Deck 3: Information Systems organizations and Strategy

Question 1

Business processes are collections of standard operating procedures.

Answer 1

True

Question 2

Strong linkages to customers and suppliers decrease switching costs.

Answer 2

False

Question 3

Mass customization is a form of mass production.

Answer 3

True

Question 4

The value chain model classifies all company activities as either primary or support.

Question 5

The technical and behavioural definitions of organizations are not complementary.Indeed,they contradict each other.

Question 6

A firm can be said to have competitive advantage when they have higher stock market valuations than their competitors.

Question 7

The term business ecosystem describes the interplay between the various organizational forces within a firm.

Question 8

In the macroeconomic definition of organizations,capital and labour are transformed by the firm through the production process into products and services.

Question 9

A transparent marketplace means that there is high product differentiation.

Question 10

In a demonstration of network economics,the more people that use Adobe software and related products,the greater the value of the software.

Question 11

In the strategy of product differentiation,information systems are used to enable new products and services.

Question 12

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.

Question 13

Research has shown that only 25% of firms are able to align their information technology with their business goals.

Question 14

An adhocracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.

Question 15

Customers are one of the competitive forces that affect an organization's ability to compete.

Question 16

All organizations have bedrock,unassailable assumptions that define their goals and products.

Question 17

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

Question 18

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.

Question 19

The use of Internet technologies allows companies to more easily sustain competitive advantage.

Question 20

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.

Question 21

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.

Question 22

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

Question 23

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.

Question 24

As transaction costs decrease,firm size (the number of employees)should shrink because it becomes easier and cheaper for the firm to contract for the purchase of goods and services in the marketplace rather than to make the product or offer the service itself.

Question 25

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.

Question 26

Which of the following would not be considered a disruptive technology?

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

Question 27

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.

Question 28

Which of the following industries has a low barrier to entry?

A) automotive
B) computer chip
C) restaurant
D) airline

Question 29

An example of a divisionalized bureaucracy is a

A) startup firm.
B) university.
C) Fortune 500 firm.
D) midsize manufacturer.

Question 30

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.

Question 31

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

Question 32

Which of the following is not one of the competitive forces?

A) suppliers
B) other competitors
C) external environment
D) customers

Question 33

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

Question 34

Routines-sometimes called non-standard operating procedures-are precise rules,procedures,and practices that have been developed to cope with virtually all expected situations.

Question 35

According to research 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) organization, culture, management, and environment.
D) tasks, technology, people, and structure.

Question 36

Information systems are key instruments for environmental scanning,helping managers identify external changes that might require an organizational response.

Question 37

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.

Question 38

Business processes are collections of

A) informal practices and behaviors.
B) formalized and documented practices.
C) routines.
D) rights and privileges.

Question 39

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.

Question 40

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

Question 41

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

Question 42

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.

Question 43

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.

Question 44

A firm can exercise greater control over its suppliers by having

A) more suppliers.
B) fewer suppliers.
C) global suppliers.
D) local suppliers.

Question 45

Which of the following best illustrates the use of information systems to focus on market niche?

A) A car manufacturer's Web site that lets you customize the features on the car you are purchasing.
B) A restaurant chain analyzing local sales figures to determine which menu items to serve.
C) A bookseller selling an e-book reader that reads only the bookseller's books.
D) A department store creating specialized products for small groups of customers.

Question 46

In environmental scanning,a firm may use information systems to

A) utilize sensors that track products through the value chain.
B) analyze external Internet traffic to its Web sites.
C) identify external events that may affect it.
D) understand its carbon footprint and energy impacts on the environment.

Question 47

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.

Question 48

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.

Question 49

A substitute product of most concern for a cable TV distributor is

A) satellite TV.
B) broadcast TV.
C) satellite radio.
D) the Internet.

Question 50

Walmart'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.

Question 51

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.

Question 52

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

Question 53

What significant competitive force is challenging the publishing industry?

A) positioning and rivalry among competitors
B) low cost of entry
C) substitute products or services
D) customer's bargaining power

Question 54

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.
B) remove publishers from the industry value chain.
C) develop synergies with publishers.
D) focus on market niche.

Question 55

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.

Question 56

________ 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

Question 57

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

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

Question 59

Which of the following industries has not been disrupted by the Internet?

A) encyclopedias
B) newspapers
C) clothing
D) air travel

Question 60

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
B) new market entrants; product specialization
C) substitute products; market niche
D) customers; customer intimacy

Question 61

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.

Question 62

Successfully using information systems to achieve a competitive advantage is challenging and requires precise coordination of ________________________.

A) network economics, organizations, and management
B) technology, organizations, and management
C) technology, organizations, and political
D) a simulated company model, technology, and management

Question 63

A/An ________________describes a young,small firm in a fast-changing environment.It has a simple structure and is managed by an entrepreneur serving as its single chief executive officer.

A) Machine bureaucracy
B) Divisionalized bureaucracy
C) Entrepreneurial structure
D) Adhocracy

Question 64

Information systems can reduce the number of levels in an organization by providing managers with in- formation to supervise larger numbers of workers and by giving lower-level employees more decision- making authority.This process describes a process of ______________________.

A) Flattening Organizations
B) Fattening Organizations
C) Forming Organizations
D) Feeding Organizations

Question 65

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.

Question 66

Disruptive technologies are tricky.Firms that invent disruptive technologies as ______________________________________________________________.

A) as "first movers" always benefit if they lack the resources to exploit the technology or fail to see the opportunity.
B) as "first agents" do not always benefit if they lack the resources to exploit the technology or fail to see the opportunity.
C) as "first movers" do not always benefit if they lack the resources to exploit the technology or fail to see the opportunity.
D) as "first agents" always benefit if they lack the resources to exploit the technology or fail to see the opportunity.

Question 67

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.

Question 68

The availability of Internet and networking technologies have inspired strategies that take advantage of firms' abilities to create networks or network with each other.Network-based strategies include the use of ___________________________________ ecosystems.

A) network economics, a simulated company model, and business
B) network economics, a virtual company model, and business
C) network economics, a virtual company model, and political
D) network economics, a simulated company model, and political

Question 69

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.

Question 70

Information systems can reduce the number of levels in an organization by providing managers with in- formation to supervise larger numbers of workers and by giving lower-level employees more decision- making authority.This process describes a process of ______________________.

A) Flattening Organizations
B) Fattening Organizations
C) Forming Organizations
D) Feeding Organizations

Question 71

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.

Question 72

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) Walmart's order entry and inventory management system to coordinate with suppliers.

Question 73

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.

Question 74

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.

Question 75

Using computer links to external suppliers,the Chrysler Corporation can achieve economies by obtaining more than 70 percent of its parts from the outside.____________________ make it possible for companies such as Cisco Systems and Dell Inc.to outsource their production to contract manufacturers such as Flextronics instead of making their products themselves.

A) Information systems
B) Divisionalized systems
C) Entrepreneurial systems
D) Knowledge systems

Question 76

_______________________is another term for these loosely coupled but interdependent networks of suppliers,distributors,outsourcing firms,transportation service firms,and technology manufacturers.

A) Management ecosystem
B) Technology ecosystem
C) Political ecosystem
D) Business ecosystem

Question 77

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.

Question 78

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

Question 79

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.

Question 80

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.