Bus 311-Kazman chapter 2 2018
C) operational
1) At the ________ level of a firm, the routine, day-to-day business processes and interactions with customers occur. A) strategic B) tactical C) operational D) managerial E) executive
D) strategic
10) The executive level of an organization is also known as the ________ level. A) managerial B) tactical C) operational D) strategic E) illusory
C) Managerial-level
11) ________ decision making in an organization is referred to as semistructured decision making because solutions and problems are not clear-cut and often require judgment and expertise. A) Illusive-level B) Operational-level C) Managerial-level D) Executive-level E) Strategic-level
B) tactical
12) The managerial level of an organization is also known as the ________ level. A) functional B) tactical C) executive D) operational E) strategic
A) deploying organizational resources to achieve the strategic objectives of the organization
13) Identify the focus of managers at the tactical level of an organization. A) deploying organizational resources to achieve the strategic objectives of the organization B) managing routine, day-to-day business processes and interactions with customers C) designing long-term strategic questions facing the organization D) solving complex problems with broad and long-term ramifications for the organization E) maintaining the efficiency of business processes within the organization
C) executive
14) Jane Estroisch works as a manager in a multidomestic firm. She focuses on the long-term questions facing the organization such as which countries to compete in and what organizational policies to follow. Jane is in the ________ level of the organization. A) operational B) tactical C) executive D) functional E) managerial
D) strategic
15) Managers in the ________ level of an organization are referred to as "executives." A) operational B) tactical C) functional D) strategic E) managerial
A) Executive-level
16) ________ decisions deal with complex problems with broad and long-term ramifications for an organization. A) Executive-level B) Functional-level C) Tactical-level D) Operational-level E) Managerial-level
C) semistructured
17) With respect to organizational decision-making levels, for ________ decisions, some procedures to follow for a given situation can be specified in advance, but not to the extent where a specific recommendation can be made. A) unstructured B) planned C) semistructured D) asymmetrical E) structured
D) executive
18) At the ________ level of an organization, managers focus on long-term strategic questions facing the organization, such as which products to produce, which countries to compete in, and what organizational strategy to follow. A) managerial B) tactical C) operational D) executive E) illusory
B) executive
19) Managers at the ________ level include the president and chief executive officer, vice presidents, and possibly the board of directors. A) functional B) executive C) tactical D) operational E) illusive
E) to increase efficiency
2) Why are information systems typically used at the operational level? A) to create a risk information sheet B) to define all project tasks C) to identify all business activities D) to create use cases E) to increase efficiency
C) Executive-level
20) ________ decisions are referred to as unstructured decisions because the problems are relatively complex and non-routine. A) Managerial-level B) Tactical-level C) Executive-level D) Operational-level E) Illusive-level
E) executive-level
21) To assist ________ decision making, information systems are used to obtain aggregate summaries of trends and projections of the future. A) managerial-level B) functional-level C) tactical-level D) operational-level E) executive-level
E) executive
22) At the ________ level of an organization, information systems provide key performance indicators (KPIs) that are focused on balancing performance across the organization. A) illusive B) operational C) tactical D) managerial E) executive
D) operational
23) Information systems at the ________ level of an organization often help in automating repetitive activities. A) tactical B) strategic C) managerial D) operational E) executive
C) offering products or services of reasonably good quality at competitive prices
24) Which of the following actions would an organization take if it decides to pursue a bestcost provider strategy? A) offering the best prices in its industry on its goods and/or services B) attempting to gain monopoly in the market by means of an unhealthy competition C) offering products or services of reasonably good quality at competitive prices D) providing high quality products at low prices in specific markets E) offering low quality products at low prices with high quality after-sales services
C) Global furniture retailer Rusicwood provides customers with affordable solutions for better living by offering home furnishings that combine good design, function, and quality with low prices.
