Exam
Name___________________________________
1. All organizations have bedrock, unassailable assumptions that define their goals and products.
2. An adhocracy is a knowledge–based organization where goods and services depend on the expertise and
knowledge of professionals.
3. 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.
4. A firm can be said to have competitive advantage when they have higher stock market valuations than their
competitors.
5. The competitive forces model can be used to analyze today’s digital firm as well as traditional firms.
6. Customers are one of the competitive forces that affect an organization’s ability to compete.
7. A transparent marketplace means that there is high product differentiation.
8. The effect of the Internet has been to raise bargaining power over suppliers.
9. In an efficient customer response system, digital answering systems are used to monitor and respond to
customer inquiries.
10. In the strategy of product differentiation, information systems are used to enable new products and services.
11. Mass customization is a form of mass production.
12. Strong linkages to customers and suppliers decrease switching costs.
13. Business processes are collections of standard operating procedures.
14. The value chain model classifies all company activities as either primary or support.
15. 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.
16. 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.
17. In a demonstration of network economics, the more people that use Adobe software and related products,
the greater the value of the software.
18. The term business ecosystem describes the interplay between the various organizational forces within a firm.
19. Research has shown that only 25% of firms are able to align their information technology with their business
goals.
20. The use of Internet technologies allows companies to more easily sustain competitive advantage.
21. As discussed in the chapter opening case, which of the four generic strategies did Sears employ to combat
the competition offered by Target, Walmart, and Macy’s?
A) focus on market niche
B) product differentiation
C) low–cost leadership
D) customer and supplier intimacy
22. The interaction between information systems and organizations is influenced
A) primarily by the decision making of middle and senior managers.
B) by two main microeconomic forces: capital and labor.
C) by many factors, including structure, politics, culture, and environment.
D) primarily by the organization’s business processes and culture.
23. An organization is a
A) stable, formal social structure that takes resources from the environment and processes them to
produce outputs.
B) collection of social elements.
C) formal, legal entity with internal rules and procedures that must abide by laws.
D) B and C
E) A, B, and C
24. 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) macroeconomic
B) sociotechnical
C) behavioral
D) microeconomic
25. How does the technical view of organizations fall short of understanding the full impacts of information
systems in a firm?
A) It sees capital and labor as primary production factors.
B) It sees the organization as a social structure similar to a machine.
C) It sees information systems as a way to rearrange the inputs and outputs of the organization.
D) It sees the inputs and outputs, labor and capital, as being infinitely malleable.
26. All of the following are major features of organizations that impact the use of information systems except for
A) business processes.
B) environments.
C) agency costs.
D) goals.
27. Business processes are collections of
A) informal practices and behaviors.
B) rights and privileges.
C) routines.
D) formalized and documented practices.
28. Which of the following would not be considered a disruptive technology?
A) e–mail
B) Internet telephony
C) PCs
D) instant messaging
29. 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) professional bureaucracy.
C) adhocracy.
D) divisionalized bureaucracy.
30. 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) multidivisional
B) divisionalized
C) machine
D) professional
31. An example of a divisionalized bureaucracy is a
A) Fortune 500 firm.
B) university.
C) startup firm.
D) midsize manufacturer.
32. The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as
A) switching costs.
B) procurement.
C) agency costs.
D) transaction costs.
33. Which of the following statements is not true about information technology’s impacts on business firms?
A) It helps firms lower the cost of market participation.
B) It helps reduce transaction costs.
C) It helps firms expand in size.
D) It helps reduce internal management costs.
34. According to agency theory, the firm is viewed as a(n)
A) task force organization that must respond to rapidly changing environments.
B) unified, profit–maximizing entity.
C) entrepreneurial endeavor.
D) “nexus of contracts” among self–interested individuals.
35. 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, and tasks.
B) technology, people, culture, and structure.
C) tasks, technology, people, and structure.
D) organization, culture, management, and environment.
36. The ________ model is used to describe the interaction of external forces that affect an organization’s strategy
and ability to compete.
