Essay Questions

1. How does management use information systems to support the sales and marketing function of a business? How do these systems make the manager more effective in this area than paper-and-pencil systems? At the operational level, information systems record daily sales figures and processes orders. At the management level, information systems track monthly sales figures by sales territory and report on territories where sales exceed or fall below anticipated levels. At the strategic level, information systems forecast sales trends over a five-year period. The most obvious advantage of information systems over paper-and-pencil systems is in the amount of time that is saved when sales and marketing information does not have to be manually-recorded, typed by a clerical worker, delivered by snail-mail or by hand, and manually filed and re-filed. Further, it is easier to correct errors than to ferret out errors in handwritten materials, or errors occurring when multiple carbons make reading difficult. The more paper-and-pencil entries are required before the material is entered into the computer system, the more chance for error exists. Further, paper-and-pencil materials must be filed and retrieved manually, and may be lost in the office melee. With an MIS, the information is available on the desktop, or retrievable on a laptop or distant computer. Using an MIS allows management to manipulate the data and retrieve information otherwise not available. 2. Distinguish between private industrial network and enterprise system. A private industrial network links systems of multiple firms in an industry for the coordination of transorganizational business processes . These Web-enabled networks provide a platform where systems from different companies can seamlessly exchange information and an infrastructure for collaborative commerce activities. They are often owned and managed by large companies who use them to coordinate purchases, orders, and other activities with their suppliers, distributors, and selected business partners. Procter & Gamble is an example. An enterprise system links and integrates key business processes within a firm so that information can flow freely within the firm. Companies can use enterprise systems to support organizational structures that were not previously possible or to create a more disciplined organizational culture. 3. List and define the four major types of information systems, and give at least two information outputs to be expected from each one. The four major types of information systems discussed in the textbook include executive support systems, decision-support systems, management information systems, and transaction processing systems. Executive support systems exist at the strategic level and are designed to address unstructured decision making through advanced graphics and communications. Information outputs include projections and responses to inquiries. Decision-support systems exist at the management level and combine data and sophisticated analytical models or data analysis tools to support semistructured and unstructured decision making. Information outputs include special reports, decision analyses, and responses to queries. Management information systems serve the management level and support the functions of planning, controlling, and decision making by providing routine summary and exception reports. Transaction processing systems serve the operations level by performing and recording

the daily routine transactions necessary to conduct the business. Information outputs include detailed reports, lists, and summaries. 4. Identify the three main categories of information systems in relation to the groups they serve and the functional areas in which they operate. Which do you believe is most difficult to implement? Why? The textbook identifies operational, management, and strategic as the three main categories of information systems. The operational level systems support operational managers; the management level systems support middle managers, and the strategic level systems support senior managers. These main system categories provide support across all functional areas, including sales and marketing, manufacturing and production, finance and accounting, and human resources. 5. Distinguish between MIS and DSS. Who within the organization is most likely to find each useful, and why? MIS provide routine summary and exception reports to provide answers to routine questions that have been specified in advance and have a predefined procedure for answering them. These systems use internal information. They are generally not flexible, and have little analytical capability, but provide basic information for the continued running of the company. DSS combine data and analytical models or data analysis tools to support semistructured and unstructured decision making. They address problems where the procedure for arriving at a solution may not be fully predefined in advance. They use information from external as well as internal sources, and contain a variety of models to analyze data. They often condense large amounts of data into a form in which they can be analyzed by decision makers at the middle and upper management level. They are interactive, and allow the user to change assumptions, ask new questions, and include new data. Middle and upper management are most likely to use both systems, but the higher up in the organization, and the more responsibility he/she holds, the more likely he/she is to use a DSS. 6. What is a customer relationship management system? What are the advantages to using a customer relationship management system? A customer relationship management system tracks all of the ways in which a company interacts with its customers and analyzes these interactions to optimize revenue profitability, customer satisfaction and customer retention. Advantages include the acquisition and retention of new customers, providing better service and support to existing customers, and the ability to customize offerings based on customer preference. 7. What is a supply chain? What is a supply chain management system? Supply chain refers to a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products, and distributing the finished products to customers. A supply chain management system automates the flow of information between a firm and its suppliers in order to optimize the planning, sourcing, manufacturing, and deliver of products and services.

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What is collaborative commerce? Identify three advantages of collaborative commerce. Collaborative commerce is the use of digital technologies to enable multiple organizations to collaboratively design, develop, build, and manage products through their lifecycles. Efficiency, minimizing excess inventory, better forecasts, and enhanced communication with partners and customers are several advantages.

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What is a knowledge management system? Provide three examples. A knowledge management system supports the creation, capture, storage, and dissemination of firm expertise and knowledge. Enterprise-wide systems, office systems, and knowledge work systems are three examples.

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Briefly describe four forms of global business organization. Domestic exporter, multinational, franchiser, and transnational are the four forms mentioned in the textbook. The domestic exporter form is characterized by heavy centralization of corporate activities in the home country of origin. The multinational form concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. The franchiser form creates, designs, finances, and initially produces a product in the home country, but for product-specific reasons relies heavily on foreign personnel for further production, marketing, and human resources. The transnational form has no national headquarters; value-added activities are managed from a global perspective without reference to national borders, optimizing sources of supply and demand and local competitive advantage.