1
Essentials of MIS, 12e (Laudon)
Chapter 1 Business Information Systems in Your Career
1) As discussed in the chapter opening case, the San Francisco Giants are taking advantage of
wireless technology to do which of the following?
A) Improve decision making
B) Achieve operational excellence
C) Implement dynamic ticket pricing
D) Perform data analysis
E) Enhance fan experience
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
2) Journalist Thomas Friedman’s description of the world as “flat” refers to:
A) the flattening of economic and cultural advantages of developed countries.
B) the use of the Internet and technology for instantaneous communication.
C) the reduction in travel times and the ubiquity of global exchange and travel.
D) the growth of globalization.
E) the increased use of global currencies.
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
3) The six important business objectives of information system investment include all of the
following except:
A) competitive advantage.
B) employee morale.
C) improved decision making.
D) survival.
E) new products.
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
2
4) A firm that invests in an information system because it is a necessity of doing business does so
because it is seeking to achieve which of the following business objectives?
A) Survival
B) Improved decision making
C) Competitive advantage
D) Operational excellence
E) Customer intimacy
AACSB: Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
5) Walmart exemplifies the power of information systems coupled with excellent business
practices and supportive management to achieve which of the following?
A) New business models
B) Operational efficiency
C) Customer intimacy
D) Competitive advantage
E) Survival
AACSB: Analytical Thinking
LO: 1.1: Why are information systems so essential for running and managing a business today?
6) Verizon’s implementation of a web-based digital dashboard to provide managers with real-
time information, such as customer complaints, is an example of:
A) improved flexibility.
B) improved decision making.
C) competitive advantage.
D) supplier intimacy.
E) a new product.
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
7) Which business objective were competitors seeking when they rushed to provide ATMs as
well after Citibank introduced the first ATMs in New York?
A) Improved efficiency
B) Customer and supplier intimacy
C) Survival
D) Competitive advantage
E) Improved decision making
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
3
8) All of the following describe the effects of globalization except:
A) significant decreases in operating costs.
B) reduction of labor costs through outsourcing.
C) ability to find low-cost suppliers.
D) increases in transaction costs.
E) replication of business models in multiple countries.
AACSB: Analytical Thinking
LO: 1.1: Why are information systems so essential for running and managing a business today?
9) A firm that must invest in a new information system in order to comply with federal
legislation is investing to achieve which of the following business objectives?
A) Customer intimacy
B) Operational excellence
C) New products.
D) Improved decision making
E) Survival
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
10) Which of the following is an example of a business using information systems to create new
products and services?
A) Apple’s creation of the iPad
B) JC Penney’s information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced
C) The Mandarin Oriental’s use of computers to keep track of guests’ preferences
D) Verizon’s web-based digital dashboard providing real-time company information for
managers
E) Walmart’s Retail Link’s system
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
4
11) An example of a business using information systems for supplier intimacy is:
A) Apple’s creation of the iPad.
B) JCPenney’s information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced.
C) Citibank’s ATM system.
D) Verizon’s web-based digital dashboard providing real-time company information for
managers.
E) the Mandarin Oriental’s use of computers to keep track of guests’ preferences.
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
12) To make sure they stock clothes that their customers will purchase, a department store
implements a new application that analyzes spending levels at their stores and cross-references
this data to popular clothing styles. Which of the following business objectives is this
information intended to support?
A) New products
B) Survival
C) Customer intimacy
D) Improved decision making
E) Operational excellence
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
13) Telepresence is an example of which of the following?
A) Business intelligence
B) Social business
C) IoT
D) Mobile digital platform
E) Virtual meeting
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
5
14) The enormous volume of data generated by Internet activity, such as web traffic, email, and
social media is referred to as:
A) IoT.
B) big data.
C) the mobile digital platform.
D) cloud computing.
E) business intelligence.
AACSB: Analytical Thinking; Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
15) In 2015, what percent of Internet users will access the web through mobile devices?
A) Less than 15 percent
B) Around 25 percent
C) 50 percent
D) More than 60 percent
E) More than 75 percent
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
16) What percent of U.S. businesses have some form of remote work program?
A) 15 percent
B) 25 percent
C) 35 percent
D) 55 percent
E) 75 percent
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
17) All of the following are new technology-related trends in MIS except:
A) cloud computing.
B) big data.
C) IoT.
D) the mobile digital platform.
E) co-creation of business value.
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
6
18) Which of the following statements is not true?
A) In 2015, American businesses will invest nearly $600 billion in information systems
hardware, software, and telecommunications equipment.
