Semester 2 Assg 1 MIS

Zahid Nazir Roll# AB523655 Page | 1

Assignment 1

ManagementManagementManagementManagement

informationinformationinformationinformation

systemsystemsystemsystem

Executive MBA/MPA

Zahid nazirZahid nazirZahid nazirZahid nazir

Roll # ab523655

Semester: spring 2009


Question 1

a). Discuss Information System versus Information

Technology

b). Explain types of MIS and explain the impact of

these MIS types on organizations.


a).

Information Systems:

“Information system means an interconnected set of information

resources under the same direct management control that shares

common functionality.”

A system normally includes hardware, software, information, data,

application, communication, and people. It is also defined as an

organized collection, storage, and presentation system of data and other

knowledge for decision making, progress reporting, and for planning

and evaluation of programs that can be either manual or computerized,

or a combination of both.

Typically, data is first collected and transformed into a form that is

suitable for processing as the input. Then, data is processed and

transformed into information which finally is stored for future use in

storage, or communicated to its users as output according to correct

processing procedures. For example, a person walks into a sundry shop

and buys a newspaper, a magazine, a bottled drink and ice cream. At

the cashier counter, the shopkeeper keys in the prices of all the four

items bought into a calculator. After adding them up, he gets the total

amount to be collected and informs you about it.

The calculator is only part of an information system. In fact, it is actually

part of a manual information system that comprises of the calculator, the

shopkeeper and the prices of items bought. This manual information

system may look simple but it can handle information management in

the sundry shop. It inputs data and then processes then into accurate

information. It then delivers the information or the output at the time

required, to the shopkeeper who is an end-user.


Regardless of whether it is manual or computer-based, an information

system operates based on the input-processing-output model. Using the

example of the sundry shop, the operations of an information system,

data - such as the prices, are treated like a resource. They are put

through the information processing of calculations, and converted into

the total amount to be collected, an information product.

Information systems play a very important role in organizations, as they

provide the information required for many kinds of decision-making.

However, information systems can contribute to an organization in other

ways. Information systems perform three vital roles in any types of

organizations.

� Provide support for managerial decision-making,

� Provide support for business operations � Provide support for strategic competitive advantage in

organizations.

Support for Managerial Decision Making

A manager in an organization has to provide leadership and direction in

organizations. Information systems provide the support for managerial

decision-making. Wrong decisions made due to lack of information on

the side of the manager will affect the organization. For example, during

an economic crisis, management may have to resort to either

retrenching staff or cutting their salaries to ensure that the organization

is able to operate. When an alternative is selected, it must ensure that

the organizations survive the economic crisis and the welfare of their

personnel is taken care of.

To be able to decide between two alternatives, a manager must be

equipped with the right information. For example, in considering

retrenchment (staff reduction), they would need information on the

number of staff and information on the labor laws. On the other hand, in


considering the salary cut they would have to look at information on the

annual budget and current salary.

Support for Business Operations

Information systems also provide support for business operations. Many

organizations today make use of computer-based information systems to

automate parts of their daily operations. This helps to improve internal

efficiency. Cashiers in some supermarkets today, do not even have to

key in the price of the items bought when calculating the total amount to

be paid by the customers. They just put the items under the scanner and

the price would appear on the screen automatically, minimizing clerical

work.

Support for Strategic Competitive Advantage

The second role of information systems is providing organizations with

support for strategic competitive advantage. These systems support

organizations in developing products, services, processes or

capabilities that give them a strategic advantage over their competitors.

In addition to this, information systems are able to influence the

environmental forces to gain extra advantage.

An environmental force is a term describing the suppliers, customers,

investors, bankers and wholesalers who surround an organization.

These forces have the potential to either support or break the

organization. Like the example of using scanners at the cashier counters.

The task of keying in prices is now automated. Automation minimizes

human error. With errors minimized, production costs goes down and

the finished products can be sold at a cheaper price. Now, that is an

advantage over competitors and it would also attract.

The competitive edge that an organization has over other organizations

will attract the attention of the environmental forces. Banks for instance,

would certainly be more willing to provide the necessary loan or


investment if they see a bright future in the products or services

introduced to them.

The support provided by an information system in creating strategic

competitive advantage can be seen from the perspective of cost

strategy, differentiation strategy and innovation strategy. Low

production cost means low customers' cost. Customers would indeed

prefer a product of a low price to an identical product at a higher price.

By providing the three forms of support, information systems play an

essential role in molding the success or failure of organizations.

INFORMATION TECHNOLOGY

Information is basically facts and ideas that are expressed through a

mutually understandable language. It has been around even in the days

of the caveman. Information Technology or IT for short in the other point

is any tools or techniques used to collect, store, process, use and

disseminate information.

Tools in IT can be divided into physical tool and symbolic tool. Physical

tool consists of telephones, computers, cameras and any peripherals or

devices that can achieve the objectives mentioned above. For symbolic

tool, it consists of written and spoken languages, mathematical symbols,

computer languages and tables of natural elements.

There are several categories of IT. It includes Input Technologies,

Communications Technologies, Processing Technologies, Storage

Technologies and Output Technologies.

Input Technologies include devices that help us gather information

from the environment and translate that information in a form that can be

understood by a computer. It also related with Sensing Technologies.

Example of input devices are keyboard, mouse, light pen, touch screen,

touch pad, joystick and etc.


Communication Technologies are technologies that tie together and

communicate information between input, analyzing and output

technologies. Some of the examples are the implementation of LAN,

MAN and WAN, cellular telephones, fax, resource sharing and etc.

These technologies have overcome the difficulties in distributing

information at distance area.

Processing Technologies include computer hardware and software. It

is also known as Analyzing Technologies. The main concern of this

technology is to get raw facts turn to useful information. Computers take

in raw facts (input) from sensing and communicating devices and then

store and process the raw facts and turn it out as useful information

(output). Storage Technologies refer to devices that are used to keep or

store data and instruction. The examples such as floppy disk, hard disk,

optical disk, micro chip, magnetic strip card and etc.

Finally, is the Output Technologies. Output technologies describes

computer hardware and software that make processed data available to

human users, either through sight or sound. This is also known as

Display Technologies. Examples are monitor, speaker, printer and etc.

With the application of IT, it helps much in managing our daily activities

efficiently. It can create and keep track of documents, control

production in manufacturing site, design new products, software and

etc. market products around the world and also expand interaction and

communication to the whole world.

Nowadays, IT has influenced much in our lives be it in our daily

activities, organization, education, communication or socialism. With the

emergence of telecommunications, the role of IT is much beyond the

expectations. From air mail to electronic mail, retails to electronic

commerce and mobile commerce, window shopping to tele-shopping

and also online transaction that could ease the burden of crowded

banks.


