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MSL 6000, Psychological Foundations of Leadership 1
Course Learning Outcomes for Unit I
Upon completion of this unit, students should be able to:
1. Summarize the major psychological foundations of
leadership.
1.1 Describe various foundational traits of leadership.
1.2 Articulate the importance of correlating personal leadership
traits and models.
4. Evaluate various leadership models.
4.1 Analyze various leadership models.
4.2 Relate leadership models to a successful leader.
Course/Unit
Learning Outcomes
Learning Activity
1.1
Unit Lesson
Chapter 1
Unit I Essay
1.2
Unit Lesson
Chapter 1
Unit I Essay
4.1
Unit Lesson
Chapter 3
Unit I Essay
4.2
Unit Lesson
Chapter 3
Unit I Essay
Reading Assignment
In addition to a physical copy of the textbook, each unit
contains the eTextbook version of the assigned
reading chapters. If preferred, click on Unit I in the course
navigation menu to access the online version of the
assigned chapters.
Chapter 1: What Does It Mean to Be a Leader?, pp. 3–24
Chapter 3: Contingency Approaches to Leadership, pp. 65–88
UNIT I STUDY GUIDE
Leadership Approaches and Models
MSL 6000, Psychological Foundations of Leadership 2
UNIT x STUDY GUIDE
Title
Unit Lesson
Welcome to Unit I! There are many types of leaders in the
business world today; some are successful at
leading their team to accomplish organizational goals, while
others are not. Leadership is a popular and
sought-after asset in business today. Therefore, it is important
to understand what is required for one to
become a good leader and acknowledge the important aspects of
leadership. Being that leadership is
complex and often misunderstood, those who are seeking to
become effective leaders must possess a desire
to establish meaningful relationships with others while leading
with a vision. Daft (2018) describes leadership
as the “ability to support and inspire the people who are needed
to achieve organizational goals” (p. 5).
This course covers the history and psychology
of leadership studies, leadership vision,
culture, courage, morals, and values. Our
focus will be on leadership concepts and
theories and correlating that knowledge into
practical use. At the bottom of each study
guide, there will be activities that focus on self-
assessment, goal setting, and overcoming
barriers—all related to how you can apply what
you learn in the course to your everyday life.
The activities are not graded but will assist in
developing your own leadership skills.
Let’s get started, as your next step in becoming a leader awaits.
When we consider the psychology of leadership, the
psychodynamic or systematic approach to studying
human behavior, there are a myriad of ways of looking at
leadership. The underlining forces that affect
leaders’ ability to lead include their personalities, their feelings
and emotions, and how they relate to others.
Leaders’ personal perceptions, values, and beliefs influence the
decisions they make in an organization and
the decisions made by those they are influencing.
Not only must leaders understand their own behaviors and what
might be best for their organization, but they
must also understand what drives and motivates their followers.
Human capital refers to how people vary in
their experiences, learning abilities, and emotions. Each person
is different and unique and evolves at his or
her own pace. Leaders must understand that the people they are
leading are likely at different levels of their
human development so a one-size-fits-all approach to leadership
may not be effective. Understanding the
skills, knowledge, and experiences (i.e., the human capital) of
their employees will allow successful leaders to
utilize tools such as coaching to further develop their teams.
Understanding people is just one element required to become a
successful leader. Leaders must also
understand themselves and their own experiences, learning
abilities, and emotions. Leadership is built on the
leader’s experiences, knowledge, perceptions, values, and
beliefs. No two leaders will be exactly alike.
Leadership is constantly changing. Someone who was
considered a good leader 20 years ago might not be a
good leader today. In the past, charisma and intelligence were
the psychological traits most valued in
leadership. Today, as leaders continue to develop, a new
psychology of leadership has emerged that focuses
on effective leaders understanding the values, opinions, and
skill sets of their followers. Effective leaders are
those who can shape and nurture the actions of their followers.
This differs significantly from the past
psychology of leadership, which was top-down and autocratic in
nature.
The psychology of leadership in the 21st century focuses on
leaders’ ability to forecast the actions of their
followers through consensus, collaboration, and communication.
Leaders who have a solid understanding of
their followers and what motivates them to succeed will be well
on their way to becoming successful leaders.
Are leaders born or developed? There are valid arguments on
both sides of this question; however, what we
do know is to be successful, leaders need to be fluid and
continually evolving.
Leaders have little stability and are in constant change; some
refer to this as a fundamental change. One
paradigm shift has been leaders moving from being controllers
to facilitators (Daft, 2018). Gone is the belief
that leaders rule with strict enforcements without flexibility. As
technology continues to change how we
interact, so has the philosophy of how we think and lead. Some
leaders still resist change in many forms.
Daft’s Definition of LEADERSHIP:
“An influence relationship among
leaders and followers who intend real
changes and outcomes that reflect
their shared purposes”
(Daft, 2018, p. 5)
MSL 6000, Psychological Foundations of Leadership 3
UNIT x STUDY GUIDE
Title
“Jim Collins, author of Good to Great and Great by Choice,
calls this new breed ‘Level 5 leaders’” (Daft, 2018,
p. 13). These Level 5 Leaders, instead of having strong egos
and larger-than-life personalities, seem shy and
unconcerned with being in the spotlight. These leaders focus on
the needs of their organization over their own
personal needs (Daft, 2018). These leaders also take full
accountability and responsibility for both their own
actions and the actions of their organization. The relevance of
this matters because one of the greatest
challenges facing leaders today is the ever-changing world we
live in that demands an ever-changing theory
of leadership. All leaders should evolve. Can you think of a
good example of a leader who evolved over time
and became better with his or her leadership skills?
To best understand the foundations of leadership, a closer look
at the leadership approaches and theories are
warranted. First, we will examine the contingency model. Daft
(2018) states that “contingency means that one
thing depends on other things, and for a leader to be effective
there must be an appropriate fit between the
leader’s behavior and style and the conditions in the situation”
(p. 66). Realistically, there is no one-way-fits-all
model for leaders. What works for one leader may not be
effective for the other. Daft (2018) notes that Hersey
and Blanchard broadened contingency through the
developmental study labeled situational theory, which
describes four different leadership styles:
S1: directing style,
S2: coaching style,
S3: supporting style, and
S4: entrusting style.
Let it be noted that Hersey and Blanchard’s situational model
favors followers’ characteristics with each
quadrant evaluated per particular situation.
Fiedler’s contingency model matches the leadership style
(personal characteristics and motivation) with the
most favorable situation posed to a group. This means that
personality can play a dominant role in the
situation and the group dynamics. The origin of Fiedler’s theory
is to identify your leadership style as being
naturally relationship-focused or naturally task-focused and
then to analyze the situation to determine the
most effective leadership style needed to resolve matters (Daft,
2018).
S1: Directing
Style
• Demonstrates
high concern for
tasks
• Demonstrates
low concern for
relationships
• Provides
detailed
instructions
• Closely
supervises
performance
S2: Coaching
Style
• Demonstrates
high concern for
tasks
• Demonstrates
high concern for
relationships
• Provides both
instruction and
support
• Explains
decisions
S3: Supporting
Style
• Demonstrates
high concern for
relationships
• Demonstrates
low concern for
tasks
• Urges creativity
and participation
S4: Entrusting
Style
• Demonstrates
low concern for
relationships
• Demonstrates
low concern for
tasks
• Provides little
direction and
support
Situational model of leadership
(Daft, 2018)
MSL 6000, Psychological Foundations of Leadership 4
UNIT x STUDY GUIDE
Title
An additional theory is the path-goal theory, which states that a
leader’s chosen style directly relates to a
reward or compensation (Daft, 2018). The path-goal theory was
first developed in 1971 by psychologist
Robert House. Later, in 1996, House updated the major
elements detailing the theory. The commonality of
the theory is simply that there are three ways to enable
individuals (as illustrated below).
Note that each of these paths are directives through either the
supportive, directive, participative, and/or
achievement-oriented leadership approach. For example,
companies like Apple give bonuses for good work
in addition to a salary.
Lastly, the Vroom-Jago model “focuses specifically on varying
degrees of participative leadership and how
each level of participation influences the quality and
accountability of decisions” (Daft, 2018, p. 81). The three
major components of the Vroom-Jago model are:
Help individuals not
only identify their goals
but assist in achieving
them.
Overall performance
will advance quickly
through the removal of
any obstacles.
The objective is to
receive rewards
periodically (too often
will defeat the purpose
of the theory).
Three ways of enabling individuals
(Daft, 2018)
Diagnostic
Questions
to Analyze
a Decision
Leader
Participation
Styles
Series of
Decision
Rules
Vroom-Jago model
(Daft, 2018)
MSL 6000, Psychological Foundations of Leadership 5
UNIT x STUDY GUIDE
Title
The Vroom-Jago model allows the leader’s preference based on
contingencies of quality, commitment,
knowledge, and expertise (Daft, 2018). Time, development, and
needed adjustments to particular situations
are taken into consideration. Each leadership approach and
respective model has a critical role in the
development and understanding of a leader and leadership. A
deeper understanding of the characteristics
and styles increases the effectiveness of developing attainable
skills to be a successful leader. It is important
to note that most leaders develop their skills and traits over
time, trusting their followers and focusing on being
continuous lifelong learners.
