Information Systems in Global Business Today

Information Systems in Global Business Today 1) Internet advertising is growing at a rate of more than 25 percent a year. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.1 2) Developing a new product, fulfilling an order, and hiring a new employee are examples of business processes. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.3 3) A fully digital firm produces only digital goods or services. Answer: FALSE AACSB: Reflective thinking skills CASE: Content Objective: 1.1 4) A business model describes how a company produces, delivers, and sells a product or service to create wealth. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.3 5) Information technology (IT) consists of all the hardware that a firm needs to use in order to achieve its business objectives, whereas information systems consist of all the software and business processes needed. Answer: FALSE AACSB: Use of information technology CASE: Content Objective: 1.3 1 6) Computers are only part of an information system. Answer: TRUE AACSB: Use of information technology CASE: Content Objective: 1.3 7) Information systems literacy describes the behavioral approach to information systems, whereas computer literacy describes the technical approach. Answer: FALSE AACSB: Use of information technology CASE: Content Objective: 1.3 8) The dimensions of information systems are management, organizations, and information technology. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.3 9) Knowledge workers assist with paperwork at all levels of the firm. Answer: FALSE AACSB: Reflective thinking skills CASE: Content Objective: 1.2 10) In order to understand how a specific business firm uses information systems, you need to know something about the hierarchy and culture of the company. Answer: TRUE AACSB: Analytic skills CASE: Analysis Objective: 1.3 11) Business processes are logically related tasks for accomplishing tasks that have been formally encoded by an organization. Answer: FALSE AACSB: Reflective thinking skills CASE: Content Objective: 1.3 2 12) There are four major business functions: Sales and marketing; manufacturing and production; finance and accounting; and information technology. Answer: FALSE Page Ref AACSB: Reflective thinking skills CASE: Content Objective: 1.2 13) A network requires at least two computers and a shared resource, such as a printer. Answer: FALSE AACSB: Use of information technology CASE: Content Objective: 1.3 14) A substantial part of management responsibility is creative work driven by new knowledge and information. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.2 15) Intranets allow firms to work easily with third-party suppliers and vendors. Answer: FALSE AACSB: Use of information technology CASE: Content Objective: 1.2 16) An IT infrastructure provides the platform on which the firm can build its information systems. Answer: TRUE AACSB: Use of information technology CASE: Content Objective: 1.3 17) UPS's use of Web-based tools that allow customers to embed UPS functions such as tracking and cost calculations into their own Web sites was an information systems solution used to achieve customer intimacy. Answer: TRUE AACSB: Analytic skills CASE: Analysis Objective: 1.2 18) Government and private sector standards are examples of complementary social assets 3 required to optimize returns from IT investments. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.4 19) A firm that invests in efficient business processes is making an investment in organizational complementary assets. Answer: TRUE AACSB: Reflective thinking skills CASE: Content Objective: 1.4 20) In the behavioral approach to information systems, technology is ignored in favor of understanding the psychological, social, and economic impacts of systems. Answer: FALSE AACSB: Reflective thinking skills CASE: Content Objective: 1.3 21) The six important business objectives of information technology are new products, services, and business models; customer and supplier intimacy; survival; competitive advantage; operational excellence; and A) improved flexibility. B) improved decision making. C) improved business practices. D) improved efficiency. Answer: B AACSB: Use of information technology CASE: Content Objective: 1.2 4 22) Dell Computer's use of information systems to improve efficiency and implement "mass customization" techniques to maintain consistent profitability and an industry lead illustrates which business objective? A) improved flexibility B) improved business practices C) competitive advantage D) survival Answer: C AACSB: Use of information technology CASE: Synthesis Objective: 1.2 23) The use of information systems because of necessity describes the business objective of A) survival. B) improved business practices. C) competitive advantage. D) improved flexibility. Answer: A AACSB: Use of information technology CASE: Content Objective: 1.2 24) Which of the following choices may lead to competitive advantage: (1) new products, services, and business models; (2) charging less for superior products; (3) responding to customers in real time? A) 1 only B) 1 and 2 C) 2 and 3 D) 1, 2, and 3 Answer: D AACSB: Analytic skills CASE: Analysis Objective: 1.2 5 25) Verizon's implementation of a Web-based digital dashboard to provide managers with real-time information such as customer complaints is an example of A) improved flexibility. B) improved decision making. C) improved efficiency. D) customer and supplier intimacy. Answer: B AACSB: Use of information technology CASE: Analysis Objective: 1.2 26) The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates the use of information systems to achieve which business objective? A) improved efficiency B) customer