Download True-False Questions

Chapter 3
3-1
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
3-2
Information Systems, Organizations, Management, and Strategy
11.
Information technology increases the cost of market participation.
Answer: False
12.
Reference: p. 86
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
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: 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
Difficulty: Hard
Reference: p. 95
Chapter 3
23.
Value chain analysis is the most common analytical tool at the business level of the
organization.
Answer: True
24.
Reference: p. 97
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
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: Hard
Reference: p. 101
By sharing knowledge across business units, an information system can enhance
competency.
Answer: True
Difficulty: Medium
Reference: p. 102
3-4
Information Systems, Organizations, Management, and Strategy
35.
When two organizations pool markets and expertise, this relationship can lower costs and
generate profits.
Answer: True
36.
Reference: p. 103
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.
Difficulty: Medium
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.
Reference: p. 102
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.
Difficulty: Medium
The three principal concepts for analyzing strategy at the industry level are information
partnerships, competitive forces model, and focused differentiation.
Answer: False
37.
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
Difficulty: Easy
Reference: p. 77
Chapter 3
42.
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
43.
Difficulty: Hard
Reference: p. 79
A task force organization that must respond to rapidly changing environments best
describes:
a.
b.
c.
d.
e.
adhocracy.
professional bureaucracy.
divisionalized bureaucracy.
machine bureaucracy.
entrepreneurial structure.
Answer: a
Difficulty: Medium
Reference: p. 80
Which of the following is an example of a professional bureaucracy?
a.
b.
c.
d.
e.
Fortune 500 firm
School system
Midsize manufacturing firm
Small start-up business
Consulting firm
Answer: b
46.
Reference: p. 78
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
45.
Difficulty: Medium
According to Weber, bureaucracies are prevalent because:
a.
b.
c.
d.
e.
44.
3-5
Information Systems, Organizations, Management, and Strategy
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
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Information Systems, Organizations, Management, and Strategy
47.
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.
Reference: p. 81
formal structure.
organizational type.
environments.
power.
function.
Answer: a
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.
Difficulty: Medium
Features common to organizations include:
a.
b.
c.
d.
e.
49.
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
Difficulty: Medium
Reference: p. 83
Chapter 3
52.
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Information Systems, Organizations, Management, and Strategy
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.
transaction costs.
end user support requirements.
management control spans.
All of the above
None of the above
Answer: a
Reference: p. 84
transaction costs.
interdepartmental conflicts.
agency costs.
information retrieval costs.
None of the above
Answer: c
Difficulty: Medium
Reference: p. 85
Some research indicates that computerization decreases the need for large numbers of
lower-level workers because:
a.
b.
c.
d.
e.
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
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.
Reference: p. 83
By making it worthwhile for firms to contract with external suppliers instead of internal
sources, information technology can reduce:
a.
b.
c.
d.
e.
54.
Difficulty: Medium
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
3-8
Information Systems, Organizations, Management, and Strategy
57.
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: Hard
Reference: p. 88
Organizations rebuilding some of their key business processes on Internet technology are
finding that:
a.
b.
c.
d.
e.
their business processes are simpler.
they are much flatter.
they need fewer employees.
All of the above
None of the above
Answer: d
59.
Chapter 3
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.
Difficulty: Hard
Reference: p. 89
Information systems provide support for the:
a.
b.
c.
d.
e.
figurehead interpersonal role.
leader interpersonal role.
disturbance handler decisional role.
negotiator decisional role.
spokesperson informational role.
Answer: e
Difficulty: Hard
Reference: p. 90
Chapter 3
62.
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.
Difficulty: Medium
Reference: p. 90
In Simon’s four stages of decision making, “implementation” 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
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.
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: c
65.
Difficulty: Medium
In Simon’s four stages of decision making, “intelligence” is when:
a.
b.
c.
d.
e.
64.
3-9
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
Difficulty: Hard
Reference: p. 91
3-10
Information Systems, Organizations, Management, and Strategy
67.
The underlying personality disposition toward decision making is called the:
a.
b.
c.
d.
e.
cognitive style.
personal bias.
systematic approach.
behavioral indicator.
model of rationalization.
Answer: a
68.
Difficulty: Medium
Reference: p. 92
Models of decision making where decisions are shaped by the organization’s standard
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
Difficulty: Medium
Reference: p. 93
The key question at the business level of strategy is:
a.
b.
c.
d.
e.
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
71.
Reference: p. 92
intuitive decision makers.
stylistic decision makers.
logical decision makers.
systematic decision makers.
random decision makers.
Answer: d
70.
Difficulty: Medium
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.
69.
Chapter 3
Difficulty: Easy
Reference: p. 95
A value chain’s primary activities include:
a.
b.
c.
d.
e.
human resources.
inbound logistics.
technology.
procurement.
administration and management.
Answer: b
Difficulty: Medium
Reference: p. 95
Chapter 3
72.
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
73.
Difficulty: Medium
Reference: p. 97
Strategic information systems for ____________ can prevent the competition from
responding in kind.
a.
b.
c.
d.
e.
competitive advantage
technology-based products
manufacturers
product differentiation
wholesalers
Answer: d
Difficulty: Hard
Reference: p. 98
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.
focused differentiation.
low-cost producer.
product differentiation.
quality differentiation.
marketing differentiation.
Answer: c
76.
Reference: p. 96
value Web.
value chain.
value extranet.
value intranet.
enterprise system.
Answer: a
75.
Difficulty: Medium
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.
74.
3-11
Information Systems, Organizations, Management, and Strategy
Difficulty: Medium
Reference: p. 98
One advantage of information systems is that they enable companies to pitch to:
a.
b.
c.
d.
e.
larger target markets.
many markets.
global markets.
smaller target markets.
competitor’s markets.
Answer: d
Difficulty: Medium
Reference: p. 99
3-12
Information Systems, Organizations, Management, and Strategy
77.
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
78.
Reference: p. 100
core competencies.
strategic competencies.
standard operating procedures.
business strategies.
strategic business processes.
Answer: a
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.
Answer: d
80.
Difficulty: Easy
Activities at which a firm excels as a world-class leader include:
a.
b.
c.
d.
e.
79.
Chapter 3
Difficulty: Medium
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
Reference: p. 77
Chapter 3
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. 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.
Reference: p. 83
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. 83
A(n) chief information officer is the senior manager in charge of the information systems
function in the firm.
Difficulty: Easy
88.
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.
3-13
Information Systems, Organizations, Management, and Strategy
Reference: p. 86
The classical model of management focuses on the formal functions of planning, organizing,
coordinating, deciding, and controlling.
Difficulty: Easy
Reference: p. 88
3-14
Information Systems, Organizations, Management, and Strategy
92.
The behavioral model of management is based on observations of what managers actually
do on their jobs.
Difficulty: Easy
93.
Reference: p. 90
A(n) structured decision is a decision that is repetitive, routine, and has a definite procedure
for handling it.
Difficulty: Easy
99.
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.
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
Chapter 3
3-15
Information Systems, Organizations, Management, and Strategy
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.
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
3-16
Information Systems, Organizations, Management, and Strategy
Chapter 3
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
120. A(n) strategic transition is a movement from one level of a sociotechnical system to
another.
Difficulty: Hard
Reference: p. 106
Chapter 3
Information Systems, Organizations, Management, and Strategy
3-17
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.
124.
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.
3-18
Information Systems, Organizations, Management, and Strategy
125.
Chapter 3
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.
Chapter 3
128.
Information Systems, Organizations, Management, and Strategy
3-19
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,
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.