Reflecting on leadership approaches and models, we can look at
one company that is known for its
leadership: Disney. Walt Disney was an innovative leader. Walt
was involved in leadership but also gave
detailed insight for the creative process. Many of the
innovations Walt developed still remain today in the
parks, such as the Enchanted Tiki Room and the Carousel of
Progress. Many wonder if Walt Disney was ever
really focused on company profits as it seemed he was mostly
concerned with creating new and innovative
products. Disney has gone through several different leaders—all
with varying approaches—over the years.
Each leader has brought different strengths and weaknesses
while overseeing the company. Robert Igor is
the current leader at Disney. While Igor has traits that compare
to those of Disney himself, Igor is clearly
using a different approach for his leadership. Igor is mainly
concerned with the bigger picture of Disney
Corporation and what it takes to maintain profitability. Igor
does not actively participate in the artistic and
creative processes but, instead, relies on others for guidance.
Some may attempt to compare Robert Igor, the
current leader, to Walt Disney, the first leader and founder, but
the two leaders are different—as are their
approaches to leadership. If Walt Disney was still here with us
today, we might see a different leadership
approach and model used by Disney himself. This example
illustrates that two leaders can use different
approaches focusing on individual concerns/interests and yet
both be successful.
As we conclude Unit I, reflect on the idea that no two leaders
are exactly the same. There is not one particular
model or theory that can be applied to every single situation. It
is critical that you learn to evaluate all the
information you are learning to practically (and slowly) apply it
to your everyday and long-term goals. This
course will hopefully support you in that journey!
Reference
Daft, R. L. (with Lane, P. G.). (2018). The leadership
experience (7th ed.). Boston, MA: Cengage Learning.
Learning Activities (Nongraded)
Nongraded Learning Activities are provided to aid students in
their course of study. You are not required to
submit these to your instructor but are encouraged to keep a
copy for your personal files. If you have
questions, contact your instructor for further guidance and
information.
Apply the Concepts: Take the Self-Assessment!
You might be wondering, “How am I going to use this
information?” The first step in understanding how these
leadership concepts pertain to you is to explore what type of
leader you are or what type of leadership
qualities you possess. This will support your search and journey
in becoming a stronger leader.
To take the Chapter 1 and 3 Self-Assessments, click on Unit I in
the course navigation menu, and then click
on Nongraded Learning Activities. Here, you will find different
assessment tools. To get the most out of these
tools as you use them, take notes in order to track your
progress. Ask yourself:
qualities?
t are some things that might motivate me to focus on
improving my leadership skills?
Course Learning Outcomes for Unit IReading AssignmentUnit
LessonLearning Activities (Nongraded)Apply the Concepts:
Take the Self-Assessment!
bgloss.indd 312 11/26/2015 7:40:39 PM
Managing and Using
Information Systems
A STRATEGIC APPROACH
Sixth Edition
Keri E. Pearlson
KP Partners
Carol S. Saunders
W.A. Franke College of Business
Northern Arizona University
Dr. Theo and Friedl Schoeller Research Center for Business
and Society
Dennis F. Galletta
Katz Graduate School of Business
University of Pittsburgh, Pittsburgh, PA
ffirs.indd 1 12/1/2015 12:34:39 PM
VICE PRESIDENT & DIRECTOR George Hoffman
EXECUTIVE EDITOR Lise Johnson
DEVELOPMENT EDITOR Jennifer Manias
ASSOCIATE DEVELOPMENT EDITOR Kyla Buckingham
SENIOR PRODUCT DESIGNER Allison Morris
MARKET SOLUTIONS ASSISTANT Amanda Dallas
SENIOR DIRECTOR Don Fowley
PROJECT MANAGER Gladys Soto
PROJECT SPECIALIST Nichole Urban
PROJECT ASSISTANT Anna Melhorn
EXECUTIVE MARKETING MANAGER Christopher DeJohn
ASSISTANT MARKETING MANAGER Puja Katariwala
ASSOCIATE DIRECTOR Kevin Holm
SENIOR CONTENT SPECIALIST Nicole Repasky
PRODUCTION EDITOR Loganathan Kandan
This book was set in 10/12 Times Roman by SPi Global and
printed and bound by Courier Kendallville.
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return the evaluation copy to Wiley. Return instructions and a
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Outside of the United States, please contact your local sales
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ISBN: 978-1-119-24428-8 (BRV)
ISBN: 978-1-119-24807-1 (EVALC)
Library of Congress Cataloging-in-Publication Data
Names: Pearlson, Keri E. | Saunders, Carol S. | Galletta, Dennis
F.
Title: Managing and using information systems: a strategic
approach / Keri
E. Pearlson, Carol S. Saunders, Dennis F. Galletta.
Description: 6th edition. | Hoboken, NJ : John Wiley & Sons,
Inc., [2015] |
Includes index.
Identifiers: LCCN 2015041210 (print) | LCCN 2015041579
(ebook) | ISBN 9781119244288 (loose-leaf : alk. paper) |
ISBN 9781119255208 (pdf) | ISBN 9781119255246 (epub)
Subjects: LCSH: Knowledge management. | Information
technology—Management. |
Management information systems. | Electronic commerce.
Classification: LCC HD30.2 .P4 2015 (print) | LCC HD30.2
(ebook) | DDC 658.4/038011—dc23
LC record available at http://lccn.loc.gov/2015041210
Printing identification and country of origin will either be
included on this page and/or the end of the book. In addition, if
the ISBN on this
page and the back cover do not match, the ISBN on the back
cover should be considered the correct ISBN.
Printed in the United States of America
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To Yale & Hana
To Rusty, Russell, Janel & Kristin
To Carole, Christy, Lauren, Matt, Gracie, and Jacob
ffirs.indd 3 12/1/2015 12:34:39 PM
iv
Information technology and business are becoming
inextricably interwoven. I don ’ t think anybody can talk
meaningfully about one without the talking about the other.
Bill Gates
Microsoft 1
I ’ m not hiring MBA students for the technology you learn
while in school, but for your ability to learn about, use
and subsequently manage new technologies when you get out .
IT Executive
Federal Express 2
Give me a fi sh and I eat for a day; teach me to fi sh and I eat
for a lifetime .
Proverb
Managers do not have the luxury of abdicating participation in
decisions regarding information systems (IS).
Managers who choose to do so risk limiting their future
business options. IS are at the heart of virtually every
business interaction, process, and decision, especially when the
vast penetration of the Web over the last 20 years
is considered. Mobile and social technologies have brought IS
to an entirely new level within fi rms and between
individuals in their personal lives. Managers who let someone
else make decisions about their IS are letting
someone else make decisions about the very foundation of their
business. This is a textbook about managing and
using information written for current and future managers as a
way to introduce the broader implications of the
impact of IS.
The goal of this book is to assist managers in becoming
knowledgeable participants in IS decisions. Becoming
a knowledgeable participant means learning the basics and
feeling comfortable enough to ask questions. It does
not mean having all the answers or having a deep understanding
of all the technologies out in the world today. No
text will provide managers everything they need to know to
make important IS decisions. Some texts instruct on
the basic technical background of IS. Others discuss
applications and their life cycles. Some take a comprehensive
view of the management information systems (MIS) fi eld and
offer readers snapshots of current systems along with
chapters describing how those technologies are designed, used,
and integrated into business life.
This book takes a different approach. It is intended to provide
the reader a foundation of basic concepts relevant
to using and managing information. This text is not intended to
provide a comprehensive treatment on any one
aspect of MIS, for certainly each aspect is itself a topic of many
books. This text is not intended to provide readers
enough technological knowledge to make them MIS experts. It
is not intended to be a source of discussion of any
particular technology. This text is written to help managers
begin to form a point of view of how IS will help or
hinder their organizations and create opportunities for them.
The idea for this text grew out of discussions with colleagues
in the MIS area. Many faculties use a series of
case studies, trade and popular press readings, and Web sites to
teach their MIS courses. Others simply rely on one
of the classic texts, which include dozens of pages of diagrams,
frameworks, and technologies. The initial idea for
this text emerged from a core MIS course taught at the business
school at the University of Texas at Austin. That
course was considered an “appetizer” course—a brief
introduction into the world of MIS for MBA students. The
course had two main topics: using information and managing
information. At the time, there was no text like this
Preface
1 Bill Gates, Business @ the Speed of Thought. New York:
Warner Books, Inc. 1999.
