Chapter 17Understanding and AnalyzingConsolidated Financial Statements LEARNING OBJECTIVES:When your students have finished studying this chapter, they should be able to:1. Contrast accounting for investments using the equity method and the market–valuemethod.2. Explain the basic ideas and methods used to prepare consolidated financial statements.3. Describe how goodwill arises and how to account for it.4. Use financial statements analysis to evaluate an organization’s performance5. Explain and use a variety of popular financial ratios.6. Identify the major implications that efficient stock markets have for accounting.CHAPTER 17: ASSIGNMENTSCRITICAL THINKING EXERCISES25. Market Method, Equity Method, and Total Assets26. Depreciation in Consolidated Financial Statements27. Just-in-Time (JIT) Inventory and Current Ratio28. Market EfficiencyGENERAL EXERCISES and PROBLEMS29. Equity Method30Consolidated Financial Statements31.Determination of Goodwill32.Purchased Goodwill33.Amortization and Depreciation34.Allocating Total Purchase Price to Assets35.Preparation of Consolidated Financial Statements36.Intercorporate Investments and Ethics37.Profitability Ratios38.Financial RatioUNDERSTANDING PUBLISHED FINANCIAL REPORTS39.Meaning of Account Descriptions40.Classification on Balance Sheet41.Effects of Transactions Under the Equity Method42.Noncontrolling Interests43.General Electric and GECS44.Goodwill45.Accounting for Goodwill46.Income Ratios and Asset Turnover47.Financial Ratios48.Nike 10-K Problem: Using Consolidated Financial StatementsEXCEL APPLICATION EXERCISE49. Calculating Financial RatiosCOLLABORATIVE LEARNING EXERCISE50. Financial RatiosINTERNET EXERCISE51. General Electric’s Annual Report()CHAPTER 17: OUTLINEPart One: Intercorporate Investments Including ConsolidationsFirms often invest in the equity securities of other companies. The investor may be simply investing excess cash, or he may be seeking some degree of control over the investee. There are three methods of accounting for intercorporate investments: the equity and market methods and consolidation.An investor that holds less than 20% of another company is assumed to be a passive investor—it cannot significantly influence the decisions of the investee—and it uses the market method. Investors with between 20% and 50% interest use the equity method.At this level of ownership, the investor has the ability to exert significant influence on the investee. Firms with an interest in excess of 50% must use the consolidation approach.I. Market Value and Equity Methods{L. O. 1}A.Market-Value Method—records the initial investment on the balancesheet at fair market value (FMV). Such investments are often calledmarketable securities in the financial statements. Trading Securities—investments that the company buys only with the intent to resell themshortly. Available-for-Sale Securities—investments that the companydoes not intend to sell in the near future. Changes in market value oftrading securities are reported as gains (increase in FMV) or losses(decrease in FMV), whereas available-for-sale securities have theirunrealized gains or losses shown in a separate valuation allowanceaccount in the stockholders’equity section of the balance sheet. (SeeEXHIBIT 17-1)B.Equity Method—accounts for the investment at the acquisition costadjusted for the investor’s share of dividends and earnings or losses ofthe investee after the date of investment. Investors increase the carryingamount of the investment by their share of investee’s earnings andreduce the carrying amount by dividends received from the investeeand by their share in investee’s losses.II. Consolidated Financial Statements {L. O. 2}Parent Company—the company owning more than 50% of the other business’s stock.Subsidiary—the company whose stock is owned by the other business. Although parent and subsidiary companies typically are separate legal entities, in many regardsthey function as one unit. Consolidated Financial Statements—financial statements that combine the financial statements of the parent company with those of various subsidiaries.A.The AcquisitionWhen a parent acquires a subsidiary, the evidence of interest is recorded asInvestment in Subsidiary. When the consolidated statements are prepared,they cannot show both the evidence of interest and the underlying assets andliabilities of the subsidiary. To avoid such double-counting, the reciprocalevidence of ownership present is eliminated in two places: (1) the Investmentin Subsidiary on the parent company’s books and (2) the Stockholders’ Equityon the subsidiary company’s books. The entries necessary to accomplish thisare called eliminating entries.III. Recognizing Income After AcquisitionLong-term investments in equity securities (e.g., the investments in a subsidiary) are carried in the investor’s balance sheet by the equity method. The income generated bya subsidiary is recognized by the parent company as an increase in an account titledInvestment in Subsidiary.A. Noncontrolling InterestsWhen a parent holds less than 100% of the stock of a subsidiary, aconsolidated balance sheet includes an account on the equities side calledNoncontrolling Interests in Subsidiaries, or simply Noncontrolling Interests—the account that shows the outside stockholders’interest, as opposed to theparent’s interest, in a subsidiary corporation.B. Perspective on Consolidated StatementsSee EXHIBIT 17-2 and EXHIBIT 17-3for an illustration of howinvestments in subsidiaries are presented in companie s’ annual reports. Theheadings of the statements indicate that they are consolidated statements. Onbalance sheets, the minority interest typically appears just above thestockholders’ equity section. On income statements, the minority interest inthe net income is deducted as if it were an expense of the consolidated entityafter all the other expenses are listed. Investments in Affiliates(orInvestments in Associates)—listed as an asset on the balance sheet and reflectthe purchase cost and interests in income or loss of investees. The FASBrequires all subsidiaries to be consolidated. The major reason for forcingconsolidation is to provide a more complete picture of the economic entity.See EXHIBIT 17-4for a summary of the accounting for different levels ofinvestment in subsidiaries.C. Accounting for Goodwill {L. O. 3}In CHAPTER 16, goodwill is defined as the excess of cost over fair value ofnet identifiable assets of businesses acquired. The purchase price of asubsidiary often exceeds its book value. In fact, it frequently exceeds the sum ofthe fair market values of the identifiable individual assets less the liabilities.When the amount paid exceeds the book values, the assets will be valued attheir fair market values for the consolidated statements. Any amounts paidabove the fair market values of the individual assets are carried as goodwill inthe consolidated financial statements.A purchaser may be willing to pay more than the current values of theindividual assets received because the acquired company is able to generateabnormally high earnings. The causes of this excess earnings power may betraced to personalities, skills, locations, operating methods, and so forth.