MIS chapter 15

8/13/2019 MIS chapter 15

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Chapter 15

Managing Global Systems

True-False Questions

1. The growth of international trade has radically altered domestic economies around the globe.

Answer: True Difficulty: Easy Reference: p !"#

2. Before you develop a corporate strategy and structure for globalization, a firm shoulddetermine the appropriate technology infrastructure.

Answer: False Difficulty: Easy Reference: pp !"$%!"&

3. Global business drivers can be divided into two groups general cultural factors and specificbusiness factors.

Answer: True Difficulty: Me'ium Reference: p !"&

( The collapse of the !astern bloc" has speeded the growth of a world culture.

Answer: True Difficulty: Easy Reference: p !"&

#. The growth of powerful communications technologies and the emergence of world culturescreate the condition for global mar"ets.

Answer: True Difficulty: Easy Reference: p !""

$. %icromar"eting is limited to mar"eting to very small geographic and social units within adomestic mar"et.

Answer: False Difficulty: Me'ium Reference: p !""

&. ' powerful strategic advantage for a globalized firm is lowered cost factors in production.

Answer: True Difficulty: Easy Reference: p !""

(. )articularism is a concept based on accepting the concept of a shared global culture and the

penetration of domestic mar"ets by foreign goods and services.

Answer: False Difficulty: )ar' Reference: p #**

*. 't the cultural level, differences among cultures produce differences in social e+pectations,politics, and legal rules.

Answer: True Difficulty: Easy Reference: p #**

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1. Globalization means that companies can be less concerned with the laws governing themovement of information.

Answer: False Difficulty: Easy Reference: p #**

11. !uropean countries have very strict laws concerning transborder data flows and privacy.


12. The !uropean -nion ata )rotection irective restricts the flow of any information tocountries that do not meet strict !uropean laws on personal information.

Answer: True Difficulty: Me'ium Reference: p #**

13. To avoid the cost and uncertainty of moving information across national boundaries, mostmultinational firms have developed information systems within each !uropean country.

Answer: True Difficulty: Me'ium Reference: p #**

1/. 0ith the growth of the nternet and reliable phone networ"s, s"illed consultants are readilyavailable to companies operating in global mar"ets.

Answer: False Difficulty: Easy Reference: p #**

1#. The accounting practices of a country are tightly intertwined with that countrys legalsystem.


1$. n international companies, !nglish has become a "ind of standard business language.

Answer: True Difficulty: Easy Reference: p #*,

1&. n a multinational strategy, products and services on sale in different countries are adapted toserve local mar"et conditions.

Answer: True Difficulty: Me'ium Reference: p #*+

1(. Global systems allow fi+ed costs to be amortized over a much smaller customer base.

Answer: False Difficulty: Me'ium Reference: p #,*

1*. The maor telecommunications challenge in an international setting is ma"ing data flowseamlessly across networ"s shaped by disparate national standards.

Answer: True Difficulty: Easy Reference: p #,+

2. )rivate networ"s may not provide the same level of 4uic" and predictable response as 5)6s.

Answer: False Difficulty: )ar' Reference: p #,

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Multiple-./oice Questions

21. Based on your reading of the chapter case discussing 78, what led 78 to reconsiderusing a decentralized database system for local data9

a. ecentralization raised costsb. :is"s of local information centers would fail and eopardize shipments in other

countriesc. ifficult to 4uic"ly change systems globallyd. 'll of the above

Answer: ' Difficulty: Easy Reference: pp !"%!"(

22. Today, the combined annual value of imports and e+ports from all nations is appro+imately

a. ;$& billion.

b. ;2& billion.c. ;2 trillion.d. ;$& trillion.

Answer: c Difficulty: Easy Reference: p !"#

23. ' force in the environment to which businesses must respond and that influences thedirection of the business is called a business

a. driver.b. threat.c. process.

d. matri+.

Answer: a Difficulty: Easy Reference: p !"$

2/. The maor dimensions of international systems architecture include each of the following!


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2#. General cultural factors driving global business are

a. global communication and transportation technologies, a global "nowledge base, andglobal social norms.

b. the development of global mar"ets, political stability, and a global wor"force.c. the rise of the global wor"force, political stability, and a global "nowledge base.

d. the rise of a global wor"force, global economies of scale, and global production andoperations.

