BA 652 Midterm #2
Company X is charged for networking expenses based on the volume of traffic it initiates. Which of the following IS funding approaches fits this example? Allocation Chargeback Crowdfunding Overhead
Chargeback
Cyber security risk assessment is a process of auditing ONLY the current technological resources, in an effort to map the current state of the art on IS security in the organization. True False
False
Outsourcing and offshoring are identical mechanisms. False True
False
Input resources of a firm undergo a transformation process to create value for the customer. True False
True
Economic value is generated when worthwhile things that did not exist before are created. True False
True
Facebook user profile data is an example of asset-stock accumulation. False True
True
Which of the following best explains why internal exploits are hard to detect? Because internal exploits often use advanced techniques that are hard to detect Because users are authorized on the network and their actions can go undetected unless they make a careless mistake or discuss their behaviors with others Because companies often limit the number of employees who can access sensible information Answer is not listed
Because users are authorized on the network and their actions can go undetected unless they make a careless mistake or discuss their behaviors with others
Which of the followings are the two main dynamics for rejuvenation and strengthening of barriers of erosion? Capability analysis, asset-stock transfer Capability development, asset-stock accumulation Capability development, asset-stock transfer Capability planning, asset-stock accumulation
Capability development, asset-stock accumulation
Which of the following best describes a firm's set of defenses to mitigate threats to its technology infrastructure? Reducing threat of new entrants Cybersecurity Longevity risk mitigation Answer is not listed
Cybersecurity
Cybersecurity is a negative deliverable because: It limits the possibility that future positive gains can be made It limits the possibility that future negative fallout will happen It limits the possibility of both future negative fallout and positive gains would occur None of the above
It limits the possibility that future negative fallout will happen
The customer service life cycle consists of four stages. In which stage does the customer receive an ordered product or service, and deal with its efficient and effective use? Acquisition Ownership Requirements Retirement
Ownership
Which of the following is not an advantage of open source software? Creativity Limited lock-in Robustness Security
Security
Which of the following is not a chargeback funding method? Low-level allocation Service-based pricing Subsidies Tiered flat rate
Subsidies
Which of the following makes decisions on the IS investment approach, portfolio, and risk? The investment committee The portfolio management committee The risk mitigation committee The steering committee
The steering committee
Which of the following malicious codes do not self-replicate? Viruses and worms Trojan horses and spyware Just worms None of the above
Trojan horses and spyware
Ride sharing applications like uber, BlaBlaCar (Europe)and Careem (Middle East) all leverage their large networks of active drivers to perform transportation services. Under the resource based view, the drivers can be considered as which of the following resource: Inimitable Nonsubstitutable Rare Valuable
Valuable
In 2010, an Apple software engineer left a prototype of the iPhone 4 in a bar. the person who found the phone sold it to the gadget blog Gizmodo for $5,000, who disassembled it and posted its characteristics online. Which of the following cyber security threats best describe this example? An internal threat due to intentional malicious behavior An internal threat due to careless behavior An external threat due to an intrusion An external threat due to online fake news
An internal threat due to careless behavior
Function creep is the situation where data collected for a stated or implied purpose is later on reused for the same purpose. True False
False
Which of the following mitigation strategies has high failure costs but low anticipation costs? Risk reduction Risk acceptance Risk transference Risk transference and risk reduction
Risk acceptance
Mr. Smith received a phone call from a person claiming to be from his bank. The unknown person told Mr. Smith that he needed to update his account security details. The caller asked for Mr. Smith's account, card and personal details in order to confirm his identity. Mr. Smith refused to provide any details to the unknown caller, and instead, called his bank which confirmed that the phone call was a scam. Which of the following best describes the mentioned scam? Backdoor exploit Malicious code Whaling Social engineering
Social engineering
A firm's added value is a measure of its competitive advantage. True False
True
An intrusion threat consists of any situation where an unauthorized attacker gains access to organizational IT resources. False True
True
An organization's ethical code of conduct communicates to all parties the organization's principles of ethical information system use and its formal stance enabling detection of, and distancing from, unethical choices made by any member of the organization. False True
True
The analysis of added value allows managers and analysts to evaluate how much of the value created the firm can appropriate in the form of profits. True False
True
The difference between cybersecurity and privacy is that whereas cybersecurity is about safe keeping of collected data, privacy is about informed consent and permission to collect and use identifying information. False True
True
