TBChap018 Final

Chapter 18
Using Advanced Information Technology to Increase Performance
True / False Questions

1. The term data refers to raw, unsummarized facts.

True False

2. The term information refers to data that have been organized in some type of meaningful way.

True False

3. Data is more useful to managers than information.

True False

4. Accuracy and reliability determine the completeness of information.

True False

5. Information that reflects current conditions in the organization is called real-time information.

True False

6. Information that is relevant is useful and suits a manager’s particular needs and circumstances.

True False

7. The greater the accuracy and reliability of information, the higher is the quality of information.

True False

8. The methods for acquiring, organizing, storing, manipulating, and transmitting information are known as
information technology.

True False

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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
9. Management information systems came into existence during the computer age.

True False

10. Information from inside the organization is sufficient for managers to make effective decisions.

True False

11. The process through which managers regulate how efficiently and effectively an organization and its
members perform the activities necessary to achieve its stated goals is called decision making.

True False

12. Computers express words, numbers, images, and sound in alphabets.

True False

13. A line of software code is called an instruction.

True False

14. The demand for a product is minimal during the embryonic stage of a product's life cycle.

True False

15. The demand for a product is highest during the growth stage.

True False

16. The decline stage of a product begins when a more advanced product makes the old one obsolete.

True False

17. The shorter a product's life cycle because of advancing IT, the less important it is to innovate products
quickly and continuously.

True False

18. Interlinked computers that exchange information constitute a network.

True False

19. The mainframe is the master computer that controls the operations of all the other types of computers and
digital devices as needed and can link them into one integrated system.

True False

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20. Cloud computing service is an example of an internal IT network.

True False

21. The client computers that are linked directly to a server constitute a local area network (LAN).

True False

22. Application software tells the computer hardware how to run.

True False

23. Microsoft Excel, a computer program which uses spreadsheets, charts, and databases, is an example of an
applications software.

True False

24. A transaction-processing system is a management information system designed to handle small volumes of
non-recurring transactions.

True False

25. An operations information system gives managers information they can use in their nonroutine coordinating,
controlling, and decision-making tasks.

True False

26. A system that managers use in their nonroutine tasks of coordinating and controlling tasks is known as a
transaction-processing system.

True False

27. A decision support system provides computer-built models that help managers make better nonprogrammed
decisions.

True False

28. While a decision support system organizes important information for managers, an operations information
system gives managers model-building capability and the chance to manipulate information in a variety of
ways.

True False

29. A marketing manager who is trying to decide whether or not to lower the price of one of the products in a
product line may decide to use a decision support system to assist her in making this decision.

True False

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30. Top managers make frequent use of decision support systems in their decision-making.

True False

31. An executive support system is a sophisticated version of a decision support system that is designed to meet
the needs of top managers.

True False

32. Natural intelligence has been defined as behavior by a machine that, if performed by a human being, would
be called "intelligent."

True False

33. Local area networks are multimodule application software packages that allow a company to link and
coordinate the entire set of functional activities necessary to move products from the initial design stage to
the final customer stage.

True False

34. E-commerce systems are aimed at making programmed decisions.

True False

35. Trade that takes place between a company and individual customers using IT and the Internet is called
business-to-business (B2B) commerce.

True False

36. A spin-off is an agreement in which managers share their organization's resources and know-how with a
foreign company, and the two organizations share the rewards and risks of starting a new venture.

True False

37. A B2B network structure is a formal series of global strategic alliances that one or several organizations
create with suppliers, manufacturers, and distributors to produce and market a product.

True False

38. Rapid advances in IT have resulted in greater decentralization and horizontal information flows within
organizations.

True False

39. A boundaryless organization is an organization composed of people linked by IT.

True False

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40. A knowledge management system is a company-specific virtual information system that systematizes the
knowledge of its employees and facilitates the sharing and integrating of their expertise.

True False

Multiple Choice Questions

41. Raw, unsummarized, and unanalyzed facts are called _____.

A. sociofacts
B. data
C. information
D. feedback
E. morse codes

42. Data that is organized in a meaningful way is known as:

A. wisdom.
B. knowledge.
C. artificial intelligence.
D. information.
E. a fact.

43. A graph of the profitability of each of an organization's products in a product line over the past three years is
an example of:

A. raw data.
B. a software program.
D. a raw fact.
E. information.

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44. Which of the following is an example of real-time information?

A. The price of a particular brand of chocolate

B. Number of cars sold by a manufacturer in the last two years
C. Census data over the last ten years
D. Daily weather forecast details
E. Literature review on a particular research study

45. Which of the following is not a factor in determining the usefulness of information?

A. Quality
B. Timeliness
C. Size
D. Completeness
E. Relevance

46. The quality of information is determined by its _____ and _____.

A. accuracy;reliability
B. timeliness;relevance
C. relevance;accuracy
D. completeness;timeliness
E. availability;reliability

47. The attribute that affects the usefulness of information and is determined by the availability of information
as per requirement is called _____.

A. relevance
B. timeliness
C. quantity
D. completeness
E. quality

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48. Information that constantly changes to correspond to immediate changes in business conditions is called
_____ information.

A. static
B. stable
C. real-time
D. complete
E. critical

49. Which of the following statements is true about the factors affecting the usefulness of information?

A. Irrelevant information is useless and may actually hurt the performance of a busy manager who has to
spend valuable time determining whether information is relevant.
B. Managers constantly have access to complete information.
C. Accuracy and reliability seldom determine the quality of information.
D. Real-time information is information that reflects changes in business conditions that have occurred in
the past.
E. In today’s rapidly changing world, the need for timely information has decreased.

50. Which of the following attributes of useful information emphasizes on accuracy and reliability?

A. Timeliness
B. Validit
y
C. Quality
D. Completeness
E. Relevance

51. The set of methods or techniques for acquiring, organizing, storing, manipulating, and transmitting
organized and meaningful data is known as:

A. data harvesting.
B. data mapping.
C. data mediation.
D. informatization.
E. information technology.

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52. A specific form of IT that managers utilize to generate specific, detailed information they need to perform
their roles effectively is known as _____.

A. management cybernetics
B. management information system
C. B2B marketplace
D. content management system
E. global positioning system

53. Establishing measurable standards of performance, measuring actual performance, comparing actual
performance against established goals, and evaluating the results and taking corrective action are steps:

A. to launch a new product in the market.

B. to indicate the life cycle of a product.
C. to achieve control over organizational activities.
D. to reduce group cohesiveness among members.
E. to increase a company's investments in research and development.

54. The first step that managers need to take to achieve control over organizational activities is to:

A. measure actual performance.

B. establish measurable standards of performance.
C. perform tests to confirm consistency.
D. compare actual performance against established goals.
E. evaluate the results and take corrective action.

55. The final step that managers need to take to achieve control over organizational activities is to:



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56. Which of the following decisions is most likely to be made by top managers?

A. Decisions on how much of a product to make and how to make it

B. Decisions regarding from whom to purchase inputs and what inventory of inputs to hold
C. Decisions on how much employees should be paid, how they should be trained, and what benefits they
should be given
D. Decisions on how to allocate scarce financial resources among competing projects
E. Decisions about the new product design

57. Which of the following describes the language used by computers, consisting of zeros and ones, to perform
their functions?

