MBA IS Exam 1

Describe the Network Effect

(also called network externality or demand-side economies of scale) is the effect that one user of a good or service has on the value of that product to other people. When a network effect is present, the value of a product or service is dependent on the number of others using it -example: the telephone. The more people who own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase a telephone without intending to create value for other users, but does so in any case. Online social networks work in the same way, with sites like Twitter and Facebook becoming more attractive as more users join.

What are the different types of organizational design?

-Decision Rights -Formal Reporting -Relationships and Structure -Informal Networks

Describe the relationship between your core competency and outsourcing?

-Firms are becoming more networked through outsourcing and strategic alliances. -To become more competitive, organizations are examining types of work that should be done internally or externally by others. -Ranges from a simple contract for services to a long-term strategic alliance. -The thinking is: We should focus on what we do best and outsource the other functions to people who specialize in them.

What are the elements of IT resources?

-IT assets and IT capability -a skill that is not easily replicable, transferable, or substitutable

What are the IT assets?

-IT infrastructure -Information Repository

What are the drivers behind why businesses can link their corporation together?

-Rise of mobile and information based economy -Globalization -Emergence of the social firm -Transformation of the business enterprise -Exponential changes in technology

What are the types of transaction costs?

-Search costs (the costs of locating information about opportunities for exchange) -Negotiation costs (costs of negotiating the terms of the exchange) -Enforcement costs (costs of enforcing the contract)

What were the changes that were made possible due to the Internet as a disruptive technology?

-Shrinkage of information asymmetry -Changing relationships -Business conducted 24/7 -Extended global reach of corporation -Can reduce transaction costs

Describe Kranzberg's Law of Technology

-Technology is neither good nor bad; nor is it neutral -Invention is the mother of necessity -Technology comes in packages, big and small -Although technology might be a prime element in many public issues, nontechnical factors take precedence in technology-policy decisions -All history is relevant, but the history of technology is the most relevant -Technology is a very human activity - and so is the history of technology

What is socio-technical systems theory?

-The technology must be changed and designed in such a way as to fit organizational and individual needs -The objective is to find a "fit" with the organization -Requires knowing the technology, organization, and management

What are the rules governing the digital economy?

-Wealth is accumulated by leveraging the power of creativity of the unknown, not through optimization of the known -The ideal environment for cultivating the unknown is to nurture the agility and nimbleness of networks by using the power of IT -Creatively leveraging the unknown means abandoning the highly successful known -The cycle of "find, nurture, destroy" happens faster and more intensely than ever before This occurs in a global context and requires the power of IT -IT-enabled mobility is enabling the digital economy to function in real time anywhere in the globe

What is the emerging software solution?

-cloud -rather than hosting the applications in-house, firms are renting applications over the Internet from a service provider

What are the different types of database approaches?

-flat file -relational database -hierarchical database -Network DBMS -Object oriented

What are the characteristics of an ERP?

-integration -packages -best practices -some assembly required -evolving

What are the elements of the business diamond?

-structure -task -people -information and control

What are the IT Capabilities?

-technical skills -IT Management skills -Relationship skills

What are the 5 changes that technology brought to business today?

1. Globalization 2. Rise of the Mobile and Information-Based Economy 3. Emergence of the Social Firm 4. Transformation of the Business Enterprise 5. Exponential changes in technology

What are the 2 types of costs?

1. Transaction costs- costs of buying or selling in the market 2. Agency costs- are the incremental costs of having an agent make decisions for a principal

What are the steps in the Enterprise 2.0 process?

1. What is the motivation 2. What does it take to get there 3. Experiment 4. Implement in other parts of the company

What are the 4 steps in the innovation process?

1. idea 2. proof of concept 3. trial or pilot 4. transition

What 3 types of managerial levers does IS impact?

1. organizational 2. control 3. cultural

What are Porter's 5 competitive forces?

1. threat of new entrants 2. threat of substitutes 3. suppliers 4. customers 5. other competitors (rivalry)

What is extranet? (from book)

A network based on the Internet standard that connects a business with individuals, customers, suppliers, and other stakeholders outside the organization's boundaries. An extranet typically is similar to the Internet; however, it has limited access to those specifically authorized to be part of it.

