What is the most important reason for Google being able to pursue four business strategies simultaneously?



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Chapter 2


Multiple Choice
Which of the following statements about information systems is not correct?

A. Information systems are concentrated in the IS Department.

B. Information systems tend to follow the structure of the organization.

C. Information systems are based on the needs of employees.

D. Any information system can be strategic.

E. Managing information systems is difficult.


Ans: A

Ref: Discussion immediately following Chapter opening case

A collection of related files, tables, and so on that stores data and the associations among them is _____.

A. hardware

B. software

C. database

D. network

E. procedures


Ans: C

Ref: 2.1 Types of Information Systems

A set of programs that enable the hardware to process data is _____.

A. hardware

B. software

C. database

D. network

E. procedures


Ans: B

Ref: 2.1 Types of Information Systems

Which of the following is not a major capability of information systems?

A. perform high-speed, high-volume numerical computations

B. provide fast, accurate communications among organizations

C. store very small amounts of information in a very large space

D. increase the effectiveness and efficiency of people working in groups

E. automate semiautomatic business processes


Ans: C

Ref: 2.1 Types of Information Systems

Two information systems that support the entire organization are:

A. Enterprise resource planning systems, dashboards

B. Transaction processing systems, office automation systems

C. Enterprise resource planning systems, transaction processing systems

D. Expert systems, office automation systems

E. Expert systems, transaction processing systems


Ans: C

Ref: 2.1 Types of Information Systems

_____ systems are designed to correct a lack of communications among _____.

A. Office automation systems, expert systems

B. Transaction processing systems, functional area information systems

C. Enterprise resource planning systems, functional area information systems

D. Dashboards, office automation systems

E. Functional area information systems, enterprise resource planning systems


Ans: C

Ref: 2.1 Types of Information Systems

When your purchases are swiped over the bar-code reader at the point-of-sale terminals at Wal-Mart, a _____ records the data.

A. transaction processing system

B. functional area information system

C. dashboard

D. enterprise resource planning system

E. office automation system


Ans: A

Ref: 2.1 Types of Information Systems

Supply chain systems are which type of information system?

A. departmental information systems

B. enterprisewide information systems

C. interorganizational information systems

D. end-user computing systems

E. individual information systems


Ans: C

Ref: Types of Information System

Electronic commerce systems are which type of information system?

A. departmental information systems

B. enterprisewide information systems

C. interorganizational information systems

D. end-user computing systems

E. individual information systems


Ans: C

Ref: 2.1 Types of Information Systems

_____ are professional people who act as advisors and assistants to both top and middle managers and are often subject-area experts in a particular area.

A. clerical workers

B. operational managers

C. knowledge workers

D. middle level managers

E. executives


Ans: C

Ref: 2.1 Types of Information Systems

_____ make decisions that deal with situations that may significantly change the manner in which business is done.

A. knowledge workers

B. staff

C. middle managers

D. operational managers

E. senior managers


Ans: E

Ref: 2.1 Types of Information Systems

_____ attempt to duplicate the work of human experts by applying reasoning capabilities.

A. expert systems

B. dashboards

C. functional area information systems

D. decision support systems

E. business intelligence systems


Ans: A

Ref: 2.1 Types of Information Systems

An information system that analyzes credit card applications and suggests approval or denial is a(n):

A. expert system

B. dashboard

C. functional area information system

D. decision support system

E. business intelligence system


Ans: A

Ref: 2.1 Types of Information Systems

_____ provide rapid access to timely information and direct access to structured information in the form of reports.

A. expert systems

B. dashboards

C. functional area information systems

D. decision support systems

E. business intelligence systems


Ans: B

Ref: 2.1 Types of Information Systems

Information-based industries are most susceptible to which one of Porter’s five forces?

A. threat of entry of new competitors

B. bargaining power of suppliers

C. bargaining power of customers

D. threat of substitute products

E. rivalry among existing firms in an industry


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Competitive advantage for an organization manifests as all of the following except:

A. lower costs

B. higher quality

C. increased time to market

D. increased profits

E. increased speed


Ans: C

Ref: 2.2 Competitive Advantage and Strategic Information Systems

For most companies, the Web _____ the threat that new competitors will enter the market by _____ traditional barriers to entry.

A. decreases, increasing

B. increases, decreasing

C. increases, increasing

D. decreases, decreasing
Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

_____ is a feature that must be offered by a competing organization for it to survive in the marketplace.

A. Competitive advantage

B. Entry barrier

C. Strategic advantage

D. Rapid time-to-market

E. One-to-one marketing


Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The threat of competitors’ entering the automobile manufacturing industry is _____ because barriers to entry are so _____.

A. low, low

B. high, high

C. high, low

D. low, high

E. cheap, expensive


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The threat of competitors’ entering a market is very high in industries that perform a(n) _____ role, and in industries where the primary product or service is _____.

A. intermediation, physical

B. broker, physical

C. sales, financial

D. financial, digital

E. intermediation, digital


Ans: E

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The Internet has had which of the following impacts on the way you purchase your textbooks?

A. The Internet gives you fewer choices.

B. The Internet increases your bargaining power.

C. The Internet provides you with less information.

D. The Internet decreases your bargaining power.

E. The Internet increases your switching costs.


Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems


Buyer power is _____ when buyers have many choices from whom to buy and _____ when buyers have few choices.

