# Chapter 1 Information Systems in Global Business Today
Which of the following is not one of the six strategic business objectives that businesses are seeking to achieve when they invest in information systems?
Verizon Corporation uses a web-based digital dashboard to provide managers with real-time information in order to:
Which of the following may lead to competitive advantage?
A firm that invests in an information system because it is a necessity of doing business does so because it is seeking to achieve which of the following business objectives?
The Mandarin Oriental uses computer systems to keep track of guests' preferences in order to:
All of the following are examples of challenges that required companies to create information systems as a necessity of doing business except:
As discussed in the chapter-opening case, AWM Smart Shelf can help brands and retailers achieve which of the following?
Which of the following is an example of a business using information systems to improve supplier intimacy?
Walmart exemplifies the power of information systems coupled with state-of-the-art business practices and supportive management to achieve which of the following?
In each of the years between 1999 and 2019, capital investment in information technology, consisting of IT equipment, software, and research and development (R&D), accounted for over percent of U.S. total capital spending (in nominal GDP).
To make sure it stocks clothes that its customers will purchase, a department store implements a new application that analyzes spending levels at its stores and cross-references this data to popular clothing styles. Which of the following business objectives is this information intended to support?
Approximately how much revenue was generated by e-commerce sales worldwide in 2019?
All of the following are new technology-related innovations in MIS except:
Which of the following statements about digital firms is not true?
A firm that must invest in new information systems capabilities in order to comply with federal legislation is investing to achieve which business objective?
All of the following exemplify the new face of e-commerce in the twenty-first century except:
All of the following are characteristics of twenty-first digital firms except:
Journalist Thomas Friedman's description of the world as "flat" refers to the:
In 2019, what percent of the world economy resulted from foreign trade?
All of the following describe the effects of globalization except:
How many service jobs move offshore to lower-wage countries in a typical year?
Which of the following statements is not true?
What percent of Facebook's users access the service from mobile phones and tablets?
Which of the following statements is not true?
Outsourcing has accelerated the development of new information systems in the United States.
Creating a marketing plan is an example of a business process.
In order to be considered a digital firm, all of the firm's significant business relationships and core business processes must be digitally enabled.
A business model describes how a company produces, delivers, and sells a product or service to create wealth.
In 2019, the supply of applicants far exceeded the number of job openings in information systems and technologies.
You work for an auto dealer. How could you use information systems to achieve greater customer intimacy?
Answer
When a business really knows its customers and serves them well (customer intimacy), the customers generally respond by returning and purchasing more. This raises revenues and profits. To use information system to achieve greater customer intimacy for an auto dealer, you could create a website and/or mobile app that allows customers to order customized cars and communicate with support personnel and other car owners. You could create an automated email service reminding car owners to take their car in for periodic check-ups. You could have an information system that tracks customer preferences in your local area, so you can offer cars that reflect local customer needs and desires.
- Define operational excellence. How have information systems helped Walmart achieve it?
Answer
Operational excellence involves the achievement of higher levels of efficiency and productivity. Walmart, the largest retailer on earth, exemplifies the power of information systems coupled with state-of-the-art business practices and supportive management to achieve operational excellence. Information systems such as Walmart's Retail Link system, which digitally links its suppliers to every one of Walmart's stores, have helped Walmart achieve operational excellence by improving communications with suppliers and optimizing its supply chain. As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement to the shelf.
- 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 that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. Hiring a new employee, customer intake, and filing medical records are examples of business processes at a hospital.
The three activities in an information system that produce the information organizations use to make decisions, control operations, analyze problems, and create new products are:
Raw data collected at checkout counters in a grocery store is an example of:
The total number of food items with storage temperature problems is an example of which of the following?
Output:
Converting raw data into a more meaningful form is called:
Which of the following is an example of raw data from an automobile manufacturer?
In a hierarchical business organization, the upper level consists of:
The fundamental set of assumptions, values, and ways of doing things that has been accepted by most of an organization's members is called its:
Data management technology consists of which of the following?
Which of the following statements best describes organizational culture?
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:
Maintaining the organization's financial records is a central purpose of which main business function?
All of the following are examples of environmental actors in an information system except:
Which of the following best describes the primary reason for implementing a new information system, from a business perspective?
Which of the following is not a key organizational complementary asset?
In a business hierarchy, which of the following levels is responsible for monitoring the daily activities of the business?
In , raw data is systematically acquired and transformed during various stages that add value to that information.
A corporation that funds an employee training program to enhance the development of decision making skills could be seen as investing in which main category of complementary assets?
Which of the following is an example of an organizational complementary asset?
Which of the following is an example of a social complementary asset?
Which of the following makes long-range strategic decisions about products and services as well as ensures financial performance of the firm?
Which of the following would be used as an input for an information system?
The three principal levels within a business organization hierarchy are:
Which of the following work at the same level as middle management?
Which of the following business functions is responsible for maintaining employee records?
Which of the following constitutes an organizational element in the UPS package tracking system described in the chapter?
Which of the following constitutes a managerial element in the UPS tracking system described in the chapter?
Which of the following is a global network that uses universal standards to connect millions of different networks around the world?
Which of the following is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format on the Internet?
Which of the following is a private corporate network extended to authorized users outside the organization?
Which of the following 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?
Which of the following is not an expression of a superior return on the investment in an information system?
