MANAGEMEMT INFORMATION SYSTEMS_Test bank chapter 3

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Exam Name___________________________________ TRUE/FALSE. Write ‘T’ if the

statement is true and ‘F’ if the statement is false. Question: An adhocracy is a

knowledge-based organization where goods and services depend on the expertise and

knowledge of professionals. Answer:

Question: From the point of view of economics, information systems technology can be

viewed as a factor of production that can be substituted for traditional capital and labor.

Answer:

Question: A firm can be said to have competitive advantage when they have higher stock

market valuations than their competitors. Answer:

Question: The competitive forces model was created for today’s digital firm. Answer:

Question: Research has shown that only 25% of firms are able to align their information

technology with their business goals. Answer:

Question: Customers are one of the competitive forces that affect an organization’s ability

to compete. Answer:

Question: A transparent marketplace means that there is high product differentiation.

Answer:

Question: The effect of the Internet has been to raise bargaining power over suppliers.

Answer:

Question: In an efficient customer response system, digital answering systems are used to

monitor and respond to customer inquiries. Answer:

Question: In the strategy of product differentiation, information systems are used to enable

new products and services. Answer:

Question: Mass customization is a form of mass production. Answer:

Question: Strong linkages to customers and suppliers decrease switching costs. Answer:

Question: In the age of the Internet, Porter’s traditional competitive forces model is still at

work, but competitive rivalry has become much more intense. Answer:

Question: In the value chain model, primary activities are most directly related to the

production and distribution of the firm’s products and services that create value for the

customer. Answer:

Question: The value chain model classifies all company activities as either primary or

support. Answer:

Question: The idea driving synergies is that when the output of some units can be used as

inputs to other units, the relationship can lower cost and generate profits. Answer:

Question: All organizations have bedrock, unassailable assumptions that define their goals

and products. Answer:

Question: In a demonstration of network economics, the more people that use Adobe

software and related products, the greater the value of the software. Answer:

Question: The term business ecosystem describes the interplay between the various

organizational forces within a firm. Answer:

Question: The use of Internet technologies allows companies to more easily sustain

competitive advantage. Answer:

Question: As discussed in the chapter opening case, which of the four generic strategies

did Verizon employ to combat the competition offered by AT&T? A) low-cost leadership

B) focus on market niche C) customer and supplier intimacy D) product differentiation

Answer:

Question: The interaction between information systems and organizations is influenced A)

primarily by the decision making of middle- and senior-managers. B) by many factors,

including structure, politics, culture, and environment. C) by two main microeconomic

forces: capital and labor. D) primarily by the organization’s business processes and culture.

Answer:

Question: An organization is a A) stable, formal social structure that takes resources from

the environment and processes them to produce outputs. B) formal, legal entity with

internal rules and procedures that must abide by laws. C) collection of social elements. D)

B and C E) A, B, and C Answer:

Question: How does the technical view of organizations fall short of understanding the full

impacts of information systems in a firm? A) It sees information systems as a way to

rearrange the inputs and outputs of the organization. B) It sees capital and labor as primary

production factors. C) It sees the inputs and outputs, labor and capital, as being infinitely

malleable. D) It sees the organization as a social structure similar to a machine. Answer:

Question: According to the ________ definition of organizations, an organization is seen

as a means by which primary production factors are transformed into outputs consumed by

the environment. A) microeconomic B) macroeconomic C) sociotechnical D) behavioral

Answer:

Question: All of the following are major features of organizations that impact the use of

information systems EXCEPT for A) business processes. B) environments. C) goals. D)

agency costs. Answer:

Question: Business processes are collections of A) informal practices and behaviors. B)

formalized and documented practices. C) routines. D) rights and privileges. Answer:

Question: Which of the following would NOT be considered a disruptive technology? A)

instant messaging B) e-mail C) Internet telephony D) PCs Answer:

