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Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
Chapter 15 Managing Global Systems
1) The first step in establishing a corporate strategy and structure for globalization is to
determine the appropriate technology platform.
2) Global business drivers can be divided into two groups: general cultural factors and specific
business factors.
3) The growth of powerful communications technologies and the emergence of world cultures
create the condition for global markets.
4) The collapse of the Eastern block has speeded the growth of a world culture.
5) Micromarketing describes the direct marketing of products to individuals rather than
groups.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
6) A powerful strategic advantage for a globalized firm is lowered cost factors in production.
7) Particularism is a concept based on accepting a shared global culture and the penetration of
domestic markets by foreign goods and services.
8) Developing international networks has few problems today because of the global
acceptance of Internet standards.
9) In a transnational business strategy, all of the regional units participate and coordinate over
all activities, from production to sales.
10) European countries have very strict laws concerning transborder data flows and privacy.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
11) In a duplicated systems building strategy, each foreign unit designs its own solutions and
systems.
12) To avoid the cost and uncertainty of moving information across national boundaries, most
multinational firms have developed information systems within each European country.
13) With the growth of the Internet and reliable phone networks, skilled consultants are readily
available to companies operating in global markets.
14) Accounting practices can vary significantly from country to country.
15) In international companies, English has become a kind of standard business language.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
16) There are two primary global organization types: management centralized in the home
country or distributed to foreign centers.
17) In a multinational strategy, financial management is centralized while production and sales
are decentralized.
18) Global systems allow fixed costs to be amortized over a much smaller customer base.
19) One major telecommunications challenge in an international setting is making data flow
seamlessly across networks shaped by disparate national standards.
20) Private networks may not provide the same level of quick and predictable response as
VPNs.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
21) The iPhone was designed by Apple engineers in the United States, sourced with more than
100 high-tech components from around the world, and assembled in China.
22) An international information systems architecture consists of the basic information systems
required by organizations to coordinate worldwide trade and other activities.
23) The major dimensions for developing an international information systems architecture are
the global environment, the corporate global strategies, the structure of the organization, the
management and business processes, and the technology platform.
24) A business driver is a force in the environment to which businesses must respond and that
influences the direction of the business.
25) Among the major dimensions for developing an international information systems
architecture, the last issue to consider is the technology platform.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
26) A Canadian culture created by television, the Internet, and other globally shared media such
as movies now permits different cultures and peoples to develop common expectations
about right and wrong, desirable and undesirable, heroic and cowardly.
27) Brazil, Russia, Isreal, and China are now referred to as the BRIC countries, all judged to be
at a similar stage of advanced economic development.
28) A product that appears profitable in Mexico or Japan will always produce a loss because of
changes in foreign exchange rates.
29) Domestic exporters tend to have highly decentralized systems in which a single domestic
systems development staff develops worldwide applications.
30) The networked systems structure is the most visible in manufacturing services where the
homogeneity of the product—money and money instruments—seems to overcome cultural
barriers.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
31) A force in the environment to which businesses must respond and that influences the
direction of the business is called a business
A) driver.
B) threat.
C) process.
D) matrix.
32) The major dimensions of international systems architecture include each of the following
except
A) the global environment.
B) corporate global strategy.
C) technology platform.
D) transborder data flows.
33) General cultural factors driving global business are
A) global communication and transportation technologies, a global knowledge base, and
global social norms.
B) the development of global markets, political stability, and a global workforce.
C) the rise of the global workforce, political stability, and a global knowledge base.
D) the rise of a global workforce, global economies of scale, and global production and
operations.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
34) Global coordination of all of the major business functions permits the location of business
activity according to
A) social norms and values.
B) comparative advantage.
C) competitive threat.
D) knowledge base.
35) Making judgments and taking action on the basis of narrow or personal characteristics is
referred to as
A) localization.
B) cooptation.
C) particularism.
D) prejudicial.
36) In a multinational business strategy, the ________ business function is decentralized,
dispersed to foreign units.
A) finance/accounting
B) production
C) human resources
D) strategic management
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
37) All of the following present challenges to developing a global business except
A) foreign accounting practices.
B) production costs.
C) language differences.
D) exchange rates.
38) Which of the following is not a specific challenge to global business system?
A) shortages of skilled consultants
B) language differences
C) different telecommunication standards
D) different data transfer speeds
39) To avoid the cost and uncertainty of moving information across national boundaries, most
multinational 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.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
40) German companies
A) do not recognize the profit until the project is completely finished and they have been paid.
B) recognize profits before the project is finished.
C) recognize profits when the project is initialized.
D) do not recognize the profits until they have been formally audited.
41) Most 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 headquarters.
C) transaction-oriented reporting based at the home office for overseas business.
D) global marketing systems developed domestically.
42) In terms of global business strategy and structure, a domestic exporter 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 marketing and human
resources.
C) centralized production, accounting, marketing, and human resources.
D) dispersed production and marketing, with centralized accounting, human resources and
strategic management.
43) Which of the following is not one of the main organizational issues facing firms who are
seeking to globalize?
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) choosing a global strategy
B) organizing the global business structure
C) organizing the systems management
D) defining the global environment
44) Most companies pursuing a global strategy begin as
A) domestic exporters.
B) multinationals.
C) franchisers.
D) transnationals.
45) A company that controls finances in the home country and decentralizes production, sales,
and marketing operations to other countries is using a ________ strategy.
A) domestic exporter
B) franchising
C) transnational
D) multinational
46) In terms of global business strategy and structure, a multinational company will use a policy
of
A) mixed sales and marketing, with centralized production, accounting, human resources,
and strategic management.
B) centralized production, accounting, marketing, human resources, with strategic management.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) dispersed production, accounting, human resources, with centralized strategic
management, and marketing.
D) dispersed production and marketing, with centralized accounting and strategic
management.
47) Which of the following is not one of the three kinds of organizational governance used by
global companies?
A) centralized
B) decentralized
C) coordinated
D) localized
48) In terms of global business strategy and structure, a franchise company will use a policy of
A) centralized production, accounting, marketing, human resources, with strategic
management.
B) dispersed production, accounting, human resources, with centralized strategic
management, and marketing.
C) dispersed production and marketing, with centralized accounting, human resources and
strategic management.
D) dispersed production, marketing, and human resources, with centralized strategic
management and finance/accounting.
49) Which of the following is not one of the primary types of system configuration discussed in
the chapter?
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) decentralized
B) duplicated
C) coordinated
D) networked
50) In terms of global business strategy, the governance of ________ firms has been likened to
a federal structure—strong central management core of decision making, but considerable
dispersal of power and financial resources.
A) domestic exporter
B) multinational
C) franchiser
D) transnational
51) In centralized systems
A) development occurs at the home base and operations are handed over to autonomous
units in foreign locations.
B) each foreign unit designs its own unique 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.
52) In duplicated systems
A) development occurs at the home base and operations are handed over to autonomous
units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) systems development and operations occur in an integrated and coordinated fashion
across all units.
D) foreign units design the solutions and systems used at the domestic home base.
53) In decentralized systems
A) development occurs at the home base and operations are handed over to autonomous
units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
C) systems development and operations occur in an integrated and coordinated fashion
across all units.
D) foreign units design the solutions and systems used at the domestic home base.
54) In networked systems
A) development occurs at the home base and operations are handed over to autonomous
units in foreign locations.
B) each foreign unit designs its own unique solutions and systems.
C) systems development and operations occur in an integrated and coordinated fashion
across all units.
D) foreign units design the solutions and systems used at the domestic home base.
55) Domestic exporters typically have highly ________ systems.
A) duplicated
B) centralized
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
C) networked
D) decentralized
56) Multinational companies tend to have ________ systems.
A) duplicated
B) centralized
C) networked
D) decentralized
57) Franchise companies have typically had ________ systems.
A) duplicated
B) centralized
C) networked
D) decentralized
58) Transnational companies have tended to use a ________ systems configuration.
A) duplicated
B) centralized
C) networked
D) decentralized
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
59) The network systems structure is the most visible in ________ services.
A) production
B) financial
C) marketing
D) software design
60) Effective networked systems must have a
A) powerful telecommunications backbone.
B) culture of shared applications development.
C) shared management culture that crosses cultural barriers.
D) both B and C.
E) A, B, and C.
F) none of the above.
61) Of the following, which is not one of the three central principles recommended in this
chapter for a firm organizing itself for international business?
A) Organize value-adding activities along lines of comparative advantage.
B) Establish a single office responsible for international systems and a global CIO position.
C) Disperse production and marketing to regional centers and establish a single center for
world headquarters and strategic management.
D) Develop and operate systems units at each level of corporate activity—regional,
national, and international.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
62) In cooptation
A) the new global system replaces all unit systems, including systems in the home territory.
B) the systems used on the company's home country are modified to communicate with the
systems of foreign units so that each unit can retain their unique business processes.
C) the systems of specific foreign units are chosen to duplicate for use by other units.
D) opponents to a planned global system are brought into the process of designing and
implementing the solution.
63) Which of the following is not one of the principle management challenges in developing
global systems?
A) encouraging local users to support global systems
B) coordinating applications development
C) defining an acceptable test plan
D) agreeing on common user requirements
64) As a firm moves from local option systems to regional and global systems
A) agency costs increase.
B) coordination costs decrease.
C) transaction costs increase.
D) both transaction and agency costs increase.
