I S Ch 3
In every industry, there's a firm that stands out from others. These firms are said to have a competitive advantage over others: They either have access to special resources that others do not, or they are able to use commonly available resources more efficiently. Firms that stand out often become the metric to which others are compared. __________ involves comparing the efficiency and effectiveness of a business process against strict standards and then measuring the performance against those standards.
Benchmarking
A collection of routines and behaviors make up a(n) ________.
Business process - A collection of routines used by an organization can be defined as a business process.
All of the following are advantages of new market entrants EXCEPT ________. A. they are not encumbered by worn-out brand names B. they are not locked into old plants and equipment C. they often hire younger, less expensive, and often more innovative workers D. they are more highly motivated than traditional occupants an industry E. they have less capital than an established company
E. they have less capital than an established company - Having less capital could be a disadvantage.
Implementing information systems has economic, organizational, and behavioral effects on firms. Information technology, especially the use of networks, can help firms lower the cost of market participation (transaction costs), making it worthwhile for firms to contract with external suppliers instead of using internal sources. As a result, firms can shrink in size. In this example, information systems have what kind of an impact on an organization?
Economic
By keeping prices low and shelves well stocked using a legendary inventory replenishment system, Walmart became the leading retail business in the United States. Walmart's continuous replenishment system sends orders for new merchandise directly to its partners based on real-time transaction data. Which of the following options directly links consumer behavior to distribution and production and supply chains?
Efficient customer response system
Which of the following best describes a business ecosystem?
It is loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.
What is a stable, formal social structure that takes resources from the environment and processes them to produce outputs?
Organization
A stable, formal social structure that takes resources from the environment and precesses them to produce output is called a(n)______.
Organization - an organization takes resources from the environment and processes them to produce output.
________ encompasses a set of assumptions about what an organization should produce, how it is produced, and for whom.
Organizational culture
There are four generic strategies, each of which often is enabled by using information technology and systems: low-cost leadership, product differentiation, focus on market niche, and strengthening customer and supplier intimacy. Which competitive strategy uses information systems to differentiate products, and enable new services and products?
Product differentiation
Adopting a strategic information system generally requires changes in business goals and relationships as well as changes in business processes. Which of the following is a movement between levels of sociotechnical systems?
Strategic transition
The value chain model describes the series or chain of basic activities that add a margin of value to a firm's products or services. Some activities are directly related to an organizations manufacturing process, while other activities are related to an organization's capital resources. __________ consist of organization infrastructure (administration and management), human resources (employee recruiting, hiring, and training), technology (improving products and the production process), and procurement (purchasing input).
Support activities
Information systems exists to support the required activities a firm must carry out in order to transform business inputs into business outputs. Which of the following highlights 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?
The value chain model
To align IT with the business and use information systems effectively for competitive advantage, managers need to perform a strategic systems analysis. Which of the following questions should managers be able to answer before implementing an IT?
Where in the value chain will information systems provide the greatest value to the firm?
Information technology, especially the use of networks, can help firms lower the cost of market participation, making it worthwhile for firms to contract with external suppliers instead of using internal sources. Similarly, technology, by reducing the costs of acquiring and analyzing information, permits organizations to reduce costs because it becomes easier for managers to oversee a greater number of employees. According to agency theory, __________.
a firm is viewed as a "nexus of contracts" among self-interested individuals rather than as a unified, profit-maximizing entity
________ of an organization's profits can be attributed to the alignment of IT with the business.
about 50 percent - Approximately 50 percent of an organization's profits are attributed to alignment of IT with the business.
Porter's competitive forces model, the strategic position of the firm and its strategies are determined by competition with its traditional direct competitors, but they are also greatly affected by new market entrants, substitute products and services, suppliers, and customers. Organizations using information systems to deal with competitive forces __________.
achieve the lowest operational costs
Adopting strategic systems generally requires changes in ________ as well as business processes.
business goals - Business goals will need to be realigned based on the strategic systems.
When a strategic system is adopted, managers will need to devise new ________ for coordinating their firm's activities with customers, suppliers, and other organizations.
business processes - Business processes must be created for coordination with customers, suppliers, and other organizations.