Answer: a Difficulty: Me'ium Reference: p !"&

2$. Global coordination of all of the maor business functions permits the location of businessactivity according to

a. social norms and values.b. comparative advantage.c. competitive threat.d. "nowledge base.

Answer: b Difficulty: Easy Reference: p !""

2&. %ar"eting to very small geographic and social units is called

a. targeted mar"eting.b. macromar"eting.c. mom>and>pop mar"eting.d. micromar"eting.

Answer: ' Difficulty: Easy Reference: p !""

2(. %a"ing udgments and ta"ing action on the basis of narrow or personal characteristics isreferred to as

a. micromar"eting.b. macromar"eting.c. particularism.d. preudicial.

Answer: c Difficulty: Easy Reference: p #**

2*. 0hich of the following restricts the flow of personal information to countries that do notmeet strict !uropean information laws on personal information9

a. ?ree Trade 'greementb. !uropean -nion ata )rotection irectivec. -nited 6ations )rivacy 'ctd. !uropean Transborder ata ?low 'ct

Answer: b Difficulty: Easy Reference: p #**

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3. General challenges and obstacles to global business systems are typified by

a. different technology standards, shortages of s"illed consultants, and social e+pectations.b. brand>name e+pectations, language differences, and commercial regulations.c. different wor" hours, transborder data and privacy laws, and different technology

standards.

d. different communications standards, language differences, and networ" reliability.

Answer: b Difficulty: )ar' Reference: p #**

31. To avoid the cost and uncertainty of moving information across national boundaries, mostmultinational firms

a. maintain a master database at their head offices.b. develop a master system that meets the standards of all the countries concerned.c. use microwave satellite transmission to move data.d. develop separate systems within each country.

Answer: ' Difficulty: Me'ium Reference: p #**

32. German companies generally

a. do not recognize the profit until the proect is completely finished and they have beenpaid.

b. recognize profits before the proect is finished.c. recognize profits when the proect is initialized.d. do not recognize the profits until they have been formally audited.

Answer: a Difficulty: )ar' Reference: p #**

33. %ost large companies with overseas operations have inherited

a. recently built technology platforms for international systems.b. batch>oriented reporting from independent foreign divisions to corporate head4uarters.c. transaction>oriented reporting based at the home office for overseas business.d. global mar"eting systems developed domestically.

Answer: b Difficulty: )ar' Reference: p #*,

3/. n terms of global business strategy and structure, a domestic e+porter will use a policy of

a. some dispersed sales, with centralized production, accounting, human resources, and

strategic management.b. centralized production and accounting with decentralized mar"eting and human resources.c. centralized production, accounting, mar"eting, and human resources.d. dispersed production and mar"eting, with centralized accounting, human resources and

strategic management.

Answer: a Difficulty: Me'ium Reference: p #*+

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3#. n terms of global business strategy, =aterpillar =orporation and other heavy capitale4uipment manufacturers fall into this category of firm.

a. omestic e+porterb. %ultinationalc. ?ranchiser

d. Transnational

Answer: a Difficulty: Me'ium Reference: p #*+

3$. ' company that controls finances in the home country and decentralizes production, sales,and mar"eting operations to other countries is using a @@@@@@ strategy.

a. domestic e+porterb. franchisingc. transnationald. multinational

Answer: ' Difficulty: Easy Reference: p #*+

3&. n terms of global business strategy and structure, a multinational companywill use apolicy of

a. mi+ed sales and mar"eting, with centralized production, accounting, human resources,and strategic management.

b. centralized production, accounting, mar"eting, human resources, with strategicmanagement.

c. dispersed production, accounting, human resources, with centralized strategicmanagement, and mar"eting.

d. 'isperse' pro'uction an' mar0eting1 wit/ centrali2e' accounting an' strategic

management

Answer: ' Difficulty: Me'ium Reference: p #*+

3(. n terms of global business strategy, General %otors, aimler=hrysler, and ntel fall into thiscategory of firm.

a. omestic e+porterb. %ultinationalc. ?ranchiser d. Transnational

Answer: b Difficulty: Me'ium Reference: p #*+

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3*. n terms of global business strategy and structure, a franc/ise companywill use a policy of

a. centralized production, accounting, mar"eting, human resources, with strategicmanagement.

