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MCQs on Information systems and strategy – Strategic Management

Strategic information is used to plan the objectives of the organisation, and to assess whether the objectives are being met in practice. Here on MCQs.CLUB

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MCQs on Information systems and strategy

Strategic information is used to plan the objectives of the organisation, and to assess whether the objectives are being met in practice. Here on MCQs.CLUB we gave prepared helpful Multiple-Choice Questions (MCQs) on Information systems and strategy that fully cover practice questions and quizzes on strategic information system planning and example, definition, types, the business applications of information technology, strategic business objectives of information systems, achieving competitive advantage with information systems, strategic management of information systems and organization. These MCQs on strategic use of information systems are also useful for professional accountancy exams, business management exams and competitive exams.

Strategic information is used to plan the objectives of the organisation, and to assess whether the objectives are being met in practice.

1. True
2. False

Organisations often have to consider different strategies in relation to information such as:

1. information systems (IS) strategy
2. information technology (IT) strategy
3. information management (IM) strategy
4. All of the above

The characteristics of the information produced (and required) at ‘Strategic information’ level is:

1. Derived from both internal and external sources
2. Summarised at a high level and Relevant to the long term
3. Uncertain, as the future cannot be accurately predicted
4. All of the above

The characteristics of the information produced (and required) at ‘Management (tactical) information’ level is:

1. Summarised at a lower level and Relevant to the short and medium term
2. Prepared routinely and regularly
3. Some focus on planning, but greater focus on control
4. All of the above

Strategic IT systems include:

1. Executive Information Systems (EIS)
2. Management Information Systems (MIS)
3. Decision Support Systems (DSS)
4. All of the above

Executive information systems (EIS) –

1. An Executive Information System (EIS) pools data from internal and external sources and makes information available to senior managers in an easy-to-use form.
2. EIS help senior managers make strategic, unstructured decisions.
3. An EIS should provide senior managers with easy access to key internal and external information.
4. All of the above

Features of an EIS include:

1. Flexibility
2. Quick response time
3. Sophisticated data analysis and modelling tools
4. All of the above

Management information systems (MIS) –

1. This information enables managers to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible.
2. An MIS provides regular reports and (usually) online access to the organisation’s current and historical performance.
3. MIS usually transform data from underlying transaction processing systems into summarised files that are used as the basis for management reports.
4. All of the above

Characteristics of MIS are:

1. Support structured decisions at operational and management control levels
2. Designed to report on existing operations
3. Have little analytical capability, relatively inflexible and Have an internal focus
4. All of the above

Decision support systems (DSS) –

1. Decision Support Systems (DSS) combine data and analytical models or data analysis tools to support semi-structured and unstructured decision making.
2. Decision support systems are intended to provide a wide range of alternative information gathering and analytical tools with a major emphasis upon flexibility and user-friendliness.
3. Both A&B
4. None

Which of the following is correct for ‘Value added networks’?

1. Value added networks (VANs) are networks that facilitate the adding of value to products and (particularly) to services by the strategic use of information.
2. VANs will link separate organisations together through electronic data interchanges (EDIs), contributing to the development of business networks.
3. Both A&B
4. None

Information strategy can be divided into:

1. information systems strategy
2. information technology strategy
3. information management strategy
4. All of the above

Which of the following is correct?

1. The Information systems (IS) strategy is the long-term plan for systems to exploit information in order to support business strategies or create new strategic options.
2. The Information technology (IT) strategy is concerned with selecting, operating and managing the technological element of the IS strategy.
3. The Information management (IM) strategy deals with the roles of the people involved in the use of IT assets, the relationships between them and design of the management processes needed to exploit IT.
4. All of the above

When developing an IS/IT strategy a firm should assess how important IT is in the provision of products and services. The role that IT fills in an organisation will vary depending on the type of organisations. IS/IT could be:

1. A support activity
2. A key operational activity
3. Potentially very important
4. A source of competitive advantage
5. All of the above

The use of IT has permitted the design of a range of information systems. Which of the following can be used to improve the quality of management information?

1. Executive Information Systems (EIS), Management Information Systems (MIS)
2. Decision Support Systems (DSS), Knowledge Work Systems (KWS)
3. Office Automation Systems (OAS)
4. All of the above

Parties interested in an organisation’s use of IT are:

1. Consumers, Employees
2. Governments and IT manufacturers
3. Both A&B
4. None

When formulating an overall information technology strategy, which of the following aspects should be taken into consideration?

