Management Information Systems: Managing the Digital Firm, 15e (Laudon)
Chapter 11 Managing Knowledge
1) Which of the following is the last step in the knowledge management value chain?
A) Feedback
B) Acquire
C) Disseminate
D) Store
E) Apply
Answer: E
2) About ________ percent of the United States GDP is produced by the knowledge and
information sectors.
A) 15
B) 25
C) 55
D) 65
E) 85
Answer: C
3) Which of the following statements best describes the relationship between collaboration and
knowledge management?
A) Collaboration is impossible without knowledge.
B) Knowledge is impossible without collaboration.
C) Knowledge is useful only when shared with others.
D) As knowledge improves, so does collaboration.
E) Knowledge is the result of collaboration.
Answer: C
4) The text defines ________ as the flow of events or transactions captured by an organization's
system.
A) information
B) data
C) wisdom
D) knowledge
E) experience
5) The text defines ________ as expertise of organizational members that has not been formally
documented.
A) wisdom
B) information
C) data
D) experience
E) tacit knowledge
Answer: E
6) Which of the following statements is not an accurate description of the importance of
knowledge to a firm?
A) Knowledge experiences network effects as more people share it.
B) Knowledge should be seen as an intangible key asset.
C) Knowledge enables firms to become more efficient in their use of scarce resources.
D) Knowledge is unconditional.
E) Much of the firm's value relies on being able to create knowledge.
Answer: D
7) What is meant by the statement "knowledge is sticky"?
A) Knowledge is hard to move.
B) Knowledge is universally applicable.
C) Knowledge works only in certain situations.
D) Knowledge is intangible.
E) Knowledge is difficult to replace.
Answer: A
8) Which of the following is not one of the main four dimensions of knowledge described in the
chapter?
A) Knowledge is a firm asset.
B) Knowledge has different forms.
C) Knowledge has a location.
D) Knowledge is situational.
E) Knowledge is timeless.
Answer: E
9) Changing organizational behavior by sensing and responding to new experience and
knowledge is called:
A) change management.
B) knowledge leveraging.
C) the knowledge value chain.
D) machine learning.
E) knowledge management.
Answer: D
10) What is the first value-adding step in the knowledge business value chain?
A) Acquire
B) Data and information acquisition
C) Store
D) Disseminate
E) Apply
Answer: B
11) The set of business processes, culture, and behavior required to obtain value from
investments in information systems is one type of:
A) knowledge culture.
B) knowledge discovery.
C) organizational and management capital.
D) organizational routine.
E) knowledge.
Answer: C
12) Which of the following are the three major types of knowledge management systems?
A) MIS, DSS, and TPS
B) CRM, SCM, and CAD
C) DBMS, DSS, and ECM
D) COPs, ECM, and MIS
E) Enterprise-wide knowledge management systems, KWS, and intelligent techniques
Answer: E
13) Specialized systems built for knowledge workers charged with discovering and creating
new knowledge for a company are called:
A) KWS.
B) LMS.
C) wikis.
D) COPs.
E) enterprise-wide knowledge management systems.
Answer: A
14) Which of the following does not describe the dimensions of knowledge in a firm?
A) It is contextual and applicable only in relevant situations.
B) It is intangible.
C) It is subject to the laws of diminishing returns.
D) It is a cognitive event involving mental models.
E) It is enmeshed in a firm's culture.
Answer: C
15) Informal social networks of professionals and employees within and outside the firm who
have similar work-related activities and interests are called communities of:
A) practice.
B) professionals.
C) interest.
D) knowledge.
E) expertise.
Answer: A
16) All of the following are intangible assets of a firm except its:
A) brand.
B) reputation.
C) knowledge.
D) information systems.
E) unique business processes.
Answer: D
17) While systems such as KWS can manage semistructured and unstructured information,
enterprise-wide content management systems are designed to manage a firm's structured
information.
Answer: FALSE
18) Knowledge is "sticky" and not easily moved.
Answer: TRUE
19) For a firm, organizational resources are unnecessary to transform data into knowledge.
Answer: FALSE
20) Expertise is thought to be the collective and individual experience of applying knowledge
to the solution of problems.
Answer: FALSE
21) Document management systems are essentially large databases.
Answer: TRUE
22) What is knowledge management? What types of knowledge might a company such as a taxi
service have, and could a taxi service benefit from knowledge management?
Answer: Knowledge management is the set of processes developed in an organization to create,
gather, store, disseminate, and apply the firm's knowledge. A taxi company's knowledge might
include explicit knowledge, such as maps and routes between destinations. Tacit knowledge would
include the experience of drivers, such as the best alternate routes between destinations or
passenger needs. A taxi service might benefit from a system that gave drivers guides on routes that
included alternate routes drivers had found. It might benefit from a learning management system
(LMS) that trained drivers for locations, destinations, and alternate routes.
23) Briefly outline the knowledge management value chain as it might apply to the online
catalog system of a public library.
Answer:
Acquisition: for an online catalog of a library this would be getting the book data into digital
format.
Storage: This would involve the systems for storing this data, perhaps a central server.
Dissemination: The library would need to determine how the card catalog information is
accessed by the public or by staff.
Application: This would involve the card catalog becoming part of the library's business
processes: for example, the card catalog would be linked to a system of borrowing, so that users
would know from the card catalog whether a book was out on loan.
Management and organizational activities: This would entail using the system with a card
catalog base for other services, perhaps linking up to a wider library system to share resources,
information, or book loaning between systems.
24) Identify the three major types of knowledge management systems. Provide two examples of
each.
Answer: The major types of knowledge management systems are enterprise-wide knowledge
management systems, knowledge work systems (KWS), and intelligent techniques.
Enterprise-wide knowledge management systems include: enterprise content management
(ECM) systems, collaboration and social tools, and learning management systems (LMS).
Types of KWS include: computer-aided design (CAD) systems, and virtual reality (VR)
systems. Intelligent techniques include: data mining, expert systems, case-based reasoning,
fuzzy logic, neural networks, genetic algorithms, hybrid AI systems, and intelligent agents.
25) What do you see as the challenges in setting up a knowledge management system?
Answer: Determining what knowledge will be the most effective or offer the most benefits to
the company; defining taxonomies, gathering accurate knowledge, quantifying the system's
success, change management and implementing business processes that incorporate the system.
26) What are the four dimensions of knowledge?
Answer: The four dimensions of knowledge are that it is a firm asset, it has different forms, it
has a location, and it is situational. Knowledge is a firm asset, although it is intangible, and its
value to the firm increases as more people share it. The different forms of knowledge are tacit
(unspoken) or explicit (codified), and involves both knowing how to follow procedures and
why things occur. The location of knowledge is in the minds of workers — it is a cognitive
event with both social and individual basis, and it is "sticky" within a firm's culture. Finally,
knowledge is situational — it is dependent on context, and knowing when to apply a procedure
is just as important as knowing the procedure itself.
27) ________ knowledge exists in formal documents, as well as in formal rules that
organizations derive by observing experts and their decision-making behaviors.
A) Unstructured
B) Tacit
C) Management
D) Explicit
E) Structured
Answer: E
28) Which of the following types of system enables organizations to digitize, index, and tag
documents according to a coherent framework?
A) Wikis
B) CAD
C) ECM
D) LMS
E) VR
Answer: C
29) All of the following are typical components or capabilities of an ECM system except:
A) knowledge portals.
B) communication tools.
C) tagging tools.
D) digital asset management.
E) AR tools.
Answer: E
30) Which of the following would not be considered semistructured knowledge?
A) Request for proposals
B) Voice mail
C) Videos
D) E-mail
E) Brochures
Answer: A
31) In content management, once a taxonomy is developed, documents must then be ________
with the proper classification.
A) tagged
B) inventoried
C) tupled
D) retrieved
E) archived
Answer: A
32) You are advising a video production company on the best type of knowledge management
system to help them archive digital video and sound clips. Which of the following will suit their
needs?
A) MOOC
B) Digital asset management system
C) CAD system
D) VRML system
E) LMS
Answer: B
33) A MOOC is:
A) a type of online course.
B) an intelligent technique.
C) a VR system.
D) a machine learning system.
E) a type of content management system.
Answer: A
34) Which of the following is a tool for the management, delivery, tracking, and assessment of
various types of employee learning?
A) Investment workstation
B) Organizational learning system
C) Employee enrichment system
D) LMS
E) Employee management system
Answer: D
35) A(n) ________ is a scheme for classifying information and knowledge in such a way that it
can be easily accessed.
A) Intelligent technique
B) COP
C) KWS
D) enterprise-wide knowledge management system
E) taxonomy
Answer: E
36) Both structured and unstructured documents can contain knowledge.
Answer: TRUE
37) Structured knowledge is explicit knowledge that exists in formal documents and formal
rules.
Answer: TRUE
38) Semistructured information is all the knowledge in a firm that resides in the heads of
experienced employees.
Answer: FALSE
39) How can knowledge be gathered from the personal and undocumented expertise of professionals
within a firm? List at least four ways to gather and disseminate such knowledge.
Answer: The expertise and experience of firm employees can be gathered by documenting their
experience through documenting best practices and frequently asked questions. You can also
develop a referral system by providing a way for employees to find a company expert for the solution
they are looking for. Other tools you can use include best-practices documents, FAQs, collaboration
tools, wikis, and blogs for helping gather and disseminate tacit knowledge.
40) You have been hired by a small architectural firm interested in implementing a knowledge
management system. What features do you think would be of most benefit to them?
Answer: Student answers will vary. The ability to store structured documents, such as plans,
blueprints; collaboration tools, the ability to reference up-to-date local or national building
codes, a system for storing case studies, best practices, and corporate standards. Also of
importance is a KWS or CAD to aid in engineering and design.
41) Which of the following statements about 3-D printing is not true?
A) It creates solid objects.
B) It is also called additive manufacturing.
C) It is incompatible with the cloud.
D) It creates objects layer by layer.
E) It uses specifications in a digital file.
Answer: C
42) All of the following are considered to be knowledge workers except:
A) designers.
B) engineers.
C) architects.
D) executives.
E) researchers.
Answer: D
43) CAD workstations:
A) provide engineers, designers, and factory managers with precise control over industrial
design and manufacturing.
B) provide an important source of expertise for organizations.
C) allow groups to work together on documents.
D) are high-end PCs used in the financial sector to analyze trading situations instantaneously
and facilitate portfolio management.
E) facilitate employee learning.
Answer: A
44) Which of the following would not be classified as a KWS?
A) CAD system
B) 3D visualization system
C) AR applications
D) Expert system
E) VR system
Answer: D
45) VR systems:
A) provide engineers, designers, and factory managers with precise control over industrial
design and manufacturing.
B) automate the creation and revision of designs.
C) use machines to make solid objects.
D) provide architects, engineers, and medical workers with precise, photorealistic simulations
of objects.
E) enable acquiring, storing, and disseminating knowledge documents in a virtual world.
Answer: D
46) Which of the following seeks to enhance human perception by combining a live direct view
of the physical world with computer-generated images?
A) AR
B) VRML
C) CAD
D) KWS
E) LMS
Answer: A
47) 3-D printers can produce fully functioning components, such as working batteries and
LEDs.
Answer: TRUE
48) CAD and VRML are both types of KWS.
Answer: TRUE
49) Knowledge workers include all of a company's workers who are tasked with managing or
creating knowledge, from top-level scientists to clerical and data workers.
Answer: FALSE
50) VRML requires the use of a powerful server as well as large amounts of bandwidth.
Answer: FALSE
51) Today's 3-D printers can create objects out of human cartilage.
Answer: TRUE
52) The yellow first-down markers shown on televised football games are examples of AR.
Answer: TRUE
53) Why are knowledge workers so important to the digital firm? What are their functions and
which of these do you feel is most critical to the success of the firm? Why?