“Goodwill”is originally generated internally. For example, a happycombination of advertising, research, management talent, and timing may give aparticular company a dominant market position for which another company iswilling to pay dearly. This ability to command a premium price for the totalbusiness is goodwill. The selling company will never record goodwill.Therefore, the only goodwill recognized as an asset is that identified when onecompany is purchased by another.Part Two: Analysis of Financial StatementsCareful analysis of financial statements can help decision makers evaluate an organization’s past performance and predict its future performance. Financial statements of Microsoft Corporation in EXHIBIT 17-5 and EXHIBIT 17-6 are used to focus on financial statement analysis.Investors analyze financial statements in order to decide whether to buy, sell, or hold common stock. Managers and the financial community (e.g., bank officers and stockholders) use them as clues to help evaluate the operating and financial outlook for an organization. Budgets or pro forma statements, carefully formulated expressions of predicted results including a schedule of the amounts and timings of cash repayments, are helpful to creditors. They want assurances of being paid in full and on time.IV. Component PercentagesComponent Percentages—analysis and presentation of financial statements in percentage form to aid comparability, and is frequently used when comparing companies that differ in size (see EXHIBIT 17-7). The resulting statements are called Common-Size Statements.Income statement percentages are usually based on sales = 100%. Comparing the gross margin rate or the net income percentage with those of other firms in the industry or with prior years may be useful. Better yet, a comparison of these percentages (along with those for other items on the income statement) with what was budgeted for the current year may help in diagnosing what changes created better or worse results.Balance sheet percentages are usually based on total assets = 100%. One can see the shifts in the composition of assets between current and long term. In addition, one can see shifts in the equities side of the balance sheet between current liabilities, noncurrent liabilities, and stockholders’ equity.V. Use of Ratios {L. O. 4}See EXHIBIT 17-8for how typical ratios are computed from financial statements.Many more ratios could be computed. For example, Standard & Poor’s Corporation sells a COMPUSTAT service. Via computer, COMPUSTAT can provide financial and statistical information for thousands of companies. The information includes 175 financial statement items on an annual basis and 100 items on a quarterly basis, plus limited footnote information. The SEC makes annual financial statements available online in its Edgar database (/edgar.shtml). The ratios shown in EXHIBIT 17-8 are as follows:TYPICAL NAME NUMERATOR DENOMINATOR OF RATIOShort-Term Ratios:Current ratio Current assets Current liabilitiesAvg. collection periodin days Avg. A/R x 365 Sales on account Debt-to-Equity Ratios:Current debt to equity Current liabilities Stockholders’ equity Total debt to equity Total liabilities Stockholders’ equity Profitability Ratios:Gross profit rate or Gross profit orpercentage gross margin SalesReturn on sales Net income SalesReturn on stockholders’Net income Averageequity stockholders’ equity Earnings per share Net income less Avg. common sharesdividends on P/S outstanding Price earnings Market price per Earnings per shareshare of common stockDividend Ratios:Dividend yield Dividends per Market price percommon share common share Dividend payout Dividends per Earnings per sharecommon shareA. Comparisons {L. O. 5}Evaluation of a financial ratio requires a comparison. There are three main types of comparisons: (1) Time Series Comparisons—with a company’s own historical ratios (e.g., for 5 to 10 years); (2) Benchmark Comparisons—general rules of thumb (e.g., there is trouble if a company’s current debt is at least 80% of its tangible net worth); and (3) Cross-Sectional Comparisons—ratios of other companies or with industry averages from Dun and Bradstreet. Comparisons for the Microsoft Company data across years, against benchmarks, and to the industry are presented.B. Discussion of Specific RatiosThe current ratio is a widely used statistic. Other things being equal, the higher the current ratio, the more assurance the creditor has about being paid in full and on time. The average collection period in days is another important short-term ratio. An increase in this ratio might indicate increasing acceptance of poor credit risks or less energetic collection efforts.Both creditors and shareholders watch the debt-to-equity ratios to judge the degree of risk of insolvency and stability of profits. Companies with heavy debt in relation to ownership capital are in greater danger of suffering net losses or even bankruptcy when business conditions sour, revenues and many expenses decline, but interest expenses and maturity dates do not change.Investors find profitability ratios especially helpful. The gross profit rate and return on sales are both measures of operating success. Shareholders view the return on their invested capital as more important. The return on equity provides a measure of overall accomplishment.The final four ratios in EXHIBIT 17-8 are based on earnings and dividends.The first, earnings per share of common stock (EPS), is the most popular of all ratios. This is the only ratio that is required as part of the body of the financial statements of publicly held companies in the United States. The EPS must be presented on the face of the income statement. The calculation of EPS can be more complicated than is indicated in EXHIBIT 17-8depending on the capital structure of the firm and the presence of common-stock equivalents.The price earnings, dividend yield, and dividend payout ratios are especially useful to investors in the common stock of the company.C. Operating Performance RatiosBusinesspeople often look at invested capital’s rate of return as an importantmeasure of overall accomplishment:rate of return on investment = income / invested capitalThe measurement of operating performance (i.e., how profitably assets areemployed) should not be influenced by the management’s financial decisions(i.e., how assets are obtained). Operating performance is best measured bypretax operating rate of return on average total assets:pretax operating rate = operating incomeof return on average total assets average total assetsThe right-hand side of the equation above consists of two important ratios:operating inc. = operating income x salesavg. total assets sales avg. tot. assets The right-hand side terms in the equation above are often called the operatingincome percentage on sales and total asset turnover (i.e., the two basic factorsin profit making). An improvement in either will, by itself, increase the rate ofreturn on total assets.If ratios are used to evaluate operating performance, they should excludeextraordinary items. Such items are not expected to recur, and therefore theyshould not be included in measures of normal performance.VI. Efficient Markets and Investor Decisions {L. O. 6}Much research in accounting and finance has concentrated on whether the stock markets are “efficient”.Efficient Capital Market—market prices “fully reflect”all information available to the public. Therefore, searching for “underpriced” securities in such a market would be fruitless, unless an investor has information that is not generally available. If the real-world markets are indeed efficient, a relatively inactive portfolio approach would be an appropriate investment strategy for most investors.The hallmarks of the approach are risk control, high diversification, and low turnover of securities. The role of accounting information would mainly be in identifying the different degrees of risk among various stocks so that investors can maintain desired levels of risk and diversification.Many ratios are used simultaneously rather than one at a time for such predictions. Research showed that accounting reports are only one source of information. In the aggregate, companies that choose the least-conservative accounting policies do not fool the market. In sum, the market as a whole generally sees through any attempts by companies to gain favor through the choice of accounting policies that tend to boost immediate income.Some alternative sources of financial information are the following: company press releases, trade association publications, brokerage house analyses, and government economic reports. If accounting reports are to be useful, they must have some advantage over alternative sources in disclosing new information. Financial statement