A. Geometric
B. Logarithmic
C. Digital
D. Analog
E. Symbolic

58. A line of software code is called:

A. a bit.
B. a byte.
C. a processor.
D. an instruction.
E. an application.

59. Which of the following statements is true about information technology (IT) and the product life cycle?

A. In the embryonic stage many consumers are entering the market and buying the product for the first time,
and demand increases rapidly.
B. In the growth stage a product has yet to gain widespread acceptance; customers are unsure what a
product has to offer, and demand for it is minimal.
C. The growth stage ends and the maturity stage begins when market demand peaks because most
customers have already bought the product.
D. Once demand for a product starts to fall, the maturity stage begins; this typically occurs when advancing
IT leads to the development of a more advanced product, making the old one obsolete.
E. Products such as desktops and laptops and services such as Internet broadband and digital TV services
are currently in the embryonic stage.

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60. The order in which the stages of the product life cycle occur over time is:

A. embryonic, growth, decline, and maturity.

B. embryonic, maturity, growth, and decline.
C. embryonic, growth, maturity, and decline.
D. growth, maturity, decline, and embryonic.
E. growth, embryonic, maturity, and decline.

61. The stage of the product life cycle in which demand and therefore sales for a product is least is the _____
stage.

A. embryonic
B. maturity
C. growth
D. decline
E. saturation

62. The stage which immediately follows the embryonic stage in a product's life cycle is the _____ stage.

A. creation
B. maturity
C. decline
D. growth
E. conception

63. The _____ stage begins when market demand peaks because most customers have already bought the
product. At this stage, demand is typically replacement demand.

A. maturity
B. decline
C. embryonic
D. growth
E. conception

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64. The _____ stage occurs when advancing IT leads to the development of a more advanced product making
the old one obsolete and resulting in a fall of sales.

A. embryonic
B. conceptual
C. growth
D. maturity
E. decline

65. Personal computers on the desks of managers within a computer network are called:

A. servers.
B. clients.
C. mainframes.
D. external networks.
E. hubs.

66. The client computers that are linked directly to a server constitute a(n):

A. local area network.

B. operating system software.
C. artificial intelligence network.
D. global positioning system.
E. content management system.

67. Large companies that need immense processing power have a(n) _____ computer at the center or hub of the
network that can quickly process vast amounts of information and can handle electronic communications
between PCs situated in different LANs.

A. server
B. client
C. mainframe
D. cloud
E. personal

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68. The _____ is the master computer that controls the operations of all the other types of computers and digital
devices as needed and can link them into one integrated system.

A. mainframe
B. client
C. server
D. personal computer
E. ethernet

69. _____ tell the computer hardware how to run.

A. Operating system softwares

B. Mainframes
C. Application softwares
D. Local area networks
E. Wide area networks

70. Powerful, user-friendly programs that are developed for a specific task or use are called _____.

A. operating system softwares

B. operating networks
C. application softwares
D. servers
E. data structures

71. Which of the following statements is true about excessive layering in hierarchy?

A. Many layers of managerial hierarchy ensures a short time for information to travel up the hierarchy.
B. Information remains undistorted when passed along the different layers of hierarchy.
C. Many layers of managerial hierarchy ensures an organization's quick response to changing market
conditions.
D. Many layers of managerial hierarchy results in a long time for information to travel down the hierarchy.
E. The usefulness of information will always increase with an increase in layering of hierarchy.

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72. A computer software program that is developed for preparing graphs of sales performance (in terms of the
number of units sold) over a required period of time is an example of a(n):

A. applications software.
B. artificial intelligence program.
C. expert system software.
D. decision support system.
E. operating system software.

73. A computer system that is designed to handle a large volume of routine and recurring transactions is called
a(n) _____ system.

A. transactional analysis
B. artificial intelligence
C. transaction-processing
D. transactional modeling
E. decision support

74. Which of the following management information systems are used for routine tasks?

A. Decision support systems

B. Expert systems
C. Transaction-processing systems
D. E-commerce systems
E. Decision support systems

75. A bank that uses a computer system to record deposits and withdrawals from its customers' accounts is most
likely to use a(n) _____.

A. inventory management system

B. transaction-processing system
C. expert system
D. group decision-support system
E. artificial intelligence system

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76. A computer system that gathers comprehensive data, organizes it, and summarizes it in ways that are useful
to managers for their nonroutine tasks is known as a(n) _____ system.

C. expert
D. operations information
E. decision support

77. An operations information system typically accesses data gathered by a _____ system and converts the data
into useful information.

A. transaction-processing
C. expert
D. executive support
E. decision support

78. Supermarket managers who use scanners at the checkout counters, that are installed with computer
softwares to track inventory levels of their products are using a(n):

A. group decision-support system.

B. artificial intelligence system.
C. expert system.
D. executive support system.
E. transaction-processing system.

79. An interactive computer-based system that produces models which help managers to make better
nonprogrammed decisions is known as a(n):

A. decision-support system.
C. decisional balance sheet.
D. transaction-processing system.
E. business decision mapping.

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80. Which of the following is an example of a programmed decision?

A. Investing in a new type of production technology

B. Developing a new type of consumer product
C. Launching a new type of promotional campaign
D. Expanding sales into a new country
E. Refilling ink into a copier

81. Which of the following is an example of a nonprogrammed task or decision?

A. The changing of streetlights

B. The purchase of a new house
C. Trip to the grocery store for supplies
D. The payment of electricity bills
E. Reordering printer cartridges

82. An executive support system is a type of _____.

A. transaction-processing system
B. business support system
C. expert support system
D. e-commerce system
E. decision support system

83. A(n) _____ system is a sophisticated version of a decision support system that is designed to meet the needs
of top managers.

B. expert support
C. enterprise resource management
D. e-commerce support
E. executive support

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84. Executive support systems are used to link top managers virtually so they can function as a team; this type
of executive support system is called a(n):

A. transaction-processing system.
B. expert system.
C. operations support system.
D. e-commerce support system.
E. group decision support system.

85. Behavior by a machine, which closely mimics human logical behavior, is known as:

A. nanotechnology.
B. an executive support system.
C. an executive simulation.
D. intelligence quotient.
E. artificial intelligence.

86. With respect to expert systems, which of the following is NOT a minimum requirement for IT in order to
mimic human expertise and intelligence?

A. Recognition of problems
B. Display of emotions
C. Formulation of solutions
D. Explanation of solutions
E. The ability to learn from experience

87. Which of the following is the most advanced management information system that incorporate artificial
intelligence in their design?

A. Expert system
B. Group decision support system
C. Executive support system
D. Transaction-processing system
E. Operations information system

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88. A(n) _____ is a system that employs human knowledge, embedded in computer software, to solve problems
that ordinarily require human expertise.

A. group decision support system

B. expert system
C. transaction-processing system
D. operations information system
E. executive support system

89. Multimodule application software packages that coordinate the various functional activities of organizations
are called:

A. enterprise resource planning systems.

B. decision support systems.
C. transaction processing systems.
E. operations information system.

90. A system that handles trade that takes place between companies, and between companies and individual
customers, using IT and the Internet is called a(n):

A. enterprise resource planning system.

B. e-commerce system.
C. transaction processing system.

91. Trade that takes place between companies using IT and the Internet to link and coordinate the value chains
of different companies is called:

A. enterprise resource planning.

B. business-to-business commerce.
C. business-to-customer commerce.
D. business-to-business marketplace.
E. business-to-customer network structure.

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92. A _____ is an Internet-based trading platform set up to connect buyers and sellers in an industry.

A. business-to-customer commerce
B. intranet
C. group decision support system
D. business-to-business marketplace
E. mainframe

93. Trade that takes place between a company and individual purchasers using IT and the Internet is called:


E. business-to-business network structure.

94. When two organizations pool resources, know-how, rewards, and risk in order to produce and market a
product, they are:

A. forming a coalition.
B. forming a strategic alliance.
C. forming a business-to-business network.
D. outsourcing.
E. forming a boundaryless organization.