Education for example, we could see the major changes in the

traditional way of acquiring knowledge or learning in some higher

learning institution. They are now make full use of the IT by promoting

virtual learning or online learning to attract the people regardless of

their age to further their studies.

Telecommunication on the other side, also promotes the flexible and

convenient way of communicating. From wire line to wireless, it now

seems like everybody could enjoy the benefits derived from its

emergence. Many technologies also arise from telecommunications

such as WiFi, Bluetooth, Edge, 3G, GPRS and etc that could be

implemented to make use of messaging system.

In socialism, IT has changed the way we interact and socialize.

Information transfer is done also much faster compared to the traditional

way. If air mail could reach the recipients in few days, electronic mail

has cut it to few seconds. By using video conferencing too, your loved

ones who are far away could see you as if you were right in front one

another. That is why distance is not a gap anymore.

CONCLUSION:

Information system concern more with managing and manipulate data

where as IT is the tools or techniques that could help in managing and

manipulate the data. Both are not the same but they are actually

interrelated with each other. Either party would not function well with

the absence of one of it.

Reference:

http://www.dynamic-education.com


b).

MANAGEMENT INFORMATION SYSTEM

Management information systems are those systems that allow

managers to make decisions for the successful operation of businesses.

Management information systems consist of computer resources,

people, and procedures used in the modern business enterprise. The

term MIS stands for management information systems. MIS also refers to

the organization that develops and maintains most or all of the computer

systems in the enterprise so that managers can make decisions. The goal

of the MIS organization is to deliver information systems to the various

levels of corporate managers. MIS professionals create and support the

computer system throughout the company. Trained and educated to

work with corporate computer systems, these professionals are

responsible in some way for nearly all of the computers, from the largest

mainframe to the desktop and portable PCs.

Management information systems can be used as a support to managers

to provide a competitive advantage. The system must support the goals

of the organization. Most organizations are structured along functional

lines, and the typical systems are identified as follows:

Accounting management information systems: All accounting

reports are shared by all levels of accounting managers.

Financial management information systems: The financial

management information system provides financial information to all

financial managers within an organization including the chief financial

officer. The chief financial officer analyzes historical and current

financial activity, projects future financial needs, and monitors and


controls the use of funds over time using the information developed by

the MIS department.

Manufacturing management information systems: More than any

functional area, operations have been impacted by great advances in

technology. As a result, manufacturing operations have changed. For

instance, inventories are provided just in time so that great amounts of

money are not spent for warehousing huge inventories. In some

instances, raw materials are even processed on railroad cars waiting to

be sent directly to the factory. Thus there is no need for warehousing.

Marketing management information systems: A marketing management

information system supports managerial activity in the area of product

development, distribution, pricing decisions, promotional effectiveness,

and sales forecasting. More than any other functional area, marketing

systems rely on external sources of data. These sources include

competition and customers, for example.

Human resources management information systems: Human

resources management information systems are concerned with

activities related to workers, managers, and other individuals employed

by the organization. Because the personnel function relates to all other

areas in business, the human resources management information system

plays a valuable role in ensuring organizational success. Activities

performed by the human resources management information systems

include, work-force analysis and planning, hiring, training, and job

assignments.

IMPACT OF MIS ON ORGANISATIONS

MIS exerts a strong influence on organizations because it can affect both

production and coordination, where production refers to the task of

producing goods or services. A major research program called


Management in the 1990s, was initiated to examine the impact of IT on

organizations. The findings of research are:

• IT enables fundamental changes in the ways of work.

• IT enables the integration of business functions at all levels within

and between organizations.

• IT enables shift in the competitive climate in many industries.

• IT presents new strategic opportunities for organizations that

reassess their missions and operations.

• Successful applications of IT require changes in management and

organizational structure.

MIS’s impact on work, business functions, industrial competition and

organizational strategy.

Impact of MIS on nature of work:

The extent to which MIS has an impact on a person’s work depends on

how much of the work is based on information. This information may be

related to production work, which is the work done to produce goods

and services, or to coordinative work, which involves working in

conjunction with others.

MIS’s high potential impact on production work is obvious if we break

production into its three constituent elements:

• Physical Production, which is affected by robotics, process control instrumentations and intelligent sensors.

• Information Production, which is affected by computerization of

the standard clerical tasks such as accounts receivables, billing

etc.

• Knowledge Production, which is affected computer-aided

design/computer-aided manufacture (CAD/CAM) tools,

customized work stations for specific work such as new software

and a new legislation.


As an enabler of connectivity IT has a high impact on the economics and

functionality of the coordination process. The impact can be easily seen

in three areas:

• Distance can be shrunk to almost zero through electronic

communications.

• Elapsed time can be shrunk towards zero or tasks can be shifted

to a more convenient point, as in the case of airline reservation

systems, which could be used worldwide all the time.

• Organizational memory can be maintained (through a database)

over time and can be shared among many users.

In addition to production and coordination, IT also affects management

work, especially with respect to its direction and control aspects. As for

direction, it involves sensing changes in the external environment,

which is easily facilitated by IT based systems such as an executive

support system or a customer feedback system. For control, IT helps in

tracking an organization’s performance and analyzing the variance

against the plan or preset standards.

Impact of IT on Business Functions:

Enhanced connectivity and information accessibility through IT has

permitted an “any information, at any time, anywhere and any way one

wants to look at it” philoshiphy in an cost effective manner. Thus

boundaries of organizations are becoming more permeable, and where

work gets down, when and with whom is changing. This has enormously

speeded up the flow of work in and around the organization. In turn, this

has permitted possible integration in many areas such as:

• Teams within the organization: For example design,

engineering, and manufacturing people can be connected

together through local and/or global networks to work as a team

focusing on one product, as done by Xerox.


• End-to-End links b/w organizations: For instance a supplier’s shipping department can be connected to the buyer’s purchasing

department for business transactions. This shifts the boundary of

the organization out to overlap with others, thus creating a virtual

organization.

• Electronic alliances: an organization may perform one stage or

part of a manufacturing or design task and subcontract either a

specific task or the whole stage to another (electronically linked)

organization.

• Electronic markets: Here coordination within a few or all

organizations gives way to an open market. For example, travel

agents can reserve seats electronically from all major carriers, and

therefore can look for a best price for the customer. Thus the

reservation system acts like an electronic market.

Impact on Industrial Competition:

At the industry level, IT has a unique impact on the competitive climate

by permitting a high degree of simultaneous competition and

collaboration between organizations. Another unique impact of IT on

competitiveness concerns the importance of standards. It is now

important for an organization to know when to support standards and

when try to pre-empt competitors by establishing a proprietary de facto

standard.

Impact of IT on Organizational Strategy

While computers cannot create business strategies by themselves they

can assist management in understanding the effects of their strategies,

and help enable effective decision-making.

MIS systems can be used to transform data into information useful for

decision making. Computers can provide financial statements and

performance reports to assist in the planning, monitoring and

implementation of strategy.