information may be more directly related to the item of interest, more reliable, lower in cost, and/or more timely than alternative sources.CHAPTER 17: Quiz/Demonstration ExercisesLearning Objective 11. The Colts Corporation has acquired a 10% interest in the shares of GiantsCorporation. Colts reported income for 20X1 of $25 million and issued dividends of $10 million during the year. Becaise Colts use the available for sale method of accounting for their investment in Giants, for 20X1 the value of their income will _____.a. increase by $25 million, the amount of Giants earningsb. increase by $1 million, the dividends paid by Giants to Coltsc. decrease by $10 million, the amount Giants paid out in dividendsd. increase by $1.5 million, Colts’ share in the earnin g s of Giants reduced by theirshare of the dividends paid out2. The Raiders Corporation owns 40% of the outstanding shares of the WarriorsCorporation. During 20X1, Warriors reported income of $25 million and paid dividends of $10 million to shareholders. Raiders use the equity method to account for their investment in Warriors. Accordingly, the value of their Warriors investment during 20X1 will increase by _____.a. $14 million, the sum of the dividends received by Raiders and their share inthe earnings of Warriorsb. $6 million, Raiders’ share in earnings of Warriors reduced by the dividendsreceivedc. $4 million, the dividends paid by Warriors to Raidersd. $10 million, Raiders’ share in the earnings of WarriorsLearning Objective 23. When a company purchases more than 50% of the stock of another business, the twocompanies’ financial statements must be presented _____.a. separately in the same annual report with the nature of the ownership interestfully disclosedb. in two separate sets of financial statements that cannot appear in the sameannual reportc. in the form of consolidated financial statements after eliminating entries arerecorded to avoid the double counting of assets and equityd. together regardless of whether the ownership interest continues4. Taylor Company owns 90% of the outstanding shares of Turner Company. If TurnerCompany reports earnings for the year of $20 million, the consolidated financial statements will show a _____ million increase in the _____.a. $20; consolidated sh areholders’ equityb. $2; noncontrolling interest in Turnerc. $20; consolidated net assetsd. $20; noncontrolling interest in TurnerLearning Objective 35. Goodwill is recognized for accounting purposes _____.a. when a business is purchased for a price that exceeds the fair market value ofits assets less liabilitiesb. every year as long as the IRS does not objectc. when the value of a business exceeds its historical cost book valued. when a business is purchased for a price that exceeds the book value of itsassets less liabilities6.Goodwill may be caused by _____.a.excellent general management skillsb.potential efficiency by rearrangementc.dominant market positiond.all of the abovee.none of the aboveLearning Objective 5Use the comparative balance sheets and income statements below for the Louise Company in answering questions 7 through 10:Louise CompanyComparative Balance SheetsDecember 31, 20X1 and 20X220X1 20X2AssetsCash $ 61,100 $ 27,200Accounts Receivable (net) 72,500 142,700Inventory 122,600 107,800Property, Plant, and Equipment (net) 577,700 507,500Total Assets $833,900 $785,200Liabilities and Stockholders’ EquityAccounts Payable $104,700 $ 72,300Notes Payable within one year 50,000 50,000Bonds Payable 200,000 210,000Common Stock—$10 par value 300,000 300,000Retained Earnings 179,200 152,900Total Liabilities and Stockholders Equity $833,900 $785,200Louise CompanyComparative Income StatementsFor the Years Ended 12/31/X1 and 12/31/X220X2 20X1 Sales $ 800,400 $ 900,000Cost of Goods Sold 454,100 396,200Gross Profit $ 346,300 $ 503,800Operating ExpensesSelling Expenses $ 130,100 $ 104,600Administrative Expenses 40,300 115,500Interest Expense 25,000 20,000Income Tax Expense 14,000 35,000Total Operating Expenses $ 209,400 $ 275,100Net Income $ 136,900 $ 71,3007. The Louise Company’s current ratio for 20X2 was _____.a. 1.66b. 5.39c. 1.23d. 1.008. Louise Company’s total debt to equity ratio has _____.a. decreased from 0.74 to 0.73 from 20X1 to 20X2b. increase from 0.73 to 0.27 from 20X1 to 20X2c. decrease from 0.32 to 0.74 from 20X1 to 20X2d. increased from 0.27 to 0.32 from 20X1 to 20X29. Louise Company’s gross profit rate for 20X1 was _____.a. 20.58%b. 55.98%c. 46.65%d. 61.92%10. In 20X2, Louise Company’s return on sales was _____.a. 2.39%b. 4.61%c. 23,27%d. 17.10% Learning Objective 611. An efficient capital market _____.a. creates an opportunity for investors to spot “underpriced” securities usingpublicly available informationb. is one in which market prices “fully reflect” all information to the publicc. has no bearing on accounting statements and proceduresd. explains why some individuals are able to “beat the market” through the use ofpublicly available information12.If markets are truly efficient, then the proper portfolio includes which of the followingcharacteristics?a.high diversificationb.risk controlc.low turnover of securitiesd.all of the abovee.none of the aboveCHAPTER 17: Solutions to Quiz/Demonstration Exercises1. [b]The amount of dividends received will increase the dividend income account.2. [b]With the equity method, the investor recognizes his share in earnings, butreduces the investment by the amount of dividends received.3. [c]Consolidated financial statements must be issued when ownership exceeds50%.4. [b]The noncontrolling interest will be increased by its share in the earnings of thesubsidiary.5. [a]Goodwill is recorded for the amount by which the purchase cost exceeds thefair market value of the net assets obtained. First, the assets are written up totheir fair market values. Then any excess is recorded as goodwill, which isamortized over a period not exceeding 40 years.6. [d]7. [a]The current ratio is found by dividing the current assets by the current liabilities.Here current assets are $256,200 [$61,100 + $72,500 + $122,600] and currentliabilities are $154,700 [$104,700 + $50,000]. Therefore, the current ratio is1.66 [$256,200/$154,700].8. [b]In 20X1 the total debt-to-equity ratio was 0.73, which was computed as[($72,300 + $50,000 + $210,000) / ($300,000 + $152,900)]. In 20X2, the totaldebt-to-equity ratio has increased to 0.74 [($104,700 + $50,000 + $200,000) /($300,000 + $179,200)].9. [b]The gross profit rate is found by dividing the gross profit by sales. For 20X1,that would be $503,800 / $900,000 = 55.98%.10. [d]The return on sales is found by dividing the net income by sales. For 20X2,that was $136,900 / $800,400 = 17.10%.11. [b] 12. [d]。
APPENDIX B – GLOSSARY and ACRONYMS P AGE(S) 6GLOSSARYThe following is a list of abbreviations, acronyms and definitions used in the Behavioral Health Services manual chapter.Ambulatory Withdrawal Management with Extended On-Site Monitoring (ASAM Level 2 WM) - An organized outpatient addiction treatment service that may be delivered in an office setting or health care or behavioral health services provider by trained clinicians who provide medically supervised evaluation, detoxification and referral services. The services are designed to treat the client’s level of clinical severity to achieve safe and comfortable withdrawal from mood-altering chemicals and to effectively facilitate the client’s entry into ongoing treatment and recovery. The services are provided in conjunction with intensive outpatient treatment services (level II.1).ASAM - American Society of Addiction MedicineAssertive Community Treatment (ACT) - Services provided as interventions that address the functional problems of individuals who have the most complex and/or pervasive conditions associated with a major mental illness or co-occurring addictions disorder. These interventions are strength-based and focused on promoting symptom stability, increasing the individual’s ability to cope and relate to others and