Lecture 5

Management Information Systems:
Managing the Digital Firm

Seventeenth Edition, Global Edition
Chapter 11
Managing Knowledge and Artificial
Intelligence
Copyright © 2022, 2020, 2018 Pearson Education, Ltd. All Rights Reserved
Learning Objectives
11.1 What is the role of knowledge management systems in business?
11,2 What are artificial intelligence (AI) and machine learning? How do
businesses use AI?
11.3 What types of systems are used for enterprise-wide knowledge
management, and how do they provide value for businesses?
11.4 What are the major types of knowledge work systems, and how do
they provide value for firms?
11.5 How will MIS help my career?
Video Cases
• Case 1: How IBM’s Watson Became a Jeopardy
Champion
• Case 2: Alfresco: Open Source Document Management
and Collaboration
Artificial Intelligence Beats Radiologists in
Reading Mammograms (1 of 2)
• Problem
– High level of information inaccuracy
– Opportunities from new technology
• Solutions
– Monitor accuracy and costs
– Evaluate study results
– Collect mammograms for system training and testing
– Train pattern recognition system
– Compare AI system and human radiologist findings
– AI pattern recognition system
Artificial Intelligence Beats Radiologist in
Reading Mammograms (2 of 2)
• Demonstrates how organizational performance can benefit from
using technology such as artificial intelligence to facilitate
acquisition and application of knowledge
• Illustrates the ability of AI pattern recognition systems to achieve
higher level of accuracy than human radiologists
What is the Role of Knowledge
Management Systems in Business?
• Knowledge management systems among fastest growing areas of software
investment
• Information economy: production and distribution of information and

knowledge a major source of wealth and prosperity
• Substantial part of a firm’s stock market value is related to intangible assets:

knowledge, brands, reputations, and unique business processes
• Well-executed knowledge-based projects can produce extraordinary ROI
Important Dimensions of Knowledge
(1 of 2)
• Data, information, knowledge, and wisdom
• Tacit knowledge and explicit knowledge
• Important dimensions of knowledge
– Knowledge is a firm asset
– Knowledge has different forms
– Knowledge has a location
– Knowledge is situational
Important Dimensions of Knowledge
(2 of 2)
• Knowledge-based core competencies
– Key organizational assets
• Knowing how to do things effectively and efficiently in ways others
cannot duplicate is a prime source of profit and competitive advantage
– Example: Having a unique build-to-order production system
• Organizational learning
– Process in which organizations gain experience through collection
of data, measurement, trial and error, and feedback
The Knowledge Management Value Chain (1 of 3)
• Knowledge management
– Set of business processes developed in an organization to create, store,
transfer, and apply knowledge
• Knowledge management value chain

– Each stage adds value to raw data and information as they are
transformed into usable knowledge
▪ Knowledge acquisition
▪ Knowledge storage
▪ Knowledge dissemination
▪ Knowledge application
• Knowledge acquisition
– Documenting tacit and explicit knowledge
▪ Storing documents, reports, presentations, best practices
▪ Unstructured documents (e.g., e-mails)
▪ Developing online expert networks
– Creating knowledge
– Tracking data from TPS and external sources
• Knowledge storage
– Databases
– Document management systems
– Role of management
• Knowledge dissemination
– Portals, wikis
– E-mail, instant messaging
– Search engines, collaboration tools
– A deluge of information
▪ Training programs, informal networks, and shared management
experience help managers focus attention on important information.
• Knowledge application
– New business practices
– New products and services
– New markets
Figure 11.1 The Knowledge Management Value
Chain
Building Organizational and Management
Capital: Collaboration, Communities of Practice,
and Office Environments
• Developing new organizational roles and responsibilities for the acquisition of
knowledge
• Chief knowledge officer executives; dedicated staff / knowledge managers
• Communities of practice (COPs)

– Informal social networks of professionals and employees
– Activities include education, online newsletters, sharing knowledge
– Reduce learning curves of new employees
Types of Knowledge Management Systems
• Enterprise-wide knowledge management systems
– General-purpose firm-wide efforts to collect, store, distribute, and apply
digital content and knowledge
• Knowledge work systems (KWS)