25) Which of the following is an example of a best-cost provider strategy? A) Different car manufacturers compete in the tiny super car category with prices starting at $150,000 and running as high as $600,000. B) Aerodoungle's Eridla brand is considered a luxury car. Some of Eridla's models like the ES model, however, are in the midrange of prices for cars. C) Global furniture retailer Rusicwood provides customers with affordable solutions for better living by offering home furnishings that combine good design, function, and quality with low prices. D) Wild Hog builds motorcycles that target only the high end of the heavyweight market-the high-end premium cruiser market-with names such as Wolf, Mastiff, and Bulldog. E) Streetsuit's everyday low prices (EDLP) strategy hinges upon its ability to obtain consumer goods at the cheapest possible price and pass these savings on to consumers.
C) low-cost leadership
26) Walmart pursues a ________ strategy by which it offers the best prices in its industry on its goods and/or services. A) best-cost provider B) decreased market share C) low-cost leadership D) broad differentiation E) focused differentiation
E) decreased market share
27) Which of the following is an implication for firms that have a threat of new entrants into their market? A) increased cost B) reduced quality C) increased demand for services D) increased price E) decreased market share
B) customers' bargaining power
28) For a firm, reduced prices, need for increased quality, and demand for more services would result due to ________. A) threat of substitute products from other industries B) customers' bargaining power C) high threat of new entrants into the market D) traditional rivals within the industry E) increase in suppliers' bargaining power
B) Value chain analysis
29) ________ is the process of analyzing an organization's activities to determine where value is added to products and/or services and what costs are incurred for doing so. A) Value networking B) Value chain analysis C) Value migration D) Value shop E) Value grid trial
A) making day-to-day decisions that are highly structured and recurring B
3) Which of the following actions is a part of operational planning? A) making day-to-day decisions that are highly structured and recurring B) effectively utilizing and deploying organizational resources to achieve strategic objectives C) focusing on long-term strategic questions facing the organization D) dealing with complex problems with broad and long-term ramifications for the organization E) focusing on balancing performance across the organization
B) efficiency
30) The extent to which goals are accomplished faster, at lower cost, or with relatively little time and effort is called ________. A) goal setting B) efficiency C) effectiveness D) accomplishment E) effort
C) effectiveness
31) The extent to which tasks are accomplished well is called ________. A) goal setting B) efficiency C) effectiveness D) accomplishment E) effort
D) key performance indicator
32) A metric deemed most critical to accessing progress toward a certain goal is referred to as a(an) ________. A) critical factor B) critical performance indicator C) critical performance initiative D) key performance indicator E) performance metric
D) Human Resources
33) Personnel forecasting is a functional area information system contained within the ________ department of an organization. A) Accounting B) Financial C) Marketing D) Human Resources E) Operations
D) value proposition
34) With respect to the components of a business model, ________ is the utility that the product/service must offer to customers. A) cost structure B) value grid C) value migration D) value proposition E) revenue stream
E) Operations
35) Inventory management is an application that is part of the ________ functional area. A) Accounting B) Financial C) Marketing D) Human Resources E) Operations
B) strategic planning
36) When senior managers at the executive level of the organization conduct ________, they form a vision of where the organization needs to head. A) executive planning B) strategic planning C) organizational planning D) resource planning E) operational planning
D) first-mover advantage
37) The term given to a company that is first to enter a market thus creating a competitive advantage is ________. A) competitive mover B) strategic mover C) executive mover D) first-mover advantage E) first-mover competitor
A) Threat of flooding the industry with excellent products
38) Which of the following is NOT one of Porter's five primary forces? A) Threat of flooding the industry with excellent products B) Rivalry among competing sellers in an industry C) Threat of potential new entrants in an industry D) Bargaining power of suppliers in an industry E) Substitute products from another industry
B) the threat of new entrants or the bargaining power of customers
39) If the ABC company is losing customers on a regular basis, the force that would explain this is most likely to be ________. A) the bargaining power of customers or the rivalry of sellers in the industry B) the threat of new entrants or the bargaining power of customers C) the threat of new entrants in an industry or the rivalry of sellers in the industry D) the potential of substitute products or the bargaining power of customers E) the threat of new entrants or the threat of substitute products
A) Business processes
4) ________ are a set of activities an organization performs in order to reach their business goals. A) Business processes B) Business standards C) Business technocracies D) Business data flow models E) Business cases
D) Resources
40) ________ reflect(s) the organization's specific assets that are utilized to achieve cost or product differentiation from its competitors. A) Products B) Goodwill C) Technology D) Resources E) People
C) provide products at a lower cost or with superior benefits to the customer
41) Value creation occurs when an organization can ________. A) sell more products at the same price over a given period B) create new products in an industry C) provide products at a lower cost or with superior benefits to the customer D) increase its customer base over time E) increase capacity in production at the same per unit cost
Answer: TRUE
42) Someone with an automating perspective thinks of technology as a way to help complete a task.