and supplier intimacy C) survival D) competitive advantage Answer: C AACSB: Use of information technology CASE: Analysis Objective: 1.2 27) An information system can be defined technically as a set of interrelated components that collect, process, store, and distribute information to support A) decision making and control in an organization. B) communications and data flow. C) managers analyzing the organization's raw data. D) the creation of new products and services. Answer: A AACSB: Use of information technology CASE: Content Objective: 1.2 28) The three activities in an information system that produce the information organizations use to control operations are A) information retrieval, research, and analysis. B) input, output, and feedback. C) input, processing, and output. D) data analysis, processing, and feedback. Answer: C AACSB: Use of information technology CASE: Content Objective: 1.3 6 29) Order data for baseball tickets and bar code data are examples of A) raw input. B) raw output. C) customer and product data. D) sales information. Answer: A AACSB: Use of information technology CASE: Content Objective: 1.3 30) The average number of tickets sold daily online is an example of A) input. B) raw data. C) meaningful information. D) feedback. Answer: C AACSB: Use of information technology CASE: Analysis Objective: 1.3 31) Output A) is feedback that has been processed to create meaningful information. B) is information that is returned to appropriate members of the organization to help them evaluate the input stage. C) transfers data to the people who will use it or to the activities for which it will be used. D) transfers processed information to the people who will use it or to the activities for which it will be used. Answer: D AACSB: Use of information technology CASE: Content Objective: 1.3 32) Converting raw data into a more meaningful form is called A) capturing. B) processing. C) organizing. D) feedback. Answer: B AACSB: Use of information technology CASE: Content Objective: 1.3 7 33) An example of raw data from a national chain of automobile stores would be A) an average of 13 Toyotas are sold daily in Kentucky. B) 30 percent increase in Toyota RAV 4 sales during September in Kentucky. C) 1 Toyota RAV4 sold March 3, 2008 in Louisville, Kentucky. D) all of the above. Answer: C AACSB: Use of information technology CASE: Analysis Objective: 1.3 34) The field that deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm is called A) information systems literacy. B) information systems architecture. C) management information systems. D) information technology infrastructure. Answer: C AACSB: Reflective thinking skills CASE: Content Objective: 1.5 35) In a hierarchical organization, the upper levels consist of A) managerial and professional employees. B) managerial, professional, and technical employees. C) professional and operational employees. D) managerial, professional, and operational employees. Answer: B AACSB: Reflective thinking skills CASE: Content Objective: 1.2 36) Which of the six strategic business objectives did the NBA's use of Synergy Sports Technology help to achieve? A) customer and supplier intimacy B) improved decision making C) new products and services D) operational excellence Answer: B AACSB: Analytic skills CASE: Analysis Objective: 1.2 8 37) The fundamental set of assumptions, values, and ways of doing things that has been accepted by most of a company's members is called its A) culture. B) environment. C) atmosphere. D) values. Answer: A AACSB: Reflective thinking skills CASE: Content Objective: 1.2 38) Thomas Friedman's declaration that the world was now "flat" meant that A) the Internet has reduced the economic advantages of developed countries. B) globalization is starting to offer less advantage to large corporations. C) the global economy is increasingly commanded by fewer and larger corporations. D) global capitalism is homogenizing culture and business practices throughout the world. Answer: A AACSB: Reflective thinking skills CASE: Content Objective: 1.2 39) Data management technology consists of the A) physical hardware and media used by an organization for storing data. B) detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. C) software governing the organization of data on physical storage media. D) hardware and software used to transfer data. Answer: C AACSB: Use of information technology CASE: Content Objective: 1.3 40) The hardware and software used to transfer data in an organization is called A) data management technology. B) networking and data management technology. C) data and telecommunications technology. D) networking and telecommunications technology. Answer: D AACSB: Use of information technology CASE: Content Objective: 1.3 9 41) Networking and telecommunications technologies, along with computer hardware, software, data management technology, and the people required to run and manage them, constitute an organization's A) data management environment. B) networked environment. C) IT infrastructure. D) information system. Answer: C AACSB: Use of information technology CASE: Content Objective: 1.3 42) An example of a business using information systems to create new products and services is A) Wal-Mart's RetailLink system. B) the Mandarin Oriental hotel's customer-preference tracking system. C) Verizon's Web-based digital dashboard. D) Apple Inc.'s iPod. Answer: D AACSB: Use of information technology CASE: Analysis Objective: 1.1 43) An example of a business using information systems to attain operational excellence is A) Wal-Mart's RetailLink system. B) the Mandarin Oriental hotel's customer-preference tracking system. C) Verizon's Web-based digital dashboard. D) Apple Inc.'s iPod. Answer: A AACSB: Use of