The research on IT and business performance has found that the more successfully a firm can align information technology with its business goals, the more profitable it will be, yet only a one-quarter of firms achieve the alignment. Most businesses make a mistake when it comes to adopting or implementing information technology because ________.
businesspeople ignore IT instead of taking an active role in shaping it
Firms that do better than others are said to have a ________.
competitive advantage - Firms that "do better" than others are said to have a competitive advantage over others: They either have access to special resources that others do not, or they are able to use commonly available resources more efficiently—usually because of superior knowledge and information assets.
The most widely used model for understanding competitive advantage is Michael Porter's ________.
competitive forces model - This model provides a general view of the firm, its competitors, and the firm's environment.
Amazon was an e-commerce leader with its rapid distribution of a wide array of products, but the firm now faces competition from eBay, Yahoo, and Google. The competitive advantages that strategic systems confer do not necessarily last long enough to ensure long-term profitability because ________.
competitors can retaliate and copy strategic systems
Procter & Gamble uses an intranet called InnovationNet to help people working on similar problems share ideas and expertise. InnovationNet connects those working in many different departments around the world. It uses a browser-based portal to access data and includes a directory of subject matter experts who can be tapped to give advice or collaborate on problem solving or product development. This scenario is an example of how information systems help businesses use __________ to achieve competitive advantage.
core competencies
Sometimes a technology and resulting business innovation comes along and radically changes the business landscape and environment. Substitute products that perform as well as or better than anything currently produced are called __________.
disruptive technologies
Substitute products that perform as well as or better than anything currently produced are called ________.
disruptive technologies - A disruptive technology is one that radically changes the business environment. (eg. internet)
All of the following are organizational factors to consider when building a new system EXCEPT ________. A. the environment in which the organization must function B. the structure of the organization C. executive compensation Your answer is correct. D. the organization's culture and politics E. the type of organization and its leadership
executive compensation - Executive compensation really has nothing to do with the success of a project.
IT affects the cost and quality of information and changes the economics of information. Information technology helps firms contract in size because it can reduce the costs incurred when a firm obtains external resources. According to transaction cost theory, __________.
firms and individuals seek to spend less on the costs incurred when a firm buys on the marketplace what it cannot make itself
Market situations characterized by economic value being generated based on the number of people using a product are called ___________.
network economics - Network economics means that the real economic value comes from the fact that other people use the product. In these situations, "network effects" are at work.
Internet sites like eBay (the giant online auction site) and iVillage (an online community for women) can be used by firms to build communities of users—like-minded customers who want to share their experiences. This builds customer loyalty and enjoyment and develops unique ties to customers. This scenario is an example of how information systems help businesses use __________ to achieve competitive advantage.
network-based strategies
The most common reason for failure of large projects to succeed is ________.
organizational resistance to change - Research on project implementation failures demonstrates that the most common reason for failure of large projects to reach their objectives is not the failure of the technology, but organizational and political resistance to change.
The value chain model describes the series or chain of basic activities that add a margin of value to a firm's products or services. Some activities are directly related to an organizations manufacturing process, while other activities are related to an organization's infrastructure. Inbound logistics (receiving and storing materials for distribution to production), operations (transforming inputs into finished products), outbound logistics (storing and distributing finished products), sales and marketing, and service are all __________.
primary activities
In order to align IT with business as well as use information systems correctly managers need to perform a(n) ________.
strategic system analysis - When performing a strategic systems analysis, managers ask a set of critical business strategy questions.
The accessibility, storage, and distribution of information and knowledge is increased dramatically by ________.
the internet - The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations. In essence, the Internet is capable of dramatically lowering the transaction and agency costs facing most organizations.
Toyota, Ford, and other automobile manufacturers use information systems to facilitate direct access by suppliers to production schedules and even permit suppliers to decide how and when to ship supplies to their factories. Meanwhile, Amazon uses information systems to keep track of user preferences and then uses these preferences to recommend products that might be interesting or useful. Organizations using information systems to deal with competitive forces __________.
tighten linkages with suppliers and develop intimacy with customers
One of the reasons that information technology flattens an organization is ________.
managers receive much more timely and accurate information, thus requiring fewer managers - Because of information technology, managers are provided with timely and accurate reporting. They can thus make much quicker decisions and, as such, fewer managers are needed.
