Chapter 2
Information Systems in the Enterprise
2-1
Chapter 2
Information Systems in the Enterprise
True-False Questions
1.
Operational management is responsible for directing the day-to-day operations of the
business.
Answer: True
2.
Reference: p. 40
Difficulty: Medium
Reference: p. 40
Difficulty: Medium
Reference: p. 41
Difficulty: Medium
Reference: p. 41
Transaction processing systems are most commonly encountered at the management level of
an organization.
Answer: False
9.
Difficulty: Medium
Management information systems and decision-support systems are most commonly
encountered at the management level of an organization.
Answer: True
8.
Reference: p. 40
The principal concern of strategic-level systems is to match changes in the external
environment with existing organizational capability.
Answer: True
7.
Difficulty: Easy
Operational-level systems often answer “what-if” questions.
Answer: False
6.
Reference: p. 40
Management-level systems do not support nonroutine decision making.
Answer: False
5.
Difficulty: Easy
Management-level systems typically provide periodic reports rather than instant information
on operations.
Answer: True
4.
Reference: p. 40
Deciding whether to introduce a new product line or employ a new marketing campaign are
the responsibility of operational managers.
Answer: False
3.
Difficulty: Easy
Difficulty: Medium
Reference: p. 41
Transaction processing systems are the basic business systems that serve the operational
level of the organization.
Answer: True
Difficulty: Medium
Reference: p. 43
2-2
Information Systems In The Enterprise
10.
A transaction processing system is a computerized system that performs and records the daily
routine transactions necessary to conduct business.
Answer: True
11.
Difficulty: Medium
Reference: p. 44
Difficulty: Easy
Reference: p. 44
Difficulty: Medium
Reference: p. 44
Difficulty: Hard
Reference: p. 45
Difficulty: Medium
Reference: p. 45
Most MIS use simple routines such as summaries and comparisons, as opposed to
sophisticated mathematical models or statistical techniques.
Answer: True
20.
Reference: p. 44
Most MIS use sophisticated mathematical models or statistical techniques.
Answer: False
19.
Difficulty: Medium
Some MIS enable managers to drill down into the data.
Answer: True
18.
Reference: p. 43
The basic transaction data from TPSs are compressed and are usually presented on an ad-hoc
basis.
Answer: False
17.
Difficulty: Medium
Management information systems primarily serve the functions of planning, controlling, and
decision making at the management level.
Answer: True
16.
Reference: p. 43
Transaction processing systems work directly with all the other organizational systems.
Answer: False
15.
Difficulty: Medium
Managers need TPSs to monitor the status of internal operations and the firm’s relations with
the external environment.
Answer: True
14.
Reference: p. 43
The decision to grant credit to a customer is normally made by the middle manager.
Answer: False
13.
Difficulty: Easy
A hotel reservation system is a typical example of a management information system.
Answer: False
12.
Chapter 2
Difficulty: Medium
Reference: p. 45
Decision support systems generally provide answers to routine questions that have been
specified in advance and have a predefined procedure for answering them.
Answer: False
Difficulty: Medium
Reference: p. 45
Chapter 2
21.
Information Systems in the Enterprise
Decision-support systems help managers make decisions that are unique, rapidly changing,
and not easily specified in advance.
Answer: True
22.
Reference: p. 47
Difficulty: Medium
Reference: p. 47
Difficulty: Medium
Reference: p. 47
Difficulty: Hard
Reference: p. 47
Difficulty: Easy
Reference: p. 48
Operational-level manufacturing systems deal with the firm’s long-term manufacturing
goals, such as where to locate a new plant.
Answer: False
30.
Difficulty: Medium
Integrating many different systems is extremely time consuming and complex.
Answer: True
29.
Reference: p. 46
The most advanced graphics software in any of the systems discussed is normally found in
decision support systems.
Answer: False
28.
Difficulty: Medium
ESSs are designed primarily to solve specific problems.
Answer: False
27.
Reference: p. 46
ESS are designed to incorporate data about external events, but they also draw summarized
information from internal MIS and DSS.
Answer: True
26.
Difficulty: Medium
ESS are designed to serve the management-level of the organization.
Answer: False
25.
