MIS Chapter 2: Information systems, organization, and strategy

Cost reduction efforts are often appropriate when looking at IT spending focused on​ __________ the business. A. running B. transforming C. growing D. restructuring E. promoting

A. Running

When a​ company's IT has the potential to contribute significantly to the​ company's success, IT is best described as a​ ________. A. support activity B. network effect C. strategic enabler D. primary activity E. benchmark

C. Strategic enabler

Which of the following represents procurement as part of the support value activities in a value chain​ analysis? A. Distributing goods and services to customers B. Providing technical support for the manufacturing processes C. Purchasing inputs such as raw​ materials, resources, equipment and supplies D. Hiring new employees E. Creating a new advertising campaign for the​ company's products

C. purchasing inputs such as raw materials, resources, equipment and supplies

Which of the following is a key point made by Nicholas​ Carr? A. IT resources are so common that their strategic importance has diminished. B. IT resources are so common and plentiful that their cost is negligible. C. IT resources are reaching a stage at which demand cannot be met. D. IT resources are available around the​ world, equalizing the economy. E. IT resources are continuing to increase in costs.

A. IT resources are so common that their strategic importance has diminished.

The Internet is a disruptive innovation that has affected​ Porter's Five Forces in all of the following ways EXCEPT​ ________. A. decreasing the threat of substitutes B. increasing rivalry among competitors C. eliminating switching costs D. lowering barriers to entry E. increasing the power of buyers

A. decreasing the threat of substitutes

Hibbett Sports offers a reward card that gives customers coupons and incentives for store purchases that they can redeem for additional merchandise. This is an example of a​ ________. A. loyalty program B. customer service system C. bonus program D. digital coupon E. marketing program

A. loyalty program

In the music​ industry, why were innovations like​ Apple's iTunes considered to be disruptive​ innovations? A. Because Apple had the support of music company executives B. Because these innovations reduced​ Apple's supplier power in the music industry C. Because these innovations had a negative effect on existing competitors in the music industry D. Because these innovations were illegal E. Because these innovations had higher operational costs

C. because these innovations had a negative effect on existing competitors in the music industry

A company that chooses to offer its drone surveillance services only for pipeline inspection purposes is employing the​ ___________ strategy. A. product differentiation B. ​industry-wide C. focused niche D. ​low-cost leader E. product monopoly

C. focused niche

In the highly competitive cell phone​ market, BlackBerry has positioned its smartphone by focusing its product on the needs of government and corporate business users. Which of​ Porter's three basic strategies is BlackBerry pursuing with its​ smartphone? A. Product differentiation strategy B. ​Value-added strategy C. Focused niche strategy D. ​Customer-focused strategy E. ​Low-cost leadership strategy

C. focused niche strategy

Which of the following businesses is an example of where rivalry among existing competitors is strong and buyers have​ power? A. ​Commercial-grade kitchen appliances B. Dude ranch vacation C. Lawn care business D. English antiques store E. Customized motorcycles

C. lawn care business

EBay was able to establish and retain a dominant position in the online auction marketplace due in part to the fact that as the largest player in the​ market, it was easier for buyers and sellers to find each other. This phenomenon is known as​ ___________. A. mass production effects B. market domination effects C. network effects D. insider effects E. bargaining position effects

C. neteork effects

Which of the following governmental actions will increase the threat of new entrants in a​ market? A. The Federal Reserve increases the cash reserve ratio to tackle inflation. B. There is a decrease in enforcement of​ anti-trust laws that prevents monopolies. C. The Department of Commerce offers a patent to an existing player. D. The government squeezes money from the market through​ open-market operations. E. The Federal Reserve reduces the interest rates on credit for small businesses.