B) In 2015, American businesses will spend $400 billion on business and management
consulting and information technology services,
C) In 2015, about 25 percent of all capital investment in the United States will be for information
systems hardware, software, and telecommunications equipment.
D) Expenditures in the United States for information systems are growing at a faster rate than the
U.S. economy as a whole.
E) Worldwide expenditures for information were around $1 trillion.
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
19) Approximately how many adult Americans are online?
A) 118 million
B) 170 million
C) 205 million
D) 220 million
E) 227 million
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
20) What percent of the Fortune 500 companies uses Twitter to communicate with their
customers?
A) 20 percent
B) 40 percent
C) 50 percent
D) 60 percent
E) 80 percent
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
21) Purchase of information systems hardware, software, and telecommunications equipment
will constitute more than half of all capital investment in the United States in 2015.
AACSB: Information Technology
LO: 1.1: Why are information systems so essential for running and managing a business today?
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22) A business model describes how a company produces, delivers, and sells a product or service
to create wealth.
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
23) Federal law requires many businesses to keep email messages for five years.
AACSB: Application of Knowledge
LO: 1.1: Why are information systems so essential for running and managing a business today?
24) Define operational excellence. How can information systems help achieve it?
AACSB: Information Technology; Written and Oral Communication; Reflective Thinking
LO: 1.1: Why are information systems so essential for running and managing a business today?
25) You work for an auto manufacturer and distributor. How could you use information systems
to achieve greater customer intimacy?
AACSB: Application of Knowledge; Information Technology; Written and Oral
Communication
LO: 1.1: Why are information systems so essential for running and managing a business today?
8
26) Which of the following is the best definition of an information system?
A) A set of interrelated components that collect (or retrieve), process, store, and distribute
information to support decision making and control in an organization
B) Computers, keyboards, printers, and telecommunications devices
C) A set of detailed programmed instructions that transform raw data into information
D) Physical devices and software that can be connected to share voice, data, images, sound, and
video
E) A global network that uses universal standards
AACSB: Information Technology
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
27) The three activities in an information system that produce the information organizations use
to control operations are:
A) information, research, and analysis.
B) input, output, and feedback.
C) input, processing, and output.
D) data analysis, processing, and feedback.
E) information, data, and processing.
AACSB: Information Technology
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
28) The average number of baseball tickets sold at a particular price is an example of:
A) input.
B) raw data.
C) meaningful information.
D) output.
E) feedback.
AACSB: Analytical Thinking
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
9
29) Output:
A) is feedback that has been processed to create meaningful information.
B) is information that is returned to appropriate members of the organization to help them
evaluate the input stage.
C) transfers raw data to the people who will use it or to the activities for which it will be used.
D) transfers processed information to the people who will use it or to the activities for which it
will be used.
E) is a stream of raw facts representing events occurring in organizations or the physical
environment.
AACSB: Information Technology
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
30) Converting raw data into a more meaningful form is called:
A) capturing.
B) processing.
C) organizing.
D) feedback.
E) inputting.
AACSB: Information Technology
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
31) An example of raw data from an automobile manufacturer would be:
A) an average of 130 Subarus sold daily in New York in 2015.
B) 1,300 Subaru Outbacks sold during the first quarter 2015 in New York.
C) 1 Subaru Outback sold January 7, 2015 in Mount Kisco, New York for $25,000.
D) annual sales of Subaru Outbacks increased 4.5 percent.
E) an average sale price of $26,000 for all Subaru Outbacks sold during January 2015 in Mount
Kisco, New York.
AACSB: Analytical Thinking
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
10
32) Which of the following fields deals with behavioral issues, as well as technical issues
surrounding the development, use, and impact of information systems used by managers and
employees in the firm?
A) Information systems literacy
B) Information systems architecture
C) Management information systems
D) Information technology infrastructure
E) Computer information systems
AACSB: Application of Knowledge
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
33) All of the following are examples of environmental actors in an information system except:
A) customers.
B) stockholders.
C) feedback.
D) competitors.
E) regulatory agencies.
AACSB: Application of Knowledge
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?
34) In a hierarchical organization, the upper levels consist of:
A) managerial, professional and knowledge workers.
B) managerial, professional, and technical workers.
C) professional and operational workers.
D) managerial, professional, and operational workers.
E) knowledge, technical and operational workers.
AACSB: Application of Knowledge
LO: 1.2: What exactly is an information system? How does it work? What are its people,
organizational, and technology components?