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WorksheetsMIS - Ch3 - Testbank (2)
Total questions: 89
Worksheet time: 45mins
The interaction between information technology and organizations is influenced
solely by the decision making of middle and senior managers.
by the development of new information technologies.
by many factors, including structure, politics, culture, and environment.
by two main macroeconomic forces: capital and labor.
by the rate of growth of the organization.
Which of the following statements about organizations is not true?
An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs.
An organization is a formal, legal entity with internal rules and procedures that must abide by laws.
An organization is a collection of people and other social elements.
An informal group can be considered to be an organization.
An organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution.
According to the ______ definition of organizations, an organization is seen as a means by which capital and labor are transformed by the organization into outputs to the environment.
microeconomic
macroeconomic
sociotechnical
behavioral
psychological
Which of the following statements about the technical view of organizations is not true?
It sees information systems as a way to rearrange the inputs and outputs of the organization.
It sees capital and labor as primary production factors.
It emphasizes group relationships, values and structures.
It sees the organization as a social structure similar to a machine.
It sees the inputs and outputs, labor and capital, as being infinitely malleable.
Which of the following is not a major feature of organizations that impacts the use of information systems?
Business processes
Environments
Goals
Agency costs
Leadership styles
Which of the following statements about business processes is not true?
Business processes influence the relationship between an organization and information technology.
Business processes are a collection of standard operating procedures.
A business firm is a collection of business processes.
Business processes are usually ensconced in an organization's culture.
Business processes are typically unaffected by changes in information systems.
Which of the following technologies disrupted the traditional publishing industry?
Instant messaging
Internet telephony
PCs
World Wide Web
Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of
entrepreneurial structures.
divisionalized bureaucracies.
professional bureaucracies.
adhocracies.
machine bureaucracies.
Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ______ bureaucracy.
machine
professional
divisionalized
multidivisional
ad hoc
Which of the following is an example of a divisionalized bureaucracy?
Startup firm
University
Fortune 500 firm
Midsize manufacturer
Consulting firm
Along with capital, ______ is the primary production input that the organization uses to create products and services.
structure
culture
politics
feedback
labor
The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as organizational
culture.
politics.
structure.
environments.
routines.
Which of the following statements about disruptive technologies is not true?
Disruptive technologies radically change the business landscape and environment.
Disruptive technologies may substitute products that perform better than other products currently being produced.
Disruptive technologies may sometimes simply extend the marketplace.
Disruptive technologies may put entire industries out of business.
Firms that invent disruptive technologies as first movers always become market leaders.
All organizations have bedrock, unquestioned assumptions that define their goals and products.
True
False
A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.
True
False
Routines are also called standard operating procedures.
True
False
How are the technical and behavioral definitions of an organization different?
The technical view sees an organization as an entity that processes inputs from the environment into outputs using interchangeable units of capital and labor, while the behavioral view sees an organization as a collection of rights, privileges, obligations, and responsibilities balanced through conflict and change.
The technical view focuses on informal social structures and culture, whereas the behavioral view focuses on formal rules and procedures.
The technical view considers organizations primarily political, whereas the behavioral view treats them as purely economic.
The technical view emphasizes group relationships and values, while the behavioral view emphasizes machine-like efficiency.
When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as
switching costs.
network costs.
procurement.
agency costs.
transaction costs.
All of the following statements are true about information technology's impact on business firms except
it helps firms expand in size.
it helps firms lower the cost of market participation.
it helps reduce internal management costs.
it helps reduce transaction costs.
it helps reduce agency costs.
According to agency theory, the firm is viewed as a(n)
unified, profit-maximizing entity.
task force organization that must respond to rapidly changing environments.
entrepreneurial endeavor.
nexus of contracts among self-interested individuals.
entrepreneurial structure.
According to research on organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are
environment, organization, structure, and tasks.
technology, people, processes, and culture.
strategy, leadership, data, and governance.
capital, labor, routines, and outputs.
Select the organizational factors that can prevent a firm from fully realizing the benefits of a new information system.
Organizational culture
Organizational politics
Organizational structure
External market competition
IT hardware failure
Which statements accurately reflect agency theory and how information technology enables a firm to reduce agency costs? Select all that apply.
The firm is viewed as a nexus of contracts among self-interested individuals.
Agents naturally and consistently align with owners’ interests, minimizing the need for supervision.
By reducing the costs of acquiring and analyzing information, information technology enables managers to oversee more employees at lower cost.
As firms grow in size and scope, agency or coordination costs typically rise due to increased supervision and management effort.
Information technology increases overall management costs by requiring more middle managers.
Which model is used to describe the interaction of external forces that affect an organization’s strategy and ability to compete?
Network economics model
Competitive forces model
Competitive advantage model
Demand control model
Agency costs model
Which of the following industries has the lowest barrier to entry?
Automotive
Computer chip
Solar energy
Airline
Small retailer
All of the following are competitive forces in Porter's model except:
suppliers.
new market entrants.
external environment.
customers.
substitute products.
Which of the following marketplace forces would be of least concern to a manufacturer of deep-sea oil rigs?
