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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. Ans er! True 2. "iffi#ulty! $asy %eferen#e! p& '(

The technical definition of organizations is highly descriptive of the way organizations actually work. Ans er! False "iffi#ulty! $asy %eferen#e! p& ''

3.

The technical and behavioral definitions of organizations are mutually contradictory. Ans er! False "iffi#ulty! $asy %eferen#e! p& ')

4.

The term bureaucracy! was first defined in "hina by the #andarins. Ans er! False "iffi#ulty! Medium %eferen#e! p& ')

$.

%rganizations that survive over time become less efficient. Ans er! False "iffi#ulty! Medium %eferen#e! p& '*

&.

'tandard operating procedures are based on business procedures. Ans er! False "iffi#ulty! Medium %eferen#e! p& '*

(.

The current )apanese theories of automobile production are based on the manufacturing theories of *enry +ord. Ans er! False "iffi#ulty! $asy %eferen#e! p& '*

,.

-ny information system that brings about significant change will elicit serious political opposition within the organization. Ans er! True "iffi#ulty! $asy %eferen#e! p& '*

..

/nformation systems help managers identify e0ternal changes that might re1uire organizational response. Ans er!True "iffi#ulty! $asy %eferen#e! p& )+

12.

/n economic terms, information system technology can be viewed as a substitute for capital and labor. Ans er! True "iffi#ulty! Medium %eferen#e! p& ),

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Information Systems, Organizations, Management, and Strategy

Chapter 3

11.

/nformation technology increases the cost of market participation. Ans er! False "iffi#ulty! Medium %eferen#e! p& ),

12.

-s firms grow in size and scope, agency costs always decrease. Ans er! False "iffi#ulty! -ard %eferen#e! p& ).

13.

3y increasing the span of management control, information systems lower agency costs. Ans er! True "iffi#ulty! Medium %eferen#e! p& ).

14.

3ehavioral research has found that information systems automatically transform organizations. Ans er! False "iffi#ulty! Medium %eferen#e! p& ).

1$.

/n virtual organizations, work is not tied to geographical location. Ans er! True "iffi#ulty! $asy %eferen#e! p& )(

1&.

#anagers perform a great deal of work at an unrelenting pace, and each activity normally lasts less than ten minutes. Ans er! True "iffi#ulty! $asy %eferen#e! p& )*

1(.

/nformation systems provide ma4or assistance for managerial decision making. Ans er! False "iffi#ulty! Medium %eferen#e! p& )*

1,.

There is a defined, linear path to decision making. Ans er! False "iffi#ulty! $asy %eferen#e! p& *+

1..

-ccording to research cited in the te0tbook, when making decisions people tend to take the first available alternative that will move them closer to the goal, without e0amining all the alternatives. Ans er! True "iffi#ulty! -ard %eferen#e! p& */

22.

'ystematic decision makers approach a problem with multiple methods. Ans er! False "iffi#ulty! $asy %eferen#e! p& */

21.

5hen planning a new information system, the organization6s culture and politics are central organizational factors that should be considered. Ans er! True "iffi#ulty! Medium %eferen#e! p& *,

22.

'trategic information systems can be used at all organizational levels and are more far reaching and deep rooted than other kinds of information systems. Ans er! True "iffi#ulty! -ard %eferen#e! p& *.

23.

7alue chain analysis is the most common analytical tool at the business level of the organization.

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Information Systems, Organizations, Management, and Strategy

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Ans er! True 24.

"iffi#ulty! -ard

%eferen#e! p& *.

/n a value chain, primary activities include inbound logistics, operations, outbound logistics, sales and marketing, and procurement. Ans er! False "iffi#ulty! -ard %eferen#e! p& *.

2$.

8igitally enabled networks can be used to coordinate the production of many independent firms. Ans er! True "iffi#ulty! $asy %eferen#e! p& *(

2&.

- value 5eb is more customer9driven than the traditional value chain. Ans er! True "iffi#ulty! $asy %eferen#e! p& *'

2(.

- value web can synchronize the value chains of business partners within an industry to rapidly respond to changes in supply and demand. Ans er! True "iffi#ulty! -ard %eferen#e! p& *'

2,.

7alue chains and value webs are static. Ans er! False "iffi#ulty! Medium %eferen#e! p& *'

2..