– Specialized systems built for engineers, scientists, other knowledge
workers charged with discovering and creating new knowledge
• Intelligent techniques
– Diverse group of techniques, such as data mining, expert systems,
machine learning, used for various goals: discovering knowledge, distilling
knowledge, discovering optimal solutions
Figure 11.2 Major Types of Knowledge
Management Systems
What Is Artificial Intelligence?
• Artificial intelligence (AI): a form of intelligent technique
• Grand vision
– Computer hardware and software systems that are as “smart” as
humans
– So far, this vision has eluded computer programmers and
scientists
• Narrower, more realistic vision
– Systems that take data inputs, process them, and produce outputs
(like all software programs) and that can perform many complex
tasks that would be difficult or impossible for humans to perform.
Major Types of AI
• Expert systems
• Machine learning
• Neural networks and deep learning networks
• Genetic algorithms
• Natural language processing
• Computer vision
• Robotics
Expert Systems
• Capture tacit knowledge in very specific and limited domain of human expertise
• Capture knowledge as set of rules
• Typically perform limited tasks

– Diagnosing malfunctioning machine
– Determining whether to grant credit for loan
• Used for discrete, highly structured decision making
• Knowledge base: Set of hundreds or thousands of rules
• Inference engine: Strategy used to search knowledge base

– Forward chaining
– Backward chaining
Figure 11.3 Rules in an Expert System
Machine Learning (1 of 2)
• Used by neural networks, deep learning networks, and genetic
algorithms
• Different paradigm than expert systems
• Focuses on recognizing patterns in very large data sets
• Contemporary examples
– Facebook ad display
– Netflix recommender system
Machine Learning (2 of 2)
• Supervised learning
– System “trained” by providing examples of desired inputs and
outputs identified by humans in advanced
– One technique used to develop autonomous vehicles
• Unsupervised learning
– Same procedures as used with supervised learning, but humans
do not provide examples
– “Cat Paper”
Neural Networks (1 of 3)
• Find patterns and relationships in massive amounts of data too
complicated for humans to analyze
• “Learn” patterns by searching for relationships, building models,
and correcting over and over again
• Humans “train” network by feeding it data inputs for which
outputs are known, to help neural network learn solution by
example from human experts
• Used in medicine, science, and business for problems in pattern
classification, prediction, financial analysis, and control and
optimization
Figure 11.4 How a Neural Network Works
Interactive Session: Technology: Do You Know
Who Is Using Your Face?
• Class discussion
– Explain the key technologies used in facial recognition
systems.
– What are the benefits of using facial recognition
systems. How do they help organizations improve
operations and decision making. What problems can
they help solve?
– Identify and describe the disadvantages of using facial
recognition systems and facial databases.
• Deep learning neural networks
– More complex, with many layers of transformations of input data to
produce target output
– Used almost exclusively for pattern detection on unlabeled data
(unsupervised learning)
– Some believe these come closest to “grand vision” of AI
Figure 11.5 A Deep Learning Network
• Limitations of neural networks and machine learning
– Require very large data sets to identify patterns
– Patterns may not “make sense: or may be ephemeral
– How system arrived at a particular solution often cannot be
explained
– Most useful for classifying digital assets into binary categories (yes
or no), but most real-world problems do not have binary solutions
– No sense of ethics, so may recommend actions that are illegal or
immoral
Genetic Algorithms
• Useful for finding optimal solution for specific problem by examining
very large number of possible solutions for that problem
• Conceptually based on process of evolution
– Search among solution variables by changing and reorganizing
component parts using processes such as inheritance, mutation,
and selection
• Used in optimization problems (minimization of costs, efficient
scheduling, optimal jet engine design) in which hundreds or thousands
of variables exist
• Able to evaluate many solution alternatives quickly
Figure 11.6 The Components of a Genetic
Algorithm
Natural Language Processing
• Software that can process voice or text command using
natural human language
• Typically based on machine learning, including deep
learning
• Examples: Google search; spam filtering systems; text
mining sentiment analysis; customer call center
interactions
Computer Vision Systems
• Emulate human visual system to view and extract
information from real-world images
• Examples:
– Facebook’s DeepFace can identify friends in photos
across their system and the entire web
– Autonomous vehicles can recognize signs, road
markers, people, animals, and other vehicles with good
reliability
Robotics
• Design, construction, and operation of movable machines that
can substitute for humans, along with computer systems for
their control, sensory feedback, and information processing
• Generally programmed to perform specific and detailed actions
in limited domains, e.g. robots spray paint autos, and assemble
certain parts, welding, heavy assembly movement
• Used in dangerous situations like bomb disposal, delivering
medical supplies to coronavirus-contaminated locations
• Surgical robots are expanding their capabilities
Interactive Session: Organizations: Will AI
Kill Jobs?
– Identify the problem described in this case study. In what
sense is it an ethical dilemma?
– Should more tasks be given to AI? Why or why not? Explain
your answer.
– Can the problem of AI reducing employment be solved?
Explain your answer.
Intelligent Agents
• Work without direct human intervention to carry out repetitive, predictable
tasks
– Deleting junk e-mail
– Finding cheapest airfare
• Use limited built-in or learned knowledge base

