Deck 3: Information Systems, Organizations, and Strategy

Question 1

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 an organization as a collection of rights, privileges, obligations, and responsibilities.
D) It sees the organization as a social structure similar to a machine.
E) It sees the inputs and outputs, labor and capital, as being infinitely malleable.

Answer 1

E

Question 2

________ technologies radically change the business landscape and environment.

A) Explosive
B) Inventive
C) Disruptive
D) Subversive
E) Divisive

Answer 2

C

Question 3

When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as

A) switching costs.
B) network costs.
C) procurement.
D) agency costs.
E) transaction costs.

Answer 3

E

Question 4

Some organizations lack bedrock, unassailable assumptions that define their goals and products.

Question 5

All of the following are considered disruptive technologies except

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

Question 6

How are the technical and behavioral definitions of an organization different?

Question 7

Business processes are collections of

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

Question 8

A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.

Question 9

The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as

A) culture.
B) politics.
C) structure.
D) viewpoints.
E) variance.

Question 10

An organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment according to the ________ definition of organizations.

A) microeconomic
B) macroeconomic
C) sociotechnical
D) behavioral
E) psychological

Question 11

Along with capital, ________ is the primary production input that the organization uses to create products and services.

A) structure
B) culture
C) politics
D) natural resources
E) labor

Question 12

An example of a divisionalized bureaucracy is a

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

Question 13

Routines are also called standard operating procedures.

Question 14

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) a collection of people and other social elements.
D) B and C
E) A, B, and C

Question 15

Which of the following is not a major feature of organizations that impacts the use of information systems?

A) business processes
B) environments
C) goals
D) agency costs
E) leadership styles

Question 16

Under Mintzberg's classification of organizational structure, the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals falls under the category of

A) entrepreneurial structures.
B) divisionalized bureaucracies.
C) professional bureaucracies.
D) adhocracies.
E) machine bureaucracies.

Question 17

Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ________ bureaucracy.

A) machine
B) professional
C) divisionalized
D) multidivisional
E) ad hoc

Question 18

The interaction between information systems and organizations is influenced

A) primarily by the decision making of middle and senior managers.
B) by the development of new information technologies.
C) by many factors, including structure, politics, culture, and environment.
D) by two main microeconomic forces: capital and labor.
E) by management decisions.

Question 19

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.
E) entrepreneurial structure.

Question 20

All of the following statements are true about information technology's impact on business firms except

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.
E) it helps reduce agency costs.

Question 21

The four major competitive strategies 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.
E) customers, suppliers, new market entrants, and substitute products.

Question 22

Nike's forays into information technology represent an effort to

A) maintain low-cost leadership.
B) focus on market niche.
C) strengthen customer and supplier intimacy.
D) perform intensive customer data analysis.
E) achieve product differentiation.

Question 23

All of the following are IT-enabled products and services providing competitive advantage except

A) Amazon's one-click shopping.
B) Apple's iPod and iTunes.
C) Ping's golf club customization.
D) PayPal's online person-to-person payment system.
E) Walmart's RetailLink system.

Question 24

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

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

Question 25

Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete?

A) network economics model
B) competitive forces model
C) competitive advantage model
D) demand control model
E) agency costs model

Question 26

Walmart's attempts to increase its online presence is an example of a firm using information systems to

A) strengthen ties to its customers.
B) simplify the industry value chain.
C) develop synergies.
D) focus on market niche.
E) achieve low-cost leadership.

Question 27

The ability to offer individually tailored products or services using the same production resources as bulk production is known as

A) customized response.
B) size customization.
C) magnitude customization.
D) dimension customization.
E) mass customization.

Question 28

List three organizational factors that can prevent a firm in fully realizing the benefits of a new information system, and provide examples for each.

Question 29

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.
E) develop a unified organizational culture.

Question 30

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.
E) developing synergies.

Question 31

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

A) environment, organization, structure, and tasks.
B) technology, people, culture, and structure.
C) organization, culture, management, and environment.
D) tasks, technology, people, and structure.
E) costs, tasks, structure, and management.

Question 32

All of the following are competitive forces except

A) suppliers.
B) new market entrants.
C) external environment.
D) customers.
E) substitute products.

Question 33

Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than competitors.

A) product differentiation
B) market niche
C) mass customization
D) process efficiency
E) low-cost leadership

Question 34

As discussed in the chapter opening case, which of the four generic strategies did T.J. Maxx employ to combat the competition offered by Target, Kohls, Walmart, Macy's and pure online stores likeRue LaLa and Gilt Groupe?