enhancing the highest level of functioning in the community.Child Specialist (Addiction Services)- An individual, who has documentation verifying the required minimum of 90 clock hours of education and training in child development and/or early childhood education.Clinically Managed High-Intensity Residential Treatment (ASAM Level 3.5) - A residential program that offers continuous observation, monitoring, and treatment by clinical staff designed to treat clients experiencing substance-related disorders who have clinically-relevant social and psychological problems, such as criminal activity, impaired functioning and disaffiliation from mainstream values, with the goal of promoting abstinence from substance use and antisocial behavior and affecting a global change in clients’ lifestyles, attitudes and values.Clinically Managed Low Intensity Residential Treatment (ASAM Level 3.1) – A residential program that offers at least five hours a week of a combination of low intensity clinical and recovery-focused services for substance-related disorders. Services may include individual, group and family therapy, medication management and medication education, and treatment is directed toward applying recovery skills, preventing relapse, improving emotional functioning, promoting personal responsibility and reintegrating the client into the worlds of work, education and family life (e.g., halfway house).APPENDIX B – GLOSSARY and ACRONYMS P AGE(S) 6 Clinically Managed Medium-Intensity Residential Treatment (ASAM Level 3.3 - A residential program that offers at least 20 hours per week of a combination of medium-intensity clinical and recovery focused services in a structured recovery environment to support recovery from substance-related disorders; is frequently referred to as extended or long term care.Clinically Managed Residential Social Withdrawal Management (ASAM LEVEL 3.2 WM) - An organized residential program utilizing 24 hour active programming and containment provided in a non-medical setting that provides relatively extended, sub-acute treatments, medication monitoring observation, and support in a supervised environment for a client experiencing non-life threatening withdrawal symptoms from the effects of alcohol/drugs and impaired functioning and who is able to participate in daily residential activities.Community Psychiatric Support and Treatment (CPST) - A comprehensive service which focuses on reducing the disability resulting from mental illness, restoring functional skills of daily living, building natural supports and solution-oriented interventions intended to achieve identified goals or objectives as set forth in the individualized treatment plan.Coordinated System of Care (CSoC) - An innovative reflection of two powerful movements in health care: coordination of care for individuals with complex needs and family-driven and youth-guided care. CSoC is guided by an overarching System of Care (SOC) philosophy and values, which include: family driven, youth guided, home and community based, strengths base, individualized, culturally and linguistically competent, integration across systems, connection to natural supports, data driven and outcomes oriented and unconditional care.Crisis Intervention (CI) - Services provided to a person who is experiencing a psychiatric crisis and are designed to interrupt and/or ameliorate a crisis experience, through a preliminary assessment, immediate crisis resolution and de-escalation and referral and linkage to appropriate community services to avoid more restrictive levels of treatment.Crisis Stabilization (CS) - Services intended to provide short-term and intensive supportive resources for the youth and his/her family. The intent of this service is to provide an out-of-home crisis stabilization option for the family in order to avoid psychiatric inpatient and institutional treatment of the youth by responding to potential crisis situations.EP - A service provided as part of Medicaid’s Early and Periodic Screening, Diagnosisand Treatment (EPSDT) program.FDA - Food and Drug Administration (FDA) is an agency within the U.S. Department of Health and Human Services. The FDA's organization consists of the Office of the Commissioner and four directorates overseeing the core functions of the agency: Medical Products and Tobacco, Foods, Global Regulatory Operations and Policy, and Operations.APPENDIX B – GLOSSARY and ACRONYMS P AGE(S) 6 Federally Qualified Health Center (FQHC) - An entity authorized under §330 of the Public Health Service (PHS) Act to receive grant funding to provide health care services and improve the health status of medically underserved populations.The U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA) certifies FQHC status.Functional Family Therapy (FFT) and Functional Family Therapy-Child Welfare (FFT-CW)- FFT and FFT-CW are deemed a best practice/family-based approach to providing treatment to youth who are between the ages of 10 and 18 (0 to 18 for FFT-CW) and are exhibiting significant externalizing behaviors. It is a systems-based model of intervention/prevention, which incorporates various levels of the member’s interpersonal experiences to include cognitive, emotional and behavioral experiences, as well as intrapersonal perspectives which focus on the family and other systems (within the environment) and impact the youth and his or her family system. FFT and FFT-CW re strengths-based models of intervention, which emphasize the capitalization of the resources of the youth, their family and those of the multi-system involved. Its purpose is to foster resilience and ultimately decrease incidents of disruptive behavior for the youth. More specifically, some of the goals of the service are to reduce intense/ negative behavioral patterns, improve family communication, parenting practices and problem-solving skill, and increase the family’s ability to access community resources.Homebuilders® - An intensive, in-home Evidence-Based Program (EBP) utilizing research based strategies (e.g. Motivational Interviewing, Cognitive and Behavioral Interventions, Relapse Prevention, Skills Training), for families with children (birth to 18 years) at imminent risk of out of home placement (requires a person with placement authority to state that the child is at risk for out of home placement without Homebuilders), or being reunified from placement. House Manager (Addiction Services) - A person who supervises activities of the facility when the professional staff is on call, but not on duty. This person is required to have adequate orientation and skills to assess situations related to relapse and to provide access to appropriate medical care when needed.Human Services Field- Academic program with a curriculum content in which at least 70 percent of the required courses are in the study of behavioral health or human behavior. Independent living/skills building services - Services designed to assist children who, are or will be, transitioning to adulthood beginning at the age of 14 years old with support in acquiring, retaining and improving self-help, socialization and adaptive skills necessary to be successful in the domains of employment, housing, education and community life and to reside successfully in home and community settings.Intensive Outpatient Treatment (ASAM Level 2.1)- Professionally directed assessment, diagnosis, treatment and recovery services provided in an organized non-residential treatment setting, including individual, group, family counseling and psycho-education on recovery as wellAPPENDIX B – GLOSSARY and ACRONYMS P AGE(S) 6 as monitoring of drug use, medication management, medical and psychiatric examinations, crisis mitigation coverage and orientation to community-based support groups. Services may be offered during the day, before or after work or school, in the evening or on a weekend, and the program must provide nine or more hours of structured programming per week for adults and six or more hours of structured