2 Source: Private conversation with one of the authors.
fpref.indd 4 11/27/2015 4:21:12 PM
vPreface
one; hence, students had to purchase thick reading packets made
up of articles and case studies to provide them the
basic concepts. The course was structured to provide general
MBA students enough knowledge of the MIS field so
that they could recognize opportunities to use the rapidly
changing technologies available to them. The course was
an appetizer to the menu of specialty courses, each of which
went much more deeply into the various topics. But
completion of the appetizer course meant that students were
able to feel comfortable listening to, contributing to,
and ultimately participating in IS decisions.
Today, many students are digital natives—people who have
grown up using information technologies (IT) all
of their lives. That means that students come to their courses
with significantly more knowledge about things such
as tablets, apps, personal computers, smartphones, texting, the
Web, social networking, file downloading, online
purchasing, and social media than their counterparts in school
just a few years ago. This is a significant trend
that is projected to continue; students will be increasingly
knowledgeable the personal use of technologies. That
knowledge has begun to change the corporate environment.
Today’s digital natives expect to find in corporations
IS that provide at least the functionality they have at home. At
the same time, these users expect to be able to work
in ways that take advantage of the technologies they have grown
to depend on for social interaction, collaboration,
and innovation. We believe that the basic foundation is still
needed for managing and using IS, but we understand
that the assumptions and knowledge base of today’s students is
significantly different.
Also different today is the vast amount of information amassed
by firms, sometimes called the “big data” prob-
lem. Organizations have figured out that there is an enormous
amount of data around their processes, their interac-
tions with customers, their products, and their suppliers. These
organizations also recognize that with the increase
in communities and social interactions on the Web, there is
additional pressure to collect and analyze vast amounts
of unstructured information contained in these conversations to
identify trends, needs, and projections. We believe
that today’s managers face an increasing amount of pressure to
understand what is being said by those inside and
outside their corporations and to join those conversations
reasonably and responsibly. That is significantly different
from just a few years ago.
This book includes an introduction, 13 chapters of text and mini
cases, and a set of case studies, supplemental
readings, and teaching support on a community hub at
http://pearlsonandsaunders.com. The Hub provides faculty
members who adopt the text additional resources organized by
chapter, including recent news items with teaching
suggestions, videos with usage suggestions, blog posts and
discussions from the community, class activities, addi-
tional cases, cartoons, and more. Supplemental materials,
including longer cases from all over the globe, can be
found on the Web. Please visit
http://www.wiley.com/college/pearlson or the Hub for more
information.
The introduction to this text defends the argument presented in
this preface that managers must be knowledge-
able participants in making IS decisions. The first few chapters
build a basic framework of relationships among
business strategy, IS strategy, and organizational strategy and
explore the links among them. The strategy chapters
are followed by ones on work design and business processes
that discuss the use of IS. General managers also need
some foundation on how IT is managed if they are to
successfully discuss their next business needs with IT pro-
fessionals who can help them. Therefore, the remaining chapters
describe the basics of information architecture
and infrastructure, IT security, the business of IT, the
governance of the IS organization, IS sourcing, project
management, business analytics, and relevant ethical issues.
Given the acceleration of security breaches, readers will find a
new chapter on IS security in this sixth edition of
the text. Also, the material on analytics and “big data” has been
extensively updated to reflect the growing impor-
tance of the topic. Further, the chapter on work design has been
reorganized and extensively revised. Each of the
other chapters has been revised with newer concepts added,
discussions of more current topics fleshed out, and old,
outdated topics removed or at least their discussion shortened.
Similar to the fifth edition, every chapter begins with a
navigation “box” to help the reader understand the flow
and key topics of the chapter. Further, most chapters continue to
have a Social Business Lens or a Geographic Lens
feature. The Social Business Lens feature reflects on an issue
related to the chapter’s main topic but is enabled by or
fundamental to using social technologies in the enterprise. The
Geographic Lens feature offers a single idea about
a global issue related to the chapter’s main topic.
No text in the field of MIS is completely current. The process of
writing the text coupled with the publication
process makes a book somewhat out‐of‐date prior to delivery to
its audience. With that in mind, this text is written
fpref.indd 5 11/27/2015 4:21:12 PM
http://pearlsonandsaunders.com
http://www.wiley.com/college/pearlson
vi Preface
to summarize the “timeless” elements of using and managing
information. Although this text is complete in and
of itself, learning is enhanced by combining the chapters with
the most current readings and cases. Faculty are
encouraged to read the news items on the faculty Hub before
each class in case one might be relevant to the topic of
the day. Students are encouraged to search the Web for
examples related to topics and current events and bring them
into the discussions of the issues at hand. The format of each
chapter begins with a navigational guide, a short case
study, and the basic language for a set of important management
issues. These are followed by a set of managerial
concerns related to the topic. The chapter concludes with a
summary, key terms, a set of discussion questions, and
case studies.
Who should read this book? General managers interested in
participating in IS decisions will find this a good
reference resource for the language and concepts of IS.
Managers in the IS field will find the book a good resource
for beginning to understand the general manager’s view of how
IS affect business decisions. And IS students will
be able to use the book’s readings and concepts as the beginning
in their journey to become informed and success-
ful businesspeople.
The information revolution is here. Where do you fit in?
Keri E. Pearlson, Carol S. Saunders, and Dennis F. Galletta
fpref.indd 6 11/27/2015 4:21:12 PM
vii
Books of this nature are written only with the support of many
individuals. We would like to personally thank
several individuals who helped with this text. Although we ’ ve
made every attempt to include everyone who helped
make this book a reality, there is always the possibility of
unintentionally leaving some out. We apologize in
advance if that is the case here.
Thank you goes to Dr. William Turner of LeftFour , in Austin,
Texas, for help with the infrastructure and
architecture concepts and to Alan Shimel, Editor‐in‐Chief at
DevOps.com for initial ideas for the new security
chapter.
We also want to acknowledge and thank pbwiki.com. Without
its incredible and free wiki, we would have been
relegated to e‐mailing drafts of chapters back and forth, or
saving countless fi les in an external drop box without
any opportunity to include explanations or status messages. For
this edition, as with earlier editions, we wanted to
use Web 2.0 tools as we wrote about them. We found that
having used the wiki for our previous editions, we were
able to get up and running much faster than if we had to start
over without the platform.
We have been blessed with the help of our colleagues in this
and in previous editions of the book. They
helped us by writing cases and reviewing the text. Our thanks
continue to go out to Jonathan Trower, Espen
Andersen, Janis Gogan, Ashok Rho, Yvonne Lederer Antonucci,
E. Jose Proenca, Bruce Rollier, Dave Oliver, Celia
Romm, Ed Watson, D. Guiter, S. Vaught, Kala Saravanamuthu,
Ron Murch, John Greenwod, Tom Rohleder, Sam
Lubbe, Thomas Kern, Mark Dekker, Anne Rutkowski, Kathy
Hurtt, Kay Nelson, Janice Sipior, Craig Tidwell, and
John Butler. Although we cannot thank them by name, we also
greatly appreciate the comments of the anonymous
reviewers who have made a mark on this edition.
The book would not have been started were it not for the initial
suggestion of a wonderful editor in 1999 at John
Wiley & Sons, Beth Lang Golub. Her persistence and patience
helped shepherd this book through many previous
editions. We also appreciate the help of our current editor, Lise
Johnson. Special thanks go to Jane Miller, Gladys
Soto, Loganathan Kandan, and the conscientious JaNoel Lowe
who very patiently helped us through the revision
process. We also appreciate the help of all the staff at Wiley
who have made this edition a reality.
We would be remiss if we did not also thank Lars Linden for
the work he has done on the Pearlson and Saunders
Faculty Hub for this book. Our vision included a Web‐based
community for discussing teaching ideas and post-
ing current articles that supplement this text. Lars made that
vision into a reality starting with the last edition and
continuing through the present. Thank you, Lars!
From Keri: Thank you to my husband, Yale, and my daughter,
Hana, a business and computer science student at
Tulane University. Writing a book like this happens in the white
space of our lives—the time in between everything
else going on. This edition came due at a particularly frenetic
time, but they listened to ideas, made suggestions, and
celebrated the book ’ s completion with us. I know how lucky I
am to have this family. I love you guys!
From Carol: I would like to thank the Dr. Theo and Friedl
Schoeller Research Center of Business and Society for
their generous support of my research. Rusty, thank you for
being my compass and my release valve. I couldn ’ t do
it without you. Paraphrasing the words of an Alan Jackson song
(“Work in Progress”): I may not be what you want
me to be, but I ’ m trying really hard. Just be patient because I ’
m a work in progress. I love you, Kristin, Russell,
and Janel very much!
From Dennis: Thanks to my terrifi c family: my wife Carole,
my daughters Christy and Lauren, and my grand-
daughter Gracie. Also thanks to Matt and Jacob, two lovable
guys who take wonderful care of my daughters. Finally,
thanks to our parents and sisters ’ families. We are also blessed
with a large number of great, caring neighbors whom
we see quite often. I love you all, and you make it all
worthwhile!
