Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
Chapter 1 Information Systems in Business Today
1) Internet advertising is growing at approximately 10 percent a year.
2) Developing a new product, fulfilling an order, and hiring a new employee are examples of
business processes.
3) A fully digital firm produces only digital goods or services.
4) A business model describes how a company produces, delivers, and sells a product or
service to create wealth.
5) Information technology (IT) consists of all the hardware that a firm needs to use in order to
achieve its business objectives, whereas information systems consist of all the software and
business processes needed.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
6) Computers are only part of an information system.
7) Information systems literacy describes the behavioral approach to information systems,
whereas computer literacy describes the technical approach.
8) The dimensions of information systems are management, organizations, and information
technology.
9) Knowledge workers assist with paperwork at all levels of the firm.
10) There are four major business functions: sales and marketing; manufacturing and
production; finance and accounting; and information technology.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
11) In order to understand how a specific business firm uses information systems, you need to
know something about the hierarchy and culture of the company.
12) Business processes are illogically related tasks for accomplishing tasks that have been
formally encoded by an organization.
13) A substantial part of management responsibility is creative work driven by new knowledge
and information.
14) Intranets allow firms to work easily with third-party suppliers and vendors.
15) UPS’s use of Web-based tools that allow customers to embed UPS functions such as
tracking and cost calculations into their own Web sites was an information systems solution
used to achieve customer intimacy.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
16) Studies have consistently shown that firms that invest greater amounts in information
technology receive greater benefits than firms that invest less.
17) Government and private sector standards are examples of complementary social assets
required to optimize returns from IT investments.
18) A firm that invests in efficient business processes is making an investment in organizational
complementary assets.
19) The behavioral approach to information systems leaves aside technical solutions to instead
analyze the psychological, social, and economic impacts of systems.
20) The Apple iPhone, Android, Blackberry, and other mobile devices are able to download
hundreds of thousands of applications to support collaboration, location-based services, and
communication with colleagues.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
21) Managers adopt telepresence videoconferencing and Web conferencing technologies to
reduce travel time and cost while improving collaboration and decision making.
22) Using handhelds to run the business is limited to small companies.
23) The emergence of the Internet as a full-blown international communications system has
drastically increased the costs of operating and transacting on a global scale.
24) An data set is a set of interrelated components that collect (or retrieve), process, store, and
distribute information to support decision making and control in an organization.
25) The six important business objectives of information technology are new products, services,
and business models; customer and supplier intimacy; survival; competitive advantage;
operational excellence; and ______________________________
A) improved flexibility.
B) improved decision making.
C) improved business practices.
D) improved efficiency.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
26) Which of the following choices may lead to competitive advantage:
1. new products, services, and business models; 2. charging less for superior products; 3.
responding to customers in real time?
A) 1 only
B) 1 and 2
C) 2 and 3
D) 1, 2, and 3
27) The use of information systems because of necessity describes the business objective of
A) survival.
B) improved business practices.
C) competitive advantage.
D) improved flexibility.
28) The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates
the use of information systems to achieve which business objective?
A) improved efficiency
B) customer and supplier intimacy
C) survival
D) competitive advantage
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
29) The four activities in an information system that produce the information organizations use
to control operations are
A) information retrieval, research, output, and analysis.
B) input, output, retrieval, and feedback.
C) input, processing, output, and feedback.
D) data analysis, retrieval, processing, and feedback.
30) Order data for baseball tickets and bar code data are examples of
A) raw input.
B) raw output.
C) customer and product data.
D) sales information.
31) The average number of tickets sold daily online is an example of
A) input.
B) raw data.
C) meaningful information.
D) feedback.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
32) 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 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.
33) Converting raw data into a more meaningful form is called
A) capturing.
B) processing.
C) organizing.
D) feedback.
34) An example of raw data from a national chain of automobile stores would be
A) an average of 13 Toyotas are sold daily in Kentucky.
B) 30 percent increase in Toyota RAV4 sales during September in Kentucky.
C) 1 Toyota RAV4 sold March 3, 2008 in Louisville, Kentucky.
D) all of the above.
35) The field that 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 is called
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
A) information systems literacy.
B) information systems architecture.
C) management information systems.
D) information technology infrastructure.
36) In a hierarchical organization, the upper levels consist of
A) managerial and professional employees.
B) managerial, professional, and technical employees.
C) professional and operational employees.
D) managerial, professional, and operational employees.
37) Which of the following is not one of the current changes taking place in information
systems technology?
A) growing business use of “big data”
B) growth in cloud computing
C) development of videopresence software
D) emerging mobile platform
38) The fundamental set of assumptions, values, and ways of doing things that has been
accepted by most of a company’s members is called its
A) culture.
B) environment.
C) atmosphere.