Reference: p. 45
Decision-support systems are interactive; the user can change assumptions, ask new
questions, and include new data.
Answer: True
24.
Difficulty: Easy
Decision-support systems use internal information as well as information from external
sources.
Answer: True
23.
2-3
Difficulty: Medium
Reference: p. 49
The “economic order quantity” formula calculates the least expensive quantity of items to
reorder for stocking inventory.
Answer: True
Difficulty: Easy
Reference: p. 50
2-4
Information Systems In The Enterprise
31.
Product life cycle management (PLM) systems are one type of sales and marketing system
that has become increasingly valuable in the automotive industry.
Answer: False
32.
Reference: p. 61
Difficulty: Hard
Reference: p. 54
Difficulty: Easy
Reference: p. 55
Difficulty: Easy
Reference: p. 56
Difficulty: Medium
Reference: p. 58
The value of a firm’s products and services is based not only on its physical resources but
also on intangible knowledge assets.
Answer: True
40.
Difficulty: Medium
Supply chain management systems are more externally oriented than enterprise systems.
Answer: True
39.
Reference: p. 52
Enterprise systems do not address the problem of organizational inefficiencies created by
isolated islands of information, business processes, and technology.
Answer: False
38.
Difficulty: Easy
Enterprise systems processes may include transactions with customers and vendors.
Answer: True
37.
Reference: p. 52
Information supplied by an enterprise system is structured around cross-functional business
processes.
Answer: True
36.
Difficulty: Medium
Maintaining online directories of employees with special areas of expertise is one application
of knowledge management systems.
Answer: True
35.
Reference: p. 50
Many human resources information systems are designed to provide data that can satisfy
federal and state record keeping requirements.
Answer: True
34.
Difficulty: Medium
The accounting function is responsible for managing the firm’s financial assets, such as cash,
stocks, bonds, and other investments.
Answer: False
33.
Chapter 2
Difficulty: Medium
Reference: p. 60
KMSs support processes for acquiring, storing, distributing, and applying knowledge, as well
as processes for creating new knowledge and integrating it into the organization.
Answer: True
Difficulty: Easy
Reference: p. 61
Chapter 2
Information Systems in the Enterprise
2-5
Multiple-Choice Questions
41.
Operational-level systems are information systems that support the:
a.
b.
c.
d.
long-range planning activities of senior management.
decision-making and administrative activities of middle managers.
day-to-day processes of production and shipping only.
elementary activities and transactions of the organization.
Answer: d
42.
Difficulty: Easy
Reference:
p. 40
Management-level systems are information systems that support the:
a.
b.
c.
d.
long-range planning activities of senior management.
knowledge and data workers in an organization.
decision-making and administrative activities of middle managers.
day-to-day processes of production.
Answer: c
Difficulty: Easy
Reference:
p. 40
A relocation control system that reports on the total moving, house-hunting, and home
financing costs for employees in all company divisions is an example of a(n):
a.
b.
c.
d.
knowledge management system.
operational-level systems.
strategic-level system.
management-level system.
Answer: d
45.
p. 40
strategic-level systems.
operational-level systems.
management-level systems.
knowledge management systems.
Answer: b
44.
Reference:
The principal purpose of __________________ is to answer routine questions and to
track the flow of transactions through the organization.
a.
b.
c.
d.
43.
Difficulty: Easy
Difficulty: Easy
Reference:
p. 40
______________systems often answer “what-if” questions.
a.
b.
c.
d.
Strategic-level
Management-level
Operational-level
Knowledge management
Answer: b
Difficulty: Easy
Reference:
p. 40
2-6
Information Systems In The Enterprise
46.
Strategic-level systems are information systems that support the:
a.
b.
c.
d.
long-range planning activities of senior management.
knowledge and data workers in an organization.
decision-making and administrative activities of middle managers.
day-to-day processes of production.
Answer: a
47.
p. 41
Difficulty: Easy
Reference:
p. 41
TPS are the basic business systems that serve which level of the organization?
a.
b.
c.
d.
strategic-level systems
management-level systems
operational-level systems
knowledge management systems
Answer: c
Difficulty: Easy
Reference:
p. 43
A computerized system that performs and records the daily routine dealings necessary to
conduct business is classified as a(n):
a.
b.
c.
d.
strategic-level system.
management-level system.
operational-level system.
transaction-level system.