/nformation systems allow companies like 8ell "omputer "orporation to sell individualized products to individual customers. Ans er! True "iffi#ulty! $asy %eferen#e! p& *)

32.

/nformation systems provide a resource that a company can mine to increase profitability. Ans er! True "iffi#ulty! $asy %eferen#e! p& **

31.

- good information system raises switching costs. Ans er! True "iffi#ulty! -ard %eferen#e! p& +00

32.

The :.'. economy is moving away from a demand9pull! strategy. Ans er! False "iffi#ulty! Medium %eferen#e! p& +0+

33.

'upply chain management and focused differentiation are two e0amples of how emerging digital firms can engage in business strategies not available to traditional firms. Ans er! False "iffi#ulty! -ard %eferen#e! p& +0+

34.

3y sharing knowledge across business units, an information system can enhance competency. Ans er! True "iffi#ulty! Medium %eferen#e! p& +0/

3$.

5hen two organizations pool markets and e0pertise, this relationship can lower costs and generate profits.

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Information Systems, Organizations, Management, and Strategy

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Ans er! True 3&.

"iffi#ulty! Medium

%eferen#e! p& +0/

The three principal concepts for analyzing strategy at the industry level are information partnerships, competitive forces model, and focused differentiation. Ans er! False "iffi#ulty! Medium %eferen#e! p& +03

3(.

/ndustry 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. Ans er! True "iffi#ulty! -ard %eferen#e! p& +03

3,.

- ma4or difference between the traditional business model and the model of the digital firm era is the awareness of industry sets!. Ans er! True "iffi#ulty! -ard %eferen#e! p& +0,

3..

-gency 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. Ans er! False "iffi#ulty! Medium %eferen#e! p& +0.

42.

5hen 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. Ans er! True "iffi#ulty! Medium %eferen#e! p& +0(

Multiple- Choi#e 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. -ll of the above "iffi#ulty! $asy %eferen#e! p& ''

Ans er! e 42.

=recise rules, procedures, and practices developed by organizations to cope with virtually all e0pected situations best describes< a. b. c. d. e. business processes. work methods. formal system. standard operating procedures. process description. "iffi#ulty! Medium %eferen#e! p& ')

Ans er! d

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Information Systems, Organizations, Management, and Strategy

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43.

-ccording to 5eber, 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 e0pected. "iffi#ulty! -ard %eferen#e! p& '*

Ans er! # 44.

- 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. "iffi#ulty! Medium %eferen#e! p& )0

Ans er! a 4$.

5hich of the following is an e0ample of a professional bureaucracy> a. b. c. d. e. +ortune $22 firm 'chool system #idsize manufacturing firm 'mall start9up business "onsulting firm "iffi#ulty! Medium %eferen#e! p& )0

Ans er! 1 4&.

-ll 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. "iffi#ulty! Medium %eferen#e! p& )0

Ans er! d 4(.

5hen information systems help organizations perceive changes in their environments and act on their environments, this function is called< a. b. c. d. e. e0ternal scanning. environmental observation. environmental scanning. competition monitoring. strategic scanning. "iffi#ulty! Medium %eferen#e! p& )+

Ans er! # 4,.

+eatures common to organizations include< a. formal structure.

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Information Systems, Organizations, Management, and Strategy

Chapter 3

b. c. d. e.

organizational type. environments. power. function. "iffi#ulty! -ard %eferen#e! p& )/

Ans er! a 4..

+eatures uni1ue to organizations include< a. b. c. d. e. goals. formal structure. standard operating procedures. politics. culture. "iffi#ulty! -ard %eferen#e! pp& )/

Ans er! a $2. 'ystems analysts are<

a. highly trained technical specialists who write computer software instructions. b. specialists who translate business problems and re1uirements into information re1uirements 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. Ans er! 1 $1. "/%s are< a. highly9trained technical specialists who write computer software instructions. b. specialists who translate business problems and re1uirements into information re1uirements 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. Ans er! d $2. "iffi#ulty! Medium %eferen#e! p& )3 "iffi#ulty! Medium %eferen#e! p& )3

/nformation systems managers are< a. highly9trained technical specialists who write computer software instructions. b. specialists who translate business problems and re1uirements into information re1uirements 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. Ans er! # "iffi#ulty! Medium %eferen#e! p& )3

$3.