Answer: Student answers will vary, but should include an understanding of the three main functions of
knowledge workers. An example answer is: Knowledge workers create new products or find ways to
improve existing ones. Without them, the firm would stagnate and become less competitive in an
environment that is always changing and is increasingly more competitive. In the modern economy,
knowledge is truly power. The three major functions of knowledge workers are: keeping the organization
up-to-date in knowledge as it develops in the external world; serving as internal consultants regarding
their areas of knowledge and its opportunities; and acting as change agents as they evaluate, initiate,
and promote new projects. The most important of these is to develop new knowledge as it applies to
the making ofproducts or services, as offering products and services is the mainstay of the corporation.
54) What are three important qualities or capabilities of a KWS?
A KWS must give knowledge workers the specialized tools they need, such as powerful graphics,
analytical tools, and communications and document-management tools. A KWS must provide a userfriendly interface to the KWS. These user-friendly interfaces save time by allowing the user to perform
needed tasks and get to required information without having to spend a lot of time learning to use the
computer. A KWS must be carefully designed to optimize the performance of the specific tasks of the
pertinent knowledge worker.
56) Which of the following statements about genetic algorithms is not true?
A) Genetic algorithms are based on techniques inspired by evolutionary biology.
B) Genetic algorithms are used to solve problems that are very dynamic and complex,
involving hundreds or thousands of variables or formulas.
C) Genetic algorithms are able to evaluate many solution alternatives quickly to find the best
one.
D) Genetic algorithms use an iterative process to refine initial solutions so that better ones are
more likely to emerge as the best solution.
E) Genetic algorithms discover knowledge by using hardware and software that parallel the
processing patterns of the biological or human brain.
Answer: E
57) All of the following are intelligent personal assistants for consumers except:
A) Siri.
B) Alexa.
C) Google Now.
D) Watson.
E) Cortana.
Answer: D
58) Apple's Siri application is an example of:
A) neural networks.
B) CBR.
C) AI.
D) intelligent agents.
E) machine learning.
Answer: D
59) Which of the following is not used to capture tacit knowledge?
A) Expert system
B) CBR
C) Fuzzy logic
D) Neural network
E) Knowledge base
Answer: D
60) Which of the following is a type of intelligent technique?
A) Digital asset management
B) Case-based reasoning
C) CAD
D) VRML
E) LMS
Answer: B
61) Which of the following techniques is used for knowledge discovery?
A) Expert system
B) Transaction processing systems
C) CBR
D) Data mining
E) Fuzzy logic
Answer: D
62) Which of the following is a computer-based system that attempts to emulate human
behavior?
A) Fuzzy logic
B) Neural networks
C) AI technology
D) Genetic algorithms
E) LMS
Answer: C
63) An inference engine is:
A) a strategy for searching the rule base in case-based reasoning.
B) the programming environment of an expert system.
C) a method of organizing expert system knowledge into chunks.
D) a strategy used to search through the rule base in an expert system by forward chaining or
backward chaining.
E) a programming algorithm used to create a virtual world using VRML.
Answer: D
64) Forward chaining is:
A) a strategy for searching the rule base in an expert system that begins with information
entered by the user.
B) the programming environment of an expert system.
C) a method of organizing expert system knowledge into chunks.
D) a strategy for searching the rule base in an expert system that begins with a hypothesis.
E) a programming algorithm used to create a virtual world using VRML.
Answer: A
65) Backward chaining is:
A) a strategy for searching the rule base in an expert system that begins with information
entered by the user.
B) the programming environment of an expert system.
C) a method of organizing expert system knowledge into chunks.
D) a strategy for searching the rule base in an expert system that begins with a hypothesis.
E) a programming algorithm used to create a virtual world using VRML.
Answer: D
66) Expert systems:
A) are capable of solving wide ranges of problems.
B) are based on DO WHILE rules.
C) lack the general intelligence of human beings.
D) share characteristics with mainframe computing.
E) are used for knowledge discovery.
Answer: C
67) Virtually all expert systems deal with problems of:
A) policy development.
B) classification.
C) logic and control.
D) high complexity.
E) imprecise rules.
Answer: B
68) Expert systems are expensive and time consuming to maintain because:
A) their rule base is so complex.
B) they rely on equipment that becomes outdated.
C) their rules must be reprogrammed every time there is a change in the environment, which in
turn may change the applicable rules.
D) only the person who created the system knows exactly how it works, and may not be
available when changes are needed.
E) it is difficult to program at this level of complexity without introducing software bugs.
Answer: C
69) Which of the following stores descriptions of past experiences of human specialists in a
database for later retrieval when the user encounters a situation with similar characteristics?
A) CBR
B) Fuzzy logic
C) Data mining
D) LMS
E) Expert systems
Answer: A
70) Your company wants to develop intelligent techniques to create a "smart" oven that can
perfectly cook basic foodstuffs, such as roasts and bread, using sensors and minimal input from
the user. The system would know the difference between rare, medium rare, medium, and well
done roasts. The category of intelligent technique that would describe this system is:
A) expert system.
B) neural network.
C) CBR.
D) fuzzy logic.
E) genetic algorithm.
Answer: D
71) You are an automotive engineer working on an application that will automatically parallel
park a car. The intelligent technique you may find most useful is:
A) CBR.
B) AI.
C) fuzzy logic.
D) expert system.
E) a neural network.
Answer: C
72) Fuzzy logic is a type of:
A) data mining.
B) a neural network.
C) an intelligent technique.
D) business intelligence.
E) CBR.
Answer: C
73) Which of the following has a large number of sensing and processing nodes that
continuously interact with each other?
A) Neural network
B) Expert system
C) CBR
D) Fuzzy logic system
E) Genetic algorithm
Answer: A
74) Which of the following describes a difference between neural networks and genetic
algorithms?
A) Genetic algorithms are designed to process large amounts of information.
B) Genetic algorithms are a type of knowledge discovery, while neural networks are an
intelligent technique.
C) Neural networks are programmed to "learn."
D) Genetic algorithms are designed to work with small amounts of data, while neural networks
can handle large quantities of data.
E) Neural networks are a type of machine learning, whereas genetic algorithms are static
programs.
Answer: C
75) Genetic algorithms:
A) develop solutions to particular problems using inheritance, crossover, and mutation.
B) represent knowledge as groups of characteristics.
C) do not work for most problems.
D) are based on logic.
E) seek to emulate a human expert's way of solving problems.
Answer: A
76) Software programs that work without direct human intervention to carry out specific tasks
for individual users, business processes, or software applications, are called:
A) intelligent agents.
B) intelligent techniques.
C) business intelligence.
D) AI hybrid systems.
E) genetic algorithms.
Answer: A
77) What type of intelligent technique helped Procter & Gamble determine the most efficient
methods for their trucks to deliver goods?
A) Fuzzy logic
B) Intelligent agents
C) Genetic algorithms
D) Neural networks
E) CBR
Answer: B
78) To automate routine tasks to help firms search for and filter information for use in
electronic commerce and supply chain management a firm would most likely use which of the
following?
A) CAD system
B) VR system
C) Fuzzy logic
D) Intelligent agent
E) Genetic algorithm
Answer: D
79) ________ is the study of how computer programs can improve their performance without
explicit programming.
A) Neural networks
B) COP
C) Genetic algorithms
D) Machine learning
E) Intelligent techniques
Answer: D
80) The terms used in a fuzzy logic system to describe imprecise states or conditions are
referred to as:
A) neural networks.
B) membership functions.
C) inference engines.
D) taxonomies.
E) tags.
Answer: B
81) Which type of intelligent agent models the behavior of consumers, stock markets, and
more, by seeing them as autonomous agents that follow relatively simple rules for interaction?
A) Agent-based modeling
B) MOOC
C) AR
D) VRML
E) Genetic algorithm
Answer: A
82) The model of human knowledge used by expert systems is referred to as:
A) the knowledge base.
B) CBR.
C) a neural network.
D) expert AI
E) VRML.
Answer: A
83) A(n) ________ is a type of intelligent technique that finds patterns and relationships in
massive data sets too large for a human to analyze.
A) inference engine
B) CAD
C) expert system
D) genetic algorithm
E) neural network
Answer: E
84) Systems that integrate different types of techniques, such as genetic algorithms, fuzzy logic,
neural networks, and expert systems, into a single application are called ________ systems.
A) differential intelligence
B) hybrid AI
C) machine learning
D) enterprise learning
E) CAD
Answer: B
85) Expert systems are the primary tools used for knowledge discovery.
Answer: FALSE
86) Expert systems capture the knowledge of skilled employees in the form of a set of rules in a
software system that can be used by others in the organization.
Answer: TRUE
87) Expert systems are typically used in business in discrete, highly structured decision-making
situations.
Answer: TRUE
88) Expert systems work by applying a set of AND/OR rules against a knowledge base, both of
which are extracted from human experts.
Answer: FALSE
89) CBR is not well-suited for diagnostic systems in medicine.
Answer: FALSE
90) Fuzzy logic can describe a particular phenomenon or process linguistically and then
represent that description in a small number of flexible rules.
Answer: TRUE
91) Fuzzy logic systems "learn" patterns from large quantities of data by sifting through data,
searching for relationships, building models, and correcting over and over again the model's
own mistakes.
Answer: FALSE
92) Because neural network applications cannot always explain why they arrive at a particular
solution, they are not well suited for use in the medical profession.
Answer: FALSE
93) Hybrid AI applications are being implemented in home appliances, such as washing
machines.
Answer: TRUE
94) Intelligent agents can discover underlying patterns, categories, and behaviors in large data
sets.
Answer: FALSE
95) Today's AI systems are about to come up with new and novel solutions to problems.
Answer: FALSE
97) What is CBR and how does it work?
Answer: Case-based reasoning (CBR) is an intelligent technique for enhancing an organization's
knowledge. In CBR, the knowledge and past experiences of human specialist are represented as
cases and stored in a database for later retrieval when the user encounters a new case with similar
parameters. The system searches for stored cases with problem characteristics similar to the new
one, finds the closest fit, and applies the solutions of the old case to the new case.
98) What is a chatbot and how are they used in business?
Answer: Chatbots (chatterbots) are software agents designed to simulate a conversation with
one or more human users via textual or auditory methods. They try to understand what you
type or say and respond by answering questions or executing tasks. Chatbots are typically used
in systems for customer service or information acquisition.
99) What is an inference engine and what is the difference between forward chaining and
backward chaining?
Answer: An inference engine is the strategy used to search through the knowledge base of an
expert system. Forward chaining and backward chaining are two different ways an inference
engine can function. In forward chaining, the engine begins with information entered by the
user and executes steps to arrive at a conclusion. In backward chaining, the user begins with a
hypothesis or condition and the engine asks questions in sequence to reach a conclusion.
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Management Information Systems: Managing the Digital Firm, 15e (Laudon) Chapter 12
Enhancing Decision Making
1) Which of the following statements best describes the business value of improved decision making?
A) Improved decision making creates better products.
B) Improved decision making results in a large monetary value for the firm as numerous small daily
decisions affecting efficiency, production, costs, and more add up to large annual values. C)
Improved decision making enables senior executives to more accurately foresee future financial
trends.
D) Improved decision making strengthens customer and supplier intimacy, which reduces costs.
E) Improved decision making creates a better organizational culture.
Answer: B
2) When there is no well-understood or agreed-on procedure for making a decision, it is said to be:
A) undocumented.
B) unstructured.
C) documented.
D) semi-structured.
E) ad-hoc.
Answer: B
3) If you can follow a definite procedure to make a business decision, you are making a(n) ________
decision.
A) ad-hoc
B) procedural
C) unstructured
D) semi-structured
E) structured
Answer: E
4) Which type of decision is calculating gross pay for hourly workers?
A) Semi-structured
B) Procedural
C) Structured
D) Unstructured
E) Ad hoc
Answer: C
5) Which type of decision is deciding whether to introduce a new product line?