Answer: d
50.
Reference:
strategic-level systems
knowledge management systems
operational-level systems
management-level systems
Answer: a
49.
Difficulty: Easy
The principal concern of these information systems is to match changes in the external
environment with existing organizational capability:
a.
b.
c.
d.
48.
Chapter 2
Difficulty: Easy
Reference:
p. 43
Managers need ____________________ to monitor the status of internal operations and
the firm's relations with the external environment.
a.
b.
c.
d.
office systems
knowledge systems
transaction processing systems
high-volume model data
Answer: c
Difficulty: Medium
Reference:
p. 44
Chapter 2
51.
Information Systems in the Enterprise
The term "management information systems" designates a specific category of
information systems serving:
a.
b.
c.
d.
integrated data processing throughout the firm.
transaction process reporting.
employees with online access to historical records.
management-level functions.
Answer: d
52.
p. 44
Difficulty: Easy
Reference:
p. 45
These systems are especially suited to situations in which the procedure for arriving at a
solution may not be fully predefined in advance:
a.
b.
c.
d.
management information systems.
transaction processing systems.
decision-support systems.
knowledge management systems.
Answer: c
Difficulty: Medium
Reference:
p. 46
These systems have more analytical power than other types of systems:
a.
b.
c.
d.
management information systems.
transaction processing systems.
decision-support systems.
executive information systems.
Answer: c
55.
Reference:
management information.
transaction processing
executive support
decision-support
Answer: d
54.
Difficulty: Easy
Decisions that are unique, rapidly changing, and not easily specified in advance are best
suited to this type of system:
a.
b.
c.
d.
53.
2-7
Difficulty: Medium
Reference:
p. 46
These systems are designed to summarize and report on the company’s basic operations.
a.
b.
c.
d.
decision-support systems
executive information systems
transaction processing systems
management information systems
Answer: d
Difficulty: Medium
Reference:
p. 46
2-8
Information Systems In The Enterprise
56.
These systems allow users to change assumptions, ask new questions, and include new
data:
a.
b.
c.
d.
decision-support systems.
transaction processing systems.
management information systems.
executive information systems.
Answer: a
57.
p. 46
Difficulty: Medium
Reference:
p. 46
ESS are specifically designed to serve this level of the organization:
a.
b.
c.
d.
operational.
end-user.
management.
strategic.
Answer: d
Difficulty: Medium
Reference:
p. 47
These systems are typically a major source of data for other systems:
a.
b.
c.
d.
transaction processing systems.
management information systems.
executive support systems.
decision-support systems.
Answer: a
60.
Reference:
business information systems.
business intelligence systems.
business support systems.
business model systems.
Answer: b
59.
Difficulty: Medium
Decision-support systems are often referred to as:
a.
b.
c.
d.
58.
Chapter 2
Difficulty: Medium
Reference:
p. 47
These systems employ the most advanced graphics software and can present graphs and
data from many sources:
a.
b.
c.
d.
executive information systems.
management information systems.
transaction processing systems.
decision-support systems.
Answer: a
Difficulty: Medium
Reference:
p. 47
Chapter 2
61.
Information Systems in the Enterprise
These systems often deliver information to senior executives through a portal, which
uses a Web interface to present integrated personalized business content:
a.
b.
c.
d.
transaction processing systems.
executive support systems.
management information systems.
decision-support systems.
Answer: b
62.
p. 47
Difficulty: Easy
Reference:
p. 48
Reference:
p. 48
Market research and pricing are functions of:
a.
b.
c.
d.
finance/accounting systems.
human resources systems.
manufacturing/production systems.
sales marketing systems.
Answer: d
Difficulty: Easy
Order processing, market analysis, and pricing analysis are examples of:
a.
b.
c.
d.
manufacturing and production information systems.
finance and accounting information systems.
enterprise application information systems.
sales and marketing information systems.
Answer: d
65.
Reference:
finance/accounting systems.
human resources systems.
manufacturing/production systems.
marketing systems.
Answer: d
64.
