Management Information Systems Managing the Digital Firm, 14E Kenneth C Laudon Test Bank

Management Information Systems Managing the Digital Firm, 14E By Kenneth C. Laudon

Email: richard@qwconsultancy.com

Management Information Systems, 14e (Laudon) Chapter 1 Information Systems in Global Business Today 1) The six important business objectives of information technology are new products, services, and business models; customer and supplier intimacy; survival; competitive advantage; operational excellence; and A) improved flexibility.

B) improved decision making.

C) improved business practices.

D) improved efficiency.

E) improved business value.

Answer: B Page Ref: 13 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

2) Verizon Corporation's use of a Web-based digital dashboard to provide managers with precise real-time information illustrates which business objective?

A) improved flexibility B) improved decision making C) competitive advantage D) survival E) customer and supplier intimacy Answer: B Page Ref: 15 Difficulty: Difficult AACSB: Information technology CASE: Synthesis 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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3) Which of the following choices may lead to competitive advantage?

1. new products, services, and business models; 2. charging less for 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: D Page Ref: 15 Difficulty: Difficult AACSB: Analytical thinking CASE: Application LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

4) The use of information systems because of necessity describes the business objective of A) operational excellence.

B) improved business practices.

C) competitive advantage.

D) improved flexibility.

E) survival.

Answer: E Page Ref: 15 Difficulty: Moderate AACSB: Information technology CASE: Concept 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 hotel's use of computer systems to keep track of guests' preferences is an example of A) improved flexibility.

B) improved decision making.

C) improved efficiency.

D) customer and supplier intimacy.

E) operational excellence.

Answer: D Page Ref: 14 Difficulty: Moderate AACSB: Information technology CASE: Application 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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6) The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates the use of information systems to achieve which business objective?

A) improved efficiency B) customer and supplier intimacy C) survival D) competitive advantage E) improved decision making Answer: C Page Ref: 15 Difficulty: Moderate AACSB: Information technology CASE: Application LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

7) Which of the following objectives best describes the business strategy behind the technologies implemented by the San Francisco Giants, as discussed in the chapter case?

A) customer and supplier intimacy B) survival C) competitive advantage D) customer support E) operational excellence Answer: C Page Ref: 3-4 Difficulty: Moderate AACSB: Analytical thinking CASE: Application LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

8) An example of a business using information systems to create new products and services is A) Wal-Mart's RetailLink system.

B) the Mandarin Oriental hotel's customer-preference tracking system.

C) Verizon's Web-based digital dashboard.

D) Apple Inc.'s iPod. E) the San Francisco Giants play tracking system.

Answer: D Page Ref: 14 Difficulty: Difficult AACSB: Information technology CASE: Application 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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9) An example of a business using information systems to attain operational excellence is A) Wal-Mart's Retail Link system.

B) the Mandarin Oriental hotel's customer-preference tracking system.

C) Verizon's Web-based digital dashboard.

D) Apple Inc.'s iPod. E) Citibank's ATMs. Answer: A Page Ref: 14 Difficulty: Difficult AACSB: Information technology CASE: Application LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

10) An example of a business using information systems for customer and supplier intimacy is A) Wal-Mart's Retail Link system.

B) the Mandarin Oriental hotel's customer-preference tracking system.

C) Verizon's Web-based digital dashboard.

D) Apple Inc.'s iPod. E) Citibank's ATMs. Answer: B Page Ref: 14 Difficulty: Moderate AACSB: Information technology CASE: Application LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

11) The temp agency that you own is having serious difficulties placing temps because few of them are familiar with Internet research. Investing in training software to enhance your workers' skills is an example of using technology to achieve which business objective?

A) customer and supplier intimacy B) survival C) operational excellence D) improved decision making E) new products and services Answer: B Page Ref: 15 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis 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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12) Apple Computer dominates the online legal music sales industry primarily because of a failure of recording label companies to A) invest in technology.

B) assemble accurate data.

C) invest in complementary assets.

D) modernize their information value chain.

E) adopt a new business model.

Answer: E Page Ref: 27 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

13) All of the following are advantages, for a firm, of cloud computing except A) ability to support mobile computing.

B) ability to support remote work.

C) ability to improve communication.

D) ability to rely on markets to build value.

E) ability to reduce data storage costs.

Answer: C Page Ref: 7 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

14) Which of the following are key corporate assets?

A) intellectual property, core competencies, and financial and human assets B) production technologies and business processes for sales, marketing, and finance C) knowledge and the firm's tangible assets, such as goods or services D) time and knowledge E) significant business relationships Answer: A Page Ref: 12 Difficulty: Difficult AACSB: Reflective thinking CASE: Concept 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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15) A firm that must invest in new information systems capabilities in order to comply with federal legislation can be said to be investing to achieve which business objective?

A) customer intimacy B) operational excellence C) survival D) improved reporting E) improved decision making Answer: C Page Ref: 15 Difficulty: Moderate AACSB: Information technology CASE: Application LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

16) Internet advertising is growing at approximately 15 percent a year.

Answer: TRUE Page Ref: 6-7 Difficulty: Difficult AACSB: Reflective thinking CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

17) Developing a new product, hiring a new employee, and fulfilling an order are examples of business processes.

Answer: TRUE Page Ref: 12 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

18) A fully digital firm produces only digital goods or services.

Answer: FALSE Page Ref: 12 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept 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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19) A business model describes how a company produces, delivers, and sells a product or service to create wealth.

Answer: TRUE Page Ref: 14 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

20) Investment in IT is 33% of all invested capital.

Answer: TRUE Page Ref: 6 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

21) ________ is known as the enormous volume of data generated by Internet activity, such as Web traffic and e-mail.

Answer: Big data Page Ref: 8 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

22) You are starting a small bike messenger company. Given your type of services (handdelivering packages within a small geographical area), could your firm be a digital firm? If so, what would make this a digital firm?

Answer: Being a digital firm doesn't purely rely on having digital goods and services. A digital firm would have most of its relationships with customers, suppliers, and employees be digitally enabled. Ordering deliveries, assigning deliveries, managing employees and assignments could certainly be digitally enabled; using cell phones, information systems, and handheld devices to connect customers, delivery management, and bike messengers.

Page Ref: 12 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis 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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23) What are the main changes taking place in organizational use of information systems? Which of these do you think is having the greatest impact on businesses?

Answer: The main organizational changes taking place are: 1. businesses using social networks to connect with customers and suppliers, 2. businesses expanding their use of the mobile platform, and 3. increase in collaboration, with customers and suppliers more connected by networks to the firm and able to contribute in new products and services.

Student answers as to the 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 product; businesses who are flexible enough to listen to and respond to customer demand will be more successful.

Page Ref: 8 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.1: How are information systems transforming business, and why are they so essential for running and managing a business today?

24) The three activities in an information system that produce the information organizations use to control operations are A) information retrieval, research, and analysis.

B) input, output, and feedback.

C) data, information, and analysis.

D) data analysis, processing, and feedback.

E) input, processing, and output.

Answer: E Page Ref: 16-17 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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25) Order data for baseball tickets and bar code data are examples of A) raw input.

B) raw output.

C) customer and product data.

D) sales information.

E) information systems.

Answer: A Page Ref: 16 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

26) The average number of tickets sold daily online is an example of A) input.

B) raw data.

C) meaningful information.

D) feedback.

E) processing.

Answer: C Page Ref: 17 Difficulty: Easy AACSB: Information technology CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

27) Output A) is feedback that has been processed to create meaningful information.

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 the activities for which it will be used.

D) transfers processed information to the people who will use it or to the activities for which it will be used.

E) converts raw input into a meaningful form.

Answer: D Page Ref: 17 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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28) Converting raw data into a more meaningful form is called A) capturing.

B) processing.

C) organizing.

D) feedback.

E) analysis.

Answer: B Page Ref: 17 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

29) An example of raw data from a national chain of automobile stores would be A) an average of 13 Toyotas are sold daily in Kentucky.

B) 30-percent increase in Toyota RAV4 sales during September in Kentucky.

C) 1 Toyota RAV4 sold March 3, 2013, in Louisville, Kentucky.

D) 10-percent improvement in sales projections for Toyota sales next year.

E) a demographic breakdown of all Toyota buyers in the past year.

Answer: C Page Ref: 16-17 Difficulty: Difficult AACSB: Information technology CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

30) In a hierarchical organization, the upper levels consist of A) managerial and professional employees.

B) managerial, professional, and technical employees.

C) professional and operational employees.

D) managerial, professional, and operational employees.

E) knowledge workers.

Answer: B Page Ref: 20 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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31) 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) growth in the PC platform D) emerging mobile platform E) increased usage of social networking by business Answer: C Page Ref: 8 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

32) 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) atmosphere.

D) values.

E) ethos.

Answer: A Page Ref: 20 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

33) Thomas Friedman's declaration that the world was now "flat" meant that A) the Internet has reduced the economic advantages of developed countries.

B) globalization is starting to offer less advantage to large corporations.

C) the global economy is increasingly commanded by fewer and larger corporations.

D) global capitalism is homogenizing culture and business practices throughout the world.

E) global shipping rates have reached historic lows.

Answer: A Page Ref: 11 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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34) Data management technology consists of the A) physical hardware and media used by an organization for storing data.

B) detailed, preprogrammed instructions 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 physical storage media.

Answer: E Page Ref: 21 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

35) Which of the following statements best describes organizational culture?

A) It encompasses the sum of beliefs and assumptions by all members.

B) It enables the organization to transcend the different levels and specialties of its employees.

C) It reflects the senior management's perspective on the organization and goals.

D) It allows a company to achieve greater operational efficiency.

E) It is a set of assumptions and values accepted by most members.

Answer: E Page Ref: 20 Difficulty: Moderate AACSB: Analytical thinking CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

36) Networking and telecommunications technologies, along with computer hardware, software, data management technology, and the people required to run and manage them, constitute an organization's A) data management environment.

B) networked environment.

C) IT infrastructure.

D) information system.

E) culture.

Answer: C Page Ref: 22 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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37) 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 Page Ref: 20 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

38) Which of the following is not one of the primary environmental actors that interacts with an organization and its information systems?

A) competitors B) regulatory agencies C) customers D) suppliers E) sales force Answer: E Page Ref: 17 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

39) Which of the following best describes 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 value for the firm, beyond its costs.

C) The system will automate key business processes.

D) The system is in use by our primary competitors.

E) The system integrates well with the Web. Answer: B Page Ref: 25 Difficulty: Moderate AACSB: Information technology CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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40) Which of the following would not be a complementary 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 management team E) subsidies for adoption of solar energy Answer: C Page Ref: 27 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

41) In a business hierarchy, the level that is responsible for monitoring the daily activities of the business is A) middle management.

B) service workers.

C) production management.

D) operational management.

E) knowledge workers.

Answer: D Page Ref: 19 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

42) From a business perspective, raw data is transformed systematically during various stages, transforming it into valuable information, in a process called A) the information value chain.

B) the IT value chain.

C) information processing.

D) feedback.

E) dissemination.

Answer: A Page Ref: 25-26 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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43) A corporation that funds a political action committee, which in turn promotes and funds a political candidate who agrees with the values of that corporation, could be seen as investing in which main category of complementary assets?

A) managerial B) governmental C) social D) organizational E) auxiliary Answer: C Page Ref: 28 Difficulty: Moderate AACSB: Analytical thinking CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

44) An example of an organizational complementary asset is A) using the appropriate business model.

B) a collaborative work environment.

C) laws and regulations.

D) the Internet.

E) strong senior management.

Answer: A Page Ref: 28 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

45) An example of a social complementary asset is A) technology and service firms in adjacent markets.

B) training programs.

C) distributed decision-making rights.

D) incentives for management innovation.

E) a strong IS development team.

Answer: A Page Ref: 28 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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46) Which of the following roles in a firm would be least affected by using mobile devices to access firm information systems?

A) senior executives B) sales executives C) production workers D) operational managers E) knowledge workers Answer: C Page Ref: 19 Difficulty: Difficult AACSB: Analytical thinking CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

47) Which of the following would not be used as an input for an information system?

A) digital dashboard B) handheld computer C) barcode scanner D) cell phone E) RFID reading Answer: A Page Ref: 16-17 Difficulty: Moderate AACSB: Information technology CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

48) The three principal levels within a business organization hierarchy are A) senior management, operational management, and service workers.

B) senior management, middle management, and operational management.

C) senior management, operational management, and information systems.

D) senior management, middle management, and service workers.

E) senior management, data workers, and service workers.

Answer: B Page Ref: 19 Difficulty: Difficult AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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49) Engineers, scientists, or architects, who design new products or services for a firm, belong to which level of a business hierarchy?

A) middle management B) production workers C) knowledge workers D) data workers E) service workers Answer: C Page Ref: 19 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

50) Which main business function is responsible for maintaining employee records?

A) sales and marketing B) human resources C) finance and accounting D) manufacturing and production E) middle management Answer: B Page Ref: 20 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

51) Which of the following constitutes an organizational element in the UPS tracking system described in the chapter?

A) the specification of procedures for identifying packages with sender and recipient information B) monitoring service levels C) promoting the company strategy of low-cost, superior service D) the use of handheld computers and networks for managing package delivery E) a Web-based Post Sales Order Management System Answer: A Page Ref: 23 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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52) A managerial element in the UPS tracking system described in the chapter is A) taking inventory.

B) providing package status reports to customers.

C) the decision to use automation.

D) in-house package tracking software.

E) ability to embed UPS functions in external sites.

Answer: C Page Ref: 22 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

53) Information technology (IT) consists of all the hardware that a firm needs to use in order to achieve its business objectives, whereas information systems consist of all the software and business processes needed.

Answer: FALSE Page Ref: 16 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

54) Computers make up the entirety of an information system.

Answer: FALSE Page Ref: 18 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

55) Information systems literacy describes the behavioral approach to information systems, whereas computer literacy describes the sociotechnical approach.

Answer: FALSE Page Ref: 18 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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56) The three main dimensions of information systems are management, organizations, and information technology.

Answer: TRUE Page Ref: 19 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

57) Knowledge workers make long-range strategic decisions about products and services.

Answer: FALSE Page Ref: 19 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

58) There are four major business functions: human resources; manufacturing and production; finance and accounting; and information technology.

Answer: FALSE Page Ref: 19 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

59) You need to know something about the hierarchy and culture of the company in order to understand how a specific business firm uses information systems Answer: TRUE Page Ref: 19-20 Difficulty: Moderate AACSB: Analytical thinking CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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60) All business processes are formally documented by an organization.

Answer: FALSE Page Ref: 20 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

61) Creative work driven by new knowledge and information is an insignificant part of management responsibility.

Answer: FALSE Page Ref: 21 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

62) Intranets link different systems and networks within a firm.

Answer: TRUE Page Ref: 22 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

63) UPS's use of Web-based tools that allow customers to embed UPS functions such as tracking and cost calculations into their own Web sites was an information systems solution used to achieve customer intimacy.

Answer: TRUE Page Ref: 23 Difficulty: Difficult AACSB: Analytical thinking CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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64) There is little variation in returns on IT investment across firms.

Answer: FALSE Page Ref: 27 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

65) Laws and regulations creating fair, stable market environments are examples of complementary social assets required to optimize returns from IT investments.

Answer: TRUE Page Ref: 28 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

66) A firm that invests in a strong IS development team is making an investment in organizational complementary assets.

Answer: TRUE Page Ref: 28 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

67) The behavioral approach to information systems leaves aside technical solutions to instead analyze the psychological, social, and economic impacts of systems.

Answer: TRUE Page Ref: 29-30 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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68) ________ is data that has been shaped into a form that is meaningful to human beings.

Answer: Information Page Ref: 16 Difficulty: Easy AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

69) ________ is output returned to appropriate members of the organization to help them evaluate or correct the input stage.

Answer: Feedback Page Ref: 18 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

70) The key elements of an organization are its structure, business processes, politics, culture, and ________.

Answer: people Page Ref: 19 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

71) ________ makes long-range strategic decisions about the firm's products and services.

Answer: Senior management Page Ref: 19 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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72) Detailed, programmed instructions that control computer hardware components in an information system are known as computer ________.

Answer: software Page Ref: 21 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

73) ________ is a global network that uses universal standards to connect millions of different networks around the world.

Answer: The Internet Page Ref: 21 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

74) The ________ is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format.

Answer: World Wide Web/Web/WWW Page Ref: 22 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

75) ________ are private corporate networks extended to authorized users outside the organization.

Answer: Extranets Page Ref: 22 Difficulty: Easy AACSB: Information technology CASE: Concept LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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76) Define operational excellence. How can information systems help achieve it?

Answer: Operational excellence is the achievement of higher levels of productivity, efficiency, and profitability. Information systems can help achieve operational excellence by improving communications to suppliers and optimizing the supply chain. Information systems could help managers communicate with workers more efficiently, enable technological innovation in products, minimize warehouse overhead, and streamline distribution.

Page Ref: 13 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

77) You work for an auto manufacturer and distributor. How could you use information systems to achieve greater customer intimacy?

Answer: You could create a Web site that allows customers to customize cars, communicate with support personnel and other car owners. You could create an automated e-mail service reminding car owners to take their car in for periodic checkups. You could have an information system that tracks customer preferences in local areas, so you can provide cars that reflect local customer needs and desires.

Page Ref: 14 Difficulty: Difficult AACSB: Analytical thinking CASE: Application LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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78) What is the difference between information technology and information systems? Describe some of the functions of information systems.

Answer: Information technology (IT) consists of all the hardware and software that a firm needs to use to achieve its business objectives. Information systems are more complex. An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization.

An information system: • supports decision making, coordination, and control • helps employees analyze problems • helps employees visualize complex subjects • helps create new products Page Ref: 16-17 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

79) You are a marketing manager for a national movie theater chain. Give an example of data that your department could use for creating meaningful information. What type of information could that data produce?

Answer: Movie ticket sales from individual theaters would be an example of raw data.

Meaningful information from this would be: average number of tickets sold to seniors on certain days of the week.

Page Ref: 16-18 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

80) Define business process. 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 processes at a hospital.

Page Ref: 12 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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81) This chapter discusses how each organization has its own culture and sets of values shared by most of its members. What kind of shared values might you find at a law firm?

Answer: Shared values at a law firm might be: The legal system works, the legal system is fair, lawyers help people, and people need help with the legal system because it is complicated.

Page Ref: 20 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

82) You work at the business headquarters for a chain of movie theaters. Describe this firm's information value chain.

Answer: An information value chain adds value to data at various stages, transforming it into valuable data. At a chain of movie theaters, data would be gathered from ticket sales and concession sales. Information systems would help transform this into meaningful information, such as determining the types of movies popular in certain regions, times and days of the week that people most often saw movies, what snacks were the most popular. This information would be valuable in making decisions, such as offering ticket discounts during less popular time slots and offering more popular snack items. Further feedback based on the results of these decisions could determine whether these decisions were effective.

Page Ref: 25-26 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

83) How does a company's use of information systems affect its corporate strategies? Provide an example.

Answer: A firm's ability to effectively use information technology is interdependent with its ability to implement corporate strategies and achieve corporate goals. More and more, the ability to compete and succeed depends on a company's ability to implement technology. What a business would like to do in the future can depends on what its systems will be able to do.

Examples of this might be a company who invests in information systems that enable it to create new products or to make its distribution system more efficient, allowing the company to become the low-cost producer.

Page Ref: 13 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 1.2: What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems provide genuine value for organizations?

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84) The field that deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm is called A) information systems literacy.

B) information systems architecture.

C) business processes.

D) information technology infrastructure.

E) management information systems.

Answer: E Page Ref: 18 Difficulty: Moderate AACSB: Reflective thinking CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

85) Disciplines that contribute to the technical approach to information systems are A) computer science, engineering, and networking.

B) operations research, management science, and computer science.

C) engineering, utilization management, and computer science.

D) management science, computer science, and engineering.

E) economics, sociology, and psychology.

Answer: B Page Ref: 29 Difficulty: Difficult AACSB: Information technology CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

86) The discipline that focuses on mathematical techniques for optimizing parameters of organizations, such as transportation and inventory control, is A) management science.

B) MIS. C) computer science.

D) utilization management.

E) operations research.

Answer: E Page Ref: 30 Difficulty: Difficult AACSB: Reflective thinking CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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87) Sociologists study information systems with an eye to understanding A) how systems affect individuals, groups, and organizations.

B) how human decision makers perceive and use formal information.

C) how new information systems change the control and cost structures within the firm.

D) the production of digital goods.

E) mathematically based models and physical technology.

Answer: A Page Ref: 30 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

88) Psychologists study information systems with an eye to understanding A) how systems affect individuals, groups, and organizations.

B) how human decision makers perceive and use formal information.

C) how new information systems change the control and cost structures within the firm.

D) the production of digital goods.

E) mathematically based models and physical technology.

Answer: B Page Ref: 30 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

89) Which field of study focuses on both a behavioral and technical understanding of information systems?

A) sociology B) operations research C) economics D) behavioral computing E) management information systems Answer: E Page Ref: 18 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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90) In a(n) ________ perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained.

Answer: sociotechnical Page Ref: 31 Difficulty: Moderate AACSB: Information technology CASE: Concept LO: 1.3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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Management Information Systems, 14e (Laudon) Chapter 2 Global E-Business and Collaboration 1) A business process in the ________ function is producing bills of material.

A) finance and accounting B) human resources C) manufacturing and production D) research and development E) sales and marketing Answer: C Page Ref: 44 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 2.1: What are business processes? How are they related to information systems?

2) An example of a cross-functional business process is A) identifying customers.

B) transporting the product.

C) creating a new product.

D) assembling a product.

E) paying creditors.

Answer: C Page Ref: 44 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.1: What are business processes? How are they related to information systems?

3) Identifying customers is a business process handled by the human resources function.

Answer: FALSE Page Ref: 44 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.1: What are business processes? How are they related to information systems?

4) One example of a business process is shipping a product to a customer.

Answer: TRUE Page Ref: 44 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 2.1: What are business processes? How are they related to information systems?

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5) A(n) ________ is a set of logically related activities for accomplishing a specific business result.

Answer: business process Page Ref: 43 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 2.1: What are business processes? How are they related to information systems?

6) What is the connection between organizations, information systems, and business processes?

Answer: Business processes refer to the manner in which work activities are organized, coordinated, and focused to produce a specific business result. They also represent unique ways in which organizations coordinate work, information, and knowledge and the ways in which management chooses to coordinate work. Managers need to pay attention to business processes because they determine how well the organization can execute, and thus are a potential source for strategic success or failures. Although each of the major business functions has its own set of business processes, many other business processes are cross functional. Information systems can help organizations achieve great efficiencies by automating parts of these processes or by helping organizations rethink and streamline them. Firms can become more flexible and efficient by coordinating and integrating their business processes to improve management of resources and customer service.

Page Ref: 43-45 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 2.1: What are business processes? How are they related to information systems?

7) What are cross-functional business processes? Give an example.

Answer: Cross-functional processes are those that require input, cooperation, or coordination between the major business functions in an organization. For instance, when a salesman takes an order, the major business functions of planning, production, inventory control, shipping, accounting, and customer relations will all be involved before the order is completed.

Page Ref: 44-45 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 2.1: What are business processes? How are they related to information systems?

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8) Your aunt has asked you for your suggestions to make her business, a local sandwich shop, more efficient. Describe at least three types of business processes that a sandwich shop has. Can any be better coordinated through the use of information systems?

Answer: The business processes of a sandwich shop would include: Taking orders, making sandwiches, selling to the customer, ordering supplies, opening the store, closing the store, cleaning the store, paying employees, hiring employees, paying creditors and vendors, creating financial statements, paying taxes, managing cash.

Many of these processes could be helped by better information systems, specifically those that require recorded data, such as any financial processes (payments, cash management, taxes, salaries) and information gathered from and distributed to employees.

Page Ref: 43-45 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 2.1: What are business processes? How are they related to information systems?

9) The ________ function is responsible for identifying customers.

A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing E) distribution and logistics Answer: D Page Ref: 44 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

10) If your main supplier was late in delivering goods, which type of system would you use to update your production schedule?

A) ESS B) TPS C) MIS D) DSS Answer: B Page Ref: 46 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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11) You have been hired by a non-profit agency to implement a system to handle their donations.

The system must be able to handle and record telephone, SMS, and Internet donations, provide up-to-the-minute reports, and create highly customizable mailing lists. In addition, event fundraisers need to be able to quickly access a donor's information and history. Which of the following systems will best meet these needs?

A) TPS B) TPS with DSS capabilities C) TPS with MIS capabilities D) TPS with ESS capabilities E) DSS with MIS capabilities Answer: C Page Ref: 46-52 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

12) To monitor the status of internal operations and the firm's relations with the external environment, managers need ________ systems.

A) decision-support B) knowledge C) transaction processing D) management information Answer: C Page Ref: 46 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

13) A(n) ________ is typically a major source of data for other systems.

A) transaction processing system B) management information system C) executive support system D) decision-support system E) knowledge management system Answer: A Page Ref: 46 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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14) The term "management information systems" designates a specific category of information systems serving A) integrated data processing throughout the firm.

B) transaction process reporting.

C) employees with online access to historical records.

D) the information technology function.

E) middle management functions.

Answer: E Page Ref: 48 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

15) You would use a(n) ________ in order to determine which of your suppliers has the best and worst records for keeping to your production schedule?

A) MIS B) TPS C) UPS D) DSS E) CRM Answer: A Page Ref: 47 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

16) A relocation control system that reports summaries on the total moving, house hunting, and home financing costs for employees in all company divisions would fall into the category of A) knowledge management systems.

B) transaction processing systems.

C) executive support systems.

D) management information systems.

E) decision support systems.

Answer: D Page Ref: 47 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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17) Non-typical business problems with causes and effects that are rapidly changing are typically handled by which type of information system?

A) MIS B) TPS C) ESS D) DSS E) KMS Answer: D Page Ref: 48 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

18) ________ systems are especially suited to situations in which the procedure for arriving at a solution may not be fully defined in advance.

A) Management information B) Transaction processing C) Decision-support D) Knowledge management E) Resource planning Answer: C Page Ref: 48 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

19) Which type of system would you use to forecast the return on investment if you used new suppliers with better delivery track records?

A) ESS B) TPS C) MIS D) CRM E) DSS Answer: E Page Ref: 48-51 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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20) Which level of the organization are ESS specifically designed to serve?

A) operational B) end-user C) middle management D) senior management E) knowledge workers Answer: D Page Ref: 52 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

21) Executive support systems are information systems that support the A) long-range planning activities of senior management.

B) knowledge and data workers in an organization.

C) decision making and administrative activities of middle managers.

D) day-to-day processes of production.

E) transactional needs of the organization.

Answer: A Page Ref: 52 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

22) Which of the following systems would you expect to deliver integrated, personalized business content through a Web portal interface?

A) transaction processing systems B) executive support systems C) management information systems D) decision-support systems E) supply chain management systems Answer: B Page Ref: 52 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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23) To forecast trends in your supplier's industry that could affect your firm over the next five years, you would use a(n) A) ESS. B) TPS. C) MIS. D) DSS. E) KMS. Answer: A Page Ref: 52 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

24) Which of the following is a highly structured decision?

A) creating a new product B) estimating the effect of changing costs of supply materials C) calculating the best trucking routes for product delivery D) granting credit to a customer E) forecasting new industry trends Answer: D Page Ref: 46 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

25) Using the Internet to buy or sell goods is called A) e-commerce.

B) e-business.

C) an intranet.

D) an extranet.

E) digital commerce.

Answer: A Page Ref: 55 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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26) Transaction-level information is essential for operational management to be able to direct the day-to-day operations of the business.

Answer: TRUE Page Ref: 46 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

27) Cross-functional systems are being phased out in favor of systems that support business processes within a single functional group, such as human resources.

Answer: FALSE Page Ref: 46 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

28) Decision-support systems are most commonly used by the operations management level of an organization.

Answer: FALSE Page Ref: 49 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

29) You would use an MIS to help determine if your business should introduce a new product line.

Answer: FALSE Page Ref: 48 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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30) For nonroutine decision making, senior managers rely on management information systems.

Answer: FALSE Page Ref: 48 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

31) Most TPSs use sophisticated mathematical models or statistical techniques.

Answer: FALSE Page Ref: 46 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

32) DSS are used by managers to make decisions about problems that are unusual and not easily specified in advance.

Answer: TRUE Page Ref: 48 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

33) DSS use internal information as well as information from external sources.

Answer: TRUE Page Ref: 48 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

34) An organization's MIS and DSS supply an ESS with summarized information.

Answer: TRUE Page Ref: 52 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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35) Operational managers use ESS primarily to solve specific problems.

Answer: FALSE Page Ref: 52 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

36) Business ________ applications allow managers to interactively work with current and historical data to discover patterns and trends to help their decision.

Answer: intelligence Page Ref: 47 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

37) An ESS's digital ________ displays an array of charts and graphs of a business's key performance indicators.

Answer: dashboard Page Ref: 52 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

38) A Web interface used to present integrated personalized business content to users is called a(n) ________.

Answer: portal Page Ref: 52 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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39) ________ applications integrate information from multiple functions and business processes to enhance the performance of the organization as a whole.

Answer: Enterprise Page Ref: 53 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

40) Supply chain management systems are described as a(n) ________ system because they manage information that flows between different companies.

Answer: interorganizational Page Ref: 56 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

41) The retail home improvement chain you work for, DIY Discount, has noticed that one of its brands of faucets is not selling nearly as well as anticipated. What information systems of the business will you use to determine the reason for the poor sales? Discuss what information you will retrieve from which system. Which of the information systems will be most important for your analysis? Which of the systems will be least important?

Answer: You might query operational level TPS to make sure that the product is actually getting to the stores and being restocked. You could query MIS to see average sales levels according to geography, location, and other factors to see if there are any specific factors affecting the sales.

You might query ESS to see if the same faucets are being sold by competitors and what these prices are. You might use DSS to see what factors could increase sales.

Assuming that the faucets are being properly stocked at the stores, the most important systems to query are the managerial-level systems: MIS for summaries of sales records to help pinpoint any other factors; ESS to check competition, and DSS for higher-level analysis to forecast possible solutions.

Page Ref: 46-52 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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42) Identify and discuss the major types of information systems that serve the main management groups within a business. What are the relationships among these systems?

Answer: The four major categories of information systems are: 1. Transaction processing systems, such as payroll or order processing, track the flow of the daily routine transactions that are necessary to conduct business.

2. Management information systems (MIS) provide the management control level with reports and access to the organization's current performance and historical records. Most MIS reports condense information from TPS and are not highly analytical.

3. Decision-support systems (DSS) support management decisions when these decisions are unique, rapidly changing, and not specified easily in advance. They have more advanced analytical models and data analysis capabilities than MIS and often draw on information from external as well as internal sources.

4. Executive support systems (ESS) support senior management by providing data of greatest importance to senior management decision makers, often in the form of graphs and charts delivered via portals. They have limited analytical capabilities but can draw on sophisticated graphics software and many sources of internal and external information.

The various types of systems in the organization exchange data with one another. TPS are a major source of data for other systems, especially MIS and DSS. ESSs primarily receive data from lower-level systems.

Page Ref: 46-52 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

43) Apex Vacuum, a family-owned manufacturer of budget vacuums, has grown exponentially over the last few years. However, the company is having difficulty preparing for future growth.

The only information system used at Apex is an antiquated accounting system. The company has one manufacturing plant located in Arkansas; and three warehouses, in Arkansas, Delaware, and California. The Apex sales force is national, and Apex purchases about a third of its vacuum parts and materials from a single overseas supplier. You have been hired to recommend the information systems Apex should implement in order to maintain their competitive edge.

However, there is not enough money for a full-blown, cross-functional enterprise application, and you will need to limit the first step to a single functional area or constituency. What will you choose, and why?

Answer: Student answers will vary. E.g. A TPS focusing on production and manufacturing to keep production costs low while maintaining quality, and for communicating with other possible vendors. The TPS would later be used to feed MIS and other higher level systems.

Page Ref: 46-52 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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44) You have been hired to work with 10 salespeople from different branches of a national business in creating an online training site for new sales employees. Identify six collaboration tools that are available to help the team work together. Which single tool would be the most helpful for the project, in your opinion, and why?

Answer: Collaboration tools include e-mail and instant messaging; social networking; wikis; virtual worlds, collaboration platforms such as virtual meeting systems, Google Apps/Google Sites. The most helpful of these might be a collaboration platform because it would enable people to have discussions, calendars, conferences, and share documents.

Page Ref: 60-67 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 2.2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

45) What is the most important function of an enterprise application?

A) increasing speed of communicating B) enabling business functions and departments to share information C) enabling a company to work collaboratively with customers and suppliers D) enabling cost-effective e-business processes E) enabling inventory and supply chain management Answer: B Page Ref: 53 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

46) Which of the following systems is designed to support organization-wide process coordination and integration?

A) decision-support systems B) management information systems C) CRM systems D) enterprise applications E) supply chain management systems Answer: D Page Ref: 53 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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47) A(n) ________ system collects data from various key business processes and stores the data in a single, comprehensive data repository, usable by other parts of the business.

A) transaction B) enterprise C) automatic reporting D) management information E) knowledge management Answer: B Page Ref: 53 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

48) The four major enterprise applications are A) SCMs, CRMs, DSSs, and KMSs. B) SCMs, CRMs, ESSs, and KMSs. C) enterprise systems, SCMs, DSSs, and CRMs. D) enterprise systems, SCMs, CRMs, and KMSs. E) TPSs, MISs, DSSs, and ESSs. Answer: D Page Ref: 53 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

49) ________ systems are also known as enterprise systems.

A) Resource planning B) Enterprise resource planning C) Enterprise support D) Management information E) Decision-support Answer: B Page Ref: 53 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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50) FWO's use of SharePoint for project management is an example of using information systems to achieve which business objective?

A) customer and supplier intimacy B) survival C) improved decision making D) operational excellence Answer: C Page Ref: 63 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

51) ________ enable management to make better decisions regarding organizing and scheduling sourcing, production, and distribution.

A) SCMs B) TPSs C) KMSs D) ERPs E) MISs Answer: A Page Ref: 53 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

52) Which type of system integrates supplier, manufacturer, distributor, and customer logistics processes?

A) collaborative distribution system B) supply-chain management system C) reverse logistics system D) enterprise planning system E) transaction processing system Answer: B Page Ref: 53 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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53) To manage relationships with your customers, you would use a(n) ________ system.

A) CRM B) MIS C) CLE D) CLU E) KMS Answer: A Page Ref: 56 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

54) Which of the following is the greatest obstacle in enabling collaboration between employees at different, distant corporate locations?

A) privacy B) permissions C) time zones D) language E) corporate culture Answer: C Page Ref: 64 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

55) To consolidate the relevant knowledge and experience in the firm and make it available to improve business processes and management decision making, you would use a(n) A) TPS. B) extranet.

C) KMS. D) CRM. E) MIS. Answer: C Page Ref: 54 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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56) A(n) ________ social networking tool creates business value by connecting the members of an organization through profiles, updates, and notifications that are tailored to internal corporate uses.

A) cloud-based B) social-commerce C) collaborative D) remote, asynchronous E) enterprise Answer: E Page Ref: 63 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

57) You have been hired by Inspiration Inc., to help improve their profit margin. Inspiration Inc. is a business communications consultancy that services many clients in different industries throughout the United States. The end products of the company are customized recommendations for the best use of a client's existing resources for improving internal communications, typically delivered via documentation in different media. The company has approximately 100 consultants, all of whom are located in their central headquarters in Chicago.

What system do you recommend to improve the company's business processes and increase their profit margin?

A) extranet, to enable quick collaboration over the Internet, minimize the time spent communicating with the client, and minimize the amount of paperwork needed B) CRM, to maintain easily accessible customer records to minimize the time spent looking for client data C) KMS, for minimizing redundant work on similar clients D) marketing system, for improving sales levels E) TPS, to help manage all daily activities and transactions Answer: A Page Ref: 46-55 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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58) You manage the IT department at a small startup Internet advertiser. You need to set up an inexpensive system that allows customers to see real-time statistics such as views and clickthroughs about their current banner ads. Which type of system will most efficiently provide a solution?

A) CRM B) enterprise system C) extranet D) intranet E) MIS Answer: C Page Ref: 55 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

59) Which of the following types of system helps coordinate the flow of information between the firm and its suppliers and customers?

A) intranet B) extranet C) KMS D) TPS E) TPS Answer: B Page Ref: 55 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

60) Using ________ to enable government relationships with citizens, businesses, and other arms of government is called e-government.

A) the Internet and networking technologies B) e-commerce C) e-business D) any computerized technology E) telecommunications Answer: A Page Ref: 55-56 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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61) In ________, digital technology and the Internet are used to execute the major business processes in the enterprise.

A) e-commerce B) e-business C) enterprise applications D) MIS E) SCM Answer: B Page Ref: 55 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

62) Which of the following statements about collaboration is not true?

A) In business, a collaboration can last as little as a few minutes.

B) Business collaboration relies on the formation of teams that are assigned a specific task or goal.

C) Successful collaboration can be achieved through technology regardless of the organization's culture or structure.

D) One business benefit of collaboration is improved innovation.

E) Businesses need special systems for collaboration.

Answer: C Page Ref: 56 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

63) Which of the following tools would you use to evaluate and choose a collaboration tool for your organization?

A) virtual meeting system B) cloud collaboration C) IBM Notes D) the collaboration matrix E) the time/space collaboration and social tool matrix Answer: E Page Ref: 63 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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64) Which of the following decisions requires knowledge based on collaboration and interaction?

A) How long will it take to manufacture this product?

B) Should we work with outside vendors on new products and services?

C) In which geographical locations are our products garnering the most sales?

D) Which product design is the most efficient for the user in terms of energy use?

E) How can we produce this product more cheaply?

Answer: B Page Ref: 56-57 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

65) Which of the following is not a business benefit of collaboration?

A) improved quality B) improved financial performance C) improved customer service D) improved innovation E) improved compliance with government regulations Answer: E Page Ref: 58-59 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

66) ________ allows you to communicate with avatars using text messaging.

A) A virtual world B) Screen sharing C) Collaborative writing D) A large audience Webinar E) Telepresence Answer: A Page Ref: 61 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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67) All of the following are reasons for the increased business focus on collaboration and teamwork, except for A) the need for creating innovative products and services.

B) growth of "interaction" jobs.

C) greater global presence.

D) the need for more efficient work hierarchies.

E) the need to reduce communication costs.

Answer: D Page Ref: 56-60 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

68) All of the following statements regarding IBM Notes are true except which one?

A) It began as an e-mail and messaging client.

B) It is a widely used collaboration tool at larger firms.

C) It provides capabilities for wikis and microblogging.

D) It provides tools for full version control of all company documentation.

E) It is designed to provide security for sensitive corporate information.

Answer: A Page Ref: 63 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

69) Which of the following is not one of the four main classifications for collaboration tools identified by the space/time matrix?

A) synchronous/colocated B) same time/remote C) different time/remote D) remote/colocated E) same time/same place Answer: D Page Ref: 64 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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70) ________ is a collaboration tool that supports remote (different place), synchronous (same time) collaboration.

A) Video conferencing B) E-mail C) A MUD D) A wall display E) A virtual world Answer: A Page Ref: 64 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

71) Production tasks are coordinated through the use of social networks in social business.

Answer: FALSE Page Ref: 57 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

72) A key word in social business is "conversations."

Answer: TRUE Page Ref: 58 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

73) Supply chain management systems are more externally oriented than enterprise systems.

