MIS Chapter 3
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? Set up a strategic transition Implement a strategic transition to the new system Identify the business ecosystem the distributor is in Perform a strategic systems analysis Benchmark existing systems
Perform a strategic systems analysis
Which of the following is a competitive force challenging the publishing industry? Customers' bargaining power Positioning and rivalry among competitors Substitute products or services Suppliers' bargaining power Low cost of entry
Substitute products or services
Which of the following is a support activity in a firm's value chain? Operations Technology Sales and marketing Service Inbound logistics
Technology
Which of the following is a support activity in a firm's value chain? Service Sales and marketing Inbound logistics Technology Operations
Technology
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 support web net marketplace consortium value chain
consortium
A(n) ________ is an activity for which a firm is a world-class leader. core competency growth driver expertise area competitive advantage efficiency
core competency
All of the following are competitive forces in Porter's model except: disruptive technologies. new market entrants. substitute products. suppliers. customers.
disruptive technologies.
In network economics, the value of a commercial software vendor's software products: decreases as more people use them. is unrelated to the number of people that use them. increases as more people use them. decreases according to the law of diminishing returns. increases due to higher marginal gain in output.
increases as more people use them.
In network economics, the value of a commercial software vendor's software products: is unrelated to the number of people that use them. increases due to higher marginal gain in output. decreases as more people use them. increases as more people use them. decreases according to the law of diminishing returns.
increases as more people use them.
All of the following statements are true about information technology's impact on business firms except: it helps reduce transaction costs. it helps reduce internal management costs. it helps firms lower the cost of market participation. it helps firms expand in size. it helps reduce agency costs.
it helps firms expand in size.
In environmental scanning, a firm may use information systems to: identify external events that may affect it. transform inputs into products and services. analyze the performance of its intranet. develop a unified organizational culture. keep track of the temperature within its data centers.
keep track of the temperature within its data centers.
In environmental scanning, a firm may use information systems to: transform inputs into products and services. keep track of the temperature within its data centers. identify external events that may affect it. develop a unified organizational culture. analyze the performance of its intranet.
keep track of the temperature within its data centers.
Along with capital, ________ is the primary production input that the organization uses to create products and services. structure culture politics labor feedback
labor
A firm can exercise greater control over its suppliers by having: global suppliers. local suppliers. only a single supplier. fewer suppliers. more suppliers.
more suppliers.
Walmart's continuous replenishment system allows it to do all of the following except: provide mass customization. fine-tune merchandise availability. transmit orders to restock directly to its suppliers. keep costs low. better meet customer demands.
provide mass customization.
Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered: business goal transitions. organizational adjustments. sociotechnical transitions. strategic transitions. systems alterations.
strategic transitions
Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered: business goal transitions. sociotechnical transitions. strategic transitions. systems alterations. organizational adjustments.
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. secondary primary service support auxiliary
support
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. service primary auxiliary secondary support
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: preservation costs. differentiation costs. variation costs. switching costs. retention costs.
switching costs.
When two organizations pool markets and expertise that result in lower costs and generate profits, they are creating: synergies. a value chain. core competencies. net marketplaces. a value web.
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: costs, tasks, structure, and management. tasks, technology, people, and structure. organization, culture, management, and environment. environment, organization, structure, and tasks. technology, people, culture, and structure.
tasks, technology, people, and structure.
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. technology, people, culture, and structure. costs, tasks, structure, and management. environment, organization, structure, and tasks. organization, culture, management, and environment.
tasks, technology, people, and structure.
When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as: agency costs. network costs. procurement. transaction costs. switching costs.
transaction costs.
A virtual company: uses Internet technology to maintain a networked community of users. uses networks to link people, assets, and ideas. uses Internet technology to maintain a virtual storefront. is limited by traditional organizational boundaries. provides entirely Internet-driven services or virtual products.
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 new entrant bargaining power competitive forces rivalry
value chain
Why does Amazon need to worry about competitors in online shopping? Internet technologies are universal, and therefore usable by all companies. Internet shopping produces cost transparency. The Internet increases switching costs. E-commerce is affected by the law of diminishing returns. The Internet enables the production or sales of substitute products or services.