Difficulty: Medium
Promoting the organization’s products or services is a function of:
a.
b.
c.
d.
63.
2-9
Difficulty: Easy
Reference:
p. 48
Identifying customers for the firm’s products and preparing five-year forecasts are
examples of:
a.
b.
c.
d.
manufacturing and production information systems.
enterprise application information systems.
human resources information systems.
sales and marketing information systems.
Answer: d
Difficulty: Easy
Reference:
p. 48
2-10
Information Systems In The Enterprise
66.
Purchasing and operations are functions of:
a.
b.
c.
d.
finance/accounting systems.
human resources systems.
manufacturing/production systems.
sales marketing systems.
Answer: c
67.
p. 49
Difficulty: Easy
Reference:
p. 50
These systems use software that enables users to create a digital model without having to
build physical prototype:
a.
b.
c.
d.
CAD
PLM
OSI
ESS
Answer: a
Difficulty: Easy
Reference:
p. 50
What function is in charge of managing the capitalization of the firm?
a.
b.
c.
d.
finance
accounting
production
human resources
Answer: a
70.
Reference:
manufacturing and production information systems.
finance and accounting information systems.
enterprise application information systems.
sales and marketing information systems.
Answer: a
69.
Difficulty: Easy
CAD, machine control, and facilities location are examples of:
a.
b.
c.
d.
68.
Chapter 2
Difficulty: Easy
Reference:
p. 52
What function is responsible for maintaining and managing the firm’s financial records?
a.
b.
c.
d.
finance
accounting
production
human resources
Answer: b
Difficulty: Easy
Reference:
p. 52
Chapter 2
71.
Information Systems in the Enterprise
Budgeting and cost accounting are functions of:
a.
b.
c.
d.
finance/accounting systems.
manufacturing/production systems.
sales marketing systems.
decision support systems.
Answer: a
72.
p. 52
Difficulty: Easy
Reference:
p. 52
Reference:
p. 52
Labor relations and training are functions of:
a.
b.
c.
d.
finance/accounting systems.
human resources systems.
manufacturing/production systems.
sales marketing systems.
Answer: b
Difficulty: Easy
_______________________ are designed to support organization-wide process
coordination and integration.
a.
b.
c.
d.
Decision-support systems
Management information systems
Strategic planning operations
Enterprise applications
Answer: d
75.
Reference:
finance and accounting information systems.
enterprise application information systems.
human resources information systems.
sales and marketing information systems.
Answer: c
74.
Difficulty: Easy
Compensation analysis and training and development are examples of:
a.
b.
c.
d.
73.
2-11
Difficulty: Easy
Reference:
p. 55
A (an) _______________________ collects data from various key business processes
and stores the data in a single comprehensive data repository, usable by other parts of the
business.
a.
b.
c.
d.
transaction system
enterprise system
automatic reporting system
management information system
Answer: b
Difficulty: Medium
Reference:
p. 56
2-12
Information Systems In The Enterprise
76.
___________________________ is the process that integrates supplier, manufacturer,
distributor, and customer logistics processes.
a.
b.
c.
d.
Collaborative distribution
Supply chain management
Reverse logistics
Enterprise planning
Answer: b
77.
p. 57
Difficulty: Medium
Reference:
p. 58
_______________________ uses a set of integrated applications to address all aspects of
the customer relationship.
a.
b.
c.
d.
CRM
MIS
CLE
CLU
Answer: a
Difficulty: Easy
Reference:
p. 60
Which of these does not supply data for customer relationship management systems?
a.
b.
c.
d.
field sales
inventory purchases
customer purchases
marketing campaigns
Answer: b
80.
Reference:
supply chain management.
collaborative planning.
outsourcing.
managerial efficiency.
Answer: a
79.
Difficulty: Medium
The rapid communication of changes in product design is one way information systems
can facilitate:
a.
b.
c.
d.
78.
Chapter 2
Difficulty: Medium
Reference:
p. 60
Knowledge management system for distributing knowledge:
a.
b.
c.
d.
knowledge discovery system.
knowledge repository.
group collaboration system.
knowledge network system..
Answer: c
Difficulty: Hard
Reference:
p. 61
Chapter 2
Information Systems in the Enterprise
2-13
Fill In the Blanks
81.