Answer: TRUE Page Ref: 54 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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74) An example of a remote, synchronous collaboration tool is a Skype conference call using VOIP and webcams.

Answer: TRUE Page Ref: 64 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

75) Global firms can collaborate from different locations at the same time using synchronous collaboration tools.

Answer: TRUE Page Ref: 64 Difficulty: Easy AACSB: Information technology CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

76) A Web site that allows citizens to file taxes online is a form of ________.

Answer: e-government Page Ref: 55-56 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

77) Describe at least two benefits of using enterprise systems.

Answer: Enterprise systems integrate the firm's key business processes in sales, production, finance, logistics, and human resources into a single software system so that information can flow throughout the organization, improving coordination, efficiency, and decision making.

These systems help create a more uniform organization in which everyone uses similar processes and information, and measures their work in terms of organization-wide performance standards.

The coordination of the firm's key business processes allows the firm to respond more rapidly to customer demands.

Page Ref: 53-56 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

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78) You have been hired by an international architectural firm, with offices in Singapore, Paris, and Mumbai. The firm would like architects and draftspeople from different teams to be able to collaborate efficiently. How will you determine what the best collaboration tools are for their needs?

Answer: The first step in evaluation is to determine what the collaboration challenges are and to locate the firm in the time/space matrix. Secondly, for each block of the matrix that the firm is in, determine what solutions are available from which vendors. Third, analyze the products in terms of their costs and benefits to the firm. Next, identify any risks involved with using the product.

Then, seek the help of potential users to identify implementation and training issues. Finally, make a shortlist of tools and invite vendors to make presentations.

Page Ref: 63-67 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 2.3: Why are systems for collaboration and social business so important and what technologies do they use?

79) The principal liaison between the information systems groups and the rest of the organization is a(n) A) programmer.

B) information systems manager.

C) systems analyst.

D) CTO. E) CIO. Answer: C Page Ref: 67 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

80) A ________ is a senior manager who oversees the use of IT in the firm.

A) CEO B) CFO C) CIO D) CTO E) CKO Answer: C Page Ref: 67 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

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81) An information systems manager A) writes software instructions for computers.

B) acts as liaison between the information systems group and the rest of the organization.

C) translates business problems into information requirements.

D) manages data entry staff.

E) oversees the company's security policy.

Answer: D Page Ref: 67 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

82) The ________ helps design programs and systems to find new sources of knowledge or to make better use of existing knowledge in organizational and management processes.

A) CTO B) CSO C) CKO D) CPO E) CEO Answer: C Page Ref: 68 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

83) Which of the following is a firm's CPO responsible for?

A) ensuring that the company complies with existing data privacy laws B) making better use of existing knowledge in organizational and management processes C) enforcing the firm's information security policy D) overseeing the use of information technology in the firm E) acting as liaison between the information systems group and the rest of the company Answer: A Page Ref: 68 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

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84) A TPS is an information system that keeps track of all of the daily routine transactions of a business.

Answer: TRUE Page Ref: 46 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

85) An inventory control system is an example of an MIS. Answer: FALSE Page Ref: 48 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 2.4: What is the role of the information systems function in a business?

86) MIS job growth is projected to be 50% greater than other jobs in the next five years.

Answer: TRUE Page Ref: 68 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

87) The people who write an information system application's software instructions or code are called ________.

Answer: programmers Page Ref: 67 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

88) The people for whom information systems applications are developed are referred to as ________.

Answer: end users Page Ref: 68 Difficulty: Easy AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

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89) IT ________ refers to the overall decision-making that guides the IT strategy of a firm.

Answer: governance Page Ref: 69 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 2.4: What is the role of the information systems function in a business?

90) Describe the role of IT governance within the firm.

Answer: IT governance is the management of how the information systems function is organized and handled within the firm. IT governance includes the strategy and policies for using information technology within an organization. It specifies the decision rights and framework for accountability to ensure that the use of information technology supports the organization's strategies and objectives. For example, IT governance decides how decisions implementing and evaluating new systems are made, whether the IT function should be decentralized or centralized, who has power to create and manage systems, and what kind of ROI is expected from systems.

Page Ref: 69 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 2.4: What is the role of the information systems function in a business?

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Management Information Systems, 14e (Laudon) Chapter 3 Information Systems, Organizations, and Strategy 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.

Answer: B Page Ref: 82 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

2) 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 Answer: E Page Ref: 82 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

3) 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 Answer: A Page Ref: 82 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

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4) 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.

Answer: E Page Ref: 83 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

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) goals D) agency costs E) leadership styles Answer: D Page Ref: 84 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

6) Business processes are collections of A) informal practices and behaviors.

B) formalized and documented practices.

C) business rules.

D) rights and privileges.

E) routines.

Answer: E Page Ref: 84 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

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7) All of the following are considered disruptive technologies except A) instant messaging.

B) e-mail.

C) Internet telephony.

D) PCs. E) smartphones.

Answer: A Page Ref: 87 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

8) 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.

Answer: C Page Ref: 88 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

9) 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 Answer: A Page Ref: 88 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

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10) An example of a divisionalized bureaucracy is a A) startup firm.

B) university.

C) Fortune 500 firm.

D) midsize manufacturer.

E) consulting firm.

Answer: C Page Ref: 88 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

11) 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 Answer: E Page Ref: 82 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

12) 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.

Answer: B Page Ref: 84 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

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13) ________ technologies radically change the business landscape and environment.

A) Explosive B) Inventive C) Disruptive D) Subversive E) Divisive Answer: C Page Ref: 87 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

14) Some organizations lack bedrock, unassailable assumptions that define their goals and products.

Answer: FALSE Page Ref: 85 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

15) A professional bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.

Answer: TRUE Page Ref: 88 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

16) Routines are also called standard operating procedures.

Answer: TRUE Page Ref: 84 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

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17) How are the technical and behavioral definitions of an organization different?

Answer: The behavioral definition of an organization is that it is a collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution. The technical definition sees an organization as an entity that takes inputs from the environment and processes these to create products that are then consumed by the environment. The technical view sees capital and labor as interchangeable units, with the ability to rearrange these units at will, whereas the behavioral view sees that rearranging some aspects of the organization, such as an information system, will have important consequences and changes for the organization's other units.

Page Ref: 82-83 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.1: Which features of organizations do managers need to know about to build and use information systems successfully?

18) 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.

Answer: E Page Ref: 89 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.2: What is the impact of information systems on organizations?

19) 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.

Answer: A Page Ref: 89-90 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.2: What is the impact of information systems on organizations?

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20) 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.

Answer: D Page Ref: 90 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 3.2: What is the impact of information systems on organizations?

21) 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.

Answer: D Page Ref: 93 Difficulty: Difficult AACSB: Information technology CASE: Analysis LO: 3.2: What is the impact of information systems on organizations?

22) 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.

Answer: TRUE Page Ref: 89 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 3.2: What is the impact of information systems on organizations?

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23) List three organizational factors that can prevent a firm in fully realizing the benefits of a new information system, and provide examples for each.

Answer: Features of organizations include the organization's culture, politics, and structure. A new information system might be resisted by end users or by managers for political reasons because they are concerned about the political changes the system implies. For example, a new system might lessen the authority of a manager in overseeing the employees, and he or she may not want to relinquish this power. A new information system might challenge the organization's culture and be resisted for this reason. For example, an information system might allow students at a university to take self-managed courses, while the university's basic cultural assumptions include the concept that professors are the purveyors of knowledge. An information system, by allowing the distribution of knowledge, may be better used in a company with a flatter organization. A company with a highly stratified hierarchy may have difficulty adjusting its business processes and structures to an information system that does not follow the same business hierarchy of information.

Page Ref: 91-93 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 3.2: What is the impact of information systems on organizations?

24) 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 Answer: A Page Ref: 79-80 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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25) 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 Answer: B Page Ref: 94 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

26) Which of the following industries has a low barrier to entry?

A) automotive B) computer chip C) national retailer D) airline E) restaurant Answer: E Page Ref: 94-95 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

27) All of the following are competitive forces except A) suppliers.

B) new market entrants.

C) external environment.

D) customers.

E) substitute products.

Answer: C Page Ref: 94-95 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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28) 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 Answer: D Page Ref: 94-95 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

29) 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.

Answer: A Page Ref: 95 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

30) 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.

Answer: E Page Ref: 116-118 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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31) 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.

Answer: A Page Ref: 96 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

32) 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.

Answer: A Page Ref: 96 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

33) 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.

Answer: B Page Ref: 96 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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34) 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.

Answer: E Page Ref: 96 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

35) 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 Answer: B Page Ref: 97 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

36) 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.

Answer: E Page Ref: 97 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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37) 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.

Answer: C Page Ref: 86-87 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

38) 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.

Answer: E Page Ref: 98-99 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

39) 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.

Answer: D Page Ref: 97 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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40) 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.

Answer: E Page Ref: 99 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

41) 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.

Answer: C Page Ref: 103 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

42) All of the following industries have been disrupted by the Internet except A) encyclopedias.

B) newspapers.

C) music.

D) air travel.

E) clothing.

Answer: E Page Ref: 103 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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43) 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.

Answer: C Page Ref: 103 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

44) 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.

Answer: D Page Ref: 103 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

45) 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 Answer: A Page Ref: 104 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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46) 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 Answer: E Page Ref: 104 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

47) 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.

Answer: A Page Ref: 105 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

48) 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 Answer: D Page Ref: 105 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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49) 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 Answer: A Page Ref: 105 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

50) 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.

Answer: C Page Ref: 106 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

51) 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.

Answer: E Page Ref: 107 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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52) 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.

Answer: B Page Ref: 107 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

53) 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 Answer: D Page Ref: 107 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

54) 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.

Answer: B Page Ref: 108 Difficulty: Easy AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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55) 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.

Answer: C Page Ref: 107-108 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

56) 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.

Answer: A Page Ref: 108 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

57) 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.

Answer: A Page Ref: 109 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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58) ________ 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 Answer: A Page Ref: 95-96 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

59) 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.

Answer: D Page Ref: 100 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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60) 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 Answer: B Page Ref: 103 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

61) 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 Answer: E Page Ref: 104 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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62) 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 Answer: C Page Ref: 106 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

63) 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 Answer: E Page Ref: 107 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

64) A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.

Answer: TRUE Page Ref: 94 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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65) 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 Page Ref: 94 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

66) Customers are one of the competitive forces that affect an organization's ability to compete.

Answer: TRUE Page Ref: 95 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

67) High product differentiation is a sign of a transparent marketplace.

Answer: FALSE Page Ref: 95 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

68) The effect of the Internet has been to decrease the bargaining power of customers.

Answer: FALSE Page Ref: 103 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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69) An efficient customer response system directly links consumer behavior to distribution and production and supply chains.

Answer: TRUE Page Ref: 97 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

70) Information systems are used to enable new products and services via product differentiation.

Answer: TRUE Page Ref: 97 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

71) Mass customization offers individually tailored products or services using the same resources as mass production.

Answer: TRUE Page Ref: 97 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

72) Switching costs increase when customers are strongly linked to products and platforms.

Answer: TRUE Page Ref: 100 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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73) The value chain model classifies all company activities as primary activities.

Answer: FALSE Page Ref: 103-104 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

74) 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 Page Ref: 104 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

75) 'Synergies' occur when the output of some units in a firm can be used as inputs to other units, lowering cost and generating profits.

Answer: TRUE Page Ref: 107 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

76) In a demonstration of network economics, the more people that use eBay's site, the greater the value of the site.

Answer: TRUE Page Ref: 108 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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77) The term business ecosystem describes the loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers.

Answer: TRUE Page Ref: 109 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

78) You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Smalltown Computer exert? Which ones will it have difficulty exercising?

Answer: Low-cost leadership: Smalltown Computer may have difficulty competing against the warranty services or computer sales of major national computer manufacturers, such as Dell, but may be able to exercise low-cost leadership in comparison to any other local computer repair stores.

Product differentiation: Although many national computer manufacturers sell customized computers to the individual, Smalltown computer may be able to differentiate their product by using superior components and adding more services to their product.

Focus on market niche: Smalltown computer could determine a market niche geared to their advantage in being a local store with in-store technology support and assistance.

Customer and supplier intimacy: Smalltown computer has an advantage in customer intimacy, in that it can develop relationships with local customers on a face-to-face basis. This advantage could be augmented to offset the low-cost leadership of national manufacturers, such as Dell.

Because of much smaller production scales, Smalltown will probably not be able to exercise as much control over suppliers as Dell or other manufacturers.

Page Ref: 96-98 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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79) You are consulting with the owner of Better Bodies, a national chain of gyms. What strategies might Better Bodies use in applying information services to achieve a competitive advantage?

Answer: Better Bodies could use computers to monitor and evaluate health and fitness of members and customize workouts in product differentiation strategy. They could use information systems for sales and marketing data research in order to define a niche market that would bring greater profits. They could allow customers to review their health data and add additional information or view statistics to create customer intimacy. If the individual gyms are franchises, then a network could be used for franchisees to share data and research new sales tactics, etc.

Page Ref: 96-98 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

80) The text describes Michael Porter's view of the Internet as somewhat negative. What negative influences does Porter see? Describe several positive influences the Internet has on business. Do these outweigh the negative influences?

Answer: Answers will vary. An example of a possible answer is: Porter sees the Internet as creating ever more intense rivalry, through allowing new competitors to enter the market, and forcing competition on price alone, raising the bargaining power of customers, and dampening profits.

Positive influences of the Internet would be lowering telecommunications costs, creating new opportunities for building brands and loyal customer bases, lowering costs of globalization. You could also view Porter's negative take on lowering the barrier to entry as a positive for new companies.

The Internet's influence being negative or positive depends in part on the point of view from which the influence is being seen. For example, a telephone utility is impacted negatively by the emergence of Internet telephony, whereas other industries may be impacted positively either through the use of this technology or through engaging in Internet telephony as a business.

Page Ref: 98-101 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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81) Value chain analysis is useful at the business level to highlight specific activities in the business where information systems are most likely to have a strategic impact. Discuss this model, identify the activities, and describe how the model can be applied to the concept of information technology.

Answer: The value chain model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive positions. Exactly where can it obtain the greatest benefit from strategic information systems? What specific activities can be used to create new products and services, enhance market penetration, lock in customers and suppliers, and lower operational costs? This model views the firm as a series or chain of basic activities that add a margin of value to a firm's products or services. These activities can be categorized as either primary activities or support activities.

• Primary activities are most directly related to the production and distribution of the firm's products and services that create value for the customer. Primary activities include: inbound logistics, operations, outbound logistics, sales and marketing, and service.

• Support activities make the delivery of the primary activities possible and consist of: organization infrastructure (administration and management), human resources (employee recruiting, hiring, and training), technology (improving products and the production process), and procurement (purchasing input).

Page Ref: 103-105 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

82) How is the concept of core competency relevant to Smalltown Computer, a local computer repair store that builds custom computers? Give examples.

Answer: A core competency is an activity for which a company is a world leader, and from this perspective, Smalltown Computer does not have a core competency, as there are thousands of similar firms with longer track records. However, it might be good business practice for Smalltown Computer to define its core competencies in ways that differentiate its products from those of competitors and enable it to provide superior service or products. In defining a core competency, the business management can then determine ways to enable employees to understand and reach higher levels of quality production and service. For example, Smalltown Computer might define a core competency as being able to advise customers as to the types of system they really need, and Smalltown Computer could engage in knowledge gathering activities to help employees assess customer need.

Page Ref: 107 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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83) How is Internet technology useful from a network economics perspective? Give examples.

Answer: In network economics, the cost of adding a participant in the network is negligible, while the gain in value is relatively much larger. The Internet itself is an example of a successful implementation of network economics—the more people participate, the more valuable and essential a commodity it is. If a company were to provide a service through the Internet such as a project management application, the costs to the company of adding another user are small (as the software infrastructure or application is already built), and the more users are signed up, the more profit is made.

Page Ref: 107 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

84) Define and describe a business ecosystem. Give an example of a business ecosystem.

Answer: A business ecosystem is a collection of loosely coupled but interdependent industries (suppliers, distributors, technology manufacturers, etc.) that provides related services and products. It is similar to a value web, except that cooperation takes place across many industries rather than many firms.

Business ecosystems can be characterized as having one or a few keystone firms that dominate the ecosystem and create the platforms used by other niche firms. Keystone firms in the Microsoft ecosystem include Microsoft and technology producers such as Intel and IBM. Niche firms include thousands of software application firms, software developers, service firms, networking firms, and consulting firms that both support and rely on the Microsoft products.

Another example of a business ecosystem is the mobile Internet platform. In this ecosystem there are four industries: device makers (Apple iPhone, RIM BlackBerry, Motorola, LG, and others), wireless telecommunication firms (AT&T, Verizon, T-Mobile, Sprint, and others), independent software applications providers (generally small firms selling games, applications, and ring tones), and Internet service providers (who participate as providers of Internet service to the mobile platform).

Page Ref: 108-109 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 3.3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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85) 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.

Answer: B Page Ref: 110 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 3.4: What are the challenges posed by strategic information systems and how should they be addressed?

86) 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.

Answer: C Page Ref: 111 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 3.4: What are the challenges posed by strategic information systems and how should they be addressed?

87) 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.

Answer: B Page Ref: 112 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 3.4: What are the challenges posed by strategic information systems and how should they be addressed?

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88) Research has shown that a majority of firms are able to align their information technology with their business goals.

Answer: FALSE Page Ref: 111 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 3.4: What are the challenges posed by strategic information systems and how should they be addressed?

89) The use of Internet technologies allows companies to more easily sustain competitive advantage.

Answer: FALSE Page Ref: 111 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 3.4: What are the challenges posed by strategic information systems and how should they be addressed?

90) What are the major factors to consider when performing a strategic systems analysis?

Answer: One major factor is the structure of the industry the firm is in. For example, what competitive forces are at work in the industry, and what is the basis for competition? What is the nature and direction of change in the industry, and how does the industry use IT? A second major factor is determining the firm and industry value chains. For example, how is the company creating value for the customer? Are best practices being used and core competencies leveraged? Is the industry supply chain or customer base changing, and what will the effect be?

Can the firm benefit from strategic partnerships or value webs? And where in the value chain will information systems provide the greatest value to the firm?

The third major factor to consider is has the firm aligned IT with its business strategy and goals.

Have these goals been correctly stated or defined? Is IT improving the right business processes and activities in accordance with the firm's goals? Are we using the right metrics to measure progress?

Page Ref: 111 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 3.4: What are the challenges posed by strategic information systems and how should they be addressed?

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Management Information Systems, 14e (Laudon) Chapter 4 Ethical and Social Issues in Information Systems 1) Which of the following best describes how new information systems result in legal gray areas?

A) They work with networked, electronic data, which are more difficult to control than information stored manually.

B) They result in new situations that are not covered by old laws.

C) They are implemented by technicians rather than managers.

D) They are created from sets of logical and technological rules rather than social or organizational mores.

E) They are little understood by politicians or lawyers.

Answer: B Page Ref: 128 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Analysis in terms of assess LO: 4.1: What ethical, social, and political issues are raised by information systems?

2) Which of the following best describes the effect that new information technology has on society?

A) It has a dampening effect on the discourse of business ethics.

B) It has a ripple effect, raising new ethical, social, and political issues.

C) It is beneficial for society as a whole, while raising dilemmas for consumers.

D) It has a waterfall effect in raising ever more complex ethical issues.

E) It has a magnifying effect, creating increasing numbers of ethical issues.

Answer: B Page Ref: 127 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.1: What ethical, social, and political issues are raised by information systems?

3) The moral dimension of ________ can be described as the obligations that individuals and organizations have concerning rights to intellectual property.

A) property rights and obligations B) system quality C) accountability and control D) information rights and obligations E) quality of life Answer: A Page Ref: 128 Difficulty: Easy AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.1: What ethical, social, and political issues are raised by information systems?

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4) In the information age, the obligations that individuals and organizations have regarding the preservation of existing values and institutions fall within the moral dimension of A) family and home.

B) property rights and obligations.

C) system quality.

D) accountability and control.

E) quality of life.

Answer: E Page Ref: 128 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.1: What ethical, social, and political issues are raised by information systems?

5) Which of the following is not one of the current key technology trends that raises ethical issues?

A) data storage improvements B) data analysis advancements C) increase in multimedia quality D) increase in use of mobile devices E) advances in networking technology Answer: C Page Ref: 129 Difficulty: Easy AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.1: What ethical, social, and political issues are raised by information systems?

6) The central business activities of ChoicePoint raise which of the five moral dimensions?

A) property rights and obligations B) system quality C) accountability and control D) quality of life E) information rights and obligations Answer: E Page Ref: 129 Difficulty: Difficult AACSB: Ethical understanding and reasoning CASE: Analysis in terms of appraise LO: 4.1: What ethical, social, and political issues are raised by information systems?

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7) The routine violation of individual privacy is made more difficult by advances in data storage.

Answer: FALSE Page Ref: 128 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 4.1: What ethical, social, and political issues are raised by information systems?

8) In today's legal environment, business managers who violate the law through the misuse of information systems are still unlikely to be fully prosecuted.

Answer: FALSE Page Ref: 125 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.1: What ethical, social, and political issues are raised by information systems?

9) Identify the five moral dimensions that are involved in political, social, and ethical issues and briefly describe each. Of these, which do you think is the most difficult for society to deal with?

Support your opinion.

Answer: The five moral dimensions are: (1) Information rights and obligations. What rights do individuals and organizations have with respect to information pertaining to them?

(2) Property rights and obligations. How can intellectual property rights be protected when it is so easy to copy digital materials?

(3) Accountability and control. Who will be held accountable and liable for the harm done to individual and collective information and property rights?

(4) System quality. What standards of data and system quality should we demand to protect individual rights and the safety of society?

(5) Quality of life. What values should be preserved? What institutions must we protect? What cultural values can be harmed?

Individual answers for determining the most difficult for society to deal with will vary. One answer might be: Quality of life issues will be most difficult for society to deal with in societies that are comprised of many different cultural and ethnic groups, such as the United States. It is difficult to regulate concerns that are based on subjective values.

Page Ref: 128 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 4.1: What ethical, social, and political issues are raised by information systems?

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10) Describe three technology trends that pose ethical issues, giving an example for each of its ethical or moral impact.

Answer: Key technology trends include the following: (1) Computer power doubling every 18 months: ethical impact—because more organizations depend on computer systems for critical operations, these systems are vulnerable to computer crime and computer abuse; (2) Data storage costs are rapidly declining: ethical impact—it is easy to maintain detailed databases on individuals—who has access to and control of these databases?; (3) Data analysis advances: ethical impact—vast databases full of individual information may be used to develop detailed profiles of individual behavior; and (4) Networking advances and the Internet: ethical impact—it is easy to copy data from one location to another. Who owns data? How can ownership be protected?; (5) Mobile device growth impact: ethical impact—individual cell phones may be tracked without user consent or knowledge.

Page Ref: 128-129 Difficulty: Moderate AACSB: Written and oral communication CASE: Synthesis in terms of applying LO: 4.1: What ethical, social, and political issues are raised by information systems?

11) ________ means that you accept the potential costs and obligations for the decisions you make.

A) Responsibility B) Accountability C) Liability D) Due process E) Duty Answer: A Page Ref: 131 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

12) ________ is a feature of social institutions that means mechanisms are in place to determine responsibility for an action.

A) Due process B) Accountability C) The courts of appeal D) The judicial system E) Liability Answer: B Page Ref: 131-132 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

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13) ________ is a societal practice of having laws that are known and understood, along with the ability to appeal to higher authorities to ensure that the laws are applied correctly.

A) Liability B) Due process C) The courts of appeal D) Accountability E) The judicial system Answer: B Page Ref: 133 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

14) As discussed in the chapter, all of the following are steps in the process for analyzing an ethical issue except A) assigning responsibility.

B) identifying the stakeholders.

C) identifying the options you can reasonably take.

D) identifying and clearly describing the facts.

E) identifying the potential consequences of your options.

Answer: A Page Ref: 134 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

15) A peer at work takes small amounts of office supplies for her own use at home, saying that this is a tiny loss to the company. You tell her that if everyone were to take office supplies, then the loss would no longer be minimal. Your rationale expresses which historical ethical principle?

A) Kant's Categorical Imperative B) The Golden Rule C) The Risk Aversion Principle D) The "No free lunch" rule E) The slippery-slope rule Answer: A Page Ref: 134 Difficulty: Difficult AACSB: Ethical understanding and reasoning CASE: Analysis in terms of categorize LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

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16) A man steals from a grocery store in order to feed his starving family. Which of the following best expresses the Utilitarian Principle in evaluating this situation?

A) His action is acceptable, because the grocer suffers the least harm.

B) His action is acceptable, because the higher social value is the survival of the family.

C) His action is wrong, because the man would not want the grocer to steal from him.

D) His action is wrong, because if everyone were to do this, the concept of personal property is defeated.

E) His action is wrong, because the grocery store owner is harmed.

Answer: B Page Ref: 135 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Analysis in terms of categorize LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

17) Which of the following describes Immanuel Kant's Categorical Imperative?

A) If an action cannot be taken repeatedly, then it is not right to be taken at any time.

B) One should take the action that produces the least harm or incurs the least cost.

C) One can put values in rank order and understand the consequences of various courses of action.

D) If an action is not right for everyone to take, it is not right for anyone to take.

E) You should act towards others as you would like them to act towards you.

Answer: D Page Ref: 135 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

18) The ethical "no free lunch" rule states that A) if an action cannot be taken repeatedly, then it is not right to be taken at any time.

B) one should take the action that produces the least harm or incurs the least cost.

C) one can put values in rank order and understand the consequences of various courses of action.

D) everything is owned by someone else, and that the creator wants compensation for this work.

E) anything of value should not be taken.

Answer: D Page Ref: 135 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

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19) Taking the action that produces the least harm best describes the A) Categorical Imperative.

B) Risk Aversion Principle.

C) Utilitarian Principle.

D) Golden Rule.

E) "no free lunch" rule.

Answer: B Page Ref: 135 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

20) As per the ________, if an action cannot be taken repeatedly, it is not right to take at all.

A) slippery-slope rule B) lemming rule C) high-failure cost rule D) utilitarian principle E) Golden Rule Answer: A Page Ref: 135 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

21) Identifying the stakeholders—people who have a vested interest in the outcome of the decision—is the last step in analyzing an ethical issue.

Answer: FALSE Page Ref: 134 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

22) Because of their special claims to knowledge, wisdom, and respect, professionals take on special rights and obligations.

Answer: TRUE Page Ref: 135 Difficulty: Easy AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

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23) The European Parliament has yet to ban unsolicited commercial messaging.

Answer: FALSE Page Ref: 154 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

24) Ethics describes the principles of right and wrong that can be used by individuals to make choices to guide their behavior.

Answer: TRUE Page Ref: 126 Difficulty: Easy AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

25) Liability is a feature of political systems and allows individuals to recover damages done to them by others.

Answer: TRUE Page Ref: 133 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

26) The ethical guideline that asks you to put yourself in the place of others, and think of yourself as the object of the decision, is called the Utilitarian Principle.

Answer: FALSE Page Ref: 135 Difficulty: Difficult AACSB: Ethical understanding and reasoning CASE: Comprehension LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

27) What are the steps in conducting an ethical analysis?

Answer: The steps are: (1) Identify and describe clearly the facts; (2) define the conflict or dilemma and identify the higher-order values involved; (3) identify the stakeholders; (4) identify the options that you can reasonably take; and (5) identify the potential consequences of your options.

Page Ref: 134 Difficulty: Easy AACSB: Ethical understanding and reasoning CASE: Analysis in terms of organize LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

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28) Identify and discuss the six ethical principles discussed in the chapter.

Answer: The six ethical principles are the Golden Rule, Kant's Categorical Imperative, Descartes' rule of change (slippery slope), the Utilitarian Principle, the Risk Aversion Principle, and the "no free lunch" rule. The Golden Rule proposes: do unto others as you would have them do unto you. Immanuel Kant's Categorical Imperative proposes, if an action is not right for everyone to take, it is not right for anyone. Descartes' rule of change says: If an action cannot be taken repeatedly, it is not right to take at all. The Utilitarian Principle is: Take the action that achieves the higher or greater value. The Risk Aversion Principle is: Take the action that produces the least harm or the least potential cost. The ethical "no free lunch" rule says: Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise. Tangible objects are owned by someone else unless there is a specific declaration otherwise.

Page Ref: 134-135 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Analysis in terms of summarize LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

29) Define the basic concepts of responsibility, accountability, and liability as applied to ethical decisions. How are these concepts related?

Answer: Responsibility is the first key element of ethical action. Responsibility means that an individual, group, or organization accepts the potential costs, duties, and obligations for decisions made. Accountability is a feature of systems and social institutions. It means that mechanisms are in place to determine who took responsible action; i.e., who is responsible for the action. Liability is a feature of political systems in which a body of law is in place that permits individuals to recover the damages done to them by others.

These concepts are related as follows: I will assume the blame or benefit for the actions I take (responsibility); this blame or benefit accrues to me through the requirement that I be able to explain why I have taken the actions I have (accountability) for actions traceable to me by defined mechanisms in the organization, and if those actions result in harm to another, I will be held by law to reparations for those actions (liability).

Page Ref: 131-133 Difficulty: Difficult AACSB: Ethical understanding and reasoning CASE: Analysis in terms of examine LO: 4.2: What specific principles for conduct can be used to guide ethical decisions?

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30) ________ is the use of computers to assemble data from different sources to create electronic dossiers of detailed information about individuals.

A) Profiling B) Phishing C) Spamming D) Targeting E) Spyware Answer: A Page Ref: 129 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

31) ________ is a new data analysis technology that finds hidden connections between data in disparate sources.

A) HIPAA B) FIP C) NORA D) COPPA E) Spyware Answer: C Page Ref: 130 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

32) In 2010, the FTC added all of the following recommendations to its privacy guidelines except A) firms should build products and services that protect privacy.

B) firms should increase the transparency of their data collection.

C) firms should require consumer consent and provide clear options to opt out of data collection.

D) firms should limit the length of time that any personal data is stored to six months or less.

E) consumers should be able to review and contest the accuracy and completeness of data.

Answer: D Page Ref: 137 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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33) ________ restricts the information that the U.S. federal government can collect about an individual and regulates what it can do with the information.

A) The Privacy Act of 1974 B) The Gramm-Leach-Bliley Act of 1999 C) The Freedom of Information Act D) The FIP set of principles E) COPPA Answer: A Page Ref: 136 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

34) Which of the following best describes the basis for the FIP principles?

A) the accountability of the record holder B) the responsibility of the record holder C) the mutuality of interest between the record holder and the individual D) the privacy of the individual E) the difference between the interests of the individual and commercial organizations Answer: C Page Ref: 136 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

35) The Federal Trade Commission FIP principle of Notice/Awareness states that A) customers must be allowed to choose how their information will be used for secondary purposes other than the supporting transaction.

B) data collectors must take responsible steps to assure that consumer information is accurate and secure from unauthorized use.

C) there must be a mechanism in place to enforce FIP principles.

D) consumers should be able to review the data collected about them.

E) Web sites must disclose their information practices before collecting data.

Answer: E Page Ref: 137 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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36) Which of the following U.S. laws gives patients access to personal medical records and the right to authorize how this information can be used or disclosed?

A) HIPAA B) Gramm-Leach-Bliley Act C) Privacy Protection Act D) Freedom of Information Act E) COPPA Answer: A Page Ref: 138 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

37) Privacy protection in the United States is ________ in Europe.

A) more far reaching than B) more liable to laws than C) much more stringent than D) much less stringent than E) at about the same level of strictness as Answer: D Page Ref: 139 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

38) U.S. businesses are allowed to use personal data from EU countries if they A) have informed consent.

B) create a safe harbor.

C) develop equivalent privacy protection policies.

D) make their privacy protection policies publicly available.

E) register their activities with a central EU government databank.

Answer: C Page Ref: 139 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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39) Cookies created during Web site visits are stored A) on the Web site's server.

B) on the user's computer.

C) on servers owned by advertising networks.

D) in the browser's application settings.

E) nowhere, because they are only used during a visit and are discarded once a visitor leaves the Web site.

Answer: B Page Ref: 140 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

40) The ________ framework developed by the U.S. Department of Commerce allows U.S. businesses to legally use personal data from EU countries.

A) COPPA B) P3P C) PGP D) bilateral E) safe-harbor Answer: E Page Ref: 139 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

41) The Online Privacy Alliance A) encourages self regulation to develop a set of privacy guidelines for its members.

B) protects user privacy during interactions with Web sites.

C) has established technical guidelines for ensuring privacy.

D) is a government agency regulating the use of customer information.

E) is a lobbying organization promoting the online privacy interests of consumers.

Answer: A Page Ref: 143 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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42) In the ________ model of informed consent, personal information can be collected until the consumer specifically requests that his or her data not be collected.

A) opt-in B) opt-out C) P3P D) PGP E) IPA Answer: B Page Ref: 143 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

43) Which of the following is not one of the types of information gathered by Web site tracking tools?

A) health concerns B) birthplace C) income D) purchases E) marital status Answer: B Page Ref: 141 Difficulty: Moderate AACSB: Information technology CASE: Analysis in terms of examine LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

44) The limitation of trade secret protection for software is that it is difficult to prevent the ideas in the work from falling into the public domain when A) the courts become involved.

B) hackers are able to break into the source code.

C) the software is widely distributed.

D) a new version of the software is released.

E) the software's programming code is released.

Answer: C Page Ref: 145 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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45) Which of the following best describes intellectual property?

A) intangible property created by individuals or corporations B) unique creative work or ideas C) tangible or intangible property created from a unique idea D) the expression of an intangible idea E) any tangible or intangible property within the creative arts Answer: A Page Ref: 145 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

46) ________ protects the creators of intellectual property from having their work copied by others.

A) Patent protection B) Intellectual property law C) Copyright law D) Fair Use Doctrine E) Trade Secret law Answer: C Page Ref: 145 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

47) "Look and feel" copyright infringement lawsuits are concerned with A) the distinction between tangible and intangible ideas.

B) the distinction between an idea and its expression.

C) using the graphical elements of another product.

D) using the creative elements of another product.

E) preventing the use of another product's graphical user interface.

Answer: B Page Ref: 145 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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48) The strength of patent protection is that it A) puts the strength of law behind copyright.

B) allows protection from Internet theft of ideas put forth publicly.

C) is easy to define.

D) provides a clear distinction between software and books.

E) grants a monopoly on underlying concepts and ideas.

Answer: E Page Ref: 146 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

49) One of the drawbacks of patent protection is A) that only the underlying ideas are protected.

B) digital media cannot be patented.

C) preventing the ideas from falling into public domain.

D) the years of waiting to receive it.

E) the limited period of protection.

Answer: D Page Ref: 146 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

50) The ________ brought copyright law to the Internet age by outlawing the circumvention of technology-based protections of copyrighted materials.

A) Digital Millennium Copyright Act B) Privacy Act C) Freedom of Information Act D) Electronic Communications Privacy Act E) Computer Software Copyright Act Answer: A Page Ref: 147 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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51) Unlike regular browser cookies, Flash cookies A) are installed only at the user's request.

B) are not stored on the user's computer.

C) cannot be easily detected or deleted.

D) monitor the user's behavior at a Web site.

E) are able to track much more of the user's personal information Answer: C Page Ref: 140 Difficulty: Moderate AACSB: Information technology CASE: Analysis in terms of compare LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

52) ________ enables advertisers to display more relevant ads based on user's search and browsing history.

A) Behavioral targeting B) A Web bug C) NORA D) An intelligent agent E) FIP Answer: A Page Ref: 141 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

53) ________ prohibits an organization from collecting any personal information unless the individual specifically takes action to approve information collection and use.

A) A legal safe harbor B) The opt-in model C) The FIP set of guidelines D) P3P Answer: B Page Ref: 143 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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54) Which legal mechanism grants the owner exclusive ownership of the ideas behind an invention for 20 years?

A) copyright B) trademark C) patent D) trade secret protection Answer: C Page Ref: 146 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

55) A Facebook users' visit to a Web site can be tracked even if they do not click a Like button.

Answer: TRUE Page Ref: 141 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

56) Malicious software that is installed secretly on your computer by other applications and that tracks your online movements is called spyware.

Answer: TRUE Page Ref: 142 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

57) Most Internet businesses do very little to protect the privacy of their customers.

Answer: TRUE Page Ref: 144 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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58) The rate of global piracy is approximately 42%.

Answer: TRUE Page Ref: 147 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

59) Any intellectual work product that isn't based on public knowledge can be classed as a trade secret.

Answer: TRUE Page Ref: 145 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

60) Copyright is the legal protection afforded intellectual property, including drawings, movies, and maps.

Answer: TRUE Page Ref: 145 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

61) Software programs were unprotected by copyright law until the early 1990s.

Answer: FALSE Page Ref: 145 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

62) The problem with Web browsers' Do Not Track options is that Web sites aren't obligated to honor these settings.

Answer: TRUE Page Ref: 144 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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63) According to several court findings, the general functional features of software are protected by copyright law.

Answer: FALSE Page Ref: 146 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

64) One of the key concepts in patent law is novelty.

Answer: TRUE Page Ref: 146 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

65) In recent years, the illegal sharing of music files has declined with the improvement of technological prevention.

Answer: TRUE Page Ref: 147 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

66) COPPA is a set of five principles developed by the FTC that most American and European privacy law is based on.

Answer: FALSE Page Ref: 137 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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67) Although online tracking gathers an enormous amount of information on individual users, it is anonymous and can't be tied to a specific person.

Answer: FALSE Page Ref: 141 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

68) Web beacons are tiny, invisible software programs hidden in e-mail messages and Web pages that are used to track and report a user's online behavior.

Answer: TRUE Page Ref: 140 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

69) What are the major issues concerning privacy in the information age? Do you believe the need for homeland security should overrule some of the personal privacy and information rights we have previously taken for granted? Why or why not?

Answer: One answer might be that we should depend upon the Federal Trade Commission Fair Information Practice Principles and that as long as these principles are not ignored or overset, personal privacy does not conflict with homeland security. This is a weak argument. Other issues involve online privacy, employee monitoring, tradeoffs between security and privacy and good business results versus privacy.

Page Ref: 136-144 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Evaluation in terms of assess LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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70) Describe how a cookie works.

Answer: A cookie works as follows: A user opens a Web browser and selects a site to visit. The user's computer sends a request for information to the computer running at the Web site. The Web site computer is called the server, since it allows the user's computer to display the Web site. At the same time it sends a cookie—a data file containing information like an encrypted user ID and information about when the user visited and what he did on the site. The user's computer receives the cookie and places it in a file on the hard drive. Whenever the user goes back to the Web site, the server running the site retrieves the cookie to help identify the user.

Page Ref: 140 Difficulty: Moderate AACSB: Information technology CASE: Analysis in terms of summarize LO: 4.3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

71) Key differences between software and books include all of the following except A) software contains more information than a book.

B) software is less easily inspected than a book.

C) software products are more easily compared to each other than books.

D) software is understood to be more fallible than a book.

E) it is more difficult to inspect software for flaws.

Answer: C Page Ref: 149 Difficulty: Easy AACSB: Analytical thinking CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

72) When a software product is considered ________, it becomes difficult to hold software producers liable for flaws in their product.

A) to be part of a machine B) similar to books C) a service D) to be an artistic expression E) a tangible product rather than a service Answer: B Page Ref: 149 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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73) ________ are not held liable for the messages they transmit.