MIS systems provide a valuable function in that they can collate into

coherent reports unmanageable volumes of data that would otherwise

be broadly useless to decision makers. By studying these reports

decision-makers can identify patterns and trends that would have

remained unseen if the raw data were consulted manually.

MIS systems can also use these raw data to run simulations –

hypothetical scenarios that answer a range of ‘what if’ questions

regarding alterations in strategy. For instance, MIS systems can provide

predictions about the effect on sales that an alteration in price would

have on a product. These Decision Support Systems (DSS) enable more

informed decision making within an enterprise than would be possible

without MIS systems.

Reference:

www.spk.uum.edu.my/aidi

*******************


Question 2

A). Explain the impact of different types of MIS on

users attitude in organization. Also design a model

that is showing the factors which are positively or

negatively impacting on organization. (Take one

organization as an example).

b). Explain that what the impact is after

implementation of (above) types of MIS and compare

it with before implementation.


a).

ROLE OF THE MANAGEMENT INFORMATION SYSTEM

The role of the MIS in an organization can be compared to the role of

heart in the body. The information is the blood and MIS is the heart. In

the body the heart plays the role of supplying pure blood to all the

elements of the body including the brain. The heart works faster and

supplies more blood when needed. It regulates and controls the

incoming impure blood, processes it and sends it to the destination in

the quantity needed. It fulfills the needs of blood supply to human body

in normal course and also in crisis.

The MIS plays exactly the same role in the organization. The system

ensures that an appropriate data is collected from the various sources,

processed, and sent further to all the needy destinations. The system is

expected to fulfill the information needs of an individual, a group of

individuals, the management functionaries: the managers and the top

management.

The MIS satisfies the diverse needs through a variety of systems such as

Query Systems, Analysis Systems, Modeling Systems and Decision

Support Systems the MIS helps in Strategic Planning, Management

Control, Operational Control and Transaction Processing.

The MIS helps the clerical personnel in the transaction processing and

answers their queries on the data pertaining to the transaction, the status

of a particular record and references on a variety of documents. The MIS

helps the junior management personnel by providing the operational

data for planning, scheduling and control, and helps them further in

decision making at the operations level to correct an out of control

situation. The MIS helps the middle management in short them planning,

target setting and controlling the business functions. It is supported by

the use of the management tools of planning and control. The MIS helps


the top management in goal setting, strategic planning and evolving the

business plans and their implementation.

The MIS plays the role of information generation, communication,

problem identification and helps in the process of decision making. The

MIS, therefore, plays a vita role in the management, administration and

operations of an organization.

IMPACT OF THE MANAGEMENT INFORMATION SYSTEM

Since the MIS plays a very important role in the organization, it creates

an impact on the organization’s functions, performance and productivity.

The impact of MIS on the functions is in its management. With a good

support, the management of marking, finance, production and

personnel become more efficient. The tracking and monitoring of the

functional targets becomes easy. The functional, managers are informed

about the progress, achievements and shortfalls in the probable trends

in the various aspects of business. This helps in forecasting and long-

term perspective planning. The manager’s attention is brought to a

situation which is exceptional in nature, inducing him to take an action or

a decision in the matter. A disciplined information reporting system

creates a structured data and a knowledge base for all the people in the

organization. The information is available in such a form that it can be

used straight away or by blending analysis, saving the manager’s

valuable time.

The MIS creates another impact in the organization which relates to the

understanding of the business itself. The MIS begins with the definition

of a data entity and its attributes. It uses a dictionary if data, entity and

attributes, respectively, designed for information generation in the

organization. Since all the information system use the dictionary, there is

common understanding of terms and terminology in the organization

brining clarity in the communication and a similar understanding

an even of the organization.


The MIS calls for a systemization of the business operation for an

affective system design.

A well designed system with a focus on the manger makes an impact on

the managerial efficiency. The fund of information motivates an

enlightened manger to use a variety of tools of the management. It helps

him to resort to such exercises as experimentation and modeling. The

use of computers enables him to use the tools techniques which are

impossible to use manually. The ready-made packages make this task

simpler. The impact is on the managerial ability to perform. It improves

the decision making ability considerably.

Since the MIS works on the basic systems such as transaction processing

and databases, the drudgery of the clerical work is transferred to the

computerized system, relieving the human mind for better work. It will

be observed that a lot of manpower is engaged in this activity in the

organization. It you study the individual’s time utilization and its

application; you will find that seventy per cent of the time is spent in

recording, searching, processing and communication. This is a large

overhead in the organization. The MIS has a direct impact on this

overhead. It creates an information- based work culture in the

organization.

MIS AND THE USER

Every person in the organization is a user of the MIS. The people in the

organization operate at all levels in the hierarchy. A typical user is a

clerk, an assistant, an officer, an executive or a manager. Each of them

has a specific task and a role to play in the management of business. The

MIS caters to the needs of all persons.

The main task of a clerk is to search the data, make a statement and

submit it to the higher level. A clerk can use the MIS for a quick search


and reporting the same to higher level. An assistant has the task of

collecting and organizing the data, and conducting a rudimentary

analysis of integrating the data from different and disciplines to analyze

it and make a critical comment if anything adverse is found.

The MIS offers the methods and facilities to integrate the data and report

the same in a proper format. An executive plays the role of a decision

maker. He is in of responsibility and accountability a position of a

planner and a decision maker. He is responsible for achieving the target

and goals of the organization. The MIS provides facilities to analyze the

data and offers the decision support systems to perform the task of

execution. The MIS provides an action . oriented information.

The manager has a position of responsibility and accountability for the

business results. His management role expands beyond his

management function. He is a strategist and a long-term planner. He is a

person with a foresight, an analytical ability and is expected to use these

abilities in the functions of top management. The MIS provides

information in a structured or unstructured format for him to react. The

MIS caters to his constant changing needs of information. The user of the

MIS is expected to be a rational person and the design of the MIS is

based on this assumption.

However, in reality the impact created on individuals by MIS is difficult

to explain. The nature of the impact in a few cases is negative. However,

this negative impact can be handled with proper training and

counseling.

It is observed that at lower level, is a sense of insecurity. As the MIS

takes away the drudgery of search, collection, writing and reporting the

data, the work vacuum, so created is not easily filled, thus creating a

sense of insecurity. To some extent the importance of the person is also

lost, giving rise to a fear of non-recognition in the organization.


At the level of an officer and an executive, the MIS does the job the of

data manipulation and integration. It analyses the data in a

predetermined manner. This means that the knowledge of business is

transferred from an individual to the MIS and is made available to all in

the organization. This change arising out of the MIS creates a sense of

being neglected for knowledge, information and advice. The

psychological impact is larger if the person is not able to cope up with

this change by expanding or enriching the job and the position held by

him.