What is integrated supply chain? (from book)

An enterprise system that crosses company boundaries and connects vendors and suppliers with organizations to synchronize and streamline planning and deliver products to all members of the supply chain.

What is strategic alliance? (from book)

An interorganizational relationship that affords one or more companies in the relationship a strategic advantage.

How can business intelligence help firms?

BI is used to describe a set of technologies and processes that use data to understand and analyze business performance.Captures, codifies, and make sense of data collected to make companies make better decisions.It gives companies the competitive advantage by making sense (knowledge) of data through strategic interpretation.

What is CRM?

CRM - Customer Relationship Management -These systems consist of a family of software modules that perform the business activities involved in such 'front office' processes like customer sales, marketing, and service. These tools enable companies to identify, target, and retain their best customers.

What is DSS?

DSS - Decision Information Systems -Systems that combine data and analytic models or data analysis tools to support non-routine decision making for individuals -Examples: sales region analysis, cost analysis, pricing analysis

What is information?

Data that have been shaped into a form that is meaningful and useful to human beings.

What is ERP?

ERP - (Used at all levels) Enterprise Resource Planning Systems -Uses integrated cross-functional software to reengineer, integrate, and automate the basic business processes of a company to improve its efficiency, agility, and profitability.

Describe Integration under ERP.

ERP systems are designed to seamlessly integrate information flows throughout the company. ERP systems are configured by installing various modules, such as: -Manufacturing - (materials management, inventory, plant maintenance, production planning, routing, shipping, purchasing, etc.) -Accounting - (general ledger, accounts payable, accounts receivable, cash management, forecasting, cost accounting, profitability analysis, etc.) -Human resources - (employee data,position management,skills inventory,time accounting, payroll, travel expenses, etc.) -Sales - (order entry, order management, delivery support, sales planning, pricing, etc.)

Describe Packages under ERP.

ERP systems are usually commercial packages purchased from software vendors. Unlike many packages, ERP systems usually require long term relationships with software vendors because the complex systems must typically be modified on a continuing basis to meet the organization's needs.

Describe Best Practices under ERP.

ERP systems reflect industry best practices for generic business processes. To implement them, businesses often have to change their processes in some way to accommodate the software.

Describe Evolving under ERP.

ERP systems were designed first for mainframe systems then client server architectures and now for Web-enabled or cloud-based delivery.

What acronyms are included in the strategic level?

ESS

What is ESS?

ESS - Executive Support Systems -Systems designed to address non routine decision making -Examples: trends in the marketplace, forecasting, personnel planning

What is web portal? (from book)

Easy-to-use Web sites that provide access to search engines, critical information, research, applications, and processes that individuals want.

What is convergence? (from book)

Exhibits a state in which business strategy and technology strategy are intertwined and the leadership team members operate almost interchangeably.

What is the acronym guiding Enterprise 2.0?

FLATNESSES freeform, links, authorship, tagging, network oriented, extensions, search, social, emergence, signals

What are the 3 views managers must take in the strategic landscape?

First view- Porter's 5 competitive forces model Second view- Porter's value chain Third view- focuses on the types of IS resources needed to gain competitive advantage

What is GDSS?

GDSS - Group Decision Support Systems -An interactive computer-based system to facilitate the solution to unstructured problems by a set of decision-makers working together as a group

What is the role of IS in the management control process of data collection?

IS enable the collection of information that helps managers determine if they are satisfactorily progressing toward realizing the organization's mission as reflected in its stated goals.

What is the role of IS in the management control process of evaluation?

IS facilitate the comparison of actual performance with the desired performance that is established as a result of planning.

What is the role of IS in the management control process of communication?

IS speed the flow of information from where it is generated to where it is needed. This allows an analysis of the situation and a determination about what can be done to correct for problematic situations.

What are Porter's primary activities?

Inbound Logistics Operations Outbound Logistics Marketing and Sales Service

What is KBS?

KBS - Knowledge-based systems -Captures the expertise of human beings

What is MIS?

MIS - Management Information Systems -Serve management level; provide reports and access to company data

What acronyms are included in the tactical level (middle managers)?

MIS, DSS, GDSS

How can you help new employees?