Information technology (IT) consists of all hardware and software that a firm needs to use in order to achieve its business objectives.
Social complementary assets are investments made by a firm to optimize its return on information technology assets.
Information systems literacy focuses primarily on knowledge of information technology.
The three main dimensions of information systems are management, organizations, and information technology.
Knowledge workers make long-range strategic decisions about products and services.
There are four major business functions: human resources; manufacturing and production; finance and accounting; and information technology.
Parts of an organization's culture can always be found embedded in its information systems.
All business processes are formally documented by an organization.
Creative work driven by new knowledge and information is a significant part of management responsibility.
Intranets are used by organization to coordinate their activities with other firms for making purchases, collaborating on design, and other interorganizational work.
UPS's use of web-based tools that allow customers to embed UPS functions such as tracking and cost calculations into their own website is an information systems solution used to achieve customer intimacy.
There is little variation in returns on IT investment across firms.
Laws and regulations creating fair, stable market environments are examples of complementary social assets required to optimize returns from IT investments.
A firm that invests in a strong IS development team is making an investment in organizational complementary assets.
Data is information that has been shaped into a form that is meaningful to human beings.
Feedback is output returned to appropriate members of the organization to help them evaluate or correct the input stage.
The key elements of an organization are its structure, business processes, politics, culture, and people.
Middle managers make long-range strategic decisions about the firm's products and services.
Detailed, programmed instructions that control computer hardware components in an information system are known as computer software.
Describe the role that management plays in an organization. What role can information technology play in helping managers?
Answer
Management's job is to make sense out of the many situations faced by organizations, make decisions, and formulate action plans to solve organizational problems. Managers perceive business challenges in the environment, they set the organizational strategy for responding to those challenges, and they allocate the human and financial resources to coordinate the work and achieve success. Throughout, they must exercise responsible leadership. But managers must do more than manage what already exists. They must also create new products and services and even re-create the organization from time to time. A substantial part of management responsibility is creative work driven by new knowledge and information. Information technology can play a powerful role in helping managers design and deliver new products and services and redirecting and redesigning their organizations. Information technology is also one of many tools managers can use to cope with change. innovation in products, minimize warehouse overhead, and streamline distribution.
- What do studies of returns on information technology investments show in terms of variation of returns on investment? What accounts for these results?
Answer
Studies of returns on information technology investments show that there is considerable variation in the return firms receive. Some firms invest a great deal and receive a great deal; others invest an equal amount and receive few returns. Still other firms invest little and receive much, whereas others invest little and receive little. This suggests that investing in information technology does not by itself guarantee a good return. The reason for this variation is that information technology investment alone cannot make organizations and managers more effective unless they are accompanied by supportive values, structures, and behavior patterns in the organization and other complementary assets. Business firms often need to change how they do business before they can really reap the advantages of new information technologies.
- 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 has managerial and organizational components as well as technology.
An information system:
• supports decision making, coordination, and control.
• helps employees analyze problems.
• helps employees visualize complex subjects.
• helps create new products.
- 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 data would be the average number of tickets sold to seniors on certain days of the week.
- 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.
- 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 information. 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, and 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.
- 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 depend 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.
- Why is the building of a house an appropriate analogy for the building of an information system?
Answer
Houses are built with hammers, nails, and wood, but these do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over one's head. Computers and programs are the hammer, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to these solutions.
- What is the single most important theme of the book?
Answer
The single most important theme of the book is that managers need to consider the broader organization and management dimensions of information systems to understand current problems as well as to derive substantial above-average returns from information technology investments.
- What are complementary assets and how does investment in them impact returns on technology investments?
Answer
Complementary assets are those assets required to derive value from a primary investment. Research indicates that firms that support their technology investments with investments in complementary assets, such as new business models, new business processes, management behavior, organizational culture, or training, receive superior returns, whereas those firms failing to make these complementary investments receive less or no returns on their information technology investments.
Disciplines that contribute to the technical approach to information systems include:
Which of the following disciplines focuses on mathematical techniques for optimizing parameters of organizations, such as transportation and inventory control?
Sociologists study information systems with an eye to understanding:
Psychologists study information systems with an eye to understanding:
The behavioral approach to information systems focuses on analyzing the social, psychological, and economic impacts of systems rather than the technical aspects.
Describe the sociotechnical view of management information systems.
Answer
In the sociotechnical view of management information systems, optimal organizational performance is achieved by jointly optimizing both the social and technical systems used in production. Adopting a sociotechnical system's perspective helps to avoid purely technological approach to information systems. For instance, the fact that information technology is rapidly declining in cost and growing in power does not necessarily or easily translate into productivity enhancement or bottom-line profits. The fact that a firm has recently installed an enterprise-wide financial reporting system does not necessarily mean that it will be used or used effectively. Likewise, the fact that a firm has recently introduced new business procedures and processes does not necessarily mean employees will be more productive in the absence of investments in new information systems to enable those processes.
- Which academic disciplines contribute to the behavioral approach to information systems?
Answer
Sociologists study information systems with an eye toward how groups and organizations shape the development of systems and also how systems affect individuals, groups, and organizations. Psychologists study information systems with an interest in how human decision makers perceive and use formal information. Economists study information systems with an interest in understanding the production of digital goods, the dynamics of digital markets, and how new information systems change the control and cost structures within the firm.
