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Test Bank For Management Information Systems: Managing the Digital Firm, 16th Edition

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    1 Management Information Systems : Managing the Digital Firm , 16e (Laudon) Chapter 1 Information Systems in Global Business Today 1) Which of the following is not one of the six strategic business objectives of information systems? A) New products and serv ices B) Improved decision m aking C) Improved community relations D) Comp etitive advantage E) Survival Answer: C Difficulty: Challenging AACSB: Information technology LO: 1 - 1: How are information systems transforming business, and why are they so essent ial for running and managin g a business today? 2) Verizon's use of a web - based digital dashboard to provide managers with precise real - time information enabled it to im prove which of the following? A) Compliance with regulations B) Managerial decision mak ing C) Efficiency in creati on of new products D) Employee morale E) Intimacy with its suppliers Answer: B Difficulty: Challenging AACSB: Information technology LO: 1 - 1: How are information systems transforming business, and why are they so essential fo r running and managing a bu siness today? 3) Which of the following may lead to competitive advantage? 1. New products, services, and business models; 2. Charging less f or superior products; 3. Responding to customers in real time A) 1 only B) 1 and 2 C) 2 and 3 D) 1 and 3 E) 1, 2, and 3 Answer: E Difficulty: Challenging AACSB: Analytical thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today?

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    2 4) A firm that invests in an information system be cause it is a necessity of doing business does so because it is seeking to achieve which of the following business objectives? A) Operational excellence B) Improved decision making C) Competitive advantage D) Customer intimacy E) Survival Answer: E Diffic ulty: Moderate AACSB: Information technology LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 5) The Mandarin Oriental's use of computer syst ems to keep track of guests ' preferences is an example of which of the following? A) Improved flexibility B) Improved decision making C) Improved efficien cy D) Customer intimacy E) Operational excellence Answer: D Difficulty: Moderate AACSB: Information technology LO: 1 - 1: How a re information systems transforming business, and why are they so essential for running and managing a business today? 6) The Toxic Substances Control Act requires firms to retain records of employee exposure to toxic chemicals: A) for 10 years. B) for 5 years. C) for 30 years. D) for 1 year. E) forever. Answer: C Difficulty: Moderate AACSB: Information technology LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managin g a business today?

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    3 7) Wh ich of the following is the key business objective behind the technologies implemente d by PCL Construction, as discussed in the chapter - opening case? A) Higher customer satisfaction levels B) Survival C) Improved employee morale D) Reduced delays in docume nt management E) Reduced cost of supplies Answer: D Difficulty: Moderate AACSB: An alytical thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 8) Which of the fo llowing is an example of a business using information systems to improve customer and supplier intimacy? A) Walmart's RetailLink system B) The Mandarin Oriental's use of computers to keep track of guest preferences C) Verizon's u se of a web - based digital d ashboard to provide real - time company information for managers D) Apple's creation of the iPad E) PCL Construction's use of cloud computing Answer: B Difficulty: Challenging AACSB: Information technology LO: 1 - 1: How are info rmation systems transformin g business, and why are they so essential for running and managing a business today? 9) Walmart exemplifies the power of information systems coupled with state - of - the - art business practices and supportive management to achieve w hich of the following? A) N ew products and services B) Operational efficiency C) Survival D) Customer intimacy E) Competitive advantage Answer: B Difficulty: Challenging AACSB: Information technology LO: 1 - 1: How are information systems transforming bu siness, and why are they so essential for running and managing a business today?

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    4 10) How much did American businesses spend on information systems hardware, software, and telecommunications equipment in 2017? A) About $100 million B) About $1 billion C) About $100 billion D) About $1 trillion E) About $10 trillion Answer: D Difficulty: Moder ate AACSB: Information technology LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business tod ay? 11) To make sure they stock clothes that their customers will purchase, a department s tore implements a new application that analyzes spending levels at their stores and cross - references this data to popular clothing styles. Which of the following bus iness objectives is this in formation intended to support? A) Customer intimacy B) Survival C) Operational excellence D) Improved decision making E) New products and services Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 1 - 1: How are inf ormation systems transformi ng business, and why are they so essential for running and manag ing a business today? 12) Approximately how much revenue was generated by e - commerce in 2017? A) About $1 trillion B) About $2 trillion C) About $229 billion D) About $700 billion E) About $180 billion Answer: D Difficulty: Moderate AACSB: Information technology LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today?

