Practice

L1:

Questions and Answers

1. What is the role of information systems in today’s competitive business

environment?

• Answer: Information systems enable businesses to compete globally by

managing and controlling in a global marketplace, supporting knowledge-based
economies, and fostering the transformation of business enterprises into digital
firms.

2. What exactly is an information system?

• Answer: An information system is a set of interrelated components that

collect, process, store, and distribute information to support decision-making and
control in an organization.

3. How have information systems transformed organizations and management?

• Answer: They have introduced flattening structures, decentralization,

flexibility, and location independence, while reducing transaction and coordination
costs. This leads to empowered teams and collaborative work environments.

4. What are the major challenges in building and using information systems?

• Answer: Challenges include designing competitive and effective

systems, understanding global system requirements, creating supportive
information architecture, determining business value, and ensuring ethical use.

5. What is the difference between data and information?

• Answer:
• Data: Raw facts representing events or transactions.
• Information: Processed data that is meaningful and useful to human
beings.

6. What are the four worldwide changes that have altered the business
environment?
 • Answer:
1. Globalization
2. Rise of the Information Economy
3. Transformation of the Business Enterprise
4. Emergence of the Digital Firm

7. What is the concept of a “Digital Firm”?

• Answer: A digital firm is one where relationships with customers,

suppliers, and employees are digitally enabled, core business processes are
conducted via networks, and corporate assets are managed digitally.

8. What is the role of complementary assets in deriving value from information

systems?

• Answer: Complementary assets, such as organizational culture, efficient

business processes, managerial incentives, and social infrastructure, are
necessary to maximize the returns from information systems investments.

9. What are the key elements of an organization relevant to information systems?

• Answer:
• People
• Structure
• Operating procedures
• Politics
• Culture

10. What are the management levels and their roles in an organization?

• Answer:
• Senior managers: Make strategic decisions.
• Middle managers: Implement plans and programs.
• Operational managers: Oversee daily activities.

11. What are the positive and negative impacts of information systems?

• Answer:
• Positive Impacts: Faster processing, analysis of customer preferences,
efficient services, medical advances, and instant global information distribution.
• Negative Impacts: Job elimination due to automation, privacy concerns,
system outages, health problems like RSI, and illegal intellectual property
distribution.
12. What is the difference between e-commerce and e-business?

• Answer:
• E-commerce: Buying and selling goods and services electronically.
• E-business: Using Internet technology to execute all business
processes.

13. What is the significance of the Internet for organizations?

• Answer: The Internet acts as a universal technology platform allowing

seamless communication between computers worldwide, enabling activities like
collaboration, information access, business transactions, and entertainment.

14. Explain the concept of “Flattening Organizations.”

• Answer: Flattening organizations reduce hierarchical levels to improve

communication, flexibility, and decision-making efficiency.

15. What is a sociotechnical perspective on information systems?

• Answer: It emphasizes the optimization of system performance through

the alignment of technology and organizational factors for mutual adjustment and
effectiveness.

L2:

Questions and Answers

1. What are the major types of information systems in organizations?

• Answer: The major types of systems include:

1. Transaction Processing Systems (TPS): Handle operational-level tasks
like payroll or order processing.
2. Management Information Systems (MIS): Provide reports and access to
data for middle managers.
3. Decision Support Systems (DSS): Help analyze data to assist in
decision-making for professionals and managers.
4. Executive Support Systems (ESS): Provide strategic-level insights for
senior management.
2. How do Transaction Processing Systems (TPS) work?

• Answer:
• Input: Transactions or events.
• Processing: Sorting, listing, merging, updating.
• Output: Detailed reports, lists, summaries.
• Users: Operational personnel and supervisors.

3. What are the functions of Management Information Systems (MIS)?

• Answer:
• Input: Summary transaction data, high-volume data.
• Processing: Routine reports, low-level analysis.
• Output: Summary and exception reports.
• Users: Middle managers.

4. Why are business processes important for managers?

• Answer: Business processes define how work is organized and

coordinated. They are essential for efficiency, consistency, and integrating
workflows across functions to meet organizational goals.

5. What are enterprise applications, and what role do they play?

• Answer: Enterprise applications are software solutions designed to

integrate and manage critical business processes across an organization.
Examples include:
• Enterprise Resource Planning (ERP): Integrates business processes
organization-wide.
• Supply Chain Management (SCM): Automates information flow with
suppliers and optimizes production and delivery.
• Customer Relationship Management (CRM): Coordinates customer
interactions to enhance satisfaction and retention.
• Knowledge Management Systems (KMS): Collect, store, and distribute
knowledge within an organization.

