Which of the following statements about benchmarking and best practices is false

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Management Information Systems: Managing the Digital Firm, 16e, Global Edition (Laudon) Chapter 3 Information Systems, Organizations, and Strategy

1. The interaction between information technology and organizations is influenced: A) solely 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 macroeconomic forces: capital and labor. E) by the rate of growth of the organization.

2. Which of the following statements about organizations is not true? A) An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs. B) An organization is a formal, legal entity with internal rules and procedures that must abide by laws. C) An organization is a collection of people and other social elements. D) An informal group can be considered to be an organization. E) An organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution.

3. According to the ________ definition of organizations, an organization is seen as a means by which capital and labor are transformed by the organization into outputs to the environment. A) microeconomic B) macroeconomic C) sociotechnical D) behavioral E) psychological

4. Which of the following statements about the technical view of organizations is not true? A) It focuses on how inputs are combined to create outputs when technology changes are introduced into a company. B) It sees capital and labor as being easily substituted for one another. C) It emphasizes group relationships, values and structures. D) It sees the organization as a social structure similar to a machine. E) It sees the firm as being infinitely malleable.

5. Which of the following is not a major feature of organizations that impacts the use of information systems? A) Business processes B) Environments C) Structure of the organization D) Agency costs E) Leadership styles

6. Which of the following statements about business processes is not true? A) Business processes influence the relationship between an organization and information technology. B) Business processes are a collection of standard operating procedures.

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C) A business firm is a collection of business processes. D) Business processes are usually ensconced in an organization's culture. E) Business processes are typically unaffected by changes in information systems.

1. Which of the following technologies disrupted the traditional publishing industry? A) Instant messaging B) e- mail C) Digital photography D) PCs E) World Wide Web

2. Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of: A) entrepreneurial structures. B) divisionalized bureaucracies. C) professional bureaucracies. D) adhocracies. E) machine bureaucracies.

3. 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. A) machine B) professional C) divisionalized D) multidivisional E) ad hoc

4. Which of the following is an example of a divisionalized bureaucracy? A) Startup firm B) University C) Fortune 500 firm D) Midsize manufacturer E) Consulting firm

5. Along with capital, ________ is the primary production input that the organization uses to create products and services. A) structure B) culture C) politics D) feedback E) labor

6. The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences are known as organizational: A) culture. B) politics. C) structure. D) environments.

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C) procurement. D) agency costs. E) transaction costs.

1. 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.

2. 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.

3. 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.

4. What is agency theory? How does information technology enable a firm to reduce agency costs? According to agency theory, the firm is viewed as a "nexus of contracts" among self-interested individuals rather than as a unified, profit-maximizing entity. A principal (owner) employs "agents" (employees) to perform work on his or her behalf. However, agents need constant supervision and management; otherwise, they will tend to pursue their own interests rather than those of the owners. As firms grow in size and scope, agency costs or coordination costs rise because owners must expend more and more effort supervising and managing employees. Information technology, by reducing the costs of acquiring and analyzing information, permits organizations to reduce agency costs because it becomes easier for managers to oversee a greater number of employees. By reducing overall management costs, information technology enables firms to increase revenues while shrinking the number of middle managers and clerical workers.

5. 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

6. Which of the following industries has the lowest barrier to entry?

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A) Automotive B) Computer chip C) Solar energy D) Airline E) Small retailer

1. All of the following are competitive forces in Porter's model except: A) suppliers. B) new market entrants. C) disruptive technologies. D) customers. E) substitute products.

2. Which of the following marketplace forces would be of least concern to a manufacturer of deep- sea oil rigs? A) Product differentiation B) Traditional competitors C) Low number of suppliers D) New market entrants E) Low number of customers

3. Which of the following substitute products would be of most concern for a cable TV distributor? A) Streaming music services B) Broadcast TV C) Satellite radio D) On-demand Internet television E) Terrestrial radio

4. Walmart's continuous replenishment system 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.

5. A firm can exercise greater control over its suppliers by having: A) more suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. E) only a single supplier.

6. Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates which of the following strategies? A) Low-cost leadership B) Marketing effectiveness C) Focusing on market niche

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1. Which of the following best illustrates the use of information systems to focus on market niche? A) A car manufacturer's website 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.

2. All of the following are IT-enabled products and services providing competitive advantage except: A) Amazon's one-click shopping. B) Apple's iTunes. C) Ping's golf club customization. D) PayPal's online person-to-person payment system. E) Nike's use of celebrities to market their products.

3. The Internet increases 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.

4. Hilton Hotels uses its OnQ system for which of the following purposes? A) To lower its operating costs B) To benchmark its progress against competitors C) To create synergies with its suppliers D) To take advantage of network economics E) To estimate each guest's profitability and give additional privileges to profitable customers

5. Which of the following is a competitive force challenging the publishing industry? A) Positioning and rivalry among competitors B) Low cost of entry C) Substitute products or services D) Customers' bargaining power E) Suppliers' bargaining power

6. 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.

7. 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

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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

1. Which of the following is a support activity in a firm's value chain? A) Inbound logistics B) Operations C) Sales and marketing D) Service E) Technology

2. Which of the following would a company employ to measure and compare its business processes to similar processes of other companies within their industry? A) Benchmarking B) Best practices C) Value chain analysis D) Strategic systems analysis E) Secondary activities

3. The most successful solutions or methods for achieving a business objective are called: A) value activities. B) best processes. C) core competencies. D) best practices. E) benchmarks.

4. Information systems can be used at the industry level to achieve strategic advantage by: A) building industrywide, IT-supported consortia and symposia. B) raising the bargaining power of suppliers. C) encouraging the entry of new competitors. D) enforcing standards that reduce the differences between competitors. E) decreasing switching costs.

5. In network economics, the value of a commercial software vendor's software products: A) increases as more people use them. B) decreases as more people use them. C) increases due to higher marginal gain in output. D) decreases according to the law of diminishing returns. E) is unrelated to the number of people that use them.

6. When two organizations pool markets and expertise that result in lower costs and generate profits, they are creating: A) a value web. B) a value chain. C) net marketplaces. D) core competencies. E) synergies.

7. Which of the following is an example of synergy in business?

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products and services that are not easily duplicated by competitors. A) Product differentiation B) Low-cost leadership C) Focusing on market niche D) Strengthening customer intimacy E) Strengthening supplier intimacy

1. 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.

2. 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

3. 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

4. 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) net marketplace

5. A(n) ________ is an activity for which a firm is a world-class leader. A) expertise area B) competitive advantage C) growth driver D) efficiency E) core competency

6. Why does Amazon need to worry about competitors in online shopping?

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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.

1. Smart products are an example of the Internet of Things. Answer: TRUE

2. A company's competitive advantages ultimately translate into higher stock market valuations than its competitors. Answer: TRUE

3. The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces that are not true of traditional firms. Answer: FALSE

4. Customers are one of the competitive forces that affect an organization's ability to compete. Answer: TRUE

5. High product differentiation is a sign of a transparent marketplace. Answer: FALSE

6. The effect of the Internet has been to increase the bargaining power of customers. Answer: TRUE

7. An efficient customer response system directly links consumer behavior to distribution, production, and supply chains. Answer: TRUE

8. Information systems are used to enable new products and services via product differentiation. Answer: TRUE

9. Mass customization offers individually tailored products or services using the same resources as mass production. Answer: TRUE

10. Switching costs increase when customers are strongly linked to products and platforms. Answer: TRUE

11. The value chain model classifies all company activities as either primary or support activities. Answer: TRUE

12. 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. Answer: FALSE

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1. Research has shown that a majority of firms are able to align their information technology with their business goals. Answer: FALSE

2. The use of Internet technologies allows companies to more easily sustain competitive advantage. Answer: FALSE

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