95. A(n) _____ is a formal series of global strategic alliances that one or several organizations create with
suppliers, manufacturers, and distributors to produce and market a product.

A. boundaryless organization
B. B2B network structure
C. ERP system
D. expert system
E. B2B marketplace

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96. Members of a _____ are linked to an organization's centralized database by computers, faxes, computer-
aided design systems, and video teleconferencing and who rarely, if ever, see one another face-to-face.

B. B2B marketplace
C. strategic alliance
D. local area network
E. virtual organization

97. Rapid advances in IT have been associated with a flattening of the organizational hierarchy which results
in:

A. an increase in establishment of boundaryless organizations.

B. a move toward vertical information flow.
C. a move toward greater centralization.
D. a decrease in the organization's efficiency.
E. an increase in the establishment of tall management hierarchies.

98. Modern information systems _____ an organization's need for hierarchy and _____ its efficiency.

A. decrease; decrease
B. decrease; increase
C. increase; increase
D. increase; decrease
E. increase; does not affect

99. Which of the following statements is true about the effects of IT on the organizational hierarchy?

A. Rapid advances in IT have popularized the idea of a boundaryless organization.

B. Rapid advances in IT have been associated with the creation of taller organizational hierarchies.
C. Rapid advances in IT have been associated with the establishment of centralized decision-making in
organizations.
D. Rapid advances in IT have been associated with an increase in vertical or top-down information flows
within organizations.
E. Management information systems have increased the need for tall management hierarchies.

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100. A(n) _____ is a company specific virtual information system that systematizes the knowledge of its
employees and facilitates the sharing and integrating of their expertise.

A. expert system
B. knowledge management system
C. enterprise resource planning system
D. knowledge economy
E. knowledge market

Essay Questions

101. Define data and information and its importance to managers. With an example, differentiate data and
information.

102. Briefly explain the four factors that determine the usefulness of information to a manager and define real-
time information.

103. Define information technology and management information system. Briefly explain the three primary
reasons why managers need information.

104. Discuss the four steps of the "control process" that managers use within organizations. Give a specific
business example of each of these steps in a business decision situation.

105. List and briefly explain the different stages of a product life cycle.

106. What is a computer network? Briefly explain the different components of a network.
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107. List the six types of management information systems. Define any three of these management information
systems.

108. Discuss the meaning of decision support system, the different types of decision support systems and how
they are useful to managers.

109. Define artificial intelligence and expert systems. List the requirements for IT to sufficiently mimic human
expertise.

110. Define an ERP system and discuss its benefits.

111. Define e-commerce and differentiate between B2B and B2C.

112. Define a boundaryless organization and discuss the effects of the rapid IT development on organizations.
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Chapter 18 Using Advanced Information Technology to Increase Performance
Answer Key
Comp: Ignore bold and underline.

True / False Questions

1. The term data refers to raw, unsummarized facts.

A. True
B. False
Answer: TRUE
Feedback: Data are raw, unsummarized facts.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01
Topic: Management information system (MIS)
2. The term information refers to data that have been organized in some type of meaningful way.

A. True
B. False
Answer: TRUE
Feedback: Information is data that are organized in a meaningful fashion, such as in a graph showing the
changes in sales volume or costs over time.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
18-22
3. Data are more useful to managers than information.

A. True
B. False
Answer: FALSE
Feedback: Data alone do not tell managers anything; information, in contrast, can communicate a great
deal of useful knowledge to the person who receives it.

AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
4. Accuracy and reliability determine the completeness of information.

A. True
B. False
Answer: FALSE
Feedback: Accuracy and reliability determine the quality of information.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
5. Information that reflects current conditions in the organization is called real-time information.

A. True
B. False
Answer: TRUE
Feedback: Real-time information is information that reflects the current status of business conditions.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
18-23
6. Information that is relevant is useful and suits a manager’s particular needs and circumstances.

A. True
B. False
Answer: TRUE
Feedback: Information that is relevant is useful and suits a manager’s particular needs and
circumstances.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
7. The greater the accuracy and reliability of information, the higher is the quality of information.

A. True
B. False
Answer: TRUE
Feedback: The greater its accuracy and reliability, the higher is the quality of information.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
8. The methods for acquiring, organizing, storing, manipulating, and transmitting information are known as
information technology.

A. True
B. False
Answer: TRUE
Feedback: Information technology (IT) is the set of methods or techniques for acquiring, organizing,
storing, manipulating, and transmitting information.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-24
9. Management information systems came into existence during the computer age.

A. True
B. False
Answer: FALSE
Feedback: Management information systems have existed for as long as there have been organizations
and were mostly paper based till the advent of the computer age.

AACSB: Technology
Blooms: Understand
10. Information from inside the organization is sufficient for managers to make effective decisions.

A. True
B. False
Answer: FALSE
Feedback: To make effective decisions, managers need information both from inside the organization
and from external stakeholders.

AACSB: Technology
Blooms: Understand
11. The process through which managers regulate how efficiently and effectively an organization and its
members perform the activities necessary to achieve its stated goals is called decision making.

A. True
B. False
Answer: FALSE
Feedback: The process through which managers regulate how efficiently and effectively an organization
and its members perform the activities necessary to achieve its stated goals is called controlling.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
18-25
12. Computers express words, numbers, images, and sound in alphabets.

A. True
B. False
Answer: FALSE
Feedback: The language of computers is a digital language of zeros and ones. Words, numbers, images,
and sound can all be expressed in zeros and ones.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
13. A line of software code is called an instruction.

A. True
B. False
Answer: TRUE
Feedback: An instruction is a line of software code.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
14. The demand for a product is minimal during the embryonic stage of a product's life cycle.

A. True
B. False
Answer: TRUE
Feedback: In the embryonic stage, a product has yet to gain widespread acceptance; customers are
unsure what a product has to offer, and demand for it is minimal.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology life cycle
18-26
15. The demand for a product is highest during the growth stage.

A. True
B. False
Answer: FALSE
Feedback: The demand for a product is highest during the maturity stage.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
16. The decline stage of a product begins when a more advanced product makes the old one obsolete.

A. True
B. False
Answer: TRUE
Feedback: The decline stage begins because advancing IT leads to the development of a more advanced
product, making the old one obsolete. Author: Bizarre feedback. Please correct.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
17. The shorter a product's life cycle, the less important it is to innovate products quickly and continuously.

A. True
B. False
Answer: FALSE
Feedback: The shorter a product's life cycle, the more important it is to innovate products quickly and
continuously.

AACSB: Technology
Blooms: Understand
18-27
18. Interlinked computers that exchange information constitute a network.

A. True
B. False
Answer: TRUE
Feedback: Interlinked computers that exchange information constitute a network.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
19. The mainframe is the master computer that controls the operations of all the other types of computers
and digital devices as needed and can link them into one integrated system.

A. True
B. False
Answer: TRUE
Feedback: The mainframe is the master computer that controls the operations of all the other types of
computers and digital devices as needed and can link them into one integrated system. Author: Most
businesses today have their own network but only the largest have a mainframe. I would suggest
you correct this question, but I suspect that would mean correcting the textbook as well.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
20. Cloud computing service is an example of an internal IT network.

A. True
B. False
Answer: FALSE
Feedback: The mainframe is the master computer that provides connection to the external IT networks
such as an organization's cloud computing services. Author: Again, incorrect as regards mainframe.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
18-28
21. The client computers that are linked directly to a server constitute a local area network (LAN).

A. True
B. False
Answer: TRUE
Feedback: The client computers that are linked directly to a server constitute a local area network (LAN).