3y making it worthwhile for firms to contract with e0ternal suppliers instead of internal sources, information technology can reduce<

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Information Systems, Organizations, Management, and Strategy

3-7

a. b. c. d. e.

transaction costs. end user support re1uirements. management control spans. -ll of the above ?one of the above "iffi#ulty! Medium %eferen#e! p& ),

Ans er! a $4.

3ecause it makes it easier for managers to oversee a greater number of employees, information technology can reduce< a. b. c. d. e. transaction costs. interdepartmental conflicts. agency costs. information retrieval costs. ?one of the above "iffi#ulty! Medium %eferen#e! p& ).

Ans er! # $$.

'ome research indicates that computerization decreases the need for large numbers of lower9level 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 highly9trained workers work faster. more training for such workers is re1uired. "iffi#ulty! -ard %eferen#e! p& )(

Ans er! 1 $&.

The /nternet is capable of reducing @@@@@@@@@@@@@ for most organizations. a. b. c. d. e. agency and transaction costs information usage reporting and analysis systems costs -ll of the above "iffi#ulty! Medium %eferen#e! p& )'

Ans er! a $(.

-ccording to +ayol, 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. "iffi#ulty! -ard %eferen#e! p& ))

Ans er! # $,.

%rganizations rebuilding some of their key business processes on /nternet 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. -ll of the above e. ?one of the above Ans er! d $.. "iffi#ulty! $asy %eferen#e! p& )'

#intzberg 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. Ans er! d "iffi#ulty! -ard %eferen#e! p& )*

&2.

#intzberg 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. Ans er! # "iffi#ulty! -ard %eferen#e! p& )*

&1.

/nformation 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. "iffi#ulty! -ard %eferen#e! p& *0

Ans er! e &2.

8eciding 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. knowledge9level decision making. liaison decision making. "iffi#ulty! Medium %eferen#e! p& *0

Ans er! a &3.

/n 'imon6s 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. ?one of the above

Chapter 3

Information Systems, Organizations, Management, and Strategy

3-!

Ans er! # &4.

"iffi#ulty! Medium

%eferen#e! p& *0

/n 'imon6s 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. ?one of the above "iffi#ulty! Medium %eferen#e! p& *+

Ans er! d &$.

/n 'imon6s 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. "iffi#ulty! Medium %eferen#e! p& *+

Ans er! a &&.

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, value9ma0imizing calculations focused on choosing the alternative that contributes most to their goals. d. engage in calculations that are concerned with correct, value9ma0imizing choices that further the goals of the organization. e. make decisions based on their own needs and abilities. Ans er! # "iffi#ulty! -ard %eferen#e! p& *+

&(.

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. "iffi#ulty! Medium %eferen#e! p& */

Ans er! a &,.

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. "iffi#ulty! Medium %eferen#e! p& */

Ans er! d &..

#odels of decision making where decisions are shaped by the organization6s 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. "iffi#ulty! Medium %eferen#e! p& *3

Ans er! 1 (2.

The key 1uestion at the business level of strategy is< a. b. c. d. e. 5hat market should we enter> 5hat will meet our goals> 5hat will give us the most efficient operation> *ow can we compete effectively in this particular market> *ow can we affect the market> "iffi#ulty! $asy %eferen#e! p& *.

Ans er! d (1.

- value chain6s primary activities include< a. b. c. d. e. human resources. inbound logistics. technology. procurement. administration and management. "iffi#ulty! Medium %eferen#e! p& *.

Ans er! 1 (2.

- value chain6s 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. "iffi#ulty! Medium %eferen#e! p& *(

Ans er! a (3.

- customer9driven 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 5eb. value chain. value e0tranet. value intranet. enterprise system. "iffi#ulty! Medium %eferen#e! p& *'

Ans er! a (4.

'trategic information systems for @@@@@@@@@@@@ can prevent the competition from responding in kind. a. competitive advantage

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Information Systems, Organizations, Management, and Strategy

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b. c. d. e.

technology9based products manufacturers product differentiation wholesalers "iffi#ulty! -ard %eferen#e! p& *)

Ans er! d ($.

- competitive strategy for creating brand loyalty by developing new and uni1ue products and services that are not easily duplicated by competitors best describes< a. b. c. d. e. focused differentiation. low9cost producer. product differentiation. 1uality differentiation. marketing differentiation. "iffi#ulty! Medium %eferen#e! p& *)

Ans er! # (&.