D) values.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
39) Thomas Friedman’s declaration that the world was now “flat” meant that
A) the Internet has reduced the economic advantages of developed countries.
B) globalization is starting to offer less advantage to large corporations.
C) the global economy is increasingly commanded by fewer and larger corporations.
D) global capitalism is homogenizing culture and business practices throughout the world.
40) Data management technology consists of the
A) physical hardware and media used by an organization for storing data.
B) detailed, preprogrammed instructions that control and coordinate the computer hardware
components in an information system.
C) software governing the organization of data on physical storage media.
D) hardware and software used to transfer data.
41) Organizational culture is best described by which of the following statements?
A) It encompasses the sum of beliefs and assumptions by all members.
B) It enables the organization to transcend the different levels and specialties of its
employees.
C) It reflects the senior management’s perspective on the organization and goals.
D) It is a set of assumptions and values accepted by most members.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
42) Networking and telecommunications technologies, along with computer hardware,
software, data management technology, and the people required to run and manage them,
constitute an organization’s
A) data management environment.
B) networked environment.
C) IT infrastructure.
D) information system.
43) An example of a business using information systems to create new products and services is
A) Wal-Mart’s RetailLink system.
B) the Mandarin Oriental hotel’s customer-preference tracking system.
C) Verizon’s Web-based digital dashboard.
D) Apple Inc.’s iPod.
44) An example of a business using information systems to attain operational excellence is
A) Wal-Mart’s RetailLink system.
B) the Mandarin Oriental hotel’s customer-preference tracking system.
C) Verizon’s Web-based digital dashboard.
D) Apple Inc.’s iPod.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
45) An example of a business using information systems for customer and supplier intimacy is
A) Wal-Mart’s RetailLink system.
B) the Mandarin Oriental hotel’s customer-preference tracking system.
C) Verizon’s Web-based digital dashboard.
D) Apple Inc.’s iPod.
46) Maintaining the organization’s financial records is a central purpose of which main business
function?
A) manufacturing and accounting
B) finance and accounting
C) sales and manufacturing
D) finance and sales
47) Which of the following is not one of the primary environmental actors that interacts with an
organization and its information systems?
A) sales force
B) regulatory agencies
C) customers
D) suppliers
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
48) Which of the following would not be a complementary asset for a solar panel manufacturer?
A) international solar equipment certification standards
B) government funding for green technology
C) centralized hierarchical decision making
D) innovation-driven management team
49) The temp agency that you own is having serious difficulties placing temps because few of
them are familiar with Internet research. Investing in training software to enhance your
workers’ skills is an example of using technology to achieve which business objective?
A) customer and supplier intimacy
B) survival
C) competitive advantage
D) improved decision making
50) In a business hierarchy, the level that is responsible for monitoring the daily activities of the
business is
A) middle management.
B) service workers.
C) production management.
D) operational management.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
51) From a business perspective, raw data is transformed systematically during various stages,
transforming it into valuable information, in a process called
A) the information value chain.
B) the IT value chain.
C) information processing.
D) feedback.
52) A corporation that funds a political action committee, which in turn promotes and funds a
political candidate who agrees with the values of that corporation, could be seen as
investing in which main category of complementary assets?
A) managerial
B) governmental
C) social
D) organizational
53) Apple Computer dominates the online legal music sales industry primarily because of a
failure of recording label companies to
A) invest in technology.
B) adopt a new business model.
C) invest in complementary assets.
D) modernize their information value chain.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
54) An example of an organizational complementary asset is
A) using the appropriate business model.
B) a collaborative work environment.
C) laws and regulations.
D) all of the above.
55) An example of a social complementary asset is
A) technology and service firms in adjacent markets.
B) training programs.
C) distributed decision-making rights.
D) all of the above.
56) Disciplines that contribute to the technical approach to information systems are
A) computer science, engineering, and networking.
B) operations research, management science, and computer science.
C) engineering, utilization management, and computer science.
D) management science, computer science, and engineering.
Laudon/Laudon/Brabston, Management Information Systems, Seventh Canadian Edition
57) The discipline that focuses on mathematical techniques for optimizing parameters of
organizations, such as transportation and inventory control, is
A) management science.
B) MIS.
C) operations research.
D) utilization management.
58) Sociologists study information systems with an eye to understanding
A) how systems affect individuals, groups, and organizations.
B) how human decision makers perceive and use formal information.
C) how new information systems change the control and cost structures within the firm.
D) the production of digital goods.
59) Psychologists study information systems with an eye to understanding
A) how systems affect individuals, groups, and organizations.
B) how human decision makers perceive and use formal information.
C) how new information systems change the control and cost structures within the firm.
D) the production of digital goods.
60) Which of the following are key corporate assets?
A) intellectual property, core competencies, and financial and human assets
B) production technologies and business processes for sales, marketing, and finance