1. What are the key business areas which could benefit most from an investment in information technology?
2. What criteria for performance should be set for information technology systems?
3. What are the implications for the existing workforce – have they the requisite skills to use the new systems, can they be trained to use the systems, and will there be any redundancies?
4. All of the above

IT enhances competitive advantage as:

1. Reducing costs
2. Making it easier to differentiate products
3. Both A&B
4. None

The types of e-business strategy which a company can employ to help it gain a competitive advantage include:

1. Cost and efficiency improvements – focus on improving efficiency and lowering costs
2. Performance improvement in business effectiveness – make major improvements in business effectiveness
3. Product and service transformation – developing new internet-based products and services, or supporting entry into new markets
4. All of the above

The success of an organisation’s use of technology depends largely on how technology is selected, implemented and managed. For example, information systems may fail to deliver the benefits expected for reasons such as:

1. They are used to tackle the wrong problem (i.e. the use of IT has not been thought through in the context of the wider organisation).
2. Senior management are not interested.
3. Users are ignored in design and development.
4. All of the above

If an organisation develops and follows a realistic information strategy and information systems plan for information systems and technology then there is less chance that these problems will arise.

1. True
2. False

Business strategy should be subject to continuing review and development, it would be inappropriate to consider an information strategy as fixed and immutable. The continuing development of an information strategy might include the features such as:

1. There should be constant reference to the overall business strategy.
2. Compatibility of technologies should be carefully considered.
3. Where significant change is envisaged, it must be properly planned, possibly using a methodology such as Structured Systems Analysis and Design Methodology (SSADM).
4. All of the above

A successfully developed strategy will contribute to the success of the organisation. Its success may also be judged by the extent to which it performs specific functions such as:

1. Prediction and definition of major areas of strategic choice
2. Indication of the degree of common ground between business and information managers on such matters as strategic assumptions, objectives and policies
3. Timely identification of the information resources required to implement the business strategy
4. All of the above

Earl’s ‘legs’ of IS strategy development are:

1. Business led (top down emphasis, focuses on business plans and goals)
2. Infrastructure led (bottom up emphasis, focuses on current systems)
3. Mixed (inside out emphasis, focuses on IT/IS opportunities)
4. All of the above

Enterprise Analysis – involves examining the entire organisation in terms of structure, processes, functions and data elements to identify the key elements and attributes of organisational data and information.

1. True
2. False

Organisations need to have information systems in place to capture information about how well they are performing. Critical success factors (CSFs) can be used to determine an organisation’s information requirements.

1. The above statement is correct
2. The above statement is incorrect

Managers need information for:

1. To make effective decisions
2. To control the activities of the organization
3. To co-ordinate the activities of the organization
4. All of the above

The key steps of the management control process can be summarised as:

1. Establish measurable standards of performance or goals
2. Measure actual performance
3. Compare actual performance against established goals
4. Evaluate the results and take corrective action where necessary
5. All of the above

The stages in making a decision are:

1. Problem recognition
2. Problem definition and structuring
3. Identifying alternative courses of action
4. Making and communicating the decision
5. Implementation of the decision
6. Monitoring the effects of the decision

1. (I) (III) and (IV) only
2. (II) (III) and (V) only
3. All of the above
4. None

Which of the following is correct?

1. Perfect information – is information that predicts the future with perfect accuracy.
2. Imperfect information – is information which cannot be guaranteed to be completely accurate. Almost all information is, therefore, imperfect – but may still be very useful
3. Both A&B
4. None

In order to be useful, control information must aid the decision-making process. However, information is often imperfect, because it is impossible to predict the future with perfect accuracy.

1. True
2. False

Data and information come from sources both inside and outside an organisation. An organisation’s information systems should be designed so as to obtain – or capture – all the relevant data and information required.

1. The above statement is correct
2. The above statement is incorrect

Capturing data and information from inside the organisation involves designing a system for collecting or measuring data and information which sets out procedures for:

1. What data and information is collected, By whom
2. How frequently, By what methods
3. How data and information is processed, filed and communicated
4. All of the above

Formal collection of data from outside sources includes:

1. Market research exercises.
2. A company’s tax specialists will be expected to gather information about changes in tax law and how this will affect the company.
3. Both A&B
4. None

Sources of external information include:

1. The government
2. Annual reports and press statements of competitors or other firms
3. Advice or information bureau and Consultants
4. All of the above

Knowledge management – The aim of knowledge management is to capture, organise and make widely available all the knowledge the organisation possesses, whether in recorded form or in people’s heads.

1. The above statement is correct
2. The above statement is incorrect

Which of the following is correct?