Jenny is a shift manager at a Starbucks in Lyon, France. She wants to pitch an idea for bio-coffee to her boss and is working out the total value created from each cup of bio-coffee. The eco-friendly coffee beans for a standard coffee cup cost $1. The rest of the raw materials and expenses per cup are $0.85. Using a survey, she has determined that the customers are willing to pay $5 per cup. What is the Supplier Opportunity Cost for the bio coffee beans? $ 0.85 $ 1.00 $ 1.85 $ 5.00
$1.00
Meg is an up-and-coming fashion designer who has created a unique dress which will be exhibited in a fall fashion show in Paris. The dress is valued at $2000. Just one day before her show, she finds out that an employee at her business has sold the design to a competitor who has already begun to mass produce the dress. What do you think is the added value of the dress at present? $ 0.00 $ 1000.00 $ 2000.00 $ 5000.00
$0.00
Which of the following is a category of risk the board of directors needs to address? Business continuity risk Concentration risk Inflation risk Longevity risk
Inflation risk
Which of the following questions is not used to identify unsustainable IT dependent strategic initiatives? How long before competitors can offer the same value proposition? Is the proposed initiative aligned with the firm's strategy? What competitors are appropriately positioned to replicate the initiative? Will replication do competitors any good?
Is the proposed initiative aligned with the firm's strategy?
Technology development must take into account which three key considerations? People, processes and structure People, project funding and structure People, shareholders and structure None of the above
People, processes and structure
Difficulty of articulating an inimitable resource (how the capability came to be and how it works in practice) is a notion known as causal ambiguity. False True
True
IT dependent strategic initiatives rely on access to assets and capabilities necessary to produce and use the technology at their core. False True
True
Mary's upscale boutique in New York creates custom-made dresses for clients. One of them is willing to pay extra to get the order completed urgently. Mary, who was considering a vacation at this time, will stay to complete this project first. This is creating new value for her business. True False
True
Sustainability of an advantage is the ability of a firm to protect its competitive advantage. False True
True
An online advertising agency charges its clients based on the number of people clicking on the advertisement for a fixed period. This is an example of which of the following funding methods? Allocation Chargeback Overhead Subsidy
Allocation
The franchise owners of Anytime Fitness are charging training suite fees for their new franchises based on the number of locations they have. For 1-3 centers the cost is $ 149/center, for 4-9 centers it is $ 109/center, for 10 plus centers it is $109/center for the first 9 locations and $ 0 for any centers above that. What kind of charging method would you consider it to be? Allocation Chargeback (service-based pricing) Overhead None of the above
Allocation
Which of the following statement apply to Apple's magic touch in designing consumer electronics that have immediate appeal with a loyal customer base. Apple's magic touch is easy to emulate Apple's magic touch is easy to replicate Apple's magic touch is imitable Apple's magic touch is inimitable
Apple's magic touch is inimitable
Company A is implementing a new HR system. The new system will roll out using a direct installation approach. Which of the following is critical to the successful installation of the new HR system? Agile development Change management System analysis Testing
Change management
The IS function in your organization has developed a new system under which each department in the organization will have to pay per use for networking expenses based on the volume of traffic initiated and the number of concurrent software application licenses run within a department. This is an example of which mode of funding for information systems? Allocation Chargeback Overhead None of the above
Chargeback
All of the following are analytical tools that were introduced or adapted to the search for strategic information systems opportunities except: Cluster analysis Customer service life cycle analysis Industry analysis Value chain analysis
Cluster analysis
Go or no-go recommendations for a project are provided at what phase of the systems development life cycle (SDLC)? Build phase (just after system design and before programming) Definition phase (just after feasibility analysis and before system analysis) Definition phase (just after investigation and before feasibility analysis) Definition phase (just after system analysis and before investigation)
Definition phase (just after feasibility analysis and before system analysis)
A business school has developed a new leave portal for all its employees and decides to immediately switch from the old platform to the new one. This migration is considered a low risk endeavor for the school and its employees. This type of migration approach is considered as: Direct Parallel Phased Pilot
Direct
Apple, Inc. provides its users the opportunity to develop applications which can later be downloaded and used via the Apple App Store. This approach of design and development where a software application is created or improved by its users is called: Custom design and development End-user development System selection and acquisition None of the above
End-user development
Which of the following are two critical processes that take place during the installation phase? Change management and prototyping End-user training and change management End-user training and prototyping Programming and testing
End-user training and change management
A trojan horse like a virus delivers malicious payload and self-replicates. True False