Acknowledgments
fack.indd 7 11/27/2015 4:24:53 PM
viii
Dr. Keri E. Pearlson is President of KP Partners , an advisory
services fi rm working with business leaders on issues
related to the strategic use of information systems (IS) and
organizational design. She is an entrepreneur, teacher,
researcher, consultant, and thought leader. Dr. Pearlson has held
various positions in academia and industry. She
has been a member of the faculty at the Graduate School of
Business at the University of Texas at Austin where she
taught management IS courses to MBAs and executives and at
Babson College where she helped design the popular
IS course for the Fast Track MBA program. Dr. Pearlson has
held positions at the Harvard Business School, CSC,
nGenera (formerly the Concours Group), AT&T , and Hughes
Aircraft Company . While writing this edition, she was
the Research Director for the Analytics Leadership Consortium
at the International Institute of Analytics and was
named the Leader of the Year by the national Society of
Information Management (SIM) 2014.
Dr. Pearlson is coauthor of Zero Time: Providing Instant
Customer Value—Every Time, All the Time (John
Wiley, 2000). Her work has been published in numerous places
including Sloan Management Review, Academy
of Management Executive, and Information Resources
Management Journal . Many of her case studies have been
published by Harvard Business Publishing and are used all over
the world. She currently writes a blog on issues at
the intersection of IT and business strategy. It ’ s available at
www.kppartners.com.
Dr. Pearlson holds a Doctorate in Business Administration
(DBA) in Management Information Systems from
the Harvard Business School and both a Master ’ s Degree in
Industrial Engineering Management and a Bachelor ’ s
Degree in Applied Mathematics from Stanford University.
Dr. Carol S. Saunders is Research Professor at the W. A.
Franke College of Business, Northern Arizona
University in Flagstaff, Arizona, and is a Schoeller Senior
Fellow at the Friedrich‐Alexander University of
Erlangen‐Nuremberg, Germany. She served as General
Conference Chair of the International Conference on
Information Systems (ICIS) in 1999 and as Program Co‐Chair of
the Americas Conference of Information
Systems (AMCIS) in 2015. Dr. Saunders was the Chair of the
ICIS Executive Committee in 2000. For three
years, she served as Editor‐in‐Chief of MIS Quarterly . She is
currently on the editorial boards of Journal
of Strategic Information Systems and Organization Science
and serves on the advisory board of Business &
Information Systems Engineering. Dr. Saunders has been
recognized for her lifetime achievements by the
Association of Information Systems (AIS) with a LEO award
and by the Organizational Communication and
Information Systems Division of the Academy of Management.
She is a Fellow of the AIS.
Dr. Saunders ’ current research interests include the impact of
IS on power and communication, overload,
virtual teams, time, sourcing, and interorganizational linkages.
Her research is published in a number of journals
including MIS Quarterly, Information Systems Research,
Journal of MIS, Communications of the ACM, Journal
of Strategic Information Systems, Journal of the AIS, Academy
of Management Journal, Academy of Management
Review, Communications Research , and Organization Science
.
Dr. Dennis F. Galletta is Professor of Business Administration
at the Katz Graduate School of Business,
University of Pittsburgh in Pennsylvania. He is also the
Director of the Katz School ’ s doctoral program and has
taught IS Management graduate courses in Harvard ’ s summer
program each year since 2009. He obtained his
doctorate from the University of Minnesota in 1985 and is a
Certifi ed Public Accountant. Dr. Galletta served as
President of the Association of Information Systems (AIS) in
2007. Like Dr. Saunders, he is both a Fellow of
the AIS and has won a LEO lifetime achievement award. He was
a member of the AIS Council for fi ve years.
He also served in leadership roles for the International
Conference on Information Systems (ICIS): Program
Co‐Chair in 2005 (Las Vegas) and Conference Co‐Chair in 2011
(Shanghai); as Program Co‐Chair for the
About the Authors
fabout.indd 8 11/27/2015 4:25:42 PM
http://www.kppartners.com
ixAbout the Authors
Americas Conference on Information Systems (AMCIS) in
2003 (Tampa, Florida) and Inaugural Conference
Chair in 1995 (Pittsburgh). The Pittsburgh conference had
several “firsts” for an IS conference, including the first
on‐line submissions, reviews, conference registration and
payment, placement service, and storage of all papers
in advance on a website. Dr. Galletta served as ICIS Treasurer
from 1994 to 1998 and Chair of the ICIS Execu-
tive Committee in 2012. He taught IS courses on the Fall 1999
Semester at Sea voyage (Institute for Shipboard
Education) and established the concept of Special Interest
Groups in AIS in 2000. In 2014, he won an Emerald
Citation of Excellence for a co‐authored article that reached the
top 50 in citations and ratings from the fields of
management, business, and economics.
Dr. Galletta’s current research addresses online and mobile
usability and behavioral security issues such as
phishing, protection motivation, and antecedents of
security‐related decision making. He has published his research
in journals such as Management Science; MIS Quarterly;
Information Systems Research; Journal of MIS; European
Journal of Information Systems; Journal of the AIS;
Communications of the ACM; Accounting, Management, and
Information Technologies; Data Base; and Decision Sciences
and in proceedings of conferences such as ICIS,
AMCIS, and the Hawaii International Conference on Systems
Sciences. Dr. Galletta’s editorship includes working
as current and founding Coeditor in Chief for AIS Transactions
on Human‐Computer Interaction and on editorial
boards at journals such as MIS Quarterly, Information Systems
Research, Journal of MIS, and Journal of the AIS.
He is currently on the Pre‐eminent Scholars Board of Data Base.
He won a Developmental Associate Editor Award
at the MIS Quarterly in 2006. And during the off‐hours, Dr.
Galletta’s fervent hobby and obsession is digital pho-
tography, often squinting through his eyepiece to make portrait,
macro, Milky Way, and lightning photos when he
should be writing.
fabout.indd 9 11/27/2015 4:25:42 PM
x
Contents
Preface iv
Acknowledgments vii
About the Authors viii
Introduction 1
The Case for Participating in Decisions about Information
Systems 2
What If a Manager Doesn’t Participate? 5
Skills Needed to Participate Effectively in Information
Technology Decisions 6
Basic Assumptions 8
Economics of Information versus Economics of Things 12
Social Business Lens 14
Summary 15
Key Terms 16
1 The Information Systems Strategy Triangle 17
Brief Overview of Business Strategy Frameworks 19
Business Models versus Business Strategy 21
Brief Overview of Organizational Strategies 25
Brief Overview of Information Systems Strategy 26
Social Business Lens: Building a Social Business Strategy 27
Summary 28
Key Terms 29
Discussion Questions 29
Case Study 1‐1 Lego 30
Case Study 1‐2 Google 31
2 Strategic Use of Information Resources 33
Evolution of Information Resources 34
Information Resources as Strategic Tools 36
How Can Information Resources Be Used Strategically? 37
Sustaining Competitive Advantage 43
Social Business Lens: Social Capital 47
Strategic Alliances 47
Risks 49
Geographic Box: Mobile‐Only Internet Users Dominate
Emerging Countries 50
Co‐Creating IT and Business Strategy 50
ftoc.indd 10 11/27/2015 8:36:37 PM
xiContents
Summary 51
Key Terms 51
Discussion Questions 51
Case Study 2‐1 Groupon 52
Case Study 2‐2 Zipcar 53
3 Organizational Strategy and Information Systems 55
Information Systems and Organizational Design 58
Social Business Lens: Social Networks 63
Information Systems and Management Control Systems 63
Information Systems and Culture 66
Geographic Lens: Does National Culture Affect Firm
Investment in IS Training? 70
Summary 71
Key Terms 71
Discussion Questions 71
Case Study 3‐1 The Merger of Airtran by Southwest Airlines:
Will the Organizational Cultures Merge? 72
Case Study 3‐2 The FBI 73
4 Digital Systems and the Design of Work 75
Work Design Framework 77
How Information Technology Changes the Nature of Work 78
Social Business Lens: Activity Streams 84
Where Work Is Done and Who Does It: Mobile and Virtual
Work Arrangements 86
Geographic Lens: How Do People Around the World Feel About
Working Remotely? 88
Geographic Lens: Who Telecommutes? A Look at Global
Telecommuting Habits 89
Gaining Acceptance for IT‐Induced Change 94
Summary 96
Key Terms 97
Discussion Questions 97
Case Study 4‐1 Trash and Waste Pickup Services, Inc. 97
Case Study 4‐2 Social Networking: How Does IBM Do It? 98
5 Information Systems and Business Transformation 99
Silo Perspective versus Business Process Perspective 100
Building Agile and Dynamic Business Processes 104
Changing Business Processes 105
Workflow and Mapping Processes 107
Integration versus Standardization 109
Enterprise Systems 110
Geographic Lens: Global vs. Local ERPs 113
Social Business Lens: Crowdsourcing Changes Innovation
Processes 118
Summary 119
Key Terms 120
ftoc.indd 11 11/27/2015 8:36:37 PM
xii Contents
Discussion Questions 120
Case Study 5‐1 Santa Cruz …
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MSL 6000, Psychological Foundations of Leadership 1 .docx

  • 1. MSL 6000, Psychological Foundations of Leadership 1 Course Learning Outcomes for Unit I Upon completion of this unit, students should be able to: 1. Summarize the major psychological foundations of leadership. 1.1 Describe various foundational traits of leadership. 1.2 Articulate the importance of correlating personal leadership traits and models. 4. Evaluate various leadership models. 4.1 Analyze various leadership models. 4.2 Relate leadership models to a successful leader. Course/Unit Learning Outcomes Learning Activity 1.1 Unit Lesson Chapter 1 Unit I Essay