%ne 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. competitor6s markets. "iffi#ulty! Medium %eferen#e! p& **

Ans er! d ((.

'upply chain management can be used to create< a. b. c. d. e. networked markets. efficient customer response systems. franchise9based environments. wide9ranging data reports. demographic9oriented sales. "iffi#ulty! $asy %eferen#e! p& +00

Ans er! 1 (,.

-ctivities at which a firm e0cels as a world9class leader include< a. b. c. d. e. core competencies. strategic competencies. standard operating procedures. business strategies. strategic business processes. "iffi#ulty! Medium %eferen#e! p& +0/

Ans er! a (..

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. #iller6s theory of ad4usted dataflow, =orter6s competitive forces model, and network analysis.

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Information Systems, Organizations, Management, and Strategy

Chapter 3

Ans er! d ,2.

"iffi#ulty! Medium

%eferen#e! p& +03

- 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. "iffi#ulty! Medium %eferen#e! p& +0(

Ans er! e

Fill In the 2lan3s

81. -AnB organization, by technical definition, is a stable, formal, social structure that takes resources from the environment and processes them to produce outputs. "iffi#ulty! $asy ,2. %eferen#e! p& ''

-AnB 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. "iffi#ulty! $asy %eferen#e! p& ')

,3.

-AnB bureaucracy is a formal organization with a clear9cut division of labor, abstract rules and procedures, and impartial decision making that uses technical 1ualifications and professionalism as a basis for promoting employees. "iffi#ulty! $asy %eferen#e! p& ')

,4.

-AnB 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. "iffi#ulty! Medium %eferen#e! p& )0

,$.

-AnB systems analyst is a specialist who translates business problems and re1uirements to information re1uirements and systems, acting as a liaison between the information systems department and the rest of the organization. "iffi#ulty! $asy %eferen#e! p& )/

,&.

-AnB information systems manager is the leader of the various specialists in the information systems department. "iffi#ulty! $asy %eferen#e! p& )3

,(.

-AnB chief information officer is the senior manager in charge of the information systems function in the firm. "iffi#ulty! $asy %eferen#e! p& )3

Chapter 3

Information Systems, Organizations, Management, and Strategy

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,,.

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 e0ternal firms in the marketplace. "iffi#ulty! Medium %eferen#e! p& ),

,..

Agency theory views the firm as a ne0us of contracts among self9interested individuals who must be supervised and managed. "iffi#ulty! Medium %eferen#e! p& ).

.2.

-AnB 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. "iffi#ulty! Medium %eferen#e! p& )(

.1.

The classical model of management focuses on the formal functions of planning, organizing, coordinating, deciding, and controlling. "iffi#ulty! $asy %eferen#e! p& ))

.2.

The behavioral model of management is based on observations of what managers actually do on their 4obs. "iffi#ulty! $asy %eferen#e! p& ))

.3.

#intzberg6s managerial roles are the e0pectations of the activities that managers should perform in an organization. "iffi#ulty! $asy %eferen#e! p& )*

.4.

#intzberg6s decisional roles describe situations wherein managers initiate activities, handle disturbances, resources, and policies of an organization. "iffi#ulty! $asy %eferen#e! p& )*

.$.

Strategic decision making is the act of determining the long9term ob4ectives, resources, and policies of an organization. "iffi#ulty! Medium %eferen#e! p& *0

.&.

Management control monitors how efficiently or effectively resources are used and how well operational units are performing. "iffi#ulty! -ard %eferen#e! p& *0

.(.

-AnB unstructured decision is a nonroutine decision in which the decision maker must provide 4udgment, evaluation, and insights into the problem definition. "iffi#ulty! $asy %eferen#e! p& *0

.,.

-AnB 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

Chapter 3

"iffi#ulty! $asy ...