False
COTS is an acronym for "customized off-the-shelf" software. False True
False
In the oil and petrol industry the price per barrel regularly fluctuates due to the fact that there are only a few big oil producers in the world (monopoly). If the price per barrel of refined oil is raised by the supplier for Total, they would be forced to transfer that price hike to their customers. What does this tell you about the bargaining power of suppliers for Total? High Low Medium None of the above
High
Mary is purchasing air tickets for travelling to Europe in the December holidays. She books a ticket for $700 roundtrip with Delta Airlines to France but the next day her colleague informs her about a connection using two different airline service providers AirFrance and RyanAir which takes shorter time and has no switching costs. She quickly changes her booking to the new connection her colleague showed her. What does this tell you about the bargaining power of buyers in the airline industry? High Low Medium None of the above
High
Which of the following risk factors captures the degree of IT-related knowledge of the board of directors? Business continuity risk Information risk IT competence risk IT project risk
IT competence risk
IT infrastructure is a response lag driver for which of the following barriers to erosion of IT dependent competitive advantage? Complementary resources barrier IT project barrier IT resources barrier Preemption barrier
IT resources barrier
Which of the following is not a barrier to erosion of advantage? IT project barrier IT resources barrier IT team barrier Preemption barrier
IT team barrier
The Amazon logistics and delivery network is so intricate and complex at the same time that competitors find it extremely difficult to duplicate. Therefore, Amazon's logistics and delivery network can be considered as the following type of resource: Inimitable Rare Valuable None of the above
Inimitable
When fulfilling the IS processing needs, what does the firm has to do in the information systems development process? Assess current IS within the firm Develop capabilities to develop the IS Generate the IT core Integrate the technology with other components of the organization (i.e. people, processes, structure)
Integrate the technology with other components of the organization (i.e. people, processes, structure)
Mr. K has been a long term corporate sales account manager at a telecommunication company. He has been angling for a promotion for the past 10 years however almost always someone younger is promoted because they are more qualified. Disgruntled by his workplace he has resigned from the office. On the last day of his job he decides to teach them all a lesson by selling confidential customer information to a competitor. What kind of behavior does this situation represent? Careless behavior International malicious behavior Careless and unintentional malicious behavior Unintentional malicious behavior
International malicious behavior
The pharmaceutical industry is characterized by a substantial need for capital investments in research and development, strong economies of scale, well known brand names with multiple issues on patents and government regulations. Threat of new entrants can be characterized as one of the following options: High Low Medium None of the above
Low
In 2009 Coca-Cola introduced the Freestyle drink dispenser, an RFID-enabled vending machine that features 165 different Coca-Cola drink products, as well as custom flavors. The Freestyle machine enabled Coca-Cola to track its customer's preferences, in the aim of improving its product line. Based on the virtual value chain three classes of strategic initiatives, which of the following best describes Coca-Cola's initiative? Mirroring capabilities New digital value Usage monitoring Visibility
Mirroring capabilities
Wikipedia, SpaceX, Airbnb, the boring company all have developed capabilities that make their overall value proposition such that competitors are unable to replicate. Key resources of these companies are examples of the following resource based views: Nonsubstitutable Rare Valuable None of the above
Nonsubstitutable
During the budgeting process which two expense decisions are considered most important? CAPEX (capital expenses, e.g. new systems) and depreciation expense (non-cash expense reducing the value of an asset over useful life, e.g. warehouse) None of the above OPEX (operating expenses, e.g. maintenance) and CAPEX (capital expenses, e.g. new systems) OPEX (operating expenses, e.g. maintenance) and depreciation expense (non-cash expense reducing the value of an asset over useful life, e.g. warehouse)
OPEX (operating expenses, e.g. maintenance) and CAPEX (capital expenses, e.g. new systems)
Mary received an email on her outlook inbox that claimed it was from the IT helpdesk at her office. The email asked her to change the password on her official account using a link within the email in the next 15 minutes or she would automatically loose access to her account on all devices. Reading this message prompts her to click on the link which redirects her to webpage that looks just like the outlook security settings page. What kind of external intrusion threat is this? Backdoors and exploits Phishing Social engineering None of the above
Phishing
Which of the following statements is not a part of the "agile manifesto" for software development: Customer collaboration over contract negotiation Processes and tools over individuals and interactions Responding to change over following a plan Working software over comprehensive documentation
Processes and tools over individuals and interactions
The customer service life cycle consists of four stages. In which stage does the customer realize the needs for a specific product or service and begins to focus on its attributes? Acquisition Ownership Requirements Retirement
