Foundations of Computers and Digital Business

Introduction

Computers are no longer confined to specialist laboratories or information-technology departments. They support accounting, marketing, operations, human-resource management, finance, logistics, customer service, entrepreneurship and public administration. A modern organization depends on computing not simply to process information, but also to coordinate work, create products, analyze markets, communicate with stakeholders and participate in digital ecosystems.

For business students, computer literacy therefore means more than knowing how to operate software. It involves understanding how computers represent data, how hardware and software work together, how computing systems are classified, how organizations use information systems, and how digital technologies create both opportunities and risks. This chapter develops those foundations.

Learning Objectives

After studying this chapter, you should be able to:

1. trace major stages in the evolution of computers;
2. explain the characteristics and basic operation of a computer system;
3. classify computers according to purpose, capacity, portability and mode of operation;
4. identify the major hardware, software, data and human components of a computing system;
5. use essential computer terminology accurately;
6. explain binary data representation and common units of digital information;
7. analyze the role of computing in organizations and the digital economy; and
8. evaluate important managerial, ethical and governance issues associated with digital business.

1. The Nature of a Computer System

A computer is an electronic, programmable system that accepts data as input, processes it according to instructions, stores it when required and produces information as output. The term computer system is broader than the physical machine. It includes hardware, software, data, procedures, networks and people.

Data are recorded facts, symbols or observations that have not yet been interpreted for a particular decision. Examples include a product code, a sales quantity, a date or a customer rating. Information is data that have been processed, organized or interpreted so that they are meaningful and useful. A list of daily sales transactions is data; a report showing the most profitable product category is information.

Computing usually follows an input–process–output cycle, supported by storage and communication. For example, a point-of-sale system receives product and payment data, checks prices and inventory, records the transaction, prints or sends a receipt, and updates management reports. The quality of the output depends on the quality of the input, the correctness of the processing rules and the reliability of the system.

Figure: The input–process–output cycle, supported by storage, people and communication.

2. Evolution of Computers

Computer evolution is commonly described through technological generations. The boundaries are approximate, and technologies overlap; nevertheless, the model helps explain the movement from large, expensive machines to pervasive, connected and intelligent systems.

2.1 Early calculating devices

Before electronic computers, people used tools such as the abacus for arithmetic. Mechanical calculators later used gears and wheels. In the nineteenth century, Charles Babbage proposed the Difference Engine and Analytical Engine. Although the Analytical Engine was not completed as planned, its design included ideas resembling a processor, memory, input, output and programmability. Ada Lovelace recognized that such a machine could manipulate symbols according to instructions, not merely perform arithmetic.

Punched-card systems, developed for data processing, represented information through holes in cards. Herman Hollerith’s tabulating equipment was used to process census data and influenced the development of commercial data-processing organizations.

2.2 First generation: vacuum tubes

First-generation electronic computers, used mainly during the 1940s and early 1950s, employed vacuum tubes for switching and amplification. They were physically large, consumed substantial electricity, generated heat and were less reliable than later systems. Programming was often performed in machine language, and input frequently used punched cards or paper tape.

These machines demonstrated the feasibility of electronic computation for scientific, military and census applications, but their cost and operating complexity restricted access.

2.3 Second generation: transistors

Transistors replaced many vacuum tubes during the 1950s and 1960s. A transistor was smaller, faster, more reliable and more energy-efficient. Computers became more practical for universities, governments and large businesses. Assembly language and early high-level languages such as FORTRAN and COBOL improved programming productivity. Business applications expanded into payroll, inventory and accounting.

2.4 Third generation: integrated circuits

An integrated circuit places multiple electronic components on a semiconductor chip. During the 1960s and 1970s, integrated circuits increased processing capability while reducing physical size and cost. Operating systems became more sophisticated, allowing organizations to manage jobs, files and multiple users. Mainframes could support large-scale transaction processing for banks, airlines, governments and corporations.

2.5 Fourth generation: microprocessors and personal computers

The microprocessor integrated the central processing unit onto a single chip. This development enabled personal computers, affordable workstations and embedded controllers. Graphical user interfaces, spreadsheets, word processors and database applications transformed office work. The computer moved from a centralized organizational resource to an individual productivity tool.

