Assignment: Management Associated Risks

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Assignment: Management Associated Risks

Assignment: Management Associated Risks

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Failing to deliver what users want: Systems that do not meet the needs of the firm’s target market are likely to fail. For example, in 2011, Netflix leadership divided the company into two, calling the DVD‐rental business Qwikster and keeping the streaming business under Netflix. But customers complained, and worse, closed their accounts, and less than a month later, Qwikster was gone. Netflix reunited both businesses under the Netflix name.16

• Running afoul of the law: Using IS strategically may promote litigation if the IS results in the violation of laws or regulations. Years ago, American Airlines’ reservation system, Sabre, was challenged by the airline’s competitors on the grounds that it violated antitrust laws. More recently, in 2010, Google said it was no longer willing to adhere to Chinese censorship. The Chinese government responded by banning searching via all Google search sites (not only google.cn but all language versions, e.g., google.co.jp. google.com.au), including Google Mobile. Google then created an automatic redirect to Google Hong Kong, which stopped June 30, 2010, so that Google would not lose its license to operate in China. Today, Google, Inc. is acting in compliance with the Chinese government’s censorship laws and Chinese users of Google.cn see filtered results as before. More recently, European antitrust officials claimed that Google’s search engine unfairly generates results that favor its shopping sites over those of its competitors and that its Android mobile phone operating system unfairly features Google as the default search engine.17

15 Marty Toohey, “More Than 100,000 Austin Energy Customers Hit by Billing Errors from $55 Million IBM System,” Statesman (February 18, 2012), http://www.statesman.com/news/local/more‐than‐100‐000‐austin‐energy‐customers‐hit‐2185031.html (accessed February 20, 2012). 16 Qwikster = Gonester (October 10, 2011), http://www.breakingcopy.com/netflix‐kills‐qwikster (accessed February 20, 2012). 17 “Viewed as a Monopoly in Europe, Google Takes on Role as a Wireless Trust‐Buster in U.S.,” The New York Times (May 8, 2015), B1, B6.

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50 Strategic Use of Information Resources

Every business decision has risks associated with it. However, with the large expenditure of IT resources needed to create sustainable, strategic advantages, the manager should carefully identify and then design a mitigation strat- egy to manage the associated risks.

 

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