MIS Chapter 3 Questions

Chapter 3

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Information Systems, Organizations, Management, and Strategy

Chapter 3 Information Systems, Organizations, Management, and Strategy True-False Questions 1.

To benefit from new technologies, the organization must be aware of, and be open to, the influences of information systems. Answer: True

2.

Difficulty: Medium

Reference: p. 79

Difficulty: Medium

Reference: p. 79

Difficulty: Easy

Reference: p. 79

Difficulty: Easy

Reference: p. 79

Information systems help managers identify external changes that might require organizational response. Answer:True

10.

Reference: p. 78

Any information system that brings about significant change will elicit serious political opposition within the organization. Answer: True

9.

Difficulty: Medium

The current Japanese theories of automobile production are based on the manufacturing theories of Henry Ford. Answer: False

8.

Reference: p. 78

Standard operating procedures are based on business procedures. Answer: False

7.

Difficulty: Easy

Organizations that survive over time become less efficient. Answer: False

6.

Reference: p. 77

The term “bureaucracy” was first defined in China by the Mandarins. Answer: False

5.

Difficulty: Easy

The technical and behavioral definitions of organizations are mutually contradictory. Answer: False

4.

Reference: p. 76

The technical definition of organizations is highly descriptive of the way organizations actually work. Answer: False

3.

Difficulty: Easy

Difficulty: Easy

Reference: p. 81

In economic terms, information system technology can be viewed as a substitute for capital and labor. Answer: True

Difficulty: Medium

Reference: p. 84

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Information Systems, Organizations, Management, and Strategy

11.

Information technology increases the cost of market participation. Answer: False

12.

Difficulty: Easy

Reference: p. 89

Difficulty: Medium

Reference: p. 89

Difficulty: Easy

Reference: p. 91

Difficulty: Hard

Reference: p. 92

Difficulty: Easy

Reference: p. 92

Difficulty: Medium

Reference: p. 94

Strategic information systems can be used at all organizational levels and are more far reaching and deep rooted than other kinds of information systems. Answer: True

23.

Reference: p. 86

When planning a new information system, the organization’s culture and politics are central organizational factors that should be considered. Answer: True

22.

Difficulty: Easy

Systematic decision makers approach a problem with multiple methods. Answer: False

21.

Reference: p. 85

According to research cited in the textbook, when making decisions people tend to take the first available alternative that will move them closer to the goal, without examining all the alternatives. Answer: True

20.

Difficulty: Medium

There is a defined, linear path to decision making. Answer: False

19.

Reference: p. 85

Information systems provide major assistance for managerial decision making. Answer: False

18.

Difficulty: Medium

Managers perform a great deal of work at an unrelenting pace, and each activity normally lasts less than ten minutes. Answer: True

17.

Reference: p. 85

In virtual organizations, work is not tied to geographical location. Answer: True

16.

Difficulty: Hard

Behavioral research has found that information systems automatically transform organizations. Answer: False

15.

Reference: p. 84

By increasing the span of management control, information systems lower agency costs. Answer: True

14.

Difficulty: Medium

As firms grow in size and scope, agency costs always decrease. Answer: False

13.

Chapter 3

Difficulty: Hard

Reference: p. 95

Value chain analysis is the most common analytical tool at the business level of the organization.

Chapter 3

Answer: True 24.

Difficulty: Medium

Reference: p. 97

Difficulty: Easy

Reference: p. 98

Difficulty: Easy

Reference: p. 99

Difficulty: Hard

Reference: p. 100

Difficulty: Medium

Reference: p. 101

Difficulty: Hard

Reference: p. 101

By sharing knowledge across business units, an information system can enhance competency. Answer: True

35.

Reference: p. 97

Supply chain management and focused differentiation are two examples of how emerging digital firms can engage in business strategies not available to traditional firms. Answer: False

34.

Difficulty: Hard

The U.S. economy is moving away from a “demand-pull” strategy. Answer: False

33.

Reference: p. 97

A good information system raises switching costs. Answer: True

32.

Difficulty: Easy

Information systems provide a resource that a company can mine to increase profitability. Answer: True

31.

Reference: p. 96

Information systems allow companies like Dell Computer Corporation to sell individualized products to individual customers. Answer: True

30.

Difficulty: Easy

Value chains and value webs are static. Answer: False

29.

Reference: p. 95

A value web can synchronize the value chains of business partners within an industry to rapidly respond to changes in supply and demand. Answer: True

28.