%eferen#e! p& *0

/n 'imon6s stages of decision making, design is the stage when the individual conceives of possible alternative solutions to a problem. "iffi#ulty! $asy %eferen#e! p& *0

122. /n 'imon6s stages of decision making, choice is the stage when the individual selects among the various solution alternatives. "iffi#ulty! $asy %eferen#e! p& *0

121. /n 'imon6s stages of decision making, implementation is the stage when the individual puts the decision into effect and reports on the progress of the solution. "iffi#ulty! $asy %eferen#e! p& *0

122. /n 'imon6s stages of decision making, intelligence is the stage when the individual collects information to identify problems occurring in the organization. "iffi#ulty! $asy %eferen#e! p& *0

123. The rational model of human behavior is based on the belief that people, organizations, and nations engage in basically consistent, value9ma0imizing calculations. "iffi#ulty! $asy %eferen#e! p& *+

124. Cognitive style is the underlying personality dispositions toward the treatment of information, selection of alternatives, and evaluation of conse1uences. "iffi#ulty! Medium %eferen#e! p& */

12$. Systematic decision makers have an underlying personality disposition to approach a problem by structuring it in terms of some formal method. "iffi#ulty! Medium %eferen#e! p& */

12&. 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. "iffi#ulty! Medium %eferen#e! p& */

12(. Organizational models of decision making take into account the structural and political characteristics of an organization. "iffi#ulty! -ard %eferen#e! p& */

12,. -AnB 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. "iffi#ulty! Medium %eferen#e! p& *.

12.. -AnB primary activity is one directly related to the production and distribution of the firm6s products or services.

Chapter 3

Information Systems, Organizations, Management, and Strategy

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"iffi#ulty! $asy

%eferen#e! p& *.

112. -AnB support activity is one that involves the organization6s infrastructure, human resources, technology, and procurement. "iffi#ulty! Medium %eferen#e! p& *(

111. -AnB value web is a customer9driven network of independent firms who use information technology to coordinate their value chains to collectively produce a product or service for a market. "iffi#ulty! Medium 112. %eferen#e! p& *'

roduct differentiation is a competitive strategy for creating brand loyalty by developing new and uni1ue products and services not easily duplicated by competitors. "iffi#ulty! -ard %eferen#e! p& *)

113. !ocused 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. "iffi#ulty! -ard %eferen#e! p& **

114. -AnB efficient customer response system directly links consumer behavior back to distribution, production, and supply chains. "iffi#ulty! -ard %eferen#e! p& +00

11$. Switching costs are the e0pense a customer or company incurs in lost time and e0penditure of resources when changing from one supplier or system to a competing supplier or system. "iffi#ulty! $asy %eferen#e! p& +00

11&. -AnB core competency is an activity at which a firm e0cels as a world9class leader. "iffi#ulty! $asy %eferen#e! p& +0/

11(. -AnB information partnership is a cooperative alliance formed between two or more corporations for the purpose of sharing information to gain strategic advantage. "iffi#ulty! Medium %eferen#e! p& +03

11,. The competitive forces model is used to describe the interaction of e0ternal influences, specifically threats and opportunities that affect an organization6s strategy and ability to compete. "iffi#ulty! Medium %eferen#e! p& +03

11.. "etwork 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. "iffi#ulty! $asy %eferen#e! p& +0.

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Information Systems, Organizations, Management, and Strategy

Chapter 3

122. -AnB strategic transition is a movement from one level of a sociotechnical system to another. "iffi#ulty! -ard %eferen#e! p& +0(

$ssay Questions
121. "is#uss the intera#tion 1et een management and the de4elopment of information systems ithin the #ompany& 5hat do you thin3 is the single most important thing management must do to ensure the su##essful #oordination of these systems ith the organization6 The interaction between information technology and organizations is comple0 and is influenced by many mediating factors, including the organization6s structure, standard operating procedures, politics, culture, surrounding environment, and management decisions. #anagers must be aware that information systems can markedly alter life in the organization. They cannot successfully design new systems or understand e0isting systems without understanding organizations and the way they work. 122. "efine and dis#uss the t o definitions of 7organization8 dis#ussed in your te9t1oo3& 5hy are 1oth useful to management, and under hi#h #ir#umstan#es is ea#h the 1etter model for understanding the ay the organization or3s6 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 companyClegal 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 comple0 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 day9to9day workings of the business itselfCpolitical 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. 2riefly des#ri1e Mintz1erg:s #lassifi#ation of organizations& ;ro4ide an e9ample of ea#h& Dntrepreneurial structure, machine bureaucracy, divisionalized bureaucracy, professional bureaucracy, and adhocracy are #intzberg6s five classifications. The entrepreneurial structure is a young, small firm in a fast9changing environment. 'mall start9up businesses fall within this category. The machine bureaucracy is a large bureaucracy e0isting in a slowly changing environment, producing standard products. -n e0ample is a mid9size manufacturing firm. - divisionalized bureaucracy is a combination of multiple machine bureaucracies, each producing a different product or service, all topped by one central head1uarters. -n e0ample is a +ortune $22 firm. - professional bureaucracy is a knowledge9based organization where goods and services depend on the e0pertise and knowledge of professionals. -n e0ample is a law firm. -n adhocracy is a task force! organization that must respond to rapidly9changing environments. -n e0ample is a consulting firm.