A) Regulated common carriers B) Private individuals C) Organizations and businesses D) Elected officials E) European ISPs Answer: A Page Ref: 149 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

74) Companies can't realistically create error-free software because A) any programming code is susceptible to error.

B) it is too expensive to create perfect software.

C) errors can be introduced in the maintenance stage of development.

D) any software of any complexity will have errors.

E) many errors are brought on by the user's operating system.

Answer: B Page Ref: 150 Difficulty: Moderate AACSB: Information technology CASE: Analysis in terms of assess, compare LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

75) The most common reason business systems fail is A) software bugs.

B) software errors.

C) hardware failures.

D) facilities failures.

E) data quality.

Answer: E Page Ref: 150 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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76) Which of the following is a primary drawback to the "do anything anywhere" computing environment?

A) It makes work environments less pleasant.

B) It creates inequality between workers who have home computing power and those who don't.

C) It centralizes power at corporate headquarters.

D) It blurs the traditional boundaries between work and family time.

E) It leads to employees being paid less for the total amount of work performed.

Answer: D Page Ref: 151 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

77) Which of the following is the primary reason that the practice of spamming has grown exponentially?

A) Telephone solicitation is no longer legal.

B) It is good advertising practice and brings in many new customers.

C) It helps pay for the Internet.

D) It is very inexpensive and can reach so many people.

E) There are no legal preventions against it.

Answer: D Page Ref: 153 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

78) The U.S. CAN-SPAM Act of 2003 A) makes spamming illegal.

B) requires spammers to identify themselves.

C) has dramatically cut down spamming.

D) does not override state anti-spamming laws.

E) does not outlaw the use of fake return addresses.

Answer: B Page Ref: 154 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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79) Spamming raises the moral dimension of A) quality of life.

B) system quality.

C) accountability and control.

D) information rights and obligations.

E) property rights and obligations.

Answer: A Page Ref: 153 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Analysis in terms of assess LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

80) Re-designing and automating business processes can be seen as a double-edged sword because A) increases in efficiency may be accompanied by job losses.

B) increases in efficiency may be accompanied by poor data quality.

C) support for middle-management decision making may be offset by poor data quality.

D) reliance on technology results in the loss of hands-on knowledge.

E) senior executives may not approve the changes.

Answer: A Page Ref: 154 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Analysis in terms of assess LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

81) The extreme difference among different social groups regarding their access to computers and the Internet is called the ________ divide.

A) computer B) technology C) digital D) electronic E) Internet Answer: C Page Ref: 155 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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82) CVS refers to A) eyestrain related to computer display screen use.

B) a business practice that attempts to evaluate the intangible values of computer systems.

C) carpal vision syndrome.

D) a type of antivirus protection software.

E) wrist injuries brought about by incorrect hand position when using a keyboard.

Answer: A Page Ref: 156 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

83) Which of the following ailments is caused by tens of thousands of repetitions under lowimpact loads?

A) CTS B) CVS C) RSI D) technostress E) RSS Answer: C Page Ref: 155 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

84) Gaining unapproved access to a computer is not a federal crime.

Answer: FALSE Page Ref: 152 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

85) Spam is legally defined as any e-mail that is unsolicited.

Answer: FALSE Page Ref: 153 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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86) The symptoms of technostress include aggravation and hostility toward humans.

Answer: TRUE Page Ref: 156 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

87) Computer abuse refers to acts involving the computer that may not be illegal but are considered unethical.

Answer: TRUE Page Ref: 153 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

88) One of the capabilities of Internet communication is the ability of the individual to appear essentially anonymous by using made-up user names. Is anonymity the same thing as privacy, and should it be a right? What ethical issues are raised by increased anonymity?

Answer: Student answers will vary, but should include a definition of privacy and an attempt to differentiate between anonymity and privacy, as well as an understanding that anonymity can result in a breakdown of clear accountability or responsibility for actions. A sample answer is: Privacy is the claim to be left alone, free from surveillance. This is different from anonymity, in which nobody knows who you are or what actions you take even in a public arena. Some individuals, if they feel they are anonymous, may have lapses in ethical behavior because anonymity means they are no longer accountable for their actions. I don't know if anonymity should be a right, but perhaps anonymity should not be permissible for some types of communication.

Page Ref: 136-138 Difficulty: Difficult AACSB: Ethical understanding and reasoning CASE: Evaluation in terms of assess LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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89) What do you consider to be the primary ethical, social, and political issues regarding the quality of a software product?

Answer: Student answers will vary, but should include a description of the software manufacturer's responsibility in software quality and an understanding of the difference between social concerns (culture, lifestyle effects) and political concerns (legal, institutional effects). A sample answer is: The central quality-related ethical issue that software quality raises is what responsibility does a software manufacturer have in the performance of its software? At what point can the manufacturer conclude that its software achieves an adequate level of quality? The leading social issue raised by quality is: how is our society affected by low-quality software and is this a concern? And how much accountability should the software manufacturer have? The central political concern raised by software quality is whether and how to enforce software quality minimums and standards, and what institutions are thus also held accountable.

Page Ref: 149-150 Difficulty: Moderate AACSB: Ethical understanding and reasoning CASE: Synthesis in terms of devising LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

90) How does the use of electronic voting machines act as a "double-edged sword?" What moral dimensions are raised by this use of information technology?

Answer: Electronic voting machines can be seen as beneficial by making voting easy to accomplish and tabulate. However, it may be easier to tamper with electronic voting machines than with countable paper ballots. In terms of information rights, it seems possible that methods could be set up to determine how an individual has voted and to store and disseminate this knowledge. Manufacturers of voting machines claim property rights to the voting software, which means that if the software is protected from inspection, there is no regulation in how the software operates or how accurate it is. In terms of accountability and control, if an electronic voting system malfunctions, will it be the responsibility of the government, of the company manufacturing the machines or software, or the programmers who programmed the software?

The dimension of system quality raises questions of how the level of accuracy of the machines is to be judged and what level is acceptable? In terms of quality of life, while it may make voting easier and quicker, does the vulnerability to abuse of these systems pose a threat to the democratic principle of one person, one vote?

Page Ref: 148-153 Difficulty: Difficult AACSB: Ethical understanding and reasoning CASE: Synthesis in terms of applying LO: 4.4: How have information systems affected laws for establishing accountability, liability, and the quality of everyday life?

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Management Information Systems, 14e (Laudon) Chapter 5 IT Infrastructure and Emerging Technologies 1) Which type of infrastructure service provides voice and video connectivity to employees, customers, and suppliers?

A) networking B) telephone C) VOIP D) telecommunications E) data management Answer: D Page Ref: 170 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

2) Which of the following is not an IT infrastructure service component?

A) operating system software B) computing platforms to provide a coherent digital environment C) physical facilities management to manage the facilities housing physical components D) IT management services to plan and develop the infrastructure and provide project management E) IT education services that provide training to employees Answer: A Page Ref: 170-171 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

3) Specifications that establish the compatibility of products and the ability to communicate in a network are called A) network standards.

B) telecommunications standards.

C) technology standards.

D) Internet standards.

E) compatibility standards.

Answer: C Page Ref: 179 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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4) Which of the following is a leading networking hardware provider?

A) Dell B) Intel C) Seagate D) IBM E) Cisco Answer: E Page Ref: 184 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

5) Software that manages the resources of the computer is called A) operating system software.

B) application software.

C) data management software.

D) network software.

E) partitioning software.

Answer: A Page Ref: 182 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

6) A SAN is a ________ network.

A) server area B) storage area C) scalable architecture D) service-oriented architecture E) software arrangement Answer: B Page Ref: 183 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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7) As referred to in the text, legacy systems are A) systems that employ Unix.

B) electronic spreadsheets used on a PC. C) any pre-1990 Wintel systems.

D) systems found on older ASPs. E) traditional mainframe-based business information systems.

Answer: E Page Ref: 185 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

8) Legacy systems are still used because they A) can only be run on the older mainframe computers.

B) are too expensive to redesign.

C) integrate well using new Web services technologies.

D) contain valuable data that would be lost during redesign.

E) incorporate cloud technologies.

Answer: B Page Ref: 185 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

9) A(n)________ server is used to communicate between a Web server and an organization's back-end systems.

A) public server B) private server C) legacy server D) application server E) blade server Answer: D Page Ref: 174 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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10) ________ are computers consisting of a circuit board with processors, memory, and network connections that are stored in racks.

A) Mainframes B) Rack servers C) Cloud servers D) Hybrid servers E) Blade servers Answer: E Page Ref: 182 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

11) A primary example of centralized processing is client/server computing.

Answer: FALSE Page Ref: 173 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

12) In N-tier computing, significant parts of Web site content, logic, and processing are performed by different servers.

Answer: TRUE Page Ref: 174 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

13) Application server software is responsible for locating and managing stored Web pages.

Answer: FALSE Page Ref: 174 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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14) IT infrastructure consists of just those physical computing devices required to operate the enterprise.

Answer: FALSE Page Ref: 170 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

15) An application server may reside on the same computer as a Web server or on its own dedicated computer.

Answer: TRUE Page Ref: 174 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

16) The operating system is used to manage the computer's activities.

Answer: TRUE Page Ref: 182 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

17) SANs maintain a series of servers and provide fee-paying subscribers with space to maintain their Web sites.

Answer: FALSE Page Ref: 183 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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18) List and describe four services that comprise IT infrastructure, beyond physical devices and software applications.

Answer: The service components of IT infrastructure include: Telecommunications services that provide data, voice, and video connectivity.

Data management services to store, manage, and analyze data.

Application software services that provide enterprise-wide capabilities.

Physical facilities management services, to develop and manage physical installations of technology.

IT standards services that establish and monitor the firm's policies.

IT education services that provide training in use of the systems.

IT research and development services that research potential projects, products, and investments.

Page Ref: 170-171 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

19) Place the following eras of IT infrastructure evolution in order, from earliest to most recent: 1. Cloud Computing Era; 2. Client/Server; 3. Enterprise Era; 4. Personal Computer; and 5.

Mainframe and Minicomputer.

A) 5, 2, 3, 4, 1 B) 5, 4, 2, 3, 1 C) 4, 5, 2, 3, 1 D) 5, 4, 2, 1, 3 E) 4, 5, 3, 2, 1 Answer: B Page Ref: 171-175 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 5.2: What are the components of IT infrastructure?

20) The introduction of the minicomputer A) allowed computers to be customized to the specific needs of departments or business units.

B) strengthened centralized computing.

C) offered new, powerful machines at higher prices than mainframes.

D) represented the rise of Microsoft.

E) was dominated by IBM. Answer: A Page Ref: 173 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

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21) A client computer networked to a server computer, with processing split between the two types of machines, is called a(n) A) service-oriented architecture.

B) on-demand architecture.

C) multi-tiered client/server architecture.

D) two-tiered client/server architecture.

E) divided architecture.

Answer: D Page Ref: 174 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

22) In a multi-tiered network A) the work of the entire network is centralized.

B) the work of the entire network is balanced over several levels of servers.

C) processing is split between clients and servers.

D) processing is handled by multiple, geographically-remote clients.

E) processing is located in the cloud.

Answer: B Page Ref: 174 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

23) Interpretations of Moore's law assert that A) computing power will eventually level off.

B) transistors decrease in size 50% every two years.

C) data storage costs decrease by 50% every 18 months.

D) PCs decrease in market share by 9% every 5 years.

E) computing power doubles every 18 months.

Answer: E Page Ref: 175 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

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24) Today's nanotechnology-produced computer transistors are roughly equivalent in size to A) the width of a fingernail.

B) a human hair.

C) a virus.

D) an atom.

E) a nanoparticle.

Answer: C Page Ref: 176 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 5.2: What are the components of IT infrastructure?

25) ________ unleash powerful economies of scale and result in price declines in manufactured computer products.

A) Internet and Web technologies B) Technology standards C) Linux and open-source software D) Client/server technologies E) Virtualization technologies Answer: B Page Ref: 179 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

26) The multitasking, multi-user, operating system developed by Bell Laboratories that operates on a wide variety of computing platforms is A) Unix.

B) Linux.

C) OS X. D) COBOL. E) DOS. Answer: A Page Ref: 180 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

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27) The network standard for connecting desktop computers into local area networks that enabled the widespread adoption of client/server computing and local area networks and further stimulated the adoption of personal computers is A) TCP/IP. B) COBOL. C) Ethernet.

D) ASCII. E) Linux.

Answer: C Page Ref: 180 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

28) The development of TCP/IP occurred during the ________ era.

A) cloud and mobile computing B) general-purpose mainframe and minicomputer C) client/server era D) personal computer E) enterprise computing Answer: E Page Ref: 174 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

29) The ________ PC, becoming the standard PC in the Personal Computer Era, uses the Windows operating system software on a computer with an Intel microprocessor.

A) Wintel B) Dell C) IBM D) Altair E) Digital Equipment Corporation Answer: A Page Ref: 173 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

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30) ________ uses individual atoms and molecules to create computer chips and other devices thinner than a human hair.

A) Virtualization B) Nanotechnology C) Quantum computing D) A minicomputer E) On-demand computing Answer: B Page Ref: 176 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

31) ________ states that the value or power of a network grows exponentially as a function of the number of network members.

A) Metcalfe's Law B) Moore's Law C) Law of scalability D) Law of outsourcing E) Law of networks Answer: A Page Ref: 178 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

32) ________ surfaces allow users to gesture on a screen with several fingers to execute commands.

A) Hypertouch B) Nanotech C) Multitouch D) Android E) Scalable Answer: C Page Ref: 183 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

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33) Enterprise infrastructure requires software that can link disparate applications and enable data to flow freely among different parts of the business.

Answer: TRUE Page Ref: 175 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.2: What are the components of IT infrastructure?

34) Explain why standards are so important in information technology. What standards have been important for the growth of Internet technologies?

Answer: Standards are important because they result in different manufacturers creating products that can be used either with each other or to communicate with each other. For example, without standards, each light-bulb manufacturer would have to also create specific light-bulb sockets for use with their light bulbs. In the same way, computers and computer technology have been enabled through standards. Standards have allowed many different manufacturers to contribute to the same, standardized definitions of a technological application. For example, the ASCII data standards made it possible for computer machines from different manufacturers to exchange data, and standardized software languages have enabled programmers to write programs that can be used on different machines.

The standards that have been important for the growth of the Internet include TCP/IP, as a networking standard, and WWW standards for displaying information as Web pages, including HTML. Page Ref: 179 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 5.2: What are the components of IT infrastructure?

35) Which of the following is not an example of the emerging mobile digital platform?

A) tablets B) the Kindle C) cell phones D) CRM E) apps Answer: D Page Ref: 185 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

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36) All of the following are current hardware platform trends except A) green computing.

B) virtualization.

C) cloud computing.

D) Unix.

E) quantum computing.

Answer: D Page Ref: 185 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

37) The ability to be in many different states at once, dramatically increasing processing power, is a hallmark of A) co-location.

B) edge computing.

C) grid computing.

D) utility computing.

E) quantum computing.

Answer: E Page Ref: 188 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

38) A recent addition to the mobile digital platform is A) quantum computing.

B) wearable computing devices.

C) cloud computing.

D) grid computing.

E) consumerization of IT. Answer: B Page Ref: 185 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 5.3: What are the current trends in computer hardware platforms?

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39) At what percent of capacity do most servers operate?

A) 100% B) 80-90% C) approximately 70 percent D) 40-50% E) 15-20% Answer: E Page Ref: 188 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

40) The process of presenting a set of computing resources (such as computing power or data storage) so that they can all be accessed in ways that are not restricted by physical configuration or geographic location is called A) cloud computing.

B) autonomic computing.

C) virtualization.

D) multicore processing.

E) ubiquitous computing.

Answer: A Page Ref: 188-189 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

41) Which type of computing refers to firms purchasing computing power from remote providers and paying only for the computing power they use?

A) on-demand B) grid C) edge D) autonomic E) quantum Answer: A Page Ref: 189 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

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42) All of the following are cloud computing services except A) infrastructure as a service.

B) platform as a service.

C) software as a service.

D) on-demand computing.

E) virtualization as a service.

Answer: E Page Ref: 190 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 5.3: What are the current trends in computer hardware platforms?

43) The phenomenon of employees using their own devices in the workplace is known as A) wearable computing.

B) mobile consolidation.

C) cloud computing.

D) BYOD. E) self computing.

Answer: D Page Ref: 185 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

44) The marketplace for computer hardware A) has become increasingly concentrated in top firms.

B) has expanded to include a wide variety of start-up and mobile-computing firms.

C) has moved significantly to Asian firms.

D) has been decimated by mobile and cloud computing.

E) has begun moving away from blade servers.

Answer: A Page Ref: 182 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

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45) Which of the following is the most popular mobile operating system?

A) Linux B) Android C) Chrome OS D) iOS E) Unix Answer: B Page Ref: 183 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 5.3: What are the current trends in computer hardware platforms?

46) Which of the following is not one of the NIST defined characteristics of cloud computing?

A) ubiquitous network access B) location-independent resource pooling C) on-demand self service D) measured service E) reduced elasticity Answer: E Page Ref: 189 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

47) ________ allows a single computing resource, such as a server, to appear to the user as multiple logical resources.

A) Cloud computing B) Virtualization C) Quantum computing D) Nanotechnology E) Utility computing Answer: B Page Ref: 188 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

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48) A(n) ________ is an integrated circuit to which two or more processors have been attached for enhanced performance and reduced power consumption.

A) multicore processor B) legacy processor C) scalable processor D) aggregate circuit E) green circuit Answer: A Page Ref: 193 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

49) In green computing, reducing computer power consumption is a top priority.

Answer: TRUE Page Ref: 193 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

50) Quantum computing is implemented primarily with enterprise or ISP servers.

Answer: FALSE Page Ref: 188 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.3: What are the current trends in computer hardware platforms?

51) Distinguish between cloud computing, green computing, and quantum computing.

Answer: In cloud computing, technology services are provided over a network, primarily the Internet. These may be infrastructure services, such as storage or networking, or platform services, such as IBM's application development and test service, or software services, such as salesforce.com. Green computing refers to practices and technologies for designing computer equipment to minimize impact on the environment. Quantum computing refers to emerging technology that uses the principles of quantum physics to dramatically boost computer processing power.

Page Ref: 188-191 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 5.3: What are the current trends in computer hardware platforms?

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52) An ad-hoc group of oceanographers needs to set up a system to analyze massive amounts of data on ocean temperatures. The technology and hardware for gathering the data and transmitting the data to a central computer is in place. What additional hardware might they need? What techniques might they use to make their research more efficient and lower costs?

Answer: To store their data they may want to use a SAN. To process their data, they will need a supercomputer. To lower costs, they could look at on-demand computing as well as virtualization and implementing multicore processors.

Page Ref: 184-194 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 5.3: What are the current trends in computer hardware platforms?

53) What are the drawbacks of cloud computing? Do you think these ever outweigh the benefits, and if so, in what cases?

Answer: Students should be able to identify at least two drawbacks. Drawbacks include: 1. placing data storage and control in another firm's hands, 2. security risks in having critical systems and data entrusted to a firm that does business with other firms, 3. loss of business capability if cloud infrastructures malfunction, 4. dependence on cloud computing provider and switching costs. Student answers regarding the relative weight will vary, an example is: The disadvantages of cloud computing outweigh the advantages, except if any data lost is irreplaceable or creates harm to others. For example, a database of financial information should remain the responsibility of the original firm so that they can be held accountable.

Page Ref: 190 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 5.3: What are the current trends in computer hardware platforms?

54) Which type of software is created and updated by a worldwide community of programmers and available for free?

A) software packages B) mashups C) outsourced D) open source E) closed source Answer: D Page Ref: 194 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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55) Which of the following is not one of the current software platform trends?

A) Web services and service-oriented architecture B) open-source software C) HTML5 D) software outsourcing E) multicore processors Answer: E Page Ref: 194 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 5.4: What are the current trends in computer software platforms?

56) Linux is A) primarily concerned with the tasks of end users.

B) designed for specific machines and specific microprocessors.

C) an example of open-source software.

D) especially useful for processing numeric data.

E) poorly suited to power fast computers.

Answer: C Page Ref: 194 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

57) Which of the following statements about Linux is not true?

A) It plays a major role in the back office running local area networks.

B) It is available in free versions downloadable from the Internet.

C) It has garnered 20 percent of the server operating system market.

D) Linux applications are embedded in cell phones, smartphones, netbooks, and other handheld devices.

E) Linux works on all the major hardware platforms.

Answer: C Page Ref: 194 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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58) Running a Java program on a computer requires A) a Java Virtual Machine to be installed on that computer.

B) a Java Virtual Machine to be installed on the server hosting the Java applet.

C) a miniature program to be downloaded to the user's computer.

D) no specialized software, as Java is platform-independent.

E) the Mozilla Firefox browser and no other browsers.

Answer: A Page Ref: 195 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

59) A software tool with a graphical user interface for displaying Web pages and for accessing the Web and other Internet resources is called a Web A) service.

B) client.

C) browser.

D) app.

E) beacon.

Answer: C Page Ref: 195 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

60) Sets of loosely coupled software components that exchange information with each other using standard Web communication standards and languages are referred to as A) Web services.

B) EAI software.

C) SOA. D) SOAP. E) SaaS. Answer: A Page Ref: 195 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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61) What is the foundation technology for Web services?

A) XML B) HTML C) SOAP D) UDDI E) SCSI Answer: A Page Ref: 196 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

62) A set of self-contained services that communicate with each other to create a working software application is called A) Web services.

B) EAI software.

C) SOA. D) SOAP. E) a software package.

Answer: C Page Ref: 196 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

63) Prewritten, commercially available sets of software programs that eliminate the need for a firm to write its own software programs for certain functions, are referred to as A) software packages.

B) mashups.

C) outsourced software.

D) open-source software.

E) service level agreements.

Answer: A Page Ref: 198 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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64) ________ are created by combining and customizing components from different online software applications.

A) Apps B) Web browsers C) SaaS D) Web services E) Mashups Answer: E Page Ref: 199 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

65) The practice of contracting custom software development to an outside firm is commonly referred to as A) outsourcing.

B) scaling.

C) service-oriented architecture.

D) application integration.

E) utility computing.

Answer: A Page Ref: 198 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

66) A formal contract between customers and their service providers that outlines the specific responsibilities of the service provider and to the customer is called a(n) A) SOA. B) SLA. C) TCO. D) RFQ. E) SaaS. Answer: B Page Ref: 199 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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67) SaaS refers to A) supplying online access over networks to storage devices and storage area network technology.

B) managing combinations of applications, networks, systems, storage, and security as well as providing Web site and systems performance monitoring to subscribers over the Internet.

C) self-contained services that communicate with each other to create a working software application.

D) easy-to-use software tools for displaying Web pages.

E) hosting and managing access to software applications delivered over the Internet to clients on a subscription basis.

Answer: E Page Ref: 199 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

68) ________ provides a standard format for data exchange, enabling Web services to pass data from one process to another.

A) HTML B) HTML5 C) Java D) Chrome OS E) XML Answer: E Page Ref: 196 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

69) ________ takes place when a firm contracts custom software development or maintenance of existing legacy programs to outside firms.

A) Cloud computing B) Utility computing C) On-demand computing D) Outsourcing E) Consumerization of IT Answer: D Page Ref: 198 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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70) The decision to purchase your own IT assets or rent them from external providers is also referred to as the rent-versus-buy decision.

Answer: TRUE Page Ref: 201 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

71) The technology trends exhibited by Portugal Telecom, as discussed in the chapter opening case, illustrate the shift away from green computing.

Answer: FALSE Page Ref: 167-168 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

72) Java software is designed to run on any computing device, regardless of the specific microprocessor or operating system it uses.

Answer: TRUE Page Ref: 195 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

73) Web services can exchange information between two different systems only if the operating systems and programming languages upon which the systems are based are identical.

Answer: FALSE Page Ref: 196 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

74) Whereas HTML is limited to describing how data should be presented in the form of Web pages, XML can perform presentation, communication, and data storage tasks.

Answer: TRUE Page Ref: 196 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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75) Hypertext markup language specifies how text, graphics, video, and sound are placed on a Web page document.

Answer: TRUE Page Ref: 195 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

76) The collection of Web services that are used to build a firm's software systems constitutes what is known as a service-oriented architecture.

Answer: TRUE Page Ref: 196 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

77) Today, many business firms continue to operate their legacy systems that meet a business need and would be costly to replace.

Answer: TRUE Page Ref: 197 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.4: What are the current trends in computer software platforms?

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78) Briefly explain why corporations are increasingly interested in using Unix or Linux for their operating system.

Answer: Linux is an inexpensive and robust open-source relative of Unix. Unix and Linux constitute the backbone of corporate infrastructure throughout much of the world because they are scalable, reliable, and much less expensive than mainframe operating systems. They can also run on many different types of processors. The major providers of Unix operating systems are IBM, HP, and Sun with slightly different and partially incompatible versions.

Although Windows continues to dominate the client marketplace, many corporations have begun to explore Linux as a low-cost desktop operating system provided by commercial vendors such as RedHat Linux and Linux-based desktop productivity suites such as Sun's StarOffice. Linux is also available in free versions downloadable from the Internet as open-source software. The rise of open-source software, particularly Linux and the applications it supports at the client and server level, has profound implications for corporate software platforms: cost, reduction, reliability and resilience, and integration, because Linux works on all the major hardware platforms from mainframes to servers to clients. Linux has the potential to break Microsoft's monopoly on the desktop. Sun's StarOffice has an inexpensive Linux-based version that competes with Microsoft's Office productivity suite.

Page Ref: 194 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 5.4: What are the current trends in computer software platforms?

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79) Identify and describe five or more of the current trends in contemporary software platforms.

Answer: 1. Growing use of Linux and open-source software—Open-source software is produced and maintained by a global community of programmers and is downloadable for free. Linux is a powerful, resilient open-source operating system that can run on multiple hardware platforms and is used widely to run Web servers.

2. HTML5—This is the next evolution of HTML which simplifies embedding multimedia, rich media, and animation in the browser.

3. Cloud-based services—In cloud-based services and software, users rent applications or storage space from online providers rather than running these applications or themselves or using local storage.

4. Web services and service-oriented architecture—Web services are loosely coupled software components based on open Web standards that are not product-specific and can work with any application software and operating system. They can be used as components of Web-based applications linking the systems of two different organizations or to link disparate systems of a single company.

5. Software outsourcing—Companies are purchasing their new software applications from outside sources, including application software packages, by outsourcing custom application development to an external vendor (that may be offshore), or by renting software services from an application service provider.

6. Cloud-based services—Companies are leasing infrastructure, hardware, and software from vendors, paying on a subscription or per-transaction basis.

7. Mashups and apps—Mashups are programs created by combining two or more existing Internet applications. Apps are small programs developed for mobiles and handhelds, turning them into more robust computing tools.

Page Ref: 194-200 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 5.4: What are the current trends in computer software platforms?

80) Which of the following factors does not help explain why computing resources today are ever more available than in previous decades?

A) network economics B) law of mass digital storage C) Moore's law D) declining communications costs and the Internet E) widespread rejection of technology standards Answer: E Page Ref: 175-179 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

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81) Which of the following refers to the ability of a computer, product, or system to expand to serve a larger number of users without breaking down?

A) modality B) scalability C) expandability D) disintermediation E) customizability Answer: B Page Ref: 201 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

82) Hardware and software acquisition costs account for about ________ percent of TCO. A) 20 B) 40 C) 50 D) 75 E) 90 Answer: A Page Ref: 202 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

83) Which model can be used to analyze the direct and indirect costs to help firms determine the actual cost of specific technology implementations?

A) supply and demand B) return on investment C) breakeven point D) cost-benefit analysis E) total cost of ownership Answer: E Page Ref: 202 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

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84) How would you determine the market demand for your firm's IT services?

A) Perform a TCO analysis.

B) Benchmark your services.

C) Hold focus groups to assess your services.

D) Analyze sales returns on key investments.

E) Perform a stress test.

Answer: C Page Ref: 203 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

85) Which of the following is not one of the main six factors to consider when evaluating how much your firm should spend on IT infrastructure?

A) your firm's business strategy B) the IT investments made by competitor firms C) market demand for your firm's services D) your firm's organizational culture E) information technology assessment Answer: D Page Ref: 203-204 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

86) Scalability refers to the ability of a computer, product, or system to expand to serve a large number of users without breaking down.

Answer: TRUE Page Ref: 201 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

87) TCO refers to the original cost of purchased technology: both hardware and software.

Answer: FALSE Page Ref: 202 Difficulty: Easy AACSB: Information technology CASE: Content LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

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88) What is scalability? Why is it essential to the success of the modern business firm?

Answer: Scalability is the ability of the computer, product, or system to expand to survey larger numbers of users without breaking down. It is important because as firms grow, they can quickly outgrow their infrastructure. As firms shrink, they can get stuck with excessive infrastructure purchased in better times. Any modern company must be able to make plans for the future, even though that future may be different than what was expected. Computer equipment is expensive, though dropping in price, and budgets must be planned to allow for new purchases, upgrades, and training. It is generally assumed that a successful company will need more computer capacity for more people as it follows a path to continued success.

Page Ref: 201 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

89) A small design agency you are consulting for will be creating client Web sites and wants to purchase a Web server so they can host the sites themselves. How will you advise them on this purchase?

Answer: They need to understand total cost of ownership: the costs will go beyond the cost of the server, but they will also need to purchase the server software and any application software they will be using. They will also need someone in their IT department to manage and maintain the computers. They will also incur facilities costs for running the computer. They need to have a backup plan should the server fail. The design agency will need to add up all the potential costs and risks. Additionally, they need to prepare for their plan if they need more servers. Will they eventually have to run and maintain their own server farm? What if one of their clients' sites is more popular than anticipated and the server has difficulty handling the load? How quickly can they add servers or processing power? The company should look at colocation, Web hosting services, and ASPs to see if their needs will be better met this way.

Page Ref: 201-202 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

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90) You are starting a market research company with a single business partner and are planning the hardware and software need for the two of you. Which factors should play into your decision of how much to spend on these investments?

Answer: Using the competitive forces model for IT infrastructure investment, the most relevant factors in this decision are: • The firm's business strategy. What capabilities will we want to have over the next five years?

• Alignment of IT strategy. How does our IT strategy match up with the business plan?

• IT assessment. What are the current technology levels for the services we are offering and our business type? We would probably not need to be at the bleeding edge, but not behind the times either.

• Competitor firm services. What technology-enabled capabilities do our competitors have? We would want to match services with our competitors.

• Competitor firm IT investments. How much are competitor firms investing in their technology?

Because this is a startup, one other factor may not play such a large role: that of market demand for services. However, finding out the market demand for competitor's services may uncover ways that this new company could have a competitive advantage.

Page Ref: 203-204 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 5.5: What are the challenges of managing IT infrastructure and management solutions?

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Management Information Systems, 14e (Laudon) Chapter 6 Foundations of Business Intelligence: Databases and Information Management 1) The relationship between entities and attributes is best illustrated by A) the entity CUSTOMER with the attribute PRODUCT. B) the entity CUSTOMER with the attribute PURCHASE. C) the entity PRODUCT with the attribute PURCHASE. D) the entity PRODUCT with the attribute CUSTOMER. E) the entity PURCHASE with the attribute CUSTOMER. Answer: B Page Ref: 218 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 6.1: What are the problems of managing data resources in a traditional file environment?

2) The traditional file environment does not typically have a problem with A) data inconsistency.

B) program-data independence.

C) lack of flexibility in creating ad-hoc reports.

D) poor security.

E) data sharing.

Answer: B Page Ref: 218 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 6.1: What are the problems of managing data resources in a traditional file environment?

3) A(n) ________ is a characteristic or quality that describes a database entity.

A) field B) tuple C) key field D) attribute E) relationship Answer: D Page Ref: 218 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

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4) A(n) ________ is an example of non-digital data storage that is comparable to a database.

A) library card catalog B) cash register receipt C) doctor's office invoice D) list of sales totals on a spreadsheet E) schedule of due dates on a project outline Answer: A Page Ref: 218 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 6.1: What are the problems of managing data resources in a traditional file environment?

5) ________ creates confusion that hampers the creation of information systems that integrate data from different sources.

A) Batch processing B) Data redundancy C) Data independence D) Online processing E) Data quality Answer: B Page Ref: 219 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

6) Data ________ occurs when the same data is duplicated in multiple files of a database.

A) redundancy B) repetition C) independence D) partitions E) discrepancy Answer: A Page Ref: 219 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

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7) When the same attribute in related data files has different values, this is called data A) redundancy.

B) duplication.

C) dependence.

D) discrepancy.

E) inconsistency.

Answer: E Page Ref: 219 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

8) A database record is a grouping of characters into a word, a group of words, or a complete number.

Answer: FALSE Page Ref: 218 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

9) An attribute is a characteristic or quality used to describe a particular entity.

Answer: TRUE Page Ref: 218 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

10) The coupling of data with the software programs that manipulate the data, such that changes in programs requires changes to the data, is called program-data dependence.

Answer: TRUE Page Ref: 220 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

11) Databases record information about general categories of information referred to as entities.

Answer: TRUE Page Ref: 218 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.1: What are the problems of managing data resources in a traditional file environment?

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12) When you design the new contracts database for the publishing house mentioned above, what fields do you anticipate needing? Which of these fields might be in use in other databases used by the company?

Answer: Author first name, author last name, author address, agent name and address, title of book, book ISBN, date of contract, amount of money, payment schedule, date contract ends.

Other databases might be an author database (author names, address, and agent details), a book title database (title and ISBN of book), and financial database (payments made).

Page Ref: 218-221 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 6.1: What are the problems of managing data resources in a traditional file environment?

13) List at least three conditions that contribute to data redundancy and inconsistency.

Answer: Data redundancy occurs when different divisions, functional areas, and groups in an organization independently collect the same piece of information. Because it is collected and maintained in so many different places, the same data item may have: 1. different meanings in different parts of the organization, 2. different names may be used for the same item, and 3. different descriptions for the same condition. In addition, the fields into which the data is gathered may have different field names, different attributes, or different constraints.

Page Ref: 219 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 6.1: What are the problems of managing data resources in a traditional file environment?

14) Which of the following features enables a DBMS to reduce data redundancy and inconsistency?

A) enforces referential integrity B) couples program and data C) data dictionary D) two-dimensional tables E) minimizes isolated files with repeated data Answer: E Page Ref: 222 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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15) A DBMS makes the A) physical database available for different logical views.

B) relational database available for different logical views.

C) physical database available for different analytic views.

D) relational database available for different analytic views.

E) logical database available for different analytic views.

Answer: A Page Ref: 221 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

16) The logical view of a database A) displays the organization and structure of data on the physical storage media.

B) includes a digital dashboard.

C) allows the creation of supplementary reports.

D) enables users to manipulate the logical structure of the database.

E) presents data as they would be perceived by end users.

Answer: E Page Ref: 221 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

17) Which of the following is not a DBMS for midrange computers?

A) DB2 B) Oracle C) Microsoft SQL Server D) Microsoft Access E) Microsoft Exchange Answer: D Page Ref: 222-223 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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18) A(n) ________ organizes data in two-dimensional tables.

A) non-relational DBMS B) mobile DBMS C) relational DBMS D) hierarchical DBMS E) object-oriented DBMS Answer: C Page Ref: 222 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

19) Microsoft SQL Server is a(n) A) DBMS for both desktops and mobile devices.

B) Internet DBMS. C) desktop relational DBMS. D) DBMS for midrange computers.

E) DBMS for mobile devices.

Answer: D Page Ref: 223 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

20) In a table for customers, the information about a single customer would reside in a single A) field.

B) row.

C) column.

D) table.

E) entity.

Answer: B Page Ref: 223 Difficulty: Easy AACSB: Information technology CASE: Analysis LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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21) In a relational database, a record is referred to in technical terms as a(n) A) tuple.

B) row.

C) entity.

D) field.

E) key.

Answer: A Page Ref: 223 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

22) A field identified in a table as holding the unique identifier of the table's records is called the A) primary key.

B) key field.

C) primary field.

D) unique ID. E) primary entity.

Answer: A Page Ref: 223 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

23) A field identified in a record as holding the unique identifier for that record is called the A) primary key.

B) key field.

C) primary field.

D) unique ID. E) key attribute.

Answer: B Page Ref: 223 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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24) In a relational database, the three basic operations used to develop useful sets of data are A) select, project, and where.

B) select, join, and where.

C) select, project, and join.

D) where, from, and join.

E) where, find, and select.

Answer: C Page Ref: 224 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

25) The select operation A) combines relational tables to provide the user with more information than is otherwise available.

B) creates a subset consisting of columns in a table.

C) identifies the table from which the columns will be selected.

D) creates a subset consisting of all records in the file that meet stated criteria.

E) creates a subset consisting of rows in a table.

Answer: D Page Ref: 224 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

26) The join operation A) combines relational tables to provide the user with more information than is otherwise available.

B) identifies the table from which the columns will be selected.

C) creates a subset consisting of columns in a table.

D) organizes elements into segments.

E) creates a subset consisting of rows in a table.

Answer: A Page Ref: 224 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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27) The project operation A) combines relational tables to provide the user with more information than is otherwise available.

B) creates a subset consisting of columns in a table.

C) organizes elements into segments.

D) identifies the table from which the columns will be selected.

E) creates a subset consisting of rows in a table.

Answer: B Page Ref: 224 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

28) The data dictionary serves as an important data management tool by A) assigning attributes to the data.

B) creating an inventory of the data elements contained in the database.

C) presenting data as end users or business specialists would perceive them.

D) maintaining data in updated form.

E) providing a guide to database terms and settings.

Answer: B Page Ref: 226 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

29) An automated or manual file that stores information about data elements and data characteristics such as usage, physical representation, ownership, authorization, and security is the A) data dictionary.

B) data definition diagram.

C) entity-relationship diagram.

D) relationship dictionary.

E) data table.

Answer: A Page Ref: 226 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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30) The specialized language programmers use to add and change data in the database is called A) a data access language.

B) a data manipulation language.

C) structured query language.

D) a data definition language.

E) a DBMS. Answer: B Page Ref: 226 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

31) The most prominent data manipulation language today is A) Access.

B) DB2.

C) SQL. D) Crystal Reports.

E) NoSQL. Answer: C Page Ref: 226 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

32) DBMSs typically include report-generating tools in order to A) retrieve and display data.

B) display data in an easier-to-read format.

C) display data in graphs.

D) perform predictive analysis.

E) analyse the database's performance.

Answer: B Page Ref: 227 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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33) The process of streamlining data to minimize redundancy and awkward many-to-many relationships is called A) normalization.

B) data scrubbing.

C) data cleansing.

D) data defining.

E) optimization.

Answer: A Page Ref: 228 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

34) A schematic of the entire database that describes the relationships in a database is called a(n) A) data dictionary.

B) intersection relationship diagram.

C) entity-relationship diagram.

D) data definition diagram.

E) data analysis table.

Answer: C Page Ref: 229-230 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

35) A one-to-many relationship between two entities is symbolized in a diagram by a line that ends with A) one short mark.

B) two short marks.

C) three short marks.

D) a crow's foot.

E) a crow's foot topped by a short mark.

Answer: E Page Ref: 230 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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36) You are creating a database to store temperature and wind data from national airport locations. Which of the following fields is the most likely candidate to use as the basis for a primary key in the Airport table?

A) address B) city C) airport code D) state E) day Answer: C Page Ref: 223 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

37) The logical and physical views of data are separated in a DBMS. Answer: TRUE Page Ref: 221 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

38) Every record in a file should contain at least one key field.