information technology CASE: Analysis Objective: 1.1 44) An example of a business using information systems for customer and supplier intimacy is A) Wal-Mart's RetailLink system. B) the Mandarin Oriental hotel's customer-preference tracking system. C) Verizon's Web-based digital dashboard. D) Apple Inc.'s iPod. Answer: B AACSB: Use of information technology CASE: Analysis Objective: 1.1 10 45) Maintaining the organization's financial records is a central purpose of which main business function? A) manufacturing and accounting B) finance and accounting C) sales and manufacturing D) finance and sales Answer: B AACSB: Reflective thinking skills CASE: Content Objective: 1.2 46) Based on the examples in the chapter, if you were asked to formulate a plan for a regional drive-in restaurant chain's efforts to use information technology to develop a loyal customer base, what would be the best use of information technology from the list below? A) Use IT to increase supplier loyalty. B) Use IT to increase operational efficiency. C) Use IT to create new products and business models. D) Use IT to help survive government reporting requirements. E) Use IT to achieve customer intimacy. Answer: E AACSB: Use of information technology CASE: Evaluation Objective: 1.2 47) The fact that online advertising revenues are growing at 25 percent a year, while offline traditional advertising revenues are growing at about 5 percent a year, suggests that A) Internet advertising is very inexpensive. B) offline traditional advertising is not very effective. C) the Internet is transforming the traditional advertising business model. D) new technologies are more efficient at selling to customers. Answer: C AACSB: Analytic skills CASE: Synthesis Objective: 1.1 11 48) Toyota Motor Company's vehicle orders management system allows it to improve efficiency by basing vehicle production on A) superior forecasts of regional demand. B) actual customer orders. C) improved decision making. D) customer preferences. Answer: B AACSB: Use of information technology CASE: Content Objective: 1.1 49) In a business hierarchy, the level that is responsible for monitoring the daily activities of the business is A) middle management. B) service workers. C) production management. D) operational management. Answer: D AACSB: Reflective thinking skills CASE: Content Objective: 1.3 50) Which of the following are environmental actors that interact with an organization and its information systems? A) customers B) suppliers C) regulatory agencies D) all of the above Answer: D AACSB: Use of information technology CASE: Content Objective: 1.2 51) From a business perspective, raw data is transformed systematically during various stages, transforming it into valuable information, in a process called A) the information value chain. B) the IT value chain. C) information processing. D) feedback. Answer: A AACSB: Use of information technology CASE: Content Objective: 1.2 12 52) A corporation that funds a political action committee, which in turn promotes and funds a political candidate who agrees with the values of that corporation, could be seen as investing in which main category of complementary assets? A) managerial B) governmental C) social D) organizational Answer: C AACSB: Analytic skills CASE: Analysis Objective: 1.4 53) Apple Computer dominates the online legal music sales industry primarily because of a failure of recording label companies to A) invest in technology. B) adopt a new business model. C) invest in complementary assets. D) modernize their information value chain. Answer: B AACSB: Use of information technology CASE: Content Objective: 1.1 54) An example of an organizational complementary asset is A) using the appropriate business model. B) a collaborative work environment. C) laws and regulations. D) all of the above. Answer: A AACSB: Reflective thinking skills CASE: Content Objective: 1.4 55) An example of a social complementary asset is A) technology and service firms in adjacent markets. B) training programs. C) distributed decision-making rights. D) all of the above. Answer: A AACSB: Reflective thinking skills CASE: Content Objective: 1.4 13 56) Disciplines that contribute to the technical approach to information systems are: A) computer science, engineering, and networking. B) operations research, management science, and computer science. C) engineering, utilization management, and computer science. D) management science, computer science, and engineering. Answer: B AACSB: Use of information technology CASE: Content Objective: 1.5 57) The discipline that focuses on mathematical techniques for optimizing parameters of organizations, such as transportation and inventory control, is A) management science. B) MIS. C) operations research. D) utilization management. Answer: C AACSB: Reflective thinking skills CASE: Content Objective: 1.5 58) Sociologists study information systems with an eye to understanding A) how systems affect individuals, groups, and organizations. B) how human decision makers perceive and use formal information. C) how new information systems change the control and cost structures within the firm. D) the production of digital goods. Answer: A AACSB: Use of information technology CASE: Content Objective: 1.5 59) Psychologists study information systems with an eye to understanding A) how systems affect individuals, groups, and organizations. B) how human decision makers perceive and use formal information. C) how new information systems change the control and cost structures within the firm. D) the production of digital goods. Answer: B AACSB: Use of information technology CASE: Content Objective: 1.5 14 60) The costs for firms operating on a global scale have been drastically reduced by A) networking