Question: Mintzberg’s classification of organizational structure categorizes the

knowledge-based organization where goods and services depend on the expertise and

knowledge of professionals as a(n) A) entrepreneurial structure. B) divisionalized

bureaucracy. C) professional bureaucracy. D) adhocracy. Answer:

Question: A large bureaucracy existing in a slowly changing environment that produces

standard products and is dominated by centralized management making is classified by

Mintzberg as a ________ bureaucracy. A) machine B) professional C) divisionalized D)

multidivisional Answer:

Question: An example of a professional bureaucracy is a A) small startup firm. B) school

system. C) mid-size manufacturing firm. D) consulting firm. Answer:

Question: The costs incurred when a firm buys on the marketplace what it cannot make

itself are referred to as A) switching costs. B) transaction costs. C) procurement. D) agency

costs. Answer:

Question: Which of the following statements is NOT true about information technology’s

impacts on business firms? A) It helps firms expand in size. B) It helps firms lower the

cost of market participation. C) It helps reduce internal management costs. D) It helps

reduce transaction costs. Answer:

Question: According to agency theory, the firm is viewed as a(n) A) unified,

profit-maximizing entity. B) task force organization that must respond to rapidly changing

environments. C) entrepreneurial endeavor. D) “nexus of contracts” among self-interested

individuals. Answer:

Question: According to Leavitt’s model of organizational resistance, the four components

that must be changed in an organization in order to successfully implement a new

information system are A) environment, organization, structure, tasks. B) technology,

people, culture, and structure. C) organization, culture, management, and environment D)

tasks, technology, people, and structure. Answer:

Question: The ________ model is used to describe the interaction of external forces that

affect an organization’s strategy and ability to compete. A) network economics B)

competitive forces C) competitive advantage D) demand control Answer:

Question: Which of the following industries has a low barrier to entry? A) automotive B)

computer chip C) restaurant D) airline Answer:

Question: Which of the following is NOT one of the competitive forces? A) suppliers B)

other competitors C) external environment D) customers Answer:

Question: A manufacturer of deep-sea oil rigs may be least concerned about this

marketplace force. A) product differentiation B) traditional competitors C) low number of

suppliers D) new market entrants Answer:

Question: A substitute product of most concern for a cable TV distributor is A) satellite TV.

B) broadcast TV. C) satellite radio. D) the Internet. Answer:

Question: Which of the following can force a business and its competitors to compete on

price alone? A) transparent marketplace B) high product differentiation C) poor process

efficiency D) demand control Answer:

Question: A firm can exercise greater control over its suppliers by having A) more

suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. Answer:

Question: Amazon’s use of the Internet as a platform to sell books more efficiently than

traditional bookstores illustrates a use of information services for A) low-cost leadership.

B) marketing effectiveness. C) focusing on market niche. D) strengthening supplier

intimacy. Answer:

Question: The four major types of competitive strategy are A) low-cost leadership;

substitute products and services; customers; and suppliers. B) low-cost leadership; product

differentiation; focus on market niche; and customer and supplier intimacy. C) new market

entrants; substitute products and services; customers; and suppliers. D) low-cost

leadership; new market entrants; product differentiation; and focus on market niche.

Answer:

Question: Wal-Mart’s continuous replenishment system allows it to A) provide mass

customization. B) provide an efficient customer response system. C) strengthen customer

intimacy. D) achieve economy of scale. Answer:

Question: When a firm provides a specialized product or service for a narrow target market

better than competitors, they are using a ________ strategy. A) product differentiation B)

market niche C) mass customization D) process efficiency Answer:

Question: ________ is the ability to offer individually tailored products or services using

the same production resources as bulk production. A) Mass customization B) Size

customization C) Magnitude customization D) Dimension customization Answer:

Question: Hilton Hotels’ use of customer information software to identify the most

profitable customers to direct services to is an example of using information systems to A)

strengthen customer intimacy. B) differentiate their service. C) focus on market niche. D)

increase efficiency. Answer:

Question: An information system can enable a company to focus on a market niche

through A) complex trend forecasting. B) tailoring products to the client. C) intensive

product trend analysis. D) intensive customer data analysis. Answer:

Question: Upon which of the following industries has the Internet as a whole been a

disruptive technology? A) bill payments B) air travel C) books D) real estate Answer:

Question: A rival of your company, AutoTown, is going to implement analytic software

that mines customer data with a goal of enabling the building of automobiles that

customers actually want. This can be categorized as using information systems for which

competitive strategy? A) low-cost leadership B) product differentiation C) focus on market

niche D) customer intimacy Answer:

Question: Internet technology A) makes it easy for rivals to compete on price alone. B)

imposes a significant cost of entry, due to infrastructure requirements. C) increases the

difference between competitors because of the wide availability of information. D) makes

it easy to sustain operational advantages. Answer:

Question: The Internet raises the bargaining power of customers by A) creating new

opportunities for building loyal customer bases. B) making more products available. C)

making information available to everyone. D) lowering transaction costs. Answer:

Question: To what competitive force did the printed encyclopedia industry succumb? A)

positioning and rivalry among competitors B) low cost of entry C) substitute products or

services D) customer’s bargaining power Answer:

Question: The value chain model A) categorizes five related advantages for adding value

to a firm’s products or services. B) sees the supply chain as the primary activity for adding

value. C) categorizes four basic strategies a firm can use to enhance its value chain. D)

helps a firm identify points at which information technology can most effectively enhance

its competitive position. Answer:

Question: The primary activities of a firm include A) inbound logistics, operations,

outbound logistics, sales and marketing, and service. B) inbound logistics, operations,

outbound logistics, technology, and service. C) procurement, inbound logistics, operations,

technology, and outbound logistics. D) procurement, operations, technology, sales and

marketing, and services. Answer:

Question: Which of the following is one of the support activities in a firm’s value chain?

A) inbound logistics B) operations C) sales and marketing D) technology Answer:

Question: Which of the following activities would you perform to measure and compare

your business processes to similar processes of other companies within your industry? A)

benchmarking B) best practices C) value chain analysis D) strategic systems analysis

Answer:

Question: The most successful solutions or methods for achieving a business objective are

called A) value activities. B) best processes. C) core competencies. D) best practices.

Answer:

Question: A collection of independent firms that use information technology to coordinate

their value chains to produce a product or service for a market collectively is called a(n) A)

industry value chain. B) business ecosystem. C) value web. D) consortia. Answer:

Question: How are information systems used at the industry level to achieve strategic

advantage? A) by building industry-wide, IT-supported consortia and symposia B) by

raising the bargaining power of suppliers C) by encouraging the entry of new competitors

D) by enforcing standards that reduce the differences between competitors Answer:

Question: If two organizations pool markets and expertise that result in lower costs and

generate profits it is often referred to as creating A) a value web. B) a value chain. C)

synergies. D) core competencies. Answer:

Question: An example of synergy in business is A) Amazon’s use of the Internet to sell

books. B) JP Morgan Chase’s mergers with other banks that provided JP Morgan with a

network of retail branches in new regions. C) Blockbuster combining traditional video

rental with online video rental. D) Wal-Mart’s order entry and inventory management

system to coordinate with suppliers. Answer:

Question: An information system can enhance core competencies by A) providing better

reporting facilities. B) creating educational opportunities for management. C) allowing

operational employees to interact with management. D) encouraging the sharing of

knowledge across business units. Answer:

Question: The more any given resource is applied to production, the lower the marginal

gain in output, until a point is reached where the additional inputs produce no additional

output. This is referred to as A) the point of no return. B) the law of diminishing returns.