A) Structured
B) Unstructured
C) Recurring
D) Nonrecurring
E) Procedural
Answer: B
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6) The decision to approve a capital budget is an example of a(n) ________ decision.
A) structured
B) ad hoc
C) semi-structured
D) undocumented
E) unstructured
Answer: E
7) The decisions involved in creating and producing a corporate intranet can be classified as ________
decisions.
A) semi-structured
B) procedural
C) ad hoc
D) structured
E) unstructured
Answer: A
8) Checking store inventory is an example of a(n) ________ decision.
A) procedural
B) structured
C) ad hoc
D) unstructured
E) semi-structured
Answer: B
9) The ________ phase of decision making finds or recognizes a problem, need, or opportunity. A)
choice
B) design
C) implementation
D) analysis
E) intelligence
Answer: E
10) Which of the following is not one of the Simon's four stages of decision making?
A) Implementation
B) Intelligence
C) Analysis
D) Choice
E) Design
Answer: C
11) Improving the quality of high-value decision making by an executive will save an organization far
more money than improving the quality of lesser-value decisions made at a lower level.
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Answer: FALSE
12) A structured decision cannot be made by following a well-defined set of procedures. "Feel"or
intuition is necessary.
Answer: FALSE
13) Structured decision making is most prevalent at lower organizational levels.
Answer: TRUE
14) The design phase of decision making consists of discovering, identifying, and understanding the
problems occurring in the organization.
Answer: FALSE
15) The choice phase of Simon's decision-making model includes choosing among solution
alternatives.
Answer: TRUE
16) The first stage in Simon's decision-making process model is the design stage.
Answer: FALSE
17) A structured decision is repetitive and routine, for which known procedures provide solutions.
Answer: TRUE
18) The third stage in Simon's description of decision making is implementation.
Answer: FALSE
19) In your position of office manager at a legal firm, you are in charge of hiring temporary legal
assistants and clerical workers. Describe how Simon's decision-making process applies to this
decision. Could that decision be aided by an information system in any way, and if so, how?
Answer: The decision-making process is:
1. Intelligence, or problem discovery: How many temps need to be hired, for how long, and what skills
would they need?
2. Design, or solution discovery: What temp agencies are available and what are their prices?
3. Choice, or choosing solutions: Evaluate the offerings of the temp agencies, and evaluate the abilities
of temps as per need.
4. Implementation, or solution testing: Evaluate the work of each temp against assignments andother
needs.
An information system that displayed the temps available for hire along with pertinent information
such as rate, and past assignments and evaluations would help in this process.
21) What are managerial roles and what are the three main categories of managerial roles?Answer:
Managerial roles are expectations of the activities that managers should perform. The three main
categories of managerial roles are interpersonal, informational, and decisional. Interpersonal roles
involve representing companies and performing symbolic duties, while also acting as liaisons
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between other levels of the firm. Informational roles require the distribution of information to those
who need to have it. Decisional roles require the initiation of new activities and the handling of
disturbances within the organization, as well as mediation of conflicts.
22) Describe high-velocity automated decision making and its dangers.
Answer: High-velocity automated decision making is a class of decisions that are highly structured and
performed in a manner of milliseconds, like a Google search or an automated stock trade. The danger
of these types of decisions is that they are made faster than a manager can supervise or control, so
mistakes can be disastrous. For example, Knight Capital lost $440 million due to trades made in error
by automated systems. Human beings who write the software enabling these types of decisions must
be careful to ensure that the systems operate properly.
23) Which of the following is not one of the five observed ways in which managerial behavior differs
from the classical description of managers?
A) Managers perform a great deal of work at an unrelenting pace.
B) Managers perform a low number of activities for a high percentage of time.
C) Managers prefer current, specific, ad-hoc information.
D) Managers prefer oral forms of communication.
E) Managers give high priority to maintaining a diverse web of contacts.
Answer: B
24) The role of liaison falls into which of Mintzberg's managerial classifications?
A) Decisional
B) Informational
C) Interpersonal
D) Symbolic
E) Leading
Answer: C
25) Mintzberg outlined three categories of managerial roles: A)
interpersonal, informational, and decisional.
B) control, leadership, oversight.
C) operational, management, and executive.
D) cultural, organizational, and technical.
E) middle management, senior management, executive.
Answer: A
26) The role of entrepreneur falls into which of Mintzberg's managerial classifications?
A) Decisional
B) Informational
C) Interpersonal
D) Symbolic
E) Leading
Answer: A
27) According to Mintzberg, managers in their informational role act as:
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A) figureheads for the organization.
B) leaders.
C) nerve centers of the organization.
D) negotiators.
E) liaisons.
Answer: C
28) Which of the following systems support a manager's role as leader of an organization?
A) DSS
B) Telepresence systems
C) E-mail
D) MIS
E) ESS
Answer: B
29) All of the following managerial roles can be supported by information systems except: A) liaison.
B) resource allocator.
C) nerve center
D) disseminator.
E) negotiator.
Answer: E
30) When managers represent their company in the outside world and perform symbolic duties, they
are acting in their: A) decisional role.
B) managerial role.
C) informational role.
D) interpersonal role.
E) leadership role.
Answer: D
31) As discussed in the chapter text, the three main reasons that investments in information technology
do not always produce positive results are:
A) management support, technical logistics, and user compliance.
B) organization, environment, culture.
C) information quality, information integrity, and information accuracy.
D) information quality, organizational culture, and management filters.
E) organization, culture, and technology.
Answer: D
32) The concept of management ________ describes situations in which managers act on
preconceived notions that reject information that does not conform to their prior conceptions. A) filters
B) backgrounds
C) biases
D) inefficiency
E) politics
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Answer: A
33) Which quality dimension of information is concerned that the data values of an information source
fall within a defined range?
A) Timeliness
B) Consistency
C) Completeness
D) Accessibility
E) Validity
Answer: E
34) The dimension of ________ describes whether data elements are consistently defined.
A) completeness
B) accuracy
C) validity
D) consistency
E) integrity
Answer: D
35) High-velocity decision making systems are growing rapidly for decisions classed as: A) semistructured.
B) financial.
C) ad hoc.
D) predefined.
E) highly structured.
Answer: E
36) Which of the following describes how the Simon framework of decision-making works in highvelocity decision environments?
A)
Only the initial step is performed by the software; the final three steps are handled by humans.
B)
The first two steps of Simon's framework are eliminated and the final two steps are handled by
software algorithms.
C)
The first three steps of the process are handled by software algorithms and the final step is
handled by experienced managers.
D)
All four steps are performed by humans with the support of high-speed, high-volume DSS and
ESS.
E)
All four steps of the process are handled by software algorithms; humans are eliminated from
the decisions because they are too slow.
Answer: E
37) A drawback to high-velocity, automated decision-making systems is that they are unable to: A)
handle high volumes of decisions.
B) handle structured decisions.
C) handle semi-structured decisions.
D) control themselves and respond to new environments.
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E) be applied to situations outside of the financial world.
Answer: D
38) Behavioral models of management see managers as being ________ than does the classical
model.
A) more systematic
B) more informal
C) more reflective
D) more well organized
E) less reactive
Answer: B
39) Which of the following is not one of the five classical functions of managers?
A) Leading
B) Deciding
C) Planning
D) Organizing
E) Controlling
Answer: A
40) The dimension of ________ in information quality describes whether the structure of data is
consistent.
A) integrity
B) accuracy
C) timeliness
D) completeness
E) consistency
Answer: A
41) The classical model of management does not address what exactly managers do when they plan,
decide things, and control the work of others.
Answer: TRUE
42) Experts from a variety of fields have found that managers are poor at assessing risk.
Answer: TRUE
43) A key business decision in your sporting goods manufacturing company is determining what
suppliers to use for your raw materials. How can you determine if a manager in charge of selecting
suppliers is making the best choice?
Answer: Student answers will vary but should include an understanding of evaluating the information
the data is based on. For example: One way to determine the manager's choice is to find out what he
or she is basing their decision on: price, quality, schedule, relationship, etc. Then you could find out
how those measurements of the supplier qualities are made is the data about the suppliers accurate
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information. You could evaluate the data informing the decision along the information quality
dimensions: accuracy, integrity, consistency, completeness, validity, timeliness, and accessibility.
44) Explain why even well-designed information systems do not always help improve a firm's decision
making.
Answer: Student answers will vary but should include the three main reasons for information systems
not always producing positive results:
1. information quality,
2. management filters, and3. organizational inertia/politics.
A sample answer is:
There are three main reasons that implementing a well-designed information system might not result
in better decisions. First, the information produced by a system may be incomplete and inaccurate.
The quality of information will depend on the quality of data gathered, and may require a minimum
amount of data to be gathered. Inaccurate data and incomplete data can degrade the quality of
decision making. Second, management filters can also stymie good decision making a manager who
has a bias against some types of activities or solutions, or is overly optimistic or pessimistic will make
decisions that are skewed towards their own perspective rather than actual facts. Finally,
organizational inertia and politics can hamper decision making. Information systems can require
organizational change in roles and business processes that employees want to resist; or a system can
produce information that suggests that a change is necessary but employees ignore in order to
maintain the status quo in roles and responsibilities. Difficulty: Moderate
45) Which of the following BI tools or abilities has been driving the movement toward "smart cities?"
A) OLAP
B) Chi-square analysis
C) Predictive analytics
D) Data mining
E) Big data analytics
Answer: E
46) Which of the following statements best describes the term business intelligence?
A) Software developed exclusively for business management
B) The tools and techniques used to analyze and understand business data
C) The infrastructure for collecting and managing business data
D) Information systems involved in business decision making
E) Enterprise systems used to make business decisions
Answer: A
47) Decisions regarding managing and monitoring day-to-day business activities are referred to as
________ intelligence.
A) business
B) analytical
C) operational
D) transactional
E) production
Answer: C
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48) Which of the following companies is not identified in the text as one of the leading producers of
business intelligence and analytics products?
A) Google
B) Microsoft
C) SAP
D) IBM
E) SAS
Answer: A
49) Which of the following is not one of the six main elements in the business intelligence environment
discussed in this chapter?
A) Managerial users and methods
B) Organizational environment
C) User interface
D) Data from the business environment
E) Delivery platform
Answer: B
50) Which of the following is not one of the six main analytic functionalities of BI systems for helping
decision makers understand information and take action?
A) Production reports
B) Parameterized reports
C) Business case archives
D) Forecasts, scenarios, and models
E) Drill down
Answer: C
51) ________ are visual tools for presenting performance data in a BI system.
A) Dashboards and scorecards
B) Parameterized reports
C) Reports and the drill-down feature
D) Scenarios and models
E) Ad hoc report creation
Answer: A
52) Which of the following are most likely to rely primarily on the drill-down functionality of BI for their
decision-making needs?
A) IT developers
B) Middle managers
C) Operational employees
D) Business analysts
E) Senior executives
Answer: B
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53) A(n)________ report is produced when a user enters various values in a pivot table to filter data.
A) drill-down
B) SQL
C) ad hoc
D) production
E) parameterized
Answer: E
54) A(n) ________ is a BI feature that presents performance data defined by users.
A) ad hoc query
B) parameterized report
C) interface
D) portal
E) dashboard
Answer: E
55) BI that is designed to determine the most likely effects of changes in the business environment is
called:
A) statistical modeling.
B) environmental analytics.
C) predictive analytics.
D) big data analytics.
E) parameterized reports.
Answer: C
56) Which of the following are most likely to rely primarily on production reports for their decisionmaking needs?
A) Operational supervisors
B) Senior managers
C) Analytic modelers
D) Business analysts
E) Executives
Answer: A
57) Which type of information system uses data visualization technology to analyze and display data
for planning and decision making in the form of digitized maps?
A) GIS
B) DSS
C) Location analytics
D) Executive support systems
E) GDSS
Answer: A
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58) Predictive analytics is used for all of the following except:
A) anticipating customer response to price changes.
B) identifying the most profitable customers.