National cultures that are more willing to accept risk appear to be more likely to adopt new technologies. Those cultures that are less concerned about power differences among people (i.e., have low power distance) are more likely to adopt technologies that help promote equality. People are more likely to adopt a new technology if they think that the technology's embedded values match those of their national culture. Further, if a technology is to be successfully implemented into an organization, either the technology must fit with the organization's culture or the culture must be shaped to fit the behavioral requirements of the technology.

What is intranet? (from book)

Network that looks and acts like the Internet, but it is comprised of information used exclusively with a company and unavailable to the general public via the Internet. It is a password-protected set of interconnected nodes that is under the company's administrative control.

What is OAS?

OAS - Office Automation Systems -Computer systems that are designed to increase the productivity of data workers in the office -Examples: Word processing: facilitate the creation of documents (e.g. Microsoft Word) Desktop publishing: produces documents combining output from various sources (e.g. Microsoft Publisher) Document imaging systems: convert documents and images into digital form so they can be stored on the computer

What acronyms are under tactical level (knowledge workers)?

OAS and KBS

What are Porter's support activities?

Organization Human Resources Technology Purchasing

What is digital firm?

Organization where nearly all significant business processes and relationships with customers, suppliers, and employees are digitally enabled

What is social firm?

Organization where nearly all significant business processes enables a partnership with customers, suppliers, and employees that goes beyond traditional organizational boundaries.

What is managerial levers? (from book)

Organizational, control, and cultural variables that are used by decision makers to effect changes in their organizations. It suggests that the successful execution of a business's organizational strategy comprises the best combination of organizational, control, and cultural variables. -Organizational variables include decision rights, business processes, formal reporting relationships, and informal networks. -Control variables include the availability of data, the nature and quality of planning, and the effectiveness of performance measurement and evaluation systems, and incentives to do good work. -Cultural variables comprise the values of the organization.

What is Porter's value chain?

Porter (1985) created the value chain model, which highlights whether activities within the firm are primary or support activities to a form's product or services -have primary and support activities

What is SCM?

SCM - Supply Chain Management -A supply chain is the network of business processes and interrelationships among businesses that are needed to build, sell, and deliver a product to its final customer. Supply Chain Management applications integrate management practices and IT to optimize information and product flows among these processes and partners.

What is data?

Set of specific, objective facts or observations that standing alone have no intrinsic meaning.

What is groupware? (from book)

Software that enables group members to work together on a project, even from remote locations, by supporting group decision making, information processing, and simultaneous file access. Calendars, documents, e-mail messages, databases, decision-making tools, and meetings are popular applications.

What acronym is in the operational level?

TPS

What is TPS?

TPS - Transaction Processing Systems -Computerized systems that perform and record the daily routine transactions necessary to conduct the business -Examples: accounts payable, accounts receivable, payroll, order tracking, order processing

Describe Some Assembly Required under ERP.

The ERP system is software that needs to be integrated with the organization's hardware, operating systems, databases, and network. Further, ERP systems often need to be integrated with proprietary legacy systems. It often requires that middleware (software used to connect processes running in one or more computers across a network) or "bolt-on" systems be used to make all the components operational. Vendor supplied ERP systems have a number of configurable components, too, which need to be setup to best fit with the organization. Rarely does an organization use it directly "out of the box" without configuration.

Describe Metcalfe's Law

The value of a telecommunications network is proportional to the square of the number of connected users of the system (n2)

Describe the usefulness of enterprise systems.

They help ensure integration and coordination across functions such as accounting, production, customer management, and supplier management. Some are designed to support a particular industry such as healthcare, retail, and manufacturing.

How does IS impact the organizational strategy?

This framework is useful in designing key characteristics of work by asking key questions and helping identify where IS can affect how the work is done. -What work will be performed? -Who is going to do the work? -When/where will it be performed? -How can IT enhance the effectiveness of the workers doing the work? *It flattens the organizational structure

What is VoIP? (from book)

Voice over Internet Protocol. Method for taking analog audio signals (i.e., those used in phone calls) and turning them into digital data that can be transmitted over the Internet. It is rapidly gaining in popularity because of the free VoIP software that is available with proprietary systems such as Skype. It allows people to make free Internet phone calls without using the phone company.