The manager holding a position in the top or middle management

suffers from fear of challenge and exposure. The MIS makes these

competitors more effective as they have access to the information and

have an ability to interpret. This leads to a situation where he is afraid

that that his position, decision and defense will be challenged and may

be proved wrong sometime. The risk of adverse exposure to the higher

management also increases. The effects so far pointed out are all

negative and they are seen only in few cases.

The positive effects on the individuals at all levels are that they have

become more effective operators. The time and energy which was spent

earlier in unproductive work is now applied for a productive work.

Some are able to use their analytical skills and knowledge with the in

formation support for improving their position in the organization.

Managers, having improved their decision . making ability, are able to

handle the complex situations with relative ease. Some are benefited by

improving their performance and being held in high esteem by the

higher management. The enterprising managers are able to use the

systems and the models for trying out a Number of alternatives in a

given problem situation. The impact of the MIS on people of the

organization is phenomenal as it has made the same body of people

collectively more effective and productive.


The recent major technological advances in communication such as

Multimedia, Imaging. Graphical User Interfaces (GUI), Internet, Web

etc. and the ability to access the data stored at different locations on the

variety hardware of platforms would make MIS more attractive and

efficient proposition. An intelligent user of information can demonstrate

the ability of decision making, since his manipulative capability is

considerably increased, with the information now being available on his

desktop.

Through the MIS, the information can be used as a strategic weapon to

counter the threats to business, make business more competitive, and

bring about the organizational transformation through integration. A

good MIS also makes an organization seamless by removing all the

communication barriers.

b).

IMPACT OF MIS AFTER IMPLEMENTATION

A). IMPACTS OF IT ON ORGANIZATIONS

The use of computers and information technology has brought many

changes to organizations. These changes are being felt in different areas

including the manager’s job, structure, authority, power, and job

content; employee career ladders and supervision. A brief discussion of

these issues follows.

The Manager’s Job

The most important task of managers is making decisions. IT can change

the manner in which many decisions are made, and consequently

change managers’ jobs. The most probable areas of organizational

change are:


• Automation of routine decisions (e.g., frontline employees).

• Less expertise required for many decisions.

• More rapid identification of problems and opportunities .

• Less reliance on experts to provide support to top executives.

• Empowerment of lower and middle levels of management due to

knowledge bases.

• Decision making undertaken by nonmanagerial employees.

• Power redistribution among managers, and power shifts down the

organization. Fewer organizational levels typically are required to

authorize action.

• Organizational intelligence that is more timely, comprehensive,

accurate, and available

• Electronic support of complex decisions (the Web, intelligent

agents, DSS).

Many managers have reported that the computer has finally given them

time to “get out of the office and into the field.” They also have found

that they can spend more time planning activities instead of “putting out

fires.” The ability of IT to support the process of decision making

changes the decision-making process and even decision-making styles.

For example, information gathering for decision-making can be done

much more quickly. Web-based intelligent agents can monitor the

environment, and scan and interpret information. Most managers

currently work on a large number of problems simultaneously, moving

from one to another as they wait for more information on their current

problem or until some external event interrupts them. IT tends to reduce

the time necessary to complete any step in the decision-making process.

Therefore, managers can work on fewer tasks during each day but

complete more of them.

Another possible impact on the manager’s job is a change in leadership

requirements. What are generally considered to be good qualities of

leadership may be significantly altered with the use of IT. For example,

when face-to-face communication is replaced by e-mail and


computerized conferencing, leadership qualities attributed to physical

appearance and dress codes could be minimized.

B) IMPACTS OF IT ON INDIVIDUALS

Information systems affect individuals in various ways. What is a benefit

to one individual may be a curse to another. This section discusses some

of the ways that IT may affect individuals, their perceptions, and their

behaviors.

Job Satisfaction, Dehumanization, and Information Anxiety Although many jobs may become substantially more “enriched” with IT,

other jobs may become more routine and less satisfying. For example,

as early as 1970, researchers predicted that computer-based

information systems would reduce managerial discretion in decision

making and thus create dissatisfied managers. This dissatisfaction may

be the result of perceived dehumanization.

Dehumanization and other Psychological Impacts . A frequent

criticism of traditional data processing systems was their impersonal

nature and their potential to dehumanize and depersonalize the activities

that have been computerized. Many people felt, and still feel, a loss of

identity, a dehumanization, because of computerization; they feel like

“just another number” because computers reduce or eliminate the

human element that was present in the noncomputerized

systems. Some people also feel this way about the Web.

On the other hand, while the major objective of newer technologies,

such as e-commerce, is to increase productivity, they can also create

personalized, flexible systems that allow individuals to include their

opinions and knowledge in the system. These technologies attempt to

be people-oriented and user-friendly.

The Internet threatens to have an even more isolating influence than has


been created by television. If people are encouraged to work and shop

from their living rooms, then some unfortunate psychological effects,

such as depression and loneliness, could develop. Some people have

become so addicted to the Web that they have dropped out of their

regular social activities, at school or work or home, creating new

societal and organizational problems.

Another possible psychological impact relates to distance learning. In

some countries, it is legal to school children at home through IT. Some

argue, however, that the lack of social contacts could be damaging to

the social, moral, and cognitive development of school-age children

who spend long periods of time working alone on the computer.

Information Anxiety. One of the negative impacts of the information

age is information anxiety. This disquiet can take several forms, such

as frustration with our inability to keep up with the amount of data present

in our lives. Information anxiety can take other forms as well. One is

frustration with the quality of the information available on the Web,

which frequently is not up-to-date or is incomplete. Another is frustration

or guilt associated with not being better informed, or being informed

too late (“How come others knew this before I did?”). A third form of

information anxiety stems from information overload (too many online

sources). For some Internet users, anxiety resulting from information

overload may even result in inadequate or poor sleep.

According to Wurman (2000), between 60 and 80 percent of the people

searching for specific information on the Web cannot find what they

want among the various types of information available. This adds to

anxiety, as does the data glut that obscures the distinction between data

and information, and between facts and knowledge. Wurman (2001)

prescribes solutions to ease the problem of information anxiety, ranging

from better access to data to better design of Web sites.


Impacts on Health and Safety

Computers and information systems are a part of the environment that

may adversely affect individuals’ health and safety. To illustrate, we will

discuss the effects of three issues: job stress, video display terminals, and

long-term use of the keyboard.

Job Stress. An increase in workload and/or responsibilities can trigger

job stress. Although computerization has benefited organizations by

increasing productivity, it has also created an ever-increasing workload

for some employees. Some workers, especially those who are not

proficient with computers but who must work with them, feel

overwhelmed and start feeling anxious about their jobs and their

performance. These feelings of anxiety can adversely affect workers’

productivity. Management’s responsibility is to help alleviate these

feelings by providing training, redistributing the workload among

workers, or by hiring more individuals.