2.6 Fifth generation and contemporary computing

The expression fifth generation is used inconsistently. It may refer to efforts to develop knowledge-based systems and artificial intelligence, or more generally to modern computing based on highly integrated processors, networking, mobile devices, cloud platforms and intelligent software. Unlike the earlier generations, contemporary computing is not defined by one component alone. It is characterized by connectivity, virtualization, distributed services, automation, data analytics and increasingly capable AI systems.

Cloud computing provides on-demand access to computing resources such as storage, processing power and software through networks. Mobile computing combines portable hardware, wireless communication, sensors and applications. The Internet of Things connects physical objects that can sense, communicate and sometimes act. Edge computing processes selected data near the location where it is generated, reducing delay and network traffic.

The historical trend is not simply “smaller and faster.” Computing has also become more accessible, interconnected and embedded in organizational processes. At the same time, dependence on digital infrastructure has increased vulnerability to outages, cyberattacks, privacy violations and technological concentration.

3. Characteristics of Computers

Several characteristics explain why computers are valuable in business.

Speed. Computers can perform large numbers of operations in a very short time. This permits real-time payment authorization, rapid search and high-volume data analysis.

Accuracy. A computer can execute instructions consistently. However, accuracy is not automatic: incorrect data, defective software or poorly designed rules can produce inaccurate results. The principle “garbage in, garbage out” emphasizes that reliable output requires valid input and appropriate processing.

Diligence and consistency. Computers do not become tired or bored when repeating a well-defined task. A payroll system can apply the same calculation rules to thousands of records, subject to correct configuration and lawful policy.

Storage capacity. Digital systems can store substantial quantities of documents, transactions, images and multimedia. Storage capacity does not eliminate the need for retention policies, classification, backup and secure disposal.

Programmability and versatility. The same general-purpose computer may support financial analysis, communication, design and inventory management by executing different software.

Connectivity. Networks allow computers to share data and services across departments, locations and organizational boundaries. Connectivity supports collaboration and digital markets but also expands the attack surface.

Automation. Once a process is specified, a system can perform it with limited human intervention. Automation is most effective for structured, repetitive tasks. It does not remove the need for human judgment in ambiguous, ethical or exceptional situations.

Lack of independent judgment. A computer follows its instructions and data. It does not possess human common sense merely because it produces sophisticated output. AI systems may generate useful predictions or content, but they can also reproduce bias, hallucinate information or make errors. Human oversight remains important for consequential decisions.

4. Classification of Computers

No single classification is sufficient. A business analyst should select the classification relevant to the decision being made.

4.1 By purpose

General-purpose computers perform many types of tasks through installed software. Personal computers, laptops and servers are general-purpose systems.

Special-purpose computers are designed for a narrow function. Examples include an automated teller machine controller, a traffic-light controller or a medical monitoring device. An embedded system is a computer built into a larger product, such as a vehicle or washing machine.

4.2 By size and processing capacity

Supercomputers are high-performance systems used for complex scientific simulations, climate modeling, advanced engineering and some large-scale AI workloads. Their defining feature is computational performance, not merely physical size.

Mainframes are designed for reliable, secure and high-volume processing, often supporting many simultaneous users and transactions. Banks, airlines and government agencies may use mainframe technology for core operations.

Servers provide services to other computers or devices over a network. A server may manage files, websites, databases, email or applications. Server capacity varies widely.

Workstations are powerful single-user computers intended for engineering, design, scientific analysis or media production.

Personal computers include desktop and laptop systems used by individuals. They support office productivity, learning, communication and specialized business applications.

Mobile computers include tablets and smartphones. They combine computing, communication, cameras, location services and sensors in portable forms.

4.3 By mode of operation

An analog computer represents information through continuously varying physical quantities. Analog systems have been used in measurement and control applications.

A digital computer represents information using discrete values, primarily binary digits. Most modern business systems are digital.

A hybrid computer combines analog measurement with digital processing, such as a medical or industrial system that reads continuous signals and analyzes them digitally.

4.4 By deployment model

An on-premises system is operated using infrastructure owned or directly controlled by the organization. It may offer control and customization but requires investment in facilities, maintenance and security.

A cloud-based system uses computing resources supplied through a network by a provider. Common service models include Infrastructure as a Service, Platform as a Service and Software as a Service. Cloud adoption can improve scalability and speed of deployment, but organizations must assess vendor dependence, data location, availability, contract terms and compliance.

5. Components of a Computer System

5.1 Hardware

Hardware is the physical equipment of a computer system. It includes the following functional units.