6. How do information systems support major business functions?

• Answer:
• Sales and Marketing: Identify customers, develop and promote products,
and track sales trends.
• Manufacturing and Production: Plan production, control machinery, and
schedule resources.
 • Finance and Accounting: Manage financial assets, budgets, and profit
planning.
• Human Resources: Maintain employee records, monitor performance,
and plan compensation.

7. What is Supply Chain Management (SCM), and how does it help?

• Answer: SCM integrates business processes and optimizes production,

delivery, and inventory. Benefits include reducing costs, improving shipment
tracking, and facilitating production planning based on customer demand.

8. What is Customer Relationship Management (CRM)?

• Answer: CRM involves managing customer interactions to optimize

revenue, satisfaction, and retention. CRM systems track interactions and analyze
data to improve customer relationships.

9. What are the components of Knowledge Management Systems (KMS)?

• Answer:
• Acquire Knowledge: Gather relevant expertise and data.
• Store Knowledge: Organize and manage information.
• Distribute Knowledge: Share knowledge effectively within the
organization.
• Apply Knowledge: Utilize knowledge to enhance decision-making.

10. What are the four main ways of organizing businesses internationally?

• Answer:
1. Domestic Exporter: Centralized production with domestic control.
2. Multinational: Decentralized operations in multiple countries.
3. Franchiser: Product created centrally, but operations are managed
locally.
4. Transnational: Combines global efficiencies with local responsiveness.

11. What are collaborative commerce systems?

• Answer: Collaborative commerce uses digital technology to enable

organizations to work together in areas like product design, logistics, and
customer support, improving efficiency and reducing costs.

L3:
Questions and Answers

1. What do managers need to know about organizations to build and use

information systems successfully?

• Answer: Managers must understand the organization’s structure,

culture, politics, business processes, and decision-making processes. This helps
align information systems to organizational needs and challenges.

2. What are the impacts of information systems on organizations?

• Answer:
• Flattening organizational hierarchies.
• Reducing transaction and agency costs.
• Enabling virtual organizations.
• Improving information flow for decision-making.

3. How do information systems support managerial activities?

• Answer:
• They assist in decision-making at strategic, management, and
operational levels.
• Provide data analysis, reporting, and simulation tools.
• Enable planning, organizing, and controlling functions.

4. How can businesses use information systems for competitive advantage?

• Answer:
• By lowering costs (cost leadership).
• Differentiating products/services.
• Enhancing customer loyalty via higher switching costs.
• Building efficient customer response systems.

5. What is the relationship between organizations and information systems?

• Answer: It is a two-way relationship where:

• Information systems influence organizational structure, goals, and
processes.
• Organizational strategies and goals shape the development and use of
information systems.

6. What are the common structural characteristics of organizations?

 • Answer:
• Clear division of labor.
• Hierarchical structure.
• Explicit rules and procedures.
• Technical qualifications for roles.
• Emphasis on efficiency.

7. What are the economic theories explaining the impact of IT on organizations?

• Answer:
• Transaction Cost Theory: IT reduces costs of market participation.
• Agency Theory: IT lowers agency costs by making it easier for managers
to oversee employees.

8. How does IT influence decision-making in organizations?

• Answer:
• IT lowers information acquisition and distribution costs.
• Decentralizes decision-making, enabling flatter organizational
structures.
• Facilitates the growth of virtual organizations.

9. What are the stages of the decision-making process?

• Answer:
1. Intelligence: Collect and identify problems.
2. Design: Develop alternative solutions.
3. Choice: Select a solution.
4. Implementation: Execute and monitor the decision.

10. What is the value chain model, and how does it relate to competitive
advantage?

• Answer:
• The value chain model sees a firm as a series of activities that add value
to products/services.
• It helps identify areas where competitive strategies, such as cost
leadership or differentiation, can be applied.

11. What is a value web?

• Answer: A value web extends the value chain using Internet technology
to connect suppliers, partners, and customers in a more flexible and customer-
driven network.

12. What are strategic information systems?

• Answer: These are systems designed to support or shape an

organization’s competitive strategy by changing goals, products, services, or
processes.