Internet technologies are universal, and therefore usable by all companies.
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. It sees the firm as being infinitely malleable. It sees capital and labor as being easily substituted for one another. It emphasizes group relationships, values and structures. It sees the organization as a social structure similar to a machine.
It focuses on how inputs are combined to create outputs when technology changes are introduced into a compan
Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates which of the following strategies? Focusing on market niche Strengthening supplier intimacy Low-cost leadership Marketing effectiveness Developing synergies
Low-cost leadership
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 Developing synergies Focusing on market niche Strengthening supplier intimacy Marketing effectiveness
Low-cost leadership
According to agency theory, the firm is viewed as a(n): "nexus of contracts" among self-interested individuals. entrepreneurial endeavor. unified, profit-maximizing entity. entrepreneurial structure. task force organization that must respond to rapidly changing environments.
"nexus of contracts" among self-interested individuals.
Which of the following is not a major feature of organizations that impacts the use of information systems? Agency costs Environments Business processes Leadership styles Structure of the organization
Agency costs
Which of the following statements about organizations is not true? An organization is a collection of people and other social elements. An informal group can be considered to be an organization. An organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution. An organization is a formal, legal entity with internal rules and procedures that must abide by laws. An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs.
An informal group can be considered to be an organization.
Which of the following statements about organizations is not true? An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs. An organization is a formal, legal entity with internal rules and procedures that must abide by laws. An organization is a collection of people and other social elements. An organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution. An informal group can be considered to be an organization.
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? American Airlines and the computerized reservation ecosystem Apple and the mobile platform ecosystem GUESS and the fashion ecosystem Nike and the athletic apparel ecosystem Citibank and the ATM ecosystem
Apple and the mobile platform ecosystem
Which of the following would a company employ to measure and compare its business processes to similar processes of other companies within their industry? Best practices Benchmarking Secondary activities Strategic systems analysis Value chain analysis
BENCHMARKING
Which of the following is an example of synergy in business? Amazon's use of the Internet to sell books Blockbuster combining traditional video rental with online video rental Walmart's order entry and inventory management system to coordinate with suppliers Nike's use of technology to improve its product offerings Bank of America acquiring Countrywide Financial Corporation to reach a large pool of new customers
Bank of America acquiring Countrywide Financial Corporation to reach a large pool of new customers
Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete? Agency costs model Network economics model Demand control model Competitive advantage model Competitive forces model
Competitive forces model
Which of the following represent the primary activities of a firm? Organization infrastructure, human resources, technology, and procurement Inbound logistics, operations, outbound logistics, sales and marketing, and service Procurement, operations, technology, sales and marketing, and services Inbound logistics, operations, outbound logistics, technology, and service Procurement, inbound logistics, operations, technology, and outbound logistics
Inbound logistics, operations, outbound logistics, technology, and service
Which of the following statements about disruptive technologies is not true? Disruptive technologies may sometimes simply extend the marketplace. Firms that invent disruptive technologies as first movers always become market leaders. Disruptive technologies may put entire industries out of business. Disruptive technologies radically change the business landscape and environment. Disruptive technologies may be substitute products that perform better than other products currently being produced.
Firms that invent disruptive technologies as first movers always become market leaders.
Which of the following is an example of a divisionalized bureaucracy? University Startup firm Midsize manufacturer Consulting firm Fortune 500 firm
Fortune 500 firm
Which of the following statements about network economics is not true? Uber is an example of a business model that is based on the principle of network economics. Information technology can be strategically useful from a network economics perspective. In network economics, the marginal cost of adding new members to the network is higher than the marginal gain. The law of diminishing returns does not always apply to every situation. From a network economics perspective, the value of a community of people grows as the number of participants in the community increases.
In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.
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 multidivisional professional ad hoc divisionalized
Machine
Which of the following marketplace forces would be of least concern to a manufacturer of deep-sea oil rigs? New market entrants Product differentiation Low number of suppliers Traditional competitors Low number of customers
New market entrants
Which of the following substitute products would be of most concern for a cable TV distributor? Terrestrial radio Broadcast TV On-demand Internet television Satellite radio Streaming music services
On-demand Internet television
________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors. Low-cost leadership Focusing on market niche Strengthening customer intimacy Product differentiation Strengthening supplier intimacy
Product differentiation
________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors. Strengthening customer intimacy Strengthening supplier intimacy Low-cost leadership Focusing on market niche Product differentiation
Product differentiation
Which of the following industries has the lowest barrier to entry? Computer chip Airline Automotive Small retailer Solar energy
Small retailer
Which of the following industries has the lowest barrier to entry? Computer chip Automotive Solar energy Small retailer Airline
Small retailer
As discussed in the chapter opening case, which of the following statements about Starbucks is not true? Starbucks is trying to create a unique customer experiences in stores. Starbucks strives to offer customers high-quality coffee, friendly servers, and customer friendly stores. Starbucks is planning to sell coffee, branded mugs, and espresso machines on its website. Starbucks plans to use IT innovations to enhance the customer experience. Starbucks plans to increase its online sales of coffee products using new technology.
Starbucks is planning to sell coffee, branded mugs, and espresso machines on its website.
Hilton Hotels uses its OnQ system for which of the following purposes? To take advantage of network economics To create synergies with its suppliers To lower its operating costs To estimate each guest's profitability and give additional privileges to profitable customers To benchmark its progress against competitors
To estimate each guest's profitability and give additional privileges to profitable customers
Which of the following is not a true statement about value webs? Value webs involve highly synchronized industry value chains. Value webs involve a collection of independent firms that use information technology to coordinate their value chains. Value webs operate in a less linear fashion than traditional value chains. Value webs are inflexible and cannot adapt quickly to changes in supply and demand. Value webs are more customer-driven than traditional value chains.
Value webs are inflexible and cannot adapt quickly to changes in supply and demand.
Which of the following technologies disrupted the traditional publishing industry? Digital photography PCs e-mail Instant messaging World Wide Web
World Wide Web
The most successful solutions or methods for achieving a business objective are called: benchmarks. value activities. best processes. core competencies. best practices.
best practices.
Information systems can be used at the industry level to achieve strategic advantage by: raising the bargaining power of suppliers. building industrywide, IT-supported consortia and symposia. decreasing switching costs. enforcing standards that reduce the differences between competitors. encouraging the entry of new competitors.
building industrywide, IT-supported consortia and symposia.
Information systems enhance core competencies by: creating educational opportunities for management. allowing operational employees to interact with management. fostering synergies among departments. encouraging the sharing of knowledge across business units. providing better reporting facilities.
encouraging the sharing of knowledge across business units.
Information systems enhance core competencies by: creating educational opportunities for management. providing better reporting facilities. encouraging the sharing of knowledge across business units. fostering synergies among departments. allowing operational employees to interact with management.
encouraging the sharing of knowledge across business units.
The value chain model: categorizes four basic strategies a firm can use to enhance its value chain. highlights specific activities in the business where competitive strategies can best be applied. categorizes five related advantages for adding value to a firm's products or services. sees the supply chain as the primary activity for adding value. enables more effective product differentiation.
highlights specific activities in the business where competitive strategies can best be applied.
The value chain model: categorizes four basic strategies a firm can use to enhance its value chain. sees the supply chain as the primary activity for adding value. enables more effective product differentiation. categorizes five related advantages for adding value to a firm's products or services. highlights specific activities in the business where competitive strategies can best be applied.
highlights specific activities in the business where competitive strategies can best be applied.
The Internet increases the bargaining power of customers by: creating new opportunities for building loyal customer bases. enabling the development of new services. lowering transaction costs. making more products available. making information available to everyone.
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 low-cost leadership product differentiation process efficiency mass customization
market niche
The ability to offer individually tailored products or services using the same production resources as bulk production is known as: micro customization. mass marketing. micromarketing. mass customization. niche customization.
mass customization.