Input devices capture data and commands. Examples are keyboards, mice, touchscreens, barcode readers, microphones, cameras and sensors.

The central processing unit (CPU) executes instructions. Its arithmetic and logic unit performs calculations and comparisons; the control unit coordinates instruction execution; registers hold small amounts of data needed immediately. CPU performance depends on multiple factors, including architecture, number of cores, memory access and workload—not only clock frequency.

Primary memory is directly accessible by the processor. Random-access memory (RAM) temporarily holds programs and data in active use. It is generally volatile, meaning its contents are lost when power is removed. Read-only memory (ROM) and firmware store instructions needed for starting or controlling hardware; modern firmware may be stored in rewritable non-volatile memory.

Secondary storage retains data when power is off. Hard disk drives, solid-state drives, optical media and removable flash storage differ in speed, capacity, durability and cost. Organizations should use backups because storage devices can fail, be damaged or become encrypted by malware.

Output devices present results. Monitors, printers, speakers and actuators translate digital results into forms people or machines can use.

Communication hardware includes network interface cards, switches, routers, wireless access points and modems. These devices enable data exchange among systems.

5.2 Software

Software consists of programs and associated instructions. System software manages hardware and provides a platform for other programs. Operating systems, device drivers, utilities and firmware are examples.

An operating system manages processes, memory, files, devices, users and security. It provides interfaces through which applications and users interact with hardware.

Application software performs user-oriented tasks such as word processing, enterprise resource planning, customer relationship management, accounting, analytics and online commerce.

Programming software includes compilers, interpreters, debuggers and development environments used to create programs. A compiler translates source code into a form that can be executed; an interpreter executes or translates instructions during operation, depending on the language and implementation.

Software may be proprietary, open source or a combination. Open-source availability does not mean that software has no license obligations or security risks. Organizations must review licensing, maintenance, support and vulnerability management.

5.3 Data, procedures and people

Data are a core organizational resource. A database organizes related data for controlled access and updating. Metadata are data about data—for example, the creator, date, format or meaning of a document.

Procedures are documented rules for using and managing a system, including approval, backup, access and recovery procedures. People include end users, managers, system analysts, programmers, database administrators, cybersecurity professionals and external stakeholders. A technically excellent system can fail if users are not trained, incentives are misaligned or responsibilities are unclear.

6. Essential Computer Terminology

A bit is a binary digit with a value of 0 or 1. A byte is commonly a group of eight bits. A program is a set of instructions. An algorithm is a finite, ordered method for solving a problem or completing a task. A file is a named collection of related data. A folder or directory organizes files.

A database is an organized collection of related data managed for access and updating. A network connects devices so that they can communicate and share resources. The Internet is a global network of interconnected networks using common communication protocols. The World Wide Web is a system of interlinked resources accessed through the Internet, usually with web browsers.

A user interface is the means through which a person interacts with a system. A graphical user interface uses visual elements such as windows and icons; a command-line interface uses typed commands. Firmware is software embedded in hardware and used for low-level control. Virtualization presents simulated computing resources, allowing multiple virtual systems to run on one physical machine.

A protocol is a set of rules governing communication. Authentication verifies identity; authorization determines permitted actions; encryption transforms data to protect confidentiality; and a backup is a separate copy used for restoration. These terms should not be confused: authentication does not itself grant permission, and a synchronized copy is not always an adequate backup if unwanted changes are replicated.

7. Data Representation and Digital Information

Digital computers use binary representation because electronic circuits can reliably distinguish two states, such as low and high voltage. A binary digit is a bit. A sequence of bits can represent numbers, text, images, sound, instructions and control signals, provided that an agreed encoding scheme is used.

7.1 Number systems

The decimal system has base 10 and uses digits 0 through 9. The binary system has base 2 and uses 0 and 1. In a positional number system, each position has a value determined by a power of the base. For example:

The subscript identifies the number base. The calculation assumes ordinary positional notation and illustrates why binary can represent decimal quantities.

Hexadecimal, base 16, uses digits 0–9 and letters A–F. One hexadecimal digit represents four bits, so hexadecimal provides a compact way to read binary values. For example, binary 1010 1100 is hexadecimal AC.