Video Display Terminals. Exposure to video display terminals (VDTs)

raises the issue of the risk of radiation exposure, which has been linked

to cancer and other health-related problems. Exposure to VDTs for long

periods of time is thought to affect an individual’s eyesight, for example.

Also, lengthy exposure to VDTs has been blamed for miscarriages in

pregnant women. However, results of the research done to investigate

these charges have been inconclusive.

Repetitive Strain (Stress) Injuries. Other potential health and safety

hazards are repetitive strain injuries such as backaches and muscle

tension in the wrists and fingers. Carpal tunnel syndrome is a painful

form of repetitive strain injury that affects the wrists and hands. It has

been associated with the long-term use of keyboards. According to

Kome (2001), 6 million Americans suffered repetitive strain injuries on

the job between 1991 and 2001.


Lessening the Negative Impact on Health & Safety. Designers are

aware of the potential problems associated with prolonged use of

computers. Consequently, they have attempted to design a better

computing environment. Research in the area of ergonomics (the

science of adapting machines and work environments to people)

provides guidance for these designers. For instance, ergonomic

techniques focus on creating an environment for the worker that is safe,

well lit, and comfortable. Devices such as antiglare screens have helped

alleviate problems of fatigued or damaged eyesight, and chairs that

contour the human body have helped decrease backaches.

Reference:

Introduction to MIS

Impact of IT on individuals and organization

**************************


Question 3

a). Explain in detail the affect of e-business on

supply chain management process.

b). Describe and discuss various strategic

approaches to e-business.


a).

Nothing has rocked the young field of supply chain management like the

emergence of the Internet. While the management of information flows

have always been a key aspect of supply chain management, the rapid

growth of web-based information transfer between companies, their

suppliers, and their customers has decidedly increased the importance

of information management in creating effective supply chains. Indeed,

the Internet has emerged as a most cost-effective means of driving

supply chain integration. E-business is defined as the marriage between

the Internet and supply chain integration. This marriage is transforming

many processes within the supply chain from procurement to customer

management and product design.

e-procurement e-commerce

e-collaboration

Fig: e-Business Forms and Their Impact on the Supply Chain


What is Supply Chain Management?

Supply Chain management is the process of managing the movement of

goods from suppliers to buyers. Supply Chain Management (SCM), also

known as supply chain integration or supply chain optimization, is the

process of optimizing a company's internal practices in interacting with

suppliers and customers in order to bring products to market more

efficiently. SCM functions encompass demand forecasting, sourcing and

procurement, inventory and warehouse management, distribution

logistics, and other disciplines. The SCM procedure repeatedly

succeeds where Enterprise Resource Planning (ERP) fails. In order to

correctly forecast inventory levels, the supply chain management

system needs ERP’s database cooperation (Laudon & Laudon, 2002). A

powerful SCM includes the systematization and optimization of

operational and strategic information and methods within and between

enterprises. SCM is connected with optimizing business processes and

business value in every nook of the outspread enterprise, from the

supplier's supplier to the customer's customer. SCM can utilize e-

business concepts and Web technologies to bring the organization

upstream and downstream. It is the strategic approach that combines all

steps in the business cycle, from the beginning of the product design

and the acquisition of raw materials for production to shipping,

distribution, and warehousing, until a finished product is sold to the

customer (Laudon & Laudon, 2002).

What is e-Business?

Laudon and Traver have defined e-Business as “the digital enablement

of transactions and processes within a firm, involving information

systems under the control of the firm, which doesn’t include the

company’s revenue”. For example, a company’s inventory management

system and warehousing do not affect its revenue directly, such as its

sales strategies and models. It comes under the domain of e-Business.

However e-commerce does affect revenue. By these points of view, it


seems that a firm’s e-Business system can also support e-Commerce for

external value exchange. Although e-Business has been defined as an

electronic information management system for a company’s internal

needs, some people still think the scope of e-Business transactions

should cover e-Commerce. e-Business is used to manage a firm’s

internal information. However, in order to be effective e-Business also

needs to be supported by huge amounts of external information. In this

instance, a manufacture’s inventory management needs to know from its

suppliers the timeline for putting the materials on the production line.

On the other hand, the production time-line relates to the products’

shipment date. Then those solutions extend to the customers and

customers’ customers and complete the business. By this theory, e-

Commerce could be seen as the rear end of e-Business. Given this point

of view, it does not only make e-commerce’s field smaller, it makes e-

Commerce a part of e-Business. People are still arguing about the

definition of e-Business and e-Commerce, but from each of their

incidence, it seems that e-Business is bigger than e-Commerce. This

paper would support the view that e-Commerce is part of wider e-

Business applications.

There are several types of business methods in today’s e-business

copes, such as

• Business-to Consumer (B2C)

• Business-to-Business (B2B)

• Consumer-to-Consumer (C2C)

• Peer-to-Peer

• Mobile, or m-Commerce

Effects of e-Business on the Supply Chain Management

A huge Gross Domestic Product (GDP) deficit between America and

Third World countries has been evident since the early 1970’s. As the

result, many American companies have decided to either close their


production lines in America or move their factories to lower cost

countries or they have bought products from Asian manufactures based

in Japan, Korea, and Taiwan. This enabled them to gain bigger

marketing power by gaining access to a cheaper production price. The

supply chain has lengthened from a few hundred miles to at least ten

thousand miles but the product prices, in addition to shipping costs, are

still cheaper than before they made this change.

In the 1970s, finding a manufacturer, or starting a new company, in

another country is not easy, especially when facing cultural differences

and legal issues. Also, bringing the products across the Pacific Ocean

back to the United States can be very difficult because more third

parties are involved in the supply chain. Information from Asia is not

easy to find and much of the secondary information could be deemed

useless or incorrect. These difficulties had brought some new jobs into

the business (supply chain environment), such as brokers and agencies.

In the first stage of business globalization, during 1970 to 1980, brokers

and agencies had done a good job with helping companies on both

sides of the Pacific Ocean. They provided the manufacture’s information

to American companies and brought American business to Asian

manufactories.

Though this new pattern of the supply chain dealing with brokers and

agencies had satisfied the demand from consumers in the United States

and also brought huge revenue to Asian manufacturers. Marketing is

about competition such as price, promotion, product, and placement. In

the 1980s, the growing GDP in Asia had raised price of products cast a

sub segment decline in companies’ profits. Once again, in mid-1980s,

some companies decided to move their orders to other undeveloped

countries such as China, the Philippines, and Vietnam. The second move

seemed enough to keep the products’ prices as low as consumers

demanded at the time. However in the 1990’s, the usage of the Internet

gave the consumers huge leverage to compare prices from different

sources.