What is resource-based view?

a basis for the competitive advantage of a firm lies primarily in the application of a bundle of valuable tangible or intangible resources at the firm's disposal

What is knowledge?

a central productive and strategic asset; information that has been organized and processed to convey understanding, experiences, accumulated learning, and expertise as it applies to a particular problem or process

What 2 characteristics must a firm possess to be successful?

agile and flexible

What is value proposition? (from book)

an innovation, service, or feature intended to make a company or product attractive to customers.

What are product innovations?

are embodied in the outputs of an organization - its goods or services.

What is an application service provider?

company providing software that can be rented by other companies over the Web or a private network

What is the flat file database approach?

data is on one table

What are agile processes?

designed with the intention of simplifying redesign and reconfiguration. They are designed so they are flexible and easily adaptable to changes in the business environment and can be incrementally changed with little effort.

What are process innovations?

innovations in the way an organization conducts its business, such as in techniques of producing or marketing goods or services.

What is Information system?

interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization.

What is a mission?

is a clear and compelling statement that unifies an organization's effort and describes what the firm is all about (i.e., its purpose).

What is a strategy?

is a coordinated set of actions to fulfill objectives, purposes, and goals. The essence of a strategy is setting limits on what the business will seek to accomplish. *strategy starts with a mission

What is co-opetition? (from book)

is the strategy for creating the best possible outcome for a business by optimally combining competition and cooperation. It frequently creates competitive advantage by giving power in the form of information to other organizations or groups.

What are collaboration tools? (from book)

is the way that small companies can "act big" and flourish in today's flat world. The key to success is for such companies "to take advantage of all the new tools for collaboration to reach farther, faster, wider and deeper."10 Collaboration tools include social networking sites, virtual worlds, Web logs (blogs), wikis, and groupware. They often leverage collaboration by increasing available connections.

What is the tactical level (knowledge workers)?

knowledge workers; systems support knowledge and data workers

What is the central and productive asset for firms today?

knowledge! -knowledge based view of the firm -central productive and strategic asset

What are secondary/support activities?

make the delivery of a firm's primary activities possible -firm infrastructure -human resource management -technology development and R&D -procurement

What is the role of IT in the digital economy?

makes pervasive changes in the structure and operation of: work, business practices, organizations, industries, the global economy, and mobility

What is the role of IT in the informational economy?

manage work better

What are primary activities?

most directly related to the production and distribution of a product or service -Receive and Store Raw Materials (5.2%) -Make the Product or Service (40.3%) -Deliver the product or service (6.6%) -Market and sell the product or service (4.3%) -Service after the sale (2.2%)

What is the role of IT in the industrial economy?

perform existing information work more quickly and efficiently

What are dynamic processes?

reconfigure themselves as they "learn" and are utilized in the business.

What is the hierarchical database database approach?

records are divided in segments that are connected in a parent-child relationship

What is the network DBMS database approach?

similar to hierarchical, but parents can have multiple children and children can have multiple parents

What is the object oriented database approach?

stores both the data and the procedures acting on the data as objects

What is the operational level?

systems monitor the elementary activities and transactions of the firm

What is the tactical level (middle managers)?

systems support monitoring, controlling, decision-making, and administrative activities

What is the strategic level?

systems that support long-range planning activities

What is innovation?

the multi-stage process whereby organizations transform ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace

What is the definition of alignment? (from the book)

the situation in which a company's current and emerging business strategy is enabled, supported, and unconstrained by technology. The authors suggest that although alignment is good, there are higher states, namely synchronization and convergence, toward which companies should strive. With synchronization, technology not only enables current business strategy but also anticipates and shapes future business strategy. Convergence goes one step further by exhibiting a state in which business strategy and technology strategy are intertwined and the leadership team members operate almost interchangeably. Although we appreciate the distinction and agree that firms should strive for synchronization and convergence, alignment in this text means any of these states, and it pertains to the balance between organizational strategies, IS strategy, and business strategy.

Why do firms adopt an enterprise system?

to automate their internal processes, believing that the IS would provide a common language, database, and platform.

What are the impacts of IT on transaction and agency costs?

transaction- IT could change hierarchy of decision making by lowering costs of information acquisition and distribution agency- IT makes it easier and cheaper to make a decision

What is the relational database database approach?

uses a series of logically related tables or files