7.2 Units of capacity

A byte commonly contains eight bits. In standardized decimal prefixes, 1 kilobyte (kB) = 1,000 bytes, 1 megabyte (MB) = 1,000,000 bytes and 1 gigabyte (GB) = 1,000,000,000 bytes. Binary prefixes are different: 1 kibibyte (KiB) = 1,024 bytes, 1 mebibyte (MiB) = 1,024 KiB and 1 gibibyte (GiB) = 1,024 MiB. Manufacturers and operating systems may use different conventions, so specifications should be read carefully.

7.3 Text, images and sound

Text is represented through character encodings. ASCII provides a limited character set, while Unicode supports writing systems and symbols from around the world. UTF-8 is a widely used variable-length Unicode encoding. A mismatch between encoding schemes can produce unreadable characters.

A digital image is represented as pixels. Each pixel has a color value; color depth indicates how many bits are used to represent that value. Increasing resolution and color depth generally increases storage requirements, although compression can reduce file size. Lossless compression preserves the original information; lossy compression removes some information to achieve a smaller file.

Digital sound is created by sampling an analog sound wave at regular intervals and quantizing the measurements. The sampling rate is measured in samples per second, or hertz, and bit depth describes the number of bits used for each sample. Higher values can improve potential fidelity but increase storage and transmission requirements. The required storage also depends on the number of channels and duration.

For uncompressed audio, a useful relationship is:

The sampling rate is in samples per second, bit depth is in bits per sample, channels is dimensionless and duration is in seconds. Compression and file-format overhead are excluded. For example, a 44,100-sample/second, 16-bit, two-channel recording lasting 60 seconds requires:

44,100 × 16 × 2 × 60 = 84,672,000 bits,

or 10,584,000 bytes before compression and overhead, using 8 bits per byte.

8. Computing in Organizations and the Digital Economy

Organizations use computing at operational, managerial and strategic levels. Transaction-processing systems record routine events such as sales, purchases, payroll and inventory movements. Management-information systems summarize operational data into regular reports. Decision-support and business-intelligence systems help managers analyze trends, scenarios and performance indicators. Enterprise systems integrate functions such as finance, procurement, production and human resources.

Digital business extends beyond internal automation. E-commerce enables transactions through digital channels. Digital platforms connect multiple groups, such as buyers and sellers, drivers and passengers, or content creators and audiences. Cloud services let small firms obtain capabilities that once required substantial capital. Data analytics supports segmentation, demand forecasting, fraud detection and process improvement. Artificial intelligence can assist with classification, recommendation, language processing and prediction, but its outputs require validation and governance.

Computing changes organizational processes in three related ways. Digitization converts analog information into digital form, such as scanning a paper record. Digitalization uses digital technologies to improve an existing process, such as automated invoice approval. Digital transformation involves broader changes to business models, capabilities, culture and stakeholder relationships, such as a retailer becoming an omnichannel service platform.

The digital economy creates value through data, software, connectivity, intellectual property and network effects. A network effect occurs when a service becomes more valuable as more participants use it, although the strength and direction of the effect depend on the platform and user group. Digital goods may have high development costs but low marginal distribution costs. This can support rapid scale, while also encouraging market concentration and raising questions about competition.

Managers should evaluate technology investments through business outcomes rather than novelty. Relevant questions include: What problem is being solved? Who benefits? What data are required? What risks arise? How will performance be measured? Can the organization integrate the system with existing processes? What happens if the provider fails or the system is unavailable?

9. Illustrative Case: A Small Retailer’s Digital Transition

Background. GreenBasket, a fictional regional grocery retailer, operated five stores. Each store maintained separate spreadsheets for sales and stock. Managers often discovered stockouts after customers complained, while excess perishable inventory generated waste.

Problem. The retailer wanted better visibility without purchasing a complex enterprise system that employees could not use. It also needed to protect customer and employee information.

Analysis. The process review identified inaccurate product codes, inconsistent units of measure and delayed data entry as major causes of unreliable reports. The problem was therefore not solved merely by buying faster computers. It required common data definitions, connected point-of-sale systems, inventory procedures and staff training.

Approach. GreenBasket adopted a cloud-based point-of-sale and inventory application. Barcode scanners captured product identifiers; transactions updated a shared database; managers received dashboards showing sales velocity and stock levels. Access was role-based, backups were tested, and a supplier contract specified availability, data ownership, breach notification and export rights. A pilot was conducted in one store before wider deployment.