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    5 13) All of the following are new technolo gy - related trends in MIS ex cept : A) cloud computing. B) big data. C) IoT. D) the mobile digital platform. E) co - creation of business value. Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 1 - 1: How are informatio n systems transforming busi ness, and why are they so e ssential for running and managing a business today? 14) Which of the following statements about digital firms is not true? A) In digital firms, time shifting and space shifting are the norm. B) Today, most firms are fully digita l. C) Digital firms offer extraordinary opportunities for flexible global organization and management. D) Digital firms sense and respond to their environments more rapidly than traditional firms. E) Digital firms have more flexi bility to survive in turbul ent times. Answer: B Difficulty: Challenging AACSB: Reflective thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 15) A firm that mus t invest in new information systems capabilities in order to comply with federal legislation is invest ing to achieve which business objective? A) Customer intimacy B) Operational excellence C) Survival D) Creation of new products E) Improved decision makin g Answer: C Difficulty: M oderate AACSB: Information technology LO: 1 - 1: How are information system s transforming business, and why are they so essential for running and managing a business today?

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    6 16) Which of the following is not one of the IT innova tions changing the world of business today? A) IoT B) Big data C) The mobile digital platform D) Cloud computing E) Business intelligence Answer: D Difficulty: Easy AACSB: Reflective thinking LO: 1 - 1: How are information systems transforming business, and why are they so essenti al for running and managing a business today? 17) Which of the following is not one of the current changes taking place in information systems technology? A) Growing business use of big data B) Growth in cloud computing C) Growt h in the PC platform D) Eme rging mobile digital platform E) Increased usage of data generated by the Internet of Things Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 1 - 1: How are information systems transforming business, and why are th ey so essential for running and managing a business today ? 18) Thomas Friedman's description of the world as "flat" refers to: A) the flattening of economic and cultural advantages of developed countries. B) the use of the Internet and technology for inst antaneous communication. C) the reduction in travel times and the ubiquity of global exchange and travel. D) the growth of globalization. E) the increased use of global currencies. Answer: A Difficulty: Easy AACSB: Reflective thinking LO: 1 - 1: How are information systems transfo rming business, and why are th ey so essential for running and managing a business today?

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    7 19) In 2017, what percent of the U.S. economy resulted from foreign trade? A) 10 percent B) 25 percent C) 30 percent D) 50 percent E) 66 p ercent Answer: C Difficult y: Challenging AACSB: Informa tion technology LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 20) All of the following describe the effects o f globalization except : A) significant decreases in operating costs. B) reduction of labor costs through outsourcing. C) ability to find low - cost suppliers. D) increases in transaction costs. E) replication of business models in multiple countries. Answer: D Difficulty: Challengin g AACSB: Analytical thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 21) How many serv ice jobs move offshore to lower - wage countries in a typical year? A) 3,000 B) 30,000 C) 300,000 D) 3 million E) 30 million Answer: C Difficulty: Challenging AACSB: Reflective thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today?

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    8 22) Whi ch of the following statements is not true? A) In 2017, American businesses invested about $1 trillion in information systems hardware, software, and telecommunications equipment. B) In 2017, American businesses spent $500 billio n on business and managemen t consulting and information technology services. C) Private business investment in information technology has grown from 21 percent of total invested capital in 1999 to 33 percent of all invested capital in 2017. D) Most of the business value of IT invest ment derives from organizational, management, and cultural changes inside firms. E) Much of the money spent by American businesses on business and management consulting involves redes igning firms' business operations to take adva ntage of new technologies. Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 1 - 1: How are informa tion systems transforming business, and why are they so essential for running and managing a business today? 23) Approximately how man y Americans access the Inte rnet using a smartphone or tablet? A) 118 million B) 172 million C) 194 million D) 230 million E) 258 million Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 24) Which of the following statement s is not true? A) Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. B) Most PCs manufactured in China use microprocessor c hips manufactured in Korea. C) Eighty percent of the toys sold in the United States are manufa ctured in China. D) In 2017, 60 percent of Apple's revenue was generated outside of the United States. E) Technology companies are part icularly dependent on offsh ore revenue. Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 1 - 1: Ho w are information systems transforming business, and why are they so essential for running and managing a business today?

