Managing the Digital Firm (99 Questions with Answers)

Management Information Systems: Managing the Digital Firm Managing Global Systems 1) Final assembly of Apple's iPhone occurs in which of the following locations? A) United States B) Japan C) South Korea D) China E) Germany Answer: D Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 2) The major dimensions of international systems architecture include each of the following except: A) the global environment. B) corporate global strategy. C) technology platform. D) transborder data flows. E) management and business processes. Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 3) Which of the following is not a general cultural factor driving global business? A) Global communication and transportation technologies B) Political stability C) Global knowledge base D) Rise of shared values E) Global social norms Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 4) New levels of global coordination of all of the major business functions permit the location of business activity according to: A) comparative advantage. B) social norms and values. C) competitive threat. D) knowledge base. E) labor costs. Answer: A Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 5) Which of the following is the best definition of international information systems? A) Systems that talk to one another using the global Internet B) Systems used by international businesses C) Business processes that span the globe D) Basic information systems required by organizations to coordinate worldwide trade and other activities E) Systems that are developed by global firms Answer: D Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 6) What is the first thing you should consider when thinking about building an international information system? A) The state of world politics B) New technologies that will help you achieve your goals C) The global environment where your business will operate, and identify the business drivers for your firm and industry D) The business challenges you face in the global environment E) The different computing and communication standards in the world Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 7) Which of the following industries is most affected by globalization? A) Telecommunications B) Manufacturing C) Law D) Entertainment E) Transportation Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 8) Transborder data flow refers to: A) the flow of information in international systems. B) the ways in which a country's laws change the flow of data from one country to another. C) the business of moving information from one country to another. D) the movement of information across international boundaries. E) the business process of coordinating information from many different countries. Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 9) Which of the following is not a business driver of global business? A) Global communication and transportation technologies B) Development of global culture C) Emergence of global social norms D) Political stability E) Growth of international systems Answer: E Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 10) Making judgments and taking action on the basis of narrow or personal characteristics is referred to as: A) localization. B) cooptation. C) particularism. D) prejudice. E) globalization. Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 11) All of the following present challenges to developing global business systems except: A) foreign accounting practices. B) production costs. C) language differences. D) exchange rates. E) shortages of skilled consultants. Answer: B Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 12) Which of the following is not a specific challenge to global business systems? A) Shortages of skilled consultants B) Cultural expectations C) Different telecommunication standards D) Different data transfer speeds E) Unreliable phone networks Answer: B Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 13) Which of the following statements about transborder data flow is not true? A) The European Data Directive of 1998 standardized privacy protection among EU nations. B) The European Data Directive of 1998 allowed for the transfer of personal data to systems located in the United States and other nations where these systems met European privacy standards. C) The General Data Protection Regulation (GDPR) provides additional privacy protection for European citizens and applies to all data produced by EU citizens. D) The GDPR applies to all companies collecting data on EU citizens even if they are not located in the EU. E) The GDPR applies only to citizens of the EU and does not apply to non-citizen residents. Answer: E Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 14) Which of the following statements about accounting practices in different countries is not true? A) German companies generally do not recognize a profit from a venture until the project is completely finished and they have been paid. B) British firms recognize profits before a project is finished, once they are reasonably certain they will get the money. C) Dutch firms separate tax calculations from reports to shareholders. D) U.S. accounting practices focus on demonstrating compliance with strict rules. E) British firms focus on showing shareholders how fast profits are growing. Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 15) Most large companies with overseas operations have inherited: A) recently built technology platforms for international systems. B) patchwork international systems from the distant past. C) transaction-oriented reporting based at the home office for overseas business. D) global marketing systems developed domestically. E) enterprise systems developed by local firms. Answer: B Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 16) The EU General Data Protection Regulation (GDPR): A) requires that European companies meet U.S. data privacy standards. B) provides additional privacy protections for Americans doing business in Europe. C) provides additional privacy protection for European citizens and applies to all data produced by EU citizens or processed in Europe. D) prevents the transfer of private personal information among EU nations. E) allows European countries to adopt their own privacy legislation. Answer: C Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 17) Consumers who only want to purchase products made in their own country are an example of: A) cultural particularism. B) political culture. C) universal global attitudes. D) different laws in different countries. E) different business standards. Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 15-1: What major factors are driving the internationalization of business? 18) Global business drivers can be divided into two groups: general cultural factors and specific business factors. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 19) The growth of powerful communications technologies and the emergence of world cultures create the condition for global markets. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 20) The emergence of a global media culture is an important driver of global trade. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 21) Micromarketing involves marketing to specific countries rather than global markets. Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 22) A powerful strategic advantage for a globalized firm is the ability to charge different prices for the same product in different countries. Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 23) Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services. Answer: FALSE Difficulty: Challenging AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 24) Language remains a significant challenge to businesses operating on a global scale. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 25) European countries have very strict laws concerning transborder data flows and privacy. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 26) The EU General Data Protection Regulation (GDPR) applies to all data produced by EU citizens, whether or not the company collecting the data in question is located within the EU, as well as all people whose data is stored within the EU, whether or not they are actually EU citizens. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 27) The shortage of skilled consultants is one challenging obstacle to global business systems. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 28) Accounting practices are largely standard among developed countries. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 29) The growth of powerful communications technologies and the emergence of world cultures have failed to create a foundation for global markets. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 30) The last step in establishing a corporate strategy and structure for globalization is to determine the appropriate products. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 31) Global economies of scale are facilitated by global markets, production, and administration. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 32) The growth of international trade has radically altered domestic economies around the globe. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-1: What major factors are driving the internationalization of business? 33) What steps should you take to develop an international information systems architecture? Answer: • Begin by developing an understanding of the overall market forces, or business drivers, that are pushing your industry toward global competition, i.e., the global environment. Also examine the inhibitors or negative factors that could scuttle the development of a global business. • Develop a corporate strategy for competing in the global environment. • Plan how to structure your organization so that it can pursue the strategy you have developed. • Consider the management issues in implementing your strategy and making the organization design a reality. The key here will be the design of business procedures. • Consider the technology platform. You must have a corporate strategy instructor before you can choose the right technology. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business? 34) List at least four general cultural factors and four specific business factors driving global business. Which two factors (one of each) do you feel are most problematic at the current moment? Why? Answer: General cultural factors include global communication and transportation technologies, development of the global culture, emergency global social norms, political stability, and a global knowledge base. Specific business factors include global markets, global production operations, global coordination, global workforce, and global economies of scale. One answer might be that two general cultural factors most in danger at the current moment are political stability and development of a global culture (either would be a good answer). Two business factors most problematic at the moment are global coordination and global workforce. Coordinating work on a truly global scale requires a fairly high level of corporation sophistication that only a small number of large firms are truly capable of on a real-time basis; and there is significant opposition in both developed and under-developed countries to changes in local labor markets which are threatened by global trade. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business? 35) What are the four specific types of business challenges to global business systems? Which one do you think will be easiest to solve? Why? Answer: • Standards: Different EDI, e-mail, telecommunications standards. • Reliability: Phone networks are not uniformly reliable. • Speed: Different data transfer speeds; many are slower than United States speeds. • Personnel: Shortages of skilled consultants. Answers will vary, but an example answer is: The easiest challenge to solve is that of standards because of the growth of universal, Internet-based standards, Web services, and componentbased programming. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business? 36) How do cultural, legal, political, and social expectations affect global business? Answer: At a cultural level, particularism in all its forms rejects the very concept of a shared global culture and rejects the penetration of domestic markets by foreign goods and services. Differences among cultures produce differences in social expectations, politics, and ultimately in legal rules. Different cultures produce different political regimes, with different laws governing the movement of information, information privacy of their citizens, origins of software and hardware in systems, and radio and satellite telecommunications. Even the hours of business and terms of business trade vary greatly across political cultures. Cultural and political differences profoundly affect organizations' standard operating procedures. Everything from the different reliability of telephone systems to the shortage of skilled consultants creates barriers. National laws and traditions have created different accounting practices in various countries, which impact the way profits and losses are analyzed. These accounting practices are tightly intertwined with each country's legal system, business philosophy, and tax code. Cultural differences can also affect the way organizations use information technology. Language is a significant barrier. Software may have to be built with local language interfaces before a new information system can be successfully implemented. Currency fluctuations can play havoc with planning models and projections. Some of these problems will diminish in parts of the world when the Euro becomes more widely used. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business? 