Difficulty: Hard

A value Web is more customer-driven than the traditional value chain. Answer: True

27.

Reference: p. 95

Digitally enabled networks can be used to coordinate the production of many independent firms. Answer: True

26.

Difficulty: Hard

In a value chain, primary activities include inbound logistics, operations, outbound logistics, sales and marketing, and procurement. Answer: False

25.

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Information Systems, Organizations, Management, and Strategy

Difficulty: Medium

Reference: p. 102

When two organizations pool markets and expertise, this relationship can lower costs and generate profits.

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Information Systems, Organizations, Management, and Strategy

Answer: True 36.

Difficulty: Hard

Reference: p. 103

Difficulty: Hard

Reference: p. 104

Agency economics is a model of strategic systems at the industry level based on the concept of a network where adding another participant entails zero marginal costs but can create much larger marginal gains. Answer: False

40.

Reference: p. 103

A major difference between the traditional business model and the model of the digital firm era is the awareness of “industry sets”. Answer: True

39.

Difficulty: Medium

Industry structure refers to the nature of participants in an industry and their relative bargaining power; it derives from the competitive forces and establishes the general business environment in an industry and the overall profitability of doing business in that environment. Answer: True

38.

Reference: p. 102

The three principal concepts for analyzing strategy at the industry level are information partnerships, competitive forces model, and focused differentiation. Answer: False

37.

Difficulty: Medium

Chapter 3

Difficulty: Medium

Reference: p. 105

When identify opportunities for strategic information systems, managers should determine where in the value chain the information systems can provide the greatest value to the firm. Answer: True

Difficulty: Medium

Reference: p. 106

Multiple- Choice Questions 41.

The interaction between information technology and organizations is influenced by: a. b. c. d. e.

organizational structure. standard operating procedures. politics and culture. environment and management decisions. All of the above

Answer: e 42.

Difficulty: Easy

Reference: p. 77

Precise rules, procedures, and practices developed by organizations to cope with virtually all expected situations best describes: a. b. c. d. e.

business processes. work methods. formal system. standard operating procedures. process description.

Answer: d

Difficulty: Medium

Reference: p. 78

Chapter 3

43.

According to Weber, bureaucracies are prevalent because: a. b. c. d. e.

they are impartial. authority is limited by abstract rules. they are the most efficient form of organization. they develop standard operating procedures. people are most comfortable with the expected.

Answer: c 44.

Reference: p. 80

Fortune 500 firm School system Midsize manufacturing firm Small start-up business Consulting firm

Answer: b

Difficulty: Medium

Reference: p. 80

All organizations have assumptions that: a. b. c. d. e.

can be studied and defined. are incorrect, but accepted. everyone knows and no one speaks. define their goals and products. determine their success over time.

Answer: d

Difficulty: Medium

Reference: p. 80

When information systems help organizations perceive changes in their environments and act on their environments, this function is called: a. b. c. d. e.

external scanning. environmental observation. environmental scanning. competition monitoring. strategic scanning.

Answer: c 48.

Difficulty: Medium

Which of the following is an example of a professional bureaucracy? a. b. c. d. e.

47.

Reference: p. 79

adhocracy. professional bureaucracy. divisionalized bureaucracy. machine bureaucracy. entrepreneurial structure.

Answer: a

46.

Difficulty: Hard

A task force organization that must respond to rapidly changing environments best describes: a. b. c. d. e.

45.

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Information Systems, Organizations, Management, and Strategy

Difficulty: Medium

Features common to organizations include: a. formal structure.

Reference: p. 81

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Information Systems, Organizations, Management, and Strategy

b. c. d. e.

organizational type. environments. power. function.

Answer: a 49.

Difficulty: Hard

Reference: p. 82

Features unique to organizations include: a. b. c. d. e.

goals. formal structure. standard operating procedures. politics. culture.

Answer: a 50.

Chapter 3

Difficulty: Hard

Reference: pp. 82

Systems analysts are: a. highly trained technical specialists who write computer software instructions. b. specialists who translate business problems and requirements into information requirements and systems. c. leaders of the various specialists in the information systems department. d. in charge of the information systems function in the organization. e. representatives of departments outside the information systems group for whom applications are developed. Answer: b

51.

Difficulty: Medium

Reference: p. 83

CIOs are: a. highly-trained technical specialists who write computer software instructions. b. specialists who translate business problems and requirements into information requirements and systems. c. leaders of the various specialists in the information systems department. d. in charge of the information systems function in the firm. e. representatives of departments outside the information systems group for whom applications are developed. Answer: d

52.