programming per week for children/adolescents.Licensed Mental Health Professional (LMHP) - An individual who is licensed in the State of Louisiana to diagnose and treat mental illness or substance use, acting within the scope of all applicable State laws and their professional license. An LMHP includes the following individuals who are licensed to practice independently: Medical psychologists, licensed psychologists, licensed clinical social workers (LCSWs), licensed professional counselors (LPCs), licensed marriage and family therapists (LMFTs), licensed addiction counselors (LACs), and advanced practice registered nurses (APRNs). See Appendix B for further details. Medically Monitored Intensive Residential Treatment (ASAM Level 3.7) -Residential program that provides a planned regimen of 24-hour professionally directed evaluation, observation, medical monitoring and addiction treatment to clients with co-occurring psychiatric and substance disorders whose disorders are so severe that they require a residential level of care but do not need the full resources of an acute care hospital. The program provides 24 hours of structured treatment activities per week, including, but not limited to, psychiatric and substance use assessments, diagnosis treatment, and habilitative and rehabilitation services.Medically Monitored Residential Withdrawal Management (ASAM Level 3.7 WM)- A residential program that provides 24-hour observation, monitoring and treatment delivered by medical and nursing professionals to clients whose withdrawal signs and symptoms are moderate to severe and thus require residential care, but do not need the full resources of an acute care hospital.Medically Necessary Services- Health care services that are in accordance with generally accepted evidence-based medical standards or that are considered by most physicians (or other independent licensed practitioners) within the community of their respective professional organizations to be the standard of care. With regards to behavioral health services, the medical necessity for services shall be determined by an LMHP or physician who is acting within the scope of their professional license and applicable state law.Multi-Systemic Therapy (MST) - Services that provide an intensive home/family and community-based treatment for youth who are at risk of out-of-home placement or who are returning from out-of-home placement.Outpatient Therapy by Licensed Practitioners - Other Licensed Practitioner Outpatient Therapy - Individual, family, and group outpatient psychotherapy, mental health assessment, evaluation, testing, medication management, psychiatric evaluation, medication administration, individual therapy with medical evaluation and management and case consultation.APPENDIX B – GLOSSARY and ACRONYMS P AGE(S) 6 Parent Support and Training (PST) -Training designed to benefit the parent/primary caregiver of Medicaid-eligible child/youth experiencing a severe emotional disorder (SED) who is eligible for the CSoC and is at risk of out-of-home placement. This service provides the training and support necessary to ensure engagement and active participation of the family in the treatment planning process and with the ongoing implementation and reinforcement of skills learned throughout the treatment process.Psychosocial Rehabilitation (PSR)- Services designed to assist the individual with compensating for or eliminating functional deficits and interpersonal and/or environmental barriers associated with their mental illness.Qualified Professional Supervisor- State regulations require supervision of unlicensed professionals by a qualified Professional Supervisor (QPS) for addiction services. A QPS includes the following professionals, who are currently registered with their respective Louisiana board: Licensed psychologist; Licensed clinical social worker (LCSW); Licensed professional counselor (LPC); Licensed addiction counselor; Licensed physician; or Advanced practice registered nurse.Rural Health Clinic (RHC) - An entity authorized under the Rural Health Clinic (RHC) Act of 1977 to encourage and stabilize the provision of outpatient primary care in rural areas through cost-based reimbursement. These entities may be independent (a free-standing practice that is not part of a hospital, skilled nursing facility or home health agency) or provider-based (an integral and subordinate part of a hospital, skilled nursing facility or home health agency).Short term respite care- Temporary direct care and supervision for the child/youth in the child’s home or a community setting that is not facility-based (i.e., not provided overnight in a provider-based facility).Unlicensed professionals (UPs)- Unlicensed professionals of addiction services must be registered with the Addictive Disorders Regulatory Authority (ADRA) and demonstrate competency as defined by the Louisiana Department of Health (referenced above), state law (RS 37:3386 et seq.) and regulations. Unlicensed addiction provider must meet at least one of the following qualifications: 1) Master’s‐prepared behavioral health professional that has not obtained full licensure privileges and is participating in ongoing professional supervision. When working in addiction treatment settings, the master’s prepared UP shall be supervised by an LMHP, who meets the requirements of this Section; 2) be a registered addiction counselor; 3) be a certified addiction counselor; 4) be a counselor in training (CIT) that is registered with ADRA and is currently participating in a supervisory relationship with an ADRA‐registered certified clinical supervisor.Youth Support and Training (YST) services – Delivered by a trained you peer, child/youth-centered services that provide the training and support necessary to ensure engagement andAPPENDIX B – GLOSSARY and ACRONYMS P AGE(S) 6 active participation of the youth in the treatment planning process and with the ongoing implementation and reinforcement of skills learned throughout the treatment process.。
Essentials of Management Information Systems, 9e (Laudon/Laudon)Chapter 2 Global E-Business and Collaboration1) Senior management is responsible for directing the day-to-day activities of the business. Answer: FALSEDiff: 1 Page Ref: 44-45AACSB: Reflective ThinkingCASE: Comprehension2) Operational-level manufacturing systems deal with the firm's long-term manufacturing goals, such as where to locate a new plant.Answer: FALSEDiff: 2 Page Ref: 45AACSB: Analytic SkillsCASE: Analysis in terms of categorize, differentiate3) Transaction processing systems are most commonly encountered at the senior management level of an organization.Answer: FALSEDiff: 2 Page Ref: 47AACSB: Reflective ThinkingCASE: Comprehension4) TPS help managers monitor the firm's relations with the external environment.Answer: TRUEDiff: 3 Page Ref: 48AACSB: Reflective ThinkingCASE: Comprehension5) A hotel reservation system is a typical example of a management information system. Answer: FALSEDiff: 2 Page Ref: 48-49AACSB: Analytic SkillsCASE: Analysis in terms of categorize6) The decision to grant credit to a customer is normally made by a senior manager. Answer: FALSEDiff: 2 Page Ref: 47AACSB: Reflective ThinkingCASE: Comprehension7) Transaction processing systems are the basic business systems that serve the operational level of the organization.Answer: TRUEDiff: 2 Page Ref: 47AACSB: Reflective ThinkingCASE: Comprehension8) Management information systems primarily support nonroutine decision making. Answer: FALSEDiff: 2 Page Ref: 49AACSB: Reflective ThinkingCASE: Comprehension9) Most MISs use sophisticated mathematical models or statistical techniques.Answer: FALSEDiff: 2 Page Ref: 49AACSB: Reflective ThinkingCASE: Comprehension10) Deciding whether to introduce a new product line is the responsibility of an operational manager.Answer: FALSEDiff: 2 Page Ref: 45AACSB: Analytic SkillsCASE: Analysis in terms of categorize11) Decision-support systems help managers make decisions that are unique, rapidly