Outcome. In the illustrative scenario, stock visibility improved and purchasing decisions became more timely. However, the retailer also discovered that automated reorder recommendations were poor when product records were incomplete. Managers retained responsibility for unusual events, such as seasonal promotions and supplier disruptions.

Learning points. First, information quality depends on data governance and process discipline. Second, cloud adoption transfers some technical responsibilities to a provider but does not transfer managerial accountability. Third, automation should support—not eliminate—professional judgment. Finally, implementation success requires people, procedures and change management alongside hardware and software.

10. Challenges, Ethics and Governance

Computing creates responsibilities as well as benefits.

Privacy and data protection. Organizations should collect only necessary data, explain purposes, restrict access, retain information appropriately and protect it from unauthorized disclosure. Legal requirements vary by jurisdiction, but privacy should be treated as a design and governance issue rather than an afterthought.

Security. Threats include phishing, malware, ransomware, unauthorized access, insider misuse and denial-of-service attacks. Basic controls include strong authentication, least-privilege access, patching, encryption where appropriate, network protection, employee awareness, logging, tested backups and incident-response plans.

Accuracy and bias. Automated decisions can disadvantage groups if training data are incomplete or historical decisions were discriminatory. Organizations should test systems, document assumptions, provide appropriate human review and establish routes for correction or appeal.

Accessibility and inclusion. Digital services should be usable by people with different abilities, languages, devices and levels of connectivity. Digital transformation that excludes customers or employees can worsen inequality.

Intellectual property and professional conduct. Software, databases, images and written content may be protected by copyright, license or contractual restrictions. Users should not copy, share or repurpose digital material without authorization. AI-generated material also requires checking for accuracy, confidentiality, ownership and inappropriate disclosure of organizational information.

Reliability and continuity. Important systems require defined availability objectives, redundancy where justified, recovery procedures and tested continuity plans. A backup that has never been restored in a test should not be assumed reliable.

Environmental impact. Manufacturing devices, operating data centers and disposing of electronic waste consume resources. Organizations can extend equipment life, purchase efficiently, manage energy use, choose responsible suppliers and dispose of equipment securely and lawfully.

11. Best Practices for Business Users and Managers

1. Define the business problem before selecting technology.
2. Establish common data definitions, ownership and quality checks.
3. Match system capacity and security controls to business risk.
4. Use unique accounts, strong authentication and least-privilege access.
5. Keep software updated and maintain tested backups.
6. Evaluate vendors for reliability, support, portability, privacy and contractual accountability.
7. Pilot significant systems and measure outcomes against a baseline.
8. Train users and communicate process changes clearly.
9. Keep human oversight for high-impact or uncertain decisions.
10. Review systems periodically for performance, accessibility, bias, compliance and continuing business value.

Chapter Summary

Computers are programmable electronic systems that accept input, process data, store records and produce output. Their evolution moved from mechanical tools and vacuum-tube machines to transistorized systems, integrated circuits, microprocessors, personal computers, mobile devices, cloud platforms and connected intelligent systems. Computers are valued for speed, consistency, storage, programmability, connectivity and automation, but they do not independently guarantee accurate judgment or ethical outcomes.

Computers may be classified by purpose, capacity, portability, operating mode and deployment model. A complete computer system includes hardware, system software, application software, data, procedures, networks and people. Binary representation underlies digital computing; bits, bytes, character encodings, pixels and sampled sound provide different ways to represent information. Organizations use computing for transactions, integration, reporting, analysis, communication, e-commerce and digital transformation.

Successful digital business depends on more than acquiring technology. It requires sound data, appropriate processes, capable people, governance, security, privacy protection, accessibility and continuous evaluation. Computing can create efficiency and new business models, but responsible managers must also address bias, cyber risk, dependence on providers, environmental effects and the limits of automation.

Key Terms

Computer: A programmable electronic system that accepts, processes, stores and outputs data.

Computer system: Hardware, software, data, procedures, networks and people working together.

Data: Recorded facts or observations before interpretation for a specific purpose.

Information: Processed or interpreted data that is meaningful and useful.

Hardware: The physical components of a computing system.

Software: Programs and instructions used to operate hardware or perform tasks.

CPU: The central processing unit that executes instructions and coordinates processing.

RAM: Volatile primary memory that holds active programs and data.

Storage: Technology used to retain data and programs, especially when power is off.

Operating system: System software that manages hardware, files, processes, memory and users.