Difficulty: Medium

Reference: p. 83

Information systems managers are: a. highly-trained technical specialists who write computer software instructions. b. specialists who translate business problems and requirements into information requirements and systems. c. leaders of the various specialists in the information systems department. d. in charge of the information systems function in the organization. e. representatives of departments outside the information systems group for whom applications are developed. Answer: c

53.

Difficulty: Medium

Reference: p. 83

By making it worthwhile for firms to contract with external suppliers instead of internal sources, information technology can reduce:

Chapter 3

a. b. c. d. e.

transaction costs. end user support requirements. management control spans. All of the above None of the above

Answer: a 54.

Reference: p. 85

their work is reclaimed. more information is given to middle managers. it permits task forces to be formed. more highly-trained workers work faster. more training for such workers is required.

Answer: b

Difficulty: Hard

Reference: p. 86

The Internet is capable of reducing _____________ for most organizations. a. b. c. d. e.

agency and transaction costs information usage reporting and analysis systems costs All of the above

Answer: a

Difficulty: Medium

Reference: p. 87

According to Fayol, the classical functions of a manager are: a. b. c. d. e.

interpersonal, informational, and decisional. planning, interpersonal, decisional, and controlling. planning, organizing, coordinating, deciding, and controlling. strategic, nonstructured, structured, organizing, and interpersonal. liaison, planning, interpersonal, deciding, and decisional.

Answer: c 58.

Difficulty: Medium

Some research indicates that computerization decreases the need for large numbers of lower-level workers because: a. b. c. d. e.

57.

Reference: p. 84

transaction costs. interdepartmental conflicts. agency costs. information retrieval costs. None of the above

Answer: c

56.

Difficulty: Medium

Because it makes it easier for managers to oversee a greater number of employees, information technology can reduce: a. b. c. d. e.

55.

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Information Systems, Organizations, Management, and Strategy

Difficulty: Hard

Reference: p. 88

Organizations rebuilding some of their key business processes on Internet technology are finding that: a. their business processes are simpler. b. they are much flatter. c. they need fewer employees.

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Information Systems, Organizations, Management, and Strategy

Chapter 3

d. All of the above e. None of the above Answer: d 59.

Difficulty: Easy

Reference: p. 87

Mintzberg defined the interpersonal roles of a manager as those in which the manager: a. disseminates critical information and negotiates conflicts. b. acts as the nerve center of the organization, receiving and disseminating critical information. c. initiates activities, handles disturbances, allocates resources, and negotiates conflicts. d. acts as a figurehead and leader of the organization. e. initiates activities, allocates resources, and leads the organization. Answer: d

60.

Difficulty: Hard

Reference: p. 89

Mintzberg defined the decisional roles of a manager as those in which the manager: a. disseminates critical information and negotiates conflicts. b. acts as the nerve center of the organization, receiving and disseminating critical information. c. initiates activities, handles disturbances, allocates resources, and negotiates conflicts. d. acts as a figurehead and leader of the organization. e. initiates activities, allocates resources, and leads the organization. Answer: c

61.

figurehead interpersonal role. leader interpersonal role. disturbance handler decisional role. negotiator decisional role. spokesperson informational role.

Answer: e

Difficulty: Hard

Reference: p. 90

Deciding how to carry out specific tasks specified by upper and middle management, and establishing criteria for completion and resource allocation best describes: a. b. c. d. e.

operational control decision making. resource allocation decision making. structured decision making. knowledge-level decision making. liaison decision making.

Answer: a 63.

Reference: p. 89

Information systems provide support for the: a. b. c. d. e.

62.

Difficulty: Hard

Difficulty: Medium

Reference: p. 90

In Simon’s four stages of decision making, “intelligence” is when: a. b. c. d. e.

the individual selects among the possible alternative solutions to a problem. the individual conceives of possible alternative solutions to a problem. the individual collects information to identify problems occurring in the organization. the individual puts the decision into effect and reports on the progress of the solution. None of the above

Chapter 3

Answer: c 64.