Answer: TRUE Page Ref: 223 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

39) NoSQL technologies are used to manage sets of data that don't require the flexibility of tables and relations.

Answer: TRUE Page Ref: 224 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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40) The DBMS programming language that end users and programmers use to manipulate data in the database is called CGI. Answer: FALSE Page Ref: 226 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

41) Complicated groupings of data in a relational database need to be adjusted to eliminate awkward many-to-many relationships.

Answer: TRUE Page Ref: 228 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

42) A physical view shows data as it is actually organized and structured on the data storage media.

Answer: TRUE Page Ref: 222 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

43) DBMS have a data definition capability to specify the structure of the content of the database.

Answer: TRUE Page Ref: 226 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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44) Relational DBMSs use key field rules to ensure that relationships between coupled tables remain consistent.

Answer: FALSE Page Ref: 229 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

45) The small publishing company you work for wants to create a new database for storing information about all of their author contracts. What factors will influence how you design the database?

Answer: Student answers will vary, but should include some assessment of data quality, business processes and user needs, and relationship to existing IT systems. Key points to include are: Data accuracy when the new data is input, establishing a good data model, determining which data is important and anticipating what the possible uses for the data will be, beyond looking up contract information, technical difficulties linking this system to existing systems, new business processes for data input and handling, and contracts management, determining how end users will use the data, making data definitions consistent with other databases, what methods to use to cleanse the data.

Page Ref: 221-230 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

46) List and describe three main capabilities or tools of a DBMS. Answer: A data definition capability to specify the structure of the content of the database. This capability would be used to create database tables and to define the characteristics of the fields in each table.

A data dictionary to store definitions of data elements in the database and their characteristics. In large corporate databases, the data dictionary may capture additional information, such as usage; ownership; authorization; security; and the individuals, business functions, programs, and reports that use each data element.

A data manipulation language, such as SQL, that is used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications.

Page Ref: 226 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

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47) Identify and describe three basic operations used to extract useful sets of data from a relational database.

Answer: The select operation creates a subset consisting of all records (rows) in the table that meets stated criteria. The join operation combines relational tables to provide the user with more information than is available in individual tables. The project operation creates a subset consisting of columns in a table, permitting the user to create new tables that contain only the information required.

Page Ref: 224 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 6.2: What are the major capabilities of database management systems (DBMS) and why is a relational DBMS so powerful?

48) Big data does not refer to A) datasets with fewer than a billion records.

B) datasets with unstructured data.

C) machine-generated data (i.e. from sensors).

D) data created by social media (i.e. tweets, Facebook Likes).

E) data from Web traffic.

Answer: A Page Ref: 230 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

49) Which of the following technologies would you use to analyze the social media data collected by a major online retailer?

A) OLAP B) data warehouse C) data mart D) Hadoop E) DBMS Answer: D Page Ref: 232 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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50) Which of the following is not one of the techniques used in Web mining?

A) content mining B) structure mining C) server mining D) usage mining E) data mining Answer: C Page Ref: 238 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

51) You work for a retail clothing chain whose primary outlets are in shopping malls, and you are conducting an analysis of your customers and their preferences. You wish to find out if there are any particular activities that your customers engage in, or the types of purchases made in the month before or after purchasing select items from your store. To do this, you will want to use data mining software that is capable of A) identifying associations.

B) identifying clusters.

C) identifying sequences.

D) classification.

E) forecasting.

Answer: C Page Ref: 237 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

52) You work for a national car rental agency and want to determine what characteristics are shared among your most loyal customers. To do this, you will want to use data mining software that is capable of A) identifying associations.

B) identifying clusters.

C) identifying sequences.

D) classification.

E) forecasting.

Answer: D Page Ref: 237 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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53) A data warehouse is composed of A) historical data from legacy systems.

B) current data.

C) internal and external data sources.

D) historic and current internal data.

E) historic external data.

Answer: D Page Ref: 231 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

54) All of the following are technologies used to analyze and manage big data except A) cloud computing.

B) noSQL. C) in-memory computing.

D) analytic platforms.

E) Hadoop.

Answer: A Page Ref: 231-235 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

55) A household appliances manufacturer has hired you to help analyze their social media datasets to determine which of their refrigerators are seen as the most reliable. Which of the following tools would you use to analyze this data?

A) text mining tools B) sentiment analysis software C) Web usage mining technologies D) data mining software for identifying associations E) data mining software for forecasting Answer: B Page Ref: 238 Difficulty: Moderate AACSB: Information technology CASE: Evaluation LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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56) The tool that enables users to view the same data in different ways using multiple dimensions is A) predictive analysis.

B) SQL. C) OLAP. D) data mining.

E) Hadoop.

Answer: C Page Ref: 235 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

57) OLAP is a tool for enabling A) users to obtain online answers to ad-hoc questions in a rapid amount of time.

B) users to view both logical and physical views of data.

C) programmers to quickly diagram data relationships.

D) programmers to normalize data.

E) users to quickly generate summary reports.

Answer: A Page Ref: 236 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

58) Data mining is a tool for allowing users to A) quickly compare transaction data gathered over many years.

B) find hidden relationships in data.

C) obtain online answers to ad-hoc questions in a rapid amount of time.

D) summarize massive amounts of data into much smaller, traditional reports.

E) access the vast amounts of data in a data warehouse.

Answer: B Page Ref: 236 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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59) In terms of data relationships, associations refers to A) events linked over time.

B) patterns that describe a group to which an item belongs.

C) occurrences linked to a single event.

D) undiscovered groupings.

E) relationships between different customers.

Answer: C Page Ref: 237 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

60) ________ tools are used to analyze large unstructured data sets, such as e-mail, memos, survey responses, etc., to discover patterns and relationships.

A) OLAP B) Text mining C) In-memory D) Clustering E) Classification Answer: B Page Ref: 238 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

61) In place of application server software to allow a Web server to communicate with a backend database, you can use A) CGI. B) HTML. C) Java.

D) SQL. E) NoSQL. Answer: A Page Ref: 239 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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62) HTML has become the preferred method of communicating with back-end databases because it is a cross-platform language.

Answer: FALSE Page Ref: 239 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

63) Legacy systems are used to populate and update data warehouses.

Answer: TRUE Page Ref: 231 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

64) Multiple data marts are combined and streamlined to create a data warehouse.

Answer: FALSE Page Ref: 231 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

65) To perform multidimensional data analysis, you would use OLAP. Answer: TRUE Page Ref: 235 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

66) OLAP is unable to manage and handle queries with very large sets of data.

Answer: FALSE Page Ref: 236 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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67) With in-memory computing, a computer's primary memory (RAM) is used for processing.

Answer: TRUE Page Ref: 232 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

68) An application that transfers information from an organization's internal database to a Web server for delivery as part of a Web page to the user is called middleware.

Answer: TRUE Page Ref: 239 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

69) Implementing a Web interface for an organization's internal database usually requires substantial changes to be made to the database.

Answer: FALSE Page Ref: 239 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

70) You can manipulate data on a Web server by using a CGI script.

Answer: TRUE Page Ref: 239 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

71) To analyze unstructured data, such as memos and legal cases, you would use text mining tools.

Answer: TRUE Page Ref: 238 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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72) In a client/server environment, a DBMS is located on a dedicated computer called a Web server.

Answer: FALSE Page Ref: 239 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

73) In associations, a data mining tool discovers different groupings within data, such as finding affinity groups for bank cards.

Answer: FALSE Page Ref: 237 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

74) High-speed analytic platforms use both relational and non-relational tools to analyze large datasets.

Answer: TRUE Page Ref: 234 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

75) A database server is software that handles all application operations between browser-based computers and a company's back-end business applications or databases.

Answer: FALSE Page Ref: 239 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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76) In data mining, the technique of predicting uses a series of existing values to determine what other future values will be.

Answer: FALSE Page Ref: 237 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

77) You have been hired by a national furniture leasing company to implement its first business intelligence systems and infrastructure. To prepare for your initial report, describe the types of data in their firm they can use to support business intelligence and the systems that you will implement to support both their power users and casual users, and explain how these systems or tools work together.

Answer: All types of data can be used for their business intelligence systems, including operational, historical, machine-generated, Web/social data, audio and video data, and external data. The large datasets can be collected in a Hadoop cluster and used by an analytic platform to support power user queries, data mining, OLAP, etc. A data warehouse can be used to house all data, including smaller data sets and operational data, and be used to support casual use, for queries, reports, and digital dashboards, as well as support the analytic platforms. Smaller data marts can be created from the data warehouse to enable faster querying and typical queries from casual users.

Page Ref: 231-238 Difficulty: Difficult AACSB: Information technology CASE: Synthesis LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

78) Describe the ways in which database technologies could be used by an office stationery supply company to achieve low-cost leadership.

Answer: Sales databases could be used to make the supply chain more efficient and minimize warehousing and transportation costs. You can also use sales databases, as well as text mining and sentiment analysis, to determine what supplies are in demand by which customers and whether needs are different in different geographical areas. Business intelligence databases could be used to predict future trends in office supply needs, to help anticipate demand, and to determine the most efficient methods of transportation and delivery.

Page Ref: 230-240 Difficulty: Difficult AACSB: Information technology CASE: Evaluation LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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79) Describe the ways in which database technologies could be used by a toy manufacturer to achieve product differentiation.

Answer: Product databases could be made available to customers for greater convenience and ordering online. Databases could be used to track customer preferences and to help anticipate customer desires. Sales databases could also help clients such as toy stores anticipate when they would need to re-supply, providing an additional service. Data mining, Web mining, and sentiment analysis of big data could help anticipate trends in sales or other factors to help determine new services and products to sell to clients.

Page Ref: 230-240 Difficulty: Difficult AACSB: Information technology CASE: Evaluation LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

80) What makes data mining an important business tool? What types of information does data mining produce? In what type of circumstance would you advise a company to use data mining?

Answer: Data mining is one of the data analysis tools that helps users make better business decisions and is one of the key tools of business intelligence. Data mining allows users to analyze large amounts of data and find hidden relationships between data that otherwise would not be discovered. For example, data mining might find that a customer that buys product X is ten times more likely to buy product Y than other customers.

Data mining finds information such as: • Associations or occurrences that are linked to a single event.

• Sequences, events that are linked over time.

• Classification, patterns that describe the group to which an item belongs, found by examining existing items that have been classified and by inferring a set of rules.

• Clusters, unclassified but related groups.

I would advise a company to use data mining when they are looking for new products and services, or when they are looking for new marketing techniques or new markets. Data mining might also be helpful when trying to analyze unanticipated problems with sales whose causes are difficult to identify.

Page Ref: 236-237 Difficulty: Difficult AACSB: Information technology CASE: Evaluation LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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81) What are the differences between data mining and OLAP? When would you advise a company to use OLAP? Answer: Data mining uncovers hidden relationships and is used when you are trying to discover data and new relationships. It is used to answer questions such as: Are there any product sales that are related in time to other product sales?

In contrast, OLAP is used to analyze multiple dimensions of data and is used to find answers to complex, but known, questions, such as: What were sales of a product—broken down by month and geographical region, and how did those sales compare to sales forecasts?

Page Ref: 235-237 Difficulty: Moderate AACSB: Information technology CASE: Evaluation LO: 6.3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

82) The organization's rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information is called a(n) A) information policy.

B) data definition file.

C) data quality audit.

D) data governance policy.

E) data policy.

Answer: A Page Ref: 240 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

83) The special organizational function whose responsibilities include physical database design and maintenance is called A) data administration.

B) database administration.

C) information policy administration.

D) data auditing.

E) database management.

Answer: B Page Ref: 241 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

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84) Which common database challenge is illustrated by a person receiving multiple copies of an L.L. Bean catalog, each addressed to a slightly different variation of his or her full name?

A) data normalization B) data accuracy C) data redundancy D) data inconsistency E) data duplication Answer: D Page Ref: 241 Difficulty: Difficult AACSB: Information technology CASE: Analysis LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

85) Detecting and correcting data in a database or file that are incorrect, incomplete, improperly formatted, or redundant is called A) data auditing.

B) defragmentation.

C) data scrubbing.

D) data optimization.

E) data normalization.

Answer: C Page Ref: 242 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

86) Data cleansing not only corrects errors but also A) establishes logical relationships between data.

B) structures data.

C) normalizes data.

D) removes duplicate data.

E) enforces consistency among different sets of data.

Answer: E Page Ref: 242 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

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87) Which of the following is not a method for performing a data quality audit?

A) surveying entire data files B) surveying samples from data files C) surveying data definition and query files D) surveying end users about their perceptions of data quality E) surveying managers about their perceptions of data quality Answer: C Page Ref: 242 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

88) The policies and processes for managing the integrity and security of data in a firm are referred to as data governance.

Answer: TRUE Page Ref: 240 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

89) The organizational function that is in charge of policies and procedures for managing internal data resources is called data administration.

Answer: TRUE Page Ref: 240 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

90) Data scrubbing is a more intensive corrective process than data cleansing.

Answer: FALSE Page Ref: 242 Difficulty: Easy AACSB: Information technology CASE: Content LO: 6.4: Why are information policy, data administration, and data quality assurance essential for managing the firm's data resources?

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Management Information Systems, 14e (Laudon) Chapter 7 Telecommunications, the Internet, and Wireless Technology 1) The device that acts as a connection point between computers and can filter and forward data to a specified destination is called a(n) A) hub.

B) switch.

C) router.

D) NIC. E) modem.

Answer: B Page Ref: 258 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

2) The Internet is based on which three key technologies?

A) TCP/IP, HTML, and HTTP B) TCP/IP, HTTP, and packet switching C) client/server computing, packet switching, and the development of communications standards for linking networks and computers D) client/server computing, packet switching, and HTTP E) e-mail, instant messaging, and newsgroups Answer: C Page Ref: 260 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

3) The method of slicing digital messages into parcels, transmitting them along different communication paths, and reassembling them at their destinations is called A) multiplexing.

B) packet shifting.

C) packet routing.

D) ATM. E) packet switching.

Answer: E Page Ref: 261 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

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4) The telephone system is an example of a ________ network.

A) peer-to-peer B) wireless C) packet-switched D) circuit-switched E) client/server Answer: D Page Ref: 261 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

5) Which of the following is not a characteristic of packet switching?

A) Packets travel independently of each other.

B) Packets are routed through many different paths.

C) Packet switching requires point-to-point circuits.

D) Packets include data for checking transmission errors.

E) Packets are reassembled into the original message when they reach their destinations.

Answer: C Page Ref: 262 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

6) In TCP/IP, IP is responsible for A) disassembling and reassembling of packets during transmission.

B) establishing an Internet connection between two computers.

C) moving packets over the network.

D) sequencing the transfer of packets.

E) breaking messages down into packets.

Answer: A Page Ref: 262 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

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7) In a telecommunications network architecture, a protocol is A) a device that handles the switching of voice and data in a local area network.

B) a standard set of rules and procedures for control of communications in a network.

C) a communications service for microcomputer users.

D) the main computer in a telecommunications network.

E) a pathway through which packets are routed.

Answer: B Page Ref: 262 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

8) What are the four layers of the TCP/IP reference model?

A) physical, application, transport, and network interface B) physical, application, Internet, and network interface C) application, transport, Internet, and network interface D) application, hardware, Internet, and network interface E) software, hardware, network interface, Internet Answer: C Page Ref: 262 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

9) Which protocol is the Internet based on?

A) TCP/IP B) FTP C) packet-switching D) HTTP E) DNS Answer: A Page Ref: 262 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

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10) A(n) ________ is a device that forwards packets of data through different networks, ensuring that the data gets to the right address.

A) modem B) router C) packet D) telnet E) hub Answer: B Page Ref: 258 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

11) Telephone networks are fundamentally different from computer networks.

Answer: TRUE Page Ref: 257 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

12) An NOS must reside on a dedicated server computer in order to manage a network.

Answer: FALSE Page Ref: 258 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

13) A hub is a networking device that connects network components and is used to filter and forward data to specified destinations on the network.

Answer: FALSE Page Ref: 258 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

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14) In a client/server network, a network server provides every connected client with an address so it can be found by others on the network.

Answer: TRUE Page Ref: 261 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

15) A computer network consists of at least three computers.

Answer: FALSE Page Ref: 258 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

16) Central large mainframe computing has largely replaced client/server computing.

Answer: FALSE Page Ref: 261 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

17) Circuit switching makes much more efficient use of the communications capacity of a network than does packet switching.

Answer: FALSE Page Ref: 262 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

18) Two computers using TCP/IP can communicate even if they are based on different hardware and software platforms.

Answer: TRUE Page Ref: 263 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

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19) More than 50% of U.S. Internet users access the Internet via mobile devices.

Answer: TRUE Page Ref: 258 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

20) In a large company today, you will often find an infrastructure that includes hundreds of small LANs linked to each other as well as to corporate-wide networks.

Answer: TRUE Page Ref: 259 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

21) TCP/IP was developed in the 1960s to enable university scientists to locate other computers on the Internet.

Answer: FALSE Page Ref: 262 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

22) How does packet switching work?

Answer: Packet switching is a method of slicing digital messages into parcels called packets, sending the packets along different communication paths as they become available, and then reassembling the packets once they arrive at their destinations. Packet switching makes much more efficient use of the communications capacity of a network than did circuit-switching. In packet-switched networks, messages are first broken down into small fixed bundles of data called packets. The packets include information for directing the packet to the right address and for checking transmission errors along with the data. The packets are transmitted over various communication channels using routers, each packet traveling independently. Packets of data originating at one source will be routed through many different paths and networks before being reassembled into the original message when they reach their destinations.

Page Ref: 261 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

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23) Identify the layers of the Department of Defense reference model for TCP/IP, and describe how this model works.

Answer: The application layer enables client application programs to access the other layers and defines the protocols that applications use to exchange data. One of these application protocols is the Hypertext Transfer Protocol (HTTP), which is used to transfer Web page files. The transport layer is responsible for providing the application layer with communication and packet services.

This layer includes TCP and other protocols. The Internet layer is responsible for addressing, routing, and packaging data packets called IP datagrams. The Internet Protocol is one of the protocols used in this layer. The network interface layer is responsible for placing packets on and receiving them from the network medium, which could be any networking technology.

Data sent from one computer to the other passes downward through all four layers, starting with the sending computer's application layer and passing through the network interface layer. After the data reach the recipient host computer, they travel up the layers and are reassembled into a format the receiving computer can use. If the receiving computer finds a damaged packet, it asks the sending computer to retransmit it. This process is reversed when the receiving computer responds.

Page Ref: 262-263 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 7.1: What are the principal components of telecommunications networks and key networking technologies?

24) Which signal types are represented by a continuous waveform?

A) laser B) optical C) digital D) RFID E) analog Answer: E Page Ref: 263 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

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25) To use the analog telephone system for sending digital data, you must also use A) a modem.

B) a router.

C) DSL. D) twisted wire.

E) TCP/IP. Answer: A Page Ref: 263 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

26) Which type of network is used to connect digital devices within a half-mile or 500-meter radius?

A) Wi-Fi B) LAN C) WAN D) MAN E) SAN Answer: B Page Ref: 264 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

27) Which type of network treats all processors equally and allows peripheral devices to be shared without going to a separate server?

A) MAN B) wireless C) LAN D) Windows domain network E) peer-to-peer Answer: E Page Ref: 265 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

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28) Which type of network would be most appropriate for a business that comprised three employees and a manager located in the same office space, whose primary need is to share documents?

A) MAN B) domain-based LAN C) peer-to-peer network D) WAN E) SAN Answer: C Page Ref: 265 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 7.2: What are the different types of networks?

29) A network that spans a city, and sometimes its major suburbs as well, is called a A) CAN. B) MAN. C) LAN. D) WAN. E) WSN. Answer: B Page Ref: 265 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

30) A network that covers entire geographical regions is most commonly referred to as a(n) A) local area network.

B) intranet.

C) peer-to-peer network.

D) wide area network.

E) MAN. Answer: D Page Ref: 265 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

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31) Bandwidth is the A) number of frequencies that can be broadcast through a medium.

B) number of cycles per second that can be sent through a medium.

C) difference between the highest and lowest frequencies that can be accommodated on a single channel.

D) total number of bytes that can be sent through a medium per second.

E) geographical distance spanned by a network.

Answer: C Page Ref: 265 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

32) The total amount of digital information that can be transmitted through any telecommunications medium is measured in A) bps.

B) Hertz.

C) baud.

D) gigaflops.

E) RPMs. Answer: A Page Ref: 265 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

33) A(n) ________ signal is a discrete, binary waveform that transmits data coded into two discrete states such as 1-bits and 0-bits.

A) modulated B) broadband C) T1 D) analog E) digital Answer: E Page Ref: 263 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

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34) Coaxial cable is similar to that used for cable television and consists of thickly insulated copper wire.

Answer: TRUE Page Ref: 266 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

35) Fiber-optic cable is more expensive and harder to install than wire media.

Answer: TRUE Page Ref: 266 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

36) The number of cycles per second that can be sent through any telecommunications medium is measured in kilobytes.

Answer: FALSE Page Ref: 265 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.2: What are the different types of networks?

37) You have been hired by a small new Web design firm to set up a network for its single office location. The network is primarily needed for exchanging files, accessing and managing beta Web sites on their Web server, and connecting to the Internet. The firm hires many freelancers who come into the office on an ad-hoc basis and it does not have a lot of money to spend on infrastructure. What type of network will you recommend?

Answer: Student answers will vary. An example answer is: I would recommend a mixed wired and wireless network. The wired LAN would connect the Web servers and primary workstations and connect via cable service to the Internet. Freelancers could connect wirelessly via access points.

Page Ref: 263-288 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 7.2: What are the different types of networks?

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38) Which of the following is not one of the top five search engines?

A) Facebook B) Yahoo C) Microsoft Bing D) Ask E) Google Answer: A Page Ref: 279 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

39) Digital subscriber lines A) operate over existing telephone lines to carry voice, data, and video.

B) operate over coaxial cable lines to deliver Internet access.

C) are very-high-speed data lines typically leased from long-distance telephone companies.

D) have up to twenty-four 64-Kbps channels.

E) are assigned to every computer on the Internet.

Answer: A Page Ref: 266 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

40) T1 lines A) operate over existing telephone lines to carry voice, data, and video.

B) operate over coaxial lines to deliver Internet access.

C) do not provide guaranteed service levels, but simply "best effort."

D) have up to twenty-four 64-Kbps channels.

E) are high-speed, leased data lines providing guaranteed service levels.

Answer: E Page Ref: 267 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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41) What service converts IP addresses into more recognizable alphanumeric names?

A) HTML B) FTP C) IP D) HTTP E) DNS Answer: E Page Ref: 267 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

42) The child domain of the root is the A) top-level domain.

B) second-level domain.

C) host name.

D) domain extension.

E) mid-tier domain.

Answer: A Page Ref: 267 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

43) In the domain name "http://books.azimuth-interactive.com", which element is the secondlevel domain?

A) books B) azimuth-interactive C) com D) none; there is no second-level domain in this name E) books.azimuth-interactive Answer: B Page Ref: 267 Difficulty: Moderate AACSB: Information technology CASE: Analysis in terms of compare LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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44) Which organization helps define the overall structure of the Internet?

A) none (no one "owns" the Internet) B) W3C C) ICANN D) The Department of Commerce (U.S.) E) IAB Answer: E Page Ref: 269 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

45) IPv6 is being developed in order to A) update the packet transmission protocols for higher bandwidth.

B) create more IP addresses.

C) allow for different levels of service.

D) support Internet2.

E) reduce excess IP addresses.

Answer: B Page Ref: 272 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

46) "Predictive search" in Google's search engine A) maintains a history of your searches and then predicts what you will search on next.

B) uses a tracking service and cookies on your browser to predict search results.

C) uses a knowledge graph of what similar people searched on to predict your search interests.

D) uses a semantic approach to predict what you are looking for.

E) predicts what you are looking for as you enter words into the query box.

Answer: E Page Ref: 281 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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47) Instant messaging is a type of ________ service.

A) chat B) cellular C) e-mail D) wireless E) network Answer: A Page Ref: 273 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

48) ________ integrate disparate channels for voice communications, data communications, instant messaging, e-mail, and electronic conferencing into a single experience.

A) Wireless networks B) Intranets C) Virtual private networks D) Modems E) Unified communications Answer: E Page Ref: 276 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

49) A VPN A) is an encrypted private network configured within a public network.

B) is more expensive than a dedicated network.

C) provides secure, encrypted communications using Telnet.

D) is an Internet-based service for delivering voice communications.

E) is a proprietary networking service technology developed by individual corporations.

Answer: A Page Ref: 277 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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50) Web browser software requests Web pages from the Internet using which protocol?

A) URL B) HTTP C) DNS D) HTML E) FTP Answer: B Page Ref: 278 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

51) Together, a protocol prefix, a domain name, a directory path, and a document name, are called a(n) A) uniform resource locator.

B) IP address.

C) third-level domain.

D) root domain.

E) child domain.

Answer: A Page Ref: 278 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

52) The most common Web server today is A) Microsoft IIS. B) WebSTAR. C) IBM HTTP Server.

D) Netscape Server.

E) Apache HTTP Server.

Answer: E Page Ref: 278 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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53) What technology allows people to have content pulled from Web sites and fed automatically to their computers?

A) FTP B) RSS C) HTTP D) Bluetooth E) IPv6 Answer: B Page Ref: 284 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

54) The process of employing techniques to help a Web site achieve a higher ranking with the major search engines is called A) VPN. B) IAB. C) SEM. D) SEO. E) RSS. Answer: D Page Ref: 281 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

55) Which of the following statements is not true about search engines?

A) They are arguably the Internet's "killer app."

B) They have solved the problem of how users instantly find information on the Internet.

C) They are monetized almost exclusively by search engine marketing.

D) There are hundreds of search engines vying for user attention, with no clear leader having yet emerged.

E) Users are increasingly using search engines on mobile devices.

Answer: D Page Ref: 278-280 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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56) Which process is used to protect transmitted data in a VPN? A) tunneling B) PPP C) VOIP D) packet-switching E) chaining Answer: A Page Ref: 277 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

57) ________ monetizes the value of the data stored by search engines.

A) TCP/IP B) RSS C) WiMax D) Wireless sensor networks E) Search engine marketing Answer: E Page Ref: 280 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

58) Shopping bots use ________ software for searching the Internet.

A) Web 2.0 B) Web 3.0 C) intelligent agent D) comparison E) SEO Answer: C Page Ref: 283 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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59) Web sites that enable users to share information, collaborate, and create new services and content are called ________ sites.

A) third generation B) second generation C) first generation D) new wave E) mashup Answer: B Page Ref: 283 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

60) A(n) ________ is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers.

A) RSS B) WAN C) NFP D) ISP E) FTP Answer: D Page Ref: 266 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

61) The backbone networks of the Internet are typically owned by long-distance telephone companies called A) regional network providers.

B) enhanced service providers.

C) internet bulk providers.

D) backbone providers.

E) network service providers.

Answer: E Page Ref: 268 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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62) A(n) ________ is software for locating and managing stored Web pages.

A) Web server B) net server C) router D) modem E) hub Answer: A Page Ref: 278 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

63) Wikis allow visitors to change or add to the original posted material.

Answer: TRUE Page Ref: 284 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

64) The Domain Name System (DNS) converts domain names to IP addresses.

Answer: TRUE Page Ref: 267 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

65) VoIP technology delivers voice information in digital form using packet switching.

Answer: TRUE Page Ref: 274 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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66) Web 3.0 is an effort to add a layer of meaning to the existing Web in order to reduce the amount of human involvement in searching for and processing Web information.

Answer: TRUE Page Ref: 285 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

67) Mobile search makes up at least 50% of all Internet searches.

Answer: TRUE Page Ref: 279 Difficulty: Easy AACSB: Reflective thinking CASE: Comprehension LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

68) Describe and explain the idea of "network neutrality." Are you in favor of network neutrality? Why or why not?

Answer: Network neutrality describes the current equal access by users to Internet bandwidth, regardless of the services they are using on the Internet. Network neutrality is the idea that Internet service providers must allow customers equal access to content and applications, regardless of the source or nature of the content. Presently, the Internet is indeed neutral: all Internet traffic is treated equally on a first-come, first-serve basis by Internet backbone owners.

The Internet is neutral because it was built on phone lines, which are subject to "common carriage" laws. These laws require phone companies to treat all calls and customers equally. For example, someone using the Internet to download large movie files pays the same rate as someone accessing their e-mail. Now telecommunications and cable companies want to be able to charge differentiated prices based on the amount of bandwidth consumed by content being delivered over the Internet. Student opinions will vary; one might be: I support network neutrality because the risk of censorship increases when network operators can selectively block or slow access to certain content.

Page Ref: 270-271 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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69) What are the business advantages of using voice over IP (VoIP) technology?

Answer: Business can lower costs by using the Internet to deliver voice information, avoiding the tolls charged by local and long-distance telephone networks. They can lower costs from not having to create a separate telephone network. VOIP enables communication by supporting Internet conference calls using video. VOIP also provides flexibility—phones can be added or moved to different offices without rewiring or reconfiguring the network.

Page Ref: 274 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

70) What is Web 3.0, and how do you think Web 3.0 developments could impact businesses?

Answer: Web 3.0 is the vision of the next generation of the Web in which all of the information available on the Web is woven together into a single experience. The related movement called the Semantic Web is a collaborative effort to add a layer of meaning to existing information to reduce the amount of human time spent in searching and processing that information. Student views on the impact on businesses would vary. An example answer is: This potentially could have huge effects on businesses as simple analysis becomes mechanized, requiring fewer humans to perform this basic task.

Page Ref: 285 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

71) Blogs, wikis, and social networking sites were designed for individuals to communicate with each other. What uses do businesses have for these tools? Give specific examples.

Answer: Businesses can use these tools to reach out and market to potential new customers. For example, many businesses have Facebook sites to market their product to specific groups on Facebook. They can use these tools to support and give added value to existing customers. For example, a software company could have a blog that discusses in-depth use of a software product. Businesses can also use these tools within their company to communicate between departments and share knowledge. For example, a company wiki could be set up as a repository of expert information.

Page Ref: 283-284 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis in terms of build, model LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

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72) What has made the Google search engine so successful?

Answer: The Google search engine became so successful because it was one of the first search engines to incorporate page ranking. Not only does it index the Web pages it finds according to both keywords and combinations of keywords, it also ranks each page according to the number of pages that link to it, and the number of pages it links to itself. This helped make search results more relevant when compared to search engines relying solely on key words used on Web pages.

A user could be relatively certain that they would find relevant information within the top results of a Google search. Improved search results for the user, along with continual improvements to its search engine, the development and other Web applications, tools, and its Ad Sense product where it sells keywords to the highest bidder has made Google so successful as a search engine and marketing firm.

Page Ref: 280 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 7.3: How do the Internet and Internet technology work and how do they support communication and e-business?

73) All of the following are physical components of an RFID system except A) bar code.

B) antenna.

C) radio transmitters.

D) tags.

E) a stationary or handheld device.

Answer: A Page Ref: 290-291 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

74) Which digital cellular standard is used widely throughout the world except the United States?

A) GSM B) CDMA C) WLAN D) LTD E) 4G Answer: A Page Ref: 287 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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75) The concept of a future Web in which it is commonplace for everyday objects to be connected, controlled or monitored over the Internet is called A) the Internet of things.

B) the Semantic Web. C) Internet2.

D) a 3-D Web. E) Web 2.0.

Answer: A Page Ref: 292 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

76) Which of the following statements about RFID is not true?

A) RFIDs transmit only over a short range.

B) RFIDs use an antenna to transmit data.

C) Microchips embedded in RFIDs are used to store data.

D) RFIDs require line-of-sight contact to be read.

E) RFID tags and antennas come in a variety of shapes and sizes.

Answer: D Page Ref: 290-91 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

77) Which of the following is the first generation of cellular systems suitable for watching videos?

A) 2G B) 2.5G C) 3G D) 3.5G E) 4G Answer: E Page Ref: 287 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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78) 4G networks use which standards?

A) GSM and LTD B) CDMA and PAN C) LTE and LTD D) T-Mobile and AT&T E) LTE and WiMax Answer: E Page Ref: 287 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

79) The most appropriate wireless networking standard for creating PANs is A) I-mode.

B) IEEE 802.11b.

C) Wi-Fi. D) Bluetooth.

E) RFID. Answer: D Page Ref: 287 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

80) Bluetooth can be used to link up to ________ devices within a 10-meter area using lowpower, radio-based communication.

A) two B) five C) eight D) fifteen E) twenty Answer: C Page Ref: 287 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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81) One or more access points positioned on a ceiling, wall, or other strategic spot in a public place to provide maximum wireless coverage for a specific area are referred to as A) touch points.

B) netcenters.

C) hot points.

D) wireless hubs.

E) hotspots.

Answer: E Page Ref: 289 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

82) The 802.11 set of standards is known as A) WLAN. B) WSN. C) Wi-Fi. D) WiMax. E) WAN. Answer: C Page Ref: 288 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

83) The WiMax standard can transmit up to a distance of approximately A) 30 meters.

B) 500 meters.

C) 30 miles.

D) 5 miles.

E) 70 miles.

Answer: C Page Ref: 290 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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84) Based on your reading of the examples in the chapter, what would be the best use of RFID for a business?

A) logging transactions B) managing the supply chain C) lowering network costs D) enabling client communication E) improving employee engagement Answer: B Page Ref: 290-291 Difficulty: Moderate AACSB: Analytical thinking CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

85) ________ combine the functionality of a cell phone with the computing of a laptop.

A) Smartphones B) Netbooks C) Tablets D) E-readers E) iPods Answer: A Page Ref: 286 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

86) A(n) ________ is a box consisting of a radio receiver/transmitter and antennas that links to a wired network, router, or hub.

A) RFID receiver B) WiMax receiver C) access point D) hub E) hotspot Answer: C Page Ref: 288 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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87) RFID technology is being gradually replaced by less costly technologies such as WSNs. Answer: FALSE Page Ref: 290-291 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

88) How are RFID systems used in inventory control and supply chain management?

Answer: In inventory control and supply chain management, RFID systems capture and manage more detailed information about items in warehouses or in production than bar coding systems.

If a large number of items are shipped together, RFID systems track each pallet, lot, or even unit item in the shipment. This technology may help companies improve receiving and storage operations by enhancing their ability to "see" exactly what stock is stored in warehouses or on retail store shelves.

Page Ref: 290-292 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

89) What are wireless sensor networks? How do they work and what are they used for?

Answer: Wireless sensor networks (WSNs) are networks of interconnected wireless devices that are embedded into the physical environment to provide measurements of many points over large spaces. These devices have built-in processing, storage, and radio frequency sensors and antennas. They are linked into an interconnected network that routes the data they capture to a computer for analysis. These networks range from hundreds to thousands of nodes. Because wireless sensor devices are placed in the field for years at a time without any maintenance or human intervention, they must have very low power requirements and batteries capable of lasting for years. Wireless sensor networks are valuable in areas such as monitoring environmental changes; monitoring traffic or military activity; protecting property; efficiently operating and managing machinery and vehicles; establishing security perimeters; monitoring supply chain management; or detecting chemical, biological, or radiological material.

Page Ref: 291 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 7.4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Management Information Systems, 14e (Laudon) Chapter 8 Securing Information Systems 1) ________ refers to policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems.

A) "Security" B) "Controls" C) "Benchmarking" D) "Algorithms" E) "Identity management" Answer: A Page Ref: 306 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

2) ________ refers to all of the methods, policies, and organizational procedures that ensure the safety of the organization's assets, the accuracy and reliability of its accounting records, and operational adherence to management standards.

A) "Legacy systems" B) "SSID standards" C) "Vulnerabilities" D) "Security policy" E) "Controls" Answer: E Page Ref: 306 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

3) Large amounts of data stored in electronic form are ________ than the same data in manual form.

A) less vulnerable to damage B) more secure C) vulnerable to many more kinds of threats D) more critical to most businesses E) prone to more errors Answer: C Page Ref: 306 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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4) Electronic data are more susceptible to destruction, fraud, error, and misuse because information systems concentrate data in computer files that A) are easily decrypted.

B) can be opened with easily available software.

C) may be accessible by anyone who has access to the same network.

D) are unprotected by up-to-date security systems.

E) are rarely validated.

Answer: C Page Ref: 307 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of compare LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

5) The communications lines in a client/server environment are specifically vulnerable to A) vandalism.

B) malware.

C) software failure.

D) tapping.

E) errors.

Answer: D Page Ref: 306 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of examine LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

6) Client software in a client/server environment is specifically vulnerable to A) DoS attacks.

B) vandalism.

C) fraud.

D) radiation.

E) unauthorized access.

Answer: E Page Ref: 306 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of examine LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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7) In a client/server environment, corporate servers are specifically vulnerable to A) unauthorized access.

B) sniffing.

C) malware.

D) radiation.

E) tapping.

Answer: C Page Ref: 306 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of examine LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

8) The Internet poses specific security problems because A) it was designed to be easily accessible.

B) Internet data is not run over secure lines.

C) Internet standards are universal.

D) it changes so rapidly.

E) there is no formal controlling body.

Answer: A Page Ref: 307 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of compare, analyze LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

9) Which of the following statements about the Internet security is not true?

A) The use of P2P networks can expose a corporate computer to outsiders.

B) A corporate network without access to the Internet is more secure than one that provides access.

C) VoIP is more secure than the switched voice network.

D) Instant messaging can provide hackers access to an otherwise secure network.

E) Smartphones have the same security weaknesses as other Internet devices.

Answer: C Page Ref: 307-308 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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10) A Trojan horse A) is software that appears to be benign but does something other than expected.

B) is a virus that replicates quickly.

C) is malware named for a breed of fast-moving Near-Eastern horses.

D) installs spyware on users' computers.

E) is a type of sniffer used to infiltrate corporate networks.

Answer: A Page Ref: 309 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

11) A salesperson clicks repeatedly on the online ads of a competitor's in order to drive the competitor's advertising costs up. This is an example of A) phishing.

B) pharming.

C) spoofing.

D) evil twins.

E) click fraud.

Answer: E Page Ref: 316 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

12) Which of the following is a virus that uses flaws in Windows software to take over a computer remotely?

A) Sasser B) Zeus Trojan C) Melissa D) ILOVEYOU E) Conficker Answer: E Page Ref: 310 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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13) ________ is malware that hijacks a user's computer and demands payment in return for giving back access.

A) A Trojan horse B) Ransomware C) Spyware D) A virus E) An evil twin Answer: B Page Ref: 310-311 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

14) ________ is malware that logs and transmits everything a user types.

A) Spyware B) A Trojan horse C) A keylogger D) A worm E) A sniffer Answer: C Page Ref: 311 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

15) Hackers create a botnet by A) infecting Web search bots with malware.

B) using Web search bots to infect other computers.

C) causing other people's computers to become "zombie" PCs following a master computer.

D) infecting corporate servers with "zombie" Trojan horses that allow undetected access through a back door.

E) pharming multiple computers.

Answer: C Page Ref: 312 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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16) Using numerous computers to inundate and overwhelm the network from numerous launch points is called a(n) ________ attack.

A) DDoS B) DoS C) SQL injection D) phishing E) botnet Answer: A Page Ref: 312 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

17) Which of the following is not an example of a computer used as a target of crime?

A) knowingly accessing a protected computer to commit fraud B) sccessing a computer system without authority C) illegally accessing stored electronic communication D) threatening to cause damage to a protected computer E) breaching the confidentiality of protected computerized data Answer: C Page Ref: 313 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

18) Which of the following is not an example of a computer used as an instrument of crime?