b. dispersed production, accounting, human resources, with centralized strategicmanagement, and mar"eting.

c. dispersed production and mar"eting, with centralized accounting, human resources andstrategic management.

d. 'isperse' pro'uction1 mar0eting1 an' /uman resources1 wit/ centrali2e' strategicmanagement an' finance3accounting

Answer: ' Difficulty: Me'ium Reference: p #*+

/. n terms of global business strategy, A?= falls into this category of firm.

a. omestic e+porterb. %ultinationalc. ?ranchiser

d. Transnational

Answer: c Difficulty: Me'ium Reference: p #*+

/1. n terms of global business strategy, the governance of these firms has been li"ened to afederal structurestrong central management core of decision ma"ing, but considerabledispersal of power and financial resources.

a. omestic e+porterb. %ultinationalc. ?ranchiser ' Transnational

Answer: ' Difficulty: Me'ium Reference: p #*

/2. =iticorp, Cony, and ?ord are attempting to ma"e a transition to this type of businessorganizational structure.

a. omestic e+porterb. %ultinationalc Transnational

d. ?ranchiser

Answer: c Difficulty: Me'ium Reference: p #*

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/3. =entralized systems are those in which

a. development occurs at the home base and operations are handed over to autonomousunits in foreign locations.

b. each foreign unit designs its own uni4ue solutions and systems.c. systems development and operations occur in an integrated and coordinated fashion

across all units.d. systems development and operations occur totally at the domestic home base.

Answer: ' Difficulty: Easy Reference: p #*(

//. uplicated systems are those in which



across all units.

d. foreign units design the solutions and systems used at the domestic home base.

Answer: a Difficulty: Easy Reference: p #*(

/#. 6etwor"ed systems are those in which



across all units.d. foreign units design the solutions and systems used at the domestic home base.

Answer: c Difficulty: Easy Reference: p #*(

/$. omestic e+porters have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systems configuration,and seem now to be moving toward @@@@@@@@@@@@@@@ systems.

a. duplicatedD decentralizedb. centralizedD decentralizedc. networ"edD decentralizedd. decentralizedD networ"ed

Answer: b Difficulty: Me'ium Reference: p #*

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/&. %ultinational companies have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systemsconfiguration, and seem now to be switching to @@@@@@@@@@@@@@@ systems.

a. duplicatedD decentralizedb. decentralizedD duplicatedc. networ"edD duplicated

d. decentralizedD networ"ed

Answer: ' Difficulty: Me'ium Reference: p #*

/(. ?ranchise companies have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systems configuration,and seem now to be moving toward @@@@@@@@@@@@@@@ systems.

a. duplicatedD decentralizedb. centralizedD decentralizedc. decentralizedD duplicatedd. decentralizedD networ"ed

Answer: a Difficulty: Me'ium Reference: p #*

/*. Transnational companies have tended to use a @@@@@@@@@@@@@@@@@@@@@@ systemsconfiguration.

a. duplicatedb. centralizedc. networ"edd. decentralized

Answer: c Difficulty: Me'ium Reference: p #*

#. The networ" systems structure is the most visible in @@@@@@@@@@@@@@@@@@@@@@ services.

a. productionb. financial servicesc. mar"etingd. software design

Answer: b Difficulty: Easy Reference: p #*(

#1. !ffective networ"ed systems must have

a. a powerful telecommunications bac"bone.

b. a culture of shared applications development.c. a shared management culture that crosses cultural barriers.d. all of the above.

Answer: ' Difficulty: Easy Reference: p #*(

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#2. Based on your reading of the chapter case discussing 'vnet nc., 'vnet mitigates thetechnical challenges posed by mergers and ac4uisitions by

a. using a E)layboo"F of best practices to integrate a new company into the corporateglobal system.

b. using 0eb services to allow for communication between the ac4uired company and

'vnets global system.c. using a combination of regional best practices and using the best systems from each

company.d. pursuing a standardized implementation process as per the 'vnet E=oo"boo".F

Answer: c Difficulty: Me'ium Reference: p #*!

#3. Two of the management challenges in developing global systems are listed in your te+t as

a. managing the privacy concerns of different countries and coordinating applicationsdevelopment.

b. creating a financial structure that will operate internationally and managing the privacy

concerns of different countries.c. agreeing on common user re4uirements and managing the privacy concerns of different

countries.d. coordinating of software releases and introducing of changes in business processes.