Answer: FALSE
43) Unstructured decisions can be programmed directly into operational information systems so that they can be made with little or no human intervention.
Answer: FALSE
44) At the executive level, information systems are typically used to optimize processes and to better understand the underlying causes of any performance problems.
Answer: FALSE
45) Tactical-level decision making is more structured and routine than operational-level decision making.
Answer: TRUE
46) Managerial-level decision making is referred to as semistructured decision making.
Answer: TRUE
47) Executive-level decisions are referred to as unstructured decisions.
Answer: FALSE
48) With respect to the organizational decision making levels, top-level managers typically focus on problems within a specific business function, such as marketing or finance.
Answer: TRUE
49) For unstructured organizational decisions, few or no procedures to follow for a given situation can be specified in advance.
B) structured
5) With respect to decision making in organizations, ________ decisions are those in which the procedures to follow for a given situation can be specified in advance. A) comparative B) structured C) unscrupulous D) asymmetrical E) disfigured
Answer: TRUE
50) Most organizations have three general decision-making levels: operational, managerial, and executive.
Answer: FALSE
51) Operational, managerial, and executive decision-making levels are all supported by a single type of information system.
Answer: TRUE
52) In an organizational setup, a functional area represents a discrete area of an organization that focuses on a specific set of activities.
Answer: TRUE
53) Organizational learning is the ability of an organization to use past behavior and information to improve its business processes.
Answer: TRUE
54) Organizational strategy is a firm's plan to accomplish its mission and goals as well as to gain or sustain competitive advantage over rivals.
Answer: TRUE
55) In an organization, managers use value chain analysis to identify opportunities where information systems can be used to develop a competitive advantage.
Answer: TRUE
56) The set of activities that add value throughout the organization is known as the value chain within an organization.
Answer: TRUE
57) The use of information systems has become one of the primary ways that organizations improve their value chains.
Answer: TRUE
58) Choosing and implementing an emerging information system is not sufficient to gain or sustain competitive advantage.
Answer: FALSE
59) Functional area information systems are designed to support decision making.
A) operational
6) ________ level manager. A) operational B) tactical C) strategic D) managerial E) executive
Answer: False
60) Choosing and implementing new or innovative information systems is sufficient to gain or sustain competitive advantage.
Answer: The extent to which something is accomplished faster, at lower cost, or with relatively little time and effort is being efficient. The extent to which something is accomplished well is being effective.
61) Discuss the difference between being effective and being efficient.
Answer: At the operational level of a firm, the routine, day-to-day business processes and interactions with customers occur. Operational planning typically has a time frame of a few hours or days, and the managers at the operational level, such as foremen or supervisors, make day-to-day decisions that are highly structured and recurring. At the managerial level (or tactical level) of the organization, functional managers focus on monitoring and controlling operational-level activities and providing information to higher levels of the organization. Managers at this level, referred to as midlevel managers, focus on effectively utilizing and deploying organizational resources to achieve the strategic objectives of the organization. Managerial-level decision making is not nearly as structured or routine as operational-level decision making. Managerial-level decision making is referred to as semistructured decision making because solutions and problems are not clear-cut and often require judgment and expertise.
62) Describe the differences between operational-level decision making and tactical-level decision making by managers in organizations.
Answer: At the managerial level (or tactical level) of the organization, functional managers focus on monitoring and controlling operational-level activities and providing information to higher levels of the organization. Managers at this level, referred to as midlevel managers, focus on effectively utilizing and deploying organizational resources to achieve the strategic objectives of the organization. Managerial-level decision making is not nearly as structured or routine as operational-level decision making. Managerial-level decision making is referred to as semistructured decision making because solutions and problems are not clear-cut and often require judgment and expertise.