technology. B) investments in organizational complementary assets. C) the Internet. D) the rise of digital content. Answer: C AACSB: Use of information technology CASE: Content Objective: 1.1 61) Which of the following are key corporate assets? A) intellectual property, core competencies, and financial and human assets B) production technologies and business processes for sales, marketing, and finance C) knowledge and the firm's tangible assets, such as goods or services D) time and knowledge Answer: A AACSB: Reflective thinking skills CASE: Content Objective: 1.2 62) Overproduction or underproduction of goods and services, misallocation of resources, and poor response times are the results of a firm's having A) poor relationships with suppliers. B) poor relationships with customers. C) inadequate information. D) a surplus of information. Answer: C AACSB: Reflective thinking skills CASE: Content Objective: 1.2 63) A firm that must invest in new information systems capabilities in order to comply with federal legislation can be said to be investing to achieve which business objective? A) customer intimacy B) operational excellence C) survival D) improved reporting Answer: C AACSB: Use of information technology CASE: Analysis Objective: 1.2 15 64) Which of the following would NOT be used as an input for an information system? A) digital dashboard B) handheld computer C) bar-code scanner D) cell phone Answer: A AACSB: Use of information technology CASE: Analysis Objective: 1.3 65) Which field of study focuses on both a behavioral and technical understanding of information systems? A) sociology B) operations research C) economics D) management information systems Answer: D AACSB: Use of information technology CASE: Content Objective: 1.5 66) The three principle levels within a business organization hierarchy are A) senior management, operational management, and service workers. B) senior management, middle management, and operational management. C) senior management, operational management, and information systems. D) senior management, middle management, and service workers. Answer: B AACSB: Reflective thinking skills CASE: Content Objective: 1.2 67) Engineers, scientists, or architects, who design new products or services for a firm, belong to which level of a business hierarchy? A) middle management B) production workers C) knowledge workers D) data workers Answer: C AACSB: Reflective thinking skills CASE: Content Objective: 1.2 16 68) Which main business function is responsible for maintaining employee records? A) sales and marketing B) human resources C) finance and accounting D) manufacturing and production Answer: B AACSB: Reflective thinking skills CASE: Content Objective: 1.2 69) Which of the following constitutes an organizational element in the UPS tracking system described in the chapter? A) the specification of procedures for identifying packages with sender and recipient information B) monitoring service levels C) promoting the company strategy of low-cost, superior service D) the use of handheld computers and networks for managing package delivery Answer: A AACSB: Analytic skills CASE: Synthesis Objective: 1.2 70) A managerial element in the UPS tracking system described in the chapter is A) taking inventory. B) providing package status reports to customers. C) the decision to use automation. D) in-house package tracking software. Answer: C AACSB: Analytic skills CASE: Synthesis Objective: 1.2 71) ________ is data that has been shaped into a form that is meaningful to human beings. Answer: Information AACSB: Reflective thinking skills CASE: Content Objective: 1.2 17 72) ________ is output returned to appropriate members of the organization to help them evaluate or correct the input stage. Answer: Feedback AACSB: Reflective thinking skills CASE: Content Objective: 1.2 73) ________ is a global network that uses universal standards to connect millions of different networks around the world. Answer: The Internet AACSB: Use of information technology CASE: Content Objective: 1.3 74) Computer ________ consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. Answer: software AACSB: Use of information technology CASE: Content Objective: 1.3 75) The ________ is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format. Answer: World Wide Web/Web/WWW AACSB: Use of information technology CASE: Content Objective: 1.3 76) ________ are private corporate networks extended to authorized users outside the organization. Answer: Extranets AACSB: Use of information technology CASE: Content Objective: 1.3 77) The key elements of an organization are its people, structure, business processes, politics, and ________. Answer: culture AACSB: Reflective thinking skills CASE: Content Objective: 1.2 18 78) In a(n) ________ perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained. Answer: sociotechnical AACSB: Use of information technology CASE: Content Objective: 1.3 79) ________ makes long-range strategic decisions about the firm's products and services. Answer: Senior management AACSB: Reflective thinking skills CASE: Content Objective: 1.2 80) Investments in organization and management, such as investments in new business models and training, are also known as ________. Answer: organizational and management capital AACSB: Reflective thinking skills CASE: Content Objective: 1.2 81) Define operational excellence. How can information systems help achieve it? Answer: Operational excellence is the achievement of higher levels of productivity, efficiency, profitability. Information systems can help achieve operational excellence by improving communications to supplier and optimizing the supply chain. Information systems could help managers communicate with workers more efficiently, enable