37) Define transborder data flow and explain what makes it a business challenge for global companies. Answer: Transborder data flow is defined as the movement of information across international boundaries in any form. What makes this a challenge for firms is that different countries have different standards for privacy protection and data transfer. In the European Union, these standards are more comprehensive and strict than they have been historically in the U.S. The General Data Protection Regulation (GDPR) requires all firms doing business in the EU, and collecting data on citizens and non-citizen residents to meet the privacy standards of the EU. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business? 38) In a multinational business strategy, the finance/accounting function is: A) centralized. B) dispersed. C) coordinated. D) mixed. E) performed by local divisions in different countries. Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 39) In terms of global business strategy and structure, a domestic exporter strategy: A) centralizes production, accounting, human resources, and strategic management, and uses a mixed model of sales and marketing. B) concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. C) centralizes production, accounting, marketing, and human resources. D) disperses production and marketing, with centralized accounting, human resources and strategic management. E) concentrates production and marketing in each country, and decentralizes accounting and human resources. Answer: A Difficulty: Challenging AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 40) Most companies pursuing a global strategy begin as: A) domestic exporters. B) multinationals. C) franchisers. D) transnationals. E) conglomerate corporations. Answer: A Difficulty: Easy AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 41) A company that controls finances in the home country and decentralizes production, sales, and marketing operations to other countries is using a ________ strategy. A) domestic exporter B) franchising C) transnational D) multinational E) conglomerate Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 42) In terms of global business strategy and structure, a multinational company will use a policy of: A) mixed sales and marketing, with centralized production, accounting, human resources, and strategic management. B) centralized production, accounting, marketing, human resources, with strategic management. C) dispersed production, accounting, human resources, with centralized strategic management, and marketing. D) dispersed production and marketing, with centralized accounting and strategic management. E) making local units that are clones of the mother country units. Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 43) Which of the following is the dominant pattern of governance used by transnational firms? A) Centralized B) Duplicated C) Decentralized D) Federal structure E) Localized Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 44) In terms of global business strategy and structure, a franchise company will use a policy of: A) centralized production, accounting, marketing, human resources, with strategic management. B) dispersed production, accounting, human resources, with centralized strategic management, and marketing. C) dispersed production and marketing, with centralized accounting, human resources and strategic management. D) coordinated production, marketing, and human resources, with centralized strategic management and finance/accounting. E) decentralized production, accounting, human resources, with a decentralized management. Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 45) Which of the following is not one of the primary types of firm strategy discussed in the chapter? A) Domestic exporter B) Multinational C) Franchiser D) Transnational E) International exporter Answer: E Difficulty: Easy AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 46) In terms of global business strategy, the governance of ________ firms has been likened to a federal structure—strong central management core of decision making, but considerable dispersal of power and financial resources. A) domestic exporter B) multinational C) franchiser D) transnational E) domestic importer Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 47) Which of the following statements about transnational firms is not true? A) Transnational firms have many regional headquarters and perhaps a world headquarters. B) Transnational firms are stateless. C) Transnational firms view the entire globe as their management frame of reference. D) Transnational firms have no single headquarters. E) Many firms have attained transnational status. Answer: E Difficulty: Challenging AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 48) Which of the following is not one of the main organizational issues facing firms who are seeking to globalize? A) Choosing a global strategy B) Organizing the global business structure C) Organizing the systems management D) Defining the global environment E) Organizing the business Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 49) In centralized systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations. B) each foreign unit designs its own unique solutions and systems. C) systems development and operations occur in an integrated and coordinated fashion across all units. D) systems development and operations occur totally at the domestic home base. E) systems development is a combined effort of domestic and international units. Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 50) In duplicated systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations. B) each foreign unit designs its own unique solutions and systems. C) systems development and operations occur in an integrated and coordinated fashion across all units. D) foreign units design the solutions and systems used at the domestic home base. E) systems development is a combined effort of domestic and international units which are then duplicated across the world. Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 51) In decentralized systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations. B) each foreign unit designs its own unique solutions and systems. C) systems development and operations occur in an integrated and coordinated fashion across all units. D) foreign units design the solutions and systems used at the domestic home base. E) all systems are designed in domestic headquarters and then distributed to foreign units. Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 52) In networked systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations. B) each foreign unit designs its own unique solutions and systems. C) systems development and operations occur in an integrated and coordinated fashion across all units. D) foreign units design the solutions and systems used at the domestic home base. E) development occurs at the home base but operations are handed over to autonomous units in foreign locations. Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 53) Domestic exporters typically have highly ________ systems. A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 54) Multinational companies tend to dominantly have ________ systems. A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 55) Franchise companies have typically had ________ systems. A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 56) Which of the following is an emerging pattern of system configuration for multinational companies? A) Duplicated B) Centralized C) Networked D) Decentralized E) Autonomous Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 57) The network systems structure is the most visible in ________ services. A) production B) financial C) marketing D) software design E) administrative Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 58) Which of the following statements about networked systems is not true? A) Networked systems require a powerful telecommunications backbone. B) Networked systems require a culture of shared applications development. C) Networked systems require a shared management culture that crosses cultural barriers. D) Networked systems are those in which there is a solid, singular global environment for developing and operating systems. E) Networked systems are an emerging trend for multinational firms. Answer: E Difficulty: Challenging AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 59) Of the following, which is one of the central principles recommended in this chapter for a firm organizing itself for international business? A) Organize value-adding activities along lines of comparative advantage. B) Establish multiple offices for international systems and a global CIO position. C) Disperse production and marketing to regional centers and establish a single center for world headquarters and strategic management. D) Develop and operate systems units at the international level first. E) Centralize production, but decentralize marketing and sales to be close to the customer. Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 60) In a transnational business strategy, nearly all the value-adding activities are managed from a global perspective without reference to national borders, optimizing sources of supply and demand wherever they appear, and taking advantage of any local competitive advantages. Answer: TRUE Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 61) In a franchiser business strategy, each foreign unit uses the same systems developed by the firm regardless of their location. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 62) There are two primary global organization types: management centralized in the home country or distributed to foreign centers. Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 63) In a multinational strategy, financial management is centralized while production and sales are decentralized. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-2: What are the alternative strategies for developing global businesses? 64) Describe the four main global strategies that form the basis for global firms' organizational structure. Answer: The domestic exporter strategy is characterized by heavy centralization of corporate activities in the home country of origin. The multinational strategy concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. For franchisers, their product is created, designed, financed, and initially produced in the home country, but for product-specific reasons must rely heavily on foreign personnel for further production, marketing, and human resources. Transnational firms are the stateless, truly globally managed firms that may represent a larger part of international business in the future. Transnational firms have no single national headquarters, but instead have many regional headquarters and perhaps a world headquarters. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-2: What are the alternative strategies for developing global businesses? 65) What are the organizational principles a company should follow to develop a global company and its information systems support structure? Do you agree? Would you change these principles, or add others? Support your answer. Answer: Student answers will vary, but should include an understanding of the following three principles. 1. Organized value-adding activities along lines of comparative advantage. 2. Develop and operate systems units at each level of corporate activity–regional, national, and international. 3. Establish at world headquarters a single office responsible for development of international systems, a global chief information officer position. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-2: What are the alternative strategies for developing global businesses? 66) List and describe four types of systems configurations used by international firms to fit their global strategies. Answer: Centralized systems are those in which systems development and operation occur totally at the domestic home base. Duplicated systems are those in which development occurs at the home base, but operations are turned over to autonomous units in locations across the globe. Decentralized systems are those in which foreign units design their own unique solutions. Networked systems are those in which systems development and operations occur in an integrated and coordinated fashion across all units. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-2: What are the alternative strategies for developing global businesses? 67) Which of the following methods of encouraging local users to support global systems should be avoided as much as possible? A) Permitting each country unit the opportunity to develop a transnational application first in its home territory and then throughout the world B) Developing transnational centers of excellence C) Requiring local units to agree on a short list of transnational systems D) Using raw power E) Involving users in the creation of the design without giving up control over the development of the project to parochial interests Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 68) Which of the following is not one of the principal management challenges in developing global systems? A) Encouraging local users to support global systems B) Coordinating applications development C) Defining an acceptable test plan D) Agreeing on common user requirements E) Introducing changes in business processes Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 69) Which of the following occurs as a firm moves from local option systems to regional and global systems? A) Agency costs increase. B) Coordination costs decrease. C) Transaction costs increase. D) Both transaction and agency costs increase. E) All costs increase. Answer: A Difficulty: Challenging AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 70) In order to define centers of excellence in a global firm, you first need to identify: A) functional areas. B) core business processes. C) SOPs. D) core competencies. E) international best practices. Answer: B Difficulty: Easy AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 71) Which of the following is not one of the main benefits to implementing