Reference: p. 90

the individual selects among the possible alternative solutions to a problem. the individual conceives of possible alternative solutions to a problem. the individual collects information to identify problems occurring in the organization. the individual puts the decision into effect and reports on the progress of the solution. None of the above

Answer: d

Difficulty: Medium

Reference: p. 91

In Simon’s four stages of decision making, “choice” is when: a. b. c. d. e.

the individual selects among the possible alternative solutions to a problem. the individual conceives of possible alternative solutions to a problem. the individual collects information to identify problems occurring in the organization. the individual puts the decision into effect and reports on the progress of the solution. the individual does none of the above.

Answer: a 66.

Difficulty: Medium

In Simon’s four stages of decision making, “implementation” is when: a. b. c. d. e.

65.

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Information Systems, Organizations, Management, and Strategy

Difficulty: Medium

Reference: p. 91

The rational model of human behavior makes the assumption that people: a. make decisions based on correct conclusions. b. can tell the difference between the right and the wrong decisions. c. engage in basically consistent, value-maximizing calculations focused on choosing the alternative that contributes most to their goals. d. engage in calculations that are concerned with correct, value-maximizing choices that further the goals of the organization. e. make decisions based on their own needs and abilities. Answer: c

67.

cognitive style. personal bias. systematic approach. behavioral indicator. model of rationalization.

Answer: a

Difficulty: Medium

Reference: p. 92

The cognitive style that describes people who approach a problem by structuring it in terms of some formal method is: a. b. c. d. e.

intuitive decision makers. stylistic decision makers. logical decision makers. systematic decision makers. random decision makers.

Answer: d 69.

Reference: p. 91

The underlying personality disposition toward decision making is called the: a. b. c. d. e.

68.

Difficulty: Hard

Difficulty: Medium

Reference: p. 92

Models of decision making where decisions are shaped by the organization’s standard

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Information Systems, Organizations, Management, and Strategy

Chapter 3

operating procedures are called: a. b. c. d. e.

garbage can models. bureaucratic models of decision making. standard organizational models. business process models. business logic models.

Answer: b 70.

What market should we enter? What will meet our goals? What will give us the most efficient operation? How can we compete effectively in this particular market? How can we affect the market?

Answer: d

Difficulty: Medium

Reference: p. 95

A value chain’s support activities include: a. b. c. d. e.

organization infrastructure, human resources, technology, and procurement. inbound logistics, operations, and outbound logistics. sales and marketing. organization infrastructure, sales and marketing, and procurement. operations, human resources, and technology.

Answer: a

Difficulty: Medium

Reference: p. 96

A customer-driven network of independent firms who use information technology to coordinate their value chains to collectively produce a product or service for a market best describes: a. b. c. d. e.

value Web. value chain. value extranet. value intranet. enterprise system.

Answer: a 74.

Reference: p. 95

human resources. inbound logistics. technology. procurement. administration and management.

Answer: b

73.

Difficulty: Easy

A value chain’s primary activities include: a. b. c. d. e.

72.

Reference: p. 93

The key question at the business level of strategy is: a. b. c. d. e.

71.

Difficulty: Medium

Difficulty: Medium

Reference: p. 97

Strategic information systems for ____________ can prevent the competition from responding in kind. a. competitive advantage

Chapter 3

b. c. d. e.

technology-based products manufacturers product differentiation wholesalers

Answer: d 75.

Reference: p. 98

larger target markets. many markets. global markets. smaller target markets. competitor’s markets.

Answer: d

Difficulty: Medium

Reference: p. 99

Supply chain management can be used to create: a. b. c. d. e.

networked markets. efficient customer response systems. franchise-based environments. wide-ranging data reports. demographic-oriented sales.

Answer: b

Difficulty: Easy

Reference: p. 100

Activities at which a firm excels as a world-class leader include: a. b. c. d. e.

core competencies. strategic competencies. standard operating procedures. business strategies. strategic business processes.

Answer: a 79.

Difficulty: Medium

One advantage of information systems is that they enable companies to pitch to: a. b. c. d. e.

78.

Reference: p. 98

focused differentiation. low-cost producer. product differentiation. quality differentiation. marketing differentiation.

Answer: c

77.

Difficulty: Hard

A competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors best describes: a. b. c. d. e.

76.

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Information Systems, Organizations, Management, and Strategy

Difficulty: Medium

Reference: p. 102

The three principal concepts for analyzing strategy at the industry level are: a. b. c. d. e.

supply chain theory, customer response theory, and network economics. managerial, operational, and marketing. network analysis, competition analysis, and customer response analysis. information partnerships, the competitive forces model, and network economics. Miller’s theory of adjusted dataflow, Porter’s competitive forces model, and network analysis.