Product differentiation
Traditional competitors
Low number of suppliers
New market entrants
Low number of customers
Which of the following substitute products would be of most concern for a cable TV distributor?
Satellite TV
Broadcast TV
Satellite radio
The Internet
Terrestrial radio
Walmart's attempt to increase its online presence is an example of a firm using information systems to:
strengthen ties to its customers.
simplify the industry value chain.
develop synergies.
focus on market niche.
achieve low-cost leadership.
A firm can exercise greater control over its suppliers by having:
more suppliers.
fewer suppliers.
global suppliers.
local suppliers.
only a single supplier.
Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates which of the following strategies?
Low-cost leadership
Marketing effectiveness
Focusing on market niche
Strengthening supplier intimacy
Developing synergies
The four major competitive strategies are:
low-cost leadership, substitute products and services, customers; and suppliers.
low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy.
new market entrants, substitute products and services, customers, and suppliers.
low-cost leadership, new market entrants, product differentiation, and focus on market niche.
customers, suppliers, new market entrants, and substitute products.
Walmart's continuous replenishment system allows it to do all of the following except:
provide mass customization.
transmit orders to restock directly to its suppliers.
keep costs low.
better meet customer demands.
fine-tune merchandise availability.
Firms use a ______ strategy to provide a specialized product or service for a narrow target market better than competitors.
product differentiation
market niche
mass customization
process efficiency
low-cost leadership
The ability to offer individually tailored products or services using the same production resources as bulk production is known as:
mass marketing.
micromarketing.
micro customization.
niche customization.
mass customization.
In environmental scanning, a firm may use information systems to:
transform inputs into products and services.
analyze the performance of its intranet.
identify external events that may affect it.
keep track of the temperature within its data centers.
develop a unified organizational culture.
Which of the following is not a true statement about value webs?
Value webs involve a collection of independent firms that use information technology to coordinate their value chains.
Value webs are more customer-driven than traditional value chains.
Value webs operate in a less linear fashion than traditional value chains.
Value webs are inflexible and cannot adapt quickly to changes in supply and demand.
Value webs involve highly synchronized industry value chains.
Which of the following best illustrates the use of information systems to focus on market niche?
A car manufacturer's Web site that lets you customize the features on the car you are purchasing.
A restaurant chain analyzing local sales figures to determine which menu items to serve.
A bookseller selling an e-book reader that reads only the bookseller's books.
A department store creating specialized products for preferred customers.
A clothes manufacturer expanding its offerings to new styles.
All of the following are IT-enabled products and services providing competitive advantage except:
Amazon's one-click shopping.
Apple's iPod and iTunes.
Ping's golf club customization.
PayPal's online person-to-person payment system.
Nike's use of celebrities to market their products.
The Internet increases the bargaining power of customers by:
creating new opportunities for building loyal customer bases.
making more products available.
making information available to everyone.
lowering transaction costs.
Procter and Gamble uses InnovationNet for which of the following?
To enhance its core competencies
To benchmark its progress against competitors
To create synergies with its suppliers
To take advantage of network economics
To establish a virtual company
Which of the following is a competitive force challenging the publishing industry?
Positioning and rivalry among competitors
Low cost of entry
Substitute products or services
Customers' bargaining power
Suppliers' bargaining power
The value chain model:
Categorizes five related advantages for adding value to a firm's products or services.
Sees the supply chain as the primary activity for adding value.
Categorizes four basic strategies a firm can use to enhance its value chain.
Highlights specific activities in the business where competitive strategies can best be applied.
Enables more effective product differentiation.
Which of the following represent the primary activities of a firm?
Inbound logistics, operations, outbound logistics, sales and marketing, and service
Inbound logistics, operations, outbound logistics, technology, and service
Procurement, inbound logistics, operations, technology, and outbound logistics
Procurement, operations, technology, sales and marketing, and services
Organization infrastructure, human resources, technology, and procurement
Which of the following is a support activity in a firm's value chain?
Inbound logistics
Operations
Sales and marketing
Service
Technology
Which of the following would a company employ to measure and compare its business processes to similar processes of other companies within their industry?
Benchmarking
Best practices
Value chain analysis
Strategic systems analysis
Secondary activities
The most successful solutions or methods for achieving a business objective are called:
value activities.
best processes.
core competencies.
best practices.
benchmarks.
Information systems can be used at the industry level to achieve strategic advantage by:
building industry wide, IT-supported consortia and symposia.
raising the bargaining power of suppliers.
encouraging the entry of new competitors.
enforcing standards that reduce the differences between competitors.
In network economics, the value of a commercial software vendor's software products:
increases as more people use them.
decreases as more people use them.
increases due to higher marginal gain in output.
decreases according to the law of diminishing returns.
is unrelated to the number of people that use them.
When two organizations pool markets and expertise that result in lower costs and generate profits, they are creating:
a value web.
a value chain.
net marketplaces.
core competencies.
synergies.
Which of the following is an example of synergy in business?