  • 2. 1.2 Unit Lesson Chapter 1 Unit I Essay 4.1 Unit Lesson Chapter 3 Unit I Essay 4.2 Unit Lesson Chapter 3 Unit I Essay Reading Assignment In addition to a physical copy of the textbook, each unit contains the eTextbook version of the assigned reading chapters. If preferred, click on Unit I in the course navigation menu to access the online version of the assigned chapters. Chapter 1: What Does It Mean to Be a Leader?, pp. 3–24 Chapter 3: Contingency Approaches to Leadership, pp. 65–88 UNIT I STUDY GUIDE Leadership Approaches and Models
  • 3. MSL 6000, Psychological Foundations of Leadership 2 UNIT x STUDY GUIDE Title Unit Lesson Welcome to Unit I! There are many types of leaders in the business world today; some are successful at leading their team to accomplish organizational goals, while others are not. Leadership is a popular and sought-after asset in business today. Therefore, it is important to understand what is required for one to become a good leader and acknowledge the important aspects of leadership. Being that leadership is complex and often misunderstood, those who are seeking to become effective leaders must possess a desire to establish meaningful relationships with others while leading with a vision. Daft (2018) describes leadership as the “ability to support and inspire the people who are needed to achieve organizational goals” (p. 5). This course covers the history and psychology of leadership studies, leadership vision, culture, courage, morals, and values. Our focus will be on leadership concepts and theories and correlating that knowledge into practical use. At the bottom of each study guide, there will be activities that focus on self-
  • 4. assessment, goal setting, and overcoming barriers—all related to how you can apply what you learn in the course to your everyday life. The activities are not graded but will assist in developing your own leadership skills. Let’s get started, as your next step in becoming a leader awaits. When we consider the psychology of leadership, the psychodynamic or systematic approach to studying human behavior, there are a myriad of ways of looking at leadership. The underlining forces that affect leaders’ ability to lead include their personalities, their feelings and emotions, and how they relate to others. Leaders’ personal perceptions, values, and beliefs influence the decisions they make in an organization and the decisions made by those they are influencing. Not only must leaders understand their own behaviors and what might be best for their organization, but they must also understand what drives and motivates their followers. Human capital refers to how people vary in their experiences, learning abilities, and emotions. Each person is different and unique and evolves at his or her own pace. Leaders must understand that the people they are leading are likely at different levels of their human development so a one-size-fits-all approach to leadership may not be effective. Understanding the skills, knowledge, and experiences (i.e., the human capital) of their employees will allow successful leaders to utilize tools such as coaching to further develop their teams. Understanding people is just one element required to become a successful leader. Leaders must also understand themselves and their own experiences, learning
  • 5. abilities, and emotions. Leadership is built on the leader’s experiences, knowledge, perceptions, values, and beliefs. No two leaders will be exactly alike. Leadership is constantly changing. Someone who was considered a good leader 20 years ago might not be a good leader today. In the past, charisma and intelligence were the psychological traits most valued in leadership. Today, as leaders continue to develop, a new psychology of leadership has emerged that focuses on effective leaders understanding the values, opinions, and skill sets of their followers. Effective leaders are those who can shape and nurture the actions of their followers. This differs significantly from the past psychology of leadership, which was top-down and autocratic in nature. The psychology of leadership in the 21st century focuses on leaders’ ability to forecast the actions of their followers through consensus, collaboration, and communication. Leaders who have a solid understanding of their followers and what motivates them to succeed will be well on their way to becoming successful leaders. Are leaders born or developed? There are valid arguments on both sides of this question; however, what we do know is to be successful, leaders need to be fluid and continually evolving. Leaders have little stability and are in constant change; some refer to this as a fundamental change. One paradigm shift has been leaders moving from being controllers to facilitators (Daft, 2018). Gone is the belief that leaders rule with strict enforcements without flexibility. As technology continues to change how we interact, so has the philosophy of how we think and lead. Some leaders still resist change in many forms.
  • 6. Daft’s Definition of LEADERSHIP: “An influence relationship among leaders and followers who intend real changes and outcomes that reflect their shared purposes” (Daft, 2018, p. 5) MSL 6000, Psychological Foundations of Leadership 3 UNIT x STUDY GUIDE Title “Jim Collins, author of Good to Great and Great by Choice, calls this new breed ‘Level 5 leaders’” (Daft, 2018, p. 13). These Level 5 Leaders, instead of having strong egos and larger-than-life personalities, seem shy and unconcerned with being in the spotlight. These leaders focus on the needs of their organization over their own personal needs (Daft, 2018). These leaders also take full accountability and responsibility for both their own actions and the actions of their organization. The relevance of this matters because one of the greatest challenges facing leaders today is the ever-changing world we live in that demands an ever-changing theory
  • 7. of leadership. All leaders should evolve. Can you think of a good example of a leader who evolved over time and became better with his or her leadership skills? To best understand the foundations of leadership, a closer look at the leadership approaches and theories are warranted. First, we will examine the contingency model. Daft (2018) states that “contingency means that one thing depends on other things, and for a leader to be effective there must be an appropriate fit between the leader’s behavior and style and the conditions in the situation” (p. 66). Realistically, there is no one-way-fits-all model for leaders. What works for one leader may not be effective for the other. Daft (2018) notes that Hersey and Blanchard broadened contingency through the developmental study labeled situational theory, which describes four different leadership styles: S1: directing style, S2: coaching style, S3: supporting style, and S4: entrusting style. Let it be noted that Hersey and Blanchard’s situational model favors followers’ characteristics with each quadrant evaluated per particular situation. Fiedler’s contingency model matches the leadership style (personal characteristics and motivation) with the most favorable situation posed to a group. This means that personality can play a dominant role in the situation and the group dynamics. The origin of Fiedler’s theory is to identify your leadership style as being
  • 8. naturally relationship-focused or naturally task-focused and then to analyze the situation to determine the most effective leadership style needed to resolve matters (Daft, 2018). S1: Directing Style • Demonstrates high concern for tasks • Demonstrates low concern for relationships • Provides detailed instructions • Closely supervises performance S2: Coaching Style • Demonstrates high concern for tasks • Demonstrates high concern for relationships
  • 9. • Provides both instruction and support • Explains decisions S3: Supporting Style • Demonstrates high concern for relationships • Demonstrates low concern for tasks • Urges creativity and participation S4: Entrusting Style • Demonstrates low concern for relationships • Demonstrates low concern for tasks • Provides little direction and support
  • 10. Situational model of leadership (Daft, 2018) MSL 6000, Psychological Foundations of Leadership 4 UNIT x STUDY GUIDE Title An additional theory is the path-goal theory, which states that a leader’s chosen style directly relates to a reward or compensation (Daft, 2018). The path-goal theory was first developed in 1971 by psychologist Robert House. Later, in 1996, House updated the major elements detailing the theory. The commonality of the theory is simply that there are three ways to enable individuals (as illustrated below). Note that each of these paths are directives through either the supportive, directive, participative, and/or achievement-oriented leadership approach. For example, companies like Apple give bonuses for good work in addition to a salary. Lastly, the Vroom-Jago model “focuses specifically on varying degrees of participative leadership and how each level of participation influences the quality and
  • 11. accountability of decisions” (Daft, 2018, p. 81). The three major components of the Vroom-Jago model are: Help individuals not only identify their goals but assist in achieving them. Overall performance will advance quickly through the removal of any obstacles. The objective is to receive rewards periodically (too often will defeat the purpose of the theory). Three ways of enabling individuals (Daft, 2018) Diagnostic Questions to Analyze a Decision Leader Participation
  • 12. Styles Series of Decision Rules Vroom-Jago model (Daft, 2018) MSL 6000, Psychological Foundations of Leadership 5 UNIT x STUDY GUIDE Title The Vroom-Jago model allows the leader’s preference based on contingencies of quality, commitment, knowledge, and expertise (Daft, 2018). Time, development, and needed adjustments to particular situations are taken into consideration. Each leadership approach and respective model has a critical role in the development and understanding of a leader and leadership. A deeper understanding of the characteristics and styles increases the effectiveness of developing attainable skills to be a successful leader. It is important to note that most leaders develop their skills and traits over time, trusting their followers and focusing on being continuous lifelong learners.