Requirements
The customer service life cycle consists of four stages. In which stage does the customer begin thinking about repurchasing, trading in, or dismissing old products? Acquisition Ownership Requirements Retirement
Retirement
Risk assessment consists of which of the following processes? Risk analysis, risk mitigation Risk audit (technical & human resources), risk analysis Risk audit (technical & human resources), risk mitigation None of the above
Risk audit (technical & human resources), risk analysis
After completing a risk assessment of the Information Systems security within company X, the directors have decided to purchase an insurance against cyber security threats. What type of risk mitigation strategy is this? Risk reduction Risk transference Risk acceptance Risk reduction & risk acceptance
Risk transference
Scope creep is the reason why system requirements are frozen once stakeholders signoff the systems requirement document. Scope creep can lead to: Improved efficiency in project deployment Significant decrease in cost and faster development of the project Significant increase in cost and delay in development of the project None of the above
Significant increase in cost and delay in development of the project
Apple allows its prospective customers to customize hardware and software features of a number of its products. This allows customers to select the features that suit their needs. Under the CLSC framework, Apple's initiative falls under which of the following stages? Establish requirements Source selection Specification Testing and acceptance
Specification
Which of the following is not an approach to the acquisition of information processing functionalities and the introduction of IT-based information systems? Customer design and development End-user development Supervised development System selection and acquisition
Supervised development
The build phase of the systems development life cycle (SDLC) consists of which of the following sub-processes: Installation, operations, maintenance Investigation, feasibility analysis, system analysis System design, programming, testing None of the above
System design, programming, testing
Which of the following are the two main processes of fulfilling information processing needs? Capability development and IT development Custom IS development and technical skills development IS research and IS development Technology development and IS development
Technology development and IS development
The purpose of a steering committee is to make decisions on: Project implementation timelines, end user testing, trainings for new software to be deployed The investment approach, portfolio, risk and prioritization of investments for the IS function The investment approach, portfolio, risk and prioritization of investments for the whole company None of the above
The investment approach, portfolio, risk and prioritization of investments for the IS function
Twin Peek is a tech-startup providing their customers with online data security. Owing to the sensitive nature of their operations their IT systems and infrastructure are well maintained and consolidated. What can you say about their budgeting practices? They have high ongoing operating expenses They have low ongoing operating expenses They only have capital expenses None of the above
They have low ongoing operating expenses
Which of the following are NOT a part of the industry analysis framework? Bargaining power of buyers Bargaining power of suppliers Threat of established players Threat of substitute products or services
Threat of established players
The industry analysis framework consists of five determinant forces. Which of the following represents the extent to which the products or services marketed by a certain firm can be replaced by other products or services, that serve the same need, from another firm? Bargaining power of buyers Bargaining power of suppliers Threat of new entrants Threat of substitute products
Threat of substitute products
Rational decision making suggests that the amount invested in cyber security safeguards should be proportional to the extent of threats and its potential negative side effects. False True
True
Risk analysis is the process by which a firm attempts to quantify the hazards identified in the risk audit. False True
True
Tesla's self-driven autonomous vehicles are continuously tested on road and in the virtual environment to build up the repository of maps, layouts, traffic patterns in order to improve the self-driving capabilities of Tesla. This is a prime example of capability development for the autonomous Tesla models. False True
True
Rotary International is an NGO that is currently working on Polio eradication in Asia. They have just set up a makeshift office in a rural village in Pakistan. Their head office in Illinois is hosting an event to generate donations for their project and would like the event attendees to be able to talk to their field agents. Unfortunately, their board room conferencing system is unable to connect to the village office over Skype. (There are compatibility issues.) Polycom has offered them a solution to purchase a single license to a cloud-based video conferencing solution that could be used from the village office to connect to the board room. Rotary will have to pay $15 per month for this license. What do you think is the competitive advantage of Polycom over Skype in this scenario? Polycom is offering to replace the board room conferencing system that does not operate with Skype. Polycom's cloud-based video conferencing solution is fully compatible with the board room conferencing system in Illinois. Skype also has a cloud-based video conferencing system. Skype is offering a free solution.