– Some are capable of self-adjustment, for example: Siri
• Chatbots
• Agent-based modeling applications:

– Model behavior of consumers, stock markets, and supply chains; used to
predict spread of epidemics
Figure 11.7 Intelligent Agents in P&G’s
Supply Chain Network
What Types of Systems Are Used for
Enterprise-Wide Knowledge Management?
• Three major types of knowledge in an enterprise
– Structured documents
▪ Reports, presentations
▪ Formal rules
– Semistructured documents
▪ E-mails, videos
– Unstructured, tacit knowledge
• 80% of an organization’s business content is semistructured or unstructured
Enterprise Content Management Systems
• Help capture, store, retrieve, distribute, preserve documents and
semistructured knowledge
• Bring in external sources
– News feeds, research
• Tools for communication and collaboration
– Blogs, wikis, and so on
• Key problem: developing taxonomy
• Digital asset management systems
Figure 11.8 An Enterprise Content
Management System
Locating and Sharing Expertise
• Provide online directory of corporate experts in well-defined
knowledge domains
• Search tools enable employees to find appropriate expert in a
company
• Social networking and social business tools for finding
knowledge outside the firm
– Saving
– Tagging
– Sharing web pages
Learning Management Systems (LMS)
• Provide tools for management, delivery, tracking, and assessment of employee
learning and training
• Support multiple modes of learning

– web-based classes, online forums, and so on
• Automates selection and administration of courses
• Assembles and delivers learning content
• Measures learning effectiveness
• Massively open online courses (MOOCs)

– Web course open to large numbers of participants
Knowledge Workers and Knowledge Work
• Knowledge workers
– Researchers, designers, architects, scientists, engineers who create
knowledge for the organization
– Perform key roles critical to organization and managers who work within
organization
• Knowledge work systems

– Systems for knowledge workers to help create new knowledge and
integrate that knowledge into business
Requirements of Knowledge Work Systems
• Sufficient computing power for graphics, complex calculations
• Communications and document management
• Access to external databases
• User-friendly interfaces
• Optimized for tasks to be performed (design engineering,
financial analysis)
Figure 11.9 Requirements of Knowledge
Work Systems
Examples of Knowledge Work Systems
• CAD (computer-aided design)
– Creation of engineering or architectural designs
– 3D printing
• Virtual reality systems
– Simulate real-life environments
• Augmented reality (AR) systems
– Enhance visualization by overlaying digital data and images
onto physical real-world environment
How Will MIS Help My Career?
• The Company: RazzleDazzle Technology
• Position Description: Entry-level sales assistant
• Job Requirements
• Interview Questions
• Author Tips
Copyright
This work is protected by United States copyright laws and is

provided solely for the use of instructors in teaching their
courses and assessing student learning. Dissemination or sale of
any part of this work (including on the World Wide Web) will
destroy the integrity of the work and is not permitted. The work
and materials from it should never be made available to students
except by instructors using the accompanying text in their
classes. All recipients of this work are expected to abide by these
restrictions and to honor the intended pedagogical purposes and
the needs of other instructors who rely on these materials.
Management Information Systems:
Managing the Digital Firm
Seventeenth Edition, Global Edition
Chapter 15
Managing Global Systems
Learning Objectives
15.1 What major factors are driving the internationalization of business?
15.2 What are the alternative strategies for developing global
businesses?
15.3 What are the challenges posed by global information systems and
management solutions for these challenges?
15.4 What are the issues and technical alternatives to be considered
when developing international information systems?
15.5 How will MIS help my career?
Video Cases
• Case 1: Daum Runs Oracle Apps on Linux.
• Case 2: Lean Manufacturing and Global ERP: Humanetics and Global
Shop
The Bel Group: Laughing All the Way to
Success (1 of 2)
• Problem
– Potential expansion
– Untouched market potential globally
• Solutions
– Design global strategy and business model
– Redesign business processes
– Deploy Salesforce’s Sales Cloud software
The Bel Group: Laughing All the Way to
Success (2 of 2)
• Global CRM System