  • 13. Reflecting on leadership approaches and models, we can look at one company that is known for its leadership: Disney. Walt Disney was an innovative leader. Walt was involved in leadership but also gave detailed insight for the creative process. Many of the innovations Walt developed still remain today in the parks, such as the Enchanted Tiki Room and the Carousel of Progress. Many wonder if Walt Disney was ever really focused on company profits as it seemed he was mostly concerned with creating new and innovative products. Disney has gone through several different leaders—all with varying approaches—over the years. Each leader has brought different strengths and weaknesses while overseeing the company. Robert Igor is the current leader at Disney. While Igor has traits that compare to those of Disney himself, Igor is clearly using a different approach for his leadership. Igor is mainly concerned with the bigger picture of Disney Corporation and what it takes to maintain profitability. Igor does not actively participate in the artistic and creative processes but, instead, relies on others for guidance. Some may attempt to compare Robert Igor, the current leader, to Walt Disney, the first leader and founder, but the two leaders are different—as are their approaches to leadership. If Walt Disney was still here with us today, we might see a different leadership approach and model used by Disney himself. This example illustrates that two leaders can use different approaches focusing on individual concerns/interests and yet both be successful. As we conclude Unit I, reflect on the idea that no two leaders are exactly the same. There is not one particular model or theory that can be applied to every single situation. It is critical that you learn to evaluate all the information you are learning to practically (and slowly) apply it
  • 14. to your everyday and long-term goals. This course will hopefully support you in that journey! Reference Daft, R. L. (with Lane, P. G.). (2018). The leadership experience (7th ed.). Boston, MA: Cengage Learning. Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You are not required to submit these to your instructor but are encouraged to keep a copy for your personal files. If you have questions, contact your instructor for further guidance and information. Apply the Concepts: Take the Self-Assessment! You might be wondering, “How am I going to use this information?” The first step in understanding how these leadership concepts pertain to you is to explore what type of leader you are or what type of leadership qualities you possess. This will support your search and journey in becoming a stronger leader. To take the Chapter 1 and 3 Self-Assessments, click on Unit I in the course navigation menu, and then click on Nongraded Learning Activities. Here, you will find different assessment tools. To get the most out of these tools as you use them, take notes in order to track your progress. Ask yourself:
  • 15. qualities? t are some things that might motivate me to focus on improving my leadership skills? Course Learning Outcomes for Unit IReading AssignmentUnit LessonLearning Activities (Nongraded)Apply the Concepts: Take the Self-Assessment! bgloss.indd 312 11/26/2015 7:40:39 PM Managing and Using Information Systems A STRATEGIC APPROACH Sixth Edition Keri E. Pearlson KP Partners Carol S. Saunders W.A. Franke College of Business Northern Arizona University Dr. Theo and Friedl Schoeller Research Center for Business
  • 16. and Society Dennis F. Galletta Katz Graduate School of Business University of Pittsburgh, Pittsburgh, PA ffirs.indd 1 12/1/2015 12:34:39 PM VICE PRESIDENT & DIRECTOR George Hoffman EXECUTIVE EDITOR Lise Johnson DEVELOPMENT EDITOR Jennifer Manias ASSOCIATE DEVELOPMENT EDITOR Kyla Buckingham SENIOR PRODUCT DESIGNER Allison Morris MARKET SOLUTIONS ASSISTANT Amanda Dallas SENIOR DIRECTOR Don Fowley PROJECT MANAGER Gladys Soto PROJECT SPECIALIST Nichole Urban PROJECT ASSISTANT Anna Melhorn EXECUTIVE MARKETING MANAGER Christopher DeJohn ASSISTANT MARKETING MANAGER Puja Katariwala ASSOCIATE DIRECTOR Kevin Holm SENIOR CONTENT SPECIALIST Nicole Repasky PRODUCTION EDITOR Loganathan Kandan This book was set in 10/12 Times Roman by SPi Global and printed and bound by Courier Kendallville. This book is printed on acid free paper. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Our company is built on a foundation of principles that include
  • 17. responsibility to the communities we serve and where we live and work. In 2008, we launched a Corporate Citizenship Initiative, a global effort to address the environmental, social, economic, and ethical challenges we face in our business. Among the issues we are addressing are carbon impact, paper specifications and procurement, ethical conduct within our business and among our vendors, and community and charitable support. For more information, please visit our website: www.wiley.com/go/citizenship. Copyright © 2016, 2013, 2010, 2006, 2004, 2001 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be repro- duced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per‐copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923 (Web site: www.copyright.com). Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030‐5774, (201) 748‐6011, fax (201) 748‐6008, or online at: www. wiley.com/go/permissions. Evaluation copies are provided to qualified academics and professionals for review purposes only, for use in their courses during the next
  • 18. academic year. These copies are licensed and may not be sold or transferred to a third party. Upon completion of the review period, please return the evaluation copy to Wiley. Return instructions and a free of charge return shipping label are available at: www.wiley.com/go/ returnlabel. If you have chosen to adopt this textbook for use in your course, please accept this book as your complimentary desk copy. Outside of the United States, please contact your local sales representative. ISBN: 978-1-119-24428-8 (BRV) ISBN: 978-1-119-24807-1 (EVALC) Library of Congress Cataloging-in-Publication Data Names: Pearlson, Keri E. | Saunders, Carol S. | Galletta, Dennis F. Title: Managing and using information systems: a strategic approach / Keri E. Pearlson, Carol S. Saunders, Dennis F. Galletta. Description: 6th edition. | Hoboken, NJ : John Wiley & Sons, Inc., [2015] | Includes index. Identifiers: LCCN 2015041210 (print) | LCCN 2015041579 (ebook) | ISBN 9781119244288 (loose-leaf : alk. paper) | ISBN 9781119255208 (pdf) | ISBN 9781119255246 (epub) Subjects: LCSH: Knowledge management. | Information technology—Management. | Management information systems. | Electronic commerce. Classification: LCC HD30.2 .P4 2015 (print) | LCC HD30.2 (ebook) | DDC 658.4/038011—dc23 LC record available at http://lccn.loc.gov/2015041210 Printing identification and country of origin will either be included on this page and/or the end of the book. In addition, if
  • 19. the ISBN on this page and the back cover do not match, the ISBN on the back cover should be considered the correct ISBN. Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 ffirs.indd 2 12/1/2015 12:34:39 PM http://www.wiley.com/go/citizenship http://www.copyright.com http://www.wiley.com/go/permissions http://www.wiley.com/go/permissions http://www.wiley.com/go/returnlabel http://lccn.loc.gov/2015041210 To Yale & Hana To Rusty, Russell, Janel & Kristin To Carole, Christy, Lauren, Matt, Gracie, and Jacob ffirs.indd 3 12/1/2015 12:34:39 PM iv Information technology and business are becoming inextricably interwoven. I don ’ t think anybody can talk meaningfully about one without the talking about the other. Bill Gates Microsoft 1
  • 20. I ’ m not hiring MBA students for the technology you learn while in school, but for your ability to learn about, use and subsequently manage new technologies when you get out . IT Executive Federal Express 2 Give me a fi sh and I eat for a day; teach me to fi sh and I eat for a lifetime . Proverb Managers do not have the luxury of abdicating participation in decisions regarding information systems (IS). Managers who choose to do so risk limiting their future business options. IS are at the heart of virtually every business interaction, process, and decision, especially when the vast penetration of the Web over the last 20 years is considered. Mobile and social technologies have brought IS to an entirely new level within fi rms and between individuals in their personal lives. Managers who let someone else make decisions about their IS are letting someone else make decisions about the very foundation of their business. This is a textbook about managing and using information written for current and future managers as a way to introduce the broader implications of the impact of IS. The goal of this book is to assist managers in becoming knowledgeable participants in IS decisions. Becoming a knowledgeable participant means learning the basics and feeling comfortable enough to ask questions. It does not mean having all the answers or having a deep understanding of all the technologies out in the world today. No text will provide managers everything they need to know to
  • 21. make important IS decisions. Some texts instruct on the basic technical background of IS. Others discuss applications and their life cycles. Some take a comprehensive view of the management information systems (MIS) fi eld and offer readers snapshots of current systems along with chapters describing how those technologies are designed, used, and integrated into business life. This book takes a different approach. It is intended to provide the reader a foundation of basic concepts relevant to using and managing information. This text is not intended to provide a comprehensive treatment on any one aspect of MIS, for certainly each aspect is itself a topic of many books. This text is not intended to provide readers enough technological knowledge to make them MIS experts. It is not intended to be a source of discussion of any particular technology. This text is written to help managers begin to form a point of view of how IS will help or hinder their organizations and create opportunities for them. The idea for this text grew out of discussions with colleagues in the MIS area. Many faculties use a series of case studies, trade and popular press readings, and Web sites to teach their MIS courses. Others simply rely on one of the classic texts, which include dozens of pages of diagrams, frameworks, and technologies. The initial idea for this text emerged from a core MIS course taught at the business school at the University of Texas at Austin. That course was considered an “appetizer” course—a brief introduction into the world of MIS for MBA students. The course had two main topics: using information and managing information. At the time, there was no text like this Preface 1 Bill Gates, Business @ the Speed of Thought. New York:
  • 22. Warner Books, Inc. 1999. 2 Source: Private conversation with one of the authors. fpref.indd 4 11/27/2015 4:21:12 PM vPreface one; hence, students had to purchase thick reading packets made up of articles and case studies to provide them the basic concepts. The course was structured to provide general MBA students enough knowledge of the MIS field so that they could recognize opportunities to use the rapidly changing technologies available to them. The course was an appetizer to the menu of specialty courses, each of which went much more deeply into the various topics. But completion of the appetizer course meant that students were able to feel comfortable listening to, contributing to, and ultimately participating in IS decisions. Today, many students are digital natives—people who have grown up using information technologies (IT) all of their lives. That means that students come to their courses with significantly more knowledge about things such as tablets, apps, personal computers, smartphones, texting, the Web, social networking, file downloading, online purchasing, and social media than their counterparts in school just a few years ago. This is a significant trend that is projected to continue; students will be increasingly knowledgeable the personal use of technologies. That knowledge has begun to change the corporate environment. Today’s digital natives expect to find in corporations IS that provide at least the functionality they have at home. At the same time, these users expect to be able to work in ways that take advantage of the technologies they have grown