technological innovation in products, minimize warehouse overhead, streamline distribution. AACSB: Analytic skills CASE: Evaluation Objective: 1.2 82) You work for an auto manufacturer and distributor. How could you use information systems to achieve greater customer intimacy? Answer: You could create a Web site that allows customers to customize cars, communicate with support personnel and other car owners. You could create an automated e-mail service reminding car owners to take their car in for periodic checkups. You could have an information system that tracks customer preferences in local areas, so you can provide cars that reflect local customer needs and desires. AACSB: Analytic skills CASE: Analysis Objective: 1.2 19 83) What is the difference between information technology and information systems? Describe some of the functions of information systems. Answer: Information technology (IT) consists of all the hardware and software that a firm needs to use to achieve its business objectives. Information systems are more complex. An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. An information system: • • • • supports decision making, coordination, and control helps employees analyze problems helps employees visualize complex subjects helps create new products AACSB: Analytic skills CASE: Evaluation Objective: 1.3 84) You are a marketing manager for a national movie theater chain. Give an example of data that your department could use for creating meaningful information. What type of information could that data produce? Answer: Movie ticket sales from individual theaters would be an example of raw data. Meaningful information from this would be: average number of tickets sold to seniors on certain days of the week. AACSB: Analytic skills CASE: Synthesis Objective: 1.3 85) Define business process. What might be a business process used at a hospital? Answer: A business process is a set of logically related tasks and behaviors for accomplishing work. Hiring a new employee, customer intake, and filing medical records are examples of business processes at a hospital. AACSB: Analytic skills CASE: Synthesis Objective: 1.2 20 86) You are starting a small bike messenger company. Given your type of services (hand-delivering packages within a small geographical area), could your firm be a digital firm? If so, what would make this a digital firm? Answer: Being a digital firm doesn't purely rely on having digital goods and services. A digital firm would have most of its relationships with customers, suppliers, and employees be digitally enabled. Ordering deliveries, assigning deliveries, managing employees and assignments could certainly be digitally enabled; using cell phones, information systems, and handheld devices to connect customers, delivery management, and bike messengers. AACSB: Analytic skills CASE: Synthesis Objective: 1.1 87) This chapter discusses how each organization has its own culture and sets of values shared by most of its members. What kind of shared values might you find at a law firm? Answer: Shared values at a law firm might be: The legal system works, the legal system is fair, lawyers help people, and people need help with the legal system because it is complicated. AACSB: Analytic skills CASE: Evaluation Objective: 1.2 88) You work at the business headquarters for a chain of movie theaters. Describe this firm's information value chain. Answer: An information value chain adds value to data at various stages, transforming it into valuable data. At a chain of movie theaters, data would be gathered from ticket sales and concession sales. Information systems would help transform this into meaningful information, such as determining the types of movies popular in certain regions, times and days of the week that people most often saw movies, what snacks were the most popular. This information would be valuable in making decisions, such as offering ticket discounts during less popular time slots, and offering more popular snack items. Further feedback based on the results of these decisions could determine whether these decisions were effective. AACSB: Analytic skills CASE: Synthesis Objective: 1.2 21 89) How does a company's use of information systems affect its corporate strategies? Provide an example. Answer: A firm's ability to effectively use information technology is interdependent with its ability to implement corporate strategies and achieve corporate goals. More and more, the ability to compete and succeed depends on a company's ability to implement technology. What a business would like to do in the future can depends on what its systems will be able to do. Examples of this might be a company who invests in information systems that enable it to create new products or to make its distribution system more efficient, allowing the company to become the low-cost producer. AACSB: Analytic skills CASE: Evaluation Objective: 1.2 90) The information systems of Accenture, a global consulting firm, allow for a highly decentralized organization without a traditional headquarters. Based on your reading of Chapter 1, which of the six strategic business objectives does Accenture's information systems contribute to? Answer: Student answers will vary. The following is an example of a possible answer: Accenture's information systems allow its mobile workforce to be within easy, constant reach of its customers, contributing to the business objective of customer and supplier intimacy. Additionally, the ability of employees to connect to and work with local branch information systems in standard ways, regardless of their location, contributes to more efficient processes and operational excellence. AACSB: Analytic skills CASE: Evaluation Objective: 1.1 22