C) determining the best routes for product delivery.
D) establishing consumer credit scores.
E) forecasting driver safety.
Answer: C
59) Which of the following is not an example of a BI predefined production report?
A) Workforce demographics
B) Order cycle time
C) Revenue forecasts
D) Supplier performance
E) Direct and indirect spending
Answer: C
60) You can use location analytics to determine how best to route your deliveries of products to retail
outlets.
Answer: TRUE
61) A GIS is a DSS designed specifically to work with spatial information.
Answer: TRUE
62) Big data is too unwieldy to analyze for consumer preferences.
Answer: FALSE
63) Data visualization technologies are used to help human users see patterns and relationships in
large amounts of data.
Answer: TRUE
64) GIS are useful for businesses, but not as much for state and local governments.
Answer: FALSE
68) Why are managerial users and methods considered an important part of the BI environment?
Answer: Managerial users and methods are an important part because the hardware and software of
business intelligence are only tools they are only as useful or intelligent as their users. The managers
using the BI tools will decide how important or unimportant various business goals are, choose what
analytic tools are used, and determine whether and how to measure progress towards those goals, and
how they evaluate the tools themselves.
69) What is big data? How does it provide business value?
Answer: Big data is a term to describe the massive amount of data generated by social media,
customer transactions, and output from machines and sensors. It is valuable to the business because
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it provides ways to find new ways to analyze sales, customers, and more, and make better predictions,
improving business decisions.
70) What is behind the movement towards "smart cities?"
Answer: "Smart cities" make use of big data analytics and digital technology to make better decisions.
Most cities have stockpiles of tax records, crime data, health stats, educational records, and much
more. Until now, there's been no good way to synthesize all of that raw data into actionable information.
Using big data analytics and predictive modeling, cities can make better decisions on transportation
operation, public safety, and health care, and other models allow cities to determine the impacts of
changing one service on the rest of their services. Difficulty: Challenging
71) MIS typically produce:
A) new ways of looking at data that emphasize change, flexibility, and rapid response.
B) fixed, regularly scheduled reports based on data extracted from the organization's TPS.
C) solutions to semi-structured problems appropriate for middle management decision making.
D) assumptions, responses to ad-hoc queries, and graphic representations of existing data.
E) scorecards of overall firm performance along predefined key indicators.
Answer: B
74) An information system for a building company that tracks construction costs for various projects
across the United States would be categorized as a type of:
A) BPM.
B) MIS.
C) KPI.
D) GSS.
E) GDSS.
Answer: B
75) A pivot table is a(n):
A) spreadsheet tool that displays two or more dimensions of data in a convenient format.
B) type of relational database.
C) chart tool that can rotate columnar data quickly and visually.
D) tool for performing sensitivity analysis.
E) integral data visualization tool used in digital dashboards and scorecards.
Answer: A
76) An information system that combines data from internal TPS with information from financial
systems and external sources to deliver reports such as profit-loss statements and impact
analyses, is an example of: A) DSS.
B) ESS.
C) CDSS.
D) MIS.
E) GIS.
Answer: B
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77) The leading methodology for understanding the really important information needed by a firm's
executives is called the ________ method.
A) digital dashboard
B) balanced scorecard
C) KPI
D) data visualization
E) predictive analytics
Answer: B
78) Which of the following types of systems would be used to present senior marketing executives with
in-depth information about customer retention, satisfaction, and quality performance?
A) CDSS
B) MIS
C) DSS
D) TPS
E) ESS
Answer: E
79) Measures defined by management and used to internally evaluate the success of a firm's
financial, business process, customer, and learning and growth are called: A) benchmarks.
B) KPIs.
C) the balanced scorecard method.
D) BPM.
E) parameters.
Answer: B
80) A(n) ________ facilitates the solution to unstructured problems by a set of decision makers working
together as a group.
A) DSS
B) ESS
C) CDSSD) GIS
E) GDSS
Answer: E
81) The management methodology of using a firm's strategy to generate operational targets for the
business and measuring progress towards them using the firm's enterprise systems is called: A)
benchmarks.
B) KPIs.
C) the balanced scorecard method.
D) BPM.
E) business intelligence.
Answer: D
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82) ESS:
A) support the structured decision making of senior executives.
B) have the ability to drill down into lower levels of detail.
C) easily integrate data from different systems.
D) are primarily driven by information derived from a company's transaction processing systems.
E) enable operational managers to create parameterized reports.
Answer: B
83) A well-designed ESS will allow management to:
A) create routine production reports as well as view overall business performance.
B) facilitate group decision making.
C) create pivot charts.
D) analyze big data.
E) track the activities of competitors.
Answer: E
84) GDSS:
A) are designed to allow meeting attendees to share their thoughts in real-time with their peers.
B) support decisions that require knowledge about the geographic distribution of resources.
C) are only used with geographically dispersed attendees.
D) facilitate the solution of unstructured problems.
E) provide tools that allow managers to visualize data.
Answer: D
85) GDSS capabilities have improved along with all of the following except: A) improved
power of desktop PCs.
B) explosion of mobile computing.
C) growth of cellular networks.
D) increase in dedicated conference rooms.
E) expansion of Wi-Fi bandwidth.
Answer: D
86) GDSS such as Cisco Collaboration Meeting Rooms Hybrid can handle up to: A) 5
participants.
B) 50 participants.
C) 500 participants.
D) 1000 participants.
E) 5000 participants.
Answer: C
87) Middle management face primarily structured decisions.
Answer: TRUE
88) DSS primarily address structured problems.
Answer: FALSE
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89) MIS typically produce fixed, regularly scheduled reports based on data extracted and summarized
from the firm's underlying transaction processing systems.
Answer: TRUE
90) DSS are a special category of location analytics.
Answer: FALSE
91) What-if analysis works forward from known or assumed conditions.
Answer: TRUE
92) Sensitivity analysis predicts outcomes from constant inputs.
Answer: FALSE
93) GDSS facilitate the solution of unstructured problems by a set of decision makers working together
as a group in either the same location or different locations.
Answer: TRUE
94) GDSS requires a dedicated conference room with special hardware and software tools.
Answer: FALSE
95) GDSS are designed to display data in the form of digitized maps.
Answer: FALSE
96) KPI analysis is the leading methodology for understanding the most important information needed
by a firm's executives.
Answer: FALSE
97) Describe MIS and DSS and differentiate between them.
Answer: MIS provide information on the firm's performance to help managers monitor and control the
business. They typically produce hard copy, fixed, regularly scheduled reports based on data extracted
and summarized from the organization's underlying transaction processing systems. DSS provide new
sets of capabilities for nonroutine decisions and user control. MIS accents reports based on routine
flows of data and assists in the general control of the organization. DSS emphasizes change, flexibility,
and rapid response to unstructured problems.
98) What is the business value of a DSS?
Answer: DSS can help companies improve supply chain management and customer relationship
management. Some take advantage of the company-wide data provided by enterprise systems. DSS
today can also harness the interactive capabilities of the web to provide decision-support tools to both
employees and customers.
Management Information Systems: Managing the Digital Firm, 15e (Laudon) Chapter 13
Building Information Systems
1) The four kinds of structural organizational change enabled by IT, in order from least to most risky,
are:
A) rationalization, automation, reengineering, and redesigning.
B) rationalization, automation, reengineering, and paradigm shift.
C) automation, rationalization, redesigning, and paradigm shift.
D) automation, redesigning, restructuring, and paradigm shift.
E) paradigm shift, reengineering, rationalization, and automation.
Answer: C
2) In automation:
A) more manual steps are required.
B) business processes are reorganized to cut waste and eliminate repetitive, paper-intensive tasks.
C) the nature of the business is rethought.
D) employees are enabled to perform their tasks more efficiently.
E) business processes are added.
Answer: D
3) Which of the following is more powerful than rationalization of procedures?
A) Business process redesign
B) TQM
C) Automation
D) Six sigma
E) Systems analysis and design
Answer: A
4) A bank has reworked its mortgage application process so that several steps are handled by
computer software, and some steps are combined to reduce bottlenecks in processing. The goal is to
gradually improve its efficiency over time. This is an example of:
A) automation.
B) rationalization of procedures.
C) paradigm shift.
D) TQM.
E) six sigma.
Answer: B
5) An upscale organic foods grocery chain is implementing an information system that will enable it to
add same-day home delivery of groceries to its customers. This is an example of: A) automation.
B) rationalization of procedures.
C) paradigm shift.
D) business process redesign.
E) organizational change.
Answer: C
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6) The idea that the achievement of quality control is an end in itself describes a main concept of:
A) BPM.
B) BPR.
C) six sigma.
D) TQM.
E) systems analysis and design.
Answer: D
7) ________ provide(s) a methodology and tools for dealing with the organization's ongoing need to
revise and optimize its numerous business processes.
A) Business process redesign
B) Business process management
C) CASE tools
D) TQM
E) Systems analysis and design
Answer: B
8) In order, what are the first three steps in BPM?
A)
1. identifying processes for change, 2. analyzing existing processes, 3. designing the new
process.
B)
1. analyzing existing processes, 2. identifying processes for change, 3. designing the new
process.
C)
1. identifying processes for change, 2. designing the new process, 3. implementing the new
process.
D)
1. analyzing processes to change, 2. designing the new process, 3. measuring the optimized
process.
E)
1. designing new processes, 2. analyzing existing processes, 3. identifying processes for
change.
Answer: A
9) What is the greatest barrier to successful business process change?
A) Ineffective project management
B) Usability of implemented solution
C) Selecting the correct process to change
D) Organizational culture
E) Poor choice of technology
Answer: D
10) Possible functions of BPM tools include all of the following except:
A) integrating existing systems to support business processes' improvements.
B) automating business processes.
C) identifying and document business processes.
D) testing the security of business processes.
E) designing new processes.
Answer: D
11) BPM software provides tools that help business do all of the following except: A) identify
and document processes requiring improvement.
B) create models of improved processes.
C) capture and enforce business rules for performing processes.
D) capture and identify information system requirements for a new system.
E) integrate existing systems to support new or redesigned processes.
Answer: D
12) A(n) ________ is an organizational change that involves rethinking the nature of the business and
the nature of the organization itself.
A) automation program
B) rationalization program
C) systems analysis
D) paradigm shift
E) business process redesign program
Answer: D
13) The most common form of IT-enabled organizational change is automation.
Answer: TRUE
14) Rationalization of procedures describes a radical rethinking of the business models.
Answer: FALSE
15) Organizations will adjust to new information systems without any special efforts if the system is a
good system to begin with.
Answer: FALSE
16) Six sigma describes the measurement of quality as 3.4 defects per million.
Answer: TRUE
17) Describe each type of organizational change enabled by information technology. Give an example
of each type of change, as it might be illustrated through the operations of a hotel.
In automation, employees are assisted with performing tasks automatically. In a hotel, this might mean
that a system is set up for the reservations desk to record and process customer reservations.
In rationalization of procedures, standard operating procedures are streamlined. In a hotel, this might
mean that a reservation system that required three or four steps for checking a customer in would be
reduced to one or two steps.
In business process reengineering, business processes are analyzed, simplified and redesigned. In a
hotel, the reservation and check-in system might be designed to allow the customers to reserve rooms
and check in themselves, without the need of a hotel employee to confirm the process.
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In paradigm shift, the very nature of the business is rethought and new business models are defined.
In a hotel, this might mean that the idea of renting rooms on a night-by-night basis to clients might be
rethought of as an extended stay place, or perhaps even as a condominium or other business type.
18) What is the business importance of managing the quality of business processes? Describe two
methods of quality management.
Answer: Quality management is one area of continuous process improvement. Quality improvements
in business processes can increase efficiency, reduce waste, lower costs, and can raise the level of
product and service quality. Two methods for achieving greater quality are Total Quality Management
(TQM) and Six Sigma. In TQM, quality is the responsibility of all people and functions within an
organization. Everyone is expected to contribute to the overall improvement of quality. Six sigma is a
specific measure of quality, representing 3.4 defects per million opportunities. Most companies cannot
achieve this level of quality but use six sigma as a goal to implement a set of methodologies and
techniques for improving quality and reducing costs.