  • 23. to depend on for social interaction, collaboration, and innovation. We believe that the basic foundation is still needed for managing and using IS, but we understand that the assumptions and knowledge base of today’s students is significantly different. Also different today is the vast amount of information amassed by firms, sometimes called the “big data” prob- lem. Organizations have figured out that there is an enormous amount of data around their processes, their interac- tions with customers, their products, and their suppliers. These organizations also recognize that with the increase in communities and social interactions on the Web, there is additional pressure to collect and analyze vast amounts of unstructured information contained in these conversations to identify trends, needs, and projections. We believe that today’s managers face an increasing amount of pressure to understand what is being said by those inside and outside their corporations and to join those conversations reasonably and responsibly. That is significantly different from just a few years ago. This book includes an introduction, 13 chapters of text and mini cases, and a set of case studies, supplemental readings, and teaching support on a community hub at http://pearlsonandsaunders.com. The Hub provides faculty members who adopt the text additional resources organized by chapter, including recent news items with teaching suggestions, videos with usage suggestions, blog posts and discussions from the community, class activities, addi- tional cases, cartoons, and more. Supplemental materials, including longer cases from all over the globe, can be found on the Web. Please visit http://www.wiley.com/college/pearlson or the Hub for more information.
  • 24. The introduction to this text defends the argument presented in this preface that managers must be knowledge- able participants in making IS decisions. The first few chapters build a basic framework of relationships among business strategy, IS strategy, and organizational strategy and explore the links among them. The strategy chapters are followed by ones on work design and business processes that discuss the use of IS. General managers also need some foundation on how IT is managed if they are to successfully discuss their next business needs with IT pro- fessionals who can help them. Therefore, the remaining chapters describe the basics of information architecture and infrastructure, IT security, the business of IT, the governance of the IS organization, IS sourcing, project management, business analytics, and relevant ethical issues. Given the acceleration of security breaches, readers will find a new chapter on IS security in this sixth edition of the text. Also, the material on analytics and “big data” has been extensively updated to reflect the growing impor- tance of the topic. Further, the chapter on work design has been reorganized and extensively revised. Each of the other chapters has been revised with newer concepts added, discussions of more current topics fleshed out, and old, outdated topics removed or at least their discussion shortened. Similar to the fifth edition, every chapter begins with a navigation “box” to help the reader understand the flow and key topics of the chapter. Further, most chapters continue to have a Social Business Lens or a Geographic Lens feature. The Social Business Lens feature reflects on an issue related to the chapter’s main topic but is enabled by or fundamental to using social technologies in the enterprise. The Geographic Lens feature offers a single idea about a global issue related to the chapter’s main topic.
  • 25. No text in the field of MIS is completely current. The process of writing the text coupled with the publication process makes a book somewhat out‐of‐date prior to delivery to its audience. With that in mind, this text is written fpref.indd 5 11/27/2015 4:21:12 PM http://pearlsonandsaunders.com http://www.wiley.com/college/pearlson vi Preface to summarize the “timeless” elements of using and managing information. Although this text is complete in and of itself, learning is enhanced by combining the chapters with the most current readings and cases. Faculty are encouraged to read the news items on the faculty Hub before each class in case one might be relevant to the topic of the day. Students are encouraged to search the Web for examples related to topics and current events and bring them into the discussions of the issues at hand. The format of each chapter begins with a navigational guide, a short case study, and the basic language for a set of important management issues. These are followed by a set of managerial concerns related to the topic. The chapter concludes with a summary, key terms, a set of discussion questions, and case studies. Who should read this book? General managers interested in participating in IS decisions will find this a good reference resource for the language and concepts of IS. Managers in the IS field will find the book a good resource for beginning to understand the general manager’s view of how IS affect business decisions. And IS students will be able to use the book’s readings and concepts as the beginning
  • 26. in their journey to become informed and success- ful businesspeople. The information revolution is here. Where do you fit in? Keri E. Pearlson, Carol S. Saunders, and Dennis F. Galletta fpref.indd 6 11/27/2015 4:21:12 PM vii Books of this nature are written only with the support of many individuals. We would like to personally thank several individuals who helped with this text. Although we ’ ve made every attempt to include everyone who helped make this book a reality, there is always the possibility of unintentionally leaving some out. We apologize in advance if that is the case here. Thank you goes to Dr. William Turner of LeftFour , in Austin, Texas, for help with the infrastructure and architecture concepts and to Alan Shimel, Editor‐in‐Chief at DevOps.com for initial ideas for the new security chapter. We also want to acknowledge and thank pbwiki.com. Without its incredible and free wiki, we would have been relegated to e‐mailing drafts of chapters back and forth, or saving countless fi les in an external drop box without any opportunity to include explanations or status messages. For this edition, as with earlier editions, we wanted to use Web 2.0 tools as we wrote about them. We found that having used the wiki for our previous editions, we were able to get up and running much faster than if we had to start
  • 27. over without the platform. We have been blessed with the help of our colleagues in this and in previous editions of the book. They helped us by writing cases and reviewing the text. Our thanks continue to go out to Jonathan Trower, Espen Andersen, Janis Gogan, Ashok Rho, Yvonne Lederer Antonucci, E. Jose Proenca, Bruce Rollier, Dave Oliver, Celia Romm, Ed Watson, D. Guiter, S. Vaught, Kala Saravanamuthu, Ron Murch, John Greenwod, Tom Rohleder, Sam Lubbe, Thomas Kern, Mark Dekker, Anne Rutkowski, Kathy Hurtt, Kay Nelson, Janice Sipior, Craig Tidwell, and John Butler. Although we cannot thank them by name, we also greatly appreciate the comments of the anonymous reviewers who have made a mark on this edition. The book would not have been started were it not for the initial suggestion of a wonderful editor in 1999 at John Wiley & Sons, Beth Lang Golub. Her persistence and patience helped shepherd this book through many previous editions. We also appreciate the help of our current editor, Lise Johnson. Special thanks go to Jane Miller, Gladys Soto, Loganathan Kandan, and the conscientious JaNoel Lowe who very patiently helped us through the revision process. We also appreciate the help of all the staff at Wiley who have made this edition a reality. We would be remiss if we did not also thank Lars Linden for the work he has done on the Pearlson and Saunders Faculty Hub for this book. Our vision included a Web‐based community for discussing teaching ideas and post- ing current articles that supplement this text. Lars made that vision into a reality starting with the last edition and continuing through the present. Thank you, Lars! From Keri: Thank you to my husband, Yale, and my daughter,
  • 28. Hana, a business and computer science student at Tulane University. Writing a book like this happens in the white space of our lives—the time in between everything else going on. This edition came due at a particularly frenetic time, but they listened to ideas, made suggestions, and celebrated the book ’ s completion with us. I know how lucky I am to have this family. I love you guys! From Carol: I would like to thank the Dr. Theo and Friedl Schoeller Research Center of Business and Society for their generous support of my research. Rusty, thank you for being my compass and my release valve. I couldn ’ t do it without you. Paraphrasing the words of an Alan Jackson song (“Work in Progress”): I may not be what you want me to be, but I ’ m trying really hard. Just be patient because I ’ m a work in progress. I love you, Kristin, Russell, and Janel very much! From Dennis: Thanks to my terrifi c family: my wife Carole, my daughters Christy and Lauren, and my grand- daughter Gracie. Also thanks to Matt and Jacob, two lovable guys who take wonderful care of my daughters. Finally, thanks to our parents and sisters ’ families. We are also blessed with a large number of great, caring neighbors whom we see quite often. I love you all, and you make it all worthwhile! Acknowledgments fack.indd 7 11/27/2015 4:24:53 PM viii Dr. Keri E. Pearlson is President of KP Partners , an advisory
  • 29. services fi rm working with business leaders on issues related to the strategic use of information systems (IS) and organizational design. She is an entrepreneur, teacher, researcher, consultant, and thought leader. Dr. Pearlson has held various positions in academia and industry. She has been a member of the faculty at the Graduate School of Business at the University of Texas at Austin where she taught management IS courses to MBAs and executives and at Babson College where she helped design the popular IS course for the Fast Track MBA program. Dr. Pearlson has held positions at the Harvard Business School, CSC, nGenera (formerly the Concours Group), AT&T , and Hughes Aircraft Company . While writing this edition, she was the Research Director for the Analytics Leadership Consortium at the International Institute of Analytics and was named the Leader of the Year by the national Society of Information Management (SIM) 2014. Dr. Pearlson is coauthor of Zero Time: Providing Instant Customer Value—Every Time, All the Time (John Wiley, 2000). Her work has been published in numerous places including Sloan Management Review, Academy of Management Executive, and Information Resources Management Journal . Many of her case studies have been published by Harvard Business Publishing and are used all over the world. She currently writes a blog on issues at the intersection of IT and business strategy. It ’ s available at www.kppartners.com. Dr. Pearlson holds a Doctorate in Business Administration (DBA) in Management Information Systems from the Harvard Business School and both a Master ’ s Degree in Industrial Engineering Management and a Bachelor ’ s Degree in Applied Mathematics from Stanford University. Dr. Carol S. Saunders is Research Professor at the W. A.