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    9 25) Interne t advertising is growing at approximately 5 percent a year. Answer: FALSE Difficulty: Challenging AACSB: Reflective thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business t oday? 26) Creating a marke ting plan is not an example of a business proces s. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 27) In or der to be considered a digital firm, all of the firm's significant business relationships and core business processes must be digitally enabled. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 1 - 1: How are infor mation systems transforming business, and why are they so essential for run ning and managing a business today? 28) A business model describes how a company produces, delivers, and sells a product or service to create wealth. Answer: TRUE Difficulty: Eas y AACSB: Reflective thinki ng LO: 1 - 1: How are information systems transfo rming business, and why are they so essential for running and managing a business today? 29) Private business investment in information technology constituted 55 percent of all inv ested capital in 2017. Answ er: FALSE Difficulty: Moderate AACSB: Reflect ive thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today?

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    10 30) You are starting a small bik e messenger company. Given your type of services (hand - delivering packages w ithin a small geographical area), could your firm be a digital firm? If so, what would make this a digital firm? Answer: Yes, your firm could be a digital firm. Being a digital fi rm doesn't mean that you ju st offer digital goods and services. A digital firm would have most of its relationships with customers, suppliers, and employees be digitally enabled. Ordering d eliveries, assigning deliveries, managing employees and assignments could certainly be digital ly enabled; using cell phones, information systems, and handheld devices to connect customers, delivery management, and bike messengers. Difficulty: Challenging AACSB: Analytical thinking LO: 1 - 1: How are information systems t ransforming business, and w hy are they so essential for running and managing a business today? 31) What are the main changes taking place in organizational use of information systems? Whic h of these do you think is having the greatest impact on businesses ? Answer: The main organiz ational changes taking place are: 1. businesses using social networking platforms to deepen interactions with employees, customers, and suppliers, 2. growing numb ers of employees using mobile devices to connect with their firm, c ustomers, and suppliers. 3 . co - creation of business value, with the sources of business value shifting from products to solutions and experiences and from internal sources to networks of s uppliers and collaboration with customers. Student answers as to th e greatest impact will vary . An example answer is: The increase in collaboration is having the greatest impact, as customers are essentially gaining greater control in determining the end p roduct; businesses who are flexible enough to listen to and respond to customer demand will be more successful. Difficulty: Moderate AACSB: Analytical thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a business today? 32) Define business proces s . What might be a business process used at a hospital? Answer: A business process is a set of logically related tasks and behaviors for accomplishing work. Hiring a new employee, customer intake, and filing medical records are examples of business proces ses at a hospital. Difficul ty: Moderate AACSB: Analytical thinking LO: 1 - 1: How are information systems transforming business, and why are they so essential for running and managing a bu siness today?

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    11 33) The three activities in an information system t hat produce the information organizations use to control operations are: A) information, research, and analysis. B) input, output, and feedback. C) data, information, and analysis. D) data a nalysis, processing, and feedback. E) input, processing, and outpu t. Answer: E Difficulty: Easy AACSB: Information technology LO: 1 - 2: What is an information system? How does it work? Wh at are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine va lue for organizations? 34) Data collected at checkout counters in a grocery store is an exam ple of: A) output. B) processing. C) feedback. D) input. E) information systems. Answer: D Difficulty: Easy AACSB: Information tec hnology LO: 1 - 2: What is a n information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 35) The total number of foo d it ems with storage temperature problems is an example of which of the following? A) Input B) Ra w data C) Meaningful information D) Feedback E) Processing Answer: C Difficulty: Easy AACSB: Information technology LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and technology components? Why are comp lementary assets essential for ensuring that information systems provide genuine value for organizations?

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    12 36) Output: A) is feedback t hat has been processed to c reate meaningful information that can be used by others. B) is information that is returned to appropriate members of the organization to help them evaluate the input stage. C) transfers data to the people who will use it or to t he activities for which it will be used. D) is the result of processing raw input data into meaningful information. E) converts raw input into a meaningful form. Answer: D Difficulty: Easy AACSB: Information technology LO: 1 - 2: What is an information s ystem? How does it work ? Wh at are its man agement, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 37) Converting raw data into a more meaningful form is called: A) cap turi ng. B) process ing. C) organizing. D) feedback. E) analysis. Answer: B Difficulty: Easy AACSB: Information technology LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and technol ogy components? Why are com plementary ass ets essential for ensuring that information systems provide genuine value for organizations? 38) Which of the following is an example of raw data from an automobile manufacturer? A) An average of 120 Subarus sold d aily in New York in 201 7 B) 1,200 Subaru Outbacks sold during the first quarter 2017 in New York C) One Subaru Outback sold July 27, 20176 in Mohegan Lake, New York for $24,000 D) Annual sales of Subaru Outbacks increased 5.3 percent E) An average sale pri ce of $25,500 for all S ubar u Outbacks sol d during July 2017 in Mohegan Lake, New York Answer: C Difficulty: Challenging AACSB: Information technology LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and t echnology components? W hy a re complementa ry assets essential for ensuring that information systems provide genuine value for organizations?