A. high, the same

B. high, low

C. low, low

D. low, high

E. low, the same
Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.

A. e-commerce, digital

B. digital, e-commerce

C. digital, physical

D. physical, financial

E. physical, digital


Ans: E

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Porter’s competitive forces model helps organizations identify _____, where his value chain model helps organizations identify specific _____.

A. competitive opportunities, activities

B. general strategies, activities

C. activities, competitive opportunities

D. activities, general strategies

E. primary activities, support activities


Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

_____ activities create value for which customers are willing to pay, where _____ activities do not add value directly to the firm’s products or services.

A. Support, primary

B. Human resource management, inbound logistics

C. Procurement, operations

D. Primary, support

E. Accounting, outbound logistics


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

If there are _____ substitutes for an organization’s products or services, then the threat of substitutes is _____.

A. many, high

B. few, few

C. few, high

D. many, few

E. few, negligible


Ans: A

Ref: 2.2 Competitive Advantage and Strategic Information Systems

New technologies can produce new products very _____, which _____ the threat from substitute products.

A. slowly, decreases

B. slowly, increases

C. slowly, does not affect

D. quickly, increases

E. quickly, does not affect


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The visibility of Internet applications on the Web makes proprietary systems more difficult to keep secret. This is an example of which of Porter’s five forces?

A. threat of entry of new competitors

B. bargaining power of suppliers

C. bargaining power of customers

D. threat of substitute products

E. rivalry among existing firms in an industry


Ans: E

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Wal-Mart’s automatic replenishment system, which enables the company to reduce inventory storage requirements, is an example of which strategy for competitive advantage?

A. cost leadership

B. differentiation

C. innovation

D. operational effectiveness

E. customer-orientation


Ans: A

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Offering different products, services, or product features is which strategy for competitive advantage?

A. cost leadership

B. differentiation

C. innovation

D. operational effectiveness

E. customer-orientation


Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Introducing new products and putting new features in existing products is which strategy for competitive advantage?

A. cost leadership

B. differentiation

C. innovation

D. operational effectiveness

E. customer-orientation


Ans: C

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The introduction of ATM machines by Citibank was a classic example of which strategy for competitive advantage?

A. cost leadership

B. innovation

C. differentiation

D. operational effectiveness

E. customer-orientation


Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Southwest Airlines’ low-cost, short-haul strategy is an example of which strategy for competitive advantage?

A. cost leadership

B. differentiation

C. innovation

D. operational effectiveness

E. customer-orientation


Ans: B

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Improving the manner in which internal business processes are executed is which strategy for competitive advantage?

A. cost leadership

B. differentiation

C. innovation

D. operational effectiveness

E. customer orientation


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

When Amazon welcomes you by name back to its Web site on your second visit, this is an example of which strategy for competitive advantage?

A. cost leadership

B. differentiation

C. innovation

D. operational effectiveness

E. customer orientation


Ans: E

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Refer to IT’s About Business 2.2. The benefits gained from Norfolk Southern Railway’s strategic information system include all of the following except:

A. Cost savings

B. Increased carload volume

C. Increased average train speed

D. Increased number of railway cars needed

E. Decreased time in the yard for trains


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

The impact of IT on managers’ jobs is all of the following except:

A. gives managers time to get into the field

B. managers can spend more time planning

C. managers must spend more time managing fewer employees

D. managers can gather information more quickly

E. none of the above


Ans: C

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Porter’s _____ help(s) companies identify general strategies, where his _____ help(s) to identify specific activities where companies can use the strategies for greatest impact.

A. Value chain model, competitive forces model

B. Primary activities, support activities

C. Competitive forces model, primary activities

D. Competitive forces model, value chain model

E. Value chain model, support activities


Ans: D

Ref: 2.2 Competitive Advantage and Strategic Information Systems

Which of the following statements about the impact of IT on managers is not correct?

A. IT makes managers more productive.

B. IT increase the number of employees who can report to one manager.

C. IT will increase the number of managerial levels in an organization.

D. IT will reduce the number of line and staff managers.
Ans: C

Ref: 2.3 Why Are Information Systems So Important to Us?

Which of the following statements concerning information resources is not correct?

A. Information resources include all the hardware, information systems and applications, data, and networks in an organization.

B. Without their information resources, organizations cannot function.

C. Information resources typically do not change quickly.

D. Information resources are expensive to acquire, operate, and maintain.
Ans: C

Ref: 2.4 Managing Information Resources

_____ is the direct use of information systems by employees in their work.

A. Transaction processing systems

B. Executive information systems

C. Decision support systems

D. Management information systems

E. End-user computing


Ans: E

Ref: 2.4 Managing Information Resources

Dividing the responsibility for developing and maintaining information resources between the Information System Department and end users depends on all of the following except :

A. Size of the organization

B. Amount and type of information resources in the organization

C. Organization’s revenue and profits

D. Organization’s attitude towards computing

E. Maturity level of the organization’s information technologies


Ans: C

Ref: 2.4 Managing Information Resources

Which of the following is a traditional, major IS function?

A. Managing systems development

B. Partnering with the firm’s executives

C. Managing outsourcing

D. Educating non-IS managers about IT

E. Incorporating the Internet and electronic commerce into the business


Ans: A

Ref: 2.4 Managing Information Resources

The role of the director of the Information Systems Department is changing from more _____ to more _____.

A. hands-on, managing

B. technical, managerial

C. operational, technical

D. hands-on, decision-making

E. managerial, technical


Ans: B

Ref: 2.4 Managing Information Resources






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