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
22. Application software tells the computer hardware how to run.

A. True
B. False
Answer: FALSE
Feedback: Operating system software tells the computer hardware how to run.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
23. Microsoft Excel, a computer program which uses spreadsheets, charts, and databases, is an example of
application software.

A. True
B. False
Answer: TRUE
Feedback: Application software, such as programs for word processing, spreadsheets, graphics, and
database management, is developed for a specific task or use.

AACSB: Technology
Blooms: Apply
Topic: Technology
18-29
24. A transaction-processing system is a management information system designed to handle small volumes
of nonrecurring transactions.

A. True
B. False
Answer: FALSE
Feedback: A transaction-processing system is an MIS designed to handle large volumes of routine,

recurring transactions.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
25. An operations information system gives managers information they can use in their nonroutine
coordinating, controlling, and decision-making tasks.

A. True
B. False
Answer: TRUE
Feedback: An operations information system gives managers information they can use in their
nonroutine coordinating, controlling, and decision-making tasks.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
26. A system that managers use in their nonroutine tasks of coordinating and controlling tasks is known as a
transaction-processing system.

A. True
B. False
Answer: FALSE
Feedback: An operations information system gives managers information they can use in their
nonroutine coordinating, controlling, and decision-making tasks.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-30
27. A decision-support system provides computer-built models that help managers make better
nonprogrammed decisions.

A. True
B. False
Answer: TRUE
Feedback: A decision-support system provides computer-built models that help managers make better

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
28. While a decision-support system organizes important information for managers, an operations
information system gives managers model-building capability and the chance to manipulate information
in a variety of ways.

A. True
B. False
Answer: FALSE
Feedback: While an operations information system organizes important information for managers, a
decision-support system gives managers model-building capability and the chance to manipulate
information in a variety of ways.

AACSB: Technology
Blooms: Understand
29. A marketing manager who is trying to decide whether or not to lower the price of one of the products in
a product line may decide to use a decision-support system to assist her in making this decision.

A. True
B. False
Answer: TRUE
Feedback: Managers might use a decision-support system to help them decide whether to cut prices for a
product. The decision-support system might contain models of how customers and competitors would
respond to a price cut.

AACSB: Technology
18-31
Blooms: Understand
30. Top managers make frequent use of decision-support systems in their decision-making.

A. True
B. False
Answer: FALSE
Feedback: Most decision-support systems are geared toward aiding middle managers in the decision-
making process. Top managers rarely use a decision-support system since most electronic management
information systems have not yet become sophisticated enough to handle effectively the ambiguous
types of problems facing top managers.

AACSB: Technology
Blooms: Understand
31. An executive-support system is a sophisticated version of a decision-support system that is designed to

meet the needs of top managers.

A. True
B. False
Answer: TRUE
Feedback: An executive-support system is a sophisticated version of a decision-support system that is

designed to meet the needs of top managers.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-32
32. Natural intelligence has been defined as behavior by a machine that, if performed by a human being,
would be called "intelligent."

A. True
B. False
Answer: FALSE
Feedback: Artificial intelligence has been defined as behavior by a machine that, if performed by a
human being, would be called "intelligent."

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
33. Local area networks are multimodule application software packages that allow a company to link and
coordinate the entire set of functional activities necessary to move products from the initial design stage
to the final customer stage.

A. True
B. False
Answer: FALSE
Feedback: Enterprise resource planning (ERP) systems are multimodule application software packages
that allow a company to link and coordinate the entire set of functional activities and operations
necessary to move products from the initial design stage to the final customer stage.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Enterprise resource planning (ERP)
34. E-commerce systems are aimed at making programmed decisions.

A. True
B. False
Answer: FALSE
Feedback: E-commerce systems are aimed at making better nonprogrammed decisions.

AACSB: Technology
Blooms: Understand
18-33
35. Trade that takes place between a company and individual customers using IT and the Internet is called
business-to-business (B2B) commerce.

A. True
B. False
Answer: FALSE
Feedback: Trade that takes place between a company and individual customers using IT and the Internet
is called business-to-customer (B2C) commerce.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: B2C commerce
36. A spin-off is an agreement in which managers share their organization's resources and know-how with a
foreign company, and the two organizations share the rewards and risks of starting a new venture.

A. True
B. False
Answer: FALSE
Feedback: A strategic alliance is an agreement in which managers pool or share their organization’s

resources and know-how with a foreign company, and the two organizations share the rewards and risks
of starting a new venture.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: B2B network structure
37. A B2B network structure is a formal series of global strategic alliances that one or several organizations
create with suppliers, manufacturers, and distributors to produce and market a product.

A. True
B. False
Answer: TRUE
Feedback: A B2B network structure is a formal series of global strategic alliances that one or several
organizations create with suppliers, manufacturers, and distributors to produce and market a product.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-34
38. Rapid advances in IT have resulted in greater decentralization and horizontal information flows within
organizations.

A. True
B. False
Answer: TRUE
Feedback: Rapid advances in IT have resulted in greater decentralization and horizontal information
flows within organizations, and the concept of the boundaryless organization.

AACSB: Technology
Blooms: Understand
Topic: Boundaryless organization
39. A boundaryless organization is an organization composed of people linked by IT.

A. True
B. False
Answer: TRUE
Feedback: A boundaryless organization is an organization whose members are linked by computers,

faxes, computer-aided design systems, and video teleconferencing and who rarely, if ever, see one
another face-to-face.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
40. A knowledge management system is a company-specific virtual information system that systematizes the
knowledge of its employees and facilitates the sharing and integrating of their expertise.

A. True
B. False
Answer: TRUE
Feedback: A knowledge management system is a company-specific virtual information system that

systematizes the knowledge of its employees and facilitates the sharing and integrating of their expertise.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Virtual organization

18-35
Multiple Choice Questions

41. Raw, unsummarized, and unanalyzed facts are called _____.

A. sociofacts
B. data
C. information
D. feedback
E. morse codes
Answer: B
Feedback: Data are raw, unsummarized, and unanalyzed facts.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
42. Data that are organized in a meaningful way are known as:

A. wisdom.
B. knowledge.
D. information.
E. a fact.
Answer: D
Feedback: Information is data that are organized in a meaningful fashion, such as in a graph showing
the changes in sales volume or costs over time.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
18-36
43. A graph of the profitability of each of an organization's products in a product line over the past three
years is an example of:

A. raw data.
B. a software program.
D. a raw fact.
E. information.
Answer: E
Feedback: Information is data that are organized in a meaningful fashion, such as in a graph showing
the changes in sales volume or costs over time.

AACSB: Analytic
Blooms: Understand
44. Which of the following is an example of real-time information?

A. The price of a particular brand of chocolate

B. Number of cars sold by a manufacturer in the last two years
C. Census data over the last ten years
D. Daily weather forecast details
E. Literature review on a particular research study
Answer: D
Feedback: Real-time information is information that reflects current conditions. Daily weather forecast
details provide real-time information.

AACSB: Technology
Blooms: Understand
18-37
45. Which of the following is not a factor in determining the usefulness of information?

A. Quality
B. Timeliness
C. Size
D. Completeness
E. Relevance
Answer: C
Feedback: Quality, timeliness, completeness, and relevance are attributes of useful information. Size is
not an attribute of useful information.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
46. The quality of information is determined by its _____ and _____.

A. accuracy; reliability
B. timeliness; relevance
C. relevance; accuracy
D. completeness; timeliness
E. availability; reliability
Answer: A

AACSB: Analytic
Blooms: Remember
18-38
47. The attribute that affects the usefulness of information and is determined by the availability of
Author: Could you rephrase this question?
information as per requirement is called _____.
"Availability as per requirement" is not exactly clear.