changing, and not easily specified in advance.Answer: TRUEDiff: 1 Page Ref: 49AACSB: Reflective ThinkingCASE: Comprehension12) Decision-support systems often use information from external sources.Answer: TRUEDiff: 2 Page Ref: 50AACSB: Reflective ThinkingCASE: Comprehension13) ESSs are designed to serve the middle management of the organization.Answer: FALSEDiff: 2 Page Ref: 51AACSB: Reflective ThinkingCASE: Comprehension14) ESSs are designed to incorporate data about external events, but they also draw summarized information from internal MIS and DSS.Answer: TRUEDiff: 2 Page Ref: 51AACSB: Reflective ThinkingCASE: Comprehension15) ESSs are designed primarily to solve specific problems.Answer: FALSEDiff: 2 Page Ref: 51AACSB: Reflective ThinkingCASE: Comprehension16) Information supplied by an enterprise system is structured around cross-functional business processes.Answer: TRUEDiff: 2 Page Ref: 54AACSB: Reflective ThinkingCASE: Comprehension17) Supply chain management systems are more externally oriented than enterprise systems. Answer: TRUEDiff: 2 Page Ref: 55AACSB: Analytic SkillsCASE: Analysis in terms of compare18) Knowledge management systems are used to gather and distribute the firm's essential operational data, such as sales reports.Answer: FALSEDiff: 1 Page Ref: 55AACSB: Reflective ThinkingCASE: Comprehension19) Cell phones are one of the tools firms use to support teamwork and collaboration. Answer: TRUEDiff: 1 Page Ref: 60AACSB: Reflective ThinkingCASE: Comprehension20) The five basic entities that make up any business are suppliers, customers, employees, products and services, and:A) its environment.B) manufacturing and production.C) sales and marketing.D) invoices and payments.Answer: DDiff: 2 Page Ref: 42AACSB: Reflective ThinkingCASE: Comprehension21) Promoting the organization's products or services is a responsibility of the ________ function.A) finance and accountingB) human resourcesC) manufacturing and productionD) sales and marketingAnswer: DDiff: 1 Page Ref: 43AACSB: Reflective ThinkingCASE: Comprehension22) Checking for product quality is an activity associated with the ________ function.A) finance and accountingB) human resourcesC) manufacturing and productionD) sales and marketingAnswer: CDiff: 1 Page Ref: 43AACSB: Reflective ThinkingCASE: Comprehension23) Which of the following is a cross-functional business process?A) Hiring an employeeB) Identifying a customerC) Fulfilling a customer orderD) Creating an invoiceAnswer: CDiff: 2 Page Ref: 44AACSB: Reflective ThinkingCASE: Comprehension24) Employees that assist with paperwork at all levels of the firm are called:A) data workers.B) knowledge workers.C) operational management.D) service workers.Answer: ADiff: 1 Page Ref: 45AACSB: Reflective ThinkingCASE: Comprehension25) The three principal levels of hierarchies within a business organization are:A) management, knowledge workers, and service workers.B) senior management, middle management, and operational management.C) management, data workers, and operational management.D) senior management, operational management, and workers.Answer: BDiff: 2 Page Ref: 45AACSB: Reflective ThinkingCASE: Comprehension26) Key forces in a business's immediate environment include:A) regulations.B) technology.C) economy.D) politics.Answer: ADiff: 3 Page Ref: 45-46AACSB: Reflective ThinkingCASE: Comprehension27) Engineers and architects are examples of:A) senior management.B) production workers.C) knowledge workers.D) middle management.Answer: CDiff: 1 Page Ref: 45AACSB: Reflective ThinkingCASE: Comprehension28) Which of the following is an example of a key force in a firm's broader, less immediate environment?A) stockholdersB) regulationsC) shipping firmsD) economic trendsAnswer: DDiff: 3 Page Ref: 46AACSB: Reflective ThinkingCASE: Comprehension29) A computerized system that performs and records the daily dealings necessary to conduct business is classified as a(n):A) executive support system.B) management-level system.C) decision support system.D) transaction-processing system.Answer: DDiff: 1 Page Ref: 47AACSB: Reflective ThinkingCASE: Comprehension30) Which type of system would you use to change a production schedule if a key supplier was late in delivering goods?A) ESSB) TPSC) MISD) DSSAnswer: BDiff: 2 Page Ref: 47-48AACSB: Analytic SkillsCASE: Analysis in terms of differentiate and appraise31) A relocation control system that reports summaries on the total moving, house-hunting, and home financing costs for employees in all company divisions would fall into the category of:A) knowledge management systems.B) transaction support systems.C) executive-support systems.D) management information systems.Answer: DDiff: 3 Page Ref: 48AACSB: Analytic SkillsCASE: Analysis in terms of categorize32) The term "management information systems" designates a specific category of information systems serving:A) integrated data processing throughout the firm.B) transaction process reporting.C) senior managementD) middle management functions.Answer: DDiff: 1 Page Ref: 48AACSB: Reflective ThinkingCASE: Comprehension33) These systems are designed to summarize and report on the company's basic operations.A) Management information systemsB) Decision-support systemsC) Executive information systemsD) Transaction processing systemsAnswer: ADiff: 2 Page Ref: 48AACSB: Reflective ThinkingCASE: Comprehension34) ________ support making decisions that are unique, rapidly changing, and not easily specified in advance.A) Management information systemsB) Transaction processing systemsC) Executive support systemsD) Decision-support systemsAnswer: DDiff: 1 Page Ref: 49AACSB: Reflective ThinkingCASE: Comprehension35) Which type of system would you use to determine the five suppliers with the worst record in delivering goods on time?A) ESSB) TPSC) MISD) DSSAnswer: CDiff: 2 Page Ref: 48-49AACSB: Analytic SkillsCASE: Analysis in terms of differentiate and appraise36) These systems are especially suited to situations in which the procedure for arriving at a solution may not be fully predefined in advance.A) Management information systemsB) Transaction processing systemsC) Decision-support systemsD) Knowledge management systemsAnswer: CDiff: 2 Page Ref: 49AACSB: Reflective ThinkingCASE: Comprehension37) Which type of system would you use to forecast the return on investment if you used new suppliers with better delivery track records?A) ESSB) TPSC) MISD) DSSAnswer: DDiff: 2 Page Ref: 49-50AACSB: Analytic SkillsCASE: Analysis in terms of categorize38) Decision-support systems are also referred to as:A) business information systems.B) business intelligence systems.C) executive support systems.D) business model systems.Answer: BDiff: 2 Page Ref: 50AACSB: Reflective ThinkingCASE: Comprehension39) Executive support systems are information systems that support the:A) long-range planning activities of senior management.B) knowledge and data workers in an organization.C) decision-making and administrative activities of middle managers.D) day-to-day processes of production.Answer: ADiff: 1 Page Ref: 51AACSB: Reflective ThinkingCASE: Comprehension40) ESS are specifically designed to serve the ________ level of the organization.A) operationalB) end-userC) middle managementD) senior managementAnswer: DDiff: 1 Page Ref: 51AACSB: Reflective ThinkingCASE: Comprehension41) Which type of system would you use to determine what trends in your supplier's industry will affect your firm the most in five years?A) ESSB) TPSC) MISD) DSSAnswer: ADiff: 2 Page Ref: 51AACSB: Analytic SkillsCASE: Analysis in terms of categorize42) ________ systems often deliver information to senior executives through a portal.A) Transaction processingB) Executive supportC) Management informationD) Decision-supportAnswer: BDiff: 2 Page Ref: 51AACSB: Reflective ThinkingCASE: Comprehension43) A POS system, such as the one selected by Johnny's Lunch in the chapter case study, falls into which category of information system?A) TPSB) KWSC) MISD) DSSAnswer: ADiff: 3 