Answer: ' Difficulty: )ar' Reference: p #*$

#/. 8ogically related tas"s to produce specific business results best defines

a. information systems.b. business processes.c. C)s.

d. core competencies.

Answer: b Difficulty: Easy Reference: p #*&

##. The way to identify core business processes is to conduct aHnI

a. cost>benefit analysis.b. wor">flow analysis.c. business process analysis.d. feasibility analysis.

Answer: c Difficulty: Me'ium Reference: p #*&

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#$. 0hich systems are worth sharing on a transnational basis, from a cost and feasibility point ofview9

a. nly systems that support functions that are absolutely critical to the organizationb. =ore systems and worthwhile provincial systemsc. =ore systems and any financial systems that can be easily integrated with each other

d. ?inancial and accounting systems

Answer: a Difficulty: Me'ium Reference: p #*&

#&. Based on your reading of the chapter, why should companies avoid implanting an all>encompassing, new global system when moving towards global operations9

a. These may fail due to lac" of visibilityb. 8ac" of power to convince senior management that transnational systems are

worthwhilec. EGrand designF approaches typically fail to identify centers of e+cellenced. pposition is strengthened because of re4uirements for huge resources

Answer: ' Difficulty: )ar' Reference: p #*"

#(. The ability of global systems to optimize the use of corporate funds over a much largercapital base means that

a. capital in a surplus region can be moved efficiently to e+pand production of capital>starved regions.

b. capital costs can be accounted or spread over a larger base of constituents.c. costs can be amortized over a larger customer base.d. value chains can be synchronized more effectively.

Answer: c Difficulty: Me'ium Reference: p #,*

#*. 0hen developing a global system, bringing the opposition of local groups into the process ofdesigning and implementing the solution without giving up control over the direction andnature of the change is called

a. cooptation.b. change management.c. implementation.d. advocacy.

Answer: a Difficulty: Easy Reference: p #,,

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$. n relation to global systems building, the nternet

a. allows the seamless flow of information through the enterprise.b. affords local groups stable broadband access.c. has reduced some networ"ing problems.d. all of the above.

Answer: c Difficulty: Easy Reference: p #,+

$1. ' critical necessity for ensuring the integration of local systems into a global system is

a. adherence to data and technical standards.b. use of standard hardware at the local level.c. use of standard user software at the local level.d. all of the above.

Answer: a Difficulty: Me'ium Reference: p #,+

$2. 5)6s

a. use the public nternet for communications.b. may not be able to support large numbers of remote users, due to the variable traffic on

the nternet.c. provide many of the same services as private networ"s.d. all of the above.

Answer: ' Difficulty: Me'ium Reference: p #,

$3. Come domestic firms are outsourcing systems development wor" or maintenance of e+istingsystems to e+ternal vendors in another country, a process "nown as

a. domestic outsourcing.b. offshore software outsourcing.c. foreign franchising.d. global development.

Answer: b Difficulty: Easy Reference: p #,(

$/. 0hich types of systems are widely used by manufacturing and distribution firms to connectto suppliers on a global basis9

a. T)C systems

b. ! systemsc. =:% systemsd. 6one of the above

Answer: b Difficulty: Easy Reference: p #,(

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$#. ne cost of offshore software outsourcing is "nowledge transfer costs. This refers to

a. the time it ta"es to transfer wor" to an outsourcer.b. the loss of "nowledge that accompanies layoffs when obs are lost to outsourcers as well

as retention bonuses to "eep staff wor"ing long enough to share their "nowledge.c. the time, documentation, travel costs, and other costs it ta"es to ensure the outsourcer

understands your business and proect re4uirements.d. the time it ta"es to transfer core data for a system to an outsourcer.

Answer: c Difficulty: Me'ium Reference: p #,!

$$. ?or their software development methodology, software outsourcing companies in ndiatypically use

a. the same development models as -.C. companies.b. the -nified %odeling 8anguage.c. the =apability %aturity %odel.d. rational -nified )rocess.

Answer: c Difficulty: )ar' Reference: p #,#

$&. The potentially most e+pensive EhiddenF cost component of offshore software outsourcing isthe cost of

a. selecting a vendor.b. transferring wor" to the offshore outsourcer.c. laying off domestic employees.d. adusting to cultural differences.