• Demonstrates I T’s role in helping organizations pursue a
global growth strategy
• Illustrates the ability of I T systems to standardize global
processes and rules
What Major Factors Are Driving the
Internationalization of Business?
• Global economic system and global world order driven by
advanced networks and information systems
• The growth of international trade has radically altered
domestic economies around the globe
• For example, production of many high-end electronic
products parceled out to multiple countries
– For example: Apple iPhone’s global supply chain
Figure 15.1: Apple iPhone’s Global Supply
Chain
Developing an International Information
Systems Architecture
• Understand global environment
– Business drivers for global competition
– Inhibitors creating management challenges
• Develop corporate strategy for global competition
• Develop organizational structure and division of labor
• Consider management issues
– Design of business procedures, reengineering, managing change
• Consider technology platform
Figure 15.2 International Information
Systems Architecture
The Global Environment: Business Drivers
and Challenges
• Business drivers
– General cultural factors
– Specific business factors
• Challenges
– Global
– Specific
Table 15.1: The Global Environment:
Business Drivers and Challenges
General Cultural Factors Specific Business Factors
Global communication and Global markets

transportation technologies
Development of global culture Global production and operations
Emergence of global social norms Global coordination
Political stability Global workforce
Global knowledge base Global economies of scale
Table 15.2 Challenges and Obstacles to
Global Business Systems
Global Specific
Cultural particularism: Regionalism, Standards: Different Electronic Data

nationalism, language differences Interchange (EDI), e-mail,
telecommunications standards
Social expectations: Brand-name Reliability: Phone networks not
expectations, work hours uniformly reliable
Political laws: Transborder data and Speed: Different data transfer speeds,
privacy laws, commercial regulations many slower than United States
Blank Personnel: Shortages of skilled
consultants
Interactive Session: Management:
Rethinking Global Supply Chains
– What factors have contributed to the growth of global supply
chains?
– What are the advantages and disadvantages of global supply
chains?
– What measures can companies take to mitigate supply chain risk?
– Should companies continue to maintain global supply chains?
Explain your answer.
State of the Art
• Most companies have inherited a patchwork international
system using traditional batch-oriented reporting, manual data
entry, legacy systems, and little online control
• Significant difficulties in building appropriate international
architectures
– Planning a system appropriate to firm’s global strategy
– Structuring organization of systems and business units
– Solving implementation issues
– Choosing right technical platform
Global Strategies and Business Organization
• Three main kinds of organizational structure
– Centralized: In the home country
– Decentralized/dispersed: To local foreign units
– Coordinated: All units participate as equals
• Four main global strategies
– Domestic exporter
– Multinational
– Franchisers
– Transnational
Table 15.3 Global Business Strategy and
Structure
Business Function Domestic Multinational Franchiser Transnational

Exporter
Production Centralized Dispersed Coordinated Coordinated
Finance/accounting Centralized Centralized Centralized Coordinated
Sales/marketing Mixed Dispersed Coordinated Coordinated
Human resources Centralized Centralized Coordinated Coordinated
Strategic Centralized Centralized Centralized Coordinated
management
Global Systems to Fit the Strategy
• Configuration, management, and development of systems tend to
follow global strategy chosen
• Four main types of systems configuration
– Centralized: Systems development and operation occur totally at
domestic home base
– Duplicated: Development occurs at home base but operations are
handed over to autonomous units in foreign locations
– Decentralized: Each foreign unit designs own solutions and
systems
– Networked: Development and operations occur in coordinated
fashion across all units
Figure 15.3 Global Strategy and Systems
Configurations
Reorganizing the Business
• To develop a global company and information systems support structure:
1. Organize value-adding activities along lines of comparative advantage-
▪ For example: Locate functions where they can best be performed, for
least cost and maximum impact and reliability (with safeguards for
supply chain resiliency)
2. Develop and operate systems units at each level of corporate activity—

regional, national, and international
3. Establish at world headquarters:
▪ Single office responsible for development of international systems
▪ Global CIO position
A Typical Scenario: Disorganization on a
Global Scale
• Traditional multinational consumer-goods company based in United
States and operating in Europe would like to expand into Asia
• World headquarters and strategic management in United States
• Separate regional, national production and marketing centers
• Foreign divisions have separate IT systems
• E-mail systems are incompatible
• Each production facility uses different ERP system, different hardware
and database platforms, and so on
Global Systems Strategy (1 of 2)
• Share only core systems
– Core systems support functionality critical to firm
• Partially coordinate systems that share some key elements
– Do not have to be totally common across national boundaries
– Local variation desirable
• Peripheral systems
• Need to suit local requirements only
Global Systems Strategy (2 of 2)
• Define core business processes
• Identify core systems to coordinate centrally
• Choose an approach
– Piecemeal and grand design approaches tend to fail
• Make benefits clear