Page Ref: 52AACSB: Analytic SkillsCASE: Analysis in terms of categorize44) These systems are designed to support organization-wide process coordination and integration.A) Decision-support systemsB) Management information systemsC) CRMD) Enterprise applicationsAnswer: DDiff: 1 Page Ref: 53AACSB: Reflective ThinkingCASE: Comprehension45) A(n) ________ collects data from various key business processes and stores the data in a single comprehensive data repository, usable by other parts of the business.A) transaction processing systemB) enterprise systemC) automatic reporting systemD) management information systemAnswer: BDiff: 2 Page Ref: 54AACSB: Reflective ThinkingCASE: Comprehension46) What is the most important benefit of an enterprise application?A) Enabling speed of communicating.B) Enabling business functions and departments to share information.C) Enabling a company to work collaboratively with customers and suppliers.D) Enabling cost-effective, e-business processes.Answer: BDiff: 3 Page Ref: 53-54AACSB: Analytic SkillsCASE: Evaluation in terms of appraise, evaluate47) ________ systems integrate and share information from suppliers, manufacturers, distributors, and logistics companies.A) Collaborative distributionB) Supply-chain managementC) Reverse logisticsD) Enterprise planningAnswer: BDiff: 1 Page Ref: 54AACSB: Reflective ThinkingCASE: Comprehension48) ________ systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention.A) CRMB) MISC) ESSD) CPSAnswer: ADiff: 1 Page Ref: 55AACSB: Reflective ThinkingCASE: Comprehension49) Which type of information system would an intranet be most easily adapted to?A) CRMB) MISC) TPSD) KMSAnswer: DDiff: 3 Page Ref: 55AACSB: Analytic SkillsCASE: Synthesis in terms of bringing information together50) Which of the following types of system could be used to enable different firms to work collaboratively on a product?A) intranetB) extranetC) KMSD) CRMAnswer: BDiff: 2 Page Ref: 55AACSB: Analytic SkillsCASE: Analysis in terms of appraise51) You manage the Information Systems department at a small startup Internet advertiser. You need to set up an inexpensive system that allows customers to see real-time statistics such as views and click-throughs about their current banner ads. Which type of system will most efficiently provide a solution?A) CRMB) Enterprise systemC) ExtranetD) IntranetAnswer: CDiff: 2 Page Ref: 55AACSB: Reflective ThinkingCASE: Evaluation in terms of assess, choose52) Buying or selling goods over the Internet is called:A) e-commerce.B) e-business.C) an intranet.D) an extranet.Answer: ADiff: 1 Page Ref: 56AACSB: Reflective ThinkingCASE: Comprehension53) The use of digital technology and the Internet to execute the major business processes in the enterprise is called:A) e-commerce.B) e-business.C) enterprise applications.D) MIS.Answer: BDiff: 1 Page Ref: 56AACSB: Reflective ThinkingCASE: Comprehension54) You work for a highly successful advertiser that is just about to expand nationally. Of utmost importance will be finding a way to store and disseminate their client's frequently updated branding and style guides to all of their branches. The guides include multiple image files and text documents. What system will best serve these needs?A) A wikiB) An extranet with KMS capabilitiesC) A TPS with KMS capabilitiesD) An ESS with collaboration capabilitiesAnswer: BDiff: 3 Page Ref: 54-65AACSB: Analytic SkillsCASE: Synthesis in terms of bringing information together55) Interaction jobs are those jobs which:A) are in the service sector and require close coordination, and collaboration.B) involve knowledge that can't be put into an information system.C) are performed typically by operational-level employees.D) require intense levels of interaction with clients.Answer: ADiff: 2 Page Ref: 57AACSB: Reflective ThinkingCASE: Comprehension56) You have been hired by Inspiration Inc, to help improve their profit margin. Inspiration Inc. is a business communications consultancy that services many clients in different industries throughout the U.S. The end products of the company are customized recommendations for the best use of a client's existing resources for improving internal communications, typically delivered via documentation in different media. The company has approximately 100 consultants all of whom are located in their central headquarters in Chicago. What system do you recommend to improve the company's business processes and increase their profit margin?A) Extranet, to enable quick collaboration over the Internet, minimize the time spent communicating with the client, and minimize the amount of paperwork neededB) CRM, to maintain easily accessible customer records to minimize the time spent looking for client dataC) KMS, for minimizing redundant work on similar clientsD) Video conferencing system, for improving collaborationAnswer: ADiff: 3 Page Ref: 55-61AACSB: Reflective ThinkingCASE: Synthesis in terms of bringing information together57) In a business environment, the focus of collaboration is to:A) accomplish the task at hand.B) provide a sense of community.C) foster better communication.D) prevent miscommunication.Answer: ADiff: 2 Page Ref: 56AACSB: Reflective ThinkingCASE: Comprehension58) Which of the following statements is NOT true about collaboration in a business setting?A) Collaboration may be a short-lived activity, lasting just a few minutes.B) Collaboration is a many-to-many activity as opposed to a one-to-one or one-to-many activity.C) Meaningful collaboration requires a supportive business firm culture and the right, decentralized structure.D) The evidence of the business benefits of collaboration are largely anecdotal.Answer: BDiff: 2 Page Ref: 56-59AACSB: Reflective ThinkingCASE: Comprehension59) Which of the following tools is NOT one of the most important 15 types of collaboration software tools?A) screen sharingB) video streamingC) video conferencingD) e-mail and instant messagingAnswer: BDiff: 2 Page Ref: 60AACSB: Reflective ThinkingCASE: Comprehension60) A wiki is a type of:A) social networking site.B) blogging.C) video conferencing.D) Web site designed for collaborative writing and editing.Answer: DDiff: 1 Page Ref: 61AACSB: Reflective ThinkingCASE: Comprehension61) Second Life is an example of a:A) virtual world.B) wiki.C) social networking site.D) mind mapping tool.Answer: ADiff: 1 Page Ref: 61AACSB: Reflective ThinkingCASE: Comprehension62) The most widely used collaboration software tool used by very large firms is:A) Lotus Notes.B) Microsoft SharePoint.C) Google Apps.D) Onehub.Answer: ADiff: 2 Page Ref: 65AACSB: Reflective ThinkingCASE: Comprehension63) What analytical framework discussed in the chapter helps understand and evaluate the benefits and uses of collaboration tools?A) cost/use matrixB) task/time matrixC) space/cost matrixD) time/space matrixAnswer: DDiff: 2 Page Ref: 67AACSB: Reflective ThinkingCASE: Comprehension64) Which of the following collaboration tools would be appropriate for participants in separate locations who need to collaborate synchronously?A) blogB) team roomC) electronic meeting softwareD) group calendarAnswer: CDiff: 2 Page Ref: 67AACSB: Analytic SkillsCASE: Analysis in terms of compare65) The ________ is responsible for ensuring that the company complies with existing data privacy laws.A) CPOB) CKOC) CIOD) CIPAnswer: ADiff: 2 Page Ref: 68AACSB: Reflective ThinkingCASE: Comprehension66) The principal liaison between the information systems groups and the rest of the organization is a(n):A) programmer.B) information systems manager.C) systems analyst.D) CIO.Answer: CDiff: 2 Page Ref: 68AACSB: Reflective ThinkingCASE: Comprehension67) A ________ is a senior manager who oversees the use of IT in the firm.A) CEOB) CFOC) CIOD) CITAnswer: CDiff: 1 Page Ref: 68AACSB: Reflective ThinkingCASE: Comprehension68) Development and support services for a firm's business systems are provided by:A) IT educational services.B) IT management services.C) Application software services.D) IT standards