CIS Chapter 3
) Mass customization offers individually tailored products or services using the same resources as mass production. True/False
True
In a demonstration of network economics, the more people that use eBay's site, the greater the value of the site.
True
Routines are also called standard operating procedures. True/False
True
Switching costs increase when customers are strongly linked to products and platforms.
True
Switching costs increase when customers are strongly linked to products and platforms. True/False
True
All of the following are IT-enabled products and services providing competitive advantage except
Walmart's RetailLink system.
The effect of the Internet has been to decrease the bargaining power of customers. True/False
False
A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force.
new entrants
Some organizations lack bedrock, unassailable assumptions that define their goals and products.
false
The value chain model classifies all company activities as primary activities.
False?
An example of a divisionalized bureaucracy is a
Fortune 500 Firm
An example of a divisionalized bureaucracy is a A) startup firm. B) university. C) Fortune 500 firm. D) midsize manufacturer. E) consulting firm.
Fortune 500 firm
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
Customers are one of the competitive forces that affect an organization's ability to compete. True/False
True
In a demonstration of network economics, the more people that use eBay's site, the greater the value of the site. True/False
True
Information systems are used to enable new products and services via product differentiation.
True
Information systems are used to enable new products and services via product differentiation. True/False
True
Information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor from the point of view of economics. True/False
True
Routines are also called standard operating procedures.
True
The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.
True
The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers. True/False
True
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
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
Switching costs
In environmental scanning, a firm may use information systems to
-identify external events that may affect it
All of the following industries have been disrupted by the Internet except A) encyclopedias. B) newspapers. C) music. D) air travel. E) clothing.
clothing
Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete?
competitive forces
Which model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete? A) network economics model B) competitive forces model C) competitive advantage model D) demand control model E) agency costs model
competitive forces model
A(n) ________ is an activity at which a firm excels as a world-class leader.
core competency
A(n) ________ is an activity at which a firm excels as a world-class leader. A) expertise area B) competitive advantage C) growth driver D) efficiency E) core competency
core competency
All of the following are competitive forces except
customers?
Which of the following industries has a low barrier to entry? A) automotive B) computer chip C) national retailer D) airline E) restaurant
restaurant
Business processes are collections of
routines
Business processes are collections of A) informal practices and behaviors. B) formalized and documented practices. C) business rules. D) rights and privileges. E) routines.
routines
A substitute product of most concern for a cable TV distributor is
satalite TV
A substitute product of most concern for a cable TV distributor is A) satellite TV. B) broadcast TV. C) satellite radio. D) the Internet. E) terrestrial radio.
satellite TV
Network economics
sees the cost of adding new members as inconsequential.
A virtual company
uses networks to link people, assets, and ideas.
A virtual company A) uses networks to link people, assets, and ideas. B) uses Internet technology to maintain a virtual storefront. C) uses Internet technology to maintain a networked community of users. D) provides entirely Internet-driven services, or virtual products. E) is limited by traditional organizational boundaries.
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
Which of the following industries has a low barrier to entry?
restaurant
According to agency theory, the firm is viewed as a(n) A) unified, profit-maximizing entity. B) task force organization that must respond to rapidly changing environments. C) entrepreneurial endeavor. D) "nexus of contracts" among self-interested individuals. E) entrepreneurial structure.
"nexus of contracts" among self-interested individuals
An example of a keystone firm within a business ecosystem is
-Apple and software application writers in the mobile platform ecosystem
What are the most successful solutions or methods for achieving a business objective?
Best Practices
Which of the following best illustrates the use of information systems to focus on market niche? A) A car manufacturer's Web site that lets you customize the features on the car you are purchasing. B) A restaurant chain analyzing local sales figures to determine which menu items to serve. C) A bookseller selling an e-book reader that reads only the bookseller's books. D) A department store creating specialized products for preferred customers. E) A clothes manufacturer expanding its offerings to new styles.
A department store creating specialized products for preferred customers
Which of the following best illustrates the use of information systems to focus on market niche?
A department store creating specialized products for small groups of customers.
An organization is a A) stable, formal social structure that takes resources from the environment and processes them to produce outputs. B) formal, legal entity with internal rules and procedures that must abide by laws. C) a collection of people and other social elements. D) B and C E) A, B, and C
A,B, and C
Example of synergy --- B
Amazon's use of the Internet to sell books. B) JP Morgan Chase's mergers with other banks that provided JP Morgan with a network of retail branches in new regions. C) Blockbuster combining traditional video rental with online video rental. D) Walmart's order entry and inventory management system to coordinate with suppliers.