Amazon's use of the Internet to sell books
Bank of America acquiring Countrywide Financial to reach a large pool of new customers
Blockbuster combining traditional video rental with online video rental
Walmart's order entry and inventory management system to coordinate with suppliers
Nike's use of technology to improve its product offerings
Information systems enhance core competencies by:
providing better reporting facilities.
creating educational opportunities for management.
allowing operational employees to interact with management.
encouraging the sharing of knowledge across business units.
fostering synergies among departments.
The idea that 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, is referred to as:
the point of no return.
the law of diminishing returns.
supply and demand.
network inelasticity.
virtual economics.
Which of the following statements about network economics is not true?
Uber is an example of a business model that is based on the principle of network economics.
The law of diminishing returns does not always apply to every situation.
From a network economics perspective, the value of a community of people grows as the number of participants in the community increases.
Information technology can be strategically useful from a network economics perspective.
In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.
A virtual company:
uses networks to link people, assets, and ideas.
uses Internet technology to maintain a virtual storefront.
uses Internet technology to maintain a networked community of users.
provides entirely Internet-driven services or virtual products.
is limited by traditional organizational boundaries.
Which of the following is an example of a keystone firm within a business ecosystem?
Apple in the mobile platform ecosystem
GUESS and the fashion ecosystem
Citibank and the ATM ecosystem
_______ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.
Product differentiation
Low-cost leadership
Focusing on market niche
Strengthening customer intimacy
Strengthening supplier intimacy
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 are known as:
retention costs
preservation costs
differentiation costs
switching costs
variation costs
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.
competitive forces
value chain
bargaining power
new entrant
rivalry
The parts of an organization's infrastructure, human resources, technology, and procurement that make the delivery of the firm's products or services possible are known as ______ activities.
primary
auxiliary
secondary
service
support
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.
value chain
support web
value web
consortium
net marketplace
A(n) ______ is an activity for which a firm is a world-class leader.
expertise area
competitive advantage
growth driver
efficiency
core competency
Why does Amazon need to worry about competitors in online shopping?
E-commerce is affected by the law of diminishing returns.
Internet technologies are universal, and therefore usable by all companies.
Internet shopping produces cost transparency.
The Internet enables the production or sales of substitute products or services.
The Internet increases switching costs.
Smart products are an example of the Internet of Things.
True
False
A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.
True
False
The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms.
True
False
Customers are one of the competitive forces that affect an organization's ability to compete.
True
False
High product differentiation is a sign of a transparent marketplace.
True
False
The effect of the Internet has been to decrease the bargaining power of customers.
True
False
An efficient customer response system directly links consumer behavior to distribution and production and supply chains.
True
False
Information systems are used to enable new products and services via product differentiation.
True
False
Mass customization offers individually tailored products or services using the same resources as mass production.
True
False
Switching costs decrease when customers are strongly linked to products and platforms.
True
False
The value chain model classifies all company activities as either primary or support activities.
True
False
In the value chain model, support activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer.
True
False
When the output of some units in a firm can be used as inputs to other units, synergies develop, which can lower costs and generate profits.
True
False
According to the network economics perspective, the more people offering products on eBay's site, the greater the value of the site to all who use it.
True
False
The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.
True
False
A firm can be said to have competitive advantage when it has access to resources that others do not.
True
False
The law of diminishing returns only applies to digital products.
True
False
The inventors of a disruptive technology typically benefit the most from the technology; it is rare that fast followers catch up quickly.
True
False
Smart products generally raise switching costs.
True
False
Mintzberg's classification identifies five forces in an industry's environment that affect the strategic position of a firm.
True
False
You are advising the owner of ABC Computers, a small local computer shop that repairs and also builds custom computers to order. What competitive strategies could ABC Computers employ? Which ones may it have difficulty executing?
Low-cost leadership compared to other local computer stores
Product differentiation using superior components and added services
Focus on market niche as a local store with in‑store technology support
Customer and supplier intimacy through face‑to‑face relationships
You are advising the owner of ABC Computers, a small local computer shop that repairs and also builds custom computers to order. Which competitive strategy is most difficult for ABC Computers to execute when competing against national manufacturers?
Achieving low-cost leadership against national manufacturers
Product differentiation via superior components
Focusing on a local market niche with in‑store support
Enhancing customer and supplier intimacy
Why are disruptive technologies "tricky"? Provide examples.
First movers may not benefit if they lack resources to exploit the technology; fast followers such as IBM and Microsoft often reap rewards, as seen with ATMs and the Altair 8800
Disruptive technologies always benefit the inventing firm most, as with IBM and Microsoft creating ATMs and the Altair 8800
Disruptive technologies mainly fail because consumers resist any change, illustrated by banks refusing ATMs and PCs
First movers always gain lasting advantage if they ship the first product, regardless of resources or market timing
Why has the Internet made competitive rivalry more intense?
Universal standards lower entry barriers and make price comparison easy
Information availability raises customer bargaining power
Geographic markets widen, increasing the number of competitors
Operational advantages are easier to sustain over time
You are consulting for a natural food products distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step?
Identify the business ecosystem the distributor is in
Implement a strategic transition to the new system
Perform a strategic systems analysis
Benchmark existing systems
Set up a strategic transition
Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered:
organizational adjustments
strategic transitions
systems alterations
business goal transitions