A. relevance
B. timeliness
C. quantity
D. completeness
E. quality
Answer: B
Feedback: Information that is timely is available when it is required to allow managers to make the
optimal decision.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
48. Information that constantly changes to correspond to current conditions is called _____ information.

A. static
B. stable
C. real-time
D. complete
E. critical
Answer: C
Feedback: Real-time information is information that reflects current conditions.

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
18-39
49. Which of the following statements is true about the factors affecting the usefulness of information?

A. Irrelevant information is useless and may actually hurt the performance of a busy manager who has
to spend valuable time determining whether information is relevant.
B. Managers constantly have access to complete information.
C. Accuracy and reliability seldom determine the quality of information.
D. Real-time information is information that reflects changes in business conditions that have occurred
in the past.
E. In today’s rapidly changing world, the need for timely information has decreased.
Answer: A
Feedback: Irrelevant information is useless and may actually hurt the performance of a busy manager
who has to spend valuable time determining whether information is relevant.

AACSB: Technology
Blooms: Understand
50. Which of the following attributes of useful information emphasizes accuracy and reliability?

A. Timeliness
B. Validit
y
C. Quality
D. Completeness
E. Relevance
Answer: C

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-40
51. The set of methods or techniques for acquiring, organizing, storing, manipulating, and transmitting
organized and meaningful data is known as:

A. data harvesting.
B. data mapping.
C. data mediation.
D. informatization.
E. information technology.
Answer: E
storing, manipulating, and transmitting information.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
52. A specific form of IT that managers utilize to generate specific, detailed information they need to
perform their roles effectively is known as _____.

A. management cybernetics
B. a management information system
C. a B2B marketplace
D. a content management system
E. a global positioning system
Answer: B
Feedback: A management information system (MIS) is a specific form of IT that managers select and
use to generate the specific, detailed information they need to perform their roles effectively.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-41
53. Establishing measurable standards of performance, measuring actual performance, comparing actual
performance against established goals, and evaluating the results and taking corrective action are steps:

A. to launch a new product in the market.

B. to indicate the life cycle of a product.
C. to achieve control over organizational activities.
D. to reduce group cohesiveness among members.
E. to increase a company's investments in research and development.
Answer: C
Feedback: Managers achieve control over organizational activities by taking four steps: (1) They
establish measurable standards of performance or goals, (2) they measure actual performance, (3) they
compare actual performance against established goals, and (4) they evaluate the results and take
corrective action if necessary.

AACSB: Technology
Blooms: Understand
Topic: Controlling
54. The first step that managers need to take to achieve control over organizational activities is to:


Answer: B
establish measurable standards of performance or goals, (2) they measure actual performance, (3) they
compare actual performance against established goals, and (4) they evaluate the results and take

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Topic: Controlling
18-42
55. The final step that managers need to take to achieve control over organizational activities is to:


Answer: E Author: I have corrected the answer.
establish measurable standards of performance or goals; (2) they measure actual performance; (3) they
compare actual performance against established goals; and (4) they evaluate the results and take

AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Topic: Controlling
56. Which of the following decisions is most likely to be made by top managers?

A. Decisions on how much of a product to make and how to make it

B. Decisions regarding from whom to purchase inputs and what inventory of inputs to hold
C. Decisions on how much employees should be paid, how they should be trained, and what benefits
they should be given
D. Decisions on how to allocate scarce financial resources among competing projects
E. Decisions about the new product design
Answer: D
Feedback: Top managers must decide how to allocate scarce financial resources among competing
projects, how best to structure and control the organization, and what business-level strategy the
organization should be pursuing.

AACSB: Technology
Blooms: Understand
18-43
57. Which of the following describes the language used by computers, consisting of zeros and ones, to
perform their functions?

A. Geometric
B. Logarithmic
C. Digital
D. Analog
E. Symbolic
Answer: C
Feedback: The language of computers is a digital language of zeros and ones.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
58. A line of software code is called:

A. a bit.
B. a byte.
C. a processor.
D. an instruction.
E. an application.
Answer: D
Feedback: An instruction is a line of software code.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
18-44
59. Which of the following statements is true about information technology (IT) and the product life cycle?

A. In the product's embryonic stage, many consumers are entering the market and buying the product
for the first time and demand increases rapidly.
B. In the growth stage, a product has yet to gain widespread acceptance; customers are unsure what a
product has to offer, and demand for it is minimal.
C. The growth stage ends and the maturity stage begins when market demand peaks because most
customers have already bought the product.
D. Once demand for a product starts to fall, the maturity stage begins; this typically occurs when
advancing IT leads to the development of a more advanced product, making the old one obsolete.
E. Products such as desktops and laptops and services such as Internet broadband and digital TV
services are currently in the embryonic stage.
Answer: C
Feedback: The growth stage ends and the maturity stage begins when market demand peaks because
most customers have already bought the product. At this stage, demand is typically replacement demand.

AACSB: Technology
Blooms: Understand
60. The order in which the stages of the product life cycle occur over time is:

A. embryonic, growth, decline, and maturity.

B. embryonic, maturity, growth, and decline.
C. embryonic, growth, maturity, and decline.
D. growth, maturity, decline, and embryonic.
E. growth, embryonic, maturity, and decline.
Answer: C
Feedback: The order in which the stages of the product life cycle occur over time is embryonic, growth,
maturity, and decline.

AACSB: Technology
Blooms: Understand
18-45
61. The stage of the product life cycle in which demand, and therefore sales, for a product is least is the
_____ stage.

A. embryonic
B. maturity
C. growth
D. decline
E. saturation
Answer: A
Feedback: In the embryonic stage, a product has yet to gain widespread acceptance; customers are
unsure what a product, such as a new smartphone, has to offer, and demand for it is minimal.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
62. The stage which immediately follows the embryonic stage in a product's life cycle is the _____ stage.

A. creation
B. maturity
C. decline
D. growth
E. conception
Answer: D
Feedback: The embryonic stage is followed by the growth stage, where a product gains acceptance.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-46
63. The _____ stage begins when market demand peaks because most customers have already bought the
product. At this stage, demand is typically replacement demand.

A. maturity
B. decline
C. embryonic
D. growth
E. conception
Answer: A
Feedback: The growth stage ends and the maturity stage begins when market demand peaks because
most customers have already bought the product. (There are relatively few first-time buyers left.) At this
stage, demand is typically replacement demand.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
64. The _____ stage occurs when advancing IT leads to the development of a more advanced product
Author: This is true only of IT-
making the old one obsolete and resulting in a fall of sales.
related products, a small portion of the business world. An energy drink does not
enter its decline stage because of advancing IT. Please revise.

A. embryonic
B. conceptual
C. growth
D. maturity
E. decline
Answer: E
Feedback: Once demand for a product starts to fall, the decline stage begins; this typically occurs when
advancing IT leads to the development of a more advanced product, making the old one obsolete.
Author: As above, this is a strange statement to make about business in general .

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-47
65. Personal computers on the desks of managers within a computer network are called:

A. servers.
B. clients.
C. mainframes.
D. external networks.
E. hubs.
Answer: B
Feedback: The internal network is composed of "client" desktop and laptop PCs connected by Ethernet
to the company's system of rack servers. Author: Or wireless.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
66. The client computers that are linked directly to a server constitute a(n):

A. local area network.

B. operating system software.
C. artificial intelligence network.
D. global positioning system.
E. content management system.
Answer: A
Feedback: The client computers that are linked directly to a server constitute a local area network
(LAN).