The Internet did not only give consumers more power to compare

products’ prices, but also allowed companies to find more distributors

easily. Also, American companies and Asian manufactures could easily

reach each other without the necessity to pay commissions to agencies

and brokers. This change has shaken up the whole supply chain

environment because the Internet has collected huge amounts of

information together for every one of us. Some industries have started to

build up their internal information systems to connect the external web

base delivery levels of need and to reach the goal of customization and

personalization. The web-based applications have impacted brokers

and agencies heavily and, as a result, forced some of them to go out of

business. If web based applications can provide information to everyone

in the market, the next stage of the supply chain in e-Business will

concentrate on reducing the length of transaction process, and more

distributors and retailers will face challenges.

Reference:

e-BUSINESS AND THE SUPPLY CHAIN MANAGEMENT by Jorge R. León-Peña

E-BUSINESS AND SUPPL y CHAIN MANAGEMENT: AN OVERVIEW AND

FRAMEWORK by M. ERIC JOHNSON AND SEUNGJIN WHANG.

*******************


b)

STRATEGIC APPROACHES TO E-BUSINESS

With the advent of the Internet and plenty of web development

technologies around the world, e-business is the new mantra of

businesses in today’s world. The Internet has in many ways facilitated

the development of businesses worldwide that can reach out to a wider

consumer base and advertises their products more effectively and

efficiently. Corporate communications, interface designs, cutting edge

applications are also found on the Internet. E business has been added

as the latest domain in business and has become a must-have in the

highly competitive technology driven open market. E Business Strategy

can be summarized as the strategies governing E Businesses through

calculated information dissemination.

Information dissemination has been widely regarded as the forte of

ebusiness, which uses information technology in a most efficient

manner. Not only has e-business has come to play an important role in

the world trade scenario; there is no business without an accompanying

e-business in today’s world. E business gives a business the opportunity

to open its portal to the global market and become a part of the global

business community. The most important feature of e-business is that the

helps businesses move on to the international scene at minimal cost but

with maximum efficiency. E-business has achieved unprecedented

levels of success as business models, which have not been enjoyed by

any other business models. Some of the examples would be MRP

(Material Requirements Planning), EDI (Electronic Data Interchange) or

ERP (Enterprise Resource Planning). The essential features of e-business

strategies are supply chain management and email marketing.

A state-of-the-art E Business Strategy would generally include:

Supply Chain Management:

Effective management of the supply chain can be handled with the help

of e-business strategies, which will ensure better coordination between


the wholesalers and the retailers of various products. Better integration

of the supply chain right from the source till the final delivery of the

product can be effectively implemented using e-business strategy. This

also brings us to the point of e- commerce where a parallel network of

buying and selling can be observed using dissemination of information

over the Internet. Everything ranging from automobiles to electronic

gizmos can be bought over the Internet in a hassle free manner under

the aegis of sound supply chain management.

Customer Service and Customer Relationship Management:

Effective e-business strategies would involve better customer service

and customer relationship management ensuring the highest level of

consumer satisfaction. E business is targeted at providing the customer-

friendly services, which would include the timely delivery of goods right

at the doorstep of the consumer.

Inventory and Service Management Integration:

e-business strategies can also help in better inventory and service

management integration through formulating specific plans for

inventory accumulation and purchasing machinery and equipment

which will avoid unnecessary purchases which can lead to higher

expenditures entailing different tax implications.

Tactical Operations Alignment:

Tactical operations directed towards short-term goals as opposed to

strategic planning aimed at long term goals can be better coordinated

implementing the e-business strategies.

E-business diverges from the traditional sphere of business by speeding

up the business activities and giving a totally new dimension and

definition to businesses worldwide be it whether partnerships, joint

ventures or large corporations. The internet, intranet, cellular networks


and other forms of digital technology have created a niche value chain

among clients, employees, suppliers, stakeholders and traders

coordinated in the world of web marketing. The tools and pillars of e-

business strategies include acceptance of payments over the Internet,

online advertising, on-line trading and auction deals over the Internet.

E-business strategies will also differ for small and medium-sized

businesses. Apart from regular sources, e-business strategies can

generate revenue from maintenance of current channel integrity,

revenue made from paid marketing alliances, revenues derived from

franchisees and subscriptions.

Reference:

http://www.economywatch.com

**********************


Question 4

a). Discuss strategies for global community

building and global marketing.

b). Briefly explain how e-business helps in brand

creation and positioning.


a).

Global Marketing Strategies:

A global marketing strategy that totally globalizes all marketing

activities is not always achievable or desirable (differentiated

globalization). In the early phases of development, global marketing

strategies were assumed to be of one type only, offering the same

marketing strategy across the globe. As marketers gained more

experience, many other types of global marketing strategies became

apparent. Some of those were much less complicated and exposed a

smaller aspect of a marketing strategy to globalization. A more common

approach is for a company to globalize its product strategy (product

lines, product designs and brand names) and localize distribution and

marketing communication.

Integrated Global Marketing Strategy:

When a company pursues an integrated global marketing strategy, most

elements of the marketing strategy have been globalized. Globalization

includes not only the product but also the communications strategy,

pricing and distribution as well as such strategic elements as

segmentation and positioning. Such a strategy may be advisable for

companies that face completely globalized customers along the lines. It

also assumes that the way a given industry works is highly similar

everywhere, thus allowing a company to unfold its strategy along similar

paths in country by country. One company that fits the description of an

integrated global marketing strategy to a large degree is Coca-Cola.

That company has achieved a coherent, consistent and integrated global

marketing strategy that covers almost all elements of its marketing

program from segmentation to positioning, branding, distribution,

bottling, advertising and more.

Reality tells us that completely integrated global marketing strategies

will continue to be the exception. However, there are many other types


of partially globalized marketing strategies; each may be tailored to

specific industry and competitive circumstances.

Global Product Category Strategy:

Possibly the least integrated type of global marketing strategy is the

global product category strategy. Leverage is gained from competing in

the same category country after country and may come in the form of

product technology or development costs. Selecting the form of global

product category implies that the company while staying within that

category will consider targeting different segments in each category or

varying the product, advertising and branding according to local market

requirements. Companies competing in the multi-domestic mode are

frequently applying the global category strategy and leveraging

knowledge across markets without pursuing standardization. That

strategy works best if there are significant differences across markets

and when few segments are present in market after market. Several

traditional multinational players who had for decades pursued a multi-

domestic marketing approach-tailoring marketing strategies to local

market conditions and assigning management to local management

teams- have been moving toward the global category strategy. Among

them are Nestle, Unilever and Procter&Gamble, three large

international consumer goods companies doing business in food and

household goods.

Global Segment Strategy:

A company that decides to target the same segment in many countries is

following a global segment strategy. The company may develop an

understanding of its customer base and leverage that experience

around the world. In both consumer and industrial industries significant

knowledge is accumulated when a company gains in-depth

understanding of a niche or segment. A pure global segment strategy

will even allow for different products, brands or advertising although

some standardization is expected. The choices may consist of competing

always in the upper or middle segment of a given consumer market or


for a particular technical application in an industrial segment. Segment

strategies are relatively new to global marketing.