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Information Systems, Organizations, Management, and Strategy

Answer: d 80.

Difficulty: Medium

Chapter 3

Reference: p. 103

A movement from one level of sociotechnical system to another best describes: a. b. c. d. e.

strategic placement. focused transition. upward transition. competitive transition. strategic transition.

Answer: e

Difficulty: Medium

Reference: p. 106

Fill In the Blanks 81.

A(n) organization, by technical definition, is a stable, formal, social structure that takes resources from the environment and processes them to produce outputs. Difficulty: Easy

82.

A(n) organization, by behavioral definition, is a collection of rights, privileges, obligations, and responsibilities that are delicately balanced over a period of time through conflict and conflict resolution. Difficulty: Easy

83.

Reference: p. 82

A(n) information systems manager is the leader of the various specialists in the information systems department. Difficulty: Easy

87.

Reference: p. 80

A(n) systems analyst is a specialist who translates business problems and requirements to information requirements and systems, acting as a liaison between the information systems department and the rest of the organization. Difficulty: Easy

86.

Reference: p. 78

A(n) organizational culture is the set of fundamental assumptions about what products the organization should produce, how and where it should produce them, and for whom they should be produced. Difficulty: Medium

85.

Reference: p. 78

A(n) bureaucracy is a formal organization with a clear-cut division of labor, abstract rules and procedures, and impartial decision making that uses technical qualifications and professionalism as a basis for promoting employees. Difficulty: Easy

84.

Reference: p. 77

Reference: p. 83

A(n) chief information officer is the senior manager in charge of the information systems function in the firm. Difficulty: Easy

Reference: p. 83

Chapter 3

88.

Information Systems, Organizations, Management, and Strategy

Transaction cost theory is the economic theory stating that firms grow larger because they can conduct marketplace transactions internally and more economically than they can with external firms in the marketplace. Difficulty: Medium

89.

Reference: p. 90

A(n) unstructured decision is a nonroutine decision in which the decision maker must provide judgment, evaluation, and insights into the problem definition. Difficulty: Easy

98.

Reference: p. 90

Management control monitors how efficiently or effectively resources are used and how well operational units are performing. Difficulty: Hard

97.

Reference: p. 89

Strategic decision making is the act of determining the long-term objectives, resources, and policies of an organization. Difficulty: Medium

96.

Reference: p. 89

Mintzberg’s decisional roles describe situations wherein managers initiate activities, handle disturbances, resources, and policies of an organization. Difficulty: Easy

95.

Reference: p. 88

Mintzberg’s managerial roles are the expectations of the activities that managers should perform in an organization. Difficulty: Easy

94.

Reference: p. 88

The behavioral model of management is based on observations of what managers actually do on their jobs. Difficulty: Easy

93.

Reference: p. 86

The classical model of management focuses on the formal functions of planning, organizing, coordinating, deciding, and controlling. Difficulty: Easy

92.

Reference: p. 85

A(n) virtual organization uses networks to link people, assets, and ideas to create and distribute products and services without being limited to traditional organizational boundaries or physical locations. Difficulty: Medium

91.

Reference: p. 84

Agency theory views the firm as a nexus of contracts among self-interested individuals who must be supervised and managed. Difficulty: Medium

90.

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Reference: p. 90

A(n) structured decision is a decision that is repetitive, routine, and has a definite procedure for handling it.

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Information Systems, Organizations, Management, and Strategy

Difficulty: Easy 99.

Chapter 3

Reference: p. 90

In Simon’s stages of decision making, design is the stage when the individual conceives of possible alternative solutions to a problem. Difficulty: Easy

Reference: p. 90

100. In Simon’s stages of decision making, choice is the stage when the individual selects among the various solution alternatives. Difficulty: Easy

Reference: p. 90

101. In Simon’s stages of decision making, implementation is the stage when the individual puts the decision into effect and reports on the progress of the solution. Difficulty: Easy

Reference: p. 90

102. In Simon’s stages of decision making, intelligence is the stage when the individual collects information to identify problems occurring in the organization. Difficulty: Easy

Reference: p. 90

103. The rational model of human behavior is based on the belief that people, organizations, and nations engage in basically consistent, value-maximizing calculations. Difficulty: Easy

Reference: p. 91

104. Cognitive style is the underlying personality dispositions toward the treatment of information, selection of alternatives, and evaluation of consequences. Difficulty: Medium

