ITC Chapter 3

According to agency theory, the firm is viewed as a(n):

"nexus of contracts" among self-interested individuals.

Which of the following best illustrates the use of information systems to focus on market niche?

A department store creating specialized products for preferred customers.

Which of the following statements about organizations is not true?

An informal group can be considered to be an organization.

Which of the following is an example of a keystone firm within a business ecosystem?

Apple and the mobile platform ecosystem

Which of the following is an example of synergy in business?

Bank of America acquiring Countrywide Financial Corporation to reach a large pool of new customers

Which of the following would a company employ to measure and compare its business processes to similar processes of other companies within their industry?

Benchmarking

Which of the following statements about business processes is not true?

Business processes are typically unaffected by changes in information systems.

Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete?

Competitive Forces Model

Which of the following is an example of a divisionalized bureaucracy?

Fortune 500 firm

Which of the following statements about network economics is not true?

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

Which of the following represent the primary activities of a firm?

Inbound logistics, operations, outbound logistics, sales and marketing, and service

Which of the following statements about the technical view of organizations is not true?

It focuses on how inputs are combined to create outputs when technology changes are introduced into a company

Along with capital, ________ is the primary production input that the organization uses to create products and services

Labor

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

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.

Microeconomic

A firm can exercise greater control over its suppliers by having:

More suppliers

Which of the following marketplace forces would be of least concern to a manufacturer of deep-sea oil rigs?

New market entrants

All of the following are IT-enabled products and services providing competitive advantage except:

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?

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.

Product differentiation

Which of the following is a competitive force challenging the publishing industry?

Substitute products or services

Which of the following is a support activity in a firm's value chain?

Technology

Hilton Hotels uses its OnQ system for which of the following purposes?

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

When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as:

Transaction costs

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.

Value web

Which of the following is not a true statement about value webs?

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

Which of the following technologies disrupted the traditional publishing industry?

World Wide Web

Walmart's continuous replenishment system is an example of a firm using information systems to:

achieve low-cost leadership.

The most successful solutions or methods for achieving a business objective are called:

best practices.

Information systems can be used at the industry level to achieve strategic advantage by:

building industrywide, IT-supported consortia and symposia.

The interaction between information technology and organizations is influenced:

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

A(n) ________ is an activity for which a firm is a world-class leader

core competency

All of the following are competitive forces in Porter's model except:

disruptive technologies

Information systems enhance core competencies by:

encouraging the sharing of knowledge across business units

Which of the following statements about disruptive technologies is not true?

firms that invent disruptive technologies as first movers always become market leaders

The value chain model:

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

In environmental scanning, a firm may use information systems to:

identify external events that may affect it.

In network economics, the value of a commercial software vendor's software products:

increases as more people use them

All of the following statements are true about information technology's impact on business firms except:

it helps firms expand in size.

The four major competitive strategies are:

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

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

The Internet increases the bargaining power of customers by:

making information available to everyone.

Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than competitors.

market niche

The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as organizational:

politics.

Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of:

professional bureaucracies.

Walmart's continuous replenishment system allows it to do all of the following except:

provide mass customization.

Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered:

strategic transitions

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.

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:

switching costs.

When two organizations pool markets and expertise that result in lower costs and generate profits, they are creating:

synergies.

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:

tasks, technology, people, and structure.

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:

the law of diminishing returns.

A virtual company:

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.

value chain