E. the federal reserve reduces the interest rates on credit for small businesses

The ecosystem in which a company is embedded is​ a(n) ________. A. single industry containing similar firms B. community constituted by markets that are not related to the company C. economic community that focuses entirely on the company and its immediate competitors D. economic community that includes related industries E. natural community that is restricted to the members of its value chain

D. economic community that includes related industries

​"The value chain does not end when the buyer pays for the product or​ service." Which of the following statements contradicts this​ judgment? A. The value chain includes all components that add value to a product or service. B. Customer reviews of products and services can help companies identify areas of improvement. C. Marketing success should be measured in terms of customer satisfaction. D. Total value transfer of tangible goods happens at the point of sale. E. Customer orientation is the key to success in modern business.

D. total value transfer of tangible goods happens at the point of sale

Which of the following is not an example of a sustaining​ technology? A. portable DVD players with longer battery B. Digital cameras with larger LCD screens C. Newly designed side airbags in the latest model Ford Taurus D. Uber E. Smart phones with larger displays

D. uber

Which of the following refers to the set of activities within a company that involves acquiring raw​ materials, making and selling​ goods, and providing customer​ service? A. Benchmarking B. Competitive advantage C. Operations management D. Network effects E. Value chain model

E. Value chain model

Which of the following activities would you perform to measure and compare your business processes to similar processes of other companies within your​ industry? A. Value chain analysis B. Competitive forces analysis C. Business process redesign D. Best practices E. Benchmarking

E. benchmarking

In the value chain​ model, ________ activities relate directly to the process by which products and services are​ created, marketed,​ sold, and delivered. A. secondary B. value C. support D. primary E. production

D. primary

Which of the following would NOT be a​ "wildcard" event? A. A new technology is developed for​ high-speed, high-volume storage of digital media. B. An earthquake through the American Midwest takes out several major interstate bridges over the Mississippi. C. Terrorist threats cause increased security checks of​ semi-trucks on the interstate. D. Silicon producer employee unions suddenly go on strike to improve working​ conditions, slowing production of computer components. E. A hurricane through the Gulf of Mexico shuts down oil refineries for several months.

A. A new technology is developed for high speed, high-volume storage of digital media

A wireless provider is currently offering customers who buy a new iPhone with a​ two-year contract a special package that includes a leather​ case, extra car​ charger, and earphones. In terms of​ Porter's Five​ Forces, what is this company trying to do with this special​ promotion? A. Decrease buyer power B. Increase the threat of new entrants C. Increase buyer power D. Decrease the power of suppliers E. Increase the threat of substitutes

A. Decrease buyer power

A pharmaceutical company that invests heavily in research and development​ (R&D) and has several​ new, patented products ready for market would be operating in an industry with​ ________. A. high buyer power B. low threat of new entrants C. low supplier power D. high threat of new entrants E. high threat of substitute products

B. low threat of new entrants

According to Michael​ Porter, companies should pick one of the three basic strategies and stick with it. Walmart has followed this theory by focusing its strategy on dominating a broad market. Which strategy is Walmart​ following? A. Customer intimacy B. Low cost leadership C. Product differentiation D. Market leadership E. Focused niche

B. Low cost leadership

When established companies fail to respond to disruptive innovations that capitalize on new​ technologies, they can become victims of​ ________. A. a merger B. creative destruction C. a takeover D. bankruptcy E. creative dissolution

B. creative destruction

Which of the following statements is NOT a key reason that information technology​ (IT) is essential to managing nonprofit​ organizations? A. Some nonprofit organizations engage in sales and marketing activities. B. Most nonprofit organizations have a concealed profit motive. C. Operational requirements for nonprofits are similar to​ for-profit businesses. D. Nonprofits need to communicate and collaborate extensively with other organizations. E. Nonprofits often require extensive human resources to operate effectively.

