Ethical and Societal Issues

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Solutions – Chapter 2

Ethical and Societal Issues

Victims of Technology?

Discussion Questions

1. Student answers will vary based on their opinion. Some, especially those from the older generations may feel there has been a social value loss with the retirement of the telegram. At one time, telegrams were an important part of the day-to-day communications between companies, business partners, friends, and even families. Of course, the new technologies that replaced the telegram, such as the telephone, fax, e-mail and text messages are an outstanding improvement over the telegram.

1. Amazon.com offers just about everything that Sears offers, only online. This appealed to many customers who wanted to shop from their home or who were unable to go to their local Sears store, or just about any other store. Traditional brick-and-mortar businesses are now offering their merchandise online to be able to compete with other online stores such as, Amazon.

Critical Thinking Questions

1. It is considerably harder for music stores to change from selling products like CDs, records, and tapes to selling mp3 downloads than some other organizations, like Kodak. Kodak went from offering one service, developing film, to offering another service, printing digital photos. The music industry would have to convert from selling merchandise to offering music downloads online. This would do away with their brick-and-mortar stores all together.

1. Answers may vary. Two ways educational institutions can take advantage of technology to win over students is by offering computer labs with the highest technologies and by offering online courses.

Information Systems @ Work

Wal-Mart Stores Manage Supply Chain with RFID

Discussion Questions

1. RFID technology has benefited Wal-Mart in the management of its supply chain by automating many of the processes involved in traditional supply chain management. This includes automatically reordering low-inventory items from the supplier, and packing the products on trucks without any human involvement. By requiring its suppliers to attach RFID tags to all shipped cartons, Wal-Mart can monitor where the cartons are and when they arrive from one location to another.

1. Information systems are used to automate communications between links in Wal-Mart’s supply chain in a number of possible ways. The RFID tags that are placed on the cartons of products from the suppliers are scanned by managers and store clerks allowing them access to the information regarding the carton. This information includes: what products the carton contains, when the carton was shipped, when the products will expire (if applicable), and if the products are low on the shelf, among other things. This leaves no need for the managers to contact the suppliers in order to request this information. The RFID tags that are placed on individual items automatically communicate with the suppliers informing them when the product needs to be reordered. This again eliminates the need of store managers from having to contact the suppliers.

Critical Thinking Questions

1. Other retailers will be affected negatively by Wal-Mart and its suppliers’ use of RFID technology. Wal-Mart is able to stock items three times faster than other retailers by using the RFID tags. When a consumer goes into another retailer and finds an item out of stock, chances are they will find that item in their local Wal-Mart. With the automation now created from using the RFID tags, Wal-Mart saves money and passes the savings on to the customers. This puts Wal-Mart at a great advantage over other retailers. The future of RFID tags is sure to be successful with a giant merchant like Wal-Mart using its technologies. As Wal-Mart continues to expand, so will its suppliers, which means the need for more RFID tags. As RFID technology costs become lower, other retailers are likely to soon follow in Wal-Mart’s footsteps and adopt RFID.

1. Wal-Mart’s RFID tag initiative has resulted in Wal-Mart having an advantage over its competitors. This technology provides Wal-Mart with the ability to offer better customer service. For example, customers concerns of products not in stock can be handled immediately by locating where a shipment is and when it is scheduled to be delivered. Tracking crates of products through the supply chain provides managers with valuable information regarding the sale of products. The managers can examine the sales of a given item and determine on which days to place certain items on the floor for the best sales. Managers and floor workers will be able to unload the trucks and stock the shelves with greater ease. They will be able to scan the RFID tag and know exactly what is in the box and when it will expire. Among other things, this will allow the managers and floor workers to know if the product needs to go directly to the sales floor.

Review Questions

1. A value chain is a series (chain) of events that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service.

1. A traditional organizational structure is one in which major department heads report to a president or top-level manager. A virtual organizational structure employs individuals, groups, or complete business units in geographically dispersed areas. The individuals, groups, or complete business units can involve people in different countries operating in different time zones. The people may never meet face to face in the same room, which explains the use of the word virtual.

1. An information system can indirectly add value by summarizing the feedback from value-added processes for use by management and other organizational employees. The monitoring and control capabilities of an IS are excellent support features. A more contemporary view of the IS function holds that this system is an integral part of the value-adding processes and is key to providing input collection, product transformation, and output creation. In this way, an IS system can become a direct, strategic tool used to accomplish organizational goals and objectives.

1. Reengineering is the radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results. Sometimes called process redesign, reengineering can reduce product delivery time, increase product and service quality, enhance customer satisfaction, and increase revenues and profits through challenging the fundamental assumptions of how a business process is done. Reengineering involves strong, broad actions to achieve major goals and is often driven by outsiders or upper management. Information system changes can be key components of reengineering. Another change mechanism, continuous improvement, is routine action taken to constantly and incrementally improve specific tasks. Workers direct this effort and rely on the outputs of an information system to assist in measurement.