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
18-48
67. Large companies that need immense processing power have a(n) _____ computer at the center or hub of
the network that can quickly process vast amounts of information and can handle electronic
communications between PCs situated in different LANs.

A. server
B. client
C. mainframe
D. cloud
E. personal
Answer: C
Feedback: Large companies that need immense processing power have a mainframe computer at the
center or hub of the network that can quickly process vast amounts of information.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
68. The _____ is the master computer that controls the operations of all the other types of computers and
digital devices as needed and can link them into one integrated system.

A. mainframe
B. client
C. server
D. personal computer
E. ethernet
Answer: A
Feedback: The mainframe is the master computer that controls the operations of all the other types of
computers and digital devices as needed and can link them into one integrated system. Author: Not
an entirely accurate description.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
18-49
69. _____ tells the computer hardware how to run.

A. Operating system software

B. Mainframes
C. Application software
D. Local area networks
E. Wide area networks
Answer: A
Feedback: Operating system software tells the computer hardware how to run.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Techology
70. Powerful, user-friendly programs that are developed for a specific task or use are called _____.

A. operating system software

B. operating networks
C. application software
D. servers
E. data structures
Answer: C
Feedback: Applications software, such as programs for word processing, spreadsheets, graphics, and

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technology
18-50
71. Which of the following statements is true about excessive layering in hierarchy?

A. Many layers of managerial hierarchy ensures a short time for information to travel up the hierarchy.
B. Information remains undistorted when passed along the different layers of hierarchy.
C. Many layers of managerial hierarchy ensures an organization's quick response to changing market
conditions.
D. Many layers of managerial hierarchy results in a long time for information to travel down the
hierarchy.
E. The usefulness of information will always increase with an increase in layering of hierarchy.
Answer: D
Feedback: When too many layers of managers exist, it takes a long time for information and requests to
travel up the hierarchy and for decisions and answers to travel back down.

AACSB: Technology
Blooms: Understand
Topic: Upward communication
72. A computer software program that is developed for preparing graphs of sales performance (in terms of
the number of units sold) over a required period of time is an example of a(n):

A. applications software.
B. artificial intelligence program.
C. expert system software.
D. decision-support system.
E. operating system software.
Answer: A
Feedback: Applications software, such as programs for word processing, spreadsheets, graphics, and

AACSB: Technology
Blooms: Apply
Difficulty: 3 Hard
Topic: Technology
18-51
73. A computer system that is designed to handle a large volume of routine and recurring transactions is
called a(n) _____ system.

C. transaction-processing
D. transactional modeling
E. decision-support
Answer: C


AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
74. Which of the following management information systems are used for routine tasks?

A. Decision-support systems
B. Expert systems
C. Transaction-processing systems
D. E-commerce systems
E. Decision-support systems
Author: Possible answers A and E are identical.
Answer: C


AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-52
75. A bank that uses a computer system to record deposits and withdrawals from its customers' accounts is
most likely to use a(n) _____.

A. inventory management system

B. transaction-processing system
C. expert system
D. group decision-support system
E. artificial intelligence system
Answer: B


AACSB: Technology
Blooms: Understand
76. A computer system that gathers comprehensive data, organizes it, and summarizes it in ways that are
useful to managers for their nonroutine tasks is known as a(n) _____ system.

C. expert
D. operations information
E. decision-support
Answer: D
Feedback: An operations information system organizes important information for managers, a decision-
support system gives managers model-building capability and the chance to manipulate information in a
variety of ways.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-53
77. An operations information system typically accesses data gathered by a _____ system and converts the
data into useful information.

C. expert
D. executive support
E. decision support
Answer: A
Feedback: An operations information system typically accesses data gathered by a transaction-

processing system and processes those data into useful information.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
78. Supermarket managers who use scanners at the checkout counters, which are installed with computer
software to track inventory levels of their products, are using a(n):

A. group decision-support system.

C. expert system.
D. executive-support system.
E. transaction-processing system.
Answer: E


AACSB: Technology
Blooms: Apply
18-54
79. An interactive computer-based system that produces models which help managers to make better
nonprogrammed decisions is known as a(n):

A. decision-support system.
C. decisional balance sheet.
D. transaction-processing system.
E. business decision mapping.
Answer: A

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
80. Which of the following is an example of a programmed decision?

A. Investing in a new type of production technology

B. Developing a new type of consumer product
C. Launching a new type of promotional campaign
D. Expanding sales into a new country
E. Refilling ink into a copier
Answer: E
Feedback: Programmed decision making occurs in usual and predictable situations.

AACSB: Technology
Blooms: Apply
Difficulty: 3 Hard
Topic: Programmed decisions
18-55
81. Which of the following is an example of a nonprogrammed task or decision?

A. Changing streetlights
B. The purchase of a new house
C. A trip to the grocery store for supplies
D. Paying electricity bills
E. Reordering printer cartridges
Answer: B
Feedback: Nonprogrammed decision making occurs in response to unusual or unpredictable

opportunities or threats.

AACSB: Technology
Blooms: Apply
Difficulty: 3 Hard
Topic: Nonprogrammed decisions
82. An executive-support system is a type of _____.

A. transaction-processing system
B. business support system
C. expert support system
D. e-commerce system
E. decision-support system
Answer: E


AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-56
83. A(n) _____ system is a sophisticated version of a decision-support system that is designed to meet the
needs of top managers.

B. expert support
C. enterprise resource management
D. e-commerce support
E. executive-support
Answer: E


AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
84. Executive-support systems are used to link top managers virtually so they can function as a team; this
type of executive-support system is called a(n):

A. transaction-processing system.
B. expert system.
C. operations support system.
D. e-commerce support system.
E. group decision-support system.
Answer: E
Feedback: Executive-support systems are used to link top managers virtually so they can function as a
team; this type of executive-support system is called a group decision-support system.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-57
85. Behavior by a machine that closely mimics human logical behavior is known as:

A. nanotechnology.
B. an executive-support system.
C. an executive simulation.
D. intelligence quotient.
E. artificial intelligence.
Answer: E
human being, would be called "intelligent."

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
86. With respect to expert systems, which of the following is NOT a minimum requirement for IT in order to
mimic human expertise and intelligence?

A. Recognition of problems
B. Display of emotions
C. Formulation of solutions
D. Explanation of solutions
E. The ability to learn from experience
Answer: B
Feedback: Mimicking human expertise (and intelligence) requires IT that can at a minimum (1)
recognize, formulate, and solve a problem; (2) explain the solution; and (3) learn from experience.

AACSB: Technology
Blooms: Understand
18-58
87. Which of the following is the most advanced management information system that incorporates artificial
intelligence in its design?

A. Expert system
B. Group decision-support system
C. Executive-support system
D. Transaction-processing system
E. Operations information system
Answer: A
Feedback: Expert systems, the most advanced management information systems available, incorporate
artificial intelligence in their design.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
88. A(n) _____ is a system that employs human knowledge, embedded in computer software, to solve
problems that ordinarily require human expertise.

