CS507 Information Systems Solved Subjective Short Questions Answers from Text Book (chapter 1- 3)
The computer is one physical part of the information system. The program is what operates the computer. An information system is the physical system including computers and networks, software (programs), people who operate the system, and the procedures for operating the system. Data is the basic raw element of facts, information is the processed data that is useful and meaningful to people.
Input captures raw data, processing converts the input into more meaningful form and output transfers the processed information to people or activities where it will be used. Some of the output will be used as feedback that will be used to evaluate the data that was input and to correct any problems found.
Information systems literacy is a broad-based understanding of information systems -- as opposed to computer literacy which is limited to understanding computers. Information systems literacy includes an understanding of the organization and management dimensions of information systems as well as the technology dimensions.
Organization: Information systems are a part of organizations, and in some cases (such as credit card companies and financial market information services) they are the organization. Information systems will have imbedded within them the SOPs and the culture of an organization.
Management: Information systems supply tools and information needed by managers to allocate, coordinate and monitor their work, make decisions, create new products and services and make long-range strategic decisions.
Technology: Management uses information systems technology (hardware, software, storage and telecommunications) to carry out their functions. It is the glue that holds the organization together.
A behavioral approach to information systems focuses on questions such as behavioral problems of system utilization, implementation and system design, social and organizational impacts of information systems, political impacts of information systems, individual responses to information systems, and cognitive models of human reasoning. Solutions to problems created by information technology are primarily changes in attitudes, managment, organization policy, and behavior.
A technical approach to information systems emphasizes mathematically based, normative models to study information systems and the physical technology and formal capabilities of information systems. Solutions to problems deal with improvements in computer hardware, methods of computation, methods of efficient data storage and access, software quality assurance, application of “normative” models of management, and operations research models.
The major disciplines that have contributed to an understanding of information systems from a technical standpoint are computer science, management science, operations research, and the more technical aspects of management information systems (MIS). The major disciplines approaching information systems from a behavioral standpoint are sociology, political science, psychology, and the more behavioral aspects of MIS.
Managers should study information systems because contemporary information systems directly affect managerial decision making, planning, and the nature of products and services of the organization. Information systems are no longer limited to technical operational issues.
Information systems are increasingly tied to the organization’s business strategy, rules and procedures. A change in strategy, rules or procedures requires changes in software, hardware, databases, and telecommunications, and vice-versa. An organization’s present and future accomplishments depend in many respects on what its systems will permit it to do. Whereas early information systems addressed primarily technical or operational issues, contemporary information systems are integral to the management and strategic foals of the firm. Building systems today affects a much larger part of the organization itself -- its products, objectives and structure. More and more business activities at all levels involve the use of information systems.
The Internet is an international network of over 100,000 public and private networks used to exchange information or perform business transactions. The Internet has changed the role of information systems by allowing the separation of work from location through the virtual organization. Networks allow the flattening of organizations because line workers can make decisions formerly made by managers, increase the flexibility of organizations (see Table 1.4), electronic commerce, and reorganize work flows.
Without the electronic linkage of buyers and sellers through networks and the Internet, there would be no way to transmit the many transactions of the electronic market. Otherwise, buyers and sellers would have to depend on paper transactions with their time delays and inaccuracies.
The flattening of organizations is probably one that students will cite, particularly with the concern over downsizing. The parallel increase in information and in the decision power of line workers (empowerment), and their corresponding increase in work satisfaction, is often missed in media reports of downsizing. The flexibility of organizations in operations, for example, custom manufacturing and in linking customers and suppliers (thus reducing order time) are some of the major changes.
Managers can have more information quicker. Therefore, they can respond quickly to changes in the market for product or in production conditions. With the increased information available, managers can more easily make plans, forecasts, and decisions. The empowering of the line worker means managers can plan and make decisions at a higher level, that is, they can think more strategically.
The information architecture of the organization is the particular form which information technology assumes in an organization to achieve selected goals or functions. Aspects of information architecture are whether hardware, databases, and specific applications are, or should be, centralized or distributed.
A technical approach to information systems emphasizes mathematically based, normative models to study information systems, and the physical technology and formal capabilities of information systems. Solutions to problems deal with improvements in computer hardware, methods of computation, methods of efficient data storage and access, software quality assurance, application of “normative” models of management and operations research models.