1. User satisfaction is what a user thinks and feels about a product and its quality.

1. Reengineering is radical redesign of business processes, organizational structures, information systems, and values of the organization to achieve a breakthrough in business results. Continuous improvement is constantly seeking ways to improve business processes to add value to products and services.

1. Technology diffusion measures how widely technology is spread throughout an organization. Technology infusion looks at the extent to which technology is deeply integrated into an area or department.

1. Quality is the ability of a product or service to meet or exceed the expectations of a customer. The intent of management to create quality goods or services is often operationalized through a commitment to a total quality management (TQM) approach to business. This means a collection of approaches, tools, and techniques are used throughout the firm to foster higher levels of quality. Key components in this approach are recognition of customer needs, employee empowerment, having a vision for quality, and developing a reward system.

1. Organizational change is the process used by both profit and nonprofit organizations to plan, implement, and handle change. Organizational learning is a concept by which organizations adapt to new conditions or alter their practices over time.

1. The following table summarizes the basic organizational structures:

Organizational Structure / Definition
Traditional / Major department heads report to a president or top-level manager
Flat / Lower-level employees are empowered to make decisions and solve problems without needing permission from mid-level managers
Project / Centered on major products or services
Team / Centered on teams or work groups
Multidimensional / Incorporates a combination of several structures

1. The change model has three basic components--unfreezing, moving, and refreezing. Unfreezing is the process of ceasing old habits and creating a climate receptive to change. Moving is learning new behaviors. Refreezing is the process of making the new behaviors a normal, accepted part of the job.

1. Downsizing is the planned reduction of a workforce used to reduce costs. It is sometimes called rightsizing. Outsourcing, on the other hand, is contracting with outside professional services to meet business needs. This means that organizational resources are focused on the primary business activity. Professionals handle secondary functions with more expertise in a particular area. In theory, the workforce is not reduced but instead reallocated.

1. Organizations employ various strategies to achieve a competitive advantage. Among these are the forming of alliances with other companies, developing a niche market, maintaining competitive costs, and creating product differentiation.

1. Five common justifications for the implementation of an IS include tangible savings, intangible savings, legal requirements, modernization, and use as a pilot project.

1. Productivity is a measure of the output achieved divided by the input required (Productivity [in percent] = [Output/Input] X 100). Companies can best use productivity measurements by well-managing, training, and motivating employees to use the IS in a way that delivers measurable gains in output.

1. On-demand computing, also called on-demand business and utility computing, involves rapidly responding to an organization’s varying workflow. On-demand computing is an advantage to organizations because instead of the businesspurchasing hardware, software, and database systems, the organization only pays a fee for the systems it needs at peak times. The approach can save money because the organization does not pay for systems that it doesn’t routinely need. On-demand computing also allows the organization’s IS staff to concentrate on more-strategic issues.

1. The total cost of ownership (TCO) is a measurement of the total cost of owning computer equipment including desktop computers, networks, and large computers.

1. A systems analyst helps users determine what outputs they need from the system and construct plans to develop the necessary programs to produce those outputs. Analysts work with programmers to purchase, modify, or develop programs. Programmers use plans developed by systems analysts to develop or adapt computer programs to produce desired outputs.

Discussion Questions

1. Firms are seeing widespread growth in positions related to the Internet. Among these are Webmaster (manages Website related issues), Network specialists, Hardware and Webserver Specialists, Marketing and E-Commerce Specialists, Programmers, Graphic Artists, and Content Developers.

1. One possible answer:
   

Raw materials / Used CDs from students
Inbound logistics / Prepaid shipping envelopes
Warehouse and storage / Storage room/containers and inventory system
Process control system / Ability to provide quotes to buyers and sellers of CDs and process payments
Customer service / Phone/email support and ordering, tracking of orders
Marketing and sales / Marketing plan
Retrieval system / Ability to locate CDs in inventory for outbound shipping
Outbound logistics / Ability to send/track CDs sold

1. Student answers will vary based on their career choice.

1. In addition to reducing costs or increasing revenues, a virtual organizational structure can provide an extra level of security. Virtual organizational structures allow work to be separated from location and time. Work can be done anywhere, anytime. Virtual organizational structures allow collaborative work, in which managers and employees can effectively work in groups, even those composed of members from around the world.Many companies are now dispersing employees and using a virtual structure in case of a terrorist attack or a disaster.