A) market niche focus
B) customer and supplier intimacy
C) network-based strategy
D) product synergies
E) efficient customer response

Question 35

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

A) automotive
B) computer chip
C) national retailer
D) airline
E) restaurant

Question 36

Walmart's continuous replenishment system allows it to

A) provide mass customization.
B) differentiate products.
C) strengthen customer intimacy.
D) achieve economy of scale.
E) achieve low-cost leadership.

Question 37

Information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor from the point of view of economics.

Question 38

A firm can exercise greater control over its suppliers by having

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

Question 39

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
E) low number of customers

Question 40

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 preferred customers.
E) A clothes manufacturer expanding its offerings to new styles.

Question 41

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.
E) uses networks to link people, assets, and ideas.

Question 42

All of the following industries have been disrupted by the Internet except

A) encyclopedias.
B) newspapers.
C) music.
D) air travel.
E) clothing.

Question 43

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.
E) enabling the development of new services.

Question 44

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) highlights specific activities in the business where competitive strategies can best be applied.
E) enables more effective product differentiation.

Question 45

An example of synergy in business is

A) Amazon's use of the Internet to sell books.
B) Bank of America acquiring Countrywide Financial to reach a large pool of new customers.
C) Blockbuster combining traditional video rental with online video rental.
D) Walmart's order entry and inventory management system to coordinate with suppliers.
E) Nike's use of technology to improve its product offerings.

Question 46

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.
E) Nike and the athletic apparel ecosystem.

Question 47

Which of the following represent the primary activities of a firm?

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
E) organization infrastructure, human resources, technology, and procurement

Question 48

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.
E) the invisible hand.

Question 49

A virtual company

A) uses networks to link people, assets, and ideas.
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.
E) is limited by traditional organizational boundaries.

Question 50

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.

A) competitive forces
B) value chain
C) bargaining power
D) new entrant
E) rivalry

Question 51

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) service
E) technology

Question 52

An activity businesses perform to measure and compare business processes to similar processes of other companies within their industry is

A) benchmarking.
B) best practices.
C) value chain analysis.
D) strategic systems analysis.
E) secondary activities.

Question 53

How do information systems enhance core competencies?

A) by providing better reporting facilities
B) by creating educational opportunities for management
C) by allowing operational employees to interact with management
D) by encouraging the sharing of knowledge across business units
E) by fostering synergies among departments

Question 54

When two organizations pool markets and expertise that result in lower costs and generate profits, it is referred to as creating

A) a value web.
B) a value chain.
C) net marketplaces.
D) core competencies.
E) synergies.

Question 55

A competitive force challenging the publishing industry is

A) positioning and rivalry among competitors.
B) low cost of entry.
C) substitute products or services.
D) customers' bargaining power.
E) suppliers' bargaining power.

Question 56

________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.

A) Product differentiation
B) Low-cost leadership
C) Customer efficiency
D) Mass customization
E) Switching cost

Question 57

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
E) by decreasing switching costs

Question 58

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

A) retention costs.
B) preservation costs.
C) differentiation costs.
D) switching costs.
E) variation costs.

Question 59

What are the most successful solutions or methods for achieving a business objective?

A) value activities
B) best processes
C) core competencies
D) best practices
E) benchmarks

Question 60

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.
E) synergy chain.

Question 61

Switching costs increase when customers are strongly linked to products and platforms.

Question 62

High product differentiation is a sign of a transparent marketplace.

Question 63

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.

A) value chain
B) support web
C) value web
D) consortium
E) firm network

Question 64

'Synergies' occur when the output of some units in a firm can be used as inputs to other units, lowering cost and generating profits.

Question 65

You are consulting with the owner of Better Bodies, a national chain of gyms. What strategies might Better Bodies use in applying information services to achieve a competitive advantage?

Question 66

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.

Question 67

The value chain model classifies all company activities as primary activities.

Question 68

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

Question 69

A(n) ________ is an activity at which a firm excels as a world-class leader.

A) expertise area
B) competitive advantage
C) growth driver
D) efficiency
E) core competency

Question 70

The effect of the Internet has been to decrease the bargaining power of customers.

Question 71

A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.

Question 72

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.

A) primary
B) auxiliary
C) secondary
D) service
E) support

Question 73

The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms.

Question 74

Information systems are used to enable new products and services via product differentiation.

Question 75

In a demonstration of network economics, the more people that use eBay's site, the greater the value of the site.

Question 76

An efficient customer response system directly links consumer behavior to distribution and production and supply chains.

Question 77

Mass customization offers individually tailored products or services using the same resources as mass production.

Question 78

You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Smalltown Computer exert?
Which ones will it have difficulty exercising?

Question 79

The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.

Question 80

The text describes Michael Porter's view of the Internet as somewhat negative. What negative influences does Porter see?
Describe several positive influences the Internet has on business. Do these outweigh the negative influences?