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Information Systems, Organizations, Management, and Strategy

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124.

<ist three

ays in

hi#h all organizations are ali3e&

They all have formal structure, standard operating procedures, politics, and culture9albeit not necessarily the same ones. 12$. 5hile it is o14ious that there are some things #ommon to all organizational stru#tures, there are more differen#es and uni=ue features than similarities& <ist and dis#uss at least si9 features that are uni=ue to ea#h organization& The authors list ten features that, in combination, are uni1ue to each organization< organizational type, environments, goals, power, constituencies, function, leadership, tasks, technology, and business processes. %rganizations differ in their ultimate goals and the types of power used to achieve them. 'ome organizations have coercive goals AprisonsB, some have utilitarian goals AbusinessesB, and some have normative goals Auniversities, religious groupsB. %rganizations 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 anotherCsome are more democratic or authoritarian than others, some have greater or lesser need for rules and procedures, or do more or fewer routine tasks re1uiring more or less 4udgment and initiative. %rganizations differ in the technology they useCsome re1uire little 4udgment andEor training, others re1uire far more of both. 12&. "is#uss the 4arious types of personnel re=uired 1y a te#hnology infrastru#ture and its attendant information te#hnology ser4i#es& The formal organizational unit is the information systems department, which is responsible for maintaining the hardware, software, and networks of the firm6s /T infrastructure. The department consists of specialists, such as programmers, systems analysts, and information systems managers. Dach of these is responsible for specific areas of the department6s functions. #any 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. 12(. Information systems affe#t organizations e#onomi#ally and 1eha4iorally& "es#ri1e the ays in hi#h ea#h of these applies to an understanding of the or3ing of the organization& Dconomic theories view information system technology as a factor of production that can be freely substituted for capital and labor. -s 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. /nformation technology can also lower costs by reducing transaction costs Atransaction cost theoryB, and by reducing internal management costs Aagency theoryB. 3ehavioral theories are more useful for describing the behavior of individual firms. 'ome behavioral researchers theorize that information technology couldEmay change the hierarchy of decision making in organizations by lowering the costs of information ac1uisition and broadening the distribution of information from upper9level management all the way down to individual workers at the lowest levels of the firm. %thers see information systems as the outcome of political competition between organizational subgroups for influence over the organization6s policies, procedures, and resources. 12,. "efine and #ontrast the t o models of managerial 1eha4ior& 5hi#h do you thin3 is most useful in the or3pla#e6 5hy6 The classical model of management is focused on the formal functions of planning,

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organizing, coordinating, deciding, and controlling the actions of the firm. /t describes the functions of managers, but does not describe how these functions are carried out. 3ehavioral models concentrate on observations of what managers actually do # The behavioral model offered by #intzberg classifies ten managerial activities into three categories< interpersonal roles, informational roles, and decisional roles. 12.. "es#ri1e and dis#uss the four stages of de#ision ma3ing as outlined 1y Simon& -o does ea#h relate to the use of information systems6 'imon identified four stages, including intelligence, design, choice, and implementation. /ntelligence involves identifying the problem and gathering information about it. Traditional #/' systems deliver a wide variety of detailed information, especially if they report e0ceptions. 8esign determines possible solutions to the problem. 'maller 8'' systems are helpful here because they operate on simple models, can be developed 1uickly, and can be operated with limited data. "hoice consists of choosing among the alternative solutions. larger 8'' system can develop more e0tensive data on a variety of alternatives. /mplementation, when the chosen decision is put into effect, re1uires a system that can report on results. Farge #/' systems and ="9run pro4ect9planning software are useful here. 132. 5hat is a strategi# information system6 In hat ays #an these systems 1e used differently at the 1usiness le4el, the firm le4el, and the industry le4el6 'trategic information systems are computer systems that change goals, operations, products, services, or environmental relationships to help the organization gain a competitive advantage. -t the business level, they are used to answer the 1uestion, *ow can we compete effectively in this particular market>! -t 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. -t 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.