A. group decision-support system

B. expert system
C. transaction-processing system
D. operations information system
E. executive-support system
Answer: B
Feedback: An expert system is a system that employs human knowledge, embedded in computer
software, to solve problems that ordinarily require human expertise.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-59
89. Multimodule application software packages that coordinate the various functional activities of
organizations are called:

A. enterprise resource planning systems.

B. decision-support systems.
C. transaction-processing systems.
D. executive-support systems.
E. operations information systems.
Answer: A
necessary to move products from the initial design stage to the final customer stage.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
90. A system that handles trade that takes place between companies and between companies and individual
customers using IT and the Internet is called a(n):

A. enterprise resource planning system.

B. e-commerce system.
C. transaction-processing system.
D. executive-support system.
Answer: B
Feedback: E-commerce systems manage trade that takes place between companies and between
companies and individual customers using IT and the Internet.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-60
91. Trade that takes place between companies using IT and the Internet to link and coordinate the value
chains of different companies is called:


E. business-to-customer network structure.
Answer: B
Feedback: Business-to-business (B2B) commerce is trade that takes place between companies using IT
and the Internet to link and coordinate the value chains of different companies.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
92. A _____ is an Internet-based trading platform set up to connect buyers and sellers in an industry.

A. business-to-customer commerce
B. intranet
C. group decision-support system
D. business-to-business marketplace
E. mainframe
Answer: D
Feedback: A business-to-business marketplace is an Internet-based trading platform set up to connect

buyers and sellers in an industry.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: B2B marketplace
18-61
93. Trade that takes place between a company and individual purchasers using IT and the Internet is called:


E. business-to-business network structure.
Answer: C
Feedback: Business-to-customer (B2C) commerce is trade that takes place between a company and
individual customers using IT and the Internet.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: B2C commerce
94. When two organizations pool resources, know-how, rewards, and risk in order to produce and market a
product, they are:

A. forming a coalition.
B. forming a strategic alliance.
C. forming a business-to-business network.
D. outsourcing.
E. forming a boundaryless organization.
Answer: B
Feedback: A strategic alliance is a formal agreement that commits two or more companies to exchange
or share their resources in order to produce and market a product.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-62
95. A(n) _____ is a formal series of global strategic alliances that one or several organizations create with
suppliers, manufacturers, and distributors to produce and market a product.

B. B2B network structure
C. ERP system
D. expert system
E. B2B marketplace
Answer: B
Feedback: A B2B network structure is a formal series of global strategic alliances that one or several
organizations create with suppliers, manufacturers, and distributors to produce and market a product.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
96. Members of a _____ are linked to an organization's centralized database by computers, faxes, computer-
aided design systems, and video teleconferencing and who rarely, if ever, see one another face-to-face.

B. B2B marketplace
C. strategic alliance
D. local area network
E. virtual organization
Answer: E
Feedback: A virtual organization is one in which employees are linked to an organization’s centralized
databases by computers, faxes, and videoconferencing and rarely see one another face-to-face, if ever.
Author: Do you want the term to be the "boundaryless" of the answer or the "virtual" or the
feedback?

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
18-63
97. Rapid advances in IT have been associated with a flattening of the organizational hierarchy which results
in:

A. an increase in establishment of boundaryless organizations.

B. a move toward vertical information flow.
C. a move toward greater centralization.
D. a decrease in the organization's efficiency.
E. an increase in the establishment of tall management hierarchies.
Answer: A
Feedback: Rapid advances in IT have been associated with a "delayering" (flattening) of the
organizational hierarchy, a move toward greater decentralization and horizontal information flows within
organizations, and the concept of the boundaryless organization.

AACSB: Technology
Blooms: Understand
98. Modern information systems _____ an organization's need for hierarchy and _____ its efficiency.

A. decrease; decrease
B. decrease; increase
C. increase; increase
D. increase; decrease
E. increase; do not affect
Answer: B
Feedback: Modern IT has reduced the need for a hierarchy to function as a means of coordinating and
controlling organizational activities. Also, by reducing the need for hierarchy, modern IT can directly
increase an organization's efficiency because fewer employees are required to perform organizational
activities.

AACSB: Technology
Blooms: Understand
Topic: Technology
18-64
99. Which of the following statements is true about the effects of IT on the organizational hierarchy?

A. Advances in IT have popularized the idea of a boundaryless organization.

B. Advances in IT have been associated with the creation of taller organizational hierarchies.
C. Advances in IT have been associated with the establishment of centralized decision-making in
organizations.
D. Advances in IT have been associated with an increase in vertical or top-down information flows
within organizations.
E. Management information systems have increased the need for tall management hierarchies.
Answer: A
Feedback: Rapid advances in IT have popularized the idea of a boundaryless organization.

AACSB: Technology
Blooms: Understand
100. A(n) _____ is a company-specific virtual information system that systematizes the knowledge of its
employees and facilitates sharing and integrating their expertise.

A. expert system
B. knowledge management system
C. enterprise resource planning system
D. knowledge economy
E. knowledge market
Answer: B
Feedback: A knowledge management system is a company-specific virtual information system that

systematizes the knowledge of its employees and facilitates sharing and integrating their expertise.

AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy

Essay Questions

18-65
101. Define data and information and say something about their importance to managers. With an example,
Author: Asking students to define "its" importance
differentiate data and information.
to managers will likely confuse them. You need to specify "its" and tell students
what to do—likely not "define." I wrote in an example revision. Please revise.

Answer:
Feedback: Data are raw, unsummarized, and unanalyzed facts such as volume of sales, level of costs, or
number of customers. Information is data that are organized in a meaningful fashion, such as in a graph
showing the changes in sales volume or costs over time. Data alone do not tell managers anything;
information, in contrast, can communicate a great deal of useful knowledge to the person who receives it.
Students' answers will vary but must explain the type of data and the relevant information that can be
obtained from the data.

AACSB: Analytic
Blooms: Understand
102. Briefly explain the four factors that determine the usefulness of information to a manager and define
real-time information.

Answer:
Feedback: Four factors determine the usefulness of information to a manager: quality, timeliness,
completeness, and relevance. (1) Quality: Accuracy and reliability determine the quality of information.
The greater its accuracy and reliability, the higher is the quality of information. (2) Timeliness:
Information that is timely is available when it is required to allow managers to make the optimal
decision. (3) Completeness: Information that is complete gives managers all the information they need to
exercise control, achieve coordination, or make an effective decision. (4) Relevance: Information that is
relevant is useful and suits a manager’s particular needs and circumstances. Frequently updated
information that reflects current conditions is called real-time information.

AACSB: Analytic
Blooms: Understand
18-66
103. Define information technology and management information system. Briefly explain the three primary
reasons why managers need information.

Answer:
storing, manipulating, and transmitting information. A management information system (MIS) is a
specific form of IT that managers select and use to generate the specific, detailed information they need
to perform their roles effectively. Managers need information in order to make effective decisions, to
control the activities of the organization, and to coordinate the various activities of the organization.

AACSB: Technology
Blooms: Understand
104. Discuss the four steps of the "control process" that managers use within organizations. Give a specific
business example of each of these steps in a business decision situation.

Answer:
Feedback: Managers achieve control over organizational activities by taking four steps: (1) Establish
measurable standards of performance, (2) Measure the actual performance of the organization, (3)
Compare the actual performance to the standards of performance, and (4) Take corrective action to
improve the performance of the organization. Students' answers will vary but must highlight the relevant
factors affecting an industry in its market and the role of the control process in mitigating problems that
arise.

AACSB: Technology
Blooms: Understand
Topic: Controlling
18-67
105. List and briefly explain the different stages of a product life cycle.

Answer:
Feedback: The product life cycle consists of four stages: the embryonic, growth, maturity, and decline
stages. In the embryonic stage, a product has yet to gain widespread acceptance; customers are unsure
what a product has to offer, and demand for it is minimal. In the growth stage, many consumers are
entering the market and buying the product for the first time, and demand increases rapidly. The growth
stage ends and the maturity stage begins when market demand peaks because most customers have
already bought the product. At this stage, demand is typically replacement demand. Once demand for a
product starts to fall, the decline stage begins. This typically occurs when the development of a more
advanced product makes the old one obsolete.