19) Which conversion process introduces the system first to a limited portion of the
organization?
A) Pilot study strategy
B) Phased approach strategy
C) Limited cutover strategy
D) Parallel strategy
E) Parallel approach strategy
Answer: A
20) Which process develops a detailed description of the functions that a new information system
must perform?
A) Feasibility study
B) Requirements analysis
C) Systems design
D) Test plan development
E) Management plan
Answer: B
21) Systems design:
A) determines whether a solution is feasible from a financial and organizational standpoint.
B) shows how the new system will fulfill the information requirements.
C) identifies which users need what information, where, when and how.
D) is concerned with the logical view of the system solution.
E) translates system specifications into software program code.
Answer: B
22) Transferring data from a legacy system to the new system would be defined by which category of
system design specifications?
A) Input
B) Database
C) Manual procedures
D) Conversion
E) Implementation
Answer: D
23) Unit testing:
A) includes all the preparations for the series of tests to be performed on the system.
B) tests the functioning of the system as a whole in order to determine if discrete modules will function
together as planned.
C) involves testing the entire system with real-world data.
D) provides the final certification that the system is ready to be used in a production setting.
E) tests each program separately.
Answer: E
24) System testing:
A) includes all the preparations for the series of tests to be performed on the system.
B) tests the functioning of the system as a whole in order to determine if discrete modules will function
together as planned.
C) tests each program separately.
D) provides the final certification that the system is ready to be used in a production setting.
E) tests the information requirements of a system.
Answer: B
25) Acceptance testing:
A) includes all the preparations for the series of tests to be performed on the system.
B) tests the functioning of the system as a whole.
C) tests each program separately in the system.
D) provides the final certification that the system is ready to be used in a production setting.
E) tests the conversion of legacy data to the new system.
Answer: D
26) In a parallel conversion strategy, the new system: A) is tested
by an outsourced company.
B) replaces the old one on an appointed day.
C) and the old are run together for a time.
D) is introduced only to a limited area first.
E) is slowly converted from the old system.
Answer: C
27) In the direct cutover conversion strategy, the new system: A) is tested
by an outsourced company.
B) replaces the old one at on an appointed day.
C) and the old are run together.
D) is introduced in stages.
E) the old and new systems are run in parallel.
Answer: B
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28) Changes in hardware, software, documentation, or production to a production system to correct
errors, meet new requirements, or improve processing efficiencies are termed: A) acceptance.
B) production.
C) maintenance.
D) post-implementation.
E) implementation.
Answer: C
29) In what stage of systems development are design specifications created?
A) Systems analysis
B) Systems design
C) Testing
D) Conversion
E) Implementation
Answer: B
30) A systems analysis includes a(n) ________ that is used to determine whether the solution is
achievable, from a financial, technical, and organizational standpoint.
A) feasibility study
B) data flow diagram
C) logical design
D) systems design document
E) request for proposal
Answer: A
31) ________ provide(s) a detailed statement of the information needs that a new system must satisfy;
identifies who needs what information, and when, where, and how the information is needed.
A) Systems analysis and design documents
B) Information requirements
C) A data flow diagram
D) A feasibility study
E) Requests for proposal
Answer: B
32) A(n) ________ is the model or blueprint for an information system solution and consists of all the
specifications that will deliver the functions identified during systems analysis.
A) feasibility study
B) data flow diagram
C) systems design document
D) information requirements document
E) request for proposal
Answer: C
33) During the ________ stage of system development, system specifications that were prepared
during the design stage are translated into software code.
A) programming
B) systems analysis and design
C) implementation
D) conversion
E) acceptance testing
Answer: A
34) ________ is the process of changing from the old system to the new system.
A) Implementation
B) Conversion
C) Systems analysis and design
D) Programming
E) End user involvement
Answer: B
35) The entire system-building effort is driven by: A) six sigma.
B) feasibility studies.
C) documentation.
D) user information requirements.
E) available information technology.
Answer: D
36) Information systems can only have one possible design.
Answer: FALSE
37) Documentation reveals how well a system works from both a technical standpoint, but not an enduser standpoint.
Answer: FALSE
38) Systems development activities always take place in sequential order.
Answer: FALSE
40) List and describe at least nine factors considered in the design specifications for a new system.
Give at least two examples for each one.
Answer:
Output. Medium, content, timing
Input. Origins, flow, data entry
User interface. Simplicity, efficiency, logic, feedback, errors
Database design. Logical data model, volume and speed requirements, organization and design,
record specifications
Processing. Computations, program modules, required reports, timing of outputs
Manual procedures. What activities, who performs them, when, how, where
Controls. Input controls, processing controls, output controls, procedural controls
Security. Access controls, catastrophe plans, audit trails
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Documentation.
Conversion. Transfer files, initiate procedures, select testing method, cut over to new system
Training. Select tra
Organizational changes. Task redesign, job design, process design, organization structure design,
reporting relationships Difficulty: Moderate
41) Discuss the role and influence the user plays in software development.
Answer: The user is the primary focus of software development. Whether a new information system
succeeds or fails largely depends on the roles of users. Building successful information systems
requires close cooperation among end users and information systems specialists throughout the
systems development process. If users are heavily involved in the development of a system, they have
more opportunities to mold the system according to their priorities and business requirements, and
more opportunities to control the outcome. They also are more likely to react positively to the
completed system because they have been active participants in the change process. Incorporating
user knowledge and expertise leads to better solutions. The role of the user in the development of
software depends on the method of development used. In SDLC work, end users are limited to
providing information requirements and reviewing the technical staff's work. In prototyping, users are
involved throughout development, through the use and review of iterative steps of the prototype. In
end-user development, the users themselves create the system. Users are typically more involved
also in RAD, through the use of prototyping and JAD. In joint application design, end users and
information systems specialists work together in an interactive session to discuss design. Difficulty:
42) Briefly describe the four main conversion strategies for changing from an old system to a new
system.
Answer: The four main conversion strategies are the parallel strategy, the direct cutover strategy, the
pilot study strategy, and the phased approach strategy. The parallel strategy involves running the old
system and its replacement concurrently until the organization is sure that the new one will work
properly. The direct cutover strategy replaces the old system with the new one entirely on a specific
date, which could be risky. The pilot study strategy introduces the new system to a limited area of the
organization to test its efficacy. The phased approach strategy introduces the system in stages, either
by functions or by organizational units.
44)
The primary tool for representing a system's component processes and the flow of data
between them is the:
A) data dictionary.
B) process specifications diagram.
C) structure chart.
D) data flow diagram.
E) object-oriented chart.
Answer: D
46) An entire information system is broken down into its subsystems by using: A) highlevel data flow diagrams.
B) low-level data flow diagrams.
C) process specifications.
D) structured diagrams.
E) logical design diagrams.
Answer: A
47) To understand and define the contents of data flows and data stores, system builders use: A) a
data dictionary.
B) process specifications diagrams.
C) user documentation.
D) data flow diagrams.
E) systems analysis.
Answer: A
48) To show each level of a system's design, its relationship to other levels, and its place in the overall
design structure, structured methodologies use: A) structure charts.
B) Gantt and PERT charts.
C) process specifications.
D) data flow diagrams.
E) user documentation.
Answer: A
49) In object-oriented development:
A) the class is used as the basic unit of systems analysis and design.
B) an object is a collection of data that is acted on by external processes.
C) processing logic resides within objects.
D) a strict, step-by-step development process is essential.
E) data and processes are separated.
Answer: C
50) In an object-oriented development framework for a university, how would the classes Degree,
Mathematics, and Physics be related?
A) Degree would be a sister class to Mathematics and Physics.
B) Degree is a superclass to Mathematics and Physics.
C) Mathematics and Physics would be ancestors to Degree.
D) Degree would be a subclass to Mathematics and Physics.
E) Math, Physics and Degree are sister classes.
Answer: B
51) Object-oriented modeling is based on the concepts of:
A) class and inheritance.
B) classes and objects.
C) objects and relationships.
D) objects and inheritance.
E) classes and relationships.
Answer: A
52) Object-oriented development could potentially reduce the time and cost of writing software because:
A) object-oriented programming requires less training.
B) iterative prototyping is not required.
C) objects are reusable.
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D) a single user interface object can be used for the entire application.
E) it's not necessary to use a formal methodology to design a system.
Answer: C
53) Which of the following statements about CASE is not true?
A) CASE provides hardware and software tools.
B) To be used effectively, CASE tools require organizational discipline.
C) CASE tools can improve communication between users and technical specialists.
D) CASE tools support iterative design.
E) CASE tools facilitate the creation of clear documentation.
Answer: A
54) ________ describe the transformation occurring within the lowest level of the data flow diagrams.
A) Design requirements
B) Information requirements
C) Technology design plans
D) object-oriented frameworks
E) Process specifications
Answer: E
55) A data flow diagram offers a logical and graphical model of information flow, partitioning asystem
into modules that show manageable levels of detail.
Answer: TRUE
56) A structure chart is a top-down chart, showing each level of design, its relationship to other levels,
and its place in the overall design structure.
Answer: TRUE
57) Objects are grouped into hierarchies, and hierarchies into classes.
Answer: FALSE
58) Traditional structured development is more incremental than object-oriented development.Answer:
Answer: FALSE
59) CASE tools facilitate the creation of clear documentation and the coordination of team development
efforts.
Answer: TRUE
60) End user development:
A) allows end users to create highly complex information systems.
B) increases the time and steps required to produce a finished application when compared to
professional development.
C) allows ends users to develop simple information systems.
D) requires more time to develop systems.
E) requires formal assistance from technical specialists.
Answer: C
62) Organizational software packages often include ________ features that allow the software to be
modified to meet organizational requirements.
A) automation
B) object oriented
C) programming
D) design
E) customization
Answer: E
63) The oldest method for building information systems is:
A) component-based development.
B) prototyping.
C) object-oriented development.
D) the systems life cycle.
E) computer-aided software engineering.
Answer: D
64) In the traditional systems life cycle, end users:
A) are important and ongoing members of the team from the original analysis phase through
maintenance.
B) are important only in the testing phases.
C) have no input.
D) are limited to providing information requirements and reviewing the technical staff's work.
E) control the development of the system.
Answer: D
65) In which type of systems building are the development stages organized so that tasks in one stage
are completed before the tasks in the next stage begin?
A) Traditional
B) Prototyping
C) RAD
D) JAD
E) Object oriented development
Answer: A
66) You are an IT project manager for an advertising firm. The firm wishes to create an online tool that
will be used to survey focus group reactions to products in development. The most important
consideration for the firm is being able to offer the tool as soon as possible as a new corporate service.
However, you know that many of the senior managers that are business owners of this project have
difficulty in understanding technical or software development issues, and are likely to change their
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requirements during the course of development. What development method would be most successful
for this project?
A) RAD
B) JAD
C) End-user development
D) Prototyping
E) Traditional
Answer: D
67) A systems building approach in which the system is developed as successive versions, each
version reflecting requirements more accurately, is described to be: A) end-user oriented.
B) prototyped.
C) object-oriented.
D) agile.
E) iterative.
Answer: E
68) Which of the following may occur when systems are created rapidly, without a formal development
methodology?
A) End users can take over the work of IT specialists.
B) The organization quickly outgrows the new system.
C) Hardware, software, and quality standards are less important.
D) Testing and documentation may be inadequate.
E) IT specialists dominate the design of the system.
Answer: D
69) What is the primary driving factor for firms in selecting domestic outsourcing firms to build system
solutions?
A) To take advantage of technical skills the firm does not have
B) To save labor costs
C) To avoid change management issues
D) To reduce the cost of hardware
E) To avoid offshore outsourcing
Answer: A
70) A software package evaluation process is often based on a series of questions sent to vendors,
called a(n):
A) systems design document.