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    13 39) In a hierarchical organization, the upper level consists of: A) scientists. B) senior management. C) professio nal employees. D) data work ers. E) knowledge workers. Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and technology components? Why are compleme ntary assets es sential for ensuring that information systems provide genuine value for organizations? 40) The fundamental set of assumptions, values, and ways of doing things that has been accepted by most of a company's members is called its: A) culture. B) environment . C) atm osph ere. D) business process. E) mission. Answer: A Difficulty: Easy AACSB: Reflective thinking LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and technology components? Why are c omplementary as sets ess enti al for ensuring that information systems provide genuine value for organizations? 41) Data management technology consists of which of the following? A) Physical hardware and media used by an organization for storing data B) Deta iled, preprogra mmed ins truc tions that control and coordinate the computer hardware components in an information system C) Two or more computers to share data or resources D) Hardware and software used to transfer data E) Software governing the organization of data on phy sical st orag e media Answer: E Difficulty: Easy AACSB: Information technology LO: 1 - 2: What is an information sys tem? How does it work? What are its management, organization, and technology components? Why are complementary assets essenti al for ensuring that in form ation systems provide genuine value for organizations?

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    14 42) Which of the following statements best descr ibes organizational culture? A) It encompasses the sum of beliefs and assumptions by all members. B) It enables the organiza tion to transcend the d iffe rent levels and specialties of its employees. C) It reflects the senior management's perspective on the o rganization and goals. D) It allows a company to achieve greater operational efficiency. E) It is a fundamental set of assum ptions, values, and way s of doing things that has been accepted by most members of the organization. Answer: E Difficulty: Moderat e AACSB: Analytical thinking LO: 1 - 2: What is an information system? How does it work? What are its management, organizati on, and technology comp onen ts? Why are complementary assets essential for ensuring that information systems provide genuine value fo r organizations? 43) Networking and telecommunications technologies, along with computer hardware, software, data managemen t technology, and the p eopl e required to run and manage them, constitute an organization's: A) data management environment. B) netwo rked environment. C) information technology (IT) infrastructure. D) information system. E) culture. Answer: C Difficulty: Easy AACSB: Informatio n te chnology LO: 1 - 2: What is an information system? How does it work? What are its management, organization , and technology components? Why are complementary assets essential for ensuring that information systems provide genuine va lue for organizations? 44) Maintaining the organization's financial records is a central purpose of which main business function? A ) Manufacturing and accounting B) Finance and accounting C) Sales and manufacturing D) Finance and sales E) Human resources Answer: B Difficulty: Eas y AACSB: Reflective thinking LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information syste ms provide genuine valu e fo r organizations?

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    15 45) All of t he following are examples of environmental actors in an information system except : A) competitors. B) regulatory agencies. C) customers. D) suppliers. E) sales force. Answer: E Difficulty: Moderat e AACSB: Information t echn ology LO: 1 - 2: What is an info rmation system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 46 ) Wh ich of the following best descr ibes the primary reason for implementing a new information system, from a business perspective? A) The system enables the firm to create new products and services. B) The system will create new valu e for the firm, beyond its costs. C) The system will autom ate key business processes. D) The system is in use by our primary competitors. E) The system integrates well with the Web. Answer: B Difficulty: Moderate AACSB: Information technology LO: 1 - 2: What is an information syst em? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 47) Which of the follo wing would not be a com plem entary asset for a solar panel manufacturer? A) International solar equipment certification standards B) Government funding for green technology C) Centralized hierarchical decision making D) Innovation - driven managemen t team E) Subsidies for adoption of s olar energy Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 1 - 2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets es sential for ensuring th at i nformation systems provide genuine value for organizations?

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