Enterprise applications consist of enterprise systems, supply chain management systems,
customer relationship management systems, and knowledge management systems.
Difficulty: Medium
82.
p. 40
Reference:
p. 40
Reference:
p. 40
Reference:
p. 41
A(n) transaction processing system performs and records the daily routine transactions
necessary to conduct the business.
Difficulty: Easy
89.
Reference:
A(n) strategic-level system supports the long-range planning activities of senior
management.
Difficulty: Easy
88.
p. 40
A(n) strategic-level system helps senior managers tackle and address long-term trends, both
in the firm and in the external environment.
Difficulty: Easy
87.
Reference:
Management-level systems typically provide periodic reports rather than instant information
on operations.
Difficulty: Medium
86.
p. 40
A(n) management-level system supports the monitoring, controlling, decision making, and
administrative activities of middle managers.
Difficulty: Easy
85.
Reference:
The principal purpose of operational-level systems is to answer routine questions and to
track the flow of transactions through the organization.
Difficulty: Medium
84.
p. 40
Enterprise applications span the entire firm, integrating information from multiple functions
and business processes to enhance the performance of the organization as a whole.
Difficulty: Medium
83.
Reference:
Reference:
p. 43
A(n) transaction processing system is the major producer of information required by the
other systems.
Difficulty: Medium
Reference:
p. 43
2-14
Information Systems In The Enterprise
90.
A payroll system would typically be classified as a transaction processing system.
Difficulty: Easy
91.
Reference:
p. 45
Reference:
p. 46
Reference:
p. 46
Reference:
p. 47
A(n) executive support system employs the most advanced graphics software and can
present graphs and data from many sources.
Difficulty: Easy
98.
p. 44
A(n) executive support system is used at the organization’s strategic level and is designed to
address unstructured decision making through advanced graphics and communications.
Difficulty: Easy
97.
Reference:
Decisions-support systems are sometimes referred to as business intelligence systems
because they focus on helping users make better business decisions.
Difficulty: Medium
96.
p. 44
A(n) decision-support system is used at management level to combine data and sophisticated
analytical models or data analysis tools to support semistructured and unstructured decision
making.
Difficulty: Easy
95.
Reference:
Management information systems generally provide answers to routine questions that have
been specified in advance and have a predefined procedure for answering them.
Difficulty: Medium
94.
p. 43
A(n) management information system is used at the management level of an organization
that serves the functions of planning, controlling, and decision making by providing routine
summary and exception reports.
Difficulty: Easy
93.
Reference:
A(n) management information system generally provides answers to routine questions that
have been specified in advance and have a predefined procedure for answering them.
Difficulty: Hard
92.
Chapter 2
Reference:
p. 47
Information systems can be classified by the specific organizational function they serve as
well as by organizational level.
Difficulty: Medium
Reference:
p. 48
Chapter 2
99.
Information Systems in the Enterprise
2-15
Marketing is concerned with identifying the customers for the firm’s product or services,
determining what customers need or want, planning and developing products and services to
meet their needs, and advertising and promoting these products and services.
Difficulty: Medium
Reference:
p. 48
100. Sales is concerned with contacting customers, selling the products and services, taking
orders, and following up on sales.
Difficulty: Medium
Reference:
p. 48
101. A(n) manufacturing and production information system deals with the planning,
development, and production of products and services, and with controlling the flow of
production.
Difficulty: Easy
Reference:
p. 49
102. The “economic order quantity” formula calculates the least expensive quantity to reorder for
restocking inventory.
Difficulty: Easy
Reference:
p. 50
103. Product life cycle management systems are one type of manufacturing and production
system that has become increasingly valuable in the automotive, aerospace, and consumer
products industries.
Difficulty: Easy
Reference:
p. 50
104. Engineering-intensive industries used computer-aided design systems to automate the
modeling and design of their products.
Difficulty: Easy
Reference:
p. 50
105. The finance function is responsible for managing the firm’s financial assets, such as cash,
stocks, bonds, and other investments, to maximize the return on these assets.
Difficulty: Easy
Reference:
p. 52
106. The accounting function is responsible for maintaining and managing the firm’s financial
records to account for the flow of funds in a firm.