A) theft of trade secrets B) intentionally attempting to intercept electronic communication C) unauthorized copying of software D) breaching the confidentiality of protected computerized data E) schemes to defraud Answer: D Page Ref: 313 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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19) Social networking sites have become a new conduit for malware because A) they are used by so many people.

B) they allow users to post media and image files.

C) they are especially vulnerable to social engineering.

D) they allow users to post software code.

E) they have poor user authentication.

Answer: D Page Ref: 309 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

20) The intentional defacement or destruction of a Web site is called A) spoofing.

B) cybervandalism.

C) cyberwarfare.

D) phishing.

E) pharming.

Answer: B Page Ref: 311 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

21) Evil twins are A) Trojan horses that appears to the user to be a legitimate commercial software application.

B) e-mail messages that mimic the e-mail messages of a legitimate business.

C) fraudulent Web sites that mimic a legitimate business's Web site.

D) computers that fraudulently access a Web site or network using the IP address and identification of an authorized computer.

E) bogus wireless network access points that look legitimate to users.

Answer: E Page Ref: 313 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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22) Pharming involves A) redirecting users to a fraudulent Web site even when the user has typed in the correct address in the Web browser.

B) pretending to be a legitimate business's representative in order to garner information about a security system.

C) setting up fake Web sites to ask users for confidential information.

D) using e-mails for threats or harassment.

E) setting up fake Wi-Fi access points that look as if they are legitimate public networks.

Answer: A Page Ref: 314 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

23) You have been hired as a security consultant for a law firm. Which of the following constitutes the greatest source for network security breaches to the firm?

A) wireless network B) employees C) authentication procedures D) lack of data encryption E) software quality Answer: B Page Ref: 317 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

24) Tricking employees to reveal their passwords by pretending to be a legitimate member of a company is called A) sniffing.

B) social engineering.

C) phishing.

D) pharming.

E) snooping Answer: B Page Ref: 317 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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25) How do software vendors correct flaws in their software after it has been distributed?

A) They issue bug fixes.

B) They issue patches.

C) They re-release the software.

D) They release updated versions of the software.

E) They don't; users purchase software at their own risk.

Answer: B Page Ref: 318 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

26) A practice in which eavesdroppers drive by buildings or park outside and try to intercept wireless network traffic is referred to as A) war driving.

B) sniffing.

C) cybervandalism.

D) drive-by tapping.

E) snooping.

Answer: A Page Ref: 308 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

27) ________ is a crime in which an imposter obtains key pieces of personal information to impersonate someone else.

A) Identity theft B) Spoofing C) Social engineering D) Evil twins E) Pharming Answer: A Page Ref: 312 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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28) ________ identify the access points in a Wi-Fi network.

A) NICs B) Mac addresses C) URLs D) UTMs E) SSIDs Answer: E Page Ref: 307 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

29) A foreign country attempting to access government networks in order to disable a national power grid would be an example of A) phishing.

B) denial-of-service attacks.

C) cyberwarfare.

D) cyberterrorism.

E) evil twins.

Answer: C Page Ref: 317 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

30) Smartphones have the same security flaws as other Internet-connected devices.

Answer: TRUE Page Ref: 307 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

31) In 2013, Panda Security reported approximately 30 million new kinds of malware strains.

Answer: TRUE Page Ref: 309 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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32) Viruses can be spread through e-mail.

Answer: TRUE Page Ref: 309 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

33) The term cracker is used to identify a hacker whose specialty is breaking open security systems.

Answer: FALSE Page Ref: 311 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

34) Wireless networks are more difficult for hackers to gain access too because radio frequency bands are difficult to scan.

Answer: FALSE Page Ref: 307 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

35) A computer virus replicates more quickly than a computer worm.

Answer: FALSE Page Ref: 309 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

36) One form of spoofing involves forging the return address on an e-mail so that the e-mail message appears to come from someone other than the sender.

Answer: TRUE Page Ref: 311 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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37) Sniffers enable hackers to steal proprietary information from anywhere on a network, including e-mail messages, company files, and confidential reports.

Answer: TRUE Page Ref: 311 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

38) DoS attacks are used to destroy information and access restricted areas of a company's information system.

Answer: FALSE Page Ref: 312 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

39) Zero defects cannot be achieved in larger software programs because fully testing programs that contain thousands of choices and millions of paths would require thousands of years.

Answer: TRUE Page Ref: 318 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

40) As discussed in the chapter opening case, magnetic stripes are an old technology that is vulnerable to counterfeit and theft.

Answer: TRUE Page Ref: 304 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

41) Malicious software programs referred to as spyware include a variety of threats such as computer viruses, worms, and Trojan horses.

Answer: FALSE Page Ref: 309 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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42) What are the security challenges faced by wireless networks?

Answer: Wireless networks are vulnerable because radio frequency bands are easy to scan. Both Bluetooth and Wi-Fi networks are susceptible to hacking by eavesdroppers. Local area networks (LANs) using the 802.11 standard can be easily penetrated by outsiders armed with laptops, wireless cards, external antennae, and hacking software. Hackers use these tools to detect unprotected networks, monitor network traffic, and, in some cases, gain access to the Internet or to corporate networks. Wi-Fi transmission technology was designed to make it easy for stations to find and hear one another. The service set identifiers (SSIDs) identifying the access points in a Wi-Fi network are broadcast multiple times and can be picked up fairly easily by intruders' sniffer programs. Wireless networks in many locations do not have basic protections against war driving, in which eavesdroppers drive by buildings or park outside and try to intercept wireless network traffic. A hacker can employ an 802.11 analysis tool to identify the SSID. An intruder that has associated with an access point by using the correct SSID is capable of accessing other resources on the network, using the Windows operating system to determine which other users are connected to the network, access their computer hard drives, and open or copy their files.

Intruders also use the information they have gleaned to set up rogue access points on a different radio channel in physical locations close to users to force a user's radio NIC to associate with the rogue access point. Once this association occurs, hackers using the rogue access point can capture the names and passwords of unsuspecting users.

Page Ref: 307 Difficulty: Difficult AACSB: Written and oral communication CASE: Analysis in terms of examine LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

43) Explain how an SQL injection attack works and what types of systems are vulnerable to this type of attack.

Answer: SQL injection attacks take advantage of vulnerabilities in poorly coded Web application software to introduce malicious code into a company's systems and networks. These vulnerabilities occur when a Web application fails to properly validate or filter data entered by a user on a Web page, which might occur when ordering something online. An attacker uses this input validation error to send a rogue SQL query to the underlying database to access the database, plant malicious code, or access other systems on the network. Large Web applications using databases are most vulnerable, as they may have hundreds of places for inputting user data, each of which creates an opportunity for an SQL injection attack.

Page Ref: 310 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of compare, assess LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

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44) How is the security of a firm's information system and data affected by its people, organization, and technology? Is the contribution of one of these dimensions any more important than the other? Why? Answer: There are various technological essentials to protecting an information system: firewalls, authentication, encryption, anti-virus protection etc. Without technology implemented correctly, there is no security. A firm's employees are its greatest threat, in terms of embezzlement and insider fraud, errors, and lax enforcement of security policies. Probably the most important dimension is organization, because this is what determines a firm's business processes and policies. The firm's information policies can most enhance security by stressing intelligent design of security systems, appropriate use of security technology, and the usability of its security processes.

Page Ref: 305-336 Difficulty: Difficult AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 8.1: Why are information systems vulnerable to destruction, error, and abuse?

45) The HIPAA Act of 1996 A) requires financial institutions to ensure the security of customer data.

B) specifies best practices in information systems security and control.

C) imposes responsibility on companies and management to safeguard the accuracy of financial information.

D) outlines medical security and privacy rules.

E) identifies computer abuse as a crime and defines abusive activities.

Answer: D Page Ref: 319 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.2: What is the business value of security and control?

46) The Gramm-Leach-Bliley Act A) requires financial institutions to ensure the security of customer data.

B) specifies best practices in information systems security and control.

C) imposes responsibility on companies and management to safeguard the accuracy of financial information.

D) outlines medical security and privacy rules.

E) identifies computer abuse as a crime and defines abusive activities.

Answer: A Page Ref: 319 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 8.2: What is the business value of security and control?

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47) The Sarbanes-Oxley Act A) requires financial institutions to ensure the security of customer data.

B) specifies best practices in information systems security and control.

C) imposes responsibility on companies and management to safeguard the accuracy of financial information.

D) outlines medical security and privacy rules.

E) identifies computer abuse as a crime and defines abusive activities.

Answer: C Page Ref: 319 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.2: What is the business value of security and control?

48) The most common type of electronic evidence is A) voice-mail.

B) spreadsheets.

C) instant messages.

D) e-mail.

E) VOIP data.

Answer: D Page Ref: 320 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.2: What is the business value of security and control?

49) Which of the following is a type of ambient data?

A) computer log containing recent system errors B) a file deleted from a hard disk C) a file that contains an application's user settings D) a set of raw data from an environmental sensor E) data that has been recorded over Answer: B Page Ref: 320 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 8.2: What is the business value of security and control?

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50) Computer forensics tasks include all of the following except A) presenting collected evidence in a court of law.

B) securely storing recovered electronic data.

C) collecting physical evidence on the computer.

D) finding significant information in a large volume of electronic data.

Answer: C Page Ref: 320 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.2: What is the business value of security and control?

51) Three major concerns of system builders and users are disaster, security, and human error. Of the three, which do you think is most difficult to deal with? Why? Answer: Student answers will vary. Example answers are: Disaster might be the most difficult because it is unexpected, broad-based, and frequently life threatening. In addition, the company cannot know if the disaster plan will work until a disaster occurs, and then it's too late to make corrections. Security might be the most difficult because it is an ongoing problem, new viruses are devised constantly, and hackers get smarter every day. Furthermore, damage done by a trusted employee from inside cannot be obviated by system security measures. Human error might be most difficult because it isn't caught until too late, and the consequences may be disastrous. Also, administrative error can occur at any level and through any operation or procedure in the company.

Page Ref: 305-336 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 8.2: What is the business value of security and control?

52) Hackers and their companion viruses are an increasing problem, especially on the Internet.

What are the most important measurers for a firm to take to protect itself from this? Is full protection feasible? Why or why not?

Answer: For protection, a company must institute good security measures, which will include firewalls, investigation of personnel to be hired, physical and software security and controls, antivirus software, and internal education measures. These measures are best put in place at the time the system is designed, and careful attention paid to them. A prudent company will engage in disaster protection measures, frequent updating of security software, and frequent auditing of all security measures and of all data upon which the company depends. Full protection may not be feasible in light of the time and expenses involved, but a risk analysis can provide insights into which areas are most important and vulnerable. These are the areas to protect first.

Page Ref: 318-336 Difficulty: Moderate AACSB: Written and oral communication CASE: Synthesis in terms of applying LO: 8.2: What is the business value of security and control?

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53) Your company, an online discount stationers, has calculated that a loss of Internet connectivity for 3 hours results in a potential loss of $2,000 to $3,000 and that there is a 50% chance of this occurring each year. What is the annual expected loss from this exposure?

A) $500 B) $1,000 C) $1,250 D) $1,500 E) $2,500 Answer: C Page Ref: 322 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.3: What are the components of an organizational framework for security and control?

54) Application controls A) can be classified as input controls, processing controls, and output controls.

B) govern the design, security, and use of computer programs and the security of data files in general throughout the organization.

C) apply to all computerized applications and consist of a combination of hardware, software, and manual procedures that create an overall control environment.

D) include software controls, computer operations controls, and implementation controls.

E) monitor the use of system software and prevent unauthorized access to software and programs.

Answer: A Page Ref: 321 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.3: What are the components of an organizational framework for security and control?

55) ________ controls ensure that valuable business data files on either disk or tape are not subject to unauthorized access, change, or destruction while they are in use or in storage.

A) Software B) Administrative C) Data security D) Implementation E) Input Answer: C Page Ref: 321 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 8.3: What are the components of an organizational framework for security and control?

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56) Analysis of an information system that rates the likelihood of a security incident occurring and its cost is included in a(n) A) security policy.

B) AUP. C) risk assessment.

D) business impact analysis.

E) business continuity plan.

Answer: C Page Ref: 322 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.3: What are the components of an organizational framework for security and control?

57) Statements ranking information risks and identifying security goals are included in a(n) A) security policy.

B) AUP. C) risk assessment.

D) business impact analysis.

E) business continuity plan.

Answer: A Page Ref: 323 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.3: What are the components of an organizational framework for security and control?

58) An acceptable use policy defines the acceptable level of access to information assets for different users.

Answer: FALSE Page Ref: 323 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.3: What are the components of an organizational framework for security and control?

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59) How can a firm's security policies contribute and relate to the six main business objectives?

Give examples.

Answer: (1) Operational excellence: Security policies are essential to operational excellence. A firm's daily transactions can be severely disrupted by cybercrime such as hackers. A firm's efficiency relies on accurate data. In addition, information assets have tremendous value, and the repercussions can be devastating if they are lost, destroyed, or placed in the wrong hands.

(2) New products, services, business models. Security policies protect a company's ideas for new products and services, which could be stolen by competitors. Additionally, enhanced security could be seen by a customer as a way to differentiate your product.

(3) Customer and supplier intimacy: Customers rely on your security if they enter personal data into your information system, for example, credit card information into your e-commerce site.

The information you receive from customers and suppliers directly affects how able you are to customize your product, service, or communication with them.

(4) Improved decision making: Secure systems make data accuracy a priority, and good decision making relies on accurate and timely data. Lost and inaccurate data would lead to compromised decision making.

(5) Competitive advantage: The knowledge that your firm has superior security than another would, on an otherwise level playing field, make your firm more attractive to do business with.

Also, improved decision-making, new products and services, which are also affected by security (see above), will contribute to a firm's competitive advantage. Strong security and control also increase employee productivity and lower operational costs.

(6) Survival: New laws and regulations make keeping your security system up to date a matter of survival. Inadequate security and control may result in serious legal liability. Firms have been destroyed by errors in security policies.

Page Ref: 305-336 Difficulty: Difficult AACSB: Written and oral communication CASE: Synthesis in terms of applying LO: 8.3: What are the components of an organizational framework for security and control?

60) Which of the following specifications replaces WEP with a stronger security standard that features changing encryption keys?

A) TLS B) AUP C) VPN D) WPA2 E) UTM Answer: D Page Ref: 330 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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61) Rigorous password systems A) are one of the most effective security tools.

B) may hinder employee productivity.

C) are costly to implement.

D) are often disregarded by employees.

Answer: B Page Ref: 326 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

62) An authentication token is a(n) A) device the size of a credit card that contains access permission data.

B) type of smart card.

C) gadget that displays passcodes.

D) electronic marker attached to a digital authorization file.

Answer: C Page Ref: 326 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

63) Biometric authentication A) is inexpensive.

B) is used widely in Europe for security applications.

C) can use a person's voice as a unique, measurable trait.

D) only uses physical measurements for identification.

E) only uses biographical details for identification.

Answer: C Page Ref: 327 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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64) A firewall allows the organization to A) enforce a security policy on data exchanged between its network and the Internet.

B) check the accuracy of all transactions between its network and the Internet.

C) create an enterprise system on the Internet.

D) check the content of all incoming and outgoing e-mail messages.

E) create access rules for a network.

Answer: A Page Ref: 328 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

65) ________ use scanning software to look for known problems such as bad passwords, the removal of important files, security attacks in progress, and system administration errors.

A) Stateful inspections B) Intrusion detection systems C) Application proxy filtering technologies D) Packet filtering technologies E) Firewalls Answer: B Page Ref: 329 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

66) Currently, the protocols used for secure information transfer over the Internet are A) TCP/IP and SSL. B) S-HTTP and CA. C) HTTP and TCP/IP. D) S-HTTP and SHTML. E) SSL, TLS, and S-HTTP. Answer: E Page Ref: 330 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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67) Most antivirus software is effective against A) only those viruses active on the Internet and through e-mail.

B) any virus.

C) any virus except those in wireless communications applications.

D) only those viruses already known when the software is written.

E) only viruses that are well-known and typically several years old.

Answer: D Page Ref: 329 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis in terms of applying LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

68) In which method of encryption is a single encryption key sent to the receiver so both sender and receiver share the same key?

A) SSL/TLS B) symmetric key encryption C) public key encryption D) private key encryption E) distributed encryption Answer: B Page Ref: 330 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

69) A digital certificate system A) uses third-party CAs to validate a user's identity.

B) uses digital signatures to validate a user's identity.

C) uses tokens to validate a user's identity.

D) is used primarily by individuals for personal correspondence.

E) protects a user's identity by substituting a certificate in place of identifiable traits.

Answer: A Page Ref: 331 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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70) All of the following are types of information systems general controls except A) application controls.

B) computer operations controls.

C) physical hardware controls.

D) software controls.

E) administrative controls Answer: A Page Ref: 321 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

71) For 100-percent availability, online transaction processing requires A) high-capacity storage.

B) a multi-tier server network.

C) fault-tolerant computer systems.

D) dedicated phone lines.

E) a digital certificate system.

Answer: C Page Ref: 332 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

72) In controlling network traffic to minimize slow-downs, a technology called ________ is used to examine data files and sort low-priority data from high-priority data.

A) high availability computing B) deep-packet inspection C) application proxy filtering D) stateful inspection E) unified threat management Answer: B Page Ref: 332 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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73) An authentication system in which a user must provide two types of identification, such as a bank card and PIN, is called A) smart card authentication.

B) biometric authentication.

C) two-factor authentication.

D) symmetric key authorization.

E) token authentication.

Answer: C Page Ref: 327 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

74) Smaller firms may outsource some or many security functions to A) ISPs. B) MISs. C) MSSPs. D) CAs. E) PKIs. Answer: C Page Ref: 333 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

75) Comprehensive security management products, with tools for firewalls, VPNs, intrusion detection systems, and more, are called ________ systems.

A) DPI B) MSSP C) NSP D) PKI E) UTM Answer: E Page Ref: 330 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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76) Organizations can use existing network security software to secure mobile devices.

Answer: FALSE Page Ref: 334 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

77) The dispersed nature of cloud computing makes it difficult to track unauthorized access.

Answer: TRUE Page Ref: 333 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

78) Biometric authentication is the use of personal, biographic details such as the high school you attended and the first street you lived on to provide identification.

Answer: FALSE Page Ref: 327 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

79) Packet filtering catches most types of network attacks.

Answer: FALSE Page Ref: 328 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

80) NAT conceals the IP addresses of the organization's internal host computers to deter sniffer programs.

Answer: TRUE Page Ref: 329 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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81) SSL is a protocol used to establish a secure connection between two computers.

Answer: TRUE Page Ref: 330 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

82) Public key encryption uses two keys.

Answer: TRUE Page Ref: 331 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

83) Smartphones typically feature state-of-the-art encryption and security features, making them highly secure tools for businesses.

Answer: FALSE Page Ref: 334 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

84) Authentication refers to verifying that a person is who he or she claims to be.

Answer: TRUE Page Ref: 326 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

85) You can test software before it is even written by conducting a walkthrough.

Answer: TRUE Page Ref: 336 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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86) When errors are discovered in software programs, the sources of the errors are found and eliminated through a process called debugging.

Answer: TRUE Page Ref: 336 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

87) Is the cloud a safer and more secure computing environment than an in-house network? Why or why not?

Answer: Student evaluations will vary, but should include the understanding that using the cloud for computing distributes data to remote services that a company will not have final control of, that a company's cloud data will be stored alongside the data of other companies, and that various safeguards should be in place to protect your data. A sample answer is: The safety of cloud computing as compared to in-house network computing depends on the security implemented both at the corporation and at the service provider. For example, the company will need to ensure secure procedures and make sure that employees have secure passwords and access levels. The cloud service provider should use encryption for all data, at a minimum.

Clients should make sure that the service provider complies with local privacy rules, external security audits, and certifications and provides proof of encryption mechanisms.

Page Ref: 333 Difficulty: Moderate AACSB: Written and oral communication CASE: Analysis in terms of appraise LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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88) Why is software quality important to security? What specific steps can an organization take to ensure software quality?

Answer: Software errors pose a constant threat to information systems, causing untold losses in productivity. Growing complexity and size of software programs, coupled with demands for timely delivery to markets, have contributed to an increase in software flaws or vulnerabilities. A major problem with software is the presence of hidden bugs or program code defects. Studies have shown that it is virtually impossible to eliminate all bugs from large programs. Flaws in commercial software not only impede performance but also create security vulnerabilities that open networks to intruders. To correct software flaws once they are identified, the software vendor creates small pieces of software called patches to repair the flaws without disturbing the proper operation of the software. Organizations must maintain best efforts to both make sure purchased software is up to date and make sure their own software and programming is as bugfree as possible by employing software metrics and rigorous software testing. Ongoing use of metrics allows the information systems department and end users to jointly measure the performance of the system and identify problems as they occur. Examples of software metrics include the number of transactions that can be processed in a specified unit of time, online response time, the number of payroll checks printed per hour, and the number of known bugs per hundred lines of program code. For metrics to be successful, they must be carefully designed, formal, objective, and used consistently. Early, regular, and thorough testing will contribute significantly to system quality. Good testing begins before a software program is even written by using a walkthrough—a review of a specification or design document by a small group of people carefully selected based on the skills needed for the particular objectives being tested. Once developers start writing software programs, coding walkthroughs also can be used to review program code. However, code must be tested by computer runs. When errors are discovered, the source is found and eliminated through a process called debugging.

Page Ref: 317-318, 334 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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89) You have just been hired as a security consultant by MegaMalls Inc., a national chain of retail malls, to make sure that the security of their information systems is up to par. Outline the steps you will take to achieve this.

Answer: (1) Establish what data and processes are important and essential to the company. Determine what external and internal information is essential to the different employee roles in the company.

(2) Conduct a security audit and create a risk assessment analysis.

(3) Establish what legal/governmental/industry standards need to be adhered to and which international standards are relevant.

(4) Conduct a business impact analysis and determine a disaster recovery and business continuity plan.

(5) Create a security policy that defines an acceptable use policy, authorization policies and processes.

(6) Plan for any change management needed.

(7) Determine how the success of your policy will be measured and set up means for measuring this.

(8) Implement such policies.

(9) Measure and evaluate the effectiveness of the policy and make any additional adjustments.

Page Ref: 318-336 Difficulty: Difficult AACSB: Written and oral communication CASE: Synthesis in terms of build, model LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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90) What is a digital certificate? How does it work?

Answer: Digital certificates are data files used to establish the identity of users and electronic assets for protection of online transactions. A digital certificate system uses a trusted third party, known as a certification authority, to validate a user's identity. The CA verifies a digital certificate user's identity offline. This information is put into a CA server, which generates an encrypted digital certificate containing owner identification information and a copy of the owner's public key. The certificate authenticates that the public key belongs to the designated owner. The CA makes its own public key available publicly either in print or perhaps on the Internet. The recipient of an encrypted message uses the CA's public key to decode the digital certificate attached to the message, verifies it was issued by the CA, and then obtains the sender's public key and identification information contained in the certificate. Using this information, the recipient can send an encrypted reply. The digital certificate system would enable, for example, a credit card user and a merchant to validate that their digital certificates were issued by an authorized and trusted third party before they exchange data. Public key infrastructure (PKI), the use of public key cryptography working with a certificate authority, is now widely used in ecommerce.

Page Ref: 331 Difficulty: Moderate AACSB: Written and oral communication CASE: Analysis in terms of summarize LO: 8.4: What are the most important tools and technologies for safeguarding information resources?

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Management Information Systems, 14e (Laudon) Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 1) From your reading of the chapter's opening case, ACH Food Companies implemented new information systems in order to achieve which of the following business objectives?

A) customer and supplier intimacy B) operational excellence C) survival D) improved decision making E) new products and services Answer: B Page Ref: 347-348 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

2) A suite of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processes best describes A) process management software.

B) ERP systems.

C) groupware.

D) application software.

E) supply chain management systems.

Answer: B Page Ref: 350 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

3) Enterprise software is built around thousands of predefined business processes that reflect A) the firm's organization.

B) industry goals.

C) best practices.

D) cutting edge workflow analyses.

E) the firm's culture.

Answer: C Page Ref: 351 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

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4) Which of the following is not true about enterprise systems?

A) Enterprise systems help firms respond rapidly to customer requests for information or products.

B) Enterprise system data have standardized definitions and formats that are accepted by the entire organization.

C) Enterprise software is expressly built to allow companies to mimic their unique business practices.

D) Enterprise software includes analytical tools to evaluate overall organizational performance.

E) Enterprise systems provide firmwide information to help managers make better decisions.

Answer: C Page Ref: 352-353 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

5) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take?

A) Rewrite the software to support the way the company's business processes work.

B) Select the business processes you wish to automate.

C) Map the company's business processes to the software's business processes.

D) Map the software's business processes to the company's business processes.

E) Select the functions of the system you wish to use.

Answer: E Page Ref: 351 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

6) When tailoring a particular aspect of a system to the way a company does business, enterprise software can provide the company with A) configuration tables.

B) Web services.

C) data dictionaries.

D) middleware.

E) customized plug-ins.

Answer: A Page Ref: 351 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

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7) In order to achieve maximum benefit from an enterprise software package, a business A) customizes the software to match all of its business processes.

B) uses only the processes in the software that match its own processes.

C) changes the way it works to match the software's business processes.

D) selects only the software that best matches its existing business processes.

E) retains legacy systems that best work with the software.

Answer: C Page Ref: 352 Difficulty: Moderate AACSB: Information technology CASE: Evaluation in terms of assess LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

8) ________ systems are based on a suite of software models used to support business activities across the firm.

A) Global B) Organizational C) Supply chain D) Product differentiation E) Enterprise Answer: E Page Ref: 351 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

9) Enterprise systems include analytical tools.

Answer: TRUE Page Ref: 352 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

10) An enterprise system helps reduce redundant business processes.

Answer: FALSE Page Ref: 352 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

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11) Identify and describe three major enterprise applications.

Answer: Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and marketing processes. Enterprise systems provide many benefits including an enterprise-enabled organization, improved management reporting and decision making, a unified information systems technology platform, and more efficient operations and customer-driven business processes.

Supply chain management systems help an organization better manage its supply chain, including planning, sourcing, making, delivering, and returning items. Supply chain management software can be categorized as a supply chain planning system or as a supply chain execution system. A supply chain planning system enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. A supply chain execution system manages the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. Supply chain management benefits include improved customer service and responsiveness, cost reduction, and cash utilization.

Customer relationship management systems help firms maximize the benefits of their customer assets. These systems capture and consolidate data from all over the organization and then distribute the results to various systems and customer touch points across the enterprise.

Customer relationship management systems can be classified as operational or as analytical.

Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Benefits include increased customer satisfaction, reduced direct marketing costs, more effective marketing, and lower costs for customer acquisition and retention.

Page Ref: 350-372 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

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12) Identify at least four benefits and four challenges of enterprise systems.

Answer: Benefits include: increasing operational efficiency; providing firmwide information to help decision making; standardized business processes; greater responsiveness to customer needs; greater accuracy in fulfilling product demand; reduction of inventory and inventory costs; reduction in order-to-delivery time; improving business processes; removing redundant processes and systems; lowering costs through centralized processing; and improved decision making. Challenges include: the expense of the software and related costs; the time required for implementation; deep-seated technological changes required, the deep-seated organizational changes required; overcoming organizational resistance; switching costs; data cleansing work required.

Page Ref: 353-372 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

13) You have been hired by Santori, Inc., a small company that imports and distributes an Italian sparkling water. The company is interested in what benefits an enterprise system would bring.

Would an enterprise system be appropriate for this company? What steps would you take in determining this?

Answer: An enterprise system may be too expensive, although there are enterprise software packages that are available to smaller companies. A hosted enterprise application might be the most economical way to implement an enterprise system. To determine whether this would be beneficial to Santori, I would first look at their existing business processes. It would be ideal to determine if their efficiency meets benchmarks in their industry and allows them to be competitive with other businesses in their niche. Then I would review existing hosted applications to see how the applications business processes matched up with Santori's. It would be important to compare the costs of instituting new business processes with the benefits and cost savings.

Page Ref: 349-372 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis in terms of devising LO: 9.1: How do enterprise systems help businesses achieve operational excellence?

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14) Supply chain complexity and scale increases when firms A) move to globalization.

B) manage the procurement, manufacturing, and distribution functions themselves.

C) outsource more labor.

D) modify their existing workflows to comply with supply-chain management systems.

E) develop products and services that coordinate with many firms and suppliers.

Answer: E Page Ref: 353 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

15) A network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers is called a A) distribution channel.

B) supply chain.

C) value chain.

D) marketing channel.

E) information system.

Answer: B Page Ref: 353 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

16) Components or parts of finished products are referred to as A) upstream materials.

B) raw materials.

C) secondary products.

D) intermediate products.

E) mid-chain products.

Answer: D Page Ref: 353 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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17) A company's suppliers, supplier's suppliers, and the processes for managing relationships with them is the A) supplier's internal supply chain.

B) external supply chain.

C) upstream portion of the supply chain.

D) downstream portion of the supply chain.

E) onstream portion of the supply chain.

Answer: C Page Ref: 354 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

18) A company's organizations and processes for distributing and delivering products to the final customers is the A) supplier's internal supply chain.

B) external supply chain.

C) upstream portion of the supply chain.

D) downstream portion of the supply chain.

E) onstream portion of the supply chain.

Answer: D Page Ref: 354 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

19) If manufacturers had perfect information, they could implement a A) hyper-efficient strategy.

B) frictionless strategy.

C) streamlined strategy.

D) bullwhip strategy.

E) just-in-time strategy.

Answer: E Page Ref: 355 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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20) Why is overstocking warehouses not an effective solution for a problem of low availability?

A) It does not speed product time to market.

B) It is an inefficient use of raw materials.

C) It increases sales costs.

D) It increases inventory costs.

E) It lowers fill rate.

Answer: D Page Ref: 355 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

21) Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply chain?

A) safety stock B) continuous replenishment C) just-in-time strategies D) demand planning E) perfect information Answer: A Page Ref: 355 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

22) A scheduling system for minimizing inventory by having components arrive exactly at the moment they are needed and finished goods shipped as soon as they leave the assembly line best describes a ________ strategy.

A) just-in-time B) frictionless C) bullwhip D) safety-stock E) streamlined Answer: A Page Ref: 355 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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23) A distortion of information about the demand for a product as it passes from one entity to the next across the supply chain is called the ________ effect.

A) network B) bullwhip C) ripple D) whirlpool E) diffraction Answer: B Page Ref: 355 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

24) Supply chain software can be classified as either supply chain ________ systems or supply chain ________ systems.

A) push; pull B) demand; continual C) upstream; downstream D) planning; execution E) maintenance; development Answer: D Page Ref: 355-358 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

25) Systems that enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product best describes supply chain ________ systems.

A) demand B) delivery C) optimization D) execution E) planning Answer: E Page Ref: 355 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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26) Supply chain planning systems perform all of the following functions except A) establish inventory levels for raw materials and finished goods.

B) identify the transportation mode to use for product delivery.

C) determine where to store finished goods.

D) determine how much product to manufacture in a given time period.

E) track the physical status of goods.

Answer: E Page Ref: 355-356 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

27) Which supply chain planning function determines how much product is needed to satisfy all customer demands?

A) distribution management B) replenishment planning C) demand planning D) order planning E) customer planning Answer: C Page Ref: 356 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

28) Supply chain ________ systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner.

A) demand B) delivery C) planning D) execution E) optimization Answer: D Page Ref: 358 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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29) Capabilities of supply chain execution systems would not include A) identifying the optimal transportation mode.

B) tracking the flow of finished goods.

C) managing materials.

D) managing warehouse operations.

E) managing the financial information involving all parties.

Answer: A Page Ref: 358-359 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

30) From your reading of the Scott's Miracle-Gro case study, the company implemented SAP and JDA enterprise and supply chain planning systems to solve what problems?

A) lack of brand recognition B) lack of coordination among production facilities C) poor supply chain visibility for management D) shoddy record-keeping E) coordination issues caused by the merger of Scott's and MiracleGro Answer: E Page Ref: 357-358 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

31) A supply chain driven by actual customer orders or purchases follows a ________ model.

A) pull-based B) build-to-stock C) push-based D) replenishment-driven E) optimized Answer: A Page Ref: 360 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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32) A build-to-order supply-chain model is also called a ________ model.

A) supply-based B) demand-driven C) replenishment-driven D) push-based E) market-driven Answer: B Page Ref: 360 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

33) Concurrent supply chains are made possible by which technology?

A) ERP systems B) the Internet C) supply-chain management systems D) just-in-time supply-chain technologies E) extranets Answer: B Page Ref: 360 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

34) The business value of an effective supply chain management system includes all of the following except A) faster time to market.

B) cost reduction.

C) supply matched to demand.

D) improved delivery service.

E) increased inventory levels.

Answer: D Page Ref: 361 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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35) The bullwhip effect is countered by A) globalization.

B) disintermediation.

C) implementing an SCM. D) reducing information uncertainty.

E) product differentiation.

Answer: D Page Ref: 355 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

36) As they move through the supply chain, ________ are transformed into finished products and shipped to retailers and customers.

A) raw materials B) intermediate products C) basic products D) natural resources E) nascent products Answer: A Page Ref: 353 Difficulty: Easy AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

37) The total time it takes to complete a business process, from start to finish, is called its ________ time.

A) development B) cycle C) fulfillment D) service E) actualization Answer: B Page Ref: 353 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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38) A company having difficulty with timely delivery of parts to its manufacturing plants should implement a supply chain ________ system.

A) execution B) planning C) optimization D) management E) touch point Answer: A Page Ref: 358 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

39) Supply chain management systems are a type of enterprise system.

Answer: FALSE Page Ref: 355 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

40) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers.

Answer: FALSE Page Ref: 354 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

41) Supply chain inefficiencies can waste as much as 25 percent of a company's operating costs.

Answer: TRUE Page Ref: 355 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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42) Safety stock acts as a buffer for the lack of flexibility in the supply chain.

Answer: TRUE Page Ref: 355 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

43) The bullwhip effect describes consistency and continuity in demand for a product as it passes from one entity to the next across the supply chain.

Answer: FALSE Page Ref: 355 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

44) Supply chain execution systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product.

Answer: FALSE Page Ref: 358 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

45) Before the Internet, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes.

Answer: TRUE Page Ref: 359 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

46) Inefficiencies in a supply chain are primarily caused by inaccurate information.

Answer: TRUE Page Ref: 354 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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47) In a push-based model of SCM systems, actual customer orders or purchases trigger events in the supply chain.

Answer: FALSE Page Ref: 360 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

48) In a pull-based model of SCM systems, production master schedules are based on forecasts of demand for products.

Answer: FALSE Page Ref: 360 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

49) Walmart is an example of a push-based model.

Answer: FALSE Page Ref: 360 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

50) Total supply chain costs represent the majority of operating expenses for many businesses and in some industries approach 75 percent of the total operating budget.

Answer: TRUE Page Ref: 361 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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51) Identify two classifications for supply chain software. For each classification, identify five capabilities.

Answer: Supply chain planning systems and supply chain execution systems are two classifications for supply chain software. Supply chain planning systems enable a firm to generate demand forecasts for a product and develop sourcing and manufacturing plans for that product. Capabilities include order planning, advanced scheduling and manufacturing planning, demand planning, distribution planning, and transportation planning. Supply chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations. Capabilities include order commitments, final production, replenishment, distribution management, and reverse distribution.

Page Ref: 355-358 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

52) What additional complexities are faced in global supply chains? How does the Internet help in managing global supply chains?

Answer: Global supply chains typically span greater geographic distances and time differences than domestic supply chains and have participants from a number of different countries.

Although the purchase price of many goods might be lower abroad, there are often additional costs for transportation, inventory, and local taxes or fees. Performance standards may vary from region to region or from nation to nation. Supply chain management may need to reflect foreign government regulations and cultural differences. All of these factors impact how a company takes orders, plans distribution, organizes warehousing, and manages inbound and outbound logistics throughout the global markets it services. The Internet helps companies manage many aspects of their global supply chains, including sourcing, transportation, communications, and international finance. As goods are being sourced, produced, and shipped, communication is required among retailers, manufacturers, contractors, agents, and logistics providers. With Internet technology, supply chain members communicate through a Web-based system. Firms use intranets to improve coordination among their internal supply chain processes, and they use extranets to coordinate supply chain processes shared with their business partners.

Page Ref: 359-360 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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53) Identify two supply chain models. Which is better?

Answer: Push-based and pull-based models were discussed in the textbook. Push-based refers to a supply chain driven by production master schedules based on forecasts or best guesses of demand for products. Pull-based refers to a supply chain driven by actual customer orders or purchases so that members of the supply chain produce and deliver only what customers have ordered. Pull-based models are better.

Page Ref: 360 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

54) Plant Away is an Oregon-based retailer and distributor of trees and shrubs. They have hundreds of smaller nurseries based around the country that grow the plant stock. The majority of their business is conducted online. Consumers purchase typically small quantities of products online and Plant Away coordinates the shipping from the most appropriate nursery. What unique problems might you anticipate they have in their supply chain? What might remedy these problems?

Answer: Typical problems in supply chains arise from unforeseeable events. In a plant nursery, variations in the weather, growing season, plant diseases, crop output would be uncertainties.

Other problems might be interstate regulations governing plants allowed in different states, and making sure plants survive and are healthy during transportation. It would be very important to have up-to-date forecasting of the weather or growing seasons that could anticipate possible problems, and analyze and determine the best transportation routes.

Page Ref: 352-361 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis in terms of devising LO: 9.2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

55) A ________ is a method of interaction with a customer, such as telephone or customer service desk.

A) point of presence B) touch point C) sales point D) client channel E) point of service Answer: B Page Ref: 362 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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56) Which of the following would not be considered a contact point?

A) e-mail B) Web site C) intranet D) retail store E) Facebook Answer: C Page Ref: 362 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

57) ________ modules use many of the same data, tools, and systems as CRM to enhance collaboration between a company and its selling partners.

A) SCM B) SFA C) ERM D) DRM E) PRM Answer: E Page Ref: 362 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

58) ________ modules deal with issues such as setting objectives, employee performance management, and performance-based compensation.

A) SCM B) SFA C) ERM D) DRM E) PRM Answer: C Page Ref: 363 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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59) Customer relationship management systems typically provide software and online tools for sales, customer service, and A) marketing.

B) account management.

C) advertising.

D) public relations.

E) human resources.

Answer: A Page Ref: 362-363 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

60) SFA modules in CRM systems would provide tools for A) assigning and managing customer service requests.

B) capturing prospect and customer data.

C) identifying profitable and unprofitable customers.

D) managing sales prospect and contact information.

E) employee performance management.

Answer: D Page Ref: 363 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

61) CRM systems help businesses obtain which business objective?

A) survival B) operational excellence C) new products and services D) improved decision making E) customer and supplier intimacy Answer: E Page Ref: 367 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of compare LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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62) Customer service modules in CRM systems provide tools for A) assigning and managing customer service requests.

B) capturing prospect and customer data.

C) identifying profitable and unprofitable customers.

D) managing sales prospect and contact information.

E) organizing effective marketing campaigns.

Answer: A Page Ref: 364 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

63) Marketing modules in CRM systems would provide tools for A) assigning and managing customer service requests.

B) capturing prospect and customer data.

C) identifying profitable and unprofitable customers.