B. most nonprofit organizations have a concealed profit motive

Which of the following is incurred by customers for changing​ suppliers? A. Benchmarks B. Switching costs C. Production costs D. Network effects E. Disruptive innovations

B. switching costs

Which of​ Porter's Five Forces is high when it is easy for competitors to enter a market and low when there are high capital investment costs to compete in the​ market? A. Rivalry among existing competitors B. Threat of new entrants C. Threat of substitutes D. Supplier power E. Buyer power

B. threat of new entrants

HR​ Solutions, Inc. provides human resource technology solutions to companies that are seeking ways to reduce costs and improve efficiencies in their operations. Which one of the following functions is NOT a human resource function that would benefit from a​ technology-based solution? A. Processing timesheets electronically B. Developing a website to answer routine HR questions C. Interviewing potential job candidates D. Implementing direct deposit for all payroll processing E. Implementing an online application process

C. interviewing potential job candidates

Nonprofit organizations that rely on volunteers and donations for their survival have benefitted greatly through the use of​ _______________ applications to manage their volunteer and donor relationships. A. forecasting B. financial C. accounting D. customer relationship management E. operations

D. Customer relationship management

Which government entity created the computer research program in the 1960s that eventually grew into the​ Internet? A. Federal Communications Agency B. Department of Homeland Security C. Environmental Protection Agency D. Defense Advanced Research Projects Agency E. Department of Defense

D. Defense advanced research projects agency

Haliburton Manufacturing Corporation makes industrial air conditioning units for large organizations. Last year the company spent more than​ $5 million on new technology designed to make its employees more productive and streamline its business processes. The expected return on​ investment, however, was much lower than the company​ expected, and production of new air conditioners was not improving. What economic theory helps explain the reason Haliburton is not getting an immediate return on its IT​ investment? A. Agency theory B. Rational choice theory C. Business performance theory D. Productivity paradox E. Productivity theory

D. Productivity paradox

​Pharma, Inc. recently started selling a​ new, patented drug for high cholesterol called Terazatin. Sales of Terazatin are so successful that Pharma has decided to raise the price from​ $12 a pill to​ $20 a pill. Which of the following forces is Pharma using to increase the price of​ Terazatin? A. Rivalry among existing competitors B. Threat of new entrants C. Threat of new products D. Supplier power E. Buyer power

D. Supplier power

Government funding for​ technology-based innovation is often the only source of funding available for​ high-risk projects that private investors may avoid. For which of the following projects is government funding most​ critical? A. A project to develop a more​ disease-resistant orange tree B. A project to launch a​ new, low-cost and​ fuel-efficient car C. An infrastructure project that should be completed in one year D. A research project on hybrid oil E. A scheme to improve the financial status of a company

D. a research project on hybrid oil

Columbus Flight​ Services, Inc. offers charter flights serving small to medium cities. They are evaluating the possibility of expanding into the corporate jet leasing industry. As part of the planning​ process, they are using​ Porter's Five Competitive Forces model to evaluate the​ ________. A. market B. product C. competition D. industry E. investment

D. industry

Cingular​ Cell, Inc. charges its customers a high contract termination fee if they cancel their cell phone contract before the expiration date. The termination fee is an example of a​ ________. A. loyalty cost B. customer service fee C. customer service penalty D. switching cost E. customer retention fee

D. switching cost

When the need for a product or service steeply declines due to significant technological​ advances, a(n)​ ____________ has occurred. A. network effect B. sustaining technology C. ecosystem shift D. market correction E. disruptive innovation

E. disruptive innovation

Information technology​ (IT) is a strategic enabler when​ ________. A. it is used to create a new marketing campaign for the company B. it is used to automate the procurement processes in manufacturing C. it is used to manage​ day-to-day operations D. it is used to develop work schedules E. it focuses on the growth of an organization

E. it focuses on the growth of an organization

​Xerox, a company that sells business services and document technology​ products, sustains its investment in technological​ innovation, particularly in areas such as color​ science, digital​ imaging, and nanotechnology. These strategic​ investments, made only in specific​ areas, keep the company ahead of the competition. Which of the following messages does this example​ convey? A. Large IT investments are essential for the success of a company in​ today's business environment. B. The ability to extract the value of technology requires human imagination and innovation. C. IT investments must be made on the most modern technology available in the market. D. IT investments should not be focused on certain aspects and should have a broad outlook. E. Xerox will not be able to compete effectively without IT investments in all areas of the company.

b. the ability to extract the value of technology requires human imagination and innovation.