Difficulty: Easy
Reference:
p. 52
107. A(n) finance and accounting information system keeps track of the firm’s financial assets
and fund flows.
Difficulty: Easy
Reference:
p. 52
2-16
Information Systems In The Enterprise
Chapter 2
108. The human resources function is responsible for attracting, developing, and maintaining the
firm’s workforce.
Difficulty: Easy
Reference:
p. 52
109. A(n) human resources information system maintains employee records and tracks employee
skills, job performance, and training and support for employee compensation and career
development.
Difficulty: Easy
Reference:
p. 52
110. Budgeting is an example of a finance and accounting system serving the management level
of the firm.
Difficulty: Medium
Reference:
p. 52
111. Business processes refer to sets of logically related activities for accomplishing a specific
business result.
Difficulty: Easy
Reference:
p. 54
112. Knowledge management systems enable organizations to better manage processes for
capturing and applying knowledge and expertise.
Difficulty: Easy
Reference:
p. 55
113. A(n) enterprise application is a system that coordinates activities, decisions, and knowledge
across many different functions, levels, and business units in a firm.
Difficulty: Medium
Reference:
p. 55
114. Enterprise application systems are inherently cross-level, cross-functional, and business
process oriented.
Difficulty: Easy
Reference:
p. 55
115. Supply chain management involves close linkage and coordination of the activities involved
in buying, making, and moving a product.
Difficulty: Medium
Reference:
p. 57
116. Supply chain management systems are one type of interorganizational system because they
automate the flow of information across organizational boundaries.
Difficulty: Medium
Reference:
p. 58
117. Tracking shipments is a typical capability of supply chain management systems.
Difficulty: Easy
Reference:
p. 58
Chapter 2
Information Systems in the Enterprise
2-17
118. The use of Customer Relationship Management (CRM) requires information from sales,
marketing, and customer service processes to encourage sharing of customer information.
Difficulty: Medium
Reference:
p. 60
119. Knowledge management systems collect all relevant knowledge and experience in the firm
and make it available wherever and whenever it is needed to support business processes and
management decisions.
Difficulty: Easy
Reference:
p. 60
120. Knowledge management systems support processes for acquiring, storing, distributing, and
applying knowledge, as well as processes for creating new knowledge and integrating it into
the organization.
Difficulty: Easy
Reference:
p. 61
Essay Questions
121.
Identify and discuss the four major types of systems in a business and their relationship to
each other.
There are four major types of information systems in contemporary organizations.
1. Operational-level systems are transaction processing systems, such as
payroll or order processing that track the flow of the daily routine
transactions that are necessary to conduct business.
2. Management-level systems (MIS) provide the management control level
with reports and access to the organization’s current performance and
historical records. Most MIS reports condense information from TPS and
are not highly analytical.
3. Decision-support systems (DSS) support management decisions when these
decisions are unique, rapidly changing, and not specified easily in advance.
They have more advanced analytical models and data analysis capabilities
than MIS and often draw on information from external as well as internal
sources.
4. Executive support systems (ESS) support the strategic level by providing
data of greatest importance to senior management decision makers, often in
the form of graphs and charts delivered via portals. They have limited
analytical capabilities but can draw on sophisticated graphics software and
many sources of internal and external information.
The various types of systems in the organization exchange data with one another. TPS are a
major source of data for other systems, especially MIS and DSS. ESS primarily receive data
from lower-level systems.
2-18
Information Systems In The Enterprise
122.
Chapter 2
In your opinion, what are at least three factors that contribute to the difficulty of integrating
systems for different organizational levels and functions within an organization? Support
your answer.
One answer might be similar to this: A business firm is not a simple mechanism, and firms
that have been in business any length of time will have highly individualized ways of
conducting common business procedures. Even though software programs can be
customized, it will be necessary for the business to change because new procedures are
always required by new software, and these changes are expensive partly because of the time
involved. On the other hand, if the company decides to write software to fit the specialized
methods it has developed to conduct its business, it will most certainly find this process to be
much more expensive and technologically difficult than anyone imagined! Though many
companies do not realize it, it will be necessary for them to map and to understand their
systems before they will be able to integrate them. This is another time-consuming and
expensive process, and is not easy to achieve.
