MIS Chapter 3
23) List three organizational factors that can prevent a firm in fully realizing the benefits of a new information system, and provide examples for each. Short Answer:
1. Culture: All organizations have a foundation of unquestioned assumptions that define their goals and products. These assumptions include what products should be produced, how they should be produced, where and for whom they should be produced. Sharing the same cultural assumptions, agreement on other matters is more likely. Any changes that threaten or undermine these assumptions will most likely be met with resistance. For example, if a company stops paying overtime at time and a half, employees might feel undervalued and be less willing to work extra hours. 2. Politics: People in an organizations occupy different positions with different specialties, concerns, and perspectives. This means that they naturally have opposing views about how resources, rewards, and punishments should be distributed. This results in political struggles for resources, competition, and conflict within every organization. 3. Environments: Organizations reside in environments which they draw resources and to which they supply goods and services. Organization and environments have a reciprocal relationship, meaning that organizations are depended on the social and physical environment and organizations can influence their environment. For example, business firms form alliances with other businesses to influence the political process (they advertise to influence customer acceptance of their products.)
17) Routines are also called standard operating procedures. A) TRUE B) FALSE
A
14) As discussed in the chapter opening case, which of the following statements about Verizon is not true? A) Verizon is focusing on satellite-based television in its competition with AT&T. B) Verizon claims that its wireless network is the largest and most reliable in the United States. C) Verizon is investing in upgrading its high-speed networks. D) Verizon sees mobile ads and video as an investment for the future. E) Verizon offers a standalone video service.
A
15) All organizations have bedrock, unquestioned assumptions that define their goals and products. A) TRUE B) FALSE
A
16) A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals. A) TRUE B) FALSE
A
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.
A
29) Which of the following substitute products would be of most concern for a cable TV distributor? A) Satellite TV B) Broadcast TV C) Satellite radio D) The Internet E) Terrestrial radio
A
3) 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. A) microeconomic B) macroeconomic C) sociotechnical D) behavioral E) psychological
A
31) A firm can exercise greater control over its suppliers by having: A) more suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. E) only a single supplier.
A
32) Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates which of the following strategies? A) Low-cost leadership B) Marketing effectiveness C) Focusing on market niche D) Strengthening supplier intimacy E) Developing synergies
A
9) 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
A
24) What is agency theory? How does information technology enable a firm to reduce agency costs? Short Answer:
Agency theory - economic theory that views the firm as a nexus of contracts among self-interested individuals who must be supervised and managed Information technology reduces the costs of acquiring and analyzing information, which allows organizations to reduces agency costs because it becomes easier for managers to oversee a greater number of employees. This, overall, lowers agency costs. In the long run, firms should have fewer middle managers and higher revenue per employee, if they've invested in IT.
33) 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.
B
12) The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as organizational: A) culture. B) politics. C) structure. D) environments. E) routines.
B
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
B
10) Which of the following is an example of a divisionalized bureaucracy? A) Startup firm B) University C) Fortune 500 firm D) Midsize manufacturer E) Consulting firm
C
27) All of the following are competitive forces in Porter's model except: A) suppliers. B) new market entrants. C) external environment. D) customers. E) substitute products.
C
1) The interaction between information technology and organizations is influenced: A) solely 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 macroeconomic forces: capital and labor. E) by the rate of growth of the organization.
C
8) Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of: A) entrepreneurial structures. B) divisionalized bureaucracies. C) professional bureaucracies. D) adhocracies. E) machine bureaucracies.
C
21) 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.
D
2) Which of the following statements about organizations is not true? A) An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs. B) An organization is a formal, legal entity with internal rules and procedures that must abide by laws. C) An organization is a collection of people and other social elements. D) An informal group can be considered to be an organization. E) An organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution.
D
22) 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.
D
28) Which of the following marketplace forces would be of least concern to a manufacturer of deep-sea oil rigs? A) Product differentiation B) Traditional competitors C) Low number of suppliers D) New market entrants E) Low number of customers
D
5) 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
D
13) Which of the following statements about disruptive technologies is not true? A) Disruptive technologies radically change the business landscape and environment. B) Disruptive technologies may be substitute products that perform better than other products currently being produced. C) Disruptive technologies may sometimes simply extend the marketplace. D) Disruptive technologies may put entire industries out of business. E) Firms that invent disruptive technologies as first movers always become market leaders.
E
30) Walmart's attempt 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.
E
4) Which of the following statements about the technical view of organizations is not true? 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 emphasizes group relationships, values and structures. 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.
E
7) Which of the following technologies disrupted the traditional publishing industry? A) Instant messaging B) e-mail C) Internet telephony D) PCs E) World Wide Web
E
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) feedback E) labor
E
19) 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.
E
26) Which of the following industries has the lowest barrier to entry? A) Automotive B) Computer chip C) Solar energy D) Airline E) Small retailer
E
6) Which of the following statements about business processes is not true? A) Business processes influence the relationship between an organization and information technology. B) Business processes are a collection of standard operating procedures. C) A business firm is a collection of business processes. D) Business processes are usually ensconced in an organization's culture. E) Business processes are typically unaffected by changes in information systems.
E
18) How are the technical and behavioral definitions of an organization different? Short Answer:
The behavioral definition of an organization is that it is a collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution. The technical definition sees an organization as an entity that takes inputs from the environment and processes these to create products that are then consumed by the environment. The technical view sees capital and labor as interchangeable units, with the ability to rearrange these units at will, whereas the behavioral view sees that rearranging some aspects of the organization, such as an information system, will have important consequences and changes for the organization's other units.