D) managing sales prospect and contact information.

E) increasing efficiency of call centers.

Answer: C Page Ref: 364 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

64) Selling a customer with a checking account a home improvement loan is an example of A) operational CRM. B) direct marketing.

C) sales force automation.

D) cross-channel promotions.

E) cross-selling.

Answer: E Page Ref: 365 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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65) All of the following service capabilities would be found in major CRM products except A) customer satisfaction management.

B) returns management.

C) call center & help desk.

D) service analytics.

E) order management.

Answer: E Page Ref: 365 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

66) Which of the following is an important capability for sales processes that is found in most major CRM software products?

A) returns management B) lead management C) channel promotions management D) events management E) customer satisfaction management Answer: B Page Ref: 365 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

67) Customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance best describes ________ applications.

A) operational CRM B) analytical CRM C) operational SCM D) analytical SFA E) operational SFA Answer: B Page Ref: 366 Difficulty: Moderate AACSB: Information technology CASE: Synthesis in terms of applying LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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68) Operational CRM applications include tools for A) identifying buying patterns.

B) calculating CLTV. C) salesforce automation.

D) pinpointing unprofitable customers.

E) creating segments for targeted marketing.

Answer: C Page Ref: 366 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

69) Which of the following is not one of the four types of customers described in the case study on Graybar?

A) core customers B) opportunistic customers C) marginal customers D) service-drain customers E) niche customers Answer: E Page Ref: 368 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

70) Analyzing customer buying patterns is an example of A) CLTV. B) analytical CRM. C) operational CRM. D) demand planning.

E) cross-selling.

Answer: B Page Ref: 366 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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71) Which metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the company?

A) churn rate B) customer lifetime value C) cost per lead D) cost per sale E) customer average value Answer: B Page Ref: 366 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

72) The measurement of the number of customers who stop using or purchasing products or services from a company is called A) switching costs.

B) churn rate.

C) CLTV. D) switch rate.

E) turnover percentage.

Answer: B Page Ref: 367 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

73) Walmart's continuous replenishment system is an example of a ________ model.

A) push-based B) pull-based C) enterprise-based D) supply chain optimization E) forecast-based Answer: B Page Ref: 360 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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74) ________ modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services.

A) Customer B) SOA C) Marketing D) Complex E) SFA Answer: E Page Ref: 363 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

75) ________ CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation.

A) Analytical B) Employee C) Operational D) Partner E) Next-generation Answer: C Page Ref: 366 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

76) All CRM packages contain modules for PRM and ERM. Answer: FALSE Page Ref: 362 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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77) Major CRM application software vendors include Oracle, SAP, and Salesforce.com.

Answer: TRUE Page Ref: 363 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

78) Cross-selling is the marketing of complementary products to customers.

Answer: TRUE Page Ref: 365 Difficulty: Moderate AACSB: Reflective thinking CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

79) CRM software can help organizations identify high-value customers for preferential treatments.

Answer: TRUE Page Ref: 365 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

80) Analytical CRM uses tools to analyze customer data collected from the firm's customer touch points and from other sources.

Answer: TRUE Page Ref: 366 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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81) Identify and describe the two types of customer relationship management applications.

Answer: Operational CRM and analytical CRM are two types of CRM. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance.

Page Ref: 366 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis in terms of summarize LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

82) Identify five benefits of customer relationship management systems.

Answer: Benefits include: better customer service, make call centers more efficient, cross-sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, acquire new profitable customers, sell additional products and services, provide customer information for developing new products, increase product utilization, reduce sales and marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high-lifetime value customers, improve customer loyalty, improve response rates to direct mail, increase product profitability, respond quickly to market opportunities.

Page Ref: 364-368 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

83) You have been hired by Croydon Visiting Nurse Services, whose business processes are all manual, paper-based processes. How might a CRM system benefit them?

Answer: A CRM system that includes patients' health records would allow any nurse to take over if another needed replacement. Assuming that the nurses had access via laptops or other PDAs to the system, a new nurse would have instant access to the patients' needs. The CRM might also be able to record which types of treatments or products customers were most interested in or gave the greatest benefit to customers, and help anticipate needs. Additionally, with PRM capabilities, products needed by the nursing service would be more easily anticipated, ordered, and delivered. Since the employees work in the field, or away from a central office, Internet-based communications might provide tools for reviewing employee performance.

Page Ref: 361-367 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 9.3: How do customer relationship management systems help firms achieve customer intimacy?

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84) Which of the following statements about enterprise applications is not true?

A) Enterprise applications require organizational learning.

B) Enterprise applications introduce "switching costs."

C) Enterprise applications are based on organization-wide definitions of data.

D) Enterprise applications require fundamental changes in the way a business operates.

E) Enterprise applications are best implemented when few changes in business processes are required.

Answer: E Page Ref: 369-370 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

85) Which of the following is not an example of next-generation enterprise applications?

A) open-source solutions B) social CRM C) solutions incorporating SCM D) solutions incorporating SOA E) cloud solutions Answer: C Page Ref: 371-372 Difficulty: Difficult AACSB: Reflective thinking CASE: Comprehension LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

86) Enterprise application vendors have created ________ to make their own customer relationship management, supply chain management, and enterprise systems work closely together with each other.

A) e-business suites B) ERP systems C) middleware D) legacy systems E) cloud solutions Answer: A Page Ref: 371 Difficulty: Easy AACSB: Information technology CASE: Comprehension LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

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87) Next-generation enterprise suites use ________ and SOA to link to systems of customers and suppliers.

A) employee relationship management B) cross-selling C) just-in-time strategy D) Web services E) operational CRM Answer: D Page Ref: 371 Difficulty: Difficult AACSB: Information technology CASE: Comprehension LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

88) Using social networking tools to converse with customers is called A) analytical CRM. B) social CRM. C) operational CRM. D) PRM. E) ERM. Answer: B Page Ref: 371 Difficulty: Easy AACSB: Reflective thinking CASE: Comprehension LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

89) Enterprise application vendors are now including ________ features, such as tools for data visualization, flexible reporting, and ad-hoc analysis, as part of the application.

A) social media B) PRM C) ERM D) SOA E) business intelligence Answer: E Page Ref: 372 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

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90) Enterprise systems require fundamental changes in the way the business operates.

Answer: TRUE Page Ref: 370 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 9.4: What are the challenges posed by enterprise applications and how are enterprise applications taking advantage of new technologies?

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Management Information Systems, 14e (Laudon) Chapter 10 E-Commerce: Digital Markets, Digital Goods 1) What event marked the beginning of e-commerce?

A) The first product sold online.

B) The first domain name registered.

C) The first e-mail sent.

D) The first paid advertisements placed on a Web site.

E) The first product advertised online.

Answer: D Page Ref: 384 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

2) Based on your reading of the chapter, e-commerce is A) still in a revolutionary phase.

B) widely accepted by consumers, although technology is still quickly changing.

C) not yet fully accepted by consumers, although much of its driving technology is firmly in place.

D) well entrenched as a form of modern commerce.

E) declining as users lose interest.

Answer: A Page Ref: 384-394 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

3) A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location is called a(n) A) exchange.

B) marketspace.

C) online marketplace.

D) e-hub.

E) net marketplace.

Answer: B Page Ref: 387 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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4) Recent developments in e-commerce include all of the following except A) small businesses continue to flood the e-commerce marketplace.

B) social networking sites become a new platform for e-commerce.

C) Internet-based models of computing, such as smartphone apps.

D) the online demographic of shoppers broadens to match that of ordinary shoppers.

E) social sharing e-commerce sites extend the market creator business model.

Answer: C Page Ref: 386 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of examine LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

5) What standards are referred to when discussing universal standards as a unique feature of ecommerce?

A) Internet technology standards B) common spoken and written languages C) universal measuring standards D) universal advertising and media format standards E) EDI standards Answer: B Page Ref: 388 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

6) All of the following are unique features of e-commerce technology, except A) personalization/customization.

B) interactivity.

C) universality.

D) richness.

E) global reach.

Answer: C Page Ref: 388 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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7) The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology?

A) ubiquity B) personalization/customization C) richness D) interactivity E) information density Answer: D Page Ref: 389 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

8) The integration of video, audio, and text marketing messages into a single marketing message and consumer experience describes which dimension of e-commerce technology?

A) ubiquity B) personalization/customization C) richness D) interactivity E) social technology Answer: C Page Ref: 389 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

9) The lowered costs of information storage, processing, and communication, along with the improvement of data quality, has resulted in which unique quality of e-commerce?

A) information density B) richness C) customization D) interactivity E) global reach Answer: A Page Ref: 389 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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10) The effort required to locate a suitable product is called A) price discrimination.

B) search costs.

C) menu costs.

D) shopping costs.

E) location costs.

Answer: B Page Ref: 389 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

11) Information density refers to the A) richness—complexity and content—of a message.

B) total amount and quantity of information delivered to consumers by merchants.

C) total amount and quantity of information available to all market participants.

D) amount of information available to reduce price transparency.

E) amount of physical storage space needed to store data about a specific entity, such as a product or consumer.

Answer: C Page Ref: 389 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

12) Selling the same goods to different targeted groups at different prices is called A) cost customization.

B) cost optimization.

C) price gouging.

D) cost personalization.

E) price discrimination.

Answer: E Page Ref: 389 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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13) Information ________ exists when one party in a transaction has more information that is important for the transaction than the other party.

A) transparency B) asymmetry C) complexity D) discrimination Answer: B Page Ref: 389 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

14) Varying a product's price according to the supply situation of the seller is called ________ pricing.

A) menu B) flexible C) dynamic D) asymmetric E) customized Answer: C Page Ref: 391 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

15) Reducing the business process layers in a distribution channel is called A) disintermediation.

B) BPR. C) market segmentation.

D) network effects.

E) market transparency.

Answer: A Page Ref: 391 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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16) Digital goods are goods that are A) produced digitally.

B) sold over digital networks.

C) delivered digitally.

D) used with digital equipment.

E) created with software.

Answer: C Page Ref: 392 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

17) Compared to digital markets, traditional markets have A) lower search costs.

B) stronger network effects.

C) higher delayed gratification effects.

D) reduced asymmetry.

E) higher transaction costs.

Answer: E Page Ref: 392 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of compare LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

18) Compared to traditional goods, digital goods have A) greater pricing flexibility.

B) lower marketing costs.

C) higher production costs.

D) higher inventory costs.

E) lower menu costs.

Answer: A Page Ref: 392 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of compare LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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19) Compared to traditional goods, digital goods incur A) lower distribution costs.

B) higher marginal costs per unit.

C) equivalent copying costs.

D) similar inventory costs.

E) less disintermediation.

Answer: A Page Ref: 392 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis in terms of compare LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

20) What is the primary benefit to consumers of disintermediation?

A) faster service B) lower costs C) higher quality D) greater choices E) None, disintermediation primarily benefits manufacturers.

Answer: B Page Ref: 391 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

21) E-commerce refers simply to the use of the Internet and the Web to transact business.

Answer: TRUE Page Ref: 384 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

22) Retail consumer e-commerce is growing at single-digit rates.

Answer: FALSE Page Ref: 383 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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23) The Internet shrinks information asymmetry.

Answer: TRUE Page Ref: 390 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

24) All previous mass media in modern history, including the printing press, use a broadcast model where content is created in a central location by experts.

Answer: TRUE Page Ref: 390 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

25) Disintermediation provides major benefits to the distributor.

Answer: FALSE Page Ref: 391 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

26) In general, for digital goods, the marginal cost of producing another unit is about zero.

Answer: TRUE Page Ref: 392 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

27) Intellectual property refers to all forms of human expression, both tangible and intangible.

Answer: FALSE Page Ref: 392 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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28) Traditional online marketing, such as display ads, is still the majority of all online marketing.

Answer: TRUE Page Ref: 387 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

29) Information asymmetry exists when there is more information about one product than there is about a similar product.

Answer: FALSE Page Ref: 390 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

30) Price transparency refers to the ability of consumers to discover what merchants actually pay for products.

Answer: FALSE Page Ref: 389 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

31) Switching costs are the merchants' costs of changing prices.

Answer: FALSE Page Ref: 391 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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32) What is the most profound way in which e-commerce and the Internet have changed the relationship between companies and their customers? Support your answer.

Answer: Student answers will vary. A sample answer is: The most profound way in which ecommerce and the Internet have changed this relationship is in the shrinking of information asymmetry. An information asymmetry exists when one party in a transaction has more information that is important for the transaction than the other party. That information helps determine their relative bargaining power. In digital markets, consumers and suppliers can "see" the prices being charged for goods, and in that sense digital markets are said to be more "transparent" than traditional markets. For example, until auto retailing sites appeared on the Web, there was a pronounced information asymmetry between auto dealers and customers. Only the auto dealers knew the manufacturers' prices, and it was difficult for consumers to shop around for the best price. Auto dealers' profit margins depended on this asymmetry of information. Today's consumers have access to a legion of Web sites providing competitive pricing information, and three-fourths of U.S. auto buyers use the Internet to shop around for the best deal. Thus, the Web has reduced the information asymmetry surrounding an auto purchase.

The Internet has also helped businesses seeking to purchase from other businesses reduce information asymmetries and locate better prices and terms.

Page Ref: 383-418 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

33) "Knowledge increases exponentially" is a phrase with which we are all familiar. How does this concept apply to electronic business and the emergence of the digital firm? Support your contentions.

Answer: Student answers will vary. A sample answer is: The exponential increases of knowledge refer to shared information. For example, once the concept of a wheel is established, inheritors of that knowledge do not have to "reinvent the wheel." The Internet is a tool similar to the wheel: it is based on shared standards and universal tools. The Internet and shared networking technologies are allowing new techniques for attracting customers and selling customers to be developed and adapted very quickly. For example, although early Internet retailers had difficulty setting up secure credit card transactions and payment systems, today there are many systems in place as vendors step in to create shared tools for doing this. The Internet is fostering shared knowledge and, as such, propagating ever greater increases in that knowledge.

Page Ref: 383-418 Difficulty: Difficult AACSB: Written and oral communication CASE: Synthesis in terms of bringing information together LO: 10.1: What are the unique features of e-commerce, digital markets, and digital goods?

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34) Which of the following Internet business models does Amazon.com use?

A) vontent provider B) portal C) market creator D) e-tailer E) transaction brokder Answer: D Page Ref: 395 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

35) eBay is an example of A) C2C e-commerce.

B) B2B e-commerce.

C) B2C e-commerce.

D) M-commerce.

E) P2P-commerce.

Answer: A Page Ref: 394 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

36) ________ refers to businesses selling goods and services electronically to individuals.

A) B2C e-commerce B) Social e-commerce C) C2C e-commerce D) Disintermediation E) M-commerce Answer: A Page Ref: 394 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

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37) ________ uses the community provider Internet business model.

A) iTunes B) Yahoo C) eBay D) Google E) Twitter Answer: E Page Ref: 395 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

38) Transaction brokers A) generate revenue from advertising or from directing buyers to sellers.

B) save users money and time by processing online sales transactions.

C) provide a digital environment where buyers and sellers can establish prices for products.

D) sell physical products directly to consumers or individual businesses.

E) provide online meeting places where people with similar interests can communicate.

Answer: B Page Ref: 395 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

39) In which of the following Internet business models does a merchant create an online digital environment that enables people with like interests to share information?

A) community provider B) service provider C) market creator D) transaction broker E) portal Answer: A Page Ref: 395 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

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40) Market creators A) save users money and time by processing online sales transactions.

B) provide a digital environment where buyers and sellers can establish prices for products.

C) create revenue by providing digital content over the Web. D) sell physical products directly to consumers or individual businesses.

E) generate revenue from advertising or from directing buyers to sellers.

Answer: B Page Ref: 395 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

41) Which of the following best illustrates the sales revenue model?

A) eBay receives a small fee from a seller if a seller is successful in selling an item.

B) Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.

C) Flickr provides basic services for free, but charges a premium for advanced services.

D) Apple accepts micropayments for single music track downloads.

E) Netflix charges customers a monthly fee for access to its library of movies.

Answer: D Page Ref: 398 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

42) Which of the following best illustrates the affiliate revenue model?

A) eBay receives a small fee from a seller if a seller is successful in selling an item.

B) Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.

C) Flickr provides basic services for free, but charges a premium for advanced services.

D) Apple accepts micropayments for single music track downloads.

E) Netflix charges customers a monthly fee for access to its library of movies.

Answer: B Page Ref: 399 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

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43) Which of the following best illustrates the transaction fee revenue model?

A) eBay receives a small fee from a seller if a seller is successful in selling an item.

B) Epinions receives a fee after steering a customer to a participating Web site where he or she makes a purchase.

C) Flickr provides basic services for free, but charges a premium for advanced services.

D) Apple accepts micropayments for single music track downloads.

E) Netflix charges customers a monthly fee for access to its library of movies.

Answer: A Page Ref: 399 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

44) In the ________ revenue models, a firm offers some services for free but charges a subscription fee for premium services.

A) free/freemium B) subscription C) transaction fee D) affiliate E) sales Answer: A Page Ref: 399 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

45) Content providers use ________ systems to process large amounts of very small monetary transactions cost-effectively.

A) subscription B) mobile payment C) transaction fee D) micropayment E) affiliate revenue Answer: D Page Ref: 398 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

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46) An example of the market creator business model is eBay, a C2C auction site.

Answer: TRUE Page Ref: 395 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

47) An example of the portal business model is Facebook.

Answer: FALSE Page Ref: 395 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis in terms of categorize LO: 10.2: What are the principal e-commerce business and revenue models?

48) Web personalization is used primarily as a major marketing tool.

Answer: TRUE Page Ref: 404 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 10.2: What are the principal e-commerce business and revenue models?

49) Podcasting allows subscribers to listen to live, streaming radio and other audio content.

Answer: FALSE Page Ref: 396 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis in terms of examine LO: 10.2: What are the principal e-commerce business and revenue models?

50) In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites.

Answer: FALSE Page Ref: 399 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.2: What are the principal e-commerce business and revenue models?

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51) List and describe at least five different Internet business models. Which of these models do you think would be the most risky for a startup business today? Support your answer.

Answer: Internet business models include: e-tailer, transaction broker, market creator, content provider, community provider, portal and service. The choice of riskiest model will depend on the individual student. A sample answer is: Today the riskiest model would be a contentprovider, because most, if not all, of the major offline entertainment and content producers such as television networks and newspapers are online. They would be your competitors, and already have the means for content creation and distribution in place. All of the other business models do not have the risk of creating brand new content.

Page Ref: 394-397 Difficulty: Easy AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 10.2: What are the principal e-commerce business and revenue models?

52) List and describe the three main categories of electronic commerce. Which do you think is ultimately the most valuable to the individual consumer? Support your answer.

Answer: Business-to-consumer, business-to-business, and consumer-to-consumer. All three are valuable to the consumer, but in the long run, business-to-business may be the most valuable to the individual consumer because it will reduce prices and increase both goods and services.

(Other opinions, of course, are supportable.)

Page Ref: 394 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 10.2: What are the principal e-commerce business and revenue models?

53) What methods could a portal use to generate revenue? Which do you think might be most successful, and why?

Answer: Advertising, subscriptions, selling collected marketing information, and directing buyers to sellers could all generate revenue. Student evaluations will vary. A sample answer is: I would think the most successful method would be through collecting marketing information, because as a portal that links to large amounts of external information and attracts repeat customers, the portal would have the opportunity to gather a lot of information about each user.

Page Ref: 394-395 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 10.2: What are the principal e-commerce business and revenue models?

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54) You are consulting for Lucky's, a chain of gas stations. What types of e-commerce opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business models for this opportunity?

Answer: Student answers will vary. A sample answer is: In terms of B2B e-commerce, Lucky's might be able to procure goods over the Internet, use a private industrial network to coordinate their supply chain with suppliers and manage inventory. Depending on the structure of the gasoline retail business, industry net marketplaces and exchanges might be of use. In terms of B2C e-commerce, there are not many opportunities, as it is inefficient to sell gasoline over the Internet. Lucky's could make sure that its stations are listed in popular location-based mobile services that help drivers find nearby gas stations.

Page Ref: 383-418 Difficulty: Difficult AACSB: Written and oral communication CASE: Synthesis in terms of bringing information together LO: 10.2: What are the principal e-commerce business and revenue models?

55) ________ describes the concept that a large group of people is better at making good decisions than a single person.

A) The wisdom of crowds B) Outsourcing C) Crowdsourcing D) Social graphing E) Social search Answer: A Page Ref: 407 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

56) Netflix's public announcement of a reward for a technology solution to its movie recommendation system is an example of A) prediction markets.

B) behavioral targeting.

C) long-tail marketing.

D) social shopping.

E) crowdsourcing.

Answer: E Page Ref: 408 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

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57) Exposing an individual to ads that are chosen and based on the recorded and analyzed online behavior of the individual is referred to as A) clickstream advertising.

B) behavioral targeting.

C) online profiling.

D) long tail marketing.

E) crowdsourcing.

Answer: B Page Ref: 402 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

58) Which of the following best describes the digital social graph?

A) a person's direct and indirect relationships B) all of a person's closest digital relationships C) a mapping of all online social relationships D) all of the online and offline relationships a person has E) all of the relationships in an online community Answer: C Page Ref: 405 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

59) Which of the following marketing formats is sales oriented, rather than branding oriented or a mix?

A) lead generation B) search engine C) rich media D) display ads E) video Answer: B Page Ref: 402 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 10.3: How has e-commerce transformed marketing?

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60) Which of the following social commerce features allows social network sites to gather and distribute to others information about which products a user likes and dislikes?

A) social sign-on B) collaborative shopping C) network notification D) social search E) newsfeed Answer: C Page Ref: 407 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

61) Which of the following is a marketing format that uses banner ads and pop-ups with interactive features?

A) search engine ads B) video ads C) rich media ads D) e-mail ads E) display ads Answer: E Page Ref: 402 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

62) The Internet enables ________ marketing, by leveraging the fact that there is always some demand, however small, for a product.

A) long-tail B) behavioral C) crowdsource D) prediction E) lead generation Answer: A Page Ref: 401 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

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63) ________ is a peer-to-peer market in which participants bet on the outcomes of current events, business, or social trends.

A) Crowdsourcing B) A net marketplace C) A prediction market D) A futures auction E) A private exchange Answer: C Page Ref: 408 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

64) What is the difference between personalization and customization, as applied to e-commerce technologies?

A) Customization is any type of adjustment made to a product by the user; personalization refers to a business changing a product or service for the user.

B) Personalization is any type of adjustment made to a product by the user; customization refers to a business changing a product or service for the user.

C) Customization refers to adjusting marketing messages for a consumer; personalization refers to adjusting a product or service based on a user's preferences.

D) Personalization refers to adjusting marketing messages for a consumer; customization refers to adjusting a product or service based on a user's preferences.

E) There is no difference, both terms refer to changing a product or communication for the consumer.

Answer: D Page Ref: 389-390 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

65) Rich media advertisements are a sales-oriented marketing format.

Answer: FALSE Page Ref: 402 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 10.3: How has e-commerce transformed marketing?

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66) Behavioral targeting occurs at two levels: individual Web sites and through ISPs. Answer: FALSE Page Ref: 403 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

67) Advertising networks track a user's behavior at thousands of Web sites.

Answer: TRUE Page Ref: 403 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

68) Viral marketing is like traditional word-of-mouth marketing except that it is spread via online communities.

Answer: TRUE Page Ref: 407 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

69) The behavioral targeting of ads results in consumers responding ten times more frequently than when delivered ads randomly.

Answer: TRUE Page Ref: 404 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.3: How has e-commerce transformed marketing?

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70) Describe the use of personalization and customization in e-commerce. What business value do these techniques have?

Answer: In personalization, merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. For example, Amazon.com greets each logged in user with their user name. With customization, merchants can change the delivered product or service based on a user's preferences or prior behavior. The Wall Street Journal Online allows you to select the type of news stories you want to see first and gives you the opportunity to be alerted when certain events happen. The ability of Internet technology to track customer behavior at Web sites, along with records of purchases and other behavior, allows merchants to create a detailed profile of a customer. These profiles can be used to create unique personalized Web pages that display content or ads for products or services of special interest to each user, improving the customer's experience and creating additional value. The business value of personalization is reduced marketing costs, as you spend only the money to target customers that are more likely to be receptive and are more profitable, and improved sales results, from increased customer response to personalized sites that better serve their own purposes and shopping needs. Personalization can achieve some of the benefits of using individual salespeople for dramatically lower costs.

Page Ref: 389-390 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 10.3: How has e-commerce transformed marketing?

71) You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the firm's services?

Answer: Student answers will vary. A sample answer is: For marketing research, you could advertise on search engines. You could pay for marketing research at relevant portals. You could also collect customer information from the company's Web site. You could monitor relevant blogs to see what issues are of concern in juvenile justice, so as to address these concerns in your advertising campaigns. To advertise, you could advertise on search engine results and at relevant portals or legal information content providers. If it were feasible, you could create a juvenile justice portal and blog for the company in order to attract users from whom you could gather market research as well as promote your services. You might also want to investigate social network marketing—assuming that your clients might be the best leads for other clients.

Page Ref: 399-408 Difficulty: Difficult AACSB: Written and oral communication CASE: Synthesis in terms of bringing information together LO: 10.3: How has e-commerce transformed marketing?

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72) Web site tracking software can log the path a customer took through the Web site, the time spent on the site, and what geographic area, in general, the customer is from, all of which can help in customer analysis. It can also log the customer's operating system and which browser the customer is using. How could these last two data items be of interest to a company? Give examples.

Answer: Student answers will vary, but should include an understanding that customer OS and browser interact technologically with a Web site and might be relevant in data analysis. An example is: Customer OSs and browsers could help a company determine what technical functionalities could be used in the site. For example, if it found out that a significant percentage of its users are using mobile browsers, they might want to make sure that the Web site is easily used by various mobile devices. Secondly, this data might be relevant in data mining or other analysis. For example, a retail clothing company might find that a significant portion of their most valued customers use an Apple operating system, and from other data analysis know that Apple users are more likely to purchase cashmere sweaters. Then the company may want to place a greater emphasis on selling the cashmere sweaters.

Page Ref: 402-405 Difficulty: Moderate AACSB: Written and oral communication CASE: Evaluation in terms of assess LO: 10.3: How has e-commerce transformed marketing?

73) All of the following are activities related to establishing a Web presence except for A) search.

B) affiliates.

C) apps.

D) newsletters.

E) display.

Answer: D Page Ref: 417 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

74) EDI is A) the use of Internet technologies for electronic data transactions.

B) the exchange between two organizations of standard transactions through a network.

C) electronic data invoicing.

D) electronic delivery infrastructure.

E) slowly becoming the norm for B2B communications.

Answer: B Page Ref: 409 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

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75) The process of sourcing goods and materials, negotiating with suppliers, paying for goods, and making delivery arrangements is called A) e-procurement.

B) SCM. C) procurement.

D) sourcing.

E) production.

Answer: C Page Ref: 410 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

76) A secure Web site that links a large firm to its suppliers and other key business partners is called a(n) A) e-hub.

B) marketspace.

C) exchange.

D) private industrial network.

E) net marketplace.

Answer: D Page Ref: 410 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

77) Net marketplaces A) focus on continuous business process coordination between companies for supply chain management.

B) are industry owned or operate as independent intermediaries between buyers and sellers.

C) are geared towards short-term spot purchasing.

D) are more relationship oriented than private industrial networks.

E) typically consist of a large firm linking to its suppliers and partners.

Answer: B Page Ref: 411 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation in terms of assess LO: 10.4: How has e-commerce affected business-to-business transactions?

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78) A third-party Net marketplace that connects many buyers and suppliers for spot purchasing is called a(n) A) exchange.

B) vertical market.

C) private exchange.

D) e-hub.

E) private industrial network.

Answer: A Page Ref: 411 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

79) Goods that are involved in the actual production process are referred to as A) raw materials.

B) direct goods.

C) purchasing goods.

D) indirect goods.

E) products.

Answer: B Page Ref: 411 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

80) Which of the following statements about m-commerce is not true?

A) In 2014, m-commerce represented about 19 percent of all e-commerce.

B) M-commerce is the fastest growing form of e-commerce.

C) In 2014, mobile advertising is up over 80% from the previous year.

D) Fifty-five percent of online retailers have m-commerce Web sites.

E) In 2014, the main areas of growth are in online banking and location-based services.

Answer: E Page Ref: 412 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

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81) EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.

Answer: FALSE Page Ref: 409 Difficulty: Moderate AACSB: Information technology CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

82) Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing.

Answer: TRUE Page Ref: 411 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

83) Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down.

Answer: FALSE Page Ref: 412 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

84) Indirect goods are not involved firsthand in the production process.

Answer: TRUE Page Ref: 411 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.4: How has e-commerce affected business-to-business transactions?

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85) A new social mobile app you are developing allows users to find friends who are logged in and within a 10-mile radius. This would be categorized as a ________ service.

A) geosocial B) geoinformation C) geoadvertising D) geomapping E) geolocating Answer: B Page Ref: 413 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis in terms of appraise LO: 10.5: What is the role of m-commerce in business and what are the most important mcommerce applications?

86) Geoadvertising sends ads to users based on their A) GPS locations.

B) home addresses.

C) shopping preferences.

D) web site behaviors.

E) Google Maps settings.

Answer: A Page Ref: 413 Difficulty: Moderate AACSB: Application of knowledge CASE: Comprehension LO: 10.5: What is the role of m-commerce in business and what are the most important mcommerce applications?

87) Define location-based services and describe the main categories of these services. Which of the categories do you feel has the most potential in terms of e-commerce revenues, and why?

Answer: Location-based services are services that use GPS mapping services available on smartphones to deliver value-added services. They include geosocial services, geoadvertising, and geoinformation services. A geosocial service can tell you where your friends are meeting.

Geoadvertising services can tell you where to find the nearest Italian restaurant, and geoinformation services can tell you the price of a house you are looking at, or about special exhibits at a museum you are passing. Student answers as to the most valuable of these services will vary; an example is: I feel that geoadvertising services have the most potential for profit, as it is based on a profit-making mechanism: advertising. Geosocial services and geoinformation services, by themselves, are more content- and communication-oriented.

Page Ref: 412-413 Difficulty: Moderate AACSB: Written and oral communication CASE: Analysis in terms of summarize LO: 10.5: What is the role of m-commerce in business and what are the most important mcommerce applications?

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88) Which of the following is a milestone for the Web site development phase of building an ecommerce presence?

A) Web mission statement B) social media plan C) Web site plan D) Web presence map E) functional Web site Answer: C Page Ref: 418 Difficulty: Difficult AACSB: Application of knowledge CASE: Comprehension LO: 10.6: What issues must be addressed when building an e-commerce presence?

89) In planning a robust e-commerce presence, you will want to consider the blog platform as part of your ________ presence.

A) social media B) e-mail C) community D) Web site E) offline media Answer: A Page Ref: 417 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation in terms of appraise, assess LO: 10.6: What issues must be addressed when building an e-commerce presence?

90) Which of the following is not one of four types of presence to be considered when building an E-commerce presence?

A) offline media B) Web sites C) social media D) corporate E) e-mail Answer: D Page Ref: 417 Difficulty: Easy AACSB: Application of knowledge CASE: Comprehension LO: 10.6: What issues must be addressed when building an e-commerce presence?

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Management Information Systems, 14e (Laudon) Chapter 11 Managing Knowledge 1) The last step in the knowledge management value chain is A) feedback.

B) acquire.

C) disseminate.

D) store.

E) apply.

Answer: E Page Ref: 432 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

2) About ________ percent of the United States GDP is produced by the knowledge and information sectors.

A) 15 B) 25 C) 45 D) 65 E) 85 Answer: C Page Ref: 430 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

3) Which of the following statements best describes the relationship between collaboration and knowledge management?

A) Without knowledge, collaboration is difficult.

B) Knowledge doesn't exist without collaboration.

C) Knowledge is useful only when shared with others.

D) As knowledge increases, so does collaboration.

E) Knowledge is the end product of collaboration.

Answer: C Page Ref: 429 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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4) The flow of events or transactions captured by an organization's system describes A) information.

B) data.

C) wisdom.

D) knowledge.

E) experience.

Answer: B Page Ref: 430 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

5) Expertise of organizational members that has not been formally documented best describes A) wisdom.

B) information.

C) data.

D) experience.

E) tacit knowledge.

Answer: E Page Ref: 430 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

6) Which of the following statements is not an accurate description of the importance of knowledge to a firm?

A) Knowledge experiences network effects as more people share it.

B) Knowledge should be seen as an intangible key asset.

C) Knowledge enables firms to become more efficient in their use of scarce resources.

D) Knowledge is unconditional.

E) Much of the firm's value relies on being able to create knowledge.

Answer: D Page Ref: 430-431 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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7) What is meant by the statement "knowledge is sticky"?

A) Knowledge is hard to move.

B) Knowledge is universally applicable.

C) Knowledge works only in certain situations.

D) Knowledge is intangible.

E) Knowledge is difficult to replace.

Answer: A Page Ref: 431 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

8) Which of the following is not one of the main four dimensions of knowledge described in the chapter?

A) Knowledge is a firm asset.

B) Knowledge has different forms.

C) Knowledge has a location.

D) Knowledge is situational.

E) Knowledge is timeless.

Answer: E Page Ref: 431 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

9) Changing organizational behavior by sensing and responding to new experience and knowledge is called A) change management.

B) knowledge networking.

C) the knowledge value chain.

D) organizational learning.

E) knowledge management.

Answer: D Page Ref: 431 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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10) What is the first value-adding step in the knowledge business value chain?

A) acquire B) data and information acquisition C) store D) disseminate E) apply Answer: B Page Ref: 432 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

11) The set of business processes, culture, and behavior required to obtain value from investments in information systems is one type of A) knowledge culture.

B) knowledge discovery.

C) organizational and management capital.

D) organizational routine.

E) knowledge.

Answer: C Page Ref: 432 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

12) Which of the following are the three major types of knowledge management systems?

A) management information systems, decision support systems, and transaction processing systems B) enterprise systems, customer support systems, and supply chain management systems C) database management systems, expert systems, and knowledge work systems D) enterprise-wide knowledge management systems, knowledge work systems, and intelligent techniques E) KMS, LMS, and KWS Answer: D Page Ref: 434 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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13) Specialized systems built for engineers, scientists, and other knowledge workers charged with discovering and creating new knowledge for a company are called A) KWS. B) LMS. C) wikis.

D) CAD systems.

E) KMS. Answer: A Page Ref: 435 Difficulty: Easy AACSB: Information technology CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

14) Which of the following does not describe the dimensions of knowledge in a firm?

A) It is contextual and applicable only in relevant situations.

B) It is intangible.

C) It is subject to the laws of diminishing returns.

D) It is a cognitive event involving mental models.

E) It is enmeshed in a firm's culture.

Answer: C Page Ref: 431 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

15) ________ knowledge exists in formal documents, as well as in formal rules that organizations derive by observing experts and their decision-making behaviors.

A) Unstructured B) Tacit C) Management D) Explicit E) Semi-structured Answer: E Page Ref: 435 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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16) While systems such as KWS can manage semistructured and unstructured information, enterprise-wide content management systems are designed to manage a firm's structured information.

Answer: FALSE Page Ref: 434-435 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

17) Both structured and unstructured documents can contain knowledge.

Answer: TRUE Page Ref: 430 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

18) Knowledge is universally applicable and easily moved.

Answer: FALSE Page Ref: 431 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

19) For a firm, organizational resources are needed to transform data into knowledge.

Answer: TRUE Page Ref: 431 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

20) Expertise is thought to be the collective and individual experience of applying knowledge to the solution of problems.

Answer: FALSE Page Ref: 430 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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21) What is knowledge management? What types of knowledge might a company such as a taxi service have, and could a taxi service benefit from knowledge management?

Answer: Knowledge management is the set of processes developed in an organization to create, gather, store, disseminate, and apply the firm's knowledge. A taxi company's knowledge might include explicit knowledge, such as maps and routes between destinations. Tacit knowledge would include the experience of drivers, such as the best alternate routes between destinations or passenger needs. A taxi service might benefit from a system that gave drivers guides on routes that included alternate routes drivers had found. It might benefit from a learning management system that trained drivers for locations, destinations, and alternate routes.

Page Ref: 429-432 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

22) Briefly outline the knowledge management value chain as it might apply to the online catalog system of a public library.

Answer: Steps in the knowledge management chain include: Acquisition: for an online catalog of a library this would be getting the book data into digital format.

Storage: This would involve the systems for storing this data, perhaps a central server.

Dissemination: The library would need to determine how the card catalog information is accessed by the public or by staff.

Application: This would involve the card catalog becoming part of the library's business processes: for example, the card catalog would be linked to a system of borrowing, so that users would know from the card catalog whether a book was out on loan.

Management and organizational activities: This would entail using the system with a card catalog base for other services, perhaps linking up to a wider library system to share resources, information, or book loaning between systems.

Page Ref: 431-434 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

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23) Identify the three major types of knowledge management systems. Provide two examples of each.

Answer: The major types of knowledge management systems are enterprise-wide knowledge management systems, knowledge work systems, and intelligent techniques.

Enterprise-wide knowledge management systems include: enterprise content management systems, collaboration and social tools, and learning management systems. Knowledge work systems include: computer-aided design systems, virtual reality systems, and financial investment workstations. Intelligent techniques include: data mining, expert systems, case-based reasoning, fuzzy logic, neural networks, genetic algorithms, hybrid AI systems, and intelligent agents.

Page Ref: 434 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

24) What do you see as the challenges in setting up a knowledge management system?

Answer: Determining what knowledge will be the most effective or offer the most benefits to the company; defining taxonomies, gathering accurate knowledge, quantifying the system's success, change management and implementing business processes that incorporate the system.

Page Ref: 429-437 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 11.1: What is the role of knowledge management and knowledge management programs in business?

25) Which of the following systems digitizes, indexes, and tags documents according to a coherent framework?

A) wikis B) CAD C) document management D) LMS E) KMS Answer: C Page Ref: 433 Difficulty: Easy AACSB: Information technology CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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26) Informal social networks of professionals and employees within and outside the firm who have similar work-related activities and interests are called communities of A) practice.

B) professionals.

C) interest.

D) knowledge.

E) expertise.

Answer: A Page Ref: 434 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

27) Which of the following is not a typical component or capability of an enterprise content management system?

A) LMS B) social networking tools C) tagging tools D) digital asset management E) KWS Answer: E Page Ref: 435-437 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

28) Which of the following would not be considered semistructured knowledge?

A) request for proposals B) voice-mail C) videos D) e-mail E) memos Answer: A Page Ref: 435 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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29) In content management, once a taxonomy is developed, documents must then be ________ with the proper classification.

A) tagged B) linked C) tupled D) referenced E) documented Answer: A Page Ref: 436 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

30) You are advising a multimedia company on the best type of knowledge management system to help them archive digital video and sound clips. Which of the following will suit their needs?

A) enterprise content management system B) digital asset management system C) CAD system D) VRML system E) LMS Answer: B Page Ref: 437 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

31) A MOOC is A) a type of online course.

B) an intelligent technique.

C) a virtual reality system.

D) a collaboration tool.

E) a type of knowledge work system.

Answer: A Page Ref: 437 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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32) Tools for the management, delivery, tracking, and assessment of various types of employee learning best describes a(n) A) investment workstation.

B) organizational learning system.

C) employee enrichment system.

D) learning management system.

E) employee management system.

