MIS Chapter 3

1) All organizations have bedrock, unassailable assumptions that define their goals and products.
True
2) An adhocracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.
False
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.
True
4) A firm can be said to have competitive advantage when they have higher stock market valuations than their competitors.
True
5) The competitive forces model can be used to analyze today’s digital firm as well as traditional firms.
True
6) Customers are one of the competitive forces that affect an organization’s ability to compete.
True
7) A transparent marketplace means that there is high product differentiation.
False
8) The effect of the Internet has been to raise bargaining power over suppliers.
True
9) In an efficient customer response system, digital answering systems are used to monitor and respond to customer inquiries.
False
10) In the strategy of product differentiation, information systems are used to enable new products and services.
True
11) Mass customization is a form of mass production.
True
12) Strong linkages to customers and suppliers decrease switching costs.
False
13) Business processes are collections of standard operating procedures.
True
14) The value chain model classifies all company activities as either primary or support.
True
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.
True
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.
True
17) In a demonstration of network economics, the more people that use Adobe software and related products, the greater the value of the software.
True
18) The term business ecosystem describes the interplay between the various organizational forces within a firm.
False
19) Research has shown that only 25% of firms are able to align their information technology with their business goals.
True
20) The use of Internet technologies allows companies to more easily sustain competitive advantage.
False
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?
C) customer and supplier intimacy
22) The interaction between information systems and organizations is influenced
B) by many factors, including structure, politics, culture, and environment.
23) An organization is a
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) microeconomic
25) How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm?
C) 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
D) agency costs.
27) Business processes are collections of
C) routines.
28) Which of the following would not be considered a disruptive technology?
A) 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)
C) professional 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) machine
31) An example of a divisionalized bureaucracy is a
C) Fortune 500 firm.
32) The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as
B) transaction costs.
33) Which of the following statements is not true about information technology’s impacts on business firms?
A) It helps firms expand in size.
34) According to agency theory, the firm is viewed as a(n)
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
D) tasks, technology, people, and structure.
36) The ________ model is used to describe the interaction of external forces that affect an organization’s strategy and ability to compete.
B) competitive forces
37) Which of the following industries has a low barrier to entry?
C) restaurant
38) Which of the following is not one of the competitive forces?
C) external environment
39) A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force.
D) new market entrants
40) A substitute product of most concern for a cable TV distributor is
A) satellite TV.
41) Barnes & Noble’s apps for its e-reader, the Nook, is an example of a firm using information systems to
A) strengthen ties to its customers.
42) A firm can exercise greater control over its suppliers by having
A) 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.
44) The four major types of competitive strategy are
B) low-cost leadership; product differentiation; focus on market niche; and customer and supplier intimacy.
45) Walmart’s continuous replenishment system allows it to
B) 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.
B) market niche
47) ________ is the ability to offer individually tailored products or services using the same production resources as bulk production.
A) Mass customization
48) In environmental scanning, a firm may use information systems to
C) identify external events that may affect it.
49) An information system can enable a company to focus on a market niche through
D) intensive customer data analysis.
50) Which of the following best illustrates the use of information systems to focus on market niche?
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) traditional competitors; product differentiation
52) The Internet raises the bargaining power of customers by
C) making information available to everyone.
53) Which of the following industries has not been disrupted by the Internet?
C) clothing
54) What significant competitive force is challenging the publishing industry?
C) substitute products or services
55) The value chain model
D) helps a firm identify points at which information technology can most effectively enhance its competitive position.
56) The primary activities of a firm include
A) inbound logistics, operations, outbound logistics, sales and marketing, and service.
57) Which of the following is one of the support activities in a firm’s value chain?
D) technology
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) benchmarking
59) The most successful solutions or methods for achieving a business objective are called
D) best practices.
60) How are information systems used at the industry level to achieve strategic advantage?
A) by building industry-wide, IT-supported consortia and symposia
61) 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)
C) value web.
62) If two organizations pool markets and expertise that result in lower costs and generate profits it is often referred to as creating
C) synergies.
63) An example of synergy in business is
B) JP Morgan Chase’s mergers with other banks that provided JP Morgan with a network of retail branches in new regions.
64) An information system can enhance core competencies by
D) encouraging the sharing of knowledge across business units.
65) 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
B) the law of diminishing returns.
66) Network economics
C) sees the cost of adding new members as inconsequential.
67) A virtual company
A) uses the capabilities of other companies without being physically tied to those companies.
68) An example of a keystone firm within a business ecosystem is
A) Apple and software application writers in the mobile platform ecosystem.
69) 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?
B) Internet technologies are universal, and therefore usable by all companies.
70) 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?
C) Perform a strategic systems analysis.