An example of a keystone firm within a business ecosystem is A) Apple and software application writers in the mobile platform ecosystem. B) GUESS and the fashion ecosystem. C) Citibank and the ATM ecosystem. D) American Airlines and the computerized reservation ecosystem. E) Nike and the athletic apparel ecosystem.
Apple and software application writers in the mobile platform ecosystem.
How are information systems used at the industry level to achieve strategic advantage?
Building industry-wide, IT-supported consortia and symposia
An example of synergy in business is A) Amazon's use of the Internet to sell books. B) Bank of America acquiring Countrywide Financial to reach a large pool of new customers. C) Blockbuster combining traditional video rental with online video rental. D) Walmart's order entry and inventory management system to coordinate with suppliers. E) Nike's use of technology to improve its product offerings.
Bank of America acquiring Countrywide Financial to reach a large pool of new customers.
Nike's forays into information technology represent an effort to
achieve product differentiation
) ________ technologies radically change the business landscape and environment. A) Explosive B) Inventive C) Disruptive D) Subversive E) Divisive
Disruptive
High product differentiation is a sign of a transparent marketplace. True/False
False
In the value chain model, support activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer.
False
In the value chain model, support activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer. True/False
False
Research has shown that a majority of firms are able to align their information technology with their business goals.
False
Research has shown that a majority of firms are able to align their information technology with their business goals. True/False
False
Some organizations lack bedrock, unassailable assumptions that define their goals and products. True/False
False
The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms.
False
The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms. True/False
False
The use of Internet technologies allows companies to more easily sustain competitive advantage.
False
The use of Internet technologies allows companies to more easily sustain competitive advantage. True/False
False
The value chain model classifies all company activities as primary activities. True/False
False
Why does Amazon.com need to worry about competitors in online shopping?
Internet technologies are universal, and therefore usable by all companies.
Why does Amazon.com need to worry about competitors in online shopping? A) E-commerce is affected by the law of diminishing returns. B) Internet technologies are universal, and therefore usable by all companies. C) Internet shopping produces cost transparency. D) The Internet enables the production or sales of substitute products or services. E) The Internet increases switching costs.
Internet technologies are universal, and therefore usable by all companies.
How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm? A) It sees information systems as a way to rearrange the inputs and outputs of the organization. B) It sees capital and labor as primary production factors. C) It sees an organization as a collection of rights, privileges, obligations, and responsibilities. D) It sees the organization as a social structure similar to a machine. E) It sees the inputs and outputs, labor and capital, as being infinitely malleable.
It sees the inputs and outputs, labor and capital, as being infinitely malleable
How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm?
It sees the inputs and outputs, labor and capital, as being infinitely malleable.
Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ________ bureaucracy.
Machine
All of the following industries have been disrupted by the Internet except
PC manufacturers
You are consulting for a cosmetics distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step? A) Identify the business ecosystem the distributor is in. B) Implement a strategic transition to the new system. C) Perform a strategic systems analysis. D) Benchmark existing systems. E) Set up a strategic transition
Perform a strategic systems analysis.
) ________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors. A) Product differentiation B) Low-cost leadership C) Customer efficiency D) Mass customization E) Switching cost
Product differentiation
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
'Synergies' occur when the output of some units in a firm can be used as inputs to other units, lowering cost and generating profits. True/False
True
A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.
True
A company's competitive advantages ultimately translate into higher stock market valuations than its competitors. True/False
True
A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals. True/False
True
An efficient customer response system directly links consumer behavior to distribution and production and supply chains True/False
True
All of the following are IT-enabled products and services providing competitive advantage except A) Amazon's one-click shopping. B) Apple's iPod and iTunes. C) Ping's golf club customization. D) PayPal's online person-to-person payment system. E) Walmart's RetailLink system.
Walmart's RetailLink system
Walmart's attempts to increase its online presence is an example of a firm using information systems to
achieve low cost leadership
Walmart's attempts to increase its online presence is an example of a firm using information systems to A) strengthen ties to its customers. B) simplify the industry value chain. C) develop synergies. D) focus on market niche. E) achieve low-cost leadership.
achieve low-cost leadership
Walmart's continuous replenishment system allows it to A) provide mass customization. B) differentiate products. C) strengthen customer intimacy. D) achieve economy of scale. E) achieve low-cost leadership.
achieve low-cost leadership
Nike's forays into information technology represent an effort to A) maintain low-cost leadership. B) focus on market niche. C) strengthen customer and supplier intimacy. D) perform intensive customer data analysis. E) achieve product differentiation.