Answer: D Page Ref: 437 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

33) A(n) ________ is a scheme for classifying information and knowledge in such a way that it can be easily accessed.

A) KWS B) KMS C) taxonomy D) intelligent technique E) COP Answer: C Page Ref: 436 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

34) Structured knowledge is explicit knowledge that exists in informal documents.

Answer: FALSE Page Ref: 435 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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35) Semistructured information is all the knowledge in a firm that resides in the heads of experienced employees.

Answer: FALSE Page Ref: 435 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

36) How can knowledge be gathered from the personal and undocumented expertise of professionals within a firm? List at least four ways to gather and disseminate such knowledge.

Answer: The expertise and experience of firm employees can be gathered by documenting their experience through documenting best practices and frequently asked questions. You can also develop a referral system by providing a way for employees to find a company expert for the solution they are looking for. Other tools you can use include best-practices documents, FAQs, collaboration tools, wikis, and blogs for helping gather and disseminate tacit knowledge.

Page Ref: 435-437 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

37) You have been hired by a small architectural firm interested in implementing a knowledge management system. What features do you think would be of most benefit to them?

Answer: Student answers will vary. The ability to store structured documents, such as plans, blueprints; collaboration tools, the ability to reference up-to-date local or national building codes, a system for storing case studies, best practices, and corporate standards. Also of importance is a knowledge work system or CAD to aid in engineering and design.

Page Ref: 435-437 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 11.2: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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38) Which of the following statements about 3D printing is not true?

A) It creates solid objects.

B) It is also called additive manufacturing.

C) It is only usable to make prototypes.

D) It creates objects layer by layer.

E) It uses specifications in a digital file.

Answer: C Page Ref: 439 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

39) Most knowledge workers require specialized knowledge work systems, but they also rely on A) office systems.

B) schools and universities.

C) imaging systems.

D) data transferring systems.

E) external feeds.

Answer: A Page Ref: 438 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

40) ________ often are designed and optimized for the specific tasks to be performed.

A) Graphics programs B) Knowledge workstations C) Virtual simulators D) CAD stations E) LMS Answer: B Page Ref: 438 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

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41) CAD workstations A) provide engineers, designers, and factory managers with precise control over industrial design and manufacturing.

B) provide an important source of expertise for organizations.

C) allow groups to work together on documents.

D) are high-end PCs used in the financial sector to analyze trading situations instantaneously and facilitate portfolio management.

E) facilitate employee learning.

Answer: A Page Ref: 439 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

42) Which of the following would not be classified as a knowledge work system?

A) computer-aided design system B) 3D visualization system C) investment workstations D) expert system E) virtual reality system Answer: D Page Ref: 439-442 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

43) Virtual reality systems A) provide engineers, designers, and factory managers with precise control over industrial design and manufacturing.

B) provide an important source of expertise for organizations.

C) allow groups to work together on documents.

D) provide architects, engineers, and medical workers with precise, photorealistic simulations of objects.

E) enable acquiring, storing, and disseminating knowledge documents in a virtual world.

Answer: D Page Ref: 441 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

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44) Investment workstations A) provide engineers, designers, and factory managers with precise control over industrial design and manufacturing.

B) provide an important source of expertise for organizations.

C) allow groups to work together on documents.

D) are used by senior executives to plan the financial future of firms.

E) are used in the financial sector to analyze trading situations and manage the investment process.

Answer: E Page Ref: 442 Difficulty: Easy AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

45) ________ seeks to enhance human perception by combining a live direct view of the physical world with computer-generated images.

A) AR B) VRML C) CAD D) KWS E) LMS Answer: A Page Ref: 442 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

46) 3-D printers can produce fully functioning components, such as working batteries and LEDs. Answer: TRUE Page Ref: 439 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

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47) Intelligent techniques include CAD and VRML. Answer: FALSE Page Ref: 439 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

48) Knowledge workers include all of a company's workers who are tasked with managing or creating knowledge, from top-level scientists to clerical and data workers.

Answer: FALSE Page Ref: 438 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

49) VRML requires the use of a powerful server as well as large amounts of bandwidth.

Answer: FALSE Page Ref: 442 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

50) Why are knowledge workers so important to the digital firm? What are their functions and which of these do you feel is most critical to the success of the firm? Why? Answer: Student answers will vary, but should include an understanding of the three main functions of knowledge workers. An example answer is: Knowledge workers create new products or find ways to improve existing ones. Without them, the firm would stagnate and become less competitive in an environment that is always changing and is increasingly more competitive. In the modern economy, knowledge is truly power. The three major functions of knowledge workers are: keeping the organization up-to-date in knowledge as it develops in the external world; serving as internal consultants regarding their areas of knowledge and its opportunities; and acting as change agents as they evaluate, initiate, and promote new projects.

The most important of these is to develop new knowledge as it applies to the making of products or services, as offering products and services is the mainstay of the corporation.

Page Ref: 438 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

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51) Identify three important qualities or capabilities of knowledge work systems.

Answer: Knowledge work systems must give knowledge workers the specialized tools they need, such as powerful graphics, analytical tools, and communications and documentmanagement tools. Knowledge work systems must provide a user-friendly interface to the KWS. These user-friendly interfaces save time by allowing the user to perform needed tasks and get to required information without having to spend a lot of time learning to use the computer.

Knowledge work systems must be carefully designed to optimize the performance of the specific tasks of the pertinent knowledge worker.

Page Ref: 438 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

52) Discuss the concept of virtual reality, especially with regard to VRML and its applications in the business arena.

Answer: Virtual reality systems use interactive graphics software and hardware to create the illusion of reality in cyberspace. The original applications were in gaming, but new uses in education, science, and business are being developed and have great promise. Virtual reality applications are being developed for the Web using a standard called Virtual Reality Modeling Language (VRML), which can organize multiple media types to put users in a simulated realworld environment. VRML is platform independent, operates over a desktop computer, and requires little bandwidth. DuPont's HyperPlant is an example of a business application.

HyperPlant allows users to go through three-dimensional models as if they were physically walking through a plant, which reduces errors during the construction of manufacturing structures. Augmented reality systems combine a direct view of physical world with computergenerated imagery to enhance the perception of reality. AR has been used in sports broadcasts, image guided surgery, military training, and other fields.

Page Ref: 442 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.3: What are the major types of knowledge work systems and how do they provide value for firms?

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53) Apple's Siri application is an example of A) neural networks.

B) CBR. C) artificial intelligence.

D) intelligent agents.

E) machine learning.

Answer: D Page Ref: 453 Difficulty: Easy AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

54) Which of the following is not used to capture tacit knowledge?

A) expert system B) case-based reasoning C) fuzzy logic D) neural network E) knowledge base Answer: D Page Ref: 442-443 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

55) Which of the following is a type of intelligent technique?

A) digital asset management B) case-based reasoning C) computer-aided design D) VRML E) LMS Answer: B Page Ref: 446 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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56) Which of the following techniques is used for knowledge discovery?

A) expert system B) transaction processing systems C) case-based reasoning D) data mining E) fuzzy logic Answer: D Page Ref: 443 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

57) Technology that consists of computer-based systems that attempt to emulate human behavior is called A) fuzzy logic.

B) neural networks.

C) AI technology.

D) genetic algorithms.

E) learning management systems.

Answer: C Page Ref: 443 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

58) An inference engine is A) a strategy for searching the rule base in case-based reasoning.

B) the programming environment of an expert system.

C) a method of organizing expert system knowledge into chunks.

D) a strategy used to search through the rule base in an expert system by forward chaining or backward chaining.

E) a programming algorithm used to create a virtual world using VRML. Answer: D Page Ref: 444 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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59) Forward chaining is A) a strategy for searching the rule base in an expert system that begins with information entered by the user.

B) the programming environment of an expert system.

C) a method of organizing expert system knowledge into chunks.

D) a strategy for searching the rule base in an expert system that begins with a hypothesis.

E) a programming algorithm used to create a virtual world using VRML. Answer: A Page Ref: 444 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

60) Backward chaining is A) a strategy for searching the rule base in an expert system that begins with information entered by the user.

B) the programming environment of an expert system.

C) a method of organizing expert system knowledge into chunks.

D) a strategy for searching the rule base in an expert system that begins with a hypothesis.

E) a programming algorithm used to create a virtual world using VRML. Answer: D Page Ref: 445 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

61) Expert systems A) solve problems too difficult for human experts.

B) are based on DO WHILE rules.

C) work in very limited domains.

D) share characteristics with mainframe computing.

E) are used for knowledge discovery.

Answer: C Page Ref: 443 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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62) Virtually all expert systems deal with problems of A) policy development.

B) classification.

C) logic and control.

D) high complexity.

E) imprecise rules.

Answer: B Page Ref: 446 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

63) Expert systems are expensive and time consuming to maintain because A) their rule base is so complex.

B) they rely on equipment that becomes outdated.

C) their rules must be reprogrammed every time there is a change in the environment, which in turn may change the applicable rules.

D) only the person who created the system knows exactly how it works, and may not be available when changes are needed.

E) it is difficult to program at this level of complexity without introducing software bugs.

Answer: C Page Ref: 446 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

64) In this technique, descriptions of past experiences of human specialists are stored in a database for later retrieval when the user encounters a situation with similar characteristics.

A) CBR B) fuzzy logic C) data mining D) LMS E) expert systems Answer: A Page Ref: 446 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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65) Your company wants to develop intelligent techniques to create a "smart" oven that can perfectly cook basic foodstuffs, such as roasts and bread, using sensors and minimal input from the user. The system would know the difference between rare, medium rare, medium, and well done roasts. The category of intelligent technique that would describe this system is A) expert system.

B) neural network.

C) case-based reasoning.

D) fuzzy logic.

E) genetic algorithm.

Answer: D Page Ref: 447 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

66) You are an automotive engineer working on an application that will automatically parallel park a car. The intelligent technique you may find most useful is A) case-based reasoning.

B) artificial intelligence.

C) fuzzy logic.

D) expert system.

E) a neural network.

Answer: C Page Ref: 447 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

67) Fuzzy logic is a type of A) data mining.

B) neural network.

C) intelligent technique.

D) business intelligence.

E) case-based reasoning.

Answer: C Page Ref: 443 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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68) Hardware and software that attempt to emulate the processing patterns of the biological brain best describe A) a neural network.

B) an expert system.

C) case-based reasoning.

D) fuzzy logic.

E) artificial intelligence.

Answer: A Page Ref: 449 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

69) Which of the following describes a difference between neural networks and genetic algorithms?

A) Genetic algorithms are designed to process large amounts of information.

B) Genetic algorithms are a type of knowledge discovery, while neural networks are an intelligent technique.

C) Neural networks are programmed to "learn."

D) Genetic algorithms are designed to work with small amounts of data, while neural networks can handle large quantities of data.

E) Neural networks are a type of machine learning, whereas genetic algorithms are static programs.

Answer: C Page Ref: 448-452 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

70) Genetic algorithms A) develop solutions to particular problems using fitness, crossover, and mutation.

B) represent knowledge as groups of characteristics.

C) do not work for most problems.

D) are based on logic.

E) seek to emulate a human expert's way of solving problems.

Answer: A Page Ref: 450 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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71) Software programs that work without direct human intervention to carry out specific tasks for individual users, business processes, or software applications, are called A) intelligent agents.

B) intelligent techniques.

C) business intelligence.

D) AI hybrid systems.

E) genetic algorithms.

Answer: A Page Ref: 453 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

72) What type of intelligent technique helped Procter & Gamble determine the most efficient methods for their trucks to deliver goods?

A) fuzzy logic B) intelligent agents C) genetic algorithms D) neural networks E) CBR Answer: B Page Ref: 454 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

73) To automate routine tasks to help firms search for and filter information for use in electronic commerce and supply chain management a firm would most likely use A) CAD systems.

B) virtual reality systems.

C) fuzzy logic systems.

D) intelligent agents.

E) genetic algorithms.

Answer: D Page Ref: 454 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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74) ________ is the study of how computer programs can improve their performance without explicit programming.

A) Neural networks B) COP C) Genetic algorithms D) Machine learning E) Intelligent techniques Answer: D Page Ref: 448 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

75) The terms used in a fuzzy logic system to describe imprecise states or conditions are referred to as A) neural networks.

B) membership functions.

C) inference engines.

D) taxonomies.

E) tags.

Answer: B Page Ref: 447 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

76) Which type of intelligent agent models the behavior of consumers, stock markets, and more, by seeing them as autonomous agents that follow relatively simple rules for interaction?

A) agent-based modeling B) MOOC C) augmented reality D) VRML E) genetic algorithm Answer: A Page Ref: 454 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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77) The model of human knowledge used by expert systems is referred to as A) the knowledge base.

B) CBR. C) a neural network.

D) AI. E) an inference engine.

Answer: A Page Ref: 444 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

78) A(n) ________ is a type of intelligent technique that finds patterns and relationships in massive data sets too large for a human to analyze.

A) inference engine B) CAD C) expert system D) genetic algorithm E) neural network Answer: E Page Ref: 449 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

79) Systems that integrate different types of techniques, such as genetic algorithms, fuzzy logic, neural networks, and expert systems, into a single application are called ________ systems.

A) differential intelligence B) hybrid AI C) machine learning D) enterprise learning E) CAD Answer: B Page Ref: 455 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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80) Expert systems are the primary tools used for knowledge discovery.

Answer: FALSE Page Ref: 443 Difficulty: Easy AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

81) Expert systems capture the knowledge of skilled employees in the form of a set of rules in a software system that can be used by others in the organization.

Answer: TRUE Page Ref: 443 Difficulty: Easy AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

82) Expert systems are typically used in business in discrete, highly structured decision-making situations.

Answer: TRUE Page Ref: 443 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

83) Expert systems work by applying a set of AND/OR rules against a knowledge base, both of which are extracted from human experts.

Answer: FALSE Page Ref: 444 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

84) Case-based reasoning is not well-suited for diagnostic systems in medicine.

Answer: FALSE Page Ref: 446 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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85) Fuzzy logic can describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules.

Answer: TRUE Page Ref: 446 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

86) Fuzzy logic systems "learn" patterns from large quantities of data by sifting through data, searching for relationships, building models, and correcting over and over again the model's own mistakes.

Answer: FALSE Page Ref: 447 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

87) Because neural network applications cannot always explain why they arrive at a particular solution, they are not well suited for use in the medical profession.

Answer: FALSE Page Ref: 450 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

88) Hybrid AI applications are being implemented in home appliances, such as washing machines.

Answer: TRUE Page Ref: 455 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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89) Intelligent agents can discover underlying patterns, categories, and behaviors in large data sets.

Answer: FALSE Page Ref: 453 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

90) What is the difference between a neural network, fuzzy logic, and genetic algorithms? Which would be most useful to an organization of astronomers analyzing gamma ray emissions reaching Earth?

Answer: A neural network attempts to emulate the processing patterns of the biological brain.

The results are a program that can "learn" by comparing solutions to known problems to sets of data presented to it. Neural networks are used for solving complex, poorly understood problems for which large amounts of data have been collected. Fuzzy logic creates rules that use approximate or subjective values. It describes a particular phenomenon or process linguistically and then represents that logic in a small number of flexible rules. Genetic algorithms are problem-solving methods that use the model of living organisms adapting to their environment.

Possible solutions are evaluated, the "best" choices are made, then more possible solutions are created by combining the factors involved in those first "best" choices, and choosing again. The process continues until an optimum solution is reached. These genetic algorithms are useful for finding the optimal solution for a specific problem by examining a very large number of alternative solutions for that problem. Student evaluations will vary. One answer is: I think a neural network would be of most use because of its ability to analyze large amounts of data and find hidden relationships.

Page Ref: 442-455 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 11.4: What are the business benefits of using intelligent techniques for knowledge management?

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Management Information Systems, 14e (Laudon) Chapter 12 Enhancing Decision Making 1) Which of the following statements best describes the business value of improved decision making?

A) Improved decision making creates better products.

B) Improved decision making results in a large monetary value for the firm as numerous small daily decisions affecting efficiency, production, costs, and more add up to large annual values.

C) Improved decision making enables senior executives to more accurately foresee future financial trends.

D) Improved decision making strengthens customer and supplier intimacy, which reduces costs.

E) Improved decision making creates a better organizational culture.

Answer: B Page Ref: 468 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

2) When there is no well-understood or agreed-on procedure for making a decision, it is said to be A) undocumented.

B) unstructured.

C) documented.

D) semistructured.

E) ad-hoc.

Answer: B Page Ref: 468 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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3) If you can follow a definite procedure to make a business decision, you are making a(n) ________ decision.

A) ad-hoc B) procedural C) unstructured D) semistructured E) structured Answer: E Page Ref: 468 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

4) Which type of decision is calculating gross pay for hourly workers?

A) semistructured B) procedural C) structured D) unstructured E) ad hoc Answer: C Page Ref: 468 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

5) Which type of decision is deciding whether to introduce a new product line?

A) structured B) unstructured C) recurring D) nonrecurring E) procedural Answer: B Page Ref: 469 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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6) The decision to approve a capital budget is an example of a(n) ________ decision.

A) structured B) ad hoc C) semistructured D) undocumented E) unstructured Answer: E Page Ref: 469 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

7) The decisions involved in creating and producing a corporate intranet can be classified as ________ decisions.

A) semistructured B) procedural C) ad hoc D) structured E) unstructured Answer: A Page Ref: 468 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

8) Checking store inventory is an example of a(n) ________ decision.

A) procedural B) structured C) ad hoc D) unstructured E) semistructured Answer: B Page Ref: 468 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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9) The ________ phase of decision making finds or recognizes a problem, need, or opportunity.

A) choice B) design C) implementation D) analysis E) intelligence Answer: E Page Ref: 470 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

10) Which of the following is not one of the Simon's four stages of decision making?

A) implementation B) intelligence C) analysis D) choice E) design Answer: C Page Ref: 470 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

11) Which of the following is not one of the five observed ways in which managerial behavior differs from the classical description of managers?

A) Managers perform a great deal of work at an unrelenting pace.

B) Managerial activities are fragmented.

C) Managers prefer regular, written reports on firm activities.

D) Managers prefer oral forms of communication.

E) Managers give high priority to maintaining a diverse web of contacts.

Answer: C Page Ref: 471 Difficulty: Moderate AACSB: Information technology CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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12) The role of liaison falls into which of Mintzberg's managerial classifications?

A) decisional B) informational C) interpersonal D) symbolic E) leading Answer: C Page Ref: 471 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

13) Mintzberg outlined three categories of managerial roles: A) interpersonal, informational, and decisional.

B) leading, deciding, and controlling.

C) operations, management, and executive.

D) cultural, organizational, and technical.

E) negotiator, spokesperson, and entrepreneur.

Answer: A Page Ref: 471 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

14) The role of entrepreneur falls into which of Mintzberg's managerial classifications?

A) decisional B) informational C) interpersonal D) symbolic Answer: A Page Ref: 472 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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15) According to Mintzberg, managers in their informational role act as A) figureheads for the organization.

B) leaders.

C) nerve centers of the organization.

D) negotiators.

E) liaisons.

Answer: C Page Ref: 472 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

16) Which of the following systems support a manager's role as leader of an organization?

A) decision support systems B) telepresence systems C) e-mail D) MIS E) ESS Answer: B Page Ref: 472 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

17) All of the following managerial roles can be supported by information systems except A) figurehead.

B) resource allocator.

C) spokesperson.

D) disseminator.

E) entrepreneur.

Answer: E Page Ref: 472 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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18) When managers represent their company in the outside world and perform symbolic duties, they are acting in their A) decisional role.

B) managerial role.

C) informational role.

D) interpersonal role.

E) leadership role.

Answer: D Page Ref: 472 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

19) As discussed in the chapter text, the three main reasons that investments in information technology do not always produce positive results are A) management support, technical logistics, and user compliance.

B) organization, environment, culture.

C) information quality, information integrity, and information accuracy.

D) information quality, organizational culture, and management filters.

E) organization, culture, and technology.

Answer: D Page Ref: 472 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

20) The concept of management ________ describes situations in which managers act on preconceived notions that reject information that does not conform to their prior conceptions.

A) filters B) roles C) biases D) risk E) politics Answer: A Page Ref: 473 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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21) Which quality dimension of information is concerned that the data values of an information source fall within a defined range?

A) timeliness B) consistency C) completeness D) accessibility E) validity Answer: E Page Ref: 473 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

22) The dimension of ________ describes whether the structure of data is consistent within an information source.

A) completeness B) accuracy C) validity D) consistency E) integrity Answer: E Page Ref: 473 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

23) High-velocity decision making systems are growing rapidly for decisions classed as A) semi-structured.

B) financial.

C) ad hoc.

D) predefined.

E) highly structured.

Answer: E Page Ref: 474 Difficulty: Easy AACSB: Reflective thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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24) Which of the following describes how the Simon framework of decision-making works in high-velocity decision environments?

A) Only the initial step is performed by the software; the final three steps are handled by humans.

B) The first two steps of Simon's framework are eliminated and the final two steps are handled by software algorithms.

C) The first three steps of the process are handled by software algorithms and the final step is handled by experienced managers.

D) All four steps are performed by humans with the support of high-speed, high-volume DSS and ESS. E) All four steps of the process are handled by software algorithms; humans are eliminated from the decisions because they are too slow.

Answer: E Page Ref: 470 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

25) A drawback to high-velocity, automated decision-making systems is that they are unable to A) handle high volumes of decisions.

B) handle structured decisions.

C) handle semi-structured decisions.

D) control themselves and respond to new environments.

E) be applied to situations outside of the financial world.

Answer: D Page Ref: 474 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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26) Improving the quality of high-value decision making by an executive will save an organization far more money than improving the quality of lesser-value decisions made at a lower level.

Answer: FALSE Page Ref: 468 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

27) A structured decision can be made by following a well-defined set of procedures. No "feel" or intuition is necessary.

Answer: TRUE Page Ref: 468 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

28) Middle management face primarily unstructured decisions.

Answer: FALSE Page Ref: 469 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

29) Structured decision making is most prevalent at lower organizational levels.

Answer: TRUE Page Ref: 469 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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30) The intelligence phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization.

Answer: TRUE Page Ref: 470 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

31) The implementation phase of Simon's decision-making model includes choosing among solution alternatives.

Answer: FALSE Page Ref: 470 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

32) The first stage in Simon's decision-making process model is the design stage.

Answer: FALSE Page Ref: 470 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

33) The classical model of management does not address what exactly managers do when they plan, decide things, and control the work of others.

Answer: TRUE Page Ref: 471 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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34) A structured decision is repetitive and routine, for which known procedures provide solutions.

Answer: TRUE Page Ref: 468 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

35) The third stage in Simon's description of decision making is choice.

Answer: TRUE Page Ref: 470 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

36) In your position of office manager at a legal firm, you are in charge of hiring temporary legal assistants and clerical workers. Describe how Simon's decision-making process applies to this decision. Could that decision be aided by an information system in any way, and if so, how?

Answer: The decision-making process is: 1. Intelligence, or problem discovery: How many temps need to be hired, for how long, and what skills would they need?

2. Design, or solution discovery: What temp agencies are available and what are their prices?

3. Choice, or choosing solutions: Evaluate the offerings of the temp agencies, and evaluate the abilities of temps as per need.

4. Implementation, or solution testing: Evaluate the work of each temp against assignments and other needs.

An information system that displayed the temps available for hire along with pertinent information such as rate, and past assignments and evaluations would help in this process.

Page Ref: 470 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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37) A key business decision in your sporting goods manufacturing company is determining what suppliers to use for your raw materials. How can you determine if a manager in charge of selecting suppliers is making the best choice?

Answer: Student answers will vary but should include an understanding of evaluating the information the data is based on. For example: One way to determine the manager's choice is to find out what he or she is basing their decision on: price, quality, schedule, relationship, etc.

Then you could find out how those measurements of the supplier qualities are made—is the data about the suppliers accurate information. You could evaluate the data informing the decision along the information quality dimensions: accuracy, integrity, consistency, completeness, validity, timeliness, and accessibility.

Page Ref: 473 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

38) Explain why even well-designed information systems do not always help improve a firm's decision making.

Answer: Student answers will vary but should include the three main reasons for information systems not always producing positive results: 1. information quality, 2. management filters, and 3. organizational inertia/politics.

A sample answer is: There are three main reasons that implementing a well-designed information system might not result in better decisions. First, the information produced by a system may be incomplete and inaccurate. The quality of information will depend on the quality of data gathered, and may require a minimum amount of data to be gathered. Inaccurate data and incomplete data can degrade the quality of decision making. Second, management filters can also stymie good decision making—a manager who has a bias against some types of activities or solutions, or is overly optimistic or pessimistic will make decisions that are skewed towards their own perspective rather than actual facts. Finally, organizational inertia and politics can hamper decision making. Information systems can require organizational change in roles and business processes that employees want to resist; or a system can produce information that suggests that a change is necessary but employees ignore in order to maintain the status quo in roles and responsibilities.

Page Ref: 472-473 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.1: What are the different types of decisions and how does the decision-making process work? How do information systems support the activities of managers and management decision making?

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39) Behavioral models of management sees managers as being ________ than does the classical model.

A) more systematic B) more informal C) more reflective D) more well organized E) less reactive Answer: B Page Ref: 471 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

40) Which of the following is not one of the five classical functions of managers?

A) leading B) deciding C) planning D) organizing E) controlling Answer: A Page Ref: 471 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

41) Which of the following BI tools or abilities have been driving the movement toward "smart cities?"

A) OLAP B) chi-square analysis C) predictive analytics D) data mining E) big data analytics Answer: E Page Ref: 479 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

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42) The dimension of ________ in information quality describes whether data is available when needed.

A) integrity B) accuracy C) timeliness D) completeness E) consistency Answer: C Page Ref: 473 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

43) Which of the following statements best describes the term business intelligence?

A) the infrastructure for collecting and managing business data B) the tools and techniques used to analyze and understand business data C) software developed exclusively for business management D) information systems involved in business decision making E) enterprise systems used to make business decisions Answer: A Page Ref: 475 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

44) Decisions regarding managing and monitoring day-to-day business activities are referred to as ________ intelligence.

A) business B) analytical C) operational D) transactional E) production Answer: C Page Ref: 481 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

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45) Which of the following companies is not one of the top five producers of business intelligence and analytics products?

A) Sun B) Microsoft C) SAP D) IBM E) SAS Answer: A Page Ref: 475 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

46) Which of the following is not one of the six main elements in the business intelligence environment discussed in this chapter?

A) managerial users and methods B) organizational environment C) user interface D) data from the business environment E) platform Answer: B Page Ref: 476 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

47) Which of the following is not one of the six main analytic functionalities of BI systems for helping decision makers understand information and take action?

A) production reports B) parameterized reports C) business case archives D) forecasts, scenarios, and models E) drill down Answer: C Page Ref: 477 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

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48) ________ are visual tools for presenting performance data in a BI system.

A) Dashboards and scorecards B) Paramaterized reports C) Reports and the drill-down feature D) Scenarios and models E) Ad hoc report creation Answer: A Page Ref: 477 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

49) Which of the following are most likely to rely primarily on the drill-down functionality of BI for their decision-making needs?

A) IT developers B) middle managers C) operational employees D) business analysts E) senior executives Answer: B Page Ref: 478 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.2: How do business intelligence and business analytics support decision making?

50) A(n)________ report is produced when a user enters various values in a pivot table to filter data.

A) drill-down B) SQL C) ad hoc D) production E) parameterized Answer: E Page Ref: 477 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.2: How do business intelligence and business analytics support decision making?

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51) A(n) ________ is a BI feature that presents users with an easy-to-understand visual display of performance information.

A) ad hoc query B) parameterized report C) interface D) portal E) dashboard Answer: E Page Ref: 477 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

52) BI that is designed to determine the most likely effects of changes in the business environment is called A) statistical modeling.

B) environmental analytics.

C) predictive analytics.

D) big data analytics.

E) parameterized reports.

Answer: C Page Ref: 478 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

53) Which of the following are most likely to rely primarily on production reports for their decision-making needs?

A) operational supervisors B) senior managers C) analytic modelers D) business analysts E) executives Answer: A Page Ref: 478 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.2: How do business intelligence and business analytics support decision making?

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54) Which type of information system uses data visualization technology to analyze and display data for planning and decision making in the form of digitized maps?

A) GIS B) DSS C) location analytics D) Executive support systems E) GDSS Answer: A Page Ref: 485 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

55) Predictive analytics is used for all of the following except A) anticipate customer response to price changes.

B) identifying the most profitable customers.

C) determining the best routes for product delivery.

D) establishing consumer credit scores.

E) forecasting driver's safety.

Answer: C Page Ref: 478 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.2: How do business intelligence and business analytics support decision making?

56) Which of the following is not an example of a BI predefined production report?

A) workforce demographics B) order cycle time C) revenue forecasts D) supplier performance E) direct and indirect spending Answer: C Page Ref: 477 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 12.2: How do business intelligence and business analytics support decision making?

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57) You would use location analytics to determine how best to route your deliveries of products to retail outlets.

Answer: TRUE Page Ref: 482 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

58) A geographic information system is a decision support system designed specifically to work with spatial information.

Answer: TRUE Page Ref: 485 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

59) Big data is commonly used to analyze and predict consumer preferences.

Answer: TRUE Page Ref: 479 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

60) Data visualization technologies are used to help human users see patterns and relationships in large amounts of data.

Answer: TRUE Page Ref: 477 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.2: How do business intelligence and business analytics support decision making?

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61) You are evaluating BI software from a variety of vendors. Identify six elements in the BI environment. Use your understanding of the importance of these elements to formulate six questions to ask the vendor in order to determine how their software will interplay with your needs.

Answer: The six elements are: 1. Data from the business environment. A question for a salesperson is: "How does your software integrate with our data?"

2. Business intelligence infrastructure. "What type of database system does your software use?"

3. Business analytics toolset. "What tools are included?"

4. Managerial users and methods. "Our management team uses these metrics. Does your software provide that?"

5. Delivery platform: "How does your software integrate with our platforms?"

6. User interface: "What are the elements of your user interface and what delivery methods are used—mobile, social media, web portal, etc."

Student evaluations of which of these are the most important will vary.

Page Ref: 475 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 12.2: How do business intelligence and business analytics support decision making?

62) What is a GIS? Describe at least three ways in which a GIS could be used by modern business.

Answer: Geographic information systems are a special category of DSS that use data visualization technology to analyze and display data for planning and decision making in the form of digitized maps. GIS can best be used to support decisions that require knowledge about the geographic distribution of people or other resources in scientific research, resource management, and development planning. GIS have modeling capabilities, allowing managers to change data and automatically revise business scenarios to find better solutions.

For instance, a company could display its customers on a map and then design the most efficient delivery route for its products. A second way in which it could be used would be to analyze demographic information to decide where to open branch restaurants. A third use could be customer demographic data and map information to locate people who are likely to become customers for the company's services.

Page Ref: 485 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 12.2: How do business intelligence and business analytics support decision making?

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63) You are an analyst for a firm that imports and distributes specialty oils and vinegars and your company wants you to evaluate their options for taking advantage of cutting edge business analytics. What are their choices? What will you recommend?

Answer: There are two strategies for adopting BI and BA capabilities: 1. an integrated solution or 2. using multiple best-of-breed vendor software solutions.

The hardware firms want to sell you integrated hardware/software solutions that run on their hardware (the totally integrated solution). Software firms will want to sell you "best of breed" software that runs on any machine they want. In this strategy, you adopt the best database and data warehouse solution, and select the best business intelligence and analytics package from whatever vendor you believe is best. Student recommendations will vary: The first solution carries the risk that a single vendor provides your firm's total hardware and software solution, making your firm dependent on its pricing power, but it offers the advantage of dealing with a single vendor who can deliver on a global scale. The second solution offers greater flexibility and independence, but with the risk of potential difficulties integrating the software to the hardware platform, as well as to other software.

Page Ref: 485 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 12.2: How do business intelligence and business analytics support decision making?

64) MIS typically produce A) new ways of looking at data that emphasize change, flexibility, and rapid response.

B) fixed, regularly scheduled reports based on data extracted from the organization's TPS. C) solutions to semistructured problems appropriate for middle management decision making.

D) assumptions, responses to ad-hoc queries, and graphic representations of existing data.

E) scorecards of overall firm performance along predefined key indicators.

Answer: B Page Ref: 486 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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65) An information system for a building company that tracks construction costs for various projects across the United States would be categorized as a type of A) DSS. B) MIS. C) GIS. D) GDSS. E) BI. Answer: B Page Ref: 486 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

66) A pivot table is a(n) A) spreadsheet tool that displays two or more dimensions of data in a convenient format.

B) type of relational database.

C) chart tool that can rotate columnar data quickly and visually.

D) tool for performing sensitivity analysis.

E) integral data visualization tool used in digital dashboards and scorecards.

Answer: A Page Ref: 487 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

67) An information system which combines data from internal TPS with information from financial systems and external sources to deliver reports such as profit-loss statements and impact analyses, is an example of A) DSS. B) ESS. C) CDSS. D) MIS. E) GIS. Answer: B Page Ref: 488 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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68) The leading methodology for understanding the really important information needed by a firm's executives is called the ________ method.

A) digital dashboard B) balanced scorecard C) KPI D) data visualization E) predictive analytics Answer: B Page Ref: 489 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

69) Which of the following types of systems would be used to present senior marketing executives with in-depth information about customer retention, satisfaction, and quality performance?

A) CDSS B) MIS C) DSS D) TPS E) ESS Answer: E Page Ref: 489 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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70) Measures defined by management and used to internally evaluate the success of a firm's financial, business process, customer, and learning and growth are called A) benchmarks.

B) KPIs. C) the balanced scorecard method.

D) BPM. E) parameters.

Answer: B Page Ref: 489 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

71) A(n) ________ facilitates the solution to unstructured problems by a set of decision makers working together as a group.

A) DSS B) ESS C) CDSS D) GIS E) GDSS Answer: E Page Ref: 490 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

72) The management methodology of using a firm's strategy to generate operational targets for the business and measuring progress towards them using the firm's enterprise systems is called A) benchmarks.

B) KPIs. C) the balanced scorecard method.

D) BPM. E) business intelligence.

Answer: D Page Ref: 490 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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73) ESS A) support the structured decision making of senior executives.

B) have the ability to drill down into lower levels of detail.

C) easily integrate data from different systems.

D) are primarily driven by information derived from a company's transaction processing systems.

E) enable operational managers to create parameterized reports.

Answer: B Page Ref: 490 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

74) A well-designed ESS will allow management to A) create routine production reports as well as view overall business performance.

B) facilitate group decision making.

C) create pivot charts.

D) analyze big data.

E) track the activities of competitors.

Answer: E Page Ref: 489 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

75) GDSS A) are designed to allow meeting attendees to share their thoughts in real-time with their peers.

B) support decisions that require knowledge about the geographic distribution of resources.

C) are typically used with geographically dispersed attendees.

D) implement structured methods for organizing and evaluating ideas.

E) provide tools that allow managers to visualize data.

Answer: D Page Ref: 490 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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76) An essential component in the ability of GDSS to contribute to a collaborative environment is A) allowing users to contribute simultaneously.

B) using structured methods for evaluating ideas.

C) identifying users informally.

D) the guarantee of user anonymity.

E) providing each attendee with dedicated desktop computers.

Answer: D Page Ref: 490-491 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

77) GDSS A) require a small number of attendees in order to maintain high levels of productivity.

B) enable increasing a meeting size without reducing productivity.

C) include specific procedures for priority ranking the order in which participants can respond.

D) utilize shared desktop computers to foster collaboration.

E) are designed specifically for decision making by people working as a group in the same location.

Answer: B Page Ref: 490 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

78) DSS primarily address structured problems.

Answer: FALSE Page Ref: 487 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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79) MIS typically produce fixed, regularly scheduled reports based on data extracted and summarized from the firm's underlying transaction processing systems.

Answer: TRUE Page Ref: 486 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

80) DSS are a special category of GIS. Answer: FALSE Page Ref: 487 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

81) What-if analysis works forward from known or assumed conditions.

Answer: TRUE Page Ref: 487 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

82) Backward sensitivity analysis software is used for goal seeking.

Answer: TRUE Page Ref: 487 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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83) GDSS facilitate the solution of unstructured problems by a set of decision makers working together as a group in either the same location or different locations.

Answer: TRUE Page Ref: 490 Difficulty: Easy AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

84) Web-based tools for videoconferencing and electronic meetings are the primary tools for GDSS. Answer: FALSE Page Ref: 490 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

85) During a GDSS meeting, the attendees control the use of GDSS tools.

Answer: FALSE Page Ref: 490 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

86) KPI analysis is the leading methodology for understanding the most important information needed by a firm's executives.

Answer: FALSE Page Ref: 489 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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87) Describe MIS and DSS and differentiate between them.

Answer: MIS provide information on the firm's performance to help managers monitor and control the business. They typically produce hard copy, fixed, regularly scheduled reports based on data extracted and summarized from the organization's underlying transaction processing systems. DSS provide new sets of capabilities for nonroutine decisions and user control. MIS accents reports based on routine flows of data and assists in the general control of the organization. DSS emphasizes change, flexibility, and rapid response to unstructured problems.

Page Ref: 486-487 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

88) What is the business value of a DSS? Answer: DSS can help companies improve supply chain management and customer relationship management. Some take advantage of the company-wide data provided by enterprise systems.

DSS today can also harness the interactive capabilities of the Web to provide decision-support tools to both employees and customers.

Page Ref: 487 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

89) Describe the balanced scorecard model and its role in ESS. Answer: The balanced score card is a framework for operationalizing a firm's strategic plan by focusing on measurable outcomes on four dimensions of firm performance: financial, business process, customer, and learning and growth. Performance on each dimension is measured using key performance indicators (KPIs), which are the measures proposed by senior management for understanding how well the firm is performing along any given dimension. The balanced scorecard framework is thought to be "balanced" because it causes managers to focus on more than just financial performance. In this view, financial performance is past history—the result of past actions—and managers should focus on the things they are able to influence today, such as business process efficiency, customer satisfaction, and employee training.

Page Ref: 489 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 12.3: How do different decision-making constituencies in an organization use business intelligence? What is the role of information systems in helping people working in a group make decisions more efficiently?

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Management Information Systems, 14e (Laudon) Chapter 13 Building Information Systems 1) The four kinds of structural organizational change enabled by IT, in order from least to most risky, are A) rationalization, automation, reengineering, and redesigning.

B) rationalization, automation, reengineering, and paradigm shift.

C) automation, rationalization, redesigning, and paradigm shift.

D) automation, redesigning, restructuring, and paradigm shift.

E) paradigm shift, reengineering, rationalization, and automation.

Answer: C Page Ref: 503 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.1: How does building new systems produce organizational change?

2) In automation A) business processes are simplified.

B) business processes are reorganized to cut waste and eliminate repetitive, paper-intensive tasks.

C) standard operating procedures are streamlined to remove bottlenecks.

D) employees are enabled to perform their tasks more efficiently.

E) business processes are eliminated.

Answer: D Page Ref: 504 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

3) Business processes are analyzed, simplified, and redesigned in A) business process redesign.

B) rationalization of procedures.

C) automation.

D) paradigm shifts.

E) systems analysis and design.

Answer: A Page Ref: 505 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

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4) A bank has reworked its mortgage application process so that several steps are handled by computer software, and some steps are combined to reduce bottlenecks in processing. The goal is to gradually improve its efficiency over time. This is an example of A) automation.

B) rationalization of procedures.

C) paradigm shift.

D) business process redesign.

E) organizational change.