A) demand control
B) competitive forces
C) network economics
D) competitive advantage
37. Which of the following industries has a low barrier to entry?
A) airline
B) automotive
C) restaurant
D) computer chip
38. Which of the following is not one of the competitive forces?
A) suppliers
B) customers
C) external environment
D) other competitors
39. A manufacturer of deep–sea oil rigs may be least concerned about this marketplace force.
A) product differentiation
B) low number of suppliers
C) traditional competitors
D) new market entrants
40. A substitute product of most concern for a cable TV distributor is
A) the Internet.
B) broadcast TV.
C) satellite TV.
D) satellite radio.
41. Barnes & Noble’s apps for its e–reader, the Nook, is an example of a firm using information systems to
A) develop synergies with publishers.
B) focus on market niche.
C) strengthen ties to its customers.
D) remove publishers from the industry value chain.
42. A firm can exercise greater control over its suppliers by having
A) global suppliers.
B) fewer suppliers.
C) local suppliers.
D) more suppliers.
43. 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) focusing on market niche.
C) strengthening supplier intimacy.
D) marketing effectiveness.
44. The four major types of competitive strategy are
A) low–cost leadership; substitute products and services; customers; and suppliers.
B) low–cost leadership; new market entrants; product differentiation; and focus on market niche.
C) new market entrants; substitute products and services; customers; and suppliers.
D) low–cost leadership; product differentiation; focus on market niche; and customer and supplier
intimacy.
45. Walmart’s continuous replenishment system allows it to
A) provide mass customization.
B) strengthen customer intimacy.
C) achieve economy of scale.
D) provide an efficient customer response system.
46. When a firm provides a specialized product or service for a narrow target market better than competitors,
they are using a ________ strategy.
A) mass customization
B) product differentiation
C) market niche
D) process efficiency
47. ________ is the ability to offer individually tailored products or services using the same production resources
as bulk production.
A) Dimension customization
B) Size customization
C) Magnitude customization
D) Mass customization
48. In environmental scanning, a firm may use information systems to
A) analyze external Internet traffic to its Web sites.
B) understand its carbon footprint and energy impacts on the environment.
C) identify external events that may affect it.
D) utilize sensors that track products through the value chain.
49. An information system can enable a company to focus on a market niche through
A) intensive customer data analysis.
B) complex trend forecasting.
C) tailoring products to the client.
D) intensive product trend analysis.
50. Which of the following best illustrates the use of information systems to focus on market niche?
A) A restaurant chain analyzing local sales figures to determine which menu items to serve.
B) A bookseller selling an e–book reader that reads only the bookseller’s books.
C) A car manufacturer‘s Web site that lets you customize the features on the car you are purchasing.
D) A department store creating specialized products for small groups of customers.
51. As described in the chapter case, the competitive force of ________ resulted in Starbuck’s downturn in 2008,
and it employed information systems in a strategy of ________ to combat this force.
A) substitute products; market niche
B) customers; customer intimacy
C) new market entrants; product specialization
D) traditional competitors; product differentiation
52. The Internet raises the bargaining power of customers by
A) lowering transaction costs.
B) creating new opportunities for building loyal customer bases.
C) making information available to everyone.
D) making more products available.
53. Which of the following industries has not been disrupted by the Internet?
A) clothing
B) newspapers
C) air travel
D) encyclopedias
54. What significant competitive force is challenging the publishing industry?
A) substitute products or services
B) customer’s bargaining power
C) low cost of entry
D) positioning and rivalry among competitors
55. The value chain model
A) categorizes four basic strategies a firm can use to enhance its value chain.
B) helps a firm identify points at which information technology can most effectively enhance its
competitive position.
C) sees the supply chain as the primary activity for adding value.
D) categorizes five related advantages for adding value to a firm’s products or services.
56. The primary activities of a firm include
A) inbound logistics, operations, outbound logistics, sales and marketing, and service.
B) procurement, operations, technology, sales and marketing, and services.
C) procurement, inbound logistics, operations, technology, and outbound logistics.
D) inbound logistics, operations, outbound logistics, technology, and service.
57. Which of the following is one of the support activities in a firm’s value chain?
A) sales and marketing
B) technology
C) operations
D) inbound logistics
58. 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) strategic systems analysis
B) best practices
C) value chain analysis
D) benchmarking