The key management challenges are: The strategic business challenge: How can businesses use information technology to design organizations that are competitive and effective? The globalization challenge: How can firms understand the systems requirements of a global economic environment? The information architecture challenge: How can organizations develop an information architecture that supports their business goals? The information systems investment challenge: How can organizations determine the business value of information systems?
Operational-level is the lowest. Knowledge-level systems are next highest in the hierarchy, followed by management-level systems. Strategic-level systems are at the top. Transaction processing systems such as order-tracking, payroll, machine control, sales and marketing are examples of systems (or subsystems) that serve the operational level. CAD/CAM workstations, Lotus Notes, systems with word processing software, engineering workstations, computer-aided, software engineering workstations, document management systems, spreadsheet and financial planning systems are examples of knowledge work systems and office automation systems that serve the knowledge level. Sales region analysis, cost analysis, production mix and scheduling, budgeting, facility location are examples of decision support systems and management information systems. Many of these systems are programs which students learn in their management science or quantitative methods courses. Some are based on database management systems. Examples of executive support systems that serve the strategic level are sales trend forecasting, operating plan forecasting, profit planning, and manpower planning.
The major types are described in the question above:
The examples are given in the answer to 2, but let’s quickly reiterate:
MIS differ from DSS?
A DSS provides material for analysis for the solution of semi-structured problems, unique or rapidly changing problems. Typically, DSS provide the ability to do “what if” analysis. ESS support senior managers with unstructured decision-making. They are less analytical than DSS with less use of models such as linear programming or forecasting.
A strategic information system is one that fundamentally changes the goals, operations, products, services or environmental relationships of organizations--in effect, changing the very nature of the firm’s business. These strategic information systems should be distinguished from strategic-level systems which provide long-term planning information to senior executives. Strategic information systems are more far-reaching and deeply rooted, and fundamentally transform the organization itself.
An appropriate model at the business level is value chain model. Types of strategies at this level are product differentiation, focused differentiation, and supply chain management.
Datamining can be used to support searches for customer information. Information systems allow the organization to change products for product differentiation, and can be used to bind customers and suppliers through supply chain management and improved customer response.
Information systems can enhance the integration of separate unites into a whole (synergy). Also, information systems can allow different business units to share information in the organization’s core competenticies.
The competitive forces model says that firms have to enhance the firm’s ability to deal with customers, supplier, and substitute products and services. Standards and networking allow industries to reduce costs and share information. Networking means that extra participants add much more to gains than they add to costs. Groups or communities of customers or suppliers can be created to tie the group to the organization.
Information systems can make industry-wide information available on standards or products, such as electrical equipment web sites. Examples are the web sites that support the CORBA standards or Java or data warehousing, www.datawarehouse.com. The Web sites that support Java from Sun Computer are good examples of networking, www.gamelan.com or www.javasoft.com.
Strategic information systems are difficult to build because they entail massive sociotechnical changes within the organization. Organizational boundaries between the firm and its customers and suppliers, and between departments within the organization, must be broken down. New relationships among parts of the company and with customers and suppliers must be redefined. Sometimes entirely new organizational structures may need to be built (as with the Saturn division of General Motors). There may be resistance to such changes because they impact responsibilities and jobs.
An organization is a stable, formal social structure that takes resources from the environment and processes these to produce outputs. Organizations use information to produce outputs, but are not designed primarily for processing information.
The "technical" definition of an organization focuses on three elements: capital and labor, production and products for consumption. It highlights the formal and stable aspect of organizations. The "behavioral" definition states that an organization is a collection of rights, privileges, obligations and responsibilities that are delicately balanced over a period of time through conflict and conflict resolution. This definition highlights the people within the organization, their ways of working, their relationships. The behavioral definition is the more "realistic" of the two.
Universal characteristics of organizations include:
Clear division of labor
Explicit rules and procedures
Technical qualifications for positions
Maximum organizational efficiency
Organizations can differ in their:
Business processes are the ways in which an organizations coordinate and organize work activities, information, and knowledge to produce the valuable products or services. There are two views—the technical-rational and the behavioral. The technical-rational focuses on activities and views business processes as concrete flows of material, information, and knowledge. The behavioral model focuses on core competencies, management, and leadership, and views to the organization’s ways of coordinating work, information, and knowledge.
Entrepreneurial structure: a simple structure, usually dominated by a single entrepreneur and managed by a single chief executive office. These are usually young, small firms operating in a fast-changing environment.
