Chapter 3 DSM

Adopting strategic information systems often change the organization as well as its products, services, and operating procedures, driving the organization into new behavioral patterns. Strategic information systems change business goals, relationships with customers and suppliers, and business processes. Which of the following statements best describes a strategic transition?

A change in an organization's culture and activities as the result of adopting a strategic information system

When faced with competitive forces, firms sometimes decide to compete by providing its products and services at the lowest industry prices. In order to use this competitive strategy, firms streamline their operations in order to generate the greatest output using the fewest possible inputs. For example, Walmart does not need to spend much money on maintaining large inventories of goods in its own warehouses. Their information systems enable them to replenish their inventory based on real-time information about its transactions. Which of the following is true of an efficient customer response system?

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

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

​​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. Which of the following best describes benchmarking?

Benchmarking involves comparing the efficiency and effectiveness of a business process against strict standards and then measuring the performance against those standards.

The local hospital has decided to digitize all of its medical records so that their patients can access the information from anywhere in the world. A highly respected consulting group came to the hospital several times to train the staff on the new digital system but only a fraction of the total staff attended a training session. Why do approximately 25% of businesses fail to align IT with its strategic goals or shareholder interest?

Businesspeople claim to not understand IT and ignore it.

A firm is organized financially as a collection of strategic business units and the returns to the firm are directly tied to the performance of all the strategic business units. Information systems can improve the overall performance of these business units by promoting synergies and supporting those activities that a particular business unit performs better than other. What are core competencies?

Core competencies are activities at which a firm excels as a world-class leader.

The following examples show how sometimes innovations radically change a business environment, and other times the innovations simply extend the market albeit with less functionality: The car replaced the horse-drawn carriage, the word processor replaced typewriters, the Apple iPod and streaming music service replaced portable CD players, and digital photography replaced process film photography. Which of the following best describes disruptive technologies?

Disruptive technologies are substitute products that perform as well as or better than anything currently produced.

Implementing information systems has economic, organizational, and behavioral effects on firms. For example, information systems make it possible for companies such as Cisco Systems and Dell to outsource their production to contract manufacturers such as Flextronics instead of making their products themselves. In this example, information systems have what kind of an impact on an organization?

Economic

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.

If your firm is locked into older information systems that are expensive to​ maintain, this makes your firm vulnerable to​ _________.

New market entrants with the latest and less expensive technology

What is a stable, formal social structure that takes resources from the environment and processes them to produce outputs?

Organization

Firms that have​ computer-based, efficient supply chains can manage their​ suppliers' pricing behavior. This is an example of managing which of​ Porter's competitive​forces?

Power of suppliers

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

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

Which of the following best defines a value chain model?

The value chain model highlights specific primary and support activities in the business where competitive strategies can best be applied (Porter, 1985) and where information systems are most likely to have a strategic impact.

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

Information 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 _________, a firm is viewed as a "nexus of contracts" among self-interest individuals rather than as a unified, profit-maximizing entity.

agency theory

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

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. Primary activities are the value chain model category that _________.

is most directly related to the production and distribution of the firm's products and services, which creates value for the customer

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

Today, information systems support an economic model where the marginal costs of adding another participant are about zero, whereas the marginal gain is much larger. For example, the larger the number of subscribers in a telephone system, the greater the value to all participants because each user can interact with more people. Taking advantage of network economics, using the model of a virtual company, and creating a business ecosystem are all examples of how information systems help businesses use __________ to achieve competitive advantage.

network-based strategies

With regards to substitute​ products, your firm will be at a competitive disadvantage if it does not create​ _____.

new technology based​ products

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. Support activities consist of _________.

organization infrastructure, human resources, technology, and procurement

Porter's competitive forces are useful to analyze a​ firm's information systems and identify its​ _____

strategic position within its industry

In​ Porter's competitive forces model how do information systems influence interfirm​ rivalry?

superior information​ systems

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

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 __________, firms and individuals seek to spend less on the costs incurred when a firm buys on the marketplace what it cannot make itself.

transaction cost theory