– Global flexibility
– Gains in efficiency (but more emphasis now on supply chain resiliency)
– Fixed costs amortized over a larger customer base; creates new
economies of scale
– Ability to optimize corporate funds over much larger capital base
The Management Solution:
Implementation (1 of 2)
• Agreeing on common user requirements
– Short list of core business processes
– Develop common language, understanding of common elements and
unique local qualities
• Introducing changes in business processes

– Success depends on legitimacy, authority, ability to involve users in
change design process
• Coordinating applications development

– Coordinate change through incremental steps
– Reduce set of transnational systems to bare minimum
Figure 15.4 Local, Regional, and Global
Systems
The Management Solution:
Implementation (2 of 2)
• Coordinating software releases
– Institute procedures to ensure all operating units update at same
time
• Encouraging local users to support global systems
– Cooptation: Bringing the opposition into design and
implementation process without giving up control over direction
and nature of the change
▪ Permit each country unit to develop one transnational
application
▪ Develop new transnational centers of excellence
Issues and Technical Alternatives When
Developing International Information
Systems (1 of 2)
• Computing platforms and systems integration
– How new core systems will fit in with existing suite of applications
developed around globe by different divisions
– Standardization: Data standards, interfaces, software, and so on
• Connectivity
– Internet does not guarantee any level of service
– Many firms use private networks and VPNs
– Low penetration of PCs, outdated infrastructures in developing countries
Issues and Technical Alternatives When
Developing International Information
Systems (2 of 2)
• Software
– Integrating new systems with old
– Human interface design issues, languages
• Software localization
– Converting software to operate in second language
• Most important software applications:

– TPS and MIS
– SCM, EDI, and enterprise systems
– Collaboration tools, e-mail, videoconferencing
Figure 15.5 Internet Population in
Selected Countries
Interactive Session: Organizations: Digital
Nationalism
– What is digital nationalism? Give two examples.
– What problems does digital nationalism pose for conducting
business globally?
How Will MIS Help My Career?
• The Company: Global Online Stats
• Position Description: Entry-level sales and marketing trainee
• Job Requirements
• Interview Questions
• Author Tips
Copyright
This work is protected by United States copyright laws and is

provided solely for the use of instructors in teaching their
courses and assessing student learning. Dissemination or sale of
any part of this work (including on the World Wide Web) will
destroy the integrity of the work and is not permitted. The work
and materials from it should never be made available to students
except by instructors using the accompanying text in their
classes. All recipients of this work are expected to abide by these
restrictions and to honor the intended pedagogical purposes and
the needs of other instructors who rely on these materials.

Lecture 5

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lecture 5

Uploaded by

Copyright:

Available Formats

Management Information Systems:

Managing the Digital Firm

• Information economy: production and distribution of information and

• Substantial part of a firm’s stock market value is related to intangible assets:

• Well-executed knowledge-based projects can produce extraordinary ROI

• Knowledge management value chain

• Chief knowledge officer executives; dedicated staff / knowledge managers

• Communities of practice (COPs)

• Knowledge work systems (KWS)

• Capture knowledge as set of rules

• Typically perform limited tasks

• Used for discrete, highly structured decision making

• Knowledge base: Set of hundreds or thousands of rules

• Inference engine: Strategy used to search knowledge base

• Use limited built-in or learned knowledge base

• Agent-based modeling applications:

• 80% of an organization’s business content is semistructured or unstructured

• Support multiple modes of learning

• Automates selection and administration of courses

• Assembles and delivers learning content

• Measures learning effectiveness

• Massively open online courses (MOOCs)

• Knowledge work systems

This work is protected by United States copyright laws and is

• Global CRM System

Global communication and Global markets

Cultural particularism: Regionalism, Standards: Different Electronic Data

Business Function Domestic Multinational Franchiser Transnational

1. Organize value-adding activities along lines of comparative advantage-

2. Develop and operate systems units at each level of corporate activity—

• Make benefits clear

• Introducing changes in business processes

• Coordinating applications development

• Most important software applications:

This work is protected by United States copyright laws and is

You might also like