Answer: ' Difficulty: )ar' Reference: pp #,#%#,$

$(. The potentially least e+pensive EhiddenF cost component of offshore software outsourcing isthe cost of

a. selecting a vendor.b. transferring wor" to the offshore outsourcer.c. laying off domestic employees.d. adusting to cultural differences.

Answer: a Difficulty: )ar' Reference: pp #,#%#,$

$*. 's per your reading of the chapter case discussing overseas outsourcing, the outsourcing

support the -nited Ctates receives from ndia will lead to

a. tremendous loss of obs in the T sector.b. a severe T labor shortage in the -nited Ctates.c. rise in systems cost.d. reduction of spending on systems costs.

Answer: ' Difficulty: Me'ium Reference: p #,"

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&. 'ccording to the chapter case discussing6estlJs new information systems, what was thechief implementation challenge9

a. ncompatible legacy systemsb. :esistance from managersc. :esistance from ran">and>file employees

d. 8ac" of standard business processes

Answer: b Difficulty: Easy Reference: p #+#

Fill in t/e 4lan0s

&1. 'HnI business driveris a force in the environment to which businesses must respond and thatinfluences the direction of business.

Difficulty: Easy Reference: p !$+

&2. 'HnIglobal marketis formed by consumers around the world who are interested inconsuming similar products that are culturally approved.

Difficulty: Me'ium Reference: p !""

&3. Kapanese consumers who only want to purchase products made in Kapan are an e+ample ofculturalparticularism.

Difficulty: Me'ium Reference: p #**

&/. The movement of information across international boundaries is calledtransborder data flow.

Difficulty: Easy Reference: p #**

. 'HnIfranchiseris a firm where a product is created and initially produced in the homecountry, but must rely heavily on foreign personnel for further production, mar"eting, andhuman resources.

Difficulty: Easy Reference: p #*+

&$. n a global system configuration, a networked system is one in which systems developmentand operations occur in an integrated and coordinated fashion across all units.

Difficulty: Easy Reference: p #*(

&&. Core systems support functions that are absolutely critical to the organization.

Difficulty: Easy Reference: p #*&

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&(. Cooptationis defined as bringing the opposing local organization groups into the process ofdesigning and implementing an information systems solution without giving up control overthe direction and nature of the change.

Difficulty: )ar' Reference: p #,,

&*. =ompanies now outsource some of their new systems development wor" to e+ternal vendorsin another country. This practice is called offshore software outsourcing.

Difficulty: Me'ium Reference: p #,(

(. Legitimacyis defined as the e+tent to which your authority is accepted on grounds ofcompetence, the vision, or other 4ualities.

Difficulty: Me'ium Reference: p #,*

Essay Questions

(1. 5/at steps 'o t/e aut/ors recommen' be ta0en to 'e6elop an international information

systems arc/itecture7

Begin by developing an understanding of the overall mar"et forces, or business

drivers, that are pushing your industry toward global competition, i.e., the globalenvironment. 'lso e+amine the inhibitors or negative factors that could scuttle thedevelopment of a global business.

evelop a corporate strategy for competing in the global environment.

)lan how to structure your organization so that it can pursue the strategy you have

developed.

=onsider the management issues in implementing your strategy and ma"ing the

organization design a reality. The "ey here will be the design of business procedures.

=onsider the technology platform. Lou must have a corporate strategy instructor

before you can choose the right technology.

Difficulty: Me'ium Reference: pp !"$%!"&

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(2.. 8ist at least four general cultural factors an' four specific business factors 'ri6ingglobal business 5/ic/ two factors 9one of eac/ 'o you feel are most problematic at t/e

current moment7 5/y7

General .ultural Factors:Global communication and transportation

technologies, development of the global culture, emergency global social norms,

political stability, and a global "nowledge base Specific 4usiness Factors: Global mar"ets, global production operations,

global coordination, global wor"force, and global economies of scale

ne answer might be that two general cultural factors most in danger at the current momentare political stability and development of a global culture Heither would be a good answerI.Two business factors most problematic at the moment are global coordination and globalwor"force. =oordinating wor" on a truly global scale re4uires a fairly high level ofcorporation sophistication that only a small number of large firms are truly capable of on areal>time basisD and there is significant opposition in both developed and underdevelopedcountries to changes in local labor mar"ets which are threatened by global trade.

