabilities

12.3 Business Intelligence Constituencies Decision Support for Operational and Middle Management DecisionSupport for Senior Management: Balanced Scorecard and EnterprisePerformance Management Methods Group Decision-Support Systems(GDSS) Interactive Session: Management Colgate-Palmolive Keeps Managers Smilingwith Executive Dashboards Learning Track Module: Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project

Part Four Building and Managing Systems Chapter 13 Building Information Systems Opening Case: New Systems and Business Processes Put MoneyGram On theMoney 13.1 Systems as Planned Organizational Change Systems Development and Organizational Change Business Process Redesign

13.2 Overview of Systems Development Interactive Session: Organizations Burton Snowboards Speeds Ahead with Nimble Business Processes Systems Analysis Systems Design Completing the Systems Development Process Modeling and Designing Systems: Structuredand Object-Oriented Methodologies

Table of Contents 13.3 Alternative Systems-Building Approaches Traditional Systems Life Cycle Prototyping End-UserDevelopment Application Software Packages and Outsourcing

13.4 Application Development for the Digital Firm Rapid Application Development (RAD) Component-Based Development and Web Services Mobile Application Development Learning Track Modules Interactive Session: Technology What Does It Take to Go Mobile? Review Summary Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: Honam Petrochemicals Quest for Better Management Reports

Chapter 14 Managing Projects Opening Case: Nu Skins New Human Resources System Project Puts PeopleFirst 14.1 The Importance of Project Management Runaway Projects and System Failure Project ManagementObjectives Interactive Session: Management Austin Energys Billing System Cant LightUp

14.2 Selecting Projects Management Structure for Information Systems Projects LinkingSystems Projects to the Business Plan Information Requirements and Key Performance Indicatorsand Key Performance Indicators Portfolio Analysis ScoringModels

14.3 Establishing the Business Value of Information Systems Information System Costs and Benefits Real Options PricingModels Limitations of Financial Models

14.4 Managing Project Risk Dimensions of Project Risk Change Management and the Concept ofImplementation Controlling Risk Factors Interactive Session: Organizations Westinghouse Electric Takes on the Risks ofa Big Bang Project Designing for the Organization Project Management SoftwareTools Learning Track Modules: Review Summary

Table of Contents Key Terms Review Questions DiscussionQuestions Hands-On MIS Projects Video Cases Collaborationand Teamwork Project Case Study: NYCAPS and CityTime: A Tale of Two New York City ISProjects

Chapter 15 Managing Global Systems 15.1 The Growth of International Information Systems Developing an International Information Systems Architecture The Global Environment: Business Drivers and Challenges State of the Art

15.2 Organizing International Information Systems Global Strategies and Business Organization Global Systems to Fit the Strategy Reorganizing the Business

15.3 Managing Global Systems A Typical Scenario: Disorganization on a Global Scale Global Systems Strategy The Management Solution:Implementation Interactive Session: Organizations Hasbro Develops a Global Systems Strategy

15.4 Technology Issues and Opportunities for Global Value Chains Computing Platforms and Systems Integration Connectivity Software Localization Interactive Session: Management Combine Net ASAP Helps Primark Manage Its Global Supply Chain Review Summary Key Terms Review Questions Discussion Questions Hands-On MIS Projects Video Cases Collaboration and Teamwork Project Case Study: Sherwin-Williams Paints the World

References Glossary Indexes A B C D E F

Table of Contents G H J K L M N O P R S T U W Y Z