Database: An organized collection of related data managed for access and updating.

Algorithm: A finite, ordered method for solving a problem or completing a task.

Bit: A binary digit with a value of 0 or 1.

Byte: A commonly used group of eight bits.

Binary: A base-two system using the digits 0 and 1.

Network: A connection of devices that permits communication and resource sharing.

Cloud computing: On-demand network access to shared computing resources and services.

Digitization: Conversion of analog information into digital form.

Digital transformation: Broad organizational change enabled by digital technologies.

Artificial intelligence: Computing methods that perform tasks associated with capabilities such as prediction, language processing or pattern recognition.

Review Questions

Short Answer Questions

1. What is the difference between data and information?
2. Identify two important differences between RAM and secondary storage.
3. What replaced vacuum tubes in second-generation computers?
4. Define an embedded system and provide one example.
5. Why is binary representation used in digital computers?

Long Answer Questions

1. Explain the major stages in computer evolution and relate each stage to changes in business use.
2. Discuss the hardware, software, data, procedure and human components of a computer system.
3. Compare general-purpose, special-purpose, mainframe, personal and cloud-based computing systems.
4. Explain how computing supports operational, managerial and strategic activities in an organization.
5. Discuss the ethical, security, privacy and governance responsibilities associated with digital business.

Analytical / Application Questions

1. A retailer has inaccurate inventory reports despite purchasing new computers. Analyze likely causes and recommend a systems-based solution.
2. A company plans to use an AI application to screen job applicants. Identify the data, governance, fairness, privacy and human-oversight issues that management should evaluate.
3. Compare an on-premises system with a cloud-based system for a growing small business. Recommend a decision framework rather than an automatic choice.

Multiple Choice Questions with Answers

Question 1

Which sequence best describes the basic operation of a computer system?

A. Output, input, storage, deletion

B. Input, processing, output, with storage as needed

C. Storage, printing, input, interpretation

D. Communication, deletion, processing, input

Correct Answer: B. Input, processing, output, with storage as needed

Question 2

Which technology was a major feature of second-generation computers?

A. Vacuum tubes

B. Transistors

C. Microprocessors

D. Cloud platforms

Correct Answer: B. Transistors

Question 3

Which characteristic means that a computer can perform repetitive tasks consistently without becoming tired?

A. Diligence

B. Judgment

C. Creativity

D. Independence

Correct Answer: A. Diligence

Question 4

Which classification best describes a computer built into a vehicle-control system?

A. General-purpose mainframe

B. Special-purpose embedded system

C. Supercomputer network

D. Analog personal computer

Correct Answer: B. Special-purpose embedded system

Question 5

What is the principal role of an operating system?

A. To manufacture computer hardware

B. To manage hardware resources and provide a platform for applications

C. To convert every file into an image

D. To replace all human decision-making

Correct Answer: B. To manage hardware resources and provide a platform for applications

Question 6

Using positional binary notation, what is (1011)₂ in decimal?

A. 9

B. 10

C. 11

D. 12

Correct Answer: C. 11

Question 7

Which statement correctly distinguishes authentication from authorization?

A. Authentication verifies identity; authorization determines permitted actions.

B. Authentication encrypts data; authorization creates backups.

C. Authentication stores files; authorization manages hardware.

D. Authentication measures speed; authorization measures capacity.

Correct Answer: A. Authentication verifies identity; authorization determines permitted actions.

Question 8

A 60-second uncompressed recording uses a 44,100 Hz sampling rate, 16-bit depth and two channels. Ignoring overhead, which amount is required?

A. 84,672,000 bits

B. 10,584,000 bits

C. 1,411,200 bits

D. 5,292,000 bytes

Correct Answer: A. 84,672,000 bits

Question 9

Which example best illustrates digital transformation rather than simple digitization?

A. Scanning a paper invoice into a PDF

B. Typing a paper report into a word processor

C. Redesigning a retailer’s business model around connected digital channels and data

D. Printing a digital document

Correct Answer: C. Redesigning a retailer’s business model around connected digital channels and data

Question 10

Why should managers retain oversight of an automated business decision system?

A. Computers cannot store any business data.

B. Automated systems may reflect poor data, bias, errors or unusual circumstances.

C. Automation always makes processing slower.

D. Cloud systems cannot communicate with users.

Correct Answer: B. Automated systems may reflect poor data, bias, errors or unusual circumstances.