services.Answer: CDiff: 3 Page Ref: 69AACSB: Reflective ThinkingCASE: Comprehension69) Policies that determine which information technology will be used, when, and how are provided by:A) IT educational services.B) IT management services.C) Application software services.D) IT standards services.Answer: DDiff: 3 Page Ref: 69AACSB: Reflective ThinkingCASE: Comprehension70) A(n) ________ is a set of logically related activities for accomplishing a specific business result.Answer: business processDiff: 1 Page Ref: 42AACSB: Reflective ThinkingCASE: Comprehension71) A firm depends heavily on its ________ to supply capital, labor, customers, new technology, services and products, stable markets and legal systems, and general educational resources. Answer: environmentDiff: 2 Page Ref: 45AACSB: Reflective ThinkingCASE: Comprehension72) The ________ function is responsible for attracting, developing, and maintaining the firm's workforce.Answer: human resourcesDiff: 1 Page Ref: 43AACSB: Reflective ThinkingCASE: Comprehension73) Managers need ________ systems to monitor the status of internal operations and the firm's relations with the external environment.Answer: transaction processingDiff: 2 Page Ref: 48AACSB: Reflective ThinkingCASE: Comprehension74) A(n) ________ is used by middle management to support nonroutine decision making. Answer: decision-support system/DSSDiff: 1 Page Ref: 49AACSB: Reflective ThinkingCASE: Comprehension75) ________ applications span the entire firm, integrating information from multiple functions and business processes to enhance the performance of the organization as a whole.Answer: EnterpriseDiff: 1 Page Ref: 53AACSB: Reflective ThinkingCASE: Comprehension76) Supply chain management systems are one type of ________ system because they automate the flow of information across organizational boundaries.Answer: interorganizationalDiff: 3 Page Ref: 55AACSB: Reflective ThinkingCASE: Comprehension77) ________ are highly trained technical specialists who write the software instructions for computers.Answer: ProgrammersDiff: 1 Page Ref: 68AACSB: Reflective ThinkingCASE: Comprehension78) ________ are representatives of departments outside of the information systems group for whom applications are developed.Answer: End usersDiff: 2 Page Ref: 69AACSB: Reflective ThinkingCASE: Comprehension79) ________ technology allows a videoconference participant to give the appearance of being present at a location other than his or her true physical location.Answer: TelepresenceDiff: 3 Page Ref: 61AACSB: Reflective ThinkingCASE: Comprehension80) Identify the different types of systems used for the different levels of management in a business.Answer: The types of information systems used for different levels of management are transaction processing systems (TPS), management information systems (MIS), decision-support systems (DSS), and executive support systems (ESS). TPS, such as payroll or order processing, track the flow of the daily routine transactions that are necessary to conduct business. They are used by operational managers to manage day-to-day operations. MIS summarize and report on the c ompany’s basic operations using data supplied by TPS. They provide middle managers with reports on the organization’s current performance and are not highly analytical. DSS also support middle management decisions when these decisions are unique, rapidly changing, and not specified easily in advance. They use advanced analytical models and data analysis capabilities and often draw on information from external as well as internal sources. ESS support senior management by providing data of greatest importance to senior management decision makers. ESS provide a generalized computing and communications capacity that can be applied to a changing array of problems. ESS present graphs and data from many sources through an interface that is easy for senior managers to use, often a portal.Diff: 1 Page Ref: 47-51AACSB: Reflective ThinkingCASE: Synthesis in terms of generalize81) In your opinion, what are at least three factors that contribute to the difficulty of integrating systems for different organizational levels and functions within an organization? Support your answer.Answer: An example answer is: Three factors that can contribute include different computing environments; different data kept; and employee resistance. Different computing environments can make it difficult in terms of programming to connect the systems together. If the systems have kept different types of data and different records, this may also be a hindrance. For example, if some elements in a database are recorded differently, such as a customer ID not being the same in one area as another, this would make consistency a problem and may contribute to redundant information. There may also be resistance to adopting new, integrative systems that are more efficient because these may change business processes and the functions of employees. People working in an organization may not want to lose the responsibilities they have and the functions they understand.Diff: 3 Page Ref: 53AACSB: Analytic SkillsCASE: Evaluation in terms of assess, compare82) Discuss at least three reasons why collaboration and teamwork are more important today than ever.Answer: Collaboration and teamwork are more important today than ever for a variety of reasons. For one, the nature of work has changed from factory manufacturing andpre-computer office work. Today, the kinds of jobs we have require much closer coordination and interaction among the parties involved in producing the service or product. Another reason is that the organization of work has changed. For most of the industrial age, work was organized in a hierarchical fashion. Orders came down the hierarchy, and responses moved back up the hierarchy. Today, work is organized into groups and teams, who are expected to develop their own methods for accomplishing the task. Senior managers observe and measure results, but are much less likely to issue detailed orders or operating procedures. Another reason is the need to manage work from global locations: The work of the firm has changed from a single location to multiple locations - offices throughout a region, a nation, or even around the globe. Global competition also places a premium on innovation. Innovation is a group and social process, and most innovations derive from collaboration among individuals in a lab, a business, or government agencies. Strong collaborative practices and technologies are believed to increase the rate and quality of innovation. Overall, most research on collaboration supports the notion that diverse teams produce better outputs, faster, than individuals working on their own.Diff: 2 Page Ref: 57-58AACSB: Analytic SkillsCASE: Synthesis in terms of propose83) Identify and describe at least four business benefits of collaboration? Which do you feel is the most important and why?Answer: Business benefits from collaboration are (1) productivity; (2) quality; (3) innovation;(4) customer service; and (5) financial performance. Collaboration helps productivity because people working together on a task can complete the task more quickly. It helps quality because people working together will be more able to correct each other's mistakes. It helps innovation because people working in groups come up with more ideas than those working in isolation. It helps customer service because teams can solve customer complaints more quickly together rather than working in isolation. And as a result of all of these benefits, collaboration helps finance, because collaborative firms have superior sales, sales growth, and financial performance. Student evaluations will vary: for example, the most important of the benefits might be: innovation, because new products, services, and means of production are at the heart of being able to outperform your competitors.Diff: 2 Page Ref: 58-59AACSB: Analytic SkillsCASE: Evaluation in terms of compare, assess。
