MIS Chapter 3 Quiz

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

"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?

Benchmarking

The law of diminishing returns only applies to digital products.

False

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

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

Why does Amazon need to worry about competitors in online shopping?

Internet technologies are universal, and therefore usable by all companies.

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

Nike's use of celebrities to market their products

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:

external environment.

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

synergies

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

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

An efficient customer response system directly links consumer behavior to distribution and production and supply chains.

True

Customers are one of the competitive forces that affect an organization's ability to compete.

True

Which of the following is not a major feature of organizations that impacts the use of information systems?

Agency costs

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

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

Mintzberg's classification identifies five forces in an industry's environment that affect the strategic position of a firm.

False

Switching costs decrease when customers are strongly linked to products and platforms.

False

The effect of the Internet has been to decrease the bargaining power of customers.

False

The inventors of a disruptive technology typically benefit the most from the technology; it is rare that fast followers catch up quickly.

False

The use of Internet technologies allows companies to more easily sustain competitive advantage.

False

Which of the following industries has the lowest barrier to entry?

Small retailer

All organizations have bedrock, unquestioned assumptions that define their goals and products.

True

Information systems are used to enable new products and services via product differentiation.

True

Routines are also called standard operating procedures.

True

Smart products are an example of the Internet of Things.

True

Smart products generally raise switching costs.

True

The value chain model classifies all company activities as either primary or support activities.

True

When the output of some units in a firm can be used as inputs to other units, synergies develop, which can lower costs and generate profits.

True

Walmart's attempt to increase its online presence 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.

Information systems enhance core competencies by:

encouraging the sharing of knowledge across business units.

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

labor

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

market niche

The ability to offer individually tailored products or services using the same production resources as bulk production is known as:

mass customization.

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.

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

provide mass customization.

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

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.

A virtual company:

uses networks to link people, assets, and ideas.

Which of the following substitute products would be of most concern for a cable TV distributor?

Satellite TV

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

Substitute products or services

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

True

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.

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

Which of the following statements about organizations is not true?

An informal group can be considered to be an organization.

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

Business processes are typically unaffected by changes in information systems.