Polycom's cloud-based video conferencing solution is fully compatible with the board room conferencing system in Illinois.
Which of the following defines the total cost of ownership (TCO)? A financial estimate designed to explicitly recognize the full life cycle costs of IT assets A proxy for project complexity and the potential consequences of failure The cost of acquiring products or services that used to be created internally by the organization from an outside provider The set of ongoing information systems projects a firm has underway
A financial estimate designed to explicitly recognize the full life cycle costs of IT assets
Value appropriation is a process by which total value created in the transaction is equally distributed among all partner entities. True False
False
When YouTube launched its video-sharing platform in 2005, it had to develop its own IS. This is an example of system selection and development. False True
False
When an organization goes ahead with an IT initiative that does not offer strong barriers to erosion, it is unlikely that the initiative gets imitated. False True
False
Company A is thinking about using blockchain technology in managing its supply chain. The company is thinking of using the Ethereum blockchain, an existing blockchain solution, rather than developing its unique solution. Which of the following is advantage of using the existing blockchain solution? Faster-roll out Flexibility and control No advantage Unique tailoring
Faster-roll out
Julie is a first year business student doing a project for her marketing class. She is carrying out industry analysis for her project based on grocery stores in France. What tool should she use? Customer service life cycle analysis Five forces framework Value chain analysis None of the above
Five forces framework
Which of the options below is not an example of the chargeback mode of funding? Fixed yearly expenses based on size, revenue and number of users in a department Measured resource usage Negotiated flat rate Service-based pricing
Fixed yearly expenses based on size, revenue and number of users in a department
Which of the following is not an advantage of purchasing? Faster rollout Flexibility High quality Knowledge infusion
Flexibility
The US subsidiary of a major food producer decided to implement SAP within their organization. SAP is an openly available enterprise software to manage business operations and customer relations. Which type of design and development approach does the commercially available SAP software fall into? Custom design and development End-user development System selection and acquisition None of the above
None of the above
Which of the following are NOT a part of the primary activities carried out in a typical value chain? Inbound logistics Operations Outbound logistics Technology development
Technology development
A small local coffee shop has two suppliers, A and B. Supplier A went bankrupt and had to close its business. Assuming that both suppliers are able to provide the coffee shop with all its needs in term of suppliers, which of the following is likely to happen: The bargaining power of supplier B will decrease The bargaining power of supplier B will increase The bargaining power of the small coffee shop will increase The threat of substitute products will increase
The bargaining power of supplier B will increase
The analysis of added value can help you measure how much benefit your competitor is drawing from an innovation and what benefits you can get by choosing to replicate the initiative in your company. True False
True
The difference between inventors and entrepreneurs is that entrepreneurs focus on market opportunities and development of solutions to meet the opportunities whereas inventors create new products and new technologies that may or may not create value. True False
True
The main advantage of the chargeback funding approach is the perceived fairness and accountability it creates for both users and IS function. False True
True
The response lag drivers for IT project barrier are driven by IT characteristics of the technology (complexity, uniqueness, visibility) and the implementation process (complexity, degree of process change). False True
True
When an IT initiative is being developed as part of a consortium, the leader shares the risks and costs associated with the initiative with competitors that are part of the consortium. False True
True
According to the Resource Based View (RBV), a firm's resources need to be: Valuable, rare, imitable, and nonsubstitutable Valuable, rare, imitable, and substitutable Valuable, rare, inimitable, and nonsubstitutable Valuable, rare, inimitable, and substitutable
Valuable, rare, inimitable, and nonsubstitutable
