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Chapter 5Chapter 5

Organizational Structures that Organizational Structures that Support Strategic InitiativesSupport Strategic Initiatives

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Learning Outcomes

5.1 Compare the responsibilities of a chief information officer (CIO), chief technology officer (CTO), chief privacy officer (CPO), chief security officer (CSO), and chief knowledge office (CKO)

5.2 Explain the gap between IT people and business people and the primary reason this gap exists

5.3 Define the relationship between information security and ethics

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Organizational Structures

• Organizational employees must work closely together to develop strategic initiatives that create competitive advantages

• Ethics and security are two fundamental building blocks that organizations must base their businesses upon

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IT Roles and Responsibilities

• Information technology is a relatively new functional area, having only been around formally for around 40 years

• Recent IT-related strategic positions:– Chief Information Officer (CIO)– Chief Technology Officer (CTO)– Chief Security Officer (CSO)– Chief Privacy Officer (CPO)– Chief Knowledge Office (CKO)

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IT Roles and Responsibilities

• Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives

• Broad CIO functions include:– Manager – ensuring the delivery of all IT projects, on

time and within budget– Leader – ensuring the strategic vision of IT is in line

with the strategic vision of the organization– Communicator – building and maintaining strong

executive relationships

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IT Roles and Responsibilities

• Average CIO compensation by industry

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IT Roles and Responsibilities

• What concerns CIOs the most

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IT Roles and Responsibilities

• Chief Technology Officer (CTO) – responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

• Chief Security Officer (CSO) – responsible for ensuring the security of IT systems

• Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information

• Chief Knowledge Office (CKO) - responsible for collecting, maintaining, and distributing the organization’s knowledge

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IT Roles and Responsibilities

• Skills pivotal for success in executive IT roles

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The Gap Between Business Personnel and IT Personnel • Business personnel possess expertise in

functional areas such as marketing, accounting, and sales

• IT personnel have the technological expertise

• This typically causes a communications gap between the business personnel and IT personnel

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Improving Communications

• Business personnel must seek to increase their understanding of IT

• IT personnel must seek to increase their understanding of the business

• It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

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Organizational Fundamentals – Ethics and Security

• Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful

• In recent years, such events as the Enron and Martha Stewart, along with 9/11 have shed new light on the meaning of ethics and security

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Ethics

• Ethics – the principles and standards that guide our behavior toward other people

• Privacy is a major ethical issue– Privacy – the right to be left alone when you

want to be, to have control over your own personal possessions, and not to be observed without your consent

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Ethics

• Issues affected by technology advances– Intellectual property– Copyright– Fair use doctrine– Pirated software– Counterfeit software

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Ethics

• One of the main ingredients in trust is privacy

• Primary reasons privacy issues lost trust for e-business

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Security

• Organizational information is intellectual capital - it must be protected

• Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

• E-business automatically creates tremendous information security risks for organizations

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Security

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Security

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OPENING CASE STUDY QUESTIONSApple – Merging Technology, Business, and

Entertainment

1. Predict what might have happened to Apple if its top executives had not supported investments in IT

2. Explain why it would be unethical for Apple to allow its customers to download free music from iTunes

3. Evaluate the effects on Apple’s business if it failed to secure its customer’s information and it was accidentally posted to an anonymous Web site

4. Explain why Apple should have a CIO, CTO, CPO, CSO, and CKO

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CHAPTER FIVE CASEExecutive Dilemmas in the Information Age

• The vast array of business initiatives from SCM to ERP make it clear the IT is a business strategy and is quickly becoming a survival issue

• This case explores several examples of executive IT issues resulting from IT

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Chapter Five Case Questions

1. Explain why understanding technology, especially in the areas of security and ethics, is important for a CEO. How do CEO’s actions affect the organizational culture?

2. Identify why executives in nontechnological industries need to worry about technology and its potential business ramifications

3. Describe why continuously learning about technology allows an executive to better analyze threats and opportunities

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Chapter Five Case Questions

4. Identify three things that a CTO, CPO, or CSO could do to prevent the above issues

5. Describe how the Nike+iPod SportKit caused security issues for the company. Do you think Nike or Apple acted unethically when they developed the SportKit? Why or why not?

McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, All Rights Reserved

BUSINESS DRIVEN TECHNOLOGY

UNIT ONE CLOSING

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UNIT CLOSING CASE ONEHow Levi’s Got its Jeans into Wal-Mart

1. Explain how Levi Strauss & Co. achieved business success through the use of information, information technology, and people

2. Using Porter’s Five Force Model analyze Levi Strauss’s buyer power and supplier power. Which of Porter’s Five Forces did Levi Strauss address through the implementation of its updated supply chain management system?

3. Which of the three generic strategies is the company following?

4. Evaluate how Levi Strauss can gain business intelligence through the implementation of a customer relationship management system

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UNIT CLOSING CASE ONEHow Levi’s Got its Jeans into Wal-Mart

5. How can Levi Strauss use efficiency IT metrics and effectiveness IT metrics to improve its business?

6. David Bergen, Levi CIO, put together a cross-functional team of key managers from IT, finance, and sales to transform the company’s systems to meet Wal-Mart’s requirements. Analyze the relationships between these three business areas and determine why Bergen chose them to be a part of his cross-functional team

7. Predict what might happen to Wal-Mart’s business if it failed to secure its partner’s information and all sales information for all products was accidentally posted to an anonymous Web site

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UNIT CLOSING CASE TWO Business 2.0: Bad Business Decisions

1. Explain why understanding information technology and management information systems can help you achieve business success-or more importantly, help you avoid business disasters-regardless of your major