C) supply and demand. D) network inelasticity. Answer:

Question: Network economics A) applies the law of diminishing returns to communities of

users. B) applies traditional economics to networked users. C) sees the cost of adding new

members as inconsequential. D) balances the high cost of adding new members to a

community against the lower cost of using network infrastructure. Answer:

Question: An example of a keystone firm within a business ecosystem is A) Apple and

software application writers in the mobile platform ecosystem. B) GUESS and the fashion

ecosystem. C) Citibank and the ATM ecosystem. D) American Airlines and the

computerized reservation ecosystem. Answer:

Question: A virtual company A) uses the capabilities of other companies without being

physically tied to those companies. B) uses Internet technology to maintain a virtual

storefront. C) uses Internet technology to maintain a networked community of users. D)

provides entirely Internet-driven services, or virtual products. Answer:

Question: The emergence, for Amazon.com, of new competitors in the sphere of online

shopping illustrates what disadvantage posed by the use of information systems to achieve

competitive advantage? A) E-commerce is affected by the law of diminishing returns. B)

Internet technologies are universal, and therefore usable by all companies. C) Internet

shopping produces cost transparency. D) The Internet enables the production or sales of

substitute products or services. Answer:

Question: You are consulting for a beverage distributor who is interested in determining

the benefits it could achieve from implementing new information systems. What will you

advise as the first step? A) Identify the business ecosystem the distributor is in. B)

Implement a strategic transition to the new system. C) Perform a strategic systems

analysis. D) Benchmark existing systems. Answer:

Question: ________ is a competitive strategy for creating brand loyalty by developing new

and unique products and services that are not easily duplicated by competitors. Answer:

Question: Capital and ________ are the primary production inputs that the organization

uses to create products and services. Answer:

Question: ________ are the expenses incurred by a customer or company in lost time and

resources when changing from one supplier or system to a competing supplier or system.

Answer:

Question: The ________ model highlights the primary or support activities that add a

margin of value to a firm’s products or services where information systems can best be

applied to achieve a competitive advantage. Answer:

Question: Organizational ________ describes the divergent viewpoints about how

resources, rewards, and punishments should be distributed, and the struggles resulting

from these differences. Answer:

Question: A(n) ________ activity is a part of the organization’s infrastructure, human

resources, technology, and procurement that makes the delivery of the firm’s products or

services possible. Answer:

Question: A(n) ________ is a collection of independent firms that use information

technology to coordinate their value chains to collectively produce a product or service for

a market. Answer:

Question: A(n) ________ is an activity at which a firm excels as a world-class leader.

Answer:

Question: New technologies that radically change the business landscape and environment

are referred to as ________. Answer:

Question: Sociotechnical changes affecting a firm adopting new information systems

requiring organizational change can be considered ________. Answer:

Question: Differentiate between the technical and behavioral definitions of an

organization. Answer:

Question: List three organizational factors that can prevent a firm from fully realizing the

benefits of a new information system, and provide examples for each. Answer:

Question: You are advising the owner of Smalltown Computer, a new, local computer

repair store that also builds custom computers to order. What competitive strategies could

Smalltown Computer exert? Which ones will it have difficulty exercising? Answer:

Question: You are consulting with the owner of Better Bodies, a national chain of gyms.

What strategies might Better Bodies use in applying information services to achieve a

competitive advantage? Answer:

Question: The text describes Michael Porter’s view of the Internet as somewhat negative.

What negative influences does Porter see? Describe several positive influences the Internet

has on business. Do these outweigh the negative influences? Answer:

Question: Value chain analysis is useful at the business level to highlight specific activities

in the business where information systems are most likely to have a strategic impact.

Discuss this model, identify the activities, and describe how the model can be applied to

the concept of information technology. Answer:

Question: How is the concept of core competency relevant to Smalltown Computer, a local

computer repair store that builds custom computers? Give examples. Answer:

Question: How is Internet technology useful from a network economics perspective? Give

examples. Answer:

Question: Define and describe a business ecosystem. Give an example of a business

ecosystem. Answer:

Question: Describe in detail the major factors to determine when performing a strategic

systems analysis. Answer:

All Question’s Solution