Global Marketing Mix Element Strategies:

These strategies pursue globalization along individual marketing mix

elements such as pricing, distribution, place, promotion,

communications or product. They are partially globalized strategies that

allow a company that customize other aspects of its marketing strategy.

Although various types of strategies may apply, the most important ones

are global product strategies, global advertising strategies and global

branding strategies. Typically companies globalize those marketing mix

elements that are subject to particularly strong global logic forces. A

company facing strong global purchasing logic may globalize its

account management practices or its pricing strategy. Another firm

facing strong global information logic will find it important to globalize

its communications strategy.

Global Product Strategy:

Pursuing a global product strategy implies that a company has largely

globalized its product offering. Although the product may not need to be

completely standardized worldwide, key aspects or modules may in fact

be globalized. Global product strategies require that product use

conditions, expected features and required product functions be largely

identical so that few variations or changes are needed. Companies

pursuing a global product strategy are interested in leveraging the fact

that all investments for producing and developing a given product have

already been made. Global strategies will yield more volume, which

will make the original investment easier to justify.


Global Branding Strategies:

Global branding strategies consist of using the same brand name or

logo worldwide. Companies want to leverage the creation of such brand

names across many markets, because the launching of new brands

requires a considerable marketing investment. Global branding

strategies tend to be advisable if the target customers travel across

country borders and will be exposed to products elsewhere.

Global branding strategies also become important if target customers

are exposed to advertising worldwide. This is often the case for

industrial marketing customers who may read industry and trade

journals from other countries. Increasingly, global branding has become

important also for consumer products where cross-border advertising

through international TV channels has become common. Even in some

markets such as Eastern Europe, many consumers had become aware of

brands offered in Western Europe before the liberalization of the

economies in the early 1990s. Global branding allows a company to take

advantage of such existing goodwill. Companies pursuing global

branding strategies may include luxury product marketers who typically

face a large fixed investment for the worldwide promotion of a product.

Global Advertising Strategy:

Globalized advertising is generally associated with the use of the same

brand name across the world. However, a company may want to use

different brand names partly for historic purposes. Many global firms

have made acquisitions in other countries resulting in a number of local

brands. These local brands have their own distinctive market and a

company may find it counterproductive to change those names. Instead,

the company may want to leverage a certain theme or advertising

approach that may have been developed as a result of some global

customer research. Global advertising themes are most advisable when

a firm may market to customers seeking similar benefits across the


world. Once the purchasing reason has been determined as similar, a

common theme may be created to address it.

Composite Global Marketing Strategy:

The above descriptions of the various global marketing models give the

distinct impression that companies might be using one or the other

generic strategy exclusively. Reality shows, however, that few

companies consistently adhere to only one single strategy. More often

companies adopt several generic global strategies and run them in

parallel. A company might for one part of its business follow a global

brand strategy while at the same time running local brands in other

parts. Many firms are a mixture of different approaches, thus the term

composite.

b).

E-BUSINESS IN BRAND CREATION AND POSITIONING

Plant (2000) suggests that there are four variations e-businesses may

adopt as marketing strategies, all of which relate to the concept of brand

image:

• Brand Creator

• Brand Reinforce

• Brand Follower

• Brand Re-positioning

These four strategies all have merits and must be assessed on the basis

of the e-business strategy and the organization’s market positioning.

However what is important is how the customer relationship will be

managed in each of these strategies and hoe it can be measured. The


term, which is normally used to measure this concept is “Brand Equity”

and refers to the actual financially related value of the branding image.

Coca Cola has a huge investment in brand equity as do Nike but a

company supplying part-finished goods to branded suppliers has no

brand equity and no need of one in these terms.

The four main drivers of brand equity are:

• Brand name awareness

• Brand Loyalty

• Perceived quality

• Brand differentiation

Generally there are seven key factors which together can provide an

indicator of brand strength:

• Leadership

• Stability

• Market

• International scope

• Trend

• Support

• Protection

These suggest that a global e-business needs to develop a multi-

component strategy for the creation and protection of brand equity,

focusing on brand leadership, stability and global market positioning

through proactive corporate policies.

Reference:

e-BUSINESS AND THE SUPPLY CHAIN MANAGEMENT by Jorge R. León-Peña

E-BUSINESS AND SUPPL y CHAIN MANAGEMENT: AN OVERVIEW AND

FRAMEWORK by M. ERIC JOHNSON AND SEUNGJIN WHANG.


Question 5

Briefly explain the following:

• E-economy

• New Economy

• Internet Economy

• E-Business


E-ECONOMY

In this new millennium, there is a general feeling that things have

changed, that there is a new social and economic reality. In particular

this expectation applies to the world of business, transformed as it has

been by a number of powerful forces such as globalization and the

advent of the internet. There is a sense that the world of business is

significantly different from its state just 20 years ago. This perspective

gives rise to terms such as “new economy” , “information economy” ,

“digital economy” , and so on. These terms suggest, rather imprecisely,

that we have a new business reality and that the role of ICT (Information

& Communication Technology) and the internet are significant features,

perhaps even defining features or characteristics of that new business

reality.

Two broad constructs help to structure and make some sense of this new

reality if they are defined and thought about clearly: namely the “new

economy” and the “internet economy”. This block introduces these

notions as fundamental constructs for the rest of the course. There is a

sense in which trends such as globalization and the effective use of

increasingly more powerful and reliable ICT have transformed the

national economies of the USA and Europe to such an extent that when

referring to say, the contemporary US economy, we could meaningfully

talk about something called the “new economy”. A separate construct

refers to the economy that is clustered around the internet and the new

electronic commerce or e-business phenomenon.

Finally, there has been a significant restructuring of organizations, since

e-business intensifies collaborations among multiple organizations with

several complex economic, strategic, social and conflict management

issues as well as major organizational and technological factors. This

new business paradigm in one where:

• Core business processes may need to be rethought and

redesigned.


• New organizational forms and inter-organizational forms

may need to be developed.

• The emphasis will be on collaboration rather than

competition within the virtual market.

The most fundamental elements of doing business are changing and a

totally new business environment is emerging because of the

phenomena such as:

• The world wide web

• Mass customization

• Compressed product life cycles

• New distribution channels

• New forms of integrated organizations

In such an environment, responsive organizations quickly become

virtual because the costliest parts of their infrastructure no longer lend

themselves to measurement by height, length, weight or other physical

dimensions. Such organizations will have a considerable impact on all

aspects of business strategy in the 21st century.