63) Explain the differences between tactical-level decision making and executive-level decision making by managers in organizations.
Answer: Information systems at the operational level are designed to automate repetitive activities, such as sales transaction processing, and to improve the efficiency of business processes at the customer interface. Information systems at the strategic level are used to obtain aggregate summaries of trends and projections of the future. At the executive level, information systems provide KPIs that are focused on balancing performance across the organization.
64) Explain how information systems implemented in the operational level are different from those implemented at the strategic level.
Answer: Porter's primary competitive forces that analyze the competition within an industry include: 1. the rivalry among competing sellers in an industry. 2. the threat of potential new entrants into an industry. 3. the bargaining power that customers have within an industry. 4. the bargaining power that suppliers have within an industry. 5. the potential for substitute products from other industries.
65) List Porter's primary competitive forces that analyze the competition within an industry.
Answer: 1) Accounting & Finance: These are systems used for managing, controlling, and auditing the financial resources of the organization. Sample applications include: accounts payable, expense accounts, cash management, and payroll processing. 2) Human Resources: These are systems used for managing, controlling, and auditing the human resources of the organization. Sample applications include: recruiting and hiring, education and training, benefits management, employee termination, and workforce planning. 3) Marketing: These are systems used for managing new product development, distribution, pricing, promotional effectiveness, and sales forecasting of the products and services offered by the organization. Same applications include market research and analysis, new product development, promotion and advertising, pricing and sales analysis, and product location analysis. 4) Operations: These are systems used for managing, controlling, and auditing the production and operations resources of the organization. Sample applications include inventory management, cost and quality tracking, materials and resource planning, job costing, and resource utilization
66) Discuss the different functional information systems including some of the applications of each.
A) business model
67) What a company does, how a company uniquely does it, how a company gets paid for doing it, and what costs are involved are all part of an organization's ________. A) business model B) competitive model C) revenue model D) strategic model E) value model
C) Channel marketing
68) Which of the following is NOT a typical revenue model in the digital world? A) Affiliate marketing B) Subscriptions C) Channel marketing D) Licensing E) Freemium
B) Freemium
69) The Game, Inc. company is offering a new game that can expand exponentially to new users. The company is offering the very basic game for free allowing the user to upgrade to several levels of a paid subscription model. Choose the selection below that best exemplifies this revenue model. A) Affiliate marketing B) Freemium C) Channel marketing D) Licensing E) Subscriptions
E) structured
7) With respect to organizational decision-making levels, ________ decisions can be programmed directly into operational information systems so that they can be made with little or no human intervention. A) asymmetrical B) semistructured C) unstructured D) comparative E) structured
A) Service
70) What example of a platform based business model would Airbnb and Uber represent. A) Service B) Subscriptions C) Communications D) Collaboration E) Product
D) sharing economy
71) A ________ is defined as an economic system in which assets or services are shared between private individuals, either free or for a fee. A) services economy B) communication economy C) flexible economy D) sharing economy E) social economy
C) marginal cost
72) According to basic economics within a competitive marketplace, the price of a product is set by its ________. A) opportunity cost B) sunk cost C) marginal cost D) transaction cost E) fixed cost
B) It is the cost of producing an additional unit of output.
73) Which of the following defines marginal cost? A) It is the cost of an alternative that must be forgone in order to pursue a certain action. B) It is the cost of producing an additional unit of output. C) It is the cost that is independent of the level of goods or services produced by the business. D) It is the cost that has already been incurred and cannot be recovered. E) It is the cost incurred in making an economic exchange.
D) It offers basic services for free, but charges a premium for special features.
74) Which of the following actions of a firm suggests that it uses the freemium approach for applying freeconomics? A) It provides free services to customers and gets paid for it by third parties. B) It reduces the sale price of one item in order to sell something else of value. C) It distributes products to customers without an appreciable cost to anyone. D) It offers basic services for free, but charges a premium for special features. E) It allows people to participate and collaborate to create something of value.