1. The aim of knowledge management is to exploit existing knowledge and to create new knowledge so that it may be exploited in turn.
2. Knowledge management is the systematic process of finding, selecting, organising, distilling and presenting information so as to improve comprehension of a specific areas of interest.
3. Both A&B
4. None

Organisational Knowledge is the collective and shared experience accumulated through systems, routines and activities of sharing across the organisation.

1. True
2. False

____________ is personal, specific to context and hard to articulate.

1. Tacit knowledge
2. Explicit knowledge
3. Organisational learning
4. None

____________ is codified and easy to transmit in formal terms.

1. Tacit knowledge
2. Explicit knowledge
3. Organisational learning
4. None

Nonaka and Takeuchi describe several ways in which knowledge moves within and between the tacit and explicit categories including:

1. Socialisation is the informal process by which individuals share and transmit their tacit knowledge.
2. Externalisation converts tacit knowledge into explicit knowledge, thereby presenting it in a form that can be readily communicated.
3. Combination brings together separate elements of explicit knowledge and restructures them.
4. All of the above

Knowledge management can help promote competitive advantage through:

1. The fast and efficient exchange of information
2. Effective channelling of the information to Improve processes, productivity and performance
3. Both A&B
4. None

A Learning Organisation is capable of continual regeneration from the variety of knowledge, experience and skills of individuals within a culture that encourages mutual questioning and challenge around a shared purpose or vision.

1. The above statement is correct
2. The above statement is incorrect

Which of the following is correct regarding “Learning organisation”?

1. A learning organisation emphasises the sharing of information and knowledge both up and down the normal communication channels and horizontally through social networks and interest groups.
2. It challenges notions of hierarchy and managers are facilitators rather than controllers.
3. Learning organisations are continuously aware of, and interact with, their environments.
4. All of the above

A learning organisation should exhibit features such as:

1. Knowledge is transferred quickly and efficiently throughout the organisation.
2. Individual performance is linked with organisational performance.
3. Learning and development isn’t seen as the preserve of a single organisational function (such as the HR department) but is regarded as a cross-departmental responsibility.
4. All of the above

Individuals acquire knowledge in a variety of ways including:

1. Education and training
2. Experience of work
3. Observation of others
4. Informal exchanges such as coaching and brain storming
5. All of the above

Which of the following is correct?

1. Groupware is ‘a collection of tools to assist collaborative work in an organisation’.
2. Groupware products are designed to assist communication between members of a group, and capture information that the group is working with.
3. Groupware provides such facilities as discussion databases and message boards, appointment scheduling, to-do lists, and jotters.
4. All of the above

Which of the following is correct?

1. An intranet is an internal network used to share information using internet technology and protocols. The firewall surrounding an intranet fends off unauthorised access from outside the organisation.
2. An extranet is a collaborative network which uses internet technology to join organisations. Extranets may be divided into intronets and supranets.
3. Both A&B
4. None

Expert system –

1. An expert system is a computer program that captures human expertise in a limited domain of knowledge.
2. It uses a knowledge base that consists of facts, concepts and the relationships between them and uses pattern-matching techniques to solve problems.
3. Both A&B
4. None

An organisation that wishes to exploit its knowledge resource strategically should take a strategic approach. Which of the following is correct?

1. A top-down strategy uses the overall strategic plan to identify the areas in which knowledge can be best exploited.
2. A bottom-up strategy is based on research into existing key business processes in order to determine important needs and issues.
3. Both A&B
4. None

In terms developing and implementing a knowledge management strategy, the steps to consider include:

1. Support from senior management
2. Installing the IT infrastructure
3. Developing the databases and a sharing culture
4. Capturing and using the knowledge
5. All of the above

Potential issues in implementing a knowledge management system include:

1. The current structure and culture of an organisation may not be conducive to sharing knowledge.
2. There may be significant costs associated with installing a suitable network which allows information to be stored and accessed.
3. Resistance to change – Staff in different areas of an organisation may already have their own preferred ways of organising data.
4. All of the above

There is a hierarchy between data, information and knowledge, and knowledge is the most useful as a source of competitive advantage.

1. True
2. False

A database is a collection of data organised to service many applications. The database provides convenient access to data for a wide variety of users and user needs.