13. What is Porter’s Competitive Forces Model?

• Answer: The model identifies five forces shaping industry competition:

1. Threat of new entrants.
2. Bargaining power of buyers.
3. Bargaining power of suppliers.
4. Threat of substitute products/services.
5. Industry rivalry.

14. How does the Internet influence competitive forces?

• Answer:
• Reduces barriers to entry.
• Enables substitute products/services.
• Increases competition and bargaining power of buyers.
• Facilitates supplier and partner collaboration.

15. What is strategic transition?

• Answer: It refers to the organizational shift from one sociotechnical

system to another, often required when adopting new systems that involve
changes in technology and organizational culture.

L4:

1. How has Internet technology changed value propositions and business

models?

Ans: The Internet unbundled information from traditional value chains, enabling
new business models like virtual storefronts, online marketplaces, and content
providers. It also reduces transaction costs and enhances communication reach
and richness.

2. What is electronic commerce?

Ans: Electronic commerce involves buying and selling goods and services online. It
transforms retailing and B2B transactions by introducing direct sales, reducing
intermediary roles, and enabling faster and more efficient customer interactions.

3. What are the principal payment systems for electronic commerce?

Ans: Examples include:

Digital Credit Cards: Secure payments over the web.
Digital Wallets: Stores payment and shipping details.
Peer-to-Peer Payment Systems: Facilitates vendor payments without credit
cards.
Stored Value Systems: Instant payments from digital accounts.
Digital Cash: Used for micropayments and large purchases.

4. What are the categories of electronic commerce?

Business-to-Consumer (B2C): Direct retailing to consumers.

Business-to-Business (B2B): Transactions between businesses.
Consumer-to-Consumer (C2C): Direct transactions between consumers.

5. What are the benefits of disintermediation in e-commerce?

Removes intermediary steps, lowers costs for consumers, and allows direct
interactions between producers and consumers.

6. How does Internet technology facilitate internal and interorganizational

processes?

Intranets and extranets support internal and external coordination by providing

platforms for collaboration, reducing integration costs, and enhancing information
sharing.

7. What are the managerial challenges posed by electronic commerce?

Challenges include:
Finding sustainable business models.
Changing business processes.
Resolving channel conflicts.
Addressing legal, security, and privacy issues.

8. What are examples of Internet business models?

Virtual Storefronts: Direct product sales online.
Information Brokers: Provide pricing and product details.
Transaction Brokers: Facilitate transactions for a fee.
Content Providers: Deliver digital content like news.
Portals: Offer a centralized web entry point.

9. What is the role of interactive marketing in e-commerce?

It involves personalized content, data-driven marketing strategies, and shorter

sales cycles through enhanced customer data analysis.

10. What is the difference between private industrial networks and net
marketplaces?

Private Industrial Networks: Closed systems for firms and partners to share
business data.
Net Marketplaces: Open digital platforms for various buyers and sellers.

11. What are the functional applications of intranets in business?

Finance: Online financial integration.

HR: Employee information delivery.
Sales: Coordinate sales activities.
Manufacturing: Distribute production data.

12. What are the benefits of e-procurement?

Streamlines procurement, eliminates paper processes, and reduces inefficiencies

by using web-based tools.

13. What are common legal and trust issues in electronic business?

These include intellectual property concerns, data privacy, consumer protection

laws, and trust in secure transactions.

● ide pricing and product details.

● Transaction Brokers: Facilitate transactions for a fee.
● Content Providers: Deliver digital content like news.
● Portals: Offer a centralized web entry point.
● 9. What is the role of interactive marketing in e-commerce?
● It involves personalized content, data-driven marketing strategies, and
shorter sales cycles through enhanced customer data analysis.
● 10. What is the difference between private industrial networks and
 ●

net marketplaces?
● Private Industrial Networks: Closed systems for firms and partners to
share business data.
● Net Marketplaces: Open digital platforms for various buyers and sellers.
● 11. What are the functional applications of intranets in business?
● Finance: Online financial integration.
● HR: Employee information delivery.
● Sales: Coordinate sales activities.
● Manufacturing: Distribute production data.

14. What are the benefits of e-procurement?

● Streamlines procurement, eliminates paper processes, and reduces
inefficiencies by using web-based tools.

15. What are common legal and trust issues in electronic business?

• These include intellectual property concerns, data privacy, consumer

protection laws, and trust in secure transactions.