B) freemium approach
75) Iver Audio is an all-in-one music management tool that was first marketed in 1999. Most users can use the Basic version that is free, but a $19.99 upgrade provides extra features such as supertagging, faster ripping and burning. Which of the following explains this approach for applying freeconomics? A) labor exchange approach B) freemium approach C) zero marginal cost approach D) cross subsidies approach E) gift economy approach
E) Augmented reality
76) ________ use(s) information systems to enhance a person's perception of reality by providing relevant information about the user's surroundings with the use of special glasses or other devices. A) 3-D glasses B) Teleport C) Virtual reality D) HoloLens E) Augmented reality
B) Channel innovation
77) Which type of innovation is best described as using innovative ways to connect offerings with customers? A) Process innovation B) Channel innovation C) Service innovation D) Brand innovation E) Structure innovation
E) Structure innovation
78) Which type of innovation is best described as using the company's talent and assets in innovative ways? A) Process innovation B) Channel innovation C) Service innovation D) Brand innovation E) Structure innovation
C) Service innovation
79) Which type of innovation is best described as supporting and enhancing the value of an offering? A) Process innovation B) Channel innovation C) Service innovation D) Brand innovation E) Structure innovation
A) transaction
8) ________ refers to anything that occurs as part of a daily business of which a record must be kept. A) transaction B) investment C) capital asset D) value chain analysis E) use case
C) Choosing, Matching, Executing, and Assessing
80) The steps (in order) in the disruptive innovation cycle is ________. A) Matching, Choosing, Executing, and Assessing B) Matching, Evaluating, Executing, and Assessing C) Choosing, Matching, Executing, and Assessing D) Choosing, Evaluating, Executing, and Assessing E) Evaluating, Matching, Executing, and Assessing
C) startup
81) The emergence of a highly successfully business that is technology based with potential for growth and scalability is often referred to as a(an) ________. A) new age company B) innovative company C) startup D) kickstarter E) novel
D) Crowdfunding
82) ________ is the securing of business financing from individuals in the marketplace. A) Capitalizing B) eLoans C) Internet funding D) Crowdfunding E) Self sourcing
D) Moore's law
83) According to ________, the number of transistors that could be squeezed onto a silicon chip would double every 18 months. A) Metcalfe's law B) Megan's law C) Murphy's law D) Moore's law E) Ashby's law
A) process
84) In the context of organizational requirements for innovation, to deploy innovative information systems well, people in the organization must be willing to do whatever they can to bypass and eliminate internal bureaucracy, set aside political squabbles, and pull together for the common good. These requirements can be categorized as ________ requirements. A) process B) customer C) resource D) quality E) risk tolerance
A) resource
85) Organizations deploying innovative information systems must have the human capital necessary to deploy the new systems. These requirements can be categorized as ________ requirements. A) resource B) process C) risk tolerance D) customer E) quality
C) Disruptive innovations
86) ________ are new technologies, products, or services that eventually surpass the existing dominant technology or product in a market. A) Constructive innovations B) Adaptive innovations C) Disruptive innovations D) Facultative innovations E) Extensive innovations
B) gain credibility and to bridge sustaining and disruptive product development
87) According to the disruptive growth engine, executive leadership will allow a firm to ________. A) effectively identify and evaluate potential disruptive innovations B) gain credibility and to bridge sustaining and disruptive product development C) gain the greatest disruptive opportunities D) build a disruptive team of expert innovators E) educate those closest to customers and competitors in order to identify opportunities
B) The vertical dimension of the cycle shows the extent to which an organization derives value from a particular information technology and the horizontal dimension shows time
88) Which of the following statements is true about the e-business innovation cycle? A) The vertical dimension of the cycle shows the life expectancy of a particular information technology and the horizontal dimension shows time. B) The vertical dimension of the cycle shows the extent to which an organization derives value from a particular information technology and the horizontal dimension shows time. C) The vertical dimension of the cycle shows the expected investments required for a particular information technology and the horizontal dimension shows time. D) The vertical dimension of the cycle shows the efficiency of a particular information technology and the horizontal dimension shows life expectancy of that information technology. E) The vertical dimension of the cycle shows the user-friendliness of a particular technology and the horizontal dimension shows the investment in that technology.