global systems? A) Superior management and coordination B) Vast improvements in operation C) New economies of scale at production facilities D) Reduced hardware and software costs E) Optimization of the use of corporate funds Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 72) When developing a global system, bringing the opposition of local groups into the process of designing and implementing the solution without giving up control over the direction and nature of the change is called: A) cooptation. B) change management. C) implementation. D) advocacy. E) cooperation. Answer: A Difficulty: Easy AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 73) Transnational centers of excellence do all of the following except: A) perform initial identification and specification of business processes. B) define information requirements. C) perform business and systems analysis. D) accomplish all design and testing. E) implement the system. Answer: E Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 74) Which of the following is not an important challenge when implementing a global information system solution? A) Agreeing on common user requirements B) Finding a provider of global software C) Introducing changes in business processes D) Coordinating applications development E) Coordinating software releases Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 75) Which systems are worth sharing on a transnational basis, from a cost and feasibility point of view? A) Only some core systems that support functions that are absolutely critical to the organization B) Core systems and worthwhile provincial systems C) Core systems and any financial systems that can be easily integrated with each other D) Financial and accounting systems E) Systems that support decentralized units Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 76) The chapter outlines four steps in developing an effective global system solution. Which of the following is not one of these steps? A) Identify which local systems need to be replaced. B) Identify the core systems to coordinate centrally. C) Choose a developmental approach, incremental, evolutionary, or other. D) Make the benefits clear. E) Define the core business processes. Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 77) The way to identify core business processes is to conduct a: A) cost-benefit analysis. B) work-flow analysis. C) business process analysis. D) feasibility analysis. E) systems analysis. Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 78) Global systems allow fixed costs to be amortized over a much larger customer base. Answer: TRUE Difficulty: Moderate AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 79) One major telecommunications challenge in an international setting is making data flow seamlessly across networks shaped by disparate national standards. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 80) Success as a change agent depends on legitimacy, authority, and ability to involve users in the change design process. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 81) List at least four difficult problems for management in the development of the international information system. Which do you see as the most problematic, and why? Answer: Student answers will vary, but should include four of the five following problems. 1. Agreeing on common user requirements. 2. Introducing changes in business processes. 3. Coordinating applications development. 4. Coordinating software releases. 5. Encouraging local users to support global systems. Difficulty: Moderate AACSB: Analytical thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 82) You are working for a global electronic parts manufacturing company with divisions in Taiwan, Malaysia, Australia, and Germany, that has embarked on developing a global enterprise system. To ensure that overseas divisions comply with the new system, they are considering a cooptation strategy in which they will permit each country unit the opportunity to develop one transnational application first in its home territory, and then throughout the world. What are the benefits and drawbacks to this approach? Are there any other solutions for the company's cooptation strategy? Answer: With this strategy, local units will feel a sense of ownership in the transnational effort. On the downside, this assumes the ability to develop high-quality systems is widely distributed, and that a German team can successfully implement systems in Taiwan or Malaysia. This will not always be the case. Another cooptation strategy would be to develop new transnational centers of excellence, or a single center of excellence. In this, you would identify a regional location with excellent implementation of specific business processes. These centers draw heavily from local national units, are based on multinational teams, and must report to worldwide management. The centers of excellence would perform the initial identification and specification of business processes, define the information requirements, perform the business and systems analysis, and accomplish all design and testing. Implementation, however, and pilot testing are rolled out to other parts of the globe. Recruiting a wide range of local groups to transnational centers of excellence helps send the message that all significant groups are involved in the design and will have an influence. Difficulty: Challenging AACSB: Analytical thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 83) You work for a business consulting firm, and you have been asked to advise Bamboo Home, a home furniture retailer on implementing a global information system. What general benefits can Bamboo Home expect from a globalized system? Answer: Benefits in globalizing include superior management and coordination. This may not show up on balance sheets, but will affect profitability in the long run. Related benefits are the ability to switch suppliers quickly if there is a crisis and the ability to use excess capacity in one region to fulfill demand in another. Additionally, they can expect major improvements in production, operation, and supply and distribution. Value-adding activities can be concentrated in regions where they are most economical and efficient. Also, with global systems, fixed costs around the world can be amortized over a much larger customer base. In addition, corporate funds can be used over a much larger capital base. Difficulty: Easy AACSB: Analytical thinking LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 84) Why should only some core systems be coordinated on a transnational basis? Answer: Although core systems support functions that are absolutely critical to the organization, only some core systems are worth sharing globally from a cost and feasibility point of view. Participating in global markets reduces transaction costs, but agency costs increase with global systems compared to local systems. Also, many core systems share key elements across geographical boundaries, but are distinct enough that a global system would be a poor fit. The best mix for most organizations is a combination of global systems and regional systems, developing core systems for only the most vital business functions. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges? 85) Software localization is the process of: A) developing a purely graphical user interface. B) converting software programming to run on a different platform. C) converting software to operate in a second language. D) modifying software so that it can be adopted in other countries without engineering changes. E) modifying software so executives can understand its command language. Answer: C Difficulty: Challenging AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 86) Which of the following is not an important technology issue to consider when developing an international information system? A) Standardizing the global computing platform B) Deciding how mobile computing will fit into your international system C) Finding specific software applications that are user friendly and enhance productivity D) Building sufficient connectivity E) Developing common data standards Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 87) Which of the following countries has the highest percentage of its total population using the Internet? A) United States B) China C) Brazil D) Norway E) Somalia Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 88) Based on your reading of the chapter, why should companies avoid creating an allencompassing, new global system when moving towards global operations? A) This approach may fail due to a lack of visibility. B) It is difficult to quantify and explain the benefits of information systems that are large. C) "Grand design" approaches typically fail to identify centers of excellence. D) This approach tends to fail because of an inability to focus resources. E) This approach tends to fail because of a lack of concrete objectives. Answer: D Difficulty: Challenging AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 89) Which of the following statements about connectivity in relation to global systems is not true? A) Few global corporations trust the security of the Internet. B) The public Internet guarantees a basic level of service. C) Many global corporations use private networks to communicate sensitive data. D) Not all countries support basic Internet service. E) The Internet provides a powerful foundation for providing connectivity among the dispersed units of global firms. Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 90) Which of the following has the second-highest percentage of Internet users based on its total population in the world? A) China B) India C) United States D) Brazil E) Canada Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 91) Which of the following is not one of the challenges posed by international networks, including the Internet? A) Quality of service B) Security C) Costs and tariffs D) Differences in Internet protocols E) Network management Answer: D Difficulty: Moderate AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 92) Which of the following is not one of the principal problems of international networks? A) Network capacity B) Poor quality of international service C) Network standards D) Regulatory constraints E) Installation delays Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 93) In developing countries, use of the Internet is limited by all of the following except: A) use of mobile telephones. B) high cost of Internet access. C) poor bandwidth capacity. D) unreliable power grids. E) political disruptions. Answer: A Difficulty: Moderate AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 94) Which types of systems are widely used by manufacturing and distribution firms to connect to suppliers on a global basis? A) TPS B) EDI C) CRM D) Enterprise systems E) MIS Answer: B Difficulty: Easy AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 95) While private networks have guaranteed service levels and better security than the Internet, the Internet is the primary foundation for global corporate networks when lower security and service levels are acceptable. Answer: TRUE Difficulty: Challenging AACSB: Reflective thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 96) Internet-based VPNs provide the same level of quick and predictable response as private networks. Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 97) The rate of growth in the Internet population is far faster in North America and Europe than it is in Africa and the Middle East. Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 98) How does the Internet benefit the development of a global information system? Should all global systems be based on the Internet? Answer: The Internet allows anyone connected to it to communicate and compute at any time, or anywhere. Satellite systems, digital cell phones, and personal communications services will make it even easier to coordinate work and information in many parts of the globe that cannot be reached by existing ground-based systems. Companies can use Internet technology to construct virtual private networks to reduce wide-area networking costs and staffing requirements. If it wishes, the company can outsource the virtual private network to an Internet service provider. All global systems can't be based primarily on the Internet because currently not all countries have the same access to the Internet. Additionally, high-traffic volumes at certain times of the day in various regions may impede responsiveness. Difficulty: Moderate AACSB: Analytical thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 99) List and describe four of the challenges involved with international networks. Answer: Answers may include the following: 1. Quality of service – the public Internet doesn't guarantee any level of service. 2. Security – most companies use private networks to communicate data and do not trust the security of the public Internet. 3. Costs and tariffs. 4. Network management – not all countries support basic Internet service. 5. Installation delays. 6. Poor quality of international service – Internet connectivity varies worldwide. 7. Regulatory constraints – some countries employ comprehensive blocking and monitoring techniques, slowing down traffic. 8. Network capacity – the Internet can support different amounts of traffic at different times depending on worldwide usage. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems? 100) What is software localization and why is it important for global companies? Answer: Software localization is the process of converting software to operate in a second language. Although English is the assumed standard for graphical user interfaces for global systems, many systems are in use in areas where there is no common language. When this happens, software localization is necessary to build new interfaces for different languages, taking care to account for differences in meaning and expression. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?