1. True
2. False

Database Management System (DBMS) –

1. A Database Management System (DBMS) is the software that centralises data and manages access to the database.
2. It is a system which allows numerous applications to extract the data they need without the need for separate files.
3. Both A&B
4. None

The characteristics of a database system include:

1. Different users are able to access the same data for their own processing applications.
2. Controls to preserve the integrity of the database. Users should not be able to alter the data on file so as to spoil the database records for other users.
3. Flexibility – The database system should provide for the needs of different users, who each have their own processing requirements and data access methods.
4. All of the above

The advantages of a database system are:

1. Avoidance of unnecessary duplication of data
2. Data is held independently of the programs that access the data
3. Developing new application programs with a database system is easier as a central pool of data is already available to be drawn upon.
4. All of the above

The disadvantages of a database systems relate mainly to security and control and these include:

1. There are potential problems of data security and data privacy. Administrative procedures for data security should supplement software controls.
2. Initial development costs may be high.
3. For hierarchical and network structures, the access paths through the data must be specified in advance.
4. All of the above

Databases can be used in conjunction with a variety of tools and techniques, e.g. Decision support systems, Executive information systems, data warehousing, and data mining.

1. True
2. False

Which of the following is correct?

1. Databases provide convenient access to data for a wide variety of uses and users’ needs.
2. Databases can be used in strategic planning, and play an important role in database marketing.
3. Both A&B
4. None

What is Big Data?

1. Big Data – with its characteristics of volume, velocity and variety – encapsulates the opportunities and challenges which the new sources of data present to organisations.
2. Big Data is ‘high-volume, high velocity and high-variety information assets that demand cost-effective, innovative forms of information processes for enhanced insight and decision making.’
3. Both A&B
4. None

Which of the following is correct?

1. Big Data analytics – refers to the ability to analyse and reveal insights in data which had previously been too difficult or costly to analyse – due to the volume and variability of the data involved.
2. The aim of big data analytics is to extract insights from unstructured data or from large volumes of data.
3. Both A&B
4. None

The broad ways in which Big Data can create value for organisations include:

1. Creating transparency – Making data more easily accessible to relevant stakeholders, in a timely manner, can create value in its own right.
2. Decision making – The sophisticated analytics tools which are used to uncover previously hidden patterns and trends in data could also be used to improve decision making.
3. New products and services – Companies can use data about social trends and consumer behaviours to create new products and services to meet customers’ needs, or to enhance existing products and services.
4. All of the above

The goals of Knowledge-based organisations in relation to knowledge management are:

1. To ensure that knowledge from one part of an organisation is applied to activities in other parts of the organization
2. To ensure that knowledge is shared over time so that the organisation benefits from past experience
3. To facilitate people from different parts of the organisation collaborating to create new knowledge
4. To provide opportunities and incentives for experimentation and learning
5. All of the above

Technology (and digital transformation) can drive business value in several different ways including:

1. Enhanced connectivity
2. Automation of manual tasks
3. Improved decision making
4. Product or service innovation
5. All of the above

Which of the following is correct regarding ‘E-commerce’?

1. E-commerce challenges traditional business models, makes global markets available to small businesses, transforms transparency of pricing, and offers new opportunities for market segmentation.
2. E-commerce is the use of electronic techniques, including the internet, to sell products and services.
3. Both A&B
4. None

There are several features of the internet which make it radically different from traditional ‘offline’ business models such as:

1. It supplies an almost incredible level of speed of communication, giving virtually instant access to organisations, plus the capacity to complete purchasing transactions within seconds.
2. 24-hour access. Customers have access to a website 24 hours a day, 7 days a week. So, an online ‘shop’ is never closed.
3. It has created new and cheaper networks of communication – between organisations and their customers.
4. All of the above

The main categories of E-commerce are:

1. B2B (Business-to-Business) – involves companies doing business with each other.
2. B2C (Business-to-Consumer) – involves businesses selling to the general public.
3. C2B (Consumer-to-Business) – a consumer posts their project with a set budget online and within hours companies review the consumer’s requirements and bid on the project.
4. C2C (Consumer-to-Consumer) – where consumers sell their goods and services to other consumers. (e.g. eBay)
5. All of the above

Disadvantages of e-commerce are:

1. E-commerce involves an unusual mix of people – security, web technology, designers, marketing people – and this can be very difficult to manage.
2. The e-business needs supervision by expensive specialists.
3. The legal issues surrounding e-commerce are complex and still developing.
4. All of the above

The characteristics which differentiate e-marketing from traditional marketing include:

1. Independence of location – global communications potentially allow access to markets that couldn’t be reached before
2. Industry structure – redesigning business processes; redrawing market segments
3. Integration – sharing customer feedback and customer requirements throughout the whole business
4. Interactive – customers can seek information and initiate dialogue rather than receiving marketing information
5. Individualisation – communications can be tailored to specific customers, rather than sending one standard message to everyone
6. Intelligence – information gathered about customer perceptions of products and services can be used to help shape marketing strategy

1. (I) (III) and (IV) only
2. (II) (IV) and (VI) only
3. All of the above
4. None

The internet and e-commerce allow organisations to challenge traditional business models, and have changed the relationship between vendors and customers. However, a business’ e-commerce strategy needs to be consistent with its overall business strategy.