B) strategic planning document.
C) information systems management plan.
D) request for proposal.
E) logical design document.
Answer: D
71) As a technical project manager, you have decided to propose implementing a prototyping
methodology for a small web-based design project. What is the order of steps you will follow in this
project?
A) Develop the prototype; use the prototype; revise and enhance the prototype.
B) Identify user requirements, develop the prototype, use the prototype, revise and enhance the
prototype.
C) Define the requirements, develop solutions, select the best prototype, and implement the prototype.
D) Define the requirements, develop the prototype, revise and enhance the prototype.
E) Select the best prototype, define the requirements, and implement the prototype.
Answer: B
72) The systems life cycle methodology maintains a formal division of labor between end usersand
information systems specialists.
Answer: TRUE
73) Prototyping is more iterative than the conventional lifecycle.
Answer: TRUE
74) A prototype is a working version of an information system that serves as a final model.
Answer: FALSE
75) End-user-developed systems can be completed more rapidly than those developed through the
conventional systems lifecycle.
Answer: TRUE
76) A primary benefit of offshore outsourcing is that this can substantially reduce hidden costs.
Answer: FALSE
77) A request for proposal (RFP) is a detailed list of questions submitted to software vendors.
Answer: TRUE
79) What are the advantages and disadvantages of prototyping? Describe the steps in prototyping.
Give at least two circumstances under which prototyping might be useful. Answer: Prototyping is most
useful when there is some uncertainty about requirements or design solutions. Because prototyping
encourages intense end-user involvement throughout the process, it is more likely to produce systems
that fulfill user requirements. Working prototype systems can be developed very rapidly and
inexpensively.
Rapid prototyping can gloss over essential steps in systems development. If the completed prototype
works reasonably well, management may not see the need for reprogramming, redesigned, full
documentation in testing to build a polished production system. This can backfire later with large
quantities of data or large numbers of users in a production environment.
The steps in prototyping are:
1. identify the user's basic requirements,
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2. develop an initial prototype,
3. use the prototype,
4. revise and enhance the prototype.
Prototyping might be especially useful in designing end-user interfaces, or situations in which the users
have no clear ideas of what their information requirements are.
80) What are customization features and when should an organization
pursue them?
Answer: Customization features allow a commercial software package or cloud-based software to be
modified to meet an organization's unique requirements without destroying the integrity of the software.
However, if a great deal of customization is required, the effort required to customize the software may
become so expensive and time-consuming that it negates the advantages of the software in the first
place.
81) A native mobile app is:
A) a mobile website.
B) a mobile web app.
C) a standalone application that does not use a browser.
D) a responsive mobile app.
E) one that can only operate on selected devices.
Answer: C
82) What is the purpose of responsive web design?
A) It allows one website to serve different platforms, such as tablets, PCs, and mobile phones.
B) It allows websites to respond quickly to changing user needs.
C) It enables websites to customize design according to user preferences.
D) It enables websites to customize content based on user location and preferences.
E) It enables different people to responsively program the system.
Answer: A
83) A "responsive design" for mobile applications is a design that responds to a user's: A) needs.
B) location.
C) voice commands.
D) digital device and screen size.
E) gestures.
Answer: D
84) Which of the following is not a top priority in mobile application development?
A) Designing for multitouch
B) Saving resources
C) Limiting the use of keyboards
D) Designing for keyboard data entry
E) Designing for a mobile device's camera or other features
Answer: D
85) The process of creating workable information systems in a very short period of time is called:
A) RAD.
B) JAD.
C) prototyping.
D) systems analysis and design.
E) end user design.
Answer: A
86) Which type of systems development is characterized by significantly speeding up the design phase
and the generation of information requirements and involving users at an intense level?
A) RAD
B) JAD
C) Prototyping
D) End-user development
E) Traditional
Answer: B
87) Groups of objects are assembled into software components for common functions, which can be
combined into large-scale business applications, in which type of software development?
A) Object-oriented development
B) Component-based development
C) Structured methodologies
D) RAD
E) Agile development
Answer: B
88) ________ development focuses on rapid delivery of working software by breaking a large project
into a series of small sub-projects that are completed in short periods of time using iteration and
continuous feedback.
A) Agile
B) Rapid application
C) Joint application
D) Object-oriented
E) DevOps
Answer: A
89) Compared to the use of proprietary components, web services promise to be less expensive and
less difficult to implement because of:
A) their ability to integrate seamlessly with legacy systems.
B) their ability to enable communication among different systems using universal standards.
C) the ubiquity of the Internet.
D) the ability to reuse web services components.
E) their use of custom programming.
Answer: B
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90) Which of the following statements about mobile web apps is true?
A) Users access mobile web apps through their mobile device's web browser.
B) A mobile web app resides on the user's device.
C) A mobile web app only works on certain mobile platforms.
D) A mobile web app requires the user to sign onto a web page.
E) A mobile web app requires the user to login to a web service.
Answer: A
91) In component-based development, applications are developed one small portion at a time, with
each portion able to function independently.
Answer: FALSE
92) Responsive web design enables websites to change layouts according to the user's screen size.
Answer: TRUE
93) Native apps are cheap to develop and only one version is required for different mobile operating
systems.
Answer: FALSE
94) Web services are less expensive to weave together than proprietary components.
Answer: TRUE
95) DevOps stands for "development opportunities."
Answer: FALSE
96) DevOps emphasizes close collaboration between the software developers and IT operational staff.
Answer: TRUE
97) Companies using DevOps, like Netflix, can update its production systems with new software in a
matter of months.
Answer: FALSE
98) What is outsourcing? Describe the advantages and disadvantages to outsourcing software
development.
Answer: In outsourcing, a firm hires an external organization to build or maintain part or all of its
information system needs. This can include software development and hosting applications, but the
firm may also host any developed applications on its own hardware while having the vendor create and
maintain software or systems. The vendor may be domestic or in another country (in offshore
outsourcing). The benefit to outsourcing is, in the case of domestic outsourcing, being able to develop
systems that in-house staff may not have the time or skills to do. In the case of offshore outsourcing, a
primary benefit is cost savings, as costs and salaries in foreign countries can be significantly less.
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Management Information Systems: Managing the Digital Firm, 15e (Laudon) Chapter 14
Managing Projects
1) On average, private sector IT projects underestimated budget and delivery time of systems by
________ percent.
A) 30
B) 40
C) 50
D) 60
E) 70
Answer: C
2) As discussed in the chapter, which of the following is not one of the immediate consequences of
inadequate software project management?
A) Cost overruns
B) Customer loyalty
C) Time slippage
D) Technical shortfalls
E) Failure to obtain anticipated benefits
Answer: B
3) Which of the following is not one of the five main variables affecting project success?
A) Risk
B) Vendors
C) Time
D) Quality
E) Cost
Answer: B
4) All of the following are indications of a failed information systems project except:
A) employees are refusing to switch to the new system.
B) employees have created a spreadsheet solution to manipulate the data generated by the system.
C) a redesigned website has fewer visits to the customer support pages.
D) employees require training to properly use the system.
E) the system is not being used by anyone.
Answer: D
5) Which of the following project management variables defines what work is or is not included in a
project?
A) Goals
B) Risk
C) Quality
D) Scope
E) Cost
Answer: D
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6) Which of the following statistics from studies on failed projects is not true? A) Large
software projects on average run 33 percent over schedule.
B) Large software projects on average run 66 percent over budget.
C) Between 30 and 40 percent of all software projects are "runaway" projects that far exceed the original
schedule and budget projections and fail to perform as originally specified.
D) As many as 17 percent of projects turn out so badly that they can threaten the existence of the
company.
E) The average cost overrun of IT projects is 20 percent.
Answer: E
7) Which of the following variables in project management is an indicator of how well the project satisfies
management objectives?
A) Scope
B) Quality
C) Time
D) Cost
E) Risk
Answer: B
8) The cost of a project is based on the time to complete a project multiplied by the cost of human
resources required to complete the project.
Answer: TRUE
9) An information system project's scope is directly related to its business requirements.
Answer: TRUE
10) Project management refers to the application of knowledge, skills, tools and techniques to achieve
specific targets within specified budget and time constraints.
Answer: TRUE
11) The data entry screen is an example of a user interface.
Answer: TRUE
12) According to a 2015 report by 1E, over 50% of all software installed is not being used.
Answer: FALSE
13) Which of the following is at the top of the management structure for information systems projects in
a large company?
A) Project team
B) Project management group
C) Corporate strategic planning group and information systems steering committee
D) Information systems managers
E) End-user managers
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Answer: C
14) The ________ reviews and approves plans for systems in all divisions.
A) project management group
B) project team
C) information systems steering committee
D) corporate strategic planning committee
E) board of directors
Answer: C
15) The ________ consists of systems analysts, specialists from the relevant end-user business areas,
application programmers, and perhaps database specialists.
A) project management group
B) project team
C) IS steering committee
D) corporate strategic planning committee
E) system planning committee
Answer: B
16) The ________ is directly responsible for the individual systems project.
A) project management group
B) project team
C) IS steering committee
D) corporate strategic planning committee
E) systems planning committee
Answer: B
17) A road map indicating the direction of systems development, the rationale, the current systems,
new developments to consider, the management strategy, the implementation plan, and the budget is
called a(n): A) project plan.
B) portfolio analysis.
C) information systems plan.
D) enterprise analysis.
E) strategic planning document.
Answer: C
18) Which of the following best describes the central method used in a portfolio analysis?
A) Performing an inventory of all of the organization's information systems projects and assets
B) Performing a weighted comparison of the criteria used to evaluate a system
C) Surveying a large sample of managers on their objectives, decision-making process, and uses and
needs for data and information
D) Interviewing a small number of top managers to identify their goals and criteria for achieving success
E) Scoring proposed systems on a number of dimensions, and selecting the one with the highestscore
Answer: A
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19) A firm in the finance industry should do which of the following to ensure that it stays current with
technology?
A) Select only low-cost, low risk projects
B) Limit work to those projects with great rewards
C) Select only low-risk, high-reward projects
D) Have a few high-risk, high benefit projects
E) Avoid projects that were very costly
Answer: D
20) Which method would you use to develop risk profiles for a firm's information system projects
and assets? A) Information systems plan
B) Scoring model
C) Portfolio analysis
D) TCO
E) Real options model
Answer: C
21) You have been hired by a firm in a non-information-intensive industry to evaluate its inventory of
systems and IT projects. Which types of projects should the firm focus on?
A) High-risk projects
B) Low cost, low-benefit projects
C) High-benefit, low-risk projects
D) Any project that might be beneficial
E) Low cost, high benefit projects
Answer: C
22) Which of the following best describes the central method used in a scoring model?
A) Performing an inventory of all of the organization's information systems projects and assets
B) Performing a weighted comparison of the criteria used to evaluate a system
C) Surveying a large sample of managers on their objectives, decision-making process, and uses and
needs for data and information
D) Interviewing a small number of top managers to identify their goals and criteria for achieving success
E) Calculating the return on investment for each system, and choosing the system with the best return
Answer: B
23) Which method is used to assign weights to various features of a system?
A) Information systems plan
B) Scoring model
C) Portfolio analysis
D) TCO
E) Real options model
Answer: B
24) Which of the following statements about scoring models is not true?
A) There are many qualitative judgments involved in using a scoring model.
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B) A scoring model is useful for selecting projects where many criteria must be considered.
C) The most important outcome of a scoring model is the score.
D) A scoring model requires experts who understand the issues and the technology.
E) It is appropriate to cycle through a scoring model several times.
Answer: C
25) Which of the following would not be covered in the Strategic Business Plan Rationale section of an
information systems plan?
A) Current situation
B) Current business organization
C) Firm's strategic plan
D) Changing environments
E) Current infrastructure capabilities
Answer: E
26) Which of the following would not be covered in the Management Strategy section of an information
systems plan?