D) match the most promising new technologies with current economic opportunities
89) In an e-business innovation cycle, after an organization scans the environment for new emerging and enabling technologies, the next step is to ________. A) create jobs, groups, and processes that are all devoted to scanning the environment B) select the database and data storage advances C) address the current opportunity to grab customers and market share D) match the most promising new technologies with current economic opportunities E) assess the value of the use of technology for customers and internal clients
A) managerial
9) At the ________ level of an organization, functional managers focus on monitoring and controlling operational-level activities and providing information to higher levels of the organization. A) managerial B) executive C) strategic D) superficial E) illusive
Answer: TRUE
90) Sir John Maddox, a physicist, was quoted in Scientific American in 1999 saying, "The most important discoveries of the next 50 years are likely to be ones of which we cannot now even conceive."
Answer: FALSE
91) Risk tolerance for people within the organization should be low for the deployment of innovative information systems.
1. Process requirements—To deploy innovative information systems well, people in the organization must be willing to do whatever they can to bypass and eliminate internal bureaucracy, set aside political squabbles, and pull together for the common good. 2. Resource requirements—Organizations deploying innovative information systems must also have the human capital necessary to deploy the new systems. The organization must have enough employees available with the proper systems knowledge, skills, time, and other resources to deploy these systems. Alternatively, the organization must have resources and able systems partners available to outsource the development of such systems if necessary. 3. Risk tolerance requirements—The last characteristic of an organization ready for the deployment of innovative information systems is that its members must have the appropriate tolerance for risk and uncertainty as well as the willingness to deploy and use new systems that may not be as proven and pervasive as more traditional technologies. If people within the organization desire low risk in their use of information systems, then gambling on cutting-edge systems will probably not be desirable or tolerable for them
93) Explain the organizational requirements for innovation.
Answer: Disruptive innovations are new technologies, products, or services that eventually surpass the existing dominant technology or product in a market. Within every market, there are customers who have relatively high, moderate, or low performance requirements from the existing product offerings. Over time, as disruptive innovations and incremental improvements are introduced into an industry, the capabilities of the products in all segments (i.e., low to high performance) improve; as product capabilities improve at the high-performance end of the market, the number of potential customers for these products gets relatively smaller. At the same time, as the low-end products also improve, they are increasingly able to capture more and more of the mainstream marketplace. These developments caused by disruptive innovations, typically ignored by established market leaders, lead to loss of their market dominance and hence lead to market failure. This is known by the term innovator's dilemma.
94) Define disruptive innovation and how it leads to the innovator's dilemma.
Answer: The three new ways to think about investments in disruptive innovations as suggested by the e-business innovation cycle are: 1. Put Technology Ahead of Strategy. This approach says that technology is so important to strategy and to success that you have to begin with technology. Given how important technology is today and how fast it changes, if you start with a strategy and then try to retrofit technology into your aging strategy, you are doomed. This approach argues that you begin by understanding technology and develop a strategy from there. 2. Put Technology Ahead of Marketing. The second way that this approach turns conventional wisdom on its head is that, like strategy, marketing also takes a backseat to the technology. A very traditional marketing-oriented approach would be to go first to your customers and find out from them what their needs are and what you ought to be doing with technology. The trouble with this approach is that, given the rapid evolution of technology, your customers are not likely to know about new technologies and their capabilities. They are the last place you ought to be looking for ideas about new technologies and their impact on your business. If they know about the new technology, then chances are your competitors already do too, meaning that this technology is not the one to rest your competitive advantage on. 3. Innovation Is Continuous. The third way that this approach is interesting—and potentially troubling—is that the process has to be ongoing. The Emerging Technologies group is constantly on the lookout for the "next new thing" that will revolutionize the business. The rate of information technology evolution is not likely to slow down, and innovative organizations truly cannot—and do not—ever rest.
95) Discuss three new ways to think about investments in disruptive innovations as suggested by the e-business innovation cycle.