AACSB: Technology
Blooms: Understand
106. What is a computer network? Briefly explain the different components of a network.

Answer:
Feedback: A computer network consists of interlinked computers that exchange information. The
typical organization-wide computing network that has emerged over time is a four-tier network solution
that consists of "external" PDAs connected to desktops and laptops, and "internal" rack servers to a
company’s mainframe. The internal network is composed of "client" desktop and laptop PCs connected
by Ethernet to the company’s system of rack servers. The client computers that are linked directly to a
server constitute a local area network (LAN). Large companies that need immense processing power
have a mainframe computer at the center or hub of the network that can quickly process vast amounts of
information, issue commands, and coordinate computing devices at the other levels. The mainframe can
also handle electronic communications between servers and PCs situated in different LANs, and the
mainframe can connect to the mainframes of other companies. The mainframe is the master computer
that controls the operations of all the other types of computers and digital devices as needed and can link
them into one integrated system. It also provides the connection to the external IT networks outside the
organization.

AACSB: Technology
Blooms: Understand
Topic: Technology
18-68
107. List the six types of management information systems. Define any three of these management
information systems.

Answer:
Feedback: The six types are transaction-processing, operations information, decision-support, expert (or
artificial intelligence), enterprise resource management, and e-commerce systems. Students' choices will
vary. Author: did you want to supply a short definition of each type?

AACSB: Technology
Blooms: Remember
108. Discuss the meaning of decision-support system, the different types of decision-support systems, and
how they are useful to managers.

Answer:
nonprogrammed decisions. A decision-support system gives managers model-building capability and the
chance to manipulate information in a variety of ways. Managers might use a decision-support system to
help them decide whether to cut prices for a product. The decision-support system might contain models
of how customers and competitors would respond to a price cut. Managers could run these models and
use the results as an aid to decision making. A sophisticated version of a decision-support system that is
designed to meet the needs of top managers is called an executive-support system. An executive-support
system that links top managers so they can function as a team is called a group decision-support system.

AACSB: Technology
Blooms: Understand
18-69
109. Define artificial intelligence and expert systems. List the requirements for IT to sufficiently mimic
human expertise.

Answer:
human being, would be called "intelligent." Expert systems, the most advanced management information
systems available, incorporate artificial intelligence in their design. An expert system is a system that
employs human knowledge, embedded in computer software, to solve problems that ordinarily require
human expertise. Mimicking human expertise (and intelligence) requires IT that can at a minimum (1)
recognize, formulate, and solve a problem; (2) explain the solution; and (3) learn from experience.

AACSB: Technology
Blooms: Understand
110. Define an enterprise resource planning ERP system and discuss its benefits.

Answer:
necessary to move products from the initial design stage to the final customer stage. Essentially ERP
systems (1) help each individual function improve its functional-level skills and (2) improve integration
among all functions so they work together to build a competitive advantage for the company. Today
choosing and designing an ERP system to improve how a company operates is the biggest challenge
facing the IT function inside a company.

AACSB: Technology
Blooms: Understand
18-70
111. Define e-commerce and differentiate between B2B and B2C.

Answer:
Feedback: E-commerce is trade that takes place between companies and between companies and
individual customers using IT and the Internet. Business-to-business (B2B) commerce is trade that takes
place between companies using IT and the Internet to link and coordinate the value chains of different
companies. The goal of B2B commerce is to increase the profitability of making and selling goods and
services. B2B commerce increases profitability because it lets companies reduce operating costs and may
improve product quality. A principal B2B software application is B2B marketplaces, which are Internet-
based trading platforms that have been set up in many industries to connect buyers and sellers. Business-
to-customer (B2C) commerce is trade that takes place between a company and individual customers
using IT and the Internet. Using IT to connect directly to the customer means companies can avoid
having to use intermediaries, such as wholesalers and retailers, who capture a significant part of the
profit in the value chain. The use of Web sites and online stores also lets companies give their customers
much more information about the value of their products. This often allows them to attract more
customers and thus generate higher sales revenues.

AACSB: Technology
Blooms: Analyze
Difficulty: 3 Hard
Topic: B2C commerce
112. Define a boundaryless organization and discuss the effects of rapid IT development on organizations.

Answer:
Feedback: An organization whose members are linked by computers, faxes, computer-aided design
systems, and video teleconferencing and who rarely, if ever, see one another face-to-face is called a
boundaryless organization. Rapid advances in IT have been associated with a "delayering" (flattening) of
the organizational hierarchy, a move toward greater decentralization and horizontal information flows
within organizations, and the concept of the boundaryless organization. By electronically giving
managers high-quality, timely, relevant, and relatively complete information, modern management
information systems have reduced the need for tall management hierarchies.

AACSB: Technology
Blooms: Understand
18-71

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Chapter 18

Using Advanced Information Technology to Increase Performance

True / False Questions

1. The term data refers to raw, unsummarized facts.

Multiple Choice Questions

41. Raw, unsummarized, and unanalyzed facts are called _____.

A. The price of a particular brand of chocolate

A. to launch a new product in the market.

A. measure actual performance.

A. measure actual performance.

A. Decisions on how much of a product to make and how to make it

A. embryonic, growth, decline, and maturity.

A. local area network.

A. Operating system softwares

A. operating system softwares

A. Decision support systems

A. inventory management system

A. group decision-support system.

A. Investing in a new type of production technology

A. The changing of streetlights

A. group decision support system

A. enterprise resource planning systems.

A. enterprise resource planning system.

A. enterprise resource planning.

A. enterprise resource planning.

A. an increase in establishment of boundaryless organizations.

A. Rapid advances in IT have popularized the idea of a boundaryless organization.

Comp: Ignore bold and underline.

True / False Questions

1. The term data refers to raw, unsummarized facts.

Feedback: Data are raw, unsummarized facts.

4. Accuracy and reliability determine the completeness of information.

Feedback: Accuracy and reliability determine the quality of information.

Feedback: An instruction is a line of software code.

Feedback: Interlinked computers that exchange information constitute a network.

20. Cloud computing service is an example of an internal IT network.

Feedback: A transaction-processing system is an MIS designed to handle large volumes of routine,

31. An executive-support system is a sophisticated version of a decision-support system that is designed to

Feedback: An executive-support system is a sophisticated version of a decision-support system that is

34. E-commerce systems are aimed at making programmed decisions.

Feedback: E-commerce systems are aimed at making better nonprogrammed decisions.

Feedback: A strategic alliance is an agreement in which managers pool or share their organization’s

39. A boundaryless organization is an organization composed of people linked by IT.

Feedback: A boundaryless organization is an organization whose members are linked by computers,

Feedback: A knowledge management system is a company-specific virtual information system that

41. Raw, unsummarized, and unanalyzed facts are called _____.

Feedback: Data are raw, unsummarized, and unanalyzed facts.

A. The price of a particular brand of chocolate

46. The quality of information is determined by its _____ and _____.

Feedback: Accuracy and reliability determine the quality of information.

Feedback: Real-time information is information that reflects current conditions.

Feedback: Accuracy and reliability determine the quality of information.

A. to launch a new product in the market.

A. measure actual performance.

A. measure actual performance.

Answer: E Author: I have corrected the answer.

A. Decisions on how much of a product to make and how to make it

Feedback: The language of computers is a digital language of zeros and ones.

Feedback: An instruction is a line of software code.

A. embryonic, growth, decline, and maturity.

A. local area network.

A. Operating system software

A. operating system software

46. The quality of information is determined by its _ and _.