123.
Discuss
. the difference between the finance function and the accounting function..
The finance function is responsible for managing the firm’s financial assets, such as cash,
stocks, bonds, and other investments, to maximize the return on these financial assets. The
finance function is also in charge of managing the capitalization of the firm. To determine
whether the firm is getting the best return on its investments, the finance function must
obtain a considerable amount of information from sources external to the firm.
The accounting function is responsible for maintaining and managing the firm’s financial
records – receipts, disbursements, depreciation, payroll – to account for the flow of funds in a
firm. The accounting function obtains information from sources internal to the firm.
124.
Strategic-level systems, which support the long-range planning activities of senior
management, are said to require user-friendly, but highly sophisticated, graphics capabilities
that may not be needed by other systems. Do you agree with this? Support your answer.
There are several points to be made here. Long-range decisions, which are concerned with
policy changes in response to changes in the external environment as well as the internal
environment, require the understanding, and condensation, of large quantities of data. Often,
the best way to illustrate this condensation is with a picture, chart, or graphic. Second, senior
managers are often far removed from the necessity to operate computer programs on a daily
basis. They need intuitive and user-friendly programs that are transparent in their use. The
time of the senior manager is, frankly, too valuable to spend on learning how to operate a
computer program.
Chapter 2
125.
Information Systems in the Enterprise
Describe the information systems supporting the major business functions: sales and
marketing, manufacturing and production, finance and accounting, and human resources.
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126.
2-19
Sales and marketing help the firm identify customers for the firm’s products
or services, develop products and services to meet customers’ needs,
promote the products and services, sell the products and services, and
provide ongoing customer support.
Manufacturing and production systems deal with the planning, development,
and production of products and services, and controlling the flow of
production.
Finance and accounting systems keep track of the firm’s financial assets and
fund flows.
Human resources systems maintain employee records; track employee skills,
job performance, and training; and support planning for employee
compensation and career development.
How can a good CRM system increase profits for a company?
Customer relationship management uses information systems to coordinate all of the
business processes surrounding the firm’s interactions with its customers. The systems
consolidate customer information from multiple sources — telephone, e-mail, wireless
devices, traditional sales and marketing systems, and the Web — so that the firm can obtain a
unified view of a customer. This allows the firm to identify its most profitable customers and
make special efforts to please them.
127.
Describe at least two benefits of using enterprise systems.
Enterprise systems integrate the firm’s key business processes in sales, production, finance,
logistics, and human resources into a single software system so that information can flow
throughout the organization, improving coordination, efficiency, and decision making. These
systems help create a more uniform organization in which everyone uses similar processes
and information, and measures their work in terms of organization-wide performance
standards. The coordination of the firm’s key business processes allows the firm to respond
more rapidly to customer demands.
128.
Discuss supply chain management system and how it is used in businesses.
Supply chain management is the close linkage of activities involved in buying, making, and
moving products. Information systems make supply chain management more efficient by
helping companies coordinate, schedule, and control procurement, production, inventory
management, and delivery of products and services to customers.
2-20
Information Systems In The Enterprise
129.
Chapter 2
What is the connection between organizations, information systems and business processes?
Business processes refer to the manner in which work activities are organized, coordinated,
and focused to produce a specific business result. They also represent unique ways in which
organizations coordinate work, information, and knowledge and the ways in which
management chooses to coordinate work. Managers need to pay attention to business
processes because they determine how well the organization can execute, and thus are a
potential source for strategic success or failures. Although each of the major business
functions has its own set of business processes, many other business processes are crossfunctional. Information systems can help organizations achieve great efficiencies by
automating parts of these processes or by helping organizations rethink and streamline them.
Firms can become more flexible and efficient by coordinating and integrating their business
processes to improve management of resources and customer service.
130.
Define and discuss the use of cross-functional business processes within a firm.
Cross-functional processes are those that require input, cooperation, or coordination between
the major business functions in an organization. For instance, when a salesman takes an
order, the major business functions of planning, production, inventory control, shipping,
accounting, and customer relations will all be involved before the order is completed.