Difficulty: Me'ium Reference: p !"&

(3. 5/at are t/e four specific types of business c/allenges to global business systems75/ic/ one 'o you t/in0 will be easiest to sol6e7 5/y7

Stan'ar's:ifferent !, e>mail, telecommunications standards.

Reliability:)hone networ"s are not uniformly reliable.

Spee':ifferent data transfer speedsD many are slower than -nited Ctates

speeds.

;ersonnel:Chortages of s"illed consultants.

'nswers will vary, but an e+ample answer is The easiest challenge to solve is that ofstandards, because of the growth of universal, nternet>based standards, 0eb services, andcomponent>based programming.

Difficulty: Me'ium Reference: pp !""%#*,

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(/. )ow 'o cultural1 legal1 political1 an' social e


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($. ='entify at least fi6e problems associate' wit/ international networ0s

=osts and tariffs

6etwor" management

nstallation delays

)oor 4uality of international services :egulatory constraints

=hanging user re4uirements

isparate standards

6etwor" capacity

Difficulty: Easy Reference: pp #,+%#,

(&. 8ist at least four 'ifficult problems for management in t/e 'e6elopment of t/einternational information system

'greeing on user re4uirements

ntroducing changes in business processes

=oordinating applications development

=oordinating software releases

!ncouraging local users to support global systems

Difficulty: Me'ium Reference: pp #*#%#*$

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((. Evaluation

>ou are wor0ing for a global electronic parts manufacturing company wit/ 'i6isions in

Taiwan1 Malaysia1 Australia1 an' Germany1 t/at /as embar0e' on 'e6eloping a global

enterprise system To ensure t/at o6erseas 'i6isions comply wit/ t/e new system1 t/ey

are consi'ering a cooptation strategy in w/ic/ t/ey will permit eac/ country unit t/e

opportunity to 'e6elop one transnational application first in its /ome territory1 an't/en t/roug/out t/e worl' 5/at are t/e benefits an' 'rawbac0s to t/is approac/7 Are

t/ere any ot/er solutions for t/e company?s cooptation strategy7

0ith this strategy, local units will feel a sense of ownership in the transnational effort. nthe downside, this assumes the ability to develop high>4uality systems is widely distributed,and that, a German team can successfully implement systems in Taiwan or %alaysia. Thiswill not always be the case. 'nother cooptation strategy would be to develop newtransnational centers of e+cellence, or a single center of e+cellence. n this, you wouldidentify a regional location with e+cellent implementation of specific business processes.These centers draw heavily from local national units, are based on multinational teams, andmust report to worldwide management. The centers of e+cellence would perform the initial

identification and specification of business processes, define the information re4uirements,perform the business and systems analysis, and accomplish all design and testing.mplementation, however, and pilot testing are rolled out to other parts of the globe.:ecruiting a wide range of local groups to transnational centers of e+cellence helps send themessage that all significant groups are involved in the design and will have an influence.

Difficulty: Difficult Reference: p #,,

(*. 5/at options 'oes a company /a6e for pro6i'ing international connecti6ity7

They can build their own international private networ", rely on a networ" service based onthe public switched networ"s throughout the world, or use the nternet and intranets.

Difficulty: Easy Reference: pp #,+%#,

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*. Synthesis

)ow 'oes t/e =nternet benefit t/e 'e6elopment of a global information system7 S/oul'

all global systems be base' on t/e =nternet7

The nternet allows anyone connected to it to communicate and compute at any time, or

anywhere. Catellite systems, digital cell phones, and personal communications services willma"e it even easier to coordinate wor" and information in many parts of the globe thatcannot be reached by e+isting ground>based systems. =ompanies can use nternet technologyto construct virtual private networ"s to reduce wide area networ"ing costs and staffingre4uirements. f it wishes, the company can outsource the virtual private networ" to annternet service provider.

'll global systems cant be based primarily on the nternet, because currently not allcountries have the same access to the nternet. 'dditionally, high>traffic volumes at certaintimes of the day in various regions may impede responsiveness.

Difficulty: Me'ium Reference: p #,

Synthesis in terms of formulate

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