The unique design capability of Apple Inc. is a resource that is scare and not readily available for acquisition by competitors. It can be considered as which of the following kind of resource in the resource based view: Nonsubstitutable Rare Valuable None of the above
Rare
Jenny is a shift manager at a Starbucks in Lyon, France. She wants to pitch an idea for bio-coffee to her boss and is working out the total value created from each cup of bio-coffee. The eco-friendly coffee beans for a standard coffee cup cost $1. The rest of the raw materials and expenses per cup are $0.85. Using a survey, she has determined that the customers are willing to pay $5 per cup. What is the total value created? $ 0.85 $ 1.85 $ 3.15 $ 5.00
$3.15
Peter is a retired gardener who supplies homegrown vegetables to the local diner. The Firm cost for growing the pumpkins and bringing them to the diner is $1.50 per unit. It is Halloween season, so the diner is willing to pay Peter $7 per unit. What is the excess profit appropriated by Peter? $ 1.50 $ 5.50 $ 7.00 $ 8.50
$5.50
With the application of the new data protection laws in EU, your organization is thinking of realigning itself to ensure compliance over its website. This issue needs to be addressed at the company level. In your opinion which team or body is qualified to craft a governance system that ensures that an officer of the organization has clear responsibility for signing off on and ensuring compliance with established privacy and security policies? Board of directors Legal department Marketing and sales department None of the above
Board of directors
Capability development refers to the firm's ability to design and develop effective computer applications. False True
False
Creating the IT core is sufficient to fulfill the information processing needs of the firm. False True
False
In an organization where the information systems function controls the bulk of the IT budget, decisions regarding the use of IT resources will be highly decentralized. False True
False
Technical feasibility is concerned with taking the system requirements document and producing a robust, secure, and efficient application. False True
False
Technical risks and financial risks are not considered a part of the overall individual project risk. False True
False
The analysis of added value is only useful when a company is innovating (creating value in new ways and offering things no competitor is currently offering). True False
False
The distributed denial of service (DDoS) attack uses a single compromised system while a denial of service (DoS) attack uses a large network of compromised systems. True False
False
The purpose of a steering committee within an organization is to provide guidance to the company and share responsibility for aligning the business strategy of the company to the efforts of the IS function. False True
False
In June 2003, Walmart announced that its suppliers will have to include RFID tags to their products (typically on the cases and pallets). The transition from the traditional barcode technology to RFID technology meant increased costs to the suppliers, which eventually had to redesign their business processes and accept the change. Which of the following best describes Walmart's new policy? High bargaining power of suppliers High bargaining power of the buyer High threat of new entrants Low bargaining power of the buyer
High bargaining power of the buyer
Which of the following are two principles associated with IT governance in modern firms? The management of business costs and the assessment of outsourcing opportunities The management of capabilities and the assessment of internal threat The management of downside risk and the fostering of upside potential The prioritization of initiatives and the assessment of inventory
The management of downside risk and the fostering of upside potential
Input resources in a firm's transformation process can be any factor of production, such as raw materials, labor, equity and debt capital, managerial talent, support services like storage and transport, etc. True False
True
The reason that Amazon.com's distribution network is considered as a sustainable competitive advantage is: Competitors are unable to replicate Amazon's distribution network, since a lot of the Technology being used is patented by Amazon While competitors may be able to replicate Amazon's distribution network, they would not be the first ones to do so While competitors may be able to replicate Amazon's distribution network, it would be quite difficult, time consuming and expensive for them to do so None of the above
While competitors may be able to replicate Amazon's distribution network, it would be quite difficult, time consuming and expensive for them to do so