Reference: p. 92

105. Systematic decision makers have an underlying personality disposition to approach a problem by structuring it in terms of some formal method. Difficulty: Medium

Reference: p. 92

106. Intuitive decision makers have an underlying personality disposition to approach a problem with multiple methods in an unstructured manner, using trial and error to find a solution. Difficulty: Medium

Reference: p. 92

107. Organizational models of decision making take into account the structural and political characteristics of an organization. Difficulty: Hard

Reference: p. 92

108. A(n) strategic information system is any computer system at any level of the organization that changes goals, operations, products, services, or environmental relationships to help the organization gain a competitive advantage. Difficulty: Medium

Reference: p. 95

109. A(n) primary activity is one directly related to the production and distribution of the firm’s products or services.

Chapter 3

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Information Systems, Organizations, Management, and Strategy

Difficulty: Easy

Reference: p. 95

110. A(n) support activity is one that involves the organization’s infrastructure, human resources, technology, and procurement. Difficulty: Medium

Reference: p. 96

111. A(n) value web is a customer-driven network of independent firms who use information technology to coordinate their value chains to collectively produce a product or service for a market. Difficulty: Medium

Reference: p. 97

112. Product differentiation is a competitive strategy for creating brand loyalty by developing new and unique products and services not easily duplicated by competitors. Difficulty: Hard

Reference: p. 98

113. Focused differentiation is a competitive strategy for creating new market niches for specialized products or services where a business can compete in the target area better than its competitors. Difficulty: Hard

Reference: p. 99

114. A(n) efficient customer response system directly links consumer behavior back to distribution, production, and supply chains. Difficulty: Hard

Reference: p. 100

115. Switching costs are the expense a customer or company incurs in lost time and expenditure of resources when changing from one supplier or system to a competing supplier or system. Difficulty: Easy

Reference: p. 100

116. A(n) core competency is an activity at which a firm excels as a world-class leader. Difficulty: Easy

Reference: p. 102

117. A(n) information partnership is a cooperative alliance formed between two or more corporations for the purpose of sharing information to gain strategic advantage. Difficulty: Medium

Reference: p. 103

118. The competitive forces model is used to describe the interaction of external influences, specifically threats and opportunities that affect an organization’s strategy and ability to compete. Difficulty: Medium

Reference: p. 103

119. Network economics is a model of strategic systems at the industry level based on the concept of a network where adding another participant entails zero marginal costs but can create much larger marginal gains. Difficulty: Easy

Reference: p. 105

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Information Systems, Organizations, Management, and Strategy

Chapter 3

120. A(n) strategic transition is a movement from one level of a sociotechnical system to another. Difficulty: Hard

Reference: p. 106

Essay Questions 121.

Discuss the interaction between management and the development of information systems within the company. What do you think is the single most important thing management must do to ensure the successful coordination of these systems with the organization? The interaction between information technology and organizations is complex and is influenced by many mediating factors, including the organization’s structure, standard operating procedures, politics, culture, surrounding environment, and management decisions. Managers must be aware that information systems can markedly alter life in the organization. They cannot successfully design new systems or understand existing systems without understanding organizations and the way they work.

122.

Define and discuss the two definitions of “organization” discussed in your textbook. Why are both useful to management, and under which circumstances is each the better model for understanding the way the organization works? The technical definition of an organization is that it is a stable, formal, social structure that takes resources from the environment and processes them to produce outputs. This definition is most useful in discussing the more formal aspects of the company—legal responsibilities, standard operating procedures, management structure, and the hierarchies of decision making and control. The behavioral definition of an organization is that an organization is a complex collection of rights, privileges, obligations, and responsibilities delicately balanced over time through conflict and conflict resolution. This definition is most useful when one wishes to discuss or understand the actual day-to-day workings of the business itself—political alignments, personal needs and desires of the various members, the relationship of the company to the particular societal environment in which it operates, and the unwritten customs that grease the wheels of commerce.

123.

Briefly describe Mintzberg’s classification of organizations. Provide an example of each. Entrepreneurial structure, machine bureaucracy, divisionalized bureaucracy, professional bureaucracy, and adhocracy are Mintzberg’s five classifications. The entrepreneurial structure is a young, small firm in a fast-changing environment. Small start-up businesses fall within this category. The machine bureaucracy is a large bureaucracy existing in a slowly changing environment, producing standard products. An example is a mid-size manufacturing firm. A divisionalized bureaucracy is a combination of multiple machine bureaucracies, each producing a different product or service, all topped by one central headquarters. An example is a Fortune 500 firm. A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals. An example is a law firm. An adhocracy is a “task force” organization that must respond to rapidly-changing environments. An example is a consulting firm.

