MIS Chapter 3

According to agency theory, the firm is viewed as a(n): A) "nexus of contracts" among self-interested individuals. B) entrepreneurial structure. C) entrepreneurial endeavor. D) task force organization that must respond to rapidly changing environments. E) unified, profit-maximizing entity.

A) "nexus of contracts" among self-interested individuals.

Which of the following would a company employ to measure and compare its business processes to similar processes of other companies within their industry? A) Benchmarking B) Value chain analysis C) Strategic systems analysis D) Best practices E) Secondary activities

A) Benchmarking

Which of the following statements about disruptive technologies is not true? A) Firms that invent disruptive technologies as first movers always become market leaders. B) Disruptive technologies may sometimes simply extend the marketplace. C) Disruptive technologies may put entire industries out of business. D) Disruptive technologies may be substitute products that perform better than other products currently being produced. E) Disruptive technologies radically change the business landscape and environment.

A) Firms that invent disruptive technologies as first movers always become market leaders.

Which of the following statements about features of organizations is not true? A) Organizations generally change much faster than environments. B) Organizational culture is a powerful restraint on technological change. C) Organizations and environments have a reciprocal relationship. D) Organizations are devoted to maximizing output using limited inputs. E) All modern organizations are bureaucracies with clear-cut divisions of labor and specialization.

A) Organizations generally change much faster than environments.

Which of the following technologies disrupted the traditional publishing industry? A) World Wide Web B) email C) Software as a web service D) Instant messaging E) PCs

A) World Wide Web

Along with capital, ________ is the primary production input that the organization uses to create products and services. A) labor B) structure C) culture D) feedback E) politics

A) labor

Which of the following statements about business processes is not true? A) Business processes are usually ensconced in an organization's culture. B) Business processes are typically unaffected by changes in information systems. C) A business firm is a collection of business processes. D) Business processes are a collection of standard operating procedures. E) Business processes influence the relationship between an organization and information technology.

B) Business processes are typically unaffected by changes in information systems.

Which of the following statements about network economics is not true? A) Information technology can be strategically useful from a network economics perspective. B) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain. C) From a network economics perspective, the value of a community of people grows as the number of participants in the community increases. D) The law of diminishing returns does not always apply to every situation. E) Uber is an example of a business model that is based on the principle of network economics.

B) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.

Which of the following is not a true statement about value webs? A) Value webs involve highly synchronized industry value chains. B) Value webs are inflexible and cannot adapt quickly to changes in supply and demand. C) Value webs involve a collection of independent firms that use information technology to coordinate their value chains. D) Value webs operate in a less linear fashion than traditional value chains. E) Value webs are more customer-driven than traditional value chains.

B) Value webs are inflexible and cannot adapt quickly to changes in supply and demand.

All of the following are competitive forces in Porter's model except: A) substitute products. B) disruptive technologies. C) suppliers. D) customers. E) new market entrants.

B) disruptive technologies.

Which of the following statements about Porter's competitive forces model is not true? A) Porter's model focuses on a firm's general business environment. B) Porter's competitive forces model is the most widely used model for understanding competitive advantage. C) In a free economy, there are very low barriers to entry in all industries. D) The power of customers grows if they can easily switch to a competitor's products and services. E) The more substitute products and services in an industry, the less a firm can control pricing and the lower the firm's profit margins.

C) In a free economy, there are very low barriers to entry in all industries.

Which of the following statements information technology's impact on business firms is not true? A) Information technology helps reduce agency costs. B) Information technology helps reduce transaction costs. C) Information technology helps firms reduce environmental scanning. D) Information technology helps firms lower the cost of market participation. E) Information technology helps reduce internal management costs.

C) Information technology helps firms reduce environmental scanning.

Which of the following industries has the lowest barrier to entry? A) Airline B) Solar energy C) Computer chip D) Small retailer E) Automotive

D) Small retailer

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 value, is referred to as: A) virtual economics. B) the point of no return. C) network inelasticity. D) the law of diminishing returns. E) supply and demand.

D) the law of diminishing returns.

The interaction between information technology and organizations is influenced: A) by the development of new information technologies. B) solely by the decision making of middle and senior managers. C) by two main macroeconomic forces: capital and labor. D) by the rate of growth of the organization. E) by many factors, including structure, politics, culture, and environment.

E) by many factors, including structure, politics, culture, and environment.

The ability to offer individually tailored products or services using the same production resources as bulk production is known as: A) niche customization. B) mass marketing. C) micromarketing. D) micro customization. E) mass customization.

E) mass customization.

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

True

A firm can be said to have competitive advantage when it has access to resources that others do not. True False

True

The entire customer experience can be an element of product differentiation. True False

True

The term industry sets refers to collections of industries that provide related services and products that deliver value to the customer. True False

True