*******************

NEW ECONOMY

You may ask what economic rules prevail in the ‘new economy’. There is

speculation that the recent sustained boom in the US economy as

instanced by increased corporate earnings and profits, low

unemployment, relatively high productivity, low inflation and a soaring

stock market has made that economy ‘new’ in the sense that some of the

old economy rules and principles no longer apply, at least with the

force. Amidst such speculation is a view that stronger productivity


growth now allows the US economy to grow faster without inflationary

pressures. There is also the view that in the short run, a trade-off

between inflation and unemployment has changed so that low

unemployment and low inflation can coexist. Other speculation looks at

the sources of growth in the US economy and identifies factors such as

computerization and globalization as driving forces changing the nature

of the old economy.

Connected to the pre-eminent role given to IT and its potentially

transforming power has been the important role given to knowledge as

a new form of capital, along with the roles of knowledge management,

research and innovation as factors creating wealth.

Another feature of the ‘new economy’ is the increasingly important role

of the service sector. Indeed, Pine and Gilmour (1999) see the ‘service

economy’ evolving into what they call an ‘experience economy’. They

trace the evolution of economies from an agrarian-based economy

through an industrial economy through to a service economy and thence

to the emergence of an experience economy. Each economic stage has

all the elements of preceding and succeeding stages, but the focus and

emphasis is different. The contemporary economies of the developed

world can be seen to be new in terms of their emphasis on producing

and delivering services and the emerging idea of staging complete

experiences for consumers.

Of course, modern new economies examined along this plane are only

different in degree from the older economies of 20 years ago, but this

difference in degree could be seen as a ‘strand of newness’ in the ‘new

economy’. As you already notice, the nature of the new economy has

many and varied aspects of novelty. Throughout the course, your

readings will show that these are given different degrees of emphasis by

different thinkers.

Economies are examining the new IT-based organizations and the

economic world they shape but have come to no agreement yet on

whether there are new economic laws to be discovered, or whether the


old economy macroeconomic principles and technical relationships still

apply. For some it is a given that, while technology may change,

economic laws do not. Perhaps no definite views are yet possible. As

you will see, the potential for new business and organizational forms

resulting from a still-developing set of technologies has yet to be

properly mapped out, and we are still learning.

The term ‘information economy’ has come to mean the broad,

long-term trend toward the expansion of information- and knowledge-

based assets and value relative to tangible assets and products

associated with agriculture, mining, and manufacturing. The term ‘

digital economy’ refers specifically to the recent and still largely

unrealized transformation of all sectors of the economy by the computer-

enabled digitization of information. (Brynjolfsson and Kahin, 2000)

*****************

INTERNET ECONOMY

Another definition of ‘information economy’ or ‘digital economy’ is the

“Internet economy”. This notion revolves around the set of internet-

based organizations, the ‘dot-coms’ and others involved in e-commerce.

An explicit characterization of the ‘internet economy’ is provided by a

group of researchers at the University of Texas at Austin’s Center for

Research in Electronic Commerce. They view the ‘internet economy’ as

those firms engaged in e-commerce together with those firms that

provide, implement and maintain the infrastructure for e-commerce.

They see the ‘internet economy’ as a structure with four layers:

Layer 1 The internet infrastructure indicator

Layer 2 The internet applications infrastructure indicator

Layer 3 The internet intermediary indicator


Layer 4 The internet commerce indicator

Layer 1 The Internet Infrastructure Indicator

This consists of the telecommunications companies, Internet Service

Providers, Internet Bachbone Carriersd, ‘last mile’ access companies,

security vendors and manufacturers of end-user networking equipment

all of which are prerequisites for the Web and proliferation of internet-

based electronic commerce. Examples of companies include Cisco,

Lucent, Dell, AOL, Axent and Corning.

Layer 2 The Internet Applications Infrastructure Indicator

This consist of the software products and services necessary to facilitate

Web transactions and transaction intermediaries. It includes the

consultants and service companies who design , build and maintain all

types of web sites from portals to full e-commerce sites. Examples of

companies include Netscape, Microsoft, Adobe, Opera, Oracle and

Macromedia.

Layer 3 The Internet Intermediary Indicator

This consists of intermediary services such as web development,

electronic market makers or market intermediaries. Essentially they

facilitate the meeting and interaction of buyers and sellers over the

internet and act as catalysts in the process through which investments in

the infrastructure and application layers are transformed into business

transactions. Examples of companies includes VerticalNet, E8trade,

Travelweb.com, Zdnet, Yahoo, DoubleClick.

Layer 4 The Internet Commerce Indicator

This consists of all companies conducting e-business across a wide

variety of vertical industries (excluding those already included in Layer

3). Examples of companies include e-tailers, manufacturers selling


online, free-subscription-based companies, airlines selling online

tickets, online entertainment and professional services.

These four layers comprise a complete e-economy with characteristics

such as inputs, outputs, size, value added, efficiency and labor

productivity. Table below shows the growth experienced in each year

from 1998-1999 and overall revenues in US$ billions.

1998 %Growth 1999 % Growth Growth Overall

Layer 1 27 40 50

Layer 2 14 22 61

Layer 3 11 17 52

Layer 4 16 37 127

64 108 68

Annual

revenues

$301 $507

The internet economy is growing at a very fast rate, but a realistic

assessment of its growth rate is only possible if you understand the

different component parts and can measure separate results over time to

tie these into policy decisions.

********************

E-BUSINESS

Laudon and Traver have defined e-Business as “the digital enablement

of transactions and processes within a firm, involving information

systems under the control of the firm, which doesn’t include the

company’s revenue”. For example, a company’s inventory management

system and warehousing do not affect its revenue directly, such as its

sales strategies and models. It comes under the domain of e-Business.


However e-commerce does affect revenue. By these points of view, it

seems that a firm’s e-Business system can also support e-Commerce for

external value exchange. Although e-Business has been defined as an

electronic information management system for a company’s internal

needs, some people still think the scope of e-Business transactions

should cover e-Commerce. e-Business is used to manage a firm’s

internal information. However, in order to be effective e-Business also

needs to be supported by huge amounts of external information. In this

instance, a manufacture’s inventory management needs to know from its

suppliers the timeline for putting the materials on the production line.

On the other hand, the production time-line relates to the products’

shipment date. Then those solutions extend to the customers and

customers’ customers and complete the business. By this theory, e-

Commerce could be seen as the rear end of e-Business. Given this point

of view, it does not only make e-commerce’s field smaller, it makes e-

Commerce a part of e-Business. People are still arguing about the

definition of e-Business and e-Commerce, but from each of their

incidence, it seems that e-Business is bigger than e-Commerce. This

paper would support the view that e-Commerce is part of wider e-

Business applications.

There are several types of business methods in today’s e-business

copes, such as

• Business-to Consumer (B2C)

• Business-to-Business (B2B)

• Consumer-to-Consumer (C2C)

• Peer-to-Peer

• Mobile, or m-Commerce

Reference:

Management Information Systems (AIOU)

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Semester 2 Assg 1 MIS

Documents

Transcript of Semester 2 Assg 1 MIS