1. The above statement is correct
2. The above statement is incorrect

Which of the following is correct regarding “Web 2.0 technologies”?

1. Web 2.0 technologies is a collection of technologies that have spread rapidly among consumers in recent years.
2. Web 2.0 technologies can provide firms with opportunities in a range of activities – from market research, marketing, collaboration, innovation and design.
3. Web 2.0 allows people across the world to connect with each other 24 hours a day, 365 days a year.
4. All of the above

Web 2.0 plays an important role in this ‘knowledge economy’ through supporting creativity, collaboration, knowledge sharing, and ultimately, innovation.

1. True
2. False

Web-based communities are enhanced by:

1. Social networking sites – The value of these sites is that they allow users to connect with others with whom they share a common interest.
2. Blogs – Blogs provide an easy way for users to publish their own content, and are usually text based.
3. Both A&B
4. None

Web 2.0 technologies encourage the socialisation of knowledge sharing through:

1. Tagging of information
2. Mashups – A mashup is a web publication that combines data from more than one source into a single web page.
3. Feedback on sources of information
4. All of the above

Enterprise 2.0 –

1. Enterprise 2.0 technology enables businesses to work across the web, regardless of location.
2. This increases the use of virtual teams (involving people inside and outside a business) to identify and exploit new business opportunities.
3. Both A&B
4. None

Web 2.0 technologies allow businesses new ways of interacting with customers, suppliers and staff.

1. True
2. False

The main choice about organising the IT specialists is whether they should be centralised or decentralised. Which of the following is correct?

1. A centralised IS/IT department involves all IS/IT staff and functions being based at a single central location, such as head office.
2. A decentralised IS/IT department involves IS/IT staff and functions being spread out throughout the organisation.
3. Both A&B
4. None

Advantages of a centralised IS/IT department include:

1. It gives better security/control over data and files so it is easier to enforce standards.
2. Head office is in a better position to know what is going on.
3. Computer staff are in a single location, more expert staff are likely to be employed and career paths may be more clearly defined.
4. All of the above

Disadvantages of a centralised IS/IT department include:

1. Local offices might have to wait for IS/IT services and assistance.
2. Reliance on head office, so local offices are less self-sufficient.
3. A system fault at head office will impact across the organisation.
4. All of the above

Advantages of a decentralised IS/IT department are:

1. Each office is more self-sufficient.
2. Offices are likely to have quicker access to IS/IT support/advice.
3. A decentralised structure is more likely to facilitate accurate IS/IT cost/overhead allocations.
4. All of the above

Disadvantages of a decentralised IS/IT department are:

1. Control may be more difficult – different and uncoordinated information systems may be introduced.
2. Self-sufficiency may encourage a lack of co-ordination between departments.
3. Increased risk of data duplication, with different offices holding the same data on their own separate files.
4. All of the above

Which of the following is correct?

1. An Information Centre (IC) is a small unit of staff with a good technical awareness of computer systems, whose task is to provide a support function to computer users within the organisation.
2. Information centres, sometimes referred to as support centres, are particularly useful in organisations which use distributed systems and so are likely to have hardware, data and software scattered throughout the organisation.
3. Both A&B
4. None

The Information centres (IC) is also likely to be responsible for setting, and encouraging users to conform to, common standards. Which of the following is correct?

1. Hardware standards ensure that all of the equipment used in the organisation is compatible and can be put into use in different departments as needed.
2. Software standards ensure that information generated by one department can easily be shared with and worked upon by other departments.
3. Programming standards ensure that applications developed by individual end-users (for example complex spreadsheet macros) follow best practice and are easy to modify.
4. All of the above

The IC may help to preserve the security of data in various ways such as:

1. It may develop utility programs and procedures to ensure that back-ups are made at regular intervals.
2. The IC may help to preserve the company’s systems from attack by computer viruses, for instance by ensuring that the latest versions of anti-virus software are available to all users.
3. Both A&B
4. None

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MCQs on Information systems and strategy – Strategic Management

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MCQs on Information systems and strategy