Solution Manual For
Managing and Using Information Systems A Strategic Approach, 8th Edition Keri E. Pearlson,
Carol S. Saunders, Dennis F. Galletta
Chapter 1-13
Chapter 1: The Information Systems Strategy Triangle
Overview
This chapter presents a very simple framework, the Information Systems Strategy Triangle, which
links business strategy with organizational strategy and information strategy. The chapter describes
this model, and builds on several other popular strategy models and organizational models. The
goal of this chapter is to make sure every student has a basic understanding of both strategy and
organizations. For students familiar with business strategy and organizational behavior, this chapter
is a review of key points from those two fields.
Discussion Opener: One of the first slides of each chapter, following the title or agenda slide (if
present), provides discussion questions that cover the opening case. It would be a good idea to set
the tone for the entire course by putting students on notice that they should read the chapters before
coming to class. The ―notes‖ portion of the slide deck provide brief answers that instructors can see
if they use a multi-screen approach. In PowerPoint 2016 or earlier, after enabling the external
screen as an extended monitor, make sure to click the ―set up slide show‖ icon and choose ―Use
presenter view.‖ The notes will show up on your screen while the presentation will show up on the
main projector.
Note: If you provide slides to the students, you should delete the brief answers on the opening slide
of the student version for each chapter before making the slide decks available.
Alternate Discussion Opener: Why should general managers have a broad understanding of
information systems? How can that knowledge be helpful in their careers?
Key Points in Chapter
The Information Systems Strategy Triangle in Figure 1.1 links business strategy with
organizational strategy and information strategy. The triangle is used to suggest that all three points
must be in balance in any organization to have optimal efficiency and effectiveness. An imbalance
can lead to organizational tension or possibly a crisis. A company is out of ―alignment‖ when its
business strategy is not supported by the IS. There are several implications from this model. First,
business strategy drives organizational and information strategy. Second, organizational strategy
must complement business strategy. Third, information strategy must complement business
strategy. Fourth, organizational and information strategy should complement each other. Finally, if
a change is made to one corner of the triangle, it is necessary to evaluate the other two corners to
,ensure balance, or alignment, is maintained. That means that if the business strategy is changed
(i.e. such as becoming a "bricks and clicks" company), then the manager must also consider a
redesign of both the organization (i.e. do we have people that can be successful in this new
strategy) and the information systems (i.e. do we have the capability to process inquiries taken off
of the Web).
Strategy is defined and is tied to the mission of the organization. Examples of mission statements
are provided in the text (Figure 1.2), along with a discussion of how Dell has creatively adjusted its
business strategy to meet the rapidly changing computer industry.
There are several ways to describe business strategy. This chapter summarizes two well-accepted
models: the Porter generic strategies framework and dynamic frameworks such as the Goeltz
hypercompetition model and blue ocean strategy concept. Current examples are offered to
illustrate the models.
A business model is one component of a business strategy. It is essentially a blueprint of how a
company conducts business. The business model can be used to both create and capture value. A
business value can create value without bringing in new revenue from customers (by saving costs
or investing for future revenue). In addition, data-driven business models are both new and
effective, and are enabled by big data and business analytics tools.
The Porter Generic Strategies Framework (Differentiation, Cost Leadership, Focus) has spawned
many variants. A cost leadership focus means that the company maintains above average
performance by selling products that are comparable in quality (i.e. the customer perceives relative
value), but at a lower price in the marketplace. Differentiation strategy involves uniqueness of the
product in the marketplace in some appreciable qualitative dimension. A focused strategy directs
products to meet the specific needs of a particular segment of the market, either based on cost focus
or differentiation focus.
Dynamic environment strategies are useful to study. One example is the hypercompetition
concept, which asserts that it is more important to disrupt than to attempt to sustain an advantage.
Another is the creative destruction strategy, which focuses on what competitors might do to
attempt to destroy the firm, and then what moves should be taken to counteract those attacks.
Finally, a blue ocean approach flies in the face of the red ocean approach. A red ocean approach
attempts to steal away part of an existing market from competitors, which carves a market into
smaller fragments. In contrast, a blue ocean strategy attempts to redefine, or even expand an
industry, by creating new products or product categories.
A digital strategy can be helpful for large companies operating in dynamic environments, and can
require close alignment with the IS strategy. It is influenced by the digital technological capabilities
of the firm as applied in changing market environments.
Organizational strategy is a plan that answers the question ―How will the company organize to
achieve its goals and implement its business strategy?‖ The chapter describes a useful framework
for organizational design in the managerial levers model (Figure 1.5). That comprehensive model
links organizational structure variables, control variables, and cultural variables. Decision makers
,can manipulate the managerial levers to effect change within the organization. Chapters 3, 4, and 5
discuss the managerial levers in greater detail and apply the organizational strategy frameworks to
assessing the impact of IS.
