1. Essentials of Management Chapter 14
Information Technology and E-Commerce
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2. Increased Demands Placed on Managers (by IT)
Perform many of own clerical (support) tasks using information technology.
Must build transformed organization because IT increases competition.
Must adapt to many changes in IT, and help others adapt to the changes.
Importance of innovation has increased.
IT facilitates globalization, creating more demands on manager.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

3. The Wireless Environment Including WiFi
Managers use wireless communication to conduct work from remote locations.
Mobile phones and laptops are standard.
WiFi makes Internet more accessible.
Working in miniature mode is required, but quite natural for young and old managers in present environment.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4. Positive Consequences of Information Technology for Manager
Increased productivity and teamwork
Increased competitive advantage (or avoiding competitive disadvantage)
Enhanced business models (such as multiple distribution methods)
Improved customer service and supplier relationships (for example, extranet.)
Enhanced communication and coordination, including the virtual office
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

5. Positive Consequences of Information Technology for Manager, continued
Quick access to vast information
Enhanced analysis of data and decision making (e.g., wiki gathers wide input)
Greater empowerment and flatter organizations (wider access to data)
Time saving through employee self-service
10. Monitoring of work and employee surveillance
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

6. The Negative Consequences of Information Technology
Wasting time on computer (including problem of online dependence)
Repetitive motion disorders
Deterioration of customer service (such as long voic menus)
Dealing with baffled customers (some electronic devices difficult to use)
Wired managerial workers (linked to the office most of the time)
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7. The Negative Consequences of Information Technology, continued
The encouragement of nonproductive multitasking (ability to concentrate may be impaired from using two or more electronic devices at same time)
Excessive requirements to learn and adapt to new communication technologies at the same time (can be difficult to concentrate on regular work)
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

8. Impact of Internet on Customers and Other External Relationships
Outline of Topics
Marketing Side of E-Commerce
Social Media and Customer Relationships
Purchasing Side of E-Commerce
Changing of Intermediaries
Enhancement of Globalization
Integrating New and Old Economy
Living with Increased Visibility
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

9. Marketing Side of E-Commerce
Biggest impact is online sales.
75% of online sales are business to business (B2B) rather than by consumers.
Manager needs e-commerce knowledge.
Sales managers have few subordinates.
E-commerce products can decrease demand for other product or service.
Wide input possible via crowdsourcing.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

10. The Social Media and Customer Relationships
Major change has been to managing many customer relationships via social media.
Managers must learn how to squeeze marketing advantage from social media.
Social networking can help build connection to company’s brand.
Most essential component of online branding is the human touch.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

11. Purchasing Side of E-Commerce
Enables companies to purchase more efficiently than by traditional methods.
Companies encourage customers and suppliers to conduct business online.
Online purchasing may reduce transaction costs such as discussions with sales representatives.
E-commerce has not eliminated human touch in business.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

12. Changing of Intermediaries
Decreased number of intermediaries between buyers and sellers, such as travel agents and supply companies.
Example is that MySpace members can sell their music directly rather than through publishers.
Some new intermediaries have been created such as online auctioneers and travel sites offering the best buys.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

13. Enhancement of Globalization
Major factor is that facilitates communication across countries.
Development of telecommunication structures across the world has facilitated globalization of business.
China now has more Internet users than the United States, although percentage of U.S. Internet users is much higher.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

14. Integrating New Economy with Old Economy
Major challenge is to integrate traditional way of doing business with e-business.
Referred to as “bricks versus clicks”
With first surge of e-business, traditional businesses were considered obsolete.
Biggest beneficiaries of Internet revolution have been companies that integrated e-commerce into marketing and operations.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

15. Living with Increased Visibility
Like or dislike of organization is rapidly disseminated over the Internet, especially social media Websites and YouTube.
Several Websites exist for consumers to voice their complaints.
Company employees sometimes post negative comments about employer.
Managers must create fans, deal openly with issues that might create dislike.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

16. Effects of Internet on Internal Company Operations
Outline of Topics
More Effective Work Processes
Squeeze on Profits and Pressures Toward Cost Control
Data Mining
Cloud Computing
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

17. More Effective Work Processes
Internet has changed methods of distributing goods, internal collaboration, and dealing with suppliers, such as:
Ordering and production of PCs (see Exhibit 14-3, text)
Streamlining work at a winemaker with elimination of much low-value work and concentration on work that adds value for customer.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

18. Squeeze on Profits and Pressures Toward Cost Control
Information flow of Internet has tipped balance of power from sellers to buyers.
Industrial buyers and consumers can use Web to find out about costs putting them on same level as professionals.
Sellers must offer products with lower profit margins than in past.
Lower prices leads to more cost control.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

19. Data Mining
Linked to Internet because of databases accessed on Internet.
Data mining extracts useful analysis from mass of business transactions.
Insurance companies use data mining to help price auto policies.
Data mining provides automated (a) prediction of trends and behavior, (b) discovery of previously unknown patterns.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

20. Cloud Computing
Refers to moving data and software from computer hard drive to Internet storage.
Also refers to interconnected machines that replace company desktops.
External organization takes over vital computer and IT activities.
Manager must have confidence in external IT operations to use cloud computing.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

21. Success Factors in E-Commerce
Develop an excellent call center to allow for the human touch.
Keep customers informed about their order progress.
Constantly monitor and update the e-business system (ease of completing transactions).
Mix bricks and clicks (customers can purchase multiple ways).
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

22. Success Factors in E-Commerce, continued
Develop a global presence (e.g., obtain a local domain name).
Protect customers against fraud (rampant problem on the Internet).
Conclusion to chapter: Internet revolution is fabulous but traditional forms of business and personal contacts still dominate high-level business.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.