A) Acquisition plans
B) Progress reports
C) Organizational realignment
D) Internal reorganization
E) Major training initiatives
Answer: B
27) Which of the following would not be covered in the Budget Requirements section of an information
systems plan?
A) Requirements
B) Potential savings
C) Difficulties meeting business requirements
D) Financing
E) Acquisition cycle
Answer: C
28)
The information systems steering committee is composed of information systems managers and
end-user managers responsible for overseeing several specific information systems projects.
Answer: FALSE
29)
An information systems plan contains a statement of corporate goals and specifies how
information technology will support the attainment of those goals.
Answer: TRUE
30)
If an intended benefit of an IT project is improved decision making, managers should develop a
set of metrics to quantify the value of an improved decision.
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Answer: TRUE
31)
Scoring models are most commonly used to make the final decision when selecting different
systems.
Answer: FALSE
32)
The criteria used in a scoring model are usually the result of lengthy discussions among the
decision-making group.
Answer: TRUE
34) Describe the elements of a management structure for information systems projects in a large
corporation.
Answer: In a large corporation, the management structure typically consists of (from top to bottom
levels in the hierarchy):
Corporate strategic planning group: The higher level group of managers responsible for
developing the firm's strategic plan.
Information systems steering committee: A senior management group with responsibility for
systems development and operation.
Project management: A group of information systems managers and end-user managers
responsible for overseeing several specific information systems projects.
Project team: The group directly responsible for the individual systems project, consisting of
systems analysts, specialists from the relevant end-user business areas, application programmers, and
perhaps database specialists.
35) List five types of information that should be included in an information systems plan. Answer:
General categories of information included in an information plan are:
Purpose of the plan
Business rationale
Current systems or situation
New developments to consider
Management strategy
Implementation plan
Budget
36)
Describe the process of portfolio analysis. In what situations is this evaluation method useful?
Answer: Portfolio analysis inventories all of the organization's information systems projects and assets,
including infrastructure, outsourcing contracts, and licenses. Each project can be described as having
a profile of risk and benefit to the firm, similar to the financial portfolio. In a portfolio analysis, you would
list the various systems projects and rate them according to their potential risks and benefits. You would
use the portfolio analysis to determine which potential projects should be pursued and which should be
modified or abandoned. High-risk, low-benefit projects should be avoided, while low-risk, high-benefit
projects would be at the top of the list. High-benefit, high-risk projects and low-risk, low-benefit projects
would be reexamined to see if they could be modified to better fit with the company's strategic plans. A
mix of profiles could also be defined as acceptable in terms of the company's overall plans, much as is
done with a financial portfolio.
39) You are using a capital budgeting method to assess the worth of your company's new information
system. Which of the following costs would you include in measuring the cash outflow?
A) Increased sales of products
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B) Hardware and software expenditures
C) Labor expenditures
D) Reduced costs in production and operation
E) Hardware, software, and labor expenditures
Answer: E
40) The worth of systems from a financial perspective essentially revolves around the issue of:
A) total cost of ownership.
B) adherence to information requirements.
C) asset utilization.
D) return on invested capital.
E) the cost of computing equipment.
Answer: D
41) All of the following are intangible benefits of information systems except:
A) improved asset utilization.
B) increased organizational learning.
C) improved operations.
D) reduced workforce.
E) improved decision making.
Answer: D
42) Which of the following is not a tangible benefit of information systems?
A) Reduced rate of growth in expenses
B) Lower computer expenses
C) Improved resource control
D) Increased productivity
E) Reduced facility costs
Answer: C
43) The principal capital budgeting models for evaluating information technology projects are the
payback method, the accounting rate of return on investment (ROI), the net present value, and the:
A) future present value.
B) internal rate of return.
C) external rate of return.
D) ROPM (real options pricing model).
E) present value of future cash flows.
Answer: B
44) Which of the following strategies represents the proper approach to a high risk, high reward project?
A) Identify and develop
B) Avoid
C) Treat as a routine project
D) Pursue after all other projects are complete
E) Cautiously examine
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Answer: E
45) Enhanced employee goodwill falls under what category of costs and benefits of information
systems?
A) Costs
B) Tangible benefits
C) Cost savings
D) Intangible costs
E) Intangible benefits
Answer: E
46) Which of the following is a limitation of using a financial approach to evaluate information systems?
A) Inability to measure ROI
B) Inability to control vendor costs
C) Inability to assess risk
D) Inability to assess costs from organizational disruption
E) Inability to assess the cost of technology
Answer: D
47) ________ methods rely on measures of cash flows into and out of the firm.
A) Scoring model
B) Portfolio analysis
C) Real options pricing
D) Capital budgeting
E) Cost effectiveness
Answer: D
48) In one strategic approach to determining information requirements, managers select a small
number of ________ that reflect firm success and profitability.
A) efficiency measures
B) output measures
C) strategic indicators
D) key performance indicators
E) financial indicators
Answer: D
49) Transaction and clerical systems that displace labor and save space typically produce more
measurable, tangible benefits than management information systems.
Answer: TRUE
50) Intangible benefits generally do not lead to quantifiable gains in the long run.
Answer: TRUE
51) A benefit of using TCO analysis to evaluate an information technology investment is that it is able
to incorporate intangible and "soft" factors such as benefits and complexity costs.
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Answer: FALSE
52) More timely information is an intangible benefit of information systems.
Answer: TRUE
53) The difference between cash outflows and cash inflows is used for calculating the financial worth
of an investment.
Answer: TRUE
55)
You have been hired to implement an enterprise system that will automate much of the billing
and accounting work for a statewide HVAC services company. Which of the following would you
prepare to describe how the new system will affect a firm's structure and operations?
A) Information systems plan
B) Internal integration report
C) Sociotechnical design report
D) Organizational impact analysis
E) Strategic planning document
Answer: D
57) Counterimplementation is best defined as:
A) multiple implementations that are run in parallel.
B) deliberate attempts to thwart the implementation of a system.
C) critiquing the implementation of a system constructively.
D) all of the organizational challenges involved in implementing a system.
E) strategies used to overcome user resistance to change.
Answer: B
58) All of the following are directly correlated with increased risk except:
A) a large amount of technical expertise from project team and information team staff.
B) a large amount of dollars spent.
C) a large amount of implementation staff.
D) a large amount of time allocated for implementation.
E) a large amount of organizational units affected.
Answer: A
59) Which of the following statements best describes the effect that project structure has on overall
project risk?
A)
Highly structured projects are more complex, and run a higher risk of programmers and users
misunderstanding the ultimate goals.
B)
Projects with relatively undefined goals are more likely to be subjected to users changing
requirements and to run a higher risk of not satisfying project goals.
C)
Highly structured projects tend to be larger, affecting more organizational units, and run both the
risk of out-of-control costs and becoming too difficult to control.
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D)
Less structured projects are more able to be quickly developed, tested, and implemented using
cutting-edge RAD and JAD development techniques, and pose less risk of running up unforeseen
costs.
E)
The less structured a project, the greater the freedom of users to define the system.
Answer: B
60) Which of the following statements about project risk is not true?
A) The more dollars spent on project, the greater the risk.
B) The higher the number of implementation staff on a project, the lower the risk.
C) The higher the number of organizational units affected by a project, the greater the risk.
D) Very large-scale systems project have a failure rate that is 50 to 75 percent higher than that for other
projects.
E) The organizational complexity of a system contributes to the complexity of large-scale systems
projects.
Answer: B
61) Which of the following refers to all organizational activities working toward the adoption,
management, and routinization of a new information system?
A) Production
B) Maintenance
C) Implementation
D) Acceptance
E) Final acceptance
Answer: C
62) Which of the following is not one of the activities of the systems analyst?
A) Acting as a change agent
B) Communicating with users
C) Mediating between competing interest groups
D) Formulating of capital budgeting models
E) Deciding which systems to develop
Answer: D
63) Which of the following types of projects is most likely to fail?
A) Integration of a third-party automated payment system
B) Replacement of middleware with web services for legacy application integration
C) Business process redesign project that restructures workflow and responsibilities
D) Redesigning a user interface to an online investment site
E) Building a web-based interface to an existing system
Answer: C
64) Which of the following is not a responsibility of effective change management?
A) Integrating legacy systems
B) Dealing with fear and anxiety about new systems
C) Training users of the new system
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D) Enforcing user participation at all stages of system development
E) Ensuring users are properly trained
Answer: A
65) Which of the following is not something you would use to control risk factors in an
information systems project? A) Internal integration tools
B) External integration tools
C) Formal planning tools and formal control tools
D) Real options pricing models
E) Gantt charts
Answer: D
66) Internal integration tools:
A) enable a project to have sufficient technical support for projects with challenging and complex
technology.
B) enable a project manager to properly document and monitor project plans.
C) portray a project as a network diagram with numbered nodes representing project tasks.
D) consist of ways to link the work of the implementation team with users at all organization levels.
E) enable end users to communicate with system developers.
Answer: A
67) Which of the following is an example of using an internal integration tool?
A) Creating a Gantt chart
B) Including user representatives as active members of the project team
C) Creating PERT chart
D) Holding frequent project team meetings
E) Developing a scoring model
Answer: D
68) Formal planning and control tools:
A) are used to select projects where many criteria must be considered.
B) enable a project manager to properly document and monitor project plans.
C) are used to evaluate alternative systems projects.
D) link the work of the implementation team with users at all organization levels.
E) serve as a road map indicating the direction of systems development.
Answer: B
69) Which type of planning tool shows each task as a horizontal bar whose length is proportional to the
time required to complete it?
A) PERT chart
B) Gantt chart
C) Both a PERT chart and a Gannt chart
D) Scoring model
E) Portfolio analysis
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Answer: B
70) To review a project's tasks and their interrelationships, you would use which of the
following?
A) PERT chart
B) Gantt chart
C) PERT chart or a Gantt chart
D) Scoring model
E) Portfolio analysis
Answer: A
71) Which of the following helps project managers identify bottlenecks in project development?
A) Internal integration tools
B) External integration tools
C) Formal planning and control tools
D) Both internal and external integration tools
E) Portfolio analysis tools
Answer: C
72) External integration tools:
A) enable a project to have sufficient technical support for project management and development.
B) enable a project manager to properly document and monitor project plans.
C) portray a project as a network diagram with numbered nodes representing project tasks.
D) consist of ways to link the work of the implementation team with users at all organization levels.
E) enable project team members to keep track of external costs of a project.
Answer: D
73) Which of the following is an example of using an external integration tool?
A) Creating a Gantt chart
B) Including user representatives as active members of the project team
C) Creating a PERT chart
D) Using portfolio analysis
E) Developing a scoring model
Answer: B
74) Which of the following is not an organizational factor in systems planning and implementation?
A) Standards and performance monitoring
B) Government regulatory compliance
C) Health and safety
D) User interface
E) Ergonomics
Answer: D
75) In sociotechnical design:
A) separate sets of technical and social design solutions are developed and compared.
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B) ergonomic features of a system are considered to be the most important consideration.
C) systems analysts with proven backgrounds in sociological concerns rate and compare a system's
social and technical aspects.
D) human needs are given more importance than technical needs.
E) technical needs are given more importance than organizational needs.
Answer: A
76) Which of the following is the most widely used project management software today?
A) Vertabase
B) IBM Project Guide
C) Microsoft Project
D) Microsoft Excel
E) Zoho Projects
Answer: C
77) Successful system building requires careful ________ management to minimize organizational
resistance.
A) cost
B) technology
C) change
D) supply chain
E) system application
Answer: C
78) Which of the following statements about the user-designer communications gap is not true? A) It
occurs because users and information systems specialists tend to have different backgrounds,
interests, and priorities.
B) It is one of the major reasons why user requirements are not properly incorporated into information
systems.
C) It is one of the major reasons why users are driven out of the implementation process.