Answer: B Page Ref: 504 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.1: How does building new systems produce organizational change?

5) An upscale organic foods grocery chain is implementing an information system that will enable it to add same-day home delivery of groceries to its customers. This is an example of A) automation.

B) rationalization of procedures.

C) paradigm shift.

D) business process redesign.

E) organizational change.

Answer: C Page Ref: 505 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.1: How does building new systems produce organizational change?

6) The idea that the achievement of quality control is an end in itself describes a main concept of A) BPM. B) BPR. C) six sigma.

D) TQM. E) systems analysis and design.

Answer: D Page Ref: 504 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

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7) ________ provide(s) a methodology and tools for dealing with the organization's ongoing need to revise and optimize its numerous business processes.

A) Business process redesign B) Business process management C) CASE tools D) TQM E) Systems analysis and design Answer: B Page Ref: 505 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

8) In order, what are the first three steps in BPM? A) 1. identifying processes for change, 2. analyzing existing processes, 3. designing the new process.

B) 1. analyzing existing processes, 2. identifying processes for change, 3. designing the new process.

C) 1. identifying processes for change, 2. designing the new process, 3. implementing the new process.

D) 1. analyzing processes to change, 2. designing the new process, 3. measuring the optimized process.

E) 1. designing new processes, 2. analyzing existing processes, 3. identifying processes for change.

Answer: A Page Ref: 505-506 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

9) What is the greatest barrier to successful business process change?

A) ineffective project management B) usability of implemented solution C) selecting the correct process to change D) organizational change E) poor choice of technology Answer: D Page Ref: 505 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 13.1: How does building new systems produce organizational change?

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10) Categories of tools for BPM include all of the following except A) tools to integrate existing systems to support business processes' improvements.

B) tools to automate business processes.

C) tools to identify and document business processes.

D) tools to test the security of business processes.

E) tools to design new processes.

Answer: D Page Ref: 505 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.1: How does building new systems produce organizational change?

11) Which of the following is not a tool provided by Business Process Management software?

A) tools that help businesses identify and document processes requiring improvement B) create models of improved processes C) capture and enforce business rules for performing processes D) capture and identify information system requirements for a new system E) integrate existing systems to support new or redesigned processes Answer: D Page Ref: 508 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.1: How does building new systems produce organizational change?

12) End user development A) allows end users to create complex information systems.

B) increases the time and steps required to produce a finished application when compared to professional development.

C) allows ends users to easily access data, create reports, and develop simple applications.

D) requires more time to develop systems.

E) leads to lower levels of satisfaction with systems.

Answer: C Page Ref: 523 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.1: How does building new systems produce organizational change?

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13) A(n) ________ is an organizational change that involves rethinking the nature of the business and the nature of the organization itself.

A) automation program B) rationalization program C) systems analysis and design D) paradigm shift E) business process redesign program Answer: D Page Ref: 505 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

14) The most common form of IT-enabled organizational change is business process redesign.

Answer: FALSE Page Ref: 504 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.1: How does building new systems produce organizational change?

15) Rationalization of procedures describes a radical rethinking of the business models.

Answer: FALSE Page Ref: 504 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

16) Organizations will adjust to new information systems without any special efforts if the system is a good system to begin with.

Answer: FALSE Page Ref: 505 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 13.1: How does building new systems produce organizational change?

17) TQM describes the measurement of quality as 3.4 defects per million.

Answer: FALSE Page Ref: 504 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.1: How does building new systems produce organizational change?

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18) Describe each type of organizational change enabled by information technology. Give an example of each type of change, as it might be illustrated through the operations of a hotel.

Answer: 1. In automation, employees are assisted with performing tasks automatically. In a hotel, this might mean that a system is set up for the reservations desk to record and process customer reservations.

2. In rationalization of procedures, standard operating procedures are streamlined. In a hotel, this might mean that a reservation system that required three or four steps for checking a customer in would be reduced to one or two steps.

3. In business process reengineering, business processes are analyzed, simplified and redesigned. In a hotel, the reservation and check-in system might be designed to allow the customers to reserve rooms and check in themselves, without the need of a hotel employee to confirm the process.

4. In paradigm shift, the very nature of the business is rethought and new business models are defined. In a hotel, this might mean that the idea of renting rooms on a night-by-night basis to clients might be rethought of as an extended stay place, or perhaps even as a condominium or other business type.

Page Ref: 503-505 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 13.1: How does building new systems produce organizational change?

19) What is the business importance of managing the quality of business processes? Describe two methods of quality management.

Answer: Quality management is one area of continuous process improvement. Quality improvements in business processes can increase efficiency, reduce waste, lower costs, and can raise the level of product and service quality. Two methods for achieving greater quality are Total Quality Management (TQM) and Six Sigma. In TQM, quality is the responsibility of all people and functions within an organization. Everyone is expected to contribute to the overall improvement of quality. Six sigma is a specific measure of quality, representing 3.4 defects per million opportunities. Most companies cannot achieve this level of quality but use six sigma as a goal to implement a set of methodologies and techniques for improving quality and reducing costs.

Page Ref: 504 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.1: How does building new systems produce organizational change?

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20) Which conversion process introduces the system first to a limited portion of the organization?

A) the pilot study strategy B) the phased approach strategy C) the limited cutover strategy D) the parallel strategy E) the parallel approach strategy Answer: A Page Ref: 515 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 13.2 What are the core activities in the systems development process?

21) Which process develops a detailed description of the functions that a new information system must perform?

A) feasibility study B) requirements analysis C) systems design D) test plan development E) management plan Answer: B Page Ref: 512 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

22) Systems design A) describes what a system should do to meet information requirements.

B) shows how the new system will fulfill the information requirements.

C) identifies which users need what information, where, when and how.

D) is concerned with the logical view of the system solution.

E) identifies the technology to be used in the system.

Answer: B Page Ref: 512 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

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23) Transferring data from a legacy system to the new system would be defined by which category of system design specifications?

A) input B) database C) manual procedures D) conversion E) implementation Answer: D Page Ref: 514 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

24) Unit testing A) includes all the preparations for the series of tests to be performed on the system.

B) tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned.

C) tests each program separately.

D) provides the final certification that the system is ready to be used in a production setting.

E) involves testing the entire system with real-world data.

Answer: C Page Ref: 513 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

25) System testing A) includes all the preparations for the series of tests to be performed on the system.

B) tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned.

C) tests each program separately.

D) provides the final certification that the system is ready to be used in a production setting.

E) tests the information requirements of a system.

Answer: B Page Ref: 514 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

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26) Acceptance testing A) includes all the preparations for the series of tests to be performed on the system.

B) tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned.

C) tests each program separately.

D) provides the final certification that the system is ready to be used in a production setting.

E) involves testing the conversion of legacy data to the new system.

Answer: D Page Ref: 514 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

27) In a parallel conversion strategy, the new system A) is tested by an outsourced company.

B) replaces the old one at an appointed time.

C) and the old are run in parallel.

D) is introduced in stages.

E) is slowly converted from the old system.

Answer: C Page Ref: 514 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

28) In the direct cutover conversion strategy, the new system A) is tested by an outsourced company.

B) replaces the old one at an appointed time.

C) and the old are run together.

D) is introduced in stages.

E) the old and new systems are run in parallel.

Answer: B Page Ref: 514 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

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29) Changes in hardware, software, documentation, or production to a production system to correct errors, meet new requirements, or improve processing efficiencies are termed A) compliance.

B) production.

C) maintenance.

D) acceptance.

E) implementation.

Answer: C Page Ref: 515 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

30) In what stage of systems development are design specifications created?

A) systems analysis B) systems design C) testing D) conversion E) implementation Answer: B Page Ref: 512 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

31) A systems analysis includes a(n) ________ that is used to determine whether the solution is achievable, from a financial, technical, and organizational standpoint.

A) feasibility study B) data flow diagram C) logical design D) systems design document E) request for proposal Answer: A Page Ref: 511 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

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32) ________ provide(s) a detailed statement of the information needs that a new system must satisfy; identifies who needs what information, and when, where, and how the information is needed.

A) Systems analysis and design document B) Information requirements C) A data flow diagram D) Feasibility study E) Request for proposal Answer: B Page Ref: 512 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

33) A(n) ________ is the model or blueprint for an information system solution and consists of all the specifications that will deliver the functions identified during systems analysis.

A) feasibility study B) data flow diagram C) systems design document D) information requirements document E) request for proposal Answer: C Page Ref: 512 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

34) During the ________ stage of system development, system specifications that were prepared during the design stage are translated into software code.

A) systems analysis and design B) implementation C) conversion D) programming E) feasibility study Answer: D Page Ref: 513 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

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35) ________ is the process of changing from the old system to the new system.

A) Implementation B) Conversion C) Systems analysis and design D) Programming E) End user involvement Answer: B Page Ref: 514 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

36) The system is not in production until conversion is complete.

Answer: TRUE Page Ref: 515 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

37) Documentation reveals how well a system works from both a technical and end-user standpoint.

Answer: TRUE Page Ref: 515 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.2 What are the core activities in the systems development process?

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38) You are consulting for the information technology division of a state university to guide and facilitate the design of a new system for handling college applications, which has previously been handled entirely with a paper-based process. They would like to set up a system by which prospective students can apply online. Describe in detail their first steps and any studies they should perform before designing the new information system.

Answer: Student answers will vary, but should include an understanding of the first step of systems development—systems analysis, along with feasibility studies and determining information requirements. An example answer is: The college will need to perform systems analysis. This consists of defining the problem, identifying its causes, specifying the solution, identifying the information requirements. It also includes identifying the primary owners and users of data along with existing hardware and software, the problems of existing systems, examining documents, work papers, and procedures; observing system operations; and interviewing key users of the systems. The systems analysis would include a feasibility study to determine whether that solution was feasible, or achievable, from a financial, technical, and organizational standpoint. The feasibility study would determine whether the proposed system was a good investment, whether the technology needed for the system was available and could be handled by the firm's information systems specialists, and whether the organization could handle the changes introduced by the system. They should identify several alternative solutions that the organization can pursue. The process then assesses the feasibility of each.

A written systems proposal report describes the costs and benefits, advantages and disadvantages of each alternative. It is up to management to determine which mix of costs, benefits, technical features, and organizational impacts represents the most desirable alternative. They will also need to define the specific information requirements that must be met by the system solution selected. This involves identifying who needs what information, where, when, and how.

Requirements analysis carefully defines the objectives of the new or modified system and develops a detailed description of the functions that the new system must perform.

Page Ref: 509-512 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 13.2 What are the core activities in the systems development process?

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39) List and describe at least nine factors considered in the design specifications for a new system. Give at least two examples for each one.

Answer: • Output. Medium, content, timing • Input. Origins, flow, data entry • User interface. Simplicity, efficiency, logic, feedback, errors • Database design. Logical data model, volume and speed requirements, organization and design, record specifications • Processing. Computations, program modules, required reports, timing of outputs • Manual procedures. What activities, who performs them, when, how, where • Controls. Input controls, processing controls, output controls, procedural controls • Security. Access controls, catastrophe plans, audit trails • Documentation. Operations documentation, systems documents, user documentation • Conversion. Transfer files, initiate procedures, select testing method, cut over to new system • Training. Select training techniques, develop training modules, identify training facilities • Organizational changes. Task redesign, job design, process design, organization structure design, reporting relationships Page Ref: 513 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.2 What are the core activities in the systems development process?

40) Discuss the role and influence the user plays in software development.

Answer: The user is the primary focus of software development. Whether a new information system succeeds or fails largely depends on the roles of users. Building successful information systems requires close cooperation among end users and information systems specialists throughout the systems development process. If users are heavily involved in the development of a system, they have more opportunities to mold the system according to their priorities and business requirements, and more opportunities to control the outcome. They also are more likely to react positively to the completed system because they have been active participants in the change process. Incorporating user knowledge and expertise leads to better solutions.

The role of the user in the development of software depends on the method of development used.

In SLDC work, end users are limited to providing information requirements and reviewing the technical staff's work. In prototyping, users are involved throughout development, through the use and review of iterative steps of the prototype. In end-user development, the users themselves create the system. Users are typically more involved also in RAD, through the use of prototyping and JAD. In joint application design, end users and information systems specialists work together in an interactive session to discuss design.

Page Ref: 512 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 13.2 What are the core activities in the systems development process?

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41) You work for the IT department of a startup ASP, and it is your job to set up the testing processes for a new enterprise system the company will be hosting. Describe the processes you will recommend. What unique considerations will you have?

Answer: The first step is to prepare the test plan. Any individual components will need to be tested separately, first (in unit testing), and then the system as a whole will need to be tested (in system testing). Finally acceptance testing will be conducted to make sure the system is ready to be used in a production setting. Because this is a hosted application, the system will need to be tested as accessed from the variety of platforms that are supported by the application. If the hosted application supports both Mac and Windows users, the system and its parts will need to be tested using client computers running these systems.

Page Ref: 514 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 13.2 What are the core activities in the systems development process?

42) The entire system-building effort is driven by A) organizational change.

B) feasibility studies.

C) the information value chain.

D) user information requirements.

E) available information technology.

Answer: D Page Ref: 512 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.3: What are the principal methodologies for modeling and designing systems?

43) The primary tool for representing a system's component processes and the flow of data between them is the A) data dictionary.

B) process specifications diagram.

C) user documentation.

D) data flow diagram.

E) top down structure chart.

Answer: D Page Ref: 516 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

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44) An entire information system is broken down into its subsystems by using A) high-level data flow diagrams.

B) low-level data flow diagrams.

C) process specifications.

D) structured diagrams.

E) logical design diagrams.

Answer: A Page Ref: 517 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

45) To understand and define the contents of data flows and data store, system builders use A) a data dictionary.

B) process specifications diagrams.

C) user documentation.

D) data flow diagrams.

E) systems analysis.

Answer: A Page Ref: 517 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

46) To show each level of a system's design, its relationship to other levels, and its place in the overall design structure, structured methodologies use A) structure charts.

B) Gantt and PERT charts.

C) process specifications.

D) data flow diagrams.

E) user documentation.

Answer: A Page Ref: 517 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

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47) In object-oriented development A) the class is used as the basic unit of systems analysis and design.

B) an object is a collection of data that is acted on by external processes.

C) processing logic resides within objects.

D) a strict, step-by-step development process is essential.

E) data and processes are separated.

Answer: C Page Ref: 518 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 13.3: What are the principal methodologies for modeling and designing systems?

48) In an object-oriented development framework for a university, how would the classes Degree, Mathematics, and Physics be related?

A) Degree would be a sister class to Mathematics and Physics.

B) Degree is a superclass to Mathematics and Physics.

C) Mathematics and Physics would be ancestors to Degree.

D) Degree would be a subclass to Mathematics and Physics.

E) Math, Physics and Degree are sister classes.

Answer: B Page Ref: 518 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.3: What are the principal methodologies for modeling and designing systems?

49) Object-oriented modeling is based on the concepts of A) objects and relationships.

B) classes and objects.

C) class and inheritance.

D) objects and inheritance.

E) classes and relationships.

Answer: C Page Ref: 518 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

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50) Object-oriented development could potentially reduce the time and cost of writing software because A) object-oriented programming requires less training.

B) iterative prototyping is not required.

C) objects are reusable.

D) a single user interface object can be used for the entire application.

E) it's not necessary to use a formal methodology to design a system.

Answer: C Page Ref: 518 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

51) CASE tools automate A) documentation.

B) code generation.

C) creating data dictionaries.

D) user interfaces.

E) system designs.

Answer: D Page Ref: 519 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

52) A native mobile app is A) a mobile Web site.

B) a mobile Web app.

C) a stand alone application that does not use a browser.

D) a responsive mobile app.

E) one that can only operate on selected devices.

Answer: C Page Ref: 528 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

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53) ________ describe the transformation occurring within the lowest level of the data flow diagrams.

A) Design requirements B) Information requirements C) Technology design plan D) Conversion requirements E) Process specifications Answer: E Page Ref: 517 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

54) Organizational software packages often include ________ features that allow the software to be modified to meet organizational requirements.

A) automation B) object oriented C) programming D) design E) customization Answer: E Page Ref: 524 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

55) A data flow diagram offers a logical and graphical model of information flow, partitioning a system into modules that show manageable levels of detail.

Answer: TRUE Page Ref: 516 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

56) A structure chart is a bottom-up chart, showing each level of design, its relationship to other levels, and its place in the overall design structure.

Answer: FALSE Page Ref: 517 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

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57) Objects are grouped into hierarchies, and hierarchies into classes.

Answer: FALSE Page Ref: 518 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

58) Object-oriented development is more incremental than traditional structured development.

Answer: TRUE Page Ref: 518 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

59) CASE tools facilitate the creation of clear documentation and the coordination of team development efforts.

Answer: TRUE Page Ref: 519 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.3: What are the principal methodologies for modeling and designing systems?

60) What qualities of object-oriented development make this method especially suitable for Internet applications?

Answer: Object-oriented development uses the object as the basic unit of systems analysis and design. The system is modeled as a collection of objects and the relationships between them. Ecommerce companies need to be able to add, change, and retire their technology capabilities very rapidly. Object-oriented development allows objects to be reused and repackaged with other objects to create new software, saving money and development time.

Page Ref: 518-519 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 13.3: What are the principal methodologies for modeling and designing systems?

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61) The oldest method for building information systems is A) component-based development.

B) prototyping.

C) object-oriented development.

D) the systems development lifecycle.

E) RAD. Answer: D Page Ref: 520 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

62) In the traditional systems development lifecycle, end users A) are important and ongoing members of the team from the original analysis phase through maintenance.

B) are important only in the testing phases.

C) have no input.

D) are limited to providing information requirements and reviewing the technical staff's work.

E) control the development of the system.

Answer: D Page Ref: 520 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

63) In which type of systems building are the development stages organized so that tasks in one stage are completed before the tasks in the next stage begin?

A) traditional B) prototyping C) RAD D) JAD E) object oriented development Answer: A Page Ref: 520 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

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64) You are an IT project manager for an advertising firm. The firm wishes to create an online tool that will be used to survey focus group reactions to products in development. The most important consideration for the firm is being able to offer the tool as soon as possible as a new corporate service. However, you know that many of the senior managers that are business owners of this project have difficulty in understanding technical or software development issues, and are likely to change their requirements during the course of development. What development method would be most successful for this project?

A) RAD B) JAD C) end-user development D) prototyping E) traditional Answer: D Page Ref: 521 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 13.4: What are alternative methods for building information systems?

65) A systems building approach in which the system is developed as successive versions, each version reflecting requirements more accurately, is described to be A) end-user oriented.

B) iterative.

C) object-oriented.

D) agile.

E) traditional.

Answer: B Page Ref: 522 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

66) When systems are created rapidly, without a formal development methodology A) end users can take over the work of IT specialists.

B) the organization quickly outgrows the new system.

C) hardware, software, and quality standards are less important.

D) testing and documentation may be inadequate.

E) IT specialists dominate the design of the system.

Answer: D Page Ref: 523 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

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67) What is the primary driving factor in firms to select domestic outsourcing firms to build system solutions?

A) to take advantage of technical skills the firm does not have B) to save labor costs C) to avoid change management issues D) to reduce the cost of hardware E) to avoid offshore outsourcing Answer: A Page Ref: 525 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.4: What are alternative methods for building information systems?

68) A software package evaluation process is often based on a series of questions sent to vendors, called a(n) A) systems design document.

B) strategic planning document.

C) information systems management plan.

D) request for proposal.

E) logical design document.

Answer: D Page Ref: 524 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.4: What are alternative methods for building information systems?

69) The oldest method for building information systems is prototyping.

Answer: FALSE Page Ref: 521 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

70) Prototyping is more iterative than the conventional lifecycle.

Answer: TRUE Page Ref: 521 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

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71) A prototype is a working version of an information system that is meant to be only a preliminary model.

Answer: TRUE Page Ref: 521 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

72) End-user-developed systems can be completed more rapidly than those developed through the conventional systems lifecycle.

Answer: TRUE Page Ref: 523 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

73) A primary benefit of offshore outsourcing is that this can substantially reduce hidden costs.

Answer: FALSE Page Ref: 525 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.4: What are alternative methods for building information systems?

74) Identify and describe each of the five systems' development approaches.

Answer: 1. Systems lifecycle is a sequential step-by-step formal process, written specification and approvals, limited role of users.

2. In prototyping, requirements are specified dynamically with experimental systems in a rapid, informal, and iterative process; users continually interact with the prototype.

3. An applications software package is commercial software that eliminates the need for internally developed software programs.

4. In end-user development, systems are created by end users using fourth-generation software tools, rapid and informal, minimal role of information systems specialists.

5. In outsourcing, systems are built and sometimes operated by an external vendor.

Page Ref: 520-526 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.4: What are alternative methods for building information systems?

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75) What are the advantages and disadvantages of prototyping? Describe the steps in prototyping. Give at least two circumstances under which prototyping might be useful.

Answer: Prototyping is most useful when there is some uncertainty about requirements or design solutions. Because prototyping encourages intense end-user involvement throughout the process, it is more likely to produce systems that fulfill user requirements. Working prototype systems can be developed very rapidly and inexpensively.

Rapid prototyping can gloss over essential steps in systems development. If the completed prototype works reasonably well, management may not see the need for reprogramming, redesigned, full documentation in testing to build a polished production system. This can backfire later with large quantities of data or large numbers of users in a production environment.

The steps in prototyping are: 1. identify the user's basic requirements, 2. develop an initial prototype, 3. use the prototype, 4. revise and enhance the prototype.

Prototyping might be especially useful in designing end-user interfaces, or situations in which the users have no clear ideas of what their information requirements are.

Page Ref: 521-522 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 13.4: What are alternative methods for building information systems?

76) What is the purpose of responsive Web design?

A) It allows one Web site to serve different platforms, such as tablets, PCs, and mobile phones.

B) It allows Web sites to respond quickly to changing user needs.

C) It enables Web sites to customize design according to user preferences.

D) It enables Web sites to customize content based on user location and preferences.

E) It enables different people to responsively program the system.

Answer: A Page Ref: 529 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 13.5: What are new approaches for system building in the digital firm era?

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77) What is "responsive design" for mobile applications?

A) a design that responds to the user's needs B) a design that responds to the user's location C) a design that responds to the user's voice commands D) a design that responds to the user's digital device and screen E) a design that responds to the user's gestures Answer: D Page Ref: 528 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

78) As a technical project manager, you have decided to propose implementing a prototyping methodology for a small Web-based design project. What is the order of steps you will follow in this project?

A) Develop the prototype; use the prototype; revise and enhance the prototype.

B) Identify user requirements, develop the prototype, use the prototype, revise and enhance the prototype.

C) Define the requirements, develop solutions, select the best prototype, and implement the prototype.

D) Define the requirements, develop the prototype, revise and enhance the prototype.

E) Select the best prototype, define the requirements, and implement the prototype.

Answer: B Page Ref: 522 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 13.5: What are new approaches for system building in the digital firm era?

79) Which of the following is not a top priority in mobile application development?

A) designing for multitouch B) saving resources C) limiting the use of keyboards D) designing for keyboard data entry E) designing for multiple screens Answer: D Page Ref: 529 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 13.5: What are new approaches for system building in the digital firm era?

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80) The process of creating workable information systems in a very short period of time is called A) RAD. B) JAD. C) prototyping.

D) systems analysis and design.

E) end user design.

Answer: A Page Ref: 527 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

81) Which type of systems development is characterized by significantly speeding up the design phase and the generation of information requirements and involving users at an intense level?

A) RAD B) JAD C) prototyping D) end-user development E) traditional Answer: B Page Ref: 527 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

82) Groups of objects are assembled into software components for common functions, which can be combined into large-scale business applications, in which type of software development?

A) object-oriented development B) component-based development C) structured methodologies D) RAD E) Agile development Answer: B Page Ref: 527 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

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83) ________ development focuses on rapid delivery of working software by breaking a large project into a series of small sub-projects that are completed in short periods of time using iteration and continuous feedback.

A) Agile B) Rapid application C) Joint application D) Object-oriented E) Traditional Answer: A Page Ref: 527 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

84) Compared to the use of proprietary components, Web services promise to be less expensive and less difficult to implement because of A) their ability to integrate seamlessly with legacy systems.

B) their ability to enable communication among different systems using universal standards.

C) the ubiquity of the Internet.

D) the ability to reuse Web services components.

E) their use of custom programming.

Answer: B Page Ref: 528 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

85) With a mobile Web app A) users access mobile Web apps through their mobile device's Web browser.

B) the app resides on the users device.

C) the app can only work on certain mobile platforms.

D) the app requires the user to sign onto a Web page.

E) the app requires the user to login to a Web service.

Answer: A Page Ref: 528 Difficulty: Difficult AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

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86) In component-based development, applications are developed one small portion at a time, with each portion able to function independently.

Answer: FALSE Page Ref: 527 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

87) Responsive Web design enables Web sites to change layouts according to the user's screen size.

Answer: TRUE Page Ref: 529 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

88) The three main platforms for mobile apps are iPhone/iPad, iOS, and Android.

Answer: FALSE Page Ref: 528 Difficulty: Easy AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

89) Systems development activities always take place in sequential order.

Answer: FALSE Page Ref: 509 Difficulty: Moderate AACSB: Information technology CASE: Content LO: 13.5: What are new approaches for system building in the digital firm era?

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90) What is outsourcing? Describe the advantages and disadvantages to outsourcing software development.

Answer: In outsourcing, a firm hires an external organization to build or maintain part or all of its information systems needs. This can include software development and hosting applications, but the firm may also host any developed applications on its own hardware while having the vendor create and maintain software or systems. The vendor may be domestic or in another country (in offshore outsourcing).

The benefit to outsourcing is, in the case of domestic outsourcing, being able to develop systems that in-house staff may not have the time or skills to do. In the case of offshore outsourcing, a primary benefit is cost savings, as costs and salaries in foreign countries can be significantly less.

Disadvantages would include relinquishing some control over development, having third party firms access to privileged company data and information. It is also possible to underestimate costs in outsourcing, which include costs for transferring knowledge, cultural differences, productivity losses, and other human resource issues.

Page Ref: 525-526 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 13.5: What are new approaches for system building in the digital firm era?

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Management Information Systems, 14e (Laudon) Chapter 14 Managing Projects 1) On average, private sector IT projects underestimated budget and delivery time of systems by ________ percent.

A) 30 B) 40 C) 50 D) 60 E) 70 Answer: C Page Ref: 543 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

2) As discussed in the chapter, which of the following is not one of the immediate consequences of inadequate software project management?

A) cost overruns B) customer loyalty C) time slippage D) technical shortfalls E) failure to obtain anticipated benefits Answer: B Page Ref: 544 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

3) Which of the following is not one of the five main variables affecting project success?

A) risk B) vendors C) time D) quality E) cost Answer: B Page Ref: 546-549 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

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4) You have been hired to implement an enterprise system that will automate much of the billing and accounting work for a statewide HVAC services company. Which of the following would you prepare to describe how the new system will affect a firm's structure and operations?

A) information systems plan B) internal integration report C) sociotechnical design report D) organizational impact analysis E) strategic planning document Answer: D Page Ref: 564 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

5) All of the following are indications of a failed information systems project except A) employees are refusing to switch to the new system.

B) employees have created a spreadsheet solution to manipulate the data generated by the system.

C) a redesigned Web site has fewer visits to the customer support pages.

D) employees require training to properly use the system.

E) the system is not being used by anyone.

Answer: D Page Ref: 544 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

6) Which of the following project management variables indicates how well the project satisfies management objectives?

A) goals B) risk C) quality D) scope E) cost Answer: C Page Ref: 548 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

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7) Which of the following statistics from studies on failed projects is not true?

A) Only 32 percent of all technology investments were completed on time, on budget, and with all features and functions originally specified.

B) Large software projects on average run 66 percent over budget and 33 percent over schedule.

C) Between 30 and 40 percent of all software projects are "runaway" projects that far exceed the original schedule and budget projections and fail to perform as originally specified.

D) Thirty-two percent of technology investments are completed on time, within budget, and with requirements met.

E) The average cost overrun of IT projects is 20 percent.

Answer: E Page Ref: 544 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

8) The cost of a project is based on the time to complete a project multiplied by the cost of human resources required to complete the project.

Answer: TRUE Page Ref: 548 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

9) An information system project's scope is directly related to its business requirements.

Answer: TRUE Page Ref: 546 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

10) ________ refers to the application of knowledge, skills, tools and techniques to achieve specific targets within specified budget and time constraints.

Answer: Project management Page Ref: 546 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

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11) One of the five major variables in project management, ________ is an indicator of how well the project satisfies management objectives.

Answer: quality Page Ref: 548 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

12) The ________ is the part of the system that users interact with.

Answer: user interface Page Ref: 544 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

13) A planned series of related activities for achieving a specific business goal is called a(n) ________.

Answer: project Page Ref: 546 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.1: What are the objectives of project management and why is it so essential in developing information systems?

14) At the top of the management structure for information systems projects in a large company is A) project management.

B) the CIO. C) the corporate strategic planning group.

D) the board of directors.

E) chief executive officer (CEO).

Answer: C Page Ref: 549 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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15) The ________ reviews and approves plans for systems in all divisions.

A) project management group B) project team C) IS steering committee D) corporate strategic planning committee E) chief executive officer (CEO) Answer: C Page Ref: 550 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

16) The ________ consists of systems analysts, specialists from the relevant end-user business areas, application programmers, and perhaps database specialists.

A) project management group B) project team C) IS steering committee D) corporate strategic planning committee E) system planning committee Answer: B Page Ref: 550 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

17) The ________ is directly responsible for the individual systems project.

A) project management group B) project team C) IS steering committee D) corporate strategic planning committee E) systems planning committee Answer: B Page Ref: 550 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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18) A road map indicating the direction of systems development, the rationale, the current systems, new developments to consider, the management strategy, the implementation plan, and the budget is called a(n) A) project plan.

B) portfolio analysis.

C) information systems plan.

D) enterprise analysis.

E) strategic planning document.

Answer: C Page Ref: 550 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

19) The central method used in a portfolio analysis is to A) inventory all of the organization's information systems projects and assets.

B) perform a weighted comparison of the criteria used to evaluate a system.

C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information.

D) interview a small number of top managers to identify their goals and criteria for achieving success.

E) score proposed systems on a number of dimensions, and select the one with the highest score.

Answer: A Page Ref: 552 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

20) In using a portfolio analysis to determine which IT projects to pursue, you would A) select the most low-risk projects from the inventory.

B) limit work to those projects with great rewards.

C) select only low-risk, high-reward projects.

D) balance high-risk, high reward projects with lower-risk projects.

E) avoid projects that were very costly.

Answer: D Page Ref: 552 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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21) Which method would you use to develop risk profiles for a firm's information system projects and assets?

A) information systems plan B) scoring model C) portfolio analysis D) TCO E) real options model Answer: C Page Ref: 552 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

22) You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects. Which types of projects would be best avoided?

A) any high-risk projects B) any low-benefit projects C) all high-risk, low-benefit projects D) none, any project might be beneficial E) low cost, high benefit projects Answer: C Page Ref: 552 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

23) The central method used in a scoring model is to A) inventory all of the organization's information systems projects and assets.

B) perform a weighted comparison of the criteria used to evaluate a system.

C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information.

D) interview a small number of top managers to identify their goals and criteria for achieving success.

E) calculate the return on investment for each system, and choose the system with the best return.

Answer: B Page Ref: 553 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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24) Which method is used to assign weights to various features of a system?

A) information systems plan B) scoring model C) portfolio analysis D) TCO E) real options model Answer: B Page Ref: 552 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

25) The criteria used for evaluation in a scoring model are usually determined by A) lengthy discussions among the decision-making group.

B) portfolio analysis.

C) the IS steering committee.

D) systems analysts.

E) project managers.

Answer: A Page Ref: 552 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

26) The information systems steering committee is composed of information systems managers and end-user managers responsible for overseeing several specific information systems projects.

Answer: FALSE Page Ref: 550 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

27) An information systems plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals.

Answer: TRUE Page Ref: 550 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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28) If an intended benefit of an IT project is improved decision making, managers should develop a set of metrics to quantify the value of an improved decision.

Answer: TRUE Page Ref: 550 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

29) Scoring models are most commonly used to make the final decision when selecting different systems .

Answer: FALSE Page Ref: 552 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

30) A(n) ________ is a method for deciding among alternative systems based on a system of ratings for selected objectives.

Answer: scoring model Page Ref: 552 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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31) You are working as a project manager for a small IT consulting firm and have been asked to create a plan for reviewing and auditing completed projects in order to gauge their success. What factors will you use to measure the success of a project? What questions would you ask in order to understand why a project succeeded or failed?

Answer: Student answers will vary but should include an understanding of the main project variables: scope, time, cost, quality, and risk. A sample answer is: The factors I would use are: • Cost: What was the original budget and final budget?

• Time: What was the original schedule and final schedule?

• Quality: Did the project meet the requirements outlined in the project plan?

• Scope: Did the scope of the project change?

Questions I would ask to understand the success or failure of the project would be: • What technical difficulties were experienced and which could have been foreseen?

• What risks did the project entail?

• What events led to the scope changing?

• What difficulties occurred that were a consequence of personal, employee-oriented problems?

• What difficulties occurred that were a consequence of environmental, organizational, or managerial challenges?

• What do project team members consider as the primary challenges?

• What do clients or stakeholders consider as the primary challenges?

Page Ref: 543-549 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

32) Describe the elements of a management structure for information systems projects in a large corporation.

Answer: In a large corporation, the management structure typically consists of (from top to bottom levels in the hierarchy): • Corporate strategic planning group: The higher level group of managers responsible for developing the firm's strategic plan.

• Information systems steering committee: A senior management group with responsibility for systems development and operation.

• Project management: A group of information systems managers and end-user managers responsible for overseeing several specific information systems projects.

• Project team: The group directly responsible for the individual systems project, consisting of systems analysts, specialists from the relevant end-user business areas, application programmers, and perhaps database specialists.

Page Ref: 549-553 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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33) List five types of information that should be included in an information systems plan.

Answer: General categories of information included in an information plan are: • Purpose of the plan • Business rationale • Current systems or situation • New developments to consider • Management strategy • Implementation plan • Budget Page Ref: 550-551 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

34) You have been hired as a consultant for a nationwide real estate firm, Cross & Deptford, who are interested in achieving better organization between branches by updating their information systems, but are not sure what will suit their needs. What will you recommend they do in order to determine the most effective IT projects?

Answer: Cross & Deptford first should have an information systems plan created to determine what their information requirements are and what systems will support their business goals. They will need to inventory their existing systems and develop metrics to quantify any future improvements are made. They can use portfolio analysis and/or scoring models to help determine the most important information systems projects to pursue.

Page Ref: 552-556 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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35) Describe the process of portfolio analysis. In what situations is this evaluation method useful?

Answer: Portfolio analysis inventories all of the organization's information systems projects and assets, including infrastructure, outsourcing contracts, and licenses. Each project can be described as having a profile of risk and benefit to the firm, similar to the financial portfolio. In a portfolio analysis, you would list the various systems projects and rate them according to their potential risks and benefits. You would use the portfolio analysis to determine which potential projects should be pursued and which should be modified or abandoned. High-risk, low-benefit projects should be avoided, while low-risk, high-benefit projects would be at the top of the list.

High-benefit, high-risk projects and low-risk, low-benefit projects would be reexamined to see if they could be modified to better fit with the company's strategic plans. A mix of profiles could also be defined as acceptable in terms of the company's overall plans, much as is done with a financial portfolio.

Page Ref: 552 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

36) You have been hired as a consultant to make recommendations for Smarty's, a healthy fastfood chain that is undergoing major expansion and is in need of a supply chain planning system.

They are evaluating two commercially available software packages. What systems evaluation model will help them assess and compare the two packages? How does this model work?

Answer: A scoring model can be used for selecting projects where many criteria must be considered. It assigns weights to various features of a system and then calculates the weighted totals. What Smarty's would do is have decision makers such as top managers list the various features they feel are important to have in the system, such as the processes that need support or reports they may need from the system. Each feature, or criteria, the managers list is given a weight, or rating, in terms of how important it is overall to have in the system. Each package then is evaluated in terms of the percentage of requirements it contributes or supports for each criteria. In the scoring model, you multiply the weight with the software's percentage of contribution to arrive at a score for each criteria. The scores of both software packages are totaled and compared to see overall their contribution to fulfilling the company's requirements.

Page Ref: 552-553 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.2: What methods can be used for selecting and evaluating information systems projects and aligning them with the firm's business goals?

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37) You are using a capital budgeting method to assess the worth of your company's new information system. Which of the following costs would you include in measuring the cash outflow?

A) increased sales of products B) hardware and software expenditures C) labor expenditures D) reduced costs in production and operation E) both B and C Answer: E Page Ref: 554-555 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 14.3: How can firms assess the business value of information systems?

38) The worth of systems from a financial perspective essentially revolves around the issue of A) total cost of ownership.

B) adherence to information requirements.

C) asset utilization.

D) return on invested capital.

E) the cost of computing equipment.

Answer: D Page Ref: 553 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 14.3: How can firms assess the business value of information systems?

39) All of the following are intangible benefits of information systems except A) improved asset utilization.

B) increased organizational learning.

C) improved operations.

D) reduced workforce.

E) employee morale.

Answer: D Page Ref: 553 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

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40) Which of the following is not a tangible benefit of information systems?

A) reduced rate of growth in expenses B) lower computer expenses C) improved resource control D) increased productivity E) end user satisfaction Answer: C Page Ref: 555 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

41) The principal capital budgeting models for evaluating information technology projects are the payback method, the accounting rate of return on investment (ROI), the net present value, and the A) future present value.

B) internal rate of return.

C) external rate of return.

D) ROPM (real options pricing model).

E) present value of future cash flows Answer: B Page Ref: 555 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

42) In working with ROPMs (real option pricing models) and options valuation, a call option is a(n) A) obligation to purchase an asset at a later date at a fixed price.

B) obligation to either purchase or sell an asset at a later date at a strike price.

C) right to purchase an asset at a later date at a strike price.

D) right to purchase or sell an asset at a later date at a fixed price.

E) an obligation to sell an asset at a later date at a fixed price.

Answer: D Page Ref: 556 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

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43) ROPMs (real options pricing models) value information systems similar to stock options, in that A) ROPMs can be bought and sold like stocks.

B) a company's worth can be evaluated by the worth of their ROPMs. C) initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date.

D) expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options.

E) the price paid today for information systems reflects their future cash flows.

Answer: C Page Ref: 556 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.3: How can firms assess the business value of information systems?

44) To best evaluate, from a financial standpoint, an IT investment whose benefits cannot be firmly established in advance, you would use A) capital budgeting.

B) the real option pricing model.

C) a scoring model.

D) the net present value.

E) a portfolio analysis.

Answer: B Page Ref: 556 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.3: How can firms assess the business value of information systems?

45) Which of the following is a limitation of using a financial approach to evaluate information systems?

A) inability to measure ROI B) inability to control vendor costs C) inability to assess risk D) inability to assess costs from organizational disruption E) inability to assess the cost of technology Answer: D Page Ref: 557 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 14.3: How can firms assess the business value of information systems?

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46) Transaction and clerical systems that displace labor and save space typically produce more measurable, tangible benefits than management information systems.

Answer: TRUE Page Ref: 553 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

47) Intangible benefits generally do not lead to quantifiable gains in the long run.

Answer: TRUE Page Ref: 555 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

48) A benefit of using TCO analysis to evaