CH-15 Managing Information – Effective Management : Exam Guide

Chapter 15: Managing Information TRUE/FALSE 1. Moore’s law accounts for the rapid increase in power and reduction in both size and price of computer equipment from 1975 to 2005. Answer: True 2. Moore’s law refers to the prediction that every 2 years, the cost of computing will drop by 50 percent as computer-processing power doubles. Answer: True 3. Information has strategic importance for organizations because it can be used to obtain first-mover advantage and sustain a competitive advantage once it has been created. Answer: True 4. The primary difference between raw data and information is meaning to the user. Answer: True 5. The first airline that was able to allow passengers to buy their plane tickets and reserve their seats online had a first-mover advantage. Answer: True 6. In today’s hypercompetitive business environments, capital (i.e., money) is still more important than information for business success. Answer: False In today’s hypercompetitive business environments, information is as important as capital for business success. 7. Raw data contain useful information that communicates a clear and readily understandable message to the person for which the data were gathered. Answer: False Raw data refers to facts and figures that do not have clear meaning to a person. The above is a more appropriate definition of information. That is, while raw data consist of facts and figures, information is useful data that can influence someone’s choices and behavior. 8. Pioneering differential refers to the strategic advantage that companies earn by being the first in an industry to use new information technology to substantially lower costs or to differentiate a product or service from that of competitors. Answer: False First-mover advantage is the term used to describe this. 9. The first company to gain first-mover advantage typically benefits from higher profits and larger market share. Answer: True 10. According to the resource-based view of information technology, sustainable competitive advantage occurs when information technology adds value, is different across firms, and is difficult to create or acquire. Answer: True 11. The key to sustaining a competitive advantage is using information technology to continuously improve and support the core functions of a business. Answer: True 12. According to the “Doing the Right Thing” box on the recycling and disposing of computer equipment, people should dispose of old computers by tossing them in landfills. Answer: False This disposal method is not only environmentally unsafe, but it is also against the law. 13. The two basic methods of capturing information are continuous and periodic. Answer: False The two basic methods of capturing information are manual and electronic. 14. RFID technology provides consumer products manufacturers with the technology to track goods as they move through the supply chain. Answer: True 15. Bar codes and document scanners are common methods of electronically capturing data. Answer: True 16. The term data mining refers to the process of discovering unknown patterns and relationships in large amounts of data. Answer: True 17. When a database of 100,000 individuals taking multiple prescription drugs was mined to find combinations of drugs exhibiting harmful interactions, the researcher was looking for a sequence pattern. Answer: False In a sequence pattern, the researcher would be looking for a pattern where two or more elements occur together in a significant way. This is an affinity or association pattern. 18. Data mining typically splits a data set in half, finds patterns in one half, and then tests the validity of those patterns by trying to find them again in the second half of the data set. Answer: True 19. Association patterns are also called sequence patterns. Answer: False Association patterns are also called affinity patterns. 20. Unsupervised data mining is unethical. Answer: False Unsupervised data mining is the process in which the user tells the data mining software to uncover whatever patterns and relationships it can find in a data set. 21. A data warehouse stores raw data that have been collected from a variety of sources for later use. Answer: False The data in a data warehouse are not raw data; rather, the data have been prepared for data mining analysis by being cleaned of errors and redundancy. 22. Data mining often reveals data clusters where three or more database elements occur together. Answer: True 23. Protecting information is the process of ensuring that data are reliably and consistently retrievable in a usable format for authorized users, but no one else. Answer: True 24. The two activities necessary to properly secure data and data networks are the use of firewalls and antivirus software. Answer: False There are numerous steps to properly securing data and data networks. Some of the most important are using firewalls, antivirus software for PCs and e-mail servers, data encryption, and virtual private networks. 25. Authentication and authorization are practically synonyms when used to describe information access. Answer: False Authentication is making sure users are who they claim they are. Authorization grants authenticated users approved access to information. 26. Firewalls can only protect personal computers and network servers connected to the corporate network. Answer: True 27. Businesses should use an intermittent schedule to scan for computer viruses. Answer: False Businesses should scan for viruses continually by configuring their virus software to automatically check for, download, and install updates. 28. Data encryption transforms data into complex, scrambled digital codes that can only be unencrypted by authorized users who possess unique decryption keys. Answer: True 29. According to the “Doing the Right Thing” box on passwords, shorter passwords are more effective than long ones. Answer: False According to the “Doing the Right Thing” box on passwords, longer passwords are more effective than short ones. 30. Virtual private networks and secure sockets layer encryption perform basically the same function. Answer: True 31. The goal of an expert system is to provide accurate, complete, timely, and relevant information to managers. Answer: False This is the stated goal for executive information systems. 32. Intranets are private company networks that allow employees to easily access, share, and publish information using Internet software. Answer: True 33. Three kinds of information technology are used by executives, managers, and workers inside the company to access and share information. They are executive information systems, intranets, and portals. Answer: True 34. Electronic data interchange, extranets, and the Internet have proven to provide such a competitive advantage that managers are scrambling to find ways to use them in their own companies. Answer: True 35. In electronic data interchange and web services, the different purchasing and ordering applications in each company interact automatically without any human input. Answer: True 36. Electronic data interchange, or EDI, is the direct electronic transmission of purchase and ordering information from one company’s computer system to another company’s computer system. Answer: True 37. Extranets are used to handle organizational transactions with suppliers and distributors. Answer: True 38. Data and information are the same as knowledge. Answer: False Data and information are not the same as knowledge. Knowledge is the understanding that one gains from information, and it resides in people, not information. 39. It is important to understand that decision support system programs should not replace managerial decision making. Answer: True 40. Most expert systems work by using a collection of “if–then” rules to sort through information and recommend a course of action. Answer: True MULTIPLE CHOICE 1. According to _____________, the cost of computing would drop by 50 percent as computer-processing power doubled every 2 years. A. Moore’s law B. Gordon’s law C. the Peter principle D. the rule of e-commerce E. Gresham’s Law Answer: A In 1965, Gordon Moore predicted that computer-processing power would double and that its cost would drop by 50 percent every 2 years. 2. _____________ refers to facts and figures depicted in a manner that is not usable. A. Nonspecific information B. Processed data C. Raw data D. Perceived knowledge E. Relevant information Answer: C This defines raw data. 3. The first company to use new information technology to substantially lower costs or differentiate products or services often gains: A. first-mover advantage B. lower profits C. less market adaptability D. increased synergy E. all of these Answer: A This describes first-mover advantage. 4. According to the text, _____________ is derived from _____________. A. information; raw data B. raw data; perceived knowledge C. perceived knowledge; raw data D. raw data; information E. influential knowledge; perceived knowledge Answer: A Raw data refer to facts and figures depicted in a matter that is not usable. Information is derived from data and is useful data that can influence people’s choices and behaviors. 5. On the television show Threshold, there are people who monitor all of the police reports from all over the United States looking for patterns within the data that may indicate alien activity. The numerous police reports, which are examples of _____________, are turned into _____________, which reveals areas where the secret agency suspects that aliens from outer space are operating. A. information; raw data B. raw data; perceived knowledge C. perceived knowledge; raw data D. raw data; information E. influential knowledge; perceived knowledge Answer: D Raw data refer to facts and figures depicted in a matter that is not usable. Information is derived from data and is useful data that can influence people’s choices and behaviors. 6. Pages listing all of the felony crimes perpetrated in New York during the last decade would be an example of: A. a resource allocation table B. traditional knowledge C. raw data D. perceived knowledge E. information Answer: C Raw data are facts and figures. 7. A table showing the order frequencies as well as the average dollar value of the orders of different segments of a catalog retailer’s market would be an example of: A. an MIS B. perceived knowledge C. raw data D. information E. influential knowledge Answer: D Information is useful data that can influence people’s choices and behaviors. 8. Why is information strategically important for organizations? A. Information can be used to obtain first-mover advantage. B. Information is derived from perceived knowledge, which limits its availability. C. Information cannot be used as a medium of exchange. D. Information creates suboptimization opportunities. E. All of these are examples of why information is strategically important for organizations. Answer: A Information has strategic importance for organizations because it can be used to obtain first-mover advantage. 9. In February 2006, Verizon Wireless launched the first national consumer 3G service called Vcast. Verizon Wireless was first out of the gate with a full-scale combination of 3G business and consumer services, something the other national carriers couldn’t yet claim. This new wireless service gave Verizon Wireless: A. a first-mover advantage B. benchmarking capabilities C. less market adaptability D. increased synergy E. all of these Answer: A The first company to use new information technology to substantially lower costs or differentiate products or services often gains a first-mover advantage. 10. In 1921, realtor Billy Ingram closed his company and opened White Castle restaurants to sell hamburgers. In 1921, hamburgers were thought to be made from rotten beef and not fit for human consumption. Ingram ground fresh beef in front of customers to prove it was safe and was the first to successfully sell hamburgers to the middle class. Today Ingram is credited as the founder of the fast-food industry. Understanding that Midwesterners wanted clean, convenient food when they were away from home was the information Ingram used to: A. acquire a source of perceived knowledge B. create a tactical advantage C. create a first-mover advantage D. pioneer sales in the consumer food industry E. sustain a competitive advantage Answer: C The first company to use new information technology to substantially lower costs or differentiate products or services often gains a first-mover advantage. 11. Which of the following is one of the critical issues companies need to address in order to sustain a competitive advantage through information technology? A. Who will have access to the information technology? B. Will the purchase of the information technology be viewed as an expense or as an investment? C. Does the firm’s use of the information technology violate any ethical standards? D. Is it difficult for another firm to create or buy the information technology? E. What government regulations may influence the company’s use of information technology? Answer: D The other critical issues are listed in Exhibit 15.2. 12. The key to sustaining competitive advantage is: A. faster computers with more memory B. using information technology to continuously improve and support the core functions of a business C. the Internet D. the ability of the managers to delegate E. how important the company’s culture perceives conceptual skills Answer: B This is the key to sustaining competitive advantage. 13. In 1921, realtor Billy Ingram closed his company and opened White Castle restaurants to sell hamburgers. In 1921, hamburgers were thought to be made from rotten beef and not fit for human consumption. Ingram ground fresh beef in front of customers to prove it was safe and was the first to successfully sell hamburgers to the middle class. Today Ingram is credited as the founder of the fast-food industry. He could not, however, convert new information about social and cultural changes into his strategic plans. White Castle now has 330 locations, and McDonald’s has 25,000 stores. From this information, you know: A. tactics are more influential than strategies B. the competitive advantage White Castle achieved from being first was not sustainable C. White Castle lost its pioneering differential D. product diffusion rates were slow E. none of these Answer: B McDonald’s has far surpassed White Castle in its number of stores. 14. A company that wants to create a first-mover advantage needs to know that such a strategy can result in: A. limited market share B. significant expense C. a condition of certainty D. a static environment E. all of these Answer: B See phone company example in text. 15. According to the resource-based view of information technology, sustainable competitive advantage : A. is difficult to create or acquire B. can be created by using information technology to continuously improve and support the core functions of a business C. differs across firms D. occurs when information technology adds value E. is accurately described by all of these Answer: E All of the choices describe sustainable competitive advantage according to the resource-based view of information technology. 16. Radio frequency identification (RFID) tags: A. are read the same way that bar codes are read B. use electronic scanners C. represent an innovation that has not yet found its way into general use D. were created to study consumer buying patterns E. are accurately described by none of these Answer: E RFID tags contain minuscule microchips that transmit information via radio waves and can be used to track the number and location of the objects into which the tags have been inserted. They are becoming more popular because they are now so inexpensive. 17. In May 2007, the Wisconsin legislature voted to make it illegal for anyone––including employers and government agencies––to implant RFID microchips into people without their consent. Why would someone want to place these chips in employees? A. As a way to contact them in an emergency B. As a means of tracking their whereabouts C. As an intranet method of identification D. To eliminate the need for identity badges E. To establish sequence patterns of employee behavior Answer: B RFID tags contain miniscule microchips that transmit information via radio waves and can be used to tract the location of people into which the tags have been inserted. 18. Because they are inexpensive and easy to use, _____________, which convert printed text and pictures into digital images, have become an increasingly popular method for electronically capturing data. A. electronic data interchanges B. electronic scanners C. radio frequency information digitizers (RFIDs) D. data digitalization E. bar coding devices Answer: B This describes electronic scanners. 19. In Germany, the Extra Future branches of the gigantic Metro Group (department stores) were forced to withdraw its customer loyalty cards when the press discovered that the company had secreted radio frequency identification (RFID) tags in the plastic. Even when enclosed in a wallet or purse, these cards could track which departments the customer visited. The retailer was hoping to engage in _____________ and look for unknown shopping patterns. A. information keystoning B. data mining C. data warehousing D. data outsourcing E. patterning Answer: B Data mining is the process of discovering unknown patterns and relationships in large amounts of data. 20. Text and pictures that have been digitized cannot be searched or edited like text and pictures found in word processing software. _____________ can be used to convert digitized documents into ASCII text that can be edited by word processing software. A. Electronic bar scanners B. Optical readers C. Optical character recognition software D. Radio frequency analog systems E. Analog scanners Answer: C This describes optical character recognition software. 21. In the process of capturing information, ASCII text is generated by: A. bar codes B. electronic scanners C. optical character recognition software D. e-tools E. data mining Answer: C Optical character recognition software scans and converts original or digitized documents into ASCII text. 22. By examining checkout data, supermarkets have learned that people who are buying beer typically also buy a bag of salty snacks. As a result of this _____________, supermarkets often place displays of beer near the chips and pretzel aisle. A. optical scanning B. electronic data interchange C. bar coding D. data mining E. data warehousing Answer: D Data mining is the process of discovering unknown patterns and relationships in large amounts of data. 23. On the TV show Threshold, there are people who monitor police reports from all over the United States looking for patterns within the data that may indicate alien activity. These computer people are engaged in: A. optical scanning B. electronic data interchange C. bar coding D. data mining E. data warehousing Answer: D Data mining is the process of discovering unknown patterns and relationships in large amounts of data. 24. _____________ is the process of discovering unknown patterns and relationships in large amounts of data. A. Information keystoning B. Data mining C. Data warehousing D. Data outsourcing E. Patterning Answer: B Definition of data mining. 25. Data mining is the: A. automated, electronic capture of data B. process of hypothesis testing in large databases C. process of verifying known relationships in large amounts of data D. process of discovering unknown patterns and relationships in large amounts of data E. method used to identify and eliminate perishable data Answer: D Data mining is the process of discovering unknown patterns and relationships in large amounts of data. 26. Which of the following statements about data mining is true? A. Data mining is the specific process used to match buyers and sellers. B. Data mining is too expensive for most companies to use at this time. C. The two forms of data mining are centralized and decentralized. D. Data mining typically uses data from a data warehouse. E. All of these statements about data mining are true. Answer: D The two methods for data mining are supervised and unsupervised. Data mining services have made the process affordable for all types of companies. 27. Using _____________ data mining, the user usually begins with the user telling the data mining software to look and test for specific patterns and relationships in a data set. A. supervised B. specific C. comprehensive D. unsupervised E. homogenous Answer: A Definition of supervised data mining. 28. Using _____________ data mining, the user simply tells the data mining software to uncover whatever patterns and relationships it can find in a data set. A. supervised B. specific C. comprehensive D. heterogeneous E. unsupervised Answer: E Definition of unsupervised data mining. 29. The two types of data mining are: A. supervised and unsupervised B. random and sequence C. affinity and association D. sequence and affinity E. ASCII and digital Answer: A Supervised and unsupervised are the two types of data mining. 30. The Food and Drug Administration (FDA) could use data it has collected from millions of suspected drug-related adverse event reports and other electronic medical information to identify a pattern of adverse drug events in a specific population. The agency could then communicate this knowledge sooner to medical professionals and patients. This data collected by the FDA would be held in a(n): A. Internet database B. competitive intelligence source C. data warehouse D. data extraction E. information clearinghouse Answer: C The data used in data mining typically come from data warehouses that store huge amounts of data that have been prepared for data mining analysis by being cleaned of errors and redundancy. 31. Jim Rhoade thought he had a decent deal with State Farm for insurance coverage on his two cars and his home, but a buddy tipped him off to lower premiums at Allstate. After contacting his local Allstate agent, Rhoade had slashed his annual auto premiums by $400 and his homeowner’s premium by the same amount. That’s because, in addition to considering Rhoade’s record, Allstate took into account seemingly unrelated information from his credit report, such as whether he pays bills on time (he does) and whether there had ever been a claim on his home (there had not). Allstate has discovered _____________ patterns that indicate that the better the credit report, the more likely the individual is to be a good risk for an insurer. A. sequence B. association C. predictive D. adjacency E. extrapolative Answer: B The lower insurance rate is predicated on the excellent credit report. Association patterns occur when two or more database elements occur together in a significant way. 32. Experts say that magazines are uniquely positioned to take advantage of e-commerce because most already possess the type of data required to create an effective online campaign. Subscribers’ demographics and psychographics––where readers live, their housing situation, how they like to shop, and such––are indicating which individuals will respond to Internet offers. By using their databases, magazine publishers can discover _____________ patterns. A. sequence B. affinity C. predictive D. adjacency E. extrapolative Answer: B Affinity patterns occur when two or more database elements tend to occur together in a significant way. 33. By examining checkout data, supermarkets have learned that people who are buying beer often also buy a bag of salty snacks. The use of data mining led to the discovery of a(n) _____________ pattern. A. sequential B. affinity C. predictive D. adjacency E. extrapolative Answer: B An affinity pattern occurs when two or more database elements tend to occur together in a significant way. 34. The data used in data mining typically come from _____________ that store huge amounts of data that have been prepared for data mining analysis by being cleaned of errors and redundancy. A. Internet databases B. competitive intelligence sources C. data warehouses D. data extractions E. information clearinghouses Answer: C Data warehouses store huge amounts of data that have been prepared for data mining analysis by being cleaned of errors and redundancy. 35. Unsupervised data mining is particularly good at identifying: A. association or affinity patterns B. sequence patterns C. predictive patterns D. data clusters E. all of these Answer: E All of these patterns and data clusters can be identified through the use of unsupervised data mining. 36. Have you ever purchased a book or CD on Amazon.com and noticed that as soon as you put your selection in the shopping cart, you were offered a series of other items that were bought by people who made the same purchase as yours? This would be an example of a(n) _____________ pattern of data mining. A. sequence B. association C. predictive D. adjacency E. extrapolative Answer: B An association (also called an affinity) pattern occurs when two or more database elements tend to occur together in a significant way. 37. _____________ occur in data mining when two or more database elements occur together in a significant pattern, but one of the elements precedes the other. A. Data clusters B. Affinity patterns C. Association patterns D. Sequence patterns E. Logic clusters Answer: D Definition of sequence patterns. 38. Unsupervised data mining can be used to recognize _____________ patterns. A. association, affinity, and sequence B. association, extrapolative, and predictive C. affinity, predictive, and adjacency D. progressive, predictive, and accommodative E. affinity, sequence, and predictive Answer: E Affinity, sequence, and predictive patterns can be recognized by the use of unsupervised data mining. 39. Baseball management was trying to uncover matches and relationships in the data it had on first-time patrons who purchased box stadium seats. It discovered that its sales increased by almost 100 percent in those seasons when it held an open house prior to the opening game and allowed people to see the box seats and examine the view of the stadium from those seats. In terms of data mining, the management discovered a(n) _____________ pattern. A. affinity B. sequence C. association D. adjacency E. collaborative Answer: B A sequence pattern occurs in data mining when two or more database elements occur together in a significant pattern, but one of the elements precedes the other. 40. _____________ is the process of ensuring that data are reliably and consistently retrievable in a usable format for authorized users, but no one else. A. Decryption B. Roadblocking C. Data insulation D. Protecting information E. Cookie manipulation Answer: D Definition of protecting information. 41. For the purposes of data mining, _____________ patterns are just the opposite of association patterns. A. sequence B. adjacency C. predictive D. affinity E. asymmetrical Answer: C Predictive patterns are just the opposite of association or affinity patterns. 42. Data clusters: A. result from the use of internal data mining B. are a statistical technique used for trend analysis C. are used to create samples for statistical analyses D. occur when three or more database elements occur together in a significant way E. are accurately described by all of these Answer: D Data clusters occur when three or more database elements occur together (i.e., cluster) in a significant way. 43. In data mining, _____________ occur when three or more database elements occur together in a significant way. A. predictive patterns B. data clusters C. relationship clusters D. affinity patterns E. extrapolations Answer: B Definition of data clusters. 44. To properly secure data and data networks, a manager should use all of the following EXCEPT: A. roadblocks B. firewalls C. data encryption D. antivirus software E. virtual private networks Answer: A According to the text, firewalls, data encryption, antivirus software, and virtual private networks should be used for the proper securing of data and data networks. 45. Which of the following is NOT an example of a security problem that may threaten data and data networks? A. E-mail snooping B. Phishing C. Keystroke monitoring D. Mob flashing E. Password cracking Answer: D All of the responses except mob flashing are discussed in the text as examples of security problems associated with data and data networks. 46. Two critical steps are required to make sure that data can be accessed by authorized users and no one else. They are: A. authentication and authorization B. authorization and empowerment C. delegation and empowerment D. encryption and empowerment E. authentication and encryption Answer: A Authentication and authorization are the two critical steps required to make sure that data can be accessed only by authorized users. 47. AOL was the first major U.S. online business to offer small businesses, victims of identity theft, and individuals who pay bills and conduct other financial transactions through their AOL accounts _____________. When they subscribe to this service, users will receive a matchbook-size device that displays a six-digit code that changes every minute. The code is necessary to log on, so even if someone guesses or steals a password, the account cannot be accessed without the device in hand. A. web identification B. dual-authorization technology C. two-party access D. privacy codes of conduct E. two-factor authentication Answer: E Two-factor authentication is based on what users know, such as a password, and what they have, such as a secure ID card. 48. To properly secure data and data networks, a manager should use: A. virtual private networks B. firewalls C. authentication and authorization D. web-based secure sockets layer encryption E. all of these Answer: E A manager should use all of these modalities to properly secure data and data networks. 49. If you’ve watched such shows as Alias on TV, you have seen super spies use their fingerprint to gain access to critical information. This is an example of: A. firewalls used for privacy B. a data decryption device C. biometrics used for authorization D. a digital scanner used for empowerment E. biometrics used for authentication Answer: E For two-factor authentication, biometrics can be used to identify users by unique, measurable body features such as fingerprints. 50. Long lines formed at counters at Vancouver International Airport as Air Canada’s computer system slowed to a virtual standstill. A _____________ designed to inoculate against another infection brought down the company’s computer networks and forced Air Canada to check in passengers manually at airports across the country. A. firewall B. data encryption service C. virus D. secure sockets layer E. virtual private network Answer: C A virus is a program or piece of code that, against your wishes, attaches itself to other programs on your computer and can trigger everything from harmless flashing messages to mass destruction. 51. Blackmal, Kama Sutra, Tearec, and MyWife are types of _____________ that can hide in your PC and on the third day of each month delete all Word, Excel, PDF, and PowerPoint files. A. PC spies B. cloaked agents C. viruses D. activity protocols E. security sockets Answer: C A virus is a program or piece of code that, against your wishes, attaches itself to other programs on your computer and can trigger everything from harmless flashing messages to mass destruction. 52. Which of the following statements about firewalls is true? A. Firewalls are a way to protect data. B. Firewalls can be in the form of hardware or software. C. Firewalls prevent unauthorized use of data. D. Firewalls sit between the computers in an internal organizational network and outside networks. E. All of these statements about firewalls are true. Answer: E All of the statements are true with regard to firewalls. 53. Some of the 30 employees of Del Rey Nut Co. were filling out phony time cards and cashing paychecks for hours they hadn’t worked. “We were paying for people who weren’t there,” says the owner of the Los Angeles food and promotional products company. Its owner didn’t know what to do about it until he tried a system that requires employees to scan their thumbprints when punching in. The company used: A. intangible cookies B. biometrics C. personal RFID tags D. individual bar codes E. optical scanners Answer: B Biometrics is the identification of users by unique, measurable body features such as fingerprints. 54. Although firewalls can protect personal computers and network services connected to the corporate network, people away from their offices who interact with their company networks via the Internet face a safety risk. Which of the following technologies has proven to be an inexpensive solution to this problem? A. Safe software for logic (SSL) encryption B. Virtual private networks C. Local area networks D. Firewall reassignment E. Reengineered applets Answer: B A virtual private network is software that securely encrypts data sent by employees outside the company network, decrypts the data when they arrive, and does the same when the data are sent back. 55. According to the “Doing the Right Thing” box on passwords, which of the following statements will help you maintain a strong password system? A. Use short, easy-to-remember passwords. B. Avoid using any unique characters in your passwords. C. Change your password every six weeks. D. Write down your password and store it somewhere convenient. E. Avoid “dictionary attacks” by using only complete words. Answer: C This box offers guidelines for protecting data. 56. The establishment of _____________ is an information security procedure that encrypts Internet data at both ends of the transmission process. A. cookie manipulators B. virtual private networks C. cookie managers D. firewall E. data insulators Answer: B This describes virtual private networks. 57. Although firewalls can protect personal computers and network services connected to the corporate network, people away from their offices who interact with their company networks via the Internet face a safety risk. Which of the following technologies has proven to be a viable solution to this problem? A. Safe software for logic (SSL) encryption B. Firewall reengineering C. Secure sockets layer (SSL) encryption D. Secure logistical LAN (SLL) encryption E. Virus protected networks (VPNs) Answer: C Secure sockets layer (SSL) encryption is an Internet browser–based encryption that provides secure off-site web access to some data and programs. 58. The goal of an executive information system is to: A. replace the need for intuition in decision making B. create a link among authorized data and network users C. protect organizational data from hackers D. provide accurate, complete, relevant, and timely information to managers E. do none of these Answer: D Providing accurate, complete, relevant, and timely information to managers is the goal of an executive information system. 59. Three kinds of information technology are used by executives, managers, and workers inside the company to access and share information. They are: A. executive information systems, portals, and intranets B. local area networks, extranets, and management information systems C. intranets, local area networks, and portals D. expert systems, decision support systems, and virtual private networks E. Internet accesses, SSL encryption, and intranets Answer: A Executive information systems, intranets, and portals are the three types of information technology used to access and share information by executives, managers, and workers inside the company. 60. Why do the large majority of companies now use intranets? A. Intranets are inexpensive. B. Experts on how to install and use intranets are common since the crash of the dot-coms. C. Intranets are not web-based. D. Intranets do not use HTML. E. All of these are explanations for the popularity of intranets. Answer: A Intranets are private company networks that allow employees to easily access, share, and publish information using Internet software. See Exhibit 15.3. 61. Which of the following statements can be used to help explain the growing popularity of intranets? A. Intranets are inexpensive. B. Intranets can be built on top of an existing computer network. C. Intranets are intuitive and easy to use. D. Intranets increase efficiencies and reduce costs. E. All of these statements can be used to help explain the growing popularity of intranets. Answer: E See Exhibit 15.3. 62. A(n) _____________ uses internal and external sources of data to provide managers and executives the information they need to monitor and analyze organizational performance. A. executive information system B. managerial information service C. expert system D. decision support system E. environmental information system Answer: A Definition of an executive information system. 63. A(n) _____________ is a private company network that allows employees to easily access, share, and publish information using Internet software. A. LAN portal B. private company network (PCN) C. intranet D. electronic data sharing system E. information network Answer: C Definition of an intranet. 64. The industrial group Ingersoll Rand has developed a(n) _____________ called “Welcome to Ingersoll Rand.” Its purpose is to inform new staff about the company’s history, philosophy, products, divisions, human resource policies, code of conduct, and other information. Only those employees with authorization can access this site. A. LAN portal B. private company network (PCN) C. intranet D. electronic data sharing system E. information network Answer: C An intranet is a private company network that allows employees to easily access, share, and publish information using Internet software. 65. _____________ are a hybrid of executive information systems and intranets. A. Corporate portals B. Extranets C. Expert systems D. Virtual private networks E. Electronic data interchanges Answer: A Definition of corporate portals. 66. _____________ allow managers and employees to use a web browser to gain access to customized company information and complete specialized transactions. A. Corporate portals B. Extranets C. Expert systems D. Virtual private networks E. Electronic data interchanges Answer: A Corporate portals allow managers and employees to access customized information and complete specialized transactions using a web browser. 67. Why do the large majority of companies now use intranets? A. Intranets are inexpensive, intuitive, and easy to use. B. Intranets work across all kinds of computers and operating systems. C. Companies with networks already have the equipment and expertise needed to install intranets. D. Intranets increase organizational efficiencies. E. All of these explain why so many companies now use intranets. Answer: E Intranets are private company networks that allow employees to easily access, share, and publish information using Internet software. See Exhibit 13.5. 68. At Banco do Brasil, a large financial services company in South America with more than 3,000 branch locations, its internal audit department covers a geographically broad area and serves a considerable number of clients. It decided to develop a(n) _____________ to facilitate communication among its 371-member audit group, many of whom travel to company locations outside the country, and to help manage its resources and information across the organization. A. LAN portal B. private company network (PCN) C. intranet D. electronic data sharing system E. information network Answer: C An intranet is a private company network that allows employees to easily access, share, and publish information using Internet software. 69. Snyder’s of Hanover is the world’s second biggest pretzel maker. It developed a(n) _______to allow its more than 50 department heads and executive managers to use a web browser to view sales results and distribution plans with a single click. It also helped executives size up cost-cutting opportunities on demand instead of waiting until the end of the quarter or year before ramping up production of a popular pretzel brand or paring distribution routes where necessary. A. corporate portal B. extranet C. SSL network D. virtual private network E. electronic data interchange Answer: A Corporate portals are a hybrid of executive information systems and intranets. 70. Intranets are: A. doors that allow managers to access transactions as they occur B. standardized protocols used to authenticate and authorize internal network users C. public networks that are only used for business-to-business transactions D. private company networks that allow employees to easily access, share, and publish information using Internet software E. publicly funded networks designed for specific industries Answer: D Intranets are private company networks that allow employees to easily access, share, and publish information using Internet software. 71. Which of the following statements about intranets is true? A. Intranets require users to build a completely new network. B. Intranets are web-based. C. The software required to set up an intranet is expensive. D. Intranets are difficult to use. E. All of these statements about intranets are true. Answer: B Firewalls are used to set up intranets on the Internet. Intranets are intuitive and easy to use. See Exhibit 15.3. 72. A manufacturer of pharmaceuticals can access information about its sales and share new product information with drug store chains through the use of: A. electronic data interchange (EDI) B. bar scanners C. SSL interchanges D. intranets E. Internet portals Answer: A Electronic data interchange occurs when two companies––typically, the manufacturer and the distributor––are able to share sales information with each other. 73. _____________ is the direct electronic transmission of purchase and ordering information from one company’s computer system to another company’s computer system. A. Automated processing B. Electronic data interchange C. Transaction channeling D. Data manipulation E. Information exchange Answer: B This defines electronic data interchange. 74. _____________ use standardized protocols to describe data from one company in such a way that those data can automatically be read, understood, and processed by different computer systems in another company. A. Extranets B. Intranets C. Web services D. Corporate portals E. Secure socket layer Answer: C Definition of web services. 75. Independent owners of Ace Hardware Stores can access data on new products, store layouts, pricing strategies, and customer promotions by using a(n) _____________ to gain web-based access to a portion of the Ace Hardware Corporate network. A. extranet B. virtual portal C. web service D. corporate portal E. secure socket layer Answer: A An extranet allows companies to exchange information and conduct transactions by purposely providing outsiders with direct, web-based access to authorized parts of a company’s intranet or information system. 76. Brunswick Corp., one of the largest manufacturers of pleasure boats in the world, wanted to improve and streamline vendor support. It used a(n) _____________ to connect all divisions of Brunswick Boat to its vendors so that it could provide common services online. A. extranet B. virtual portal C. web service D. corporate portal E. secure socket layer Answer: A An extranet allows companies to exchange information and conduct transactions by purposely providing outsiders with direct, web-based access to authorized parts of a company’s intranet or information system. 77. A(n) _____________ allows companies to exchange information and conduct transactions by purposely providing outsiders with direct, web-based access to authorized parts of a company’s intranet or information system. A. extranet B. virtual portal C. web service D. corporate portal E. secure socket layer Answer: A Definition of an extranet. 78. Companies that use electronic data interchange, extranets, and the Internet to gain a competitive advantage have experienced: A. decreased costs B. lower productivity C. worsening customer service D. faster authentication E. none of these Answer: A The use of these information technologies has helped companies reduce costs. 79. Eckerd has built a(n) _____________ that will automate its purchasing transactions and other e-commerce activities with its small- to mid-size suppliers. It will provide thousands of Eckerd’s suppliers with secure access to critical trading partner information and will facilitate trading partner automation. A. extranet B. virtual portal C. web service D. corporate portal E. secure socket layer Answer: A An extranet allows companies to exchange information and conduct transactions by purposely providing outsiders with direct, web-based access to authorized parts of a company’s intranet or information system. 80. Which of the following statements about knowledge is true? A. Data and information are the same as knowledge. B. Knowledge resides in information. C. Knowledge is the understanding that one gains from information. D. Knowledge is easier to acquire than data and information. E. All of these statements about knowledge are true. Answer: C Knowledge is the understanding that one gains from information. 81. Unlike an executive information system, a decision support system: A. speeds up and simplifies the acquisition of information B. does not process data C. helps managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models D. can be used to replace all managerial decision making E. removes decision-making bottlenecks by creating a problem organization table Answer: C A decision support system helps managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models and tools. 82. Air Canada provides its customers with over 150 flight destinations. It offers 690 scheduled flights daily and transports 23 million scheduled and charter customers annually. Air Canada would have used a(n) _____________ to create a feasible staff roster to meet the airline’s high internal service standards and to more closely match customer arrival patterns. A. intranet B. executive information exchange C. data mining system D. decision support system E. extranet Answer: D A decision support system helps managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models and tools. 83. A decision support system: A. is broad in scope B. speeds up and simplifies the acquisition of information C. permits managers to retrieve all kinds of information D. is designed to deal with all types of problems E. allows managers to better understand a problem and its potential solutions Answer: E A decision support system helps managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models and tools. 84. Just a teaspoon too much or too little of a single ingredient can turn a great cake into a mediocre cake. The ability to know just how much to add, how long to stir, and how the cake should smell when it is cooked is a skill that a long-time baker would have. Through the use of _____________, others can capture this specialized knowledge. A. electronic data interchanges B. pragmatic portals C. data mining D. expert systems E. executive information systems Answer: D Most expert systems work by using a collection of “if–then” rules to sort through information and recommend a course of action. 85. In the manufacture of paper products, automation is used to increase productivity while reducing human resource requirements. Mechanical faults, which can severely reduce output, occur more frequently because people are not involved in much of the production process. These problems need to be caught quickly. One method for discovering these faults is through vibration analysis. Each type of problem generates a different type of vibration. The paper industry uses _____________ to determine the type, severity, and location of vibrations in its machinery as well as to create a timetable for maintenance activities. A. expert systems B. decision support systems C. executive information systems D. RAID systems E. trend analysis Answer: A Most expert systems work by using a collection of “if–then” rules to sort through information and recommend a course of action. 86. The National Peanut Research Laboratory has created a(n) _____________ designed to manage peanut irrigation and pest management decisions. Irrigation recommendations are based on more than 20 years of scientific research data and information. Growers input field data, including planting date, variety planted, previous crop, soil type, and irrigation capacity; then the software advises them if and how much to irrigate or when to check soil temperatures again. A. electronic data interchange B. pragmatic portal C. data mining D. expert system E. executive information system Answer: D Most expert systems work by using a collection of “if–then” rules to sort through information and recommend a course of action. 87. A(n) _____________ is an information system that helps managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models and tools. A. intranet B. executive information system C. expert system D. decision support system E. extranet Answer: D Definition of a decision support system. 88. Most _____________ work by using a collection of “if–then” rules to sort through information and recommend a course of action. A. expert systems B. decision support systems C. executive information systems D. RAID systems E. trend analyses Answer: A “If–then” rules are used by most expert systems to sort through information and recommend a course of action. 89. The two basic methods of capturing information are: A. systematic and unsystematic B. planned and unplanned C. continuous and intermittent D. functional and hierarchical E. manual and electronic Answer: E There are two basic methods of capturing information: manual and electronic. 90. The manual capture of information is: A. slow B. expensive C. labor-intensive D. often inaccurate E. all of these Answer: E Manual capture of information is a slow, costly, labor-intensive, and often inaccurate process. 91. Which of the following describes the primary advantage of using bar codes? A. They are a subtle way to gather customer information. B. The data they contain can be read and recorded in an instant. C. They use ASCII codes, which protect consumer privacy. D. They provide information about the buying habits of individual customers. E. They eliminate inventory shrinkage. Answer: B The primary advantage of bar codes is that the data they represent can be read and recorded in an instant with a handheld or pen-type scanner. 92. A large metropolitan hospital that wished to keep track of wheelchairs, gurneys, and other expensive equipment that regularly disappeared from inventory because some hurried employee put it in a closet or elsewhere for safekeeping could use _____________ to locate and recover missing property. A. radio frequency identification tags B. bar codes C. radio scanning systems D. electronic data interchanges E. inventory recognition scanners Answer: A Radio frequency identification tags contain minuscule microchips that transmit information via radio waves and can be used to track the number and location of the objects into which the tags have been inserted. 93. Recalls are a fact of life for the food industry according to a senior VP of a large Canadian supermarket chain. The three methods of tracing produce through the supply chain are paper records, bar codes, and radio frequency identification (RFID) tags. Which of the following statements about the tracing of recalled products is true? A. RFID tags need direct line-of-sight scanning. B. Bar codes would be the easiest and most economical method to use. C. Until technological improvements are made, paper records are the best way to trace recalled products. D. RFID tags could help locate the recalled products with the use of an RFID reader that has been tuned to a specific frequency. E. Bar codes are the most efficient because they make use of optical character recognition. Answer: D Radio frequency identification (RFID) tags could help locate the recalled products by turning on an RFID reader that, like a radio, has been tuned to a specific frequency. 94. Refer to “What Would You Do?” Starbucks uses radio frequency identification monitors to __________ information about the safety and security of the food products it has delivered to its stores. A. capture B. process C. protect D. store E. analyze Answer: A The miniscule microchips in radio frequency identification tags capture information that can be accessed later. 95. Refer to “What Would You Do?” Starbucks was an early adopter of offering Wi-Fi access to customers, but when McDonald’s offered the same access for longer time and lower price, Starbucks’ Wi-Fi offering became: A. temporary competitive advantage B. sustained competitive advantage C. competitive parity D. competitive disadvantage E. competitive inertia Answer: A Since McDonald’s was able to offer a better deal, Starbucks’ competitive advantage was temporary. 96. Refer to “What Would You Do?” One dividend of the supplier of radio frequency identification program is that Starbucks is able to rate the quality and consistency of its suppliers and distributors. These ratings are: A. raw data B. data clusters C. predictive patterns D. information E. data analysis Answer: D These ratings would be considered information because they are useful to Starbucks. SHORT ANSWER 1. What is a first-mover advantage? Answer: First-mover advantage is the strategic advantage that companies earn by being the first in an industry to use new information technology to substantially lower costs or to differentiate a product or service from competitors. 2. According to the resource-based view of information technology, what are the three critical issues that companies need to address in order to sustain a competitive advantage through information technology? Answer: According to the resource-based view of information technology, companies need to address three critical issues in order to sustain a competitive advantage through information technology. First, does the information technology create value for the firm by lowering costs or providing a better product or service? Second, is the information technology the same or different across competing firms? Third, is the firm’s use of information technology difficult for another company to create or buy? 3. Define data mining. Briefly describe the two general approaches to data mining. Answer: Data mining is a form of information processing that discovers unknown patterns and relationships in data. As such, data mining transforms raw data into meaningful information that can be used for business decision making. There are two general approaches to data mining: supervised and unsupervised. Supervised data mining looks and tests for specific patterns and relationships in a data set that have been specified by managers. In contrast, unsupervised data mining attempts to uncover whatever patterns and relationships it can find in a data set. It specifically looks for four general kinds of data patterns: association or affinity patterns, sequence patterns, predictive patterns, and data clusters. 4. What does it mean when someone says that an organization protects its information? Why it is important? What are the basic steps to properly securing data and data networks? Answer: Protecting information is the process of ensuring that data are reliably and consistently retrievable in a usable format for authorized users, but no one else. Protecting information is necessary because of the numerous security threats to data and data security, such as attacks by hackers, viruses, worms, Trojan horses, e-mail snooping, keystroke monitoring, and many others. In these ways, people inside and outside of companies can steal or destroy company data. There are numerous steps to properly securing data and data networks. Some of the most important are using firewalls, antivirus software for PCs and e-mail servers, data encryption, and virtual private networks. 5. Describe the two critical steps that can be used to ensure that an organization’s data can be accessed only by authorized users. How does biometrics relate to this process? Answer: One is authentication—that is, making sure the users are who they claim to be. The other is authorization—that is, granting authenticated users approved access to data, software, and systems. Biometrics can be used for authentication. 6. Which type of personal computer security measure would salespeople who are on the road dealing with customers’ questions want the company to use? Why? Answer: Salespeople and other employees outside the company network would prefer either a virtual private network (VPN) or secure sockets layer (SSL) encryption. Both protect data and software from unauthorized users. 7. What are intranets? List four of the reasons why they so popular. Answer: Intranets are private company networks that allow employees to easily access, share, and publish information using Internet software. Intranets are exploding in popularity for five reasons. First, intranets, which can be used by everyone in the company, are inexpensive. Much of the software required to set up an intranet is either freeware (no cost) or shareware (try before you buy and usually less expensive than commercial software). Second, using intranets is intuitive and easy. Third, intranets work across all kinds of computers and computer operating systems. Fourth, if you already have a computer network in place, chances are your company already has the computer equipment and expertise to quickly and easily roll out an intranet. Fifth, while it’s not seamless, many software programs easily convert electronic documents from proprietary word processing, spreadsheet, or graphics formats to the hypertext markup language (HTML) used to display text and graphics on the Internet and intranets. So when employees have information that others in the company want access to, HTML editors make it easy to publish information on the company intranet for all to see. 8. Briefly distinguish between knowledge and information. Answer: Data and information are not the same as knowledge. Knowledge is the understanding that one gains from information. Importantly, knowledge does not reside in information. Knowledge resides in people. That’s why companies hire consultants, or why family doctors refer patients to specialists. 9. A master brewer knows the exact ingredients to add to make a dark beer, a lager, or an ale. He understands the nuances of the fermentation process as well as when a batch reaches perfection. How can technology capture this specialized knowledge? Answer: Expert systems can be used to capture this specialized knowledge. By creating a collection of “if–then” statements, even those without the brewer’s years of experience can create a worthy beer. ESSAY 1. Discuss the issues, advantages, and risks associated with using information to gain or maintain strategic advantage. Answer: According to the resource-based view of information technology, companies need to address three critical issues in order to sustain a competitive advantage through information technology. First, does the information technology create value for the firm by lowering costs or providing a better product or service? If an information technology doesn’t add value, then investing in it would put a firm at a competitive disadvantage to companies that choose information technologies that do add value. Second, is the information technology the same or different across competing firms? If all the firms have access to the same information technology and use it in the same way, then no firm has an advantage over another (i.e., competitive parity). Third, is the firm’s use of information technology difficult for another company to create or buy? If so, then a firm has established a sustainable competitive advantage over competitors through information technology. If not, then the competitive advantage is just temporary, and competitors should eventually be able to duplicate the advantages the leading firm has gained from information technology. Information has strategic importance for organizations because it can be used to obtain first-mover advantage and to sustain a competitive advantage once it has been created. First-mover advantage is the strategic advantage that companies earn by being the first in an industry to use new information technology to substantially lower costs or to differentiate a product or service from competitors. In all, first-mover advantages can be sizable. On average, first movers earn 30 percent market share compared to 19 percent for companies that follow. However, sustaining a competitive advantage through information technology is not easy to do. Competitors can and do come up with strategies to neutralize the initial competitive advantage gained by the first mover. Furthermore, because new information technology always costs more when it is new, first-mover strategies are typically much more expensive than adopting technology after it has been established (and prices have fallen). This means that companies that establish first-mover advantage and then lose it can lose substantial amounts of money and market share. In many instances, this can put the company that had first-mover advantage out of business. 2. What are the two basic methods of capturing information? Comment on the advantages and disadvantages of each. Answer: There are two basic methods of capturing information: manual and electronic. Manual capture of information is a labor-intensive process by which data are recorded and entered by hand into a data storage device. One advantage of manual capture is that it can easily be used to enter data for which no automated electronic system exists. The problem with manual capture of information is that it is slow, expensive, and often inaccurate. Consequently, companies are relying more on electronic capture, in which data are electronically recorded and entered into electronic storage devices. Bar codes and document scanners are common methods of electronically capturing data. Bar codes represent numerical data by varying the thickness and pattern of vertical bars. The primary advantage that bar codes offer is that the data they represent can be read and recorded in an instant with a handheld or pen-type scanner. However, the necessary data must be present in bar code form in order to use this technique rather than manual entry. Thus, management must develop a plan and mechanism for using bar codes for data entry. This might be considered a disadvantage. Because they are inexpensive and easy to use, electronic scanners, which convert printed text and pictures into digital images, have become an increasingly popular method of electronically capturing data. However, text that has been digitized cannot be searched or edited like the regular text in your word processing software. Therefore, companies can use optical character recognition software to scan and convert original or digitized documents into ASCII text (American Standard Code for Information Interchange). ASCII text can be searched, read, and edited in standard word processing, e-mail, desktop publishing, database management, and spreadsheet software. Thus, the advantage of scanners and optical character recognition software is that much data entry can be done electronically, but the disadvantage is that human monitoring and interaction may still be necessary to ensure the reliability of the process, as the process is not foolproof. 3. What is data mining? Describe the two kinds of data mining. How can data mining be used to invade the privacy of individuals, given the large amount of data that is collected and stored electronically on people in their everyday transactions? Answer: Data mining is a new form of information processing that discovers unknown patterns and relationships in data. It is a very promising tool that can be used to help managers to dig out from under the avalanche of data that companies collect every day. Data mining transforms large bodies of raw data into meaningful information that can be used for business decision making. The data typically comes from a data warehouse, which stores huge amounts of data that have been prepared for data mining analysis by being cleaned of errors and redundancy. There are two general approaches to data mining: supervised and unsupervised. Supervised data mining looks and tests for specific patterns and relationships in a data set that has been specified by managers. In contrast, unsupervised data mining attempts to uncover whatever patterns and relationships it can find in a data set. It specifically looks for four general kinds of data patterns: association or affinity patterns (which occur when two or more database elements tend to occur together in a significant way), sequence patterns (which occur when two or more database elements occur together in a significant pattern but with one of the elements preceding the other), predictive patterns (which identify database elements that are different), and data clusters (which occur when three or more database elements occur together, or cluster, in a significant way). The preceding portion of this answer was drawn directly from the text. Students may take a variety of approaches to explaining how data mining could potentially be used to invade the privacy of individuals, given the large amount of data that is collected and stored electronically on people in their everyday transactions. Better answers will specify the types of data collected on individuals, the sources of that information, and how companies might use the techniques of data mining––especially unsupervised data mining––to identify relationships that could allow those companies to know more about individuals than those individuals consciously know about themselves. For example, through the use of such information, companies could develop marketing approaches that might be significantly more effective and much less obvious than traditional approaches. In this way, some might argue, the free choice of consumers could be violated. Obviously, there are numerous directions in which students could go with this answer. The key to a good answer is anchoring realistic speculation about invasion of privacy in the techniques and potential of data mining as described in the text. 4. Compare and contrast executive information systems, decision support systems, and expert systems. Answer: In addition to capturing, processing, and protecting information, information technology is used in organizations for accessing and sharing information. Companies use information technology to improve internal access and sharing of information, external access and sharing of information, and the sharing of knowledge and expertise. The executive information system (ESS), decision support system (DSS), and expert system are all examples of information technology that companies are using in an attempt to gain a competitive advantage in the marketplace by accessing and sharing information. However, the three types of system serve two different purposes. The EIS one of two types of information technology used by executives, managers, and workers for the internal access and sharing of information (the other information technology used for this purpose is an intranet). An EIS uses internal and external sources of data to provide managers and executives the information they need to monitor and analyze organizational performance. The goal of the EIS is to provide accurate, complete, relevant, and timely information to managers. As noted above, another way in which companies take advantage of the accessing and sharing of information is through the sharing of knowledge and expertise. This is the category of use into which the decision support and expert systems fall. Companies have begun using these two information technologies to capture and share the knowledge of consultants, specialists, and experts with other managers and workers. Unlike the EIS, which speeds up and simplifies the acquisition of information, a DSS helps managers understand problems and potential solutions by acquiring and analyzing information with sophisticated models and tools. Furthermore, unlike EIS programs that are broad in scope and permit managers to retrieve all kinds of information about a company, DSS programs are usually narrow in scope and targeted toward helping managers solve specific kinds of problems. DSS programs have been developed to help managers pick the shortest and most efficient routes for delivery trucks, to pick the best combination of stocks for investors, and to schedule the flow of inventory through complex manufacturing facilities. DSS programs don’t replace managerial decision making; they improve it by furthering managers’ and workers’ understanding of the problems they face and the solutions that might work. The ability to analyze “what if” scenarios is a key capability of all DSS systems. They help managers to determine what likely outcomes would be under different conditions, or as a result of different managerial decisions. Expert systems are created by capturing the specialized knowledge and decision rules used by experts and experienced decision makers. They permit nonexpert employees to draw on this expert knowledge base to make decisions. Most expert systems work by using a collection of “if–then” rules to sort through information and recommend a course of action. Decisions made using the expert system are more likely to be effective than those made by the less experienced, nonexpert employee, since the database of specialized knowledge and decision rules is taken into account by the expert system. In conclusion, both decision support and expert systems help managers solve more specific types of problems through the sharing of knowledge and expertise. On the other hand, executive information systems, which emphasize internal access and sharing of information, provide more general information to managers, which is used with wider discretion by those managers to monitor and identify threats or opportunities facing the organization. Test Bank for Effective Management Chuck Williams 9781285866246