The IS strategy provides the plan for information services, and supports the business strategy
through needs fulfillment. Figure 1.6 provides a basic framework showing the four components of
the information system, the hardware, software, networking and data, and the key managerial
concerns for each: what, who, and where.
―A Closer Look: Building a Social Business Strategy‖ – Variations on the Social Business
Strategy include collaboration (bringing people together to share ideas, information, and
expertise), engagement (increase perceived attachment through increased interaction), and
innovation (development of new ideas). Example: National Instruments (ni.com) has created a
‗branded community‘ to collect and disseminate new ideas.
Optional Discussion Question: How can we recognize a misalignment between business strategy
and IS strategy? Do you have any examples from internships or work experiences?
Illustrative Answers to Chapter Discussion
Questions
This is a summary chapter of the key models for the information systems strategy triangle, so
discussion questions were provided to get students focused on and thinking about using these
models. Below are some sample answers, but expect creative answers from your students that are
not represented here. We encourage you to post some of your best answers to the online community
webpage and share them with other instructors.
1. Why is it important for business strategy to drive organizational strategy and IS strategy? What
might happen if the business strategy was not the driver?
Ans: The primary point in this chapter is that in any well-run organization, the business strategy
drives the rest of the operational strategy, and information systems are no different. The business
strategy defines the goals and objectives based on the organizational capabilities and structure.
Information systems are intended to enable and facilitate successful realization of the goals and
objectives. Technology for its own sake is not usually a good investment. However, typically,
managers seem to think that changing or upgrading an information system (or even a component of
an information system) will only positively impact a business. This is commonly referred to as the
―Technological Imperative.‖ Quite the opposite, in fact, is true. By making changes only in IT,
impacting the information strategy, the triangle is "out of balance" and there will be consequences
in the affected areas. For example, building a virtual organization, but not changing the business
and organizational strategies to support the notion of "ensuring personnel are productive and have
the widest possible work place opportunities" can lead to significant disconnects between workers,
their managers, and their customers. And worse, without supplying the virtual worker with the
appropriate information system (a capable computer at home, a versatile and light laptop, etc.) will
, lead to a decrease in productivity by the virtual worker, and a major disruption of business
operations. Therefore, allowing IS strategy to drive business strategy could easily lead to poor
implementations with disappointing outcomes (i.e. wasted resources).
2. In 2015, the NFL decided to hand out Microsoft Surface tablets to all coaches for use during
games,* and there are reports that in the future, they will add HoloLens devices to provide
augmented reality. A HoloLens device is a high-definition, head-mounted display that allows
coaches to see the plays with text and animation superimposed right on the live images. If the NFL
simply handed them out without making any other formal changes in organization strategy or
business strategy, what might be the outcome? What unintended consequences might occur?
[*Note: You might want to ask students if they see the Surface as a visible part of NFL games. As
of early 2020, the Surface is still advertised as the ―official laptop of the NFL.‖ (according to
https://www.microsoft.com/en-us/surface/devices/nfl). Ask students if they‘ve seen any Hololens
devices yet.]
Ans: coaches might not use them, without training and modifications to their jobs. They may be
accustomed to a manual, voice and paper system and resist moving to the tablet devices. They
might not appreciate the added benefits of the dynamic animation, choosing familiar business
processes instead. If they do use the devices, there will eventually be strain on the rest of the
organization if it doesn't adapt to this new technology. For example, messaging might become
ineffective if a head coach only uses voice messaging and special team coaches use animation to
simulate plays. The head coach will never see those plays and coordination will suffer. Support
systems must also be redesigned. It does a coach little good to have to give up the device during a
game for repairs, and a sufficient quantity of ready-to-use backups should be available. Minor
problems could be disastrous, and some moderate troubleshooting skills should be provided to
coaches. Employees are adept at creating their own ―workarounds,‖ particularly when they do not
support a mandatory change.
3. Consider a traditional manufacturing company that wants to build a social business strategy.
What might be a reasonable business strategy, and how would organizational and IS strategies
need to change? How would this differ for a restaurant chain? A consumer-products company? A
non-profit?
Ans: A reasonable business strategy might be to provide what the customer wants when the
customer wants it. The idea is to use the Web as a mechanism to connect to customers, to take their
orders, to provide services when the customer wants them, and to link with suppliers and partners.
To do that, the organization would have to be actively engaged and responsive, and would have to
include elements of empowerment and authority for the employees tasked with monitoring the
social network. It would not work to have a centralized decision making authority if the
organization wants to be responsive because it would take too long to get appropriate information
and communicate decisions back to the field. The manufacturing process might be organized
around build-to-order rather than on market analysis and product histories, but then there would
need to be a series of organizational processes and people that would be in place to make sure the
manufacturing company is able to actually build the products when they are ordered. The IS
strategy to support this business strategy would be one of rethinking the use of the Web as a tool