  • 30. Franke College of Business, Northern Arizona University in Flagstaff, Arizona, and is a Schoeller Senior Fellow at the Friedrich‐Alexander University of Erlangen‐Nuremberg, Germany. She served as General Conference Chair of the International Conference on Information Systems (ICIS) in 1999 and as Program Co‐Chair of the Americas Conference of Information Systems (AMCIS) in 2015. Dr. Saunders was the Chair of the ICIS Executive Committee in 2000. For three years, she served as Editor‐in‐Chief of MIS Quarterly . She is currently on the editorial boards of Journal of Strategic Information Systems and Organization Science and serves on the advisory board of Business & Information Systems Engineering. Dr. Saunders has been recognized for her lifetime achievements by the Association of Information Systems (AIS) with a LEO award and by the Organizational Communication and Information Systems Division of the Academy of Management. She is a Fellow of the AIS. Dr. Saunders ’ current research interests include the impact of IS on power and communication, overload, virtual teams, time, sourcing, and interorganizational linkages. Her research is published in a number of journals including MIS Quarterly, Information Systems Research, Journal of MIS, Communications of the ACM, Journal of Strategic Information Systems, Journal of the AIS, Academy of Management Journal, Academy of Management Review, Communications Research , and Organization Science . Dr. Dennis F. Galletta is Professor of Business Administration at the Katz Graduate School of Business, University of Pittsburgh in Pennsylvania. He is also the Director of the Katz School ’ s doctoral program and has taught IS Management graduate courses in Harvard ’ s summer
  • 31. program each year since 2009. He obtained his doctorate from the University of Minnesota in 1985 and is a Certifi ed Public Accountant. Dr. Galletta served as President of the Association of Information Systems (AIS) in 2007. Like Dr. Saunders, he is both a Fellow of the AIS and has won a LEO lifetime achievement award. He was a member of the AIS Council for fi ve years. He also served in leadership roles for the International Conference on Information Systems (ICIS): Program Co‐Chair in 2005 (Las Vegas) and Conference Co‐Chair in 2011 (Shanghai); as Program Co‐Chair for the About the Authors fabout.indd 8 11/27/2015 4:25:42 PM http://www.kppartners.com ixAbout the Authors Americas Conference on Information Systems (AMCIS) in 2003 (Tampa, Florida) and Inaugural Conference Chair in 1995 (Pittsburgh). The Pittsburgh conference had several “firsts” for an IS conference, including the first on‐line submissions, reviews, conference registration and payment, placement service, and storage of all papers in advance on a website. Dr. Galletta served as ICIS Treasurer from 1994 to 1998 and Chair of the ICIS Execu- tive Committee in 2012. He taught IS courses on the Fall 1999 Semester at Sea voyage (Institute for Shipboard Education) and established the concept of Special Interest Groups in AIS in 2000. In 2014, he won an Emerald Citation of Excellence for a co‐authored article that reached the top 50 in citations and ratings from the fields of management, business, and economics.
  • 32. Dr. Galletta’s current research addresses online and mobile usability and behavioral security issues such as phishing, protection motivation, and antecedents of security‐related decision making. He has published his research in journals such as Management Science; MIS Quarterly; Information Systems Research; Journal of MIS; European Journal of Information Systems; Journal of the AIS; Communications of the ACM; Accounting, Management, and Information Technologies; Data Base; and Decision Sciences and in proceedings of conferences such as ICIS, AMCIS, and the Hawaii International Conference on Systems Sciences. Dr. Galletta’s editorship includes working as current and founding Coeditor in Chief for AIS Transactions on Human‐Computer Interaction and on editorial boards at journals such as MIS Quarterly, Information Systems Research, Journal of MIS, and Journal of the AIS. He is currently on the Pre‐eminent Scholars Board of Data Base. He won a Developmental Associate Editor Award at the MIS Quarterly in 2006. And during the off‐hours, Dr. Galletta’s fervent hobby and obsession is digital pho- tography, often squinting through his eyepiece to make portrait, macro, Milky Way, and lightning photos when he should be writing. fabout.indd 9 11/27/2015 4:25:42 PM x Contents Preface iv Acknowledgments vii About the Authors viii
  • 33. Introduction 1 The Case for Participating in Decisions about Information Systems 2 What If a Manager Doesn’t Participate? 5 Skills Needed to Participate Effectively in Information Technology Decisions 6 Basic Assumptions 8 Economics of Information versus Economics of Things 12 Social Business Lens 14 Summary 15 Key Terms 16 1 The Information Systems Strategy Triangle 17 Brief Overview of Business Strategy Frameworks 19 Business Models versus Business Strategy 21 Brief Overview of Organizational Strategies 25 Brief Overview of Information Systems Strategy 26 Social Business Lens: Building a Social Business Strategy 27 Summary 28 Key Terms 29 Discussion Questions 29 Case Study 1‐1 Lego 30 Case Study 1‐2 Google 31 2 Strategic Use of Information Resources 33 Evolution of Information Resources 34 Information Resources as Strategic Tools 36 How Can Information Resources Be Used Strategically? 37 Sustaining Competitive Advantage 43 Social Business Lens: Social Capital 47 Strategic Alliances 47 Risks 49
  • 34. Geographic Box: Mobile‐Only Internet Users Dominate Emerging Countries 50 Co‐Creating IT and Business Strategy 50 ftoc.indd 10 11/27/2015 8:36:37 PM xiContents Summary 51 Key Terms 51 Discussion Questions 51 Case Study 2‐1 Groupon 52 Case Study 2‐2 Zipcar 53 3 Organizational Strategy and Information Systems 55 Information Systems and Organizational Design 58 Social Business Lens: Social Networks 63 Information Systems and Management Control Systems 63 Information Systems and Culture 66 Geographic Lens: Does National Culture Affect Firm Investment in IS Training? 70 Summary 71 Key Terms 71 Discussion Questions 71 Case Study 3‐1 The Merger of Airtran by Southwest Airlines: Will the Organizational Cultures Merge? 72 Case Study 3‐2 The FBI 73 4 Digital Systems and the Design of Work 75 Work Design Framework 77 How Information Technology Changes the Nature of Work 78 Social Business Lens: Activity Streams 84
  • 35. Where Work Is Done and Who Does It: Mobile and Virtual Work Arrangements 86 Geographic Lens: How Do People Around the World Feel About Working Remotely? 88 Geographic Lens: Who Telecommutes? A Look at Global Telecommuting Habits 89 Gaining Acceptance for IT‐Induced Change 94 Summary 96 Key Terms 97 Discussion Questions 97 Case Study 4‐1 Trash and Waste Pickup Services, Inc. 97 Case Study 4‐2 Social Networking: How Does IBM Do It? 98 5 Information Systems and Business Transformation 99 Silo Perspective versus Business Process Perspective 100 Building Agile and Dynamic Business Processes 104 Changing Business Processes 105 Workflow and Mapping Processes 107 Integration versus Standardization 109 Enterprise Systems 110 Geographic Lens: Global vs. Local ERPs 113 Social Business Lens: Crowdsourcing Changes Innovation Processes 118 Summary 119 Key Terms 120 ftoc.indd 11 11/27/2015 8:36:37 PM xii Contents Discussion Questions 120 Case Study 5‐1 Santa Cruz …