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Information Systems by Efrem G. Mallach

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3
Chapter 1
Why Information Systems
Matter in Business
And to You
CHAPTER OUTLINE
Value of Information
Systems and Information Systems
What Is Information, Really?
Legal and Ethical Information Use
WHY THIS CHAPTER MATTERS
In 2015, computer literacy is a given. Every middle-school student is computer-literate,
just as every middle-school student knows how to read. is book wont try to repeat what
you’ve known for years.
Knowing how to read isnt the same as understanding literature or poetry. Computer
literacy isn’t the same as information literacy, either. Middle-school students are
computer-literate, but not information-literate. ey dont understand how informa-
tion can benet an organization, what aects its usefulness for that purpose, and how
it should be managed to be as useful as possible. Middle-school students dont have to
understand that any more than they have to understand the structure of a play or the
use of a metaphor—but college students who major in English do have to understand
those things, so they study them. As a business student, and later in your career as a
knowledge worker and as a manager, you have to be information-literate. at’s what
this chapter is about.
4 Information Systems: What Every Business Student Needs to Know
CHAPTER TAKE-AWAYS
As you read this chapter, focus on these key concepts to use on the job:
1. Intelligent use of information can help any type of organization.
2. e value of information depends on its quality. Information quality can be described
by a small number of specic factors.
3. Computers are basic to using information intelligently. A company cant use infor-
mation intelligently without using computer-based information systems (ISs)
intelligently.
4. You will benet personally in your career if you understand information systems.
VALUE OF INFORMATION
Consider these three business scenarios.
Scenario 1
A toy manufacturer gets an order for 5,000 coaster wagons. To produce 5,000 wagons, it needs
20,000 wheels. It has only 4,000 wheels in stock. It must order at least 16,000 more wheels.
Possible Outcome A
e production control manager phones the purchasing agent who handles wheels. She’s out
for the rest of the day, so the production control manager leaves a voice mail. When the pur-
chasing agent returns the call the next morning, the production control manager is on the
factory oor, so she leaves a voice mail. ey talk the day aer that. e purchasing agent
then calls three suppliers from whom the toy manufacturer has bought wheels in the past.
A is no longer in business. B’s sales representative has just le on a three-week vacation. She
leaves a voice mail for C’s salesperson. Cs salesperson senses desperation in the purchasing
agent’s voice and therefore prices the wheels 25% higher than usual. He gets the order anyhow.
Possible Outcome B
e toy company’s production planning system calculates the need and sends an electronic
message to the purchasing department. Workow soware in the purchasing department
routes the request to the purchasing agent, but will reroute it to her manager if she doesnt pro-
cess it within 24hours. She processes it the next morning, sending electronic request-for-bid
messages to three rms that have supplied wheels in the past. She gets bids back from the two
that are still in business. C quotes standard prices. B, whose sales rep is eager to close some busi-
ness before leaving on a three-week vacation, oers a 20% discount. is time, B gets the order.
Scenario 2
A college professor enjoys solving puzzles and oen buys puzzle books online. Two online
bookstores get a new puzzle book edited by Will Shortz, who is known for high-quality
puzzles.

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