Machine bureaucracy: the large, classic bureaucracy. It exists in slow changing environments, producing standardized products. It is dominated by a strategic senior management that centralizes decision authority. It is likely to be organized into functional divisions.
Divisionalized bureaucracy: a combination of many machine bureaucracies, each producing a different product or service, and all topped by a central headquarters. It is suited to a slow-changing environment and standardized products. The various divisions tend to operate in different environments. This type of organization is the most common found in Fortune 500 companies.
Professional bureaucracy: depends on the knowledge and expertise of professionals. These organizations are suitable for slow-changing environments and skill sets. They are dominated by department heads and have weak centralized authority. Professionals who have considerable information and authority create the product and service. Law firms, school systems, accounting firms, hospitals and other knowledge-based organizations are typical professional bureaucracies.
Adhocracy: this "task force" type of organization must be able to respond to fast changing environments, markets and government contracts. They tend to be innovative and flexible while having sustained power. They are characterized by large groups of specialists organized into short-lived, multidisciplinary task forces focusing on new products. They have weak central managements that understand little of the technical work. This type of organization is typically found in research organizations, aerospace companies, medical, biomedical, electronic and other high-tech firms.
The levels of analysis for organizational behavior, and their special considerations, are:
In the 1950s, the predominant IS applications were limited to achieving efficiency in such accounting functions as Payroll, Accounts Payable or General Ledger. In the 1960s, applications emerged for monitoring and controlling in such areas as marketing, manufacturing, cash flow and budgeting. The 1970s saw applications developed for forecasting, planning and simulation. In the 1980s applications emerged that are customized decision-support systems, information systems to support strategic planning, end-user developed systems and applications to manage information as a strategic resource. In the 1990s information systems are helping to create and disseminate knowledge and information throughout the organization through new knowledge work systems, applications providing company-wide access to data and company-wide communications networks.
Information systems have played an increasingly central role in the organization, starting from limited accounting functions and progressing toward support of all major business functions, various levels of management decision-making, and strategic objectives. The technical configuration of IS has changed from "electronic accounting machines" in the Treasurer's offices to support of major business functions on large centralized mainframes to a complex network of mainframes, minicomputers and microcomputers that distribute computing power throughout the organization.
The three elements in the "computer package" are:
a formal information systems department.
a group of information specialists, consisting of programmers, systems analysts, project leaders, IS managers, and external hardware and software vendors.
the information technology itself, both hardware and software.
In its early years the information systems department provided primarily technical support to limited accounting functions. As more and more business functions and decision processes have become automated, the systems analysis has become a larger proportion of the staff. The IS group today often acts as a powerful change agent in the organization, suggesting new business strategies and information-based products, and coordinating the development of technology and of planned changes within the organization.
The work of information specialists is no longer purely technical. There is a growing need for systems analysts and business analysts who can understand and translate business problems into information requirements and information systems. The growing complexity and scale of IS activities requires a range of managers who can manage programmers and analysts, projects, physical facilities, telecommunications, office automation groups and computer operations. End-users, who are representatives of departments outside the IS groups that develop applications, play an increasingly large role in design and development of information systems. The hardware and software will be discussed in later chapters (6 and 7).
An environmental model sees organizations adopting information systems to deal with constraints and opportunities posed by the external environment. Environmental constraints inspiring a new information system might include the rising cost of labor and other resources, the competitive action of other organizations, or changes in government regulations. Opportunities might include new technologies, new sources of capital, the development of new production processes, the demise of a competitor or a new government program. Student examples should vary.
An institutional model sees factors internal to an organization as the stimuli for information systems. These include values, norms, or vital strategic interests. An example might be a top management of a corporation deciding that it needs to exercise much stronger control over the inventory process. Student examples should vary.
Microeconomic theory views information systems technology as a factor of production that can be freely substituted for labor. Labor historically has a rising cost. Through use of information systems technology, less capital and less labor are required, reducing the need for middle managers and clerical workers.
Transaction cost theory is based on the notion that a firm incurs "transaction" costs when it buys on the marketplace rather than making for itself. Traditionally, firms sought to reduce transaction costs by getting bigger--hiring more employees, vertical and horizontal integration, small-company take-overs. Information technology helps firms lower the cost of market participation (transaction costs) and helps firms shrink in size.
Agency theory views the firm as a nexus of contracts among interested individuals. The owner employs agents (employees) to perform work on his or her behalf and delegates some decision-making authority to the agents. Agents need constant supervision and management which introduces management costs. As firms grow, management costs rise. According to this theory, information systems can permit organizations to reduce overall management costs by reducing the costs of acquiring and analyzing information.
Economic theories are good at explaining how large numbers of firms act in the marketplace, but they are quite poor at describing or predicting the actual behavior of any one particular real-world firm.
Decision and control theory states that the function of the organization is to make decisions under conditions of uncertainty and risk and under the constraint of bounded rationality. The theory holds that managers never have complete information and knowledge, and they can never examine all alternatives even though they would like to. Organizations are decision-making structures, arranged so as to reduce uncertainty and to ensure survival. Organizations must centralize decision making because they have the information needed to make decisions. Middle management is necessary to gather information, analyze it and pass it up to senior managers. Information technology could change this rigid structure by lowering the costs of information acquisition and broadening the distribution of information. IT could bring information directly from operating units to senior managers, thereby eliminating middle mangers and their clerical support workers and centralizing decision making further. Alternatively, IT could distribute information to lower-level workers who could then make their own decisions based on their own knowledge and information without management intervention.
Sociological theory focuses on the growth of hierarchical, bureaucratic structures and standard operating procedures as primary coping tools for organizations trying to cope in unstable environments. Organizations hone and refine SOPs until they become extremely efficient. However, organizations find it nearly impossible to change routines when their environment changes. This theory states that information technology has little independent power to transform organizations. Managers are always looking for better ways to implement existing rules and SOPs but will reject IT if it threatens existing routines or subunits. Over time, IT becomes just another hard-to-change SOP. From this perspective, people and organizations control the impact of systems in their own interests. Change will come about because new organizations form around new technologies, and they are able to incorporate the new technologies in their SOPs.
Post-industrial theory states that advanced industrial countries have entered a new kind of post-industrial economy where the service sector dominates and industrial manufacturing is shifted to low-wage countries. According to this theory, the transformation to a post-industrial society results in authority relying more on knowledge and competence and less on mere formal position. Organizations will flatten because professional workers tend to be self-managing. Decision making should become more decentralized as knowledge and information become more widespread. Information technology should lead to "task force" networked organizations in which groups of professionals come together (face-to-face or electronically) for short periods of time to accomplish a specific task. Managers are reduced. Organizations will look more like adhocracies. Under this scenario, the work will be business process oriented and IT will contribute to these processes by automating parts of them and making them more efficient.
Cultural theories argue that IT must fit into the organization's culture or they are unlikely to be adopted. Organizations work within basic assumptions that are rarely challenged. Culture only really changes when organizations supporting them die off or when radical fringe groups gain control and shift cultural assumptions. IT can either threaten or support organizational culture.
Political theories divide organizations into specialized subgroups (e.g. marketing, accounting, production). These groups have different values, and they compete for resources, producing competition and conflict. Information systems are the outcome of political competition between organizational subgroups for influence over the policies, procedures and resources of the organization. IT is bound up with organizational politics because it influences access to information which is a key resource in the political competition.
The Web enlarges the potential to access information for all market and organizational participants, that is, nearly any information can be available anywhere at any time; it enlarges the scope, depth, and range of information and knowledge storage; it lowers the cost and raises the quality of information and knowledge distribution, that is, it lowers transaction and information acquisition costs.
Information systems are very bound up with the values of the organization. A new information system will normally be absorbed into the current culture, or it will be defeated. Information systems normally embody the organization's values and SOPs.
Information systems are intimately intertwined with organizational politics, because they help determine the access of specific subgroups and interests in the organization to information, which is a key resource. An information system can determine who does what to whom, when, where and how in an organization. For example, a major study showed that FBI efforts to develop a national computerized criminal history system were successfully resisted by states that felt this information would give the federal government and the FBI the ability to monitor how states use criminal histories as well as to control the interstate dissemination of criminal history information.
There is considerable organizational resistance to new IS because they change many important organizational dimensions -- culture, structure, politics and work. Leavitt puts forth a model that says that changes in technology are absorbed, deflected and defeated by organizational task arrangements, structures and people. In this model the only way to bring about change is to change the technology, tasks, structure and people simultaneously. In a second model, authors speak of the need to "unfreeze" organizations before introducing an innovation, quickly implementing the new system and then "re-freezing" or institutionalizing the change.