Chapter 3

124.

Information Systems, Organizations, Management, and Strategy

3-17

List three ways in which all organizations are alike. They all have formal structure, standard operating procedures, politics, and culture-albeit not necessarily the same ones.

125.

While it is obvious that there are some things common to all organizational structures, there are more differences and unique features than similarities. List and discuss at least six features that are unique to each organization. The authors list ten features that, in combination, are unique to each organization: organizational type, environments, goals, power, constituencies, function, leadership, tasks, technology, and business processes. Organizations differ in their ultimate goals and the types of power used to achieve them. Some organizations have coercive goals (prisons), some have utilitarian goals (businesses), and some have normative goals (universities, religious groups). Organizations serve different groups or have different constituencies, some primarily benefiting their members, others benefiting clients, stockholders, or the public. The nature of leadership differs greatly from one organization to another—some are more democratic or authoritarian than others, some have greater or lesser need for rules and procedures, or do more or fewer routine tasks requiring more or less judgment and initiative. Organizations differ in the technology they use—some require little judgment and/or training, others require far more of both.

126.

Discuss the various types of personnel required by a technology infrastructure and its attendant information technology services. The formal organizational unit is the information systems department, which is responsible for maintaining the hardware, software, and networks of the firm’s IT infrastructure. The department consists of specialists, such as programmers, systems analysts, and information systems managers. Each of these is responsible for specific areas of the department’s functions. Many companies also employ a senior manager in the role of chief information officer, to oversee the use of information technology throughout the firm. The end users are the representatives of departments outside the information systems group for whom the applications are developed.

127.

Information systems affect organizations economically and behaviorally. Describe the ways in which each of these applies to an understanding of the working of the organization. Economic theories view information system technology as a factor of production that can be freely substituted for capital and labor. As the cost of information system technology falls, it is substituted for labor, thus resulting in a decline in the number of middle managers and clerical workers. Information technology can also lower costs by reducing transaction costs (transaction cost theory), and by reducing internal management costs (agency theory). Behavioral theories are more useful for describing the behavior of individual firms. Some behavioral researchers theorize that information technology could/may change the hierarchy of decision making in organizations by lowering the costs of information acquisition and broadening the distribution of information from upper-level management all the way down to individual workers at the lowest levels of the firm. Others see information systems as the outcome of political competition between organizational subgroups for influence over the organization’s policies, procedures, and resources.

128.

Define and contrast the two models of managerial behavior. Which do you think is most useful in the workplace? Why? The classical model of management is focused on the formal functions of planning,

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Information Systems, Organizations, Management, and Strategy

Chapter 3

organizing, coordinating, deciding, and controlling the actions of the firm. It describes the functions of managers, but does not describe how these functions are carried out. Behavioral models concentrate on observations of what managers actually do. The behavioral model offered by Mintzberg classifies ten managerial activities into three categories: interpersonal roles, informational roles, and decisional roles. 129.

Describe and discuss the four stages of decision making as outlined by Simon. How does each relate to the use of information systems? Simon identified four stages, including intelligence, design, choice, and implementation. Intelligence involves identifying the problem and gathering information about it. Traditional MIS systems deliver a wide variety of detailed information, especially if they report exceptions. Design determines possible solutions to the problem. Smaller DSS systems are helpful here because they operate on simple models, can be developed quickly, and can be operated with limited data. Choice consists of choosing among the alternative solutions. A larger DSS system can develop more extensive data on a variety of alternatives. Implementation, when the chosen decision is put into effect, requires a system that can report on results. Large MIS systems and PC-run project-planning software are useful here.

130.

What is a strategic information system? In what ways can these systems be used differently at the business level, the firm level, and the industry level? Strategic information systems are computer systems that change goals, operations, products, services, or environmental relationships to help the organization gain a competitive advantage. At the business level, they are used to answer the question, “How can we compete effectively in this particular market?” At the firm level, they can improve the overall performance of the business units of the firm in their relationship to each other by promoting synergies and core competencies. At the industry level, they can be used to determine when and how specific firms should compete with, or cooperate with, others in the industry. The three principal concepts at this level are information partnerships, the competitive forces model, and network economics.