ITC 761 - Chapter 3

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

by the development of new information technologies.

A(n) ________ is an activity for which a firm is a world-class leader. competitive advantage expertise area growth driver core competency efficiency

core competency

All of the following statements are true about information technology's impact on business firms except: it helps reduce internal management costs. it helps firms expand in size. it helps firms lower the cost of market participation. it helps reduce transaction costs. it helps reduce agency costs.

it helps firms expand in size.

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

labor

The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as organizational: politics. business processes. culture. environments. structure.

politics.

Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of: adhocracies. entrepreneurial structures. professional bureaucracies. machine bureaucracies. divisionalized bureaucracies.

professional bureaucracies.

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. secondary primary auxiliary support service

support

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: variation costs. retention costs. preservation costs. differentiation costs. switching costs.

switching costs.

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: organization, culture, management, and environment. tasks, technology, people, and structure. environment, organization, structure, and tasks. costs, tasks, structure, and management. technology, people, culture, and structure.

tasks, technology, people, and structure.

When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as: transaction costs. switching costs. network costs. procurement. agency costs.

transaction costs.

A virtual company: uses networks to link people, assets, and ideas. uses Internet technology to maintain a virtual storefront. provides entirely Internet-driven services or virtual products. is limited by traditional organizational boundaries. uses Internet technology to maintain a networked community of users.

uses networks to link people, assets, and ideas.

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. rivalry value chain bargaining power new entrant competitive forces

value chain

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. consortium value web net marketplace value chain support web

value web

Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates which of the following strategies? Low-cost leadership Developing synergies Strengthening supplier intimacy Marketing effectiveness Focusing on market niche

Low-cost leadership

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

"nexus of contracts" among self-interested individuals.

Which of the following best illustrates the use of information systems to focus on market niche? A car manufacturer's Web site that lets you customize the features on the car you are purchasing. A restaurant chain analyzing local sales figures to determine which menu items to serve. A bookseller selling an e-book reader that reads only the bookseller's books. A department store creating specialized products for preferred customers. A clothes manufacturer expanding its offerings to new styles.

A department store creating specialized products for preferred customers.

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

A. 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 major feature of organizations that impacts the use of information systems? Environments Leadership styles Structure of the organization Agency costs Business processes

Agency costs

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

B) Marketing effectiveness

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) low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy.

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

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

Which of the following is a competitive force challenging the publishing industry? A.Suppliers' bargaining power B. Substitute products or services C. Positioning and rivalry among competitors D. Low cost of entry E. Customers' bargaining power

B. Substitute products or services

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

Benchmarking

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

Business processes are typically unaffected by changes in information systems.

41) The Internet increases 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.

C) making information available to everyone.

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

E disruptive technologies.

Which of the following technologies disrupted the traditional publishing industry? World Wide Web Digital photography PCs Instant messaging e-mail

World Wide Web

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

As discussed in the chapter opening case, which of the following statements about Starbucks is not true? A) Starbucks strives to offer customers high-quality coffee, friendly servers, and customer friendly stores. B) Starbucks plans to increase its online sales of coffee products using new technology. C) Starbucks plans to use IT innovations to enhance the customer experience. D) Starbucks is trying to create a unique customer experiences in stores. E) Starbucks is planning to sell coffee, branded mugs, and espresso machines on its website.

E) Starbucks is planning to sell coffee, branded mugs, and espresso machines on its website.

Which of the following is a support activity in a firm's value chain? A) Inbound logistics B) Operations C) Sales and marketing D) Service E) Technology

E) Technology

Which of the following is an example of a divisionalized bureaucracy? Midsize manufacturer University Consulting firm Startup firm Fortune 500 firm

Fortune 500 firm

Which of the following marketplace forces would be of least concern to a manufacturer of deep-sea oil rigs? Low number of suppliers Low number of customers New market entrants Product differentiation Traditional competitors

New market entrants

All of the following are IT-enabled products and services providing competitive advantage except: Ping's golf club customization. Apple's iTunes. Nike's use of celebrities to market their products. PayPal's online person-to-person payment system. Amazon's one-click shopping.

Nike's use of celebrities to market their products.

You are consulting for a natural food products distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step? Implement a strategic transition to the new system Identify the business ecosystem the distributor is in Perform a strategic systems analysis Set up a strategic transition Benchmark existing systems

Perform a strategic systems analysis

________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors. Strengthening customer intimacy Focusing on market niche Low-cost leadership Strengthening supplier intimacy Product differentiation

Product differentiation

Which of the following industries has the lowest barrier to entry? Small retailer Solar energy Automotive Airline Computer chip

Small retailer

Hilton Hotels uses its OnQ system for which of the following purposes? To lower its operating costs To estimate each guest's profitability and give additional privileges to profitable customers To benchmark its progress against competitors To take advantage of network economics To create synergies with its suppliers

To estimate each guest's profitability and give additional privileges to profitable customers

Walmart's continuous replenishment system is an example of a firm using information systems to: focus on market niche. develop synergies. simplify the industry value chain. strengthen ties to its customers. achieve low-cost leadership.

achieve low-cost leadership.

Information systems can be used at the industry level to achieve strategic advantage by: decreasing switching costs. raising the bargaining power of suppliers. building industrywide, IT-supported consortia and symposia. encouraging the entry of new competitors. enforcing standards that reduce the differences between competitors.

building industrywide, IT-supported consortia and symposia.

How do information systems enhance core competencies? by providing better reporting facilities by creating educational opportunities for management by allowing operational employees to interact with management by encouraging the sharing of knowledge across business units by fostering synergies among departments

by encouraging the sharing of knowledge across business units

The value chain model: highlights specific activities in the business where competitive strategies can best be applied. enables more effective product differentiation. categorizes four basic strategies a firm can use to enhance its value chain. sees the supply chain as the primary activity for adding value. categorizes five related advantages for adding value to a firm's products or services.

highlights specific activities in the business where competitive strategies can best be applied.

In environmental scanning, a firm may use information systems to: keep track of the temperature within its data centers. transform inputs into products and services. identify external events that may affect it. develop a unified organizational culture. analyze the performance of its intranet.

identify external events that may affect it.

In network economics, the value of a commercial software vendor's software products: increases due to higher marginal gain in output. decreases as more people use them. decreases according to the law of diminishing returns. is unrelated to the number of people that use them. increases as more people use them.

increases as more people use them

Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a(n) ________ bureaucracy. machine ad hoc professional multidivisional Divisionalized

machine

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. sociotechnical psychological microeconomic behavioral macroeconomic

macroeconomic

Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than competitors. market niche product differentiation low-cost leadership process efficiency mass customization

market niche

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

mass customization.

A firm can exercise greater control over its suppliers by having: fewer suppliers. local suppliers. only a single supplier. global suppliers. more suppliers.

more suppliers.