1. The user satisfaction with the registration program could be measured by providing surveys to the students asking what their expectations are in the program or if they have any issues or concerns regarding the program in place. The college could offer a place for comments to be placed. User satisfaction could also be measured by how many calls the college receives with questions regarding the registration program, informing the school what the main issues are regarding the program. If the college receives numerous calls regarding the same issue, the program may be redesigned with greater ease to the student. Important features may include listing all of the courses available to students, their descriptions, what specific major requirements they satisfy, prerequisites, the capacity for each class, and how many students have already registered for a given class. That way students will be aware of which courses best suit them for their desired major and how quickly a course fills up.

1. The purpose of this question is to encourage students to think about what the forces in Porter’s model translate to in the real world. The following table provides guidelines and sample responses for the discussion. A company called New Wave Multimedia Desktop Computer Corporation was selected to illustrate the analysis.

Company: New Wave Multimedia Desktop Computer Corp.

Competitive Force / Strategic Plan’s Counter to Competitive Force
Rivalry among existing competitors / Develop new products and new looks to standard products
Threat of new entrants / Develop strategic alliances with software/hardware producers to dissuade new startup companies
Threat of substitute products / Differentiate product line so that fewer substitutes are available: integrate high end speakers, monitors, audio and video components into computer system
Bargaining power of buyers / Develop high quality service reputation and maintain buyer profiles: make buyers desire a relationship with this corporation through high levels of trust and support
Bargaining power of suppliers / Develop long term relationships with suppliers and integrate inventory systems with information technology

1. A strategy which may serve New Wave Multimedia Desktop Computer Corporation well is the development of a niche market. This would help them build and protect their spot as a leading vendor of high-end multimedia computer systems. Students will respond to the discussion with a wide variety of responses. The best approach might be to encourage them to think in terms of strategic alliances, niche markets, competitive cost approaches, and product differentiation used either alone or in combination to protect the ‘turf’ of their example corporation.

1. The following table highlights points of that discussion:

Method / Definition / Used / Pros / Cons
Productivity / Output/Input / Over time periods
/ Easy to measure / Narrow and limited in value
ROI / Return on investment / Additional profits due to IS / Easy to quantify / Misses intangibles
NPV / Net present value / Value added by IS / Easy to quantify / Requires some estimation
Earning Growth / Increase in profits / To monitor profits / Easy to obtain / Doesn't tell the 'why'
Market Share / Sales in relation to market / To monitor presence in market / Easy to obtain / Doesn't tell the 'why' and is affected by external factors very strongly.
Customer Awareness / Satisfaction / Customer survey data / Customer self-report / Surveys are easy to use / Collecting data may be tough and self-report surveys are sometimes suspect
Total Cost of Ownership / Costs of IS operation / To learn sum total of all system costs / Meaningful, does limit itself to hardware or software / Hard to determine, misses intangibles

1. The characteristics of the CIO would include virtue, courage, loyalty, honesty, and leadership.

Problem-Solving Exercises

1. Student answers will vary based on their chosen industry and firms.

1. Initial spreadsheet with ROI:

Year / Year / Year / Year / Year
1 / 2 / 3 / 4 / 5
Increased Revenue / $ - / $ 100.00 / $ 150.00 / $ 200.00 / $ 250.00
Cost Savings / $ - / $ 50.00 / $ 50.00 / $ 50.00 / $ 50.00
Depreciation / $ - / $ 75.00 / $ 75.00 / $ 75.00 / $ 75.00
Initial Expense / $ 500.00
Profit / $ - / $ 75.00 / $ 200.00 / $ 375.00 / $ 600.00
ROI / 0% / 15% / 40% / 75% / 120%
All amounts in thousands.

Additional revenue and cost savings model.

Year / Year / Year / Year / Year
1 / 2 / 3 / 4 / 5
Increased Revenue / $ 50.00 / $ 100.00 / $ 150.00 / $ 200.00 / $ 250.00
Cost Savings / $ 25.00 / $ 50.00 / $ 50.00 / $ 50.00 / $ 50.00
Depreciation / $ - / $ 75.00 / $ 75.00 / $ 75.00 / $ 75.00
Initial Expense / $ 500.00
Profit / $ 75.00 / $ 150.00 / $ 275.00 / $ 450.00 / $ 675.00
ROI / 15% / 30% / 55% / 90% / 135%
All amounts in thousands.

1. A possible CIO job description could be: The CIO should employ an IS department’s equipment and personnel in a manner that will help the organization attain its goals. The CIO will be concerned with the overall needs of the organization. He or she is responsible for corporate-wide policy, planning, management, and acquisition of information systems. The student should then create a presentation in a graphics program, such as Microsoft PowerPoint, on the requirements of the new CIO.

Team Activities

2.Students should conduct an interview to find out how a local manger defines and measures quality.