D) When it is pronounced, it creates a very high risk of failure for a systems development project.
E) Information systems specialists prefer systems that are oriented toward solving business problems
or facilitating organizational tasks.
Answer: E
79) Which of the following best describes the relationship between system implementation and user
involvement and management support?
A) System implementation rarely benefits from user involvement.
B) System implementation benefits from user support, but does not require management support.
C) System implementation generally benefits from high levels of user involvement and management
support.
D) System implementation benefits from management support, but does not require user support.
E) System implementation rarely benefits from management support.
Answer: C
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80) The differing backgrounds between users and information systems specialists is referred to as the:
A) user expertise gap.
B) information system specialist inefficiency.
C) user-designer paradigm.
D) user-designer expertise gap.
E) user-designer communications gap.
Answer: E
81) Information systems specialists often tend to seek solutions that: A) are
oriented towards solving business problems.
B) facilitate organizational tasks.
C) optimize hardware and software efficiency at the expense of ease of use.
D) are simplistic for end users to understand.
E) employ clear documentation.
Answer: C
82) According to the Project Management Institute, what is the leading factor in project success?
A) Upper management that financially backs the project
B) Executive sponsors who are actively engaged
C) Carefully monitored changes in work habits and procedures
D) Communication between technicians and end users
E) End users who communicate their needs for the project
Answer: B
83) While users are concerned about an information system delivering the information needed for
work, designers might be concerned about: A) accessing the data on iPhones and tablets.
B) the procedures required to enter data into the system.
C) how operation of the system will change their daily routines.
D) what demands the system will place on the company servers.
E) opening lines of communication with end users.
Answer: D
84) The larger the systems project, the greater the chance that the project will be completed on time,
within budget, and according to project requirements.
Answer: FALSE
85) The systems analyst is the catalyst for the entire change process and is responsible for making sure
that everyone involved accepts the changes created by a new system.
Answer: TRUE
86) The relationship between users and information systems specialists has traditionally been a
problem area for information systems implementation efforts.
Answer: TRUE
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87) User concerns and designer concerns are usually the same at the beginning of the project but may
diverge later as the system is built.
Answer: FALSE
88) A Gantt chart graphically depicts project tasks and their interrelationships.
Answer: FALSE
89) Mandatory use of a system is one effective way of overcoming user resistance to an information
system.
Answer: FALSE
90) Counterimplementation refers to a deliberate strategy to thwart the implementation of an information
system or an innovation in an organization.
Answer: TRUE
91) The design of jobs, health issues, and the end-user interface of information systems are all
considerations in the field of ergonomics.
Answer: TRUE
92) The goal of sociotechnical design is to create systems where the organization and the technology
change and adjust to one another.
Answer: TRUE
93) Ergonomics is the interaction of people and machines in the work environment, including the design
of jobs, health issues, and the end-user interface of information systems.
Answer: TRUE
96) What is the user-designer communications gap? Describe the differences between the types of
concerns users and designers have about information systems.
Answer: The user-designer communication gap refers to the tendency for users and information
systems specialists to have different backgrounds, interests, and priorities. This often manifests itself
in the types of concerns the two groups have about information systems; for example, while a user
might simply be concerned whether the information system works properly, the designer is concerned
with the demands that the system will put on the company servers. While users might be concerned
with the procedures required to enter data into a new system, the designers are likely to be focused on
where the data will be stored and the most effective technique to store it.
97) What is counterimplementation and what are some of the strategies that organizations can use to
avoid it?
Answer: Counterimplementation is a deliberate strategy to thwart the implementation of a new
information system or innovation in general. Organizations can overcome this resistance by soliciting
user participation in the design of a new system, to ensure that employees feel invested in the change;
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user education and training; encouraging management policies; and employee incentives for those who
cooperate and participate.
98) What are the benefits of the sociotechnical design approach to information systems?
Answer: The sociotechnical design approach features designers setting forth two separate plans
technical solutions and social design solutions. The social design plan will emphasize workgroup
structures, allocation of tasks, and the design of individual jobs. If the technical solutions enable the
social design plan to also be achieved, then the design can move forward. The result is an information
system that blends technical efficiency with sensitivity to organizational and human needs, as opposed
to an information system that works properly but is poorly suited to the social environment of the
workplace.
99) What are Gantt charts and PERT charts? In what way might a PERT chart be a better option than
a Gantt chart?
Answer: Gantt charts lists project activities and corresponding start and completion dates and visually
shows the duration of tasks in a project along with their human resource requirements. Tasks are
displayed as horizontal bars whose length represents the amount of time required to complete the task.
However, Gantt charts don't show how one task is affected by others. For example, if delays in a task
cause a ripple effect in other tasks, this renders the Gantt chart obsolete. PERT charts graphically
depict project tasks and their inter-relationships, much like a flow chart. PERT charts show the activities
that must be completed before the next activity can begin.
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Management Information Systems: Managing the Digital Firm, 15e (Laudon) Chapter 15
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
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
3) Which of the following is not a general cultural factor driving global business?
A) Global communication and transportation technologies
B) Political instability
C) Global knowledge base
D) Global culture
E) Global social norms
Answer: D
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
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
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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
7) Which of the following industries is most affected by globalization?
A) Telecommunications
B) Manufacturing
C) Law
D) Entertainment
E) Transportation
Answer: B
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
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
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
11) All of the following present challenges to developing global business systems except:
A) foreign accounting practices.
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B) production costs.
C) language differences.
D) exchange rates.
E) shortages of skilled consultants.
Answer: B
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
13) Which of the following statements about transborder data flow is not true?
A) The E.U.-U.S. Privacy Shield replaces previous agreements between the United States and the EU
with respect to transborder data flow.
B) Privacy Shield provides additional privacy protection for U.S. citizens.
C) Privacy Shield protects European citizens from certain surveillance activities of U.S. national security
agencies.
D) U.S. firms must register with European privacy regulators in order to process personal information
of European citizens in the United States.
E) European countries have different laws concerning transborder data flow and privacy than the United
States.
Answer: B
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
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
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17) Japanese consumers who only want to purchase products made in Japan 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
18) Global business drivers can be divided into two groups: general cultural factors and
specificbusiness factors.
Answer: TRUE
19) The growth of powerful communications technologies and the emergence of world cultures create
the condition for global markets.
Answer: TRUE
20) The collapse of the Eastern bloc has retarded the growth of a world culture.
Answer: FALSE
21) Micromarketing involves marketing to very small geographic and social units.
Answer: TRUE
22) A powerful strategic advantage for a globalized firm is lowered cost factors in production.
Answer: TRUE
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
24) In international companies, English has become a kind of standard business language.
Answer: TRUE
25) European countries have very strict laws concerning transborder data flows and privacy.
Answer: TRUE
26) To comply with European privacy laws, many multinational firms have developed information
systems within each European country.
Answer: TRUE
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27) With the growth of the Internet and reliable phone networks, skilled consultants are readily available
to companies operating in global markets.
Answer: FALSE
28) Accounting practices can vary significantly from country to country.
Answer: TRUE
29) The growth of powerful communications technologies and the emergence of world cultures have
failed to create a foundation for global markets.
Answer: FALSE
30) The last step in establishing a corporate strategy and structure for globalization is to determine the
appropriate technology platform.
Answer: TRUE
31) Global economies of scale are facilitated by global markets, production, and administration.
Answer: TRUE
32) The growth of international trade has radically altered domestic economies around the globe.
Answer: TRUE
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 realtime 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.
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.
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36) 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 than they have been historically in the U.S., though an agreement was made in 2016
(The E.U.-U.S. Privacy Shield) that will force U.S. companies to ensure that their systems comply with
European standards.
37) In a multinational business strategy, the ________ business function is decentralized and dispersed
among foreign units.
A) finance/accounting
B) production
C) human resources
D) strategic management
E) sales/marketing
Answer: B
39) In terms of global business strategy and structure, a multinational strategy:
A) centralizes production and accounting and decentralizes marketing and human resources.
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: B
40) Most companies pursuing a global strategy begin as:
A) domestic exporters.
B) multinationals.
C) franchisers.
D) transnationals.
E) conglomerate corporations.
Answer: A
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
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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
43) Which of the following is the dominant pattern of the system configurations used by transnational
firms?
A) Centralized
B) Duplicated
C) Decentralized
D) Networked
E) Localized
Answer: D
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) dispersed production, marketing, and human resources, with centralized strategic management and
finance/accounting.
E) decentralized production, accounting, human resources, with a decentralized management.
Answer: D
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
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
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Answer: D
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
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
49) In centralized systems:
A) development occurs at the home base and operations are handed over to autonomous units
inforeign 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
50) In duplicated systems:
A) development occurs at the home base and operations are handed over to autonomous units
inforeign 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
thenduplicated across the world.
Answer: A
51) In decentralized systems:
A) development occurs at the home base and operations are handed over to autonomous units
inforeign 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
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52) In networked systems:
A) development occurs at the home base and operations are handed over to autonomous units
inforeign 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 unitsin foreign
locations.
Answer: C
53) Domestic exporters typically have highly ________ systems.
A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous
Answer: B
54) Multinational companies tend to dominantly have ________ systems.
A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous
Answer: D
55) Franchise companies have typically had ________ systems.
A) duplicated
B) centralized
C) networked
D) decentralized
E) autonomous
Answer: A
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
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57) The network systems structure is the most visible in ________ services.
A) production
B) financial
C) marketing
D) software design
E) administrative
Answer: B
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 domestic exporters.
Answer: E
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
60) In a transnational business strategy, all of the regional units participate and coordinate over all
activities, from production to sales.
Answer: TRUE
61) In a franchiser business strategy, each foreign unit designs its own solutions and systems.
Answer: FALSE
62) There are two primary global organization types: management centralized in the home country or
distributed to foreign centers.
Answer: FALSE
63) In a multinational strategy, financial management is centralized while production and sales are
decentralized.
Answer: TRUE
64) Describe the four main global strategies that form the basis for global firms' organizational structure.
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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.
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. Network systems are those
in which systems development and operations occur in an integrated and coordinated fashion across
all units.
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
68) Which of the following is
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
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
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
71) Which of the following is 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 costs
E) Optimization of the use of corporate funds
Answer: D
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
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
74) Which of the following is an important factor when implementing a global information system
solution?
A) Agreeing on common user requirements
B) Understanding if your computer system can operate in a global environment
C) Introducing changes in business processes
D) Coordinating applications development
E) Coordinating software releases
Answer: B
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
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 outdated legacy systems 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
77) The way to identify core business processes is to conduct a: A) costbenefit analysis.
B) work-flow analysis.
C) business process analysis.
D) feasibility analysis.
E) systems analysis.
Answer: C
78) Global systems allow fixed costs to be amortized over a much smaller customer base.
Answer: FALSE
79) One major telecommunications challenge in an international setting is making data flow seamlessly
across networks shaped by disparate national standards.
Answer: TRUE
80) Success as a change agent depends on legitimacy, authority, and ability to involve users in the
change design process.
Answer: TRUE
84) 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.
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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
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
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) Finland
E) Somalia
Answer: D
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) Opposition is strengthened because of requirements for huge resources.
E) This approach will fail because of a lack of concrete objectives.
Answer: D
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
90) Which of the following has the second-largest number of Internet users in the world?
A) China
B) India
C) United States
D) Brazil
E) Canada
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Answer: B
91) All of the following countries block access to websites considered morally or politically offensive
except:
A) China.
B) Iran.
C) Singapore.
D) United States.
E) Saudi Arabia.
Answer: D
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
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 PCs.
C) poor bandwidth capacity.
D) unreliable power grids.
E) political disruptions.
Answer: A
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
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
96)
Internet-based VPNs provide the same level of quick and predictable response as private
networks.
Answer: FALSE
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97)
The rate of growth in the Internet population is far faster in North America and Europe thanit is
in Africa and the Middle East.
Answer: FALSE
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.
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.