achieve product differentiation
) Which of the following is not a major feature of organizations that impacts the use of information systems? A) business processes B) environments C) goals D) agency costs E) leadership styles
agency costs
Which of the following is not a major feature of organizations that impacts the use of information systems?
agency costs
An activity businesses perform to measure and compare business processes to similar processes of other companies within their industry is A) benchmarking. B) best practices. C) value chain analysis. D) strategic systems analysis. E) secondary activities.
benchmarking
) What are the most successful solutions or methods for achieving a business objective? A) value activities B) best processes C) core competencies D) best practices E) benchmarks
best practices
) How are information systems used at the industry level to achieve strategic advantage? A) by building industry-wide, IT-supported consortia and symposia B) by raising the bargaining power of suppliers C) by encouraging the entry of new competitors D) by enforcing standards that reduce the differences between competitors E) by decreasing switching costs
by building industry-wide, IT=supported consortia and symposia
How do information systems enhance core competencies? A) by providing better reporting facilities B) by creating educational opportunities for management C) by allowing operational employees to interact with management D) by encouraging the sharing of knowledge across business units E) by fostering synergies among departments
by encouraging the sharing of knowledge across business units
The interaction between information systems and organizations is influenced
by many factors, including structure, politics, culture, and environment.
1) The interaction between information systems and organizations is influenced A) primarily by the decision making of middle and senior managers. B) by the development of new information technologies. C) by many factors, including structure, politics, culture, and environment. D) by two main microeconomic forces: capital and labor. E) by management decisions.
by the development of new information technologies
________ technologies radically change the business landscape and environment.
disruptive technology
How do information systems enhance core competencies?
encouraging the sharing of knowledge across business units.
All of the following are competitive forces except A) suppliers. B) new market entrants. C) external environment. D) customers. E) substitute products.
external environment
The value chain model A) categorizes five related advantages for adding value to a firm's products or services. B) sees the supply chain as the primary activity for adding value. C) categorizes four basic strategies a firm can use to enhance its value chain. D) highlights specific activities in the business where competitive strategies can best be applied. E) enables more effective product differentiation.
highlights specific activities in the business where competitive strategies can best be applied
The value chain model
highlights specific activities in the business where competitive strategies can best be applied.
In environmental scanning, a firm may use information systems to A) utilize sensors that track products through the value chain. B) analyze external Internet traffic to its Web sites. C) identify external events that may affect it. D) understand its carbon footprint and energy impacts on the environment. E) develop a unified organizational culture.
identify external events that may affect it
Which of the following represent the primary activities of a firm?
inbound logistics, operations, outbound logistics, sales and marketing, and service
Which of the following represent the primary activities of a firm? A) inbound logistics, operations, outbound logistics, sales and marketing, and service B) inbound logistics, operations, outbound logistics, technology, and service C) procurement, inbound logistics, operations, technology, and outbound logistics D) procurement, operations, technology, sales and marketing, and services E) organization infrastructure, human resources, technology, and procurement
inbound logistics, operations, outbound logistics, sales and marketing, and service
All of the following are considered disruptive technologies except A) instant messaging. B) e-mail. C) Internet telephony. D) PCs. E) smartphones.
instant messaging
All of the following statements are true about information technology's impact on business firms except
it helps firms expand in size
All of the following statements are true about information technology's impact on business firms except A) it helps firms expand in size. B) it helps firms lower the cost of market participation. C) it helps reduce internal management costs. D) it helps reduce transaction costs. E) it helps reduce agency costs.
it helps firms expand in size
Along with capital, ________ is the primary production input that the organization uses to create products and services. A) structure B) culture C) politics D) natural resources E) labor
labor
Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates a use of information services for A) low-cost leadership. B) marketing effectiveness. C) focusing on market niche. D) strengthening supplier intimacy. E) developing synergies.
low-cost leadership
The four major competitive strategies are A) low-cost leadership, substitute products and services, customers; and suppliers. B) low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy. C) new market entrants, substitute products and services, customers, and suppliers. D) low-cost leadership, new market entrants, product differentiation, and focus on market niche. E) customers, suppliers, new market entrants, and substitute products.
low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy
Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ________ bureaucracy. A) machine B) professional C) divisionalized D) multidivisional E) ad hoc
machine
The Internet raises the bargaining power of customers by
making information available to everyone
The Internet raises the bargaining power of customers by A) creating new opportunities for building loyal customer bases. B) making more products available. C) making information available to everyone. D) lowering transaction costs. E) enabling the development of new services.
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
Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than competitors. A) product differentiation B) market niche C) mass customization D) process efficiency E) low-cost leadership
market niche
As discussed in the chapter opening case, which of the four generic strategies did T.J. Maxx employ to combat the competition offered by Target, Kohls, Walmart, Macy's and pure online stores like Rue La La and Gilt Groupe?
market niche focus
As discussed in the chapter opening case, which of the four generic strategies did T.J. Maxx employ to combat the competition offered by Target, Kohls, Walmart, Macy's and pure online stores likeRue LaLa and Gilt Groupe? A) market niche focus B) customer and supplier intimacy C) network-based strategy D) product synergies E) efficient customer response
market niche focus
The ability to offer individually tailored products or services using the same production resources as bulk production is known as
mass customization
The ability to offer individually tailored products or services using the same production resources as bulk production is known as A) customized response. B) size customization. C) magnitude customization. D) dimension customization. E) mass customization.
mass customization
An organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment according to the ________ definition of organizations. A) microeconomic B) macroeconomic C) sociotechnical D) behavioral E) psychological
microecomic
An organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment according to the ________ definition of organizations.
microeconomic
A firm can exercise greater control over its suppliers by having
more suppliers
A firm can exercise greater control over its suppliers by having A) more suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. E) regional suppliers.
more suppliers
A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force. A) product differentiation B) traditional competitors C) low number of suppliers D) new market entrants E) low number of customers
new market entrants
According to agency theory, the firm is viewed as a(n)
nexus of contracts" among self-interested individuals.
You are consulting for a cosmetics 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 analysis
The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as
politics
The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as A) culture. B) politics. C) structure. D) viewpoints. E) variance.
politics
________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.
product differation
Under Mintzberg's classification of organizational structure, the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals falls under the category of A) entrepreneurial structures. B) divisionalized bureaucracies. C) professional bureaucracies. D) adhocracies. E) machine bureaucracies.
professional bureaucracies
Walmart's continuous replenishment system allows it to
provide an efficient customer response system.
Network economics A) applies the law of diminishing returns to communities of users. B) applies traditional economics to networked users. C) sees the cost of adding new members as inconsequential. D) balances the high cost of adding new members to a community against the lower cost of using network infrastructure. E) uses networks to link people, assets, and ideas.
sees the cost of adding new members as inconsequential.
An organization
stable, formal social structure that takes resources from the environment and processes them to produce outputs, formal, legal entity with internal rules and procedures that must abide by laws, and a collection of people and other social elements
Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered
strategic transitions
Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered A) organizational adjustments. B) strategic transitions. C) systems alterations. D) business goal transitions. E) sociotechnical transitions.
strategic transitions.
A competitive force challenging the publishing industry is
substitute products
A competitive force challenging the publishing industry is A) positioning and rivalry among competitors. B) low cost of entry. C) substitute products or services. D) customers' bargaining power. E) suppliers' bargaining power.
substitute products or services
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. A) primary B) auxiliary C) secondary D) service E) 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 A) retention costs. B) preservation costs. C) differentiation costs. D) switching costs. E) variation costs.
switching costs
When two organizations pool markets and expertise that result in lower costs and generate profits, it is referred to as creating A) a value web. B) a value chain. C) net marketplaces. D) core competencies. E) synergies.
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 A) environment, organization, structure, and tasks. B) technology, people, culture, and structure. C) organization, culture, management, and environment. D) tasks, technology, people, and structure. E) costs, tasks, structure, and management.
task, 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.
Which of the following is one of the support activities in a firm's value chain?
technology
Which of the following is one of the support activities in a firm's value chain? A) inbound logistics B) operations C) sales and marketing D) service E) technology
technology
The more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output. This is referred to as
the law of diminishing returns.
The more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output. This is referred to as A) the point of no return. B) the law of diminishing returns. C) supply and demand. D) network inelasticity. E) the invisible hand.
the law of diminishing returns.
When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as
transaction costs
When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as A) switching costs. B) network costs. C) procurement. D) agency costs. E) transaction costs.
transaction costs
'Synergies' occur when the output of some units in a firm can be used as inputs to other units, lowering cost and generating profits.
true
A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.
true
Information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor from the point of view of economics.
true
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. A) competitive forces B) value chain C) bargaining power D) new entrant E) rivalry
value chain
A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n)
value web
A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n) A) industry value chain. B) business ecosystem. C) value web. D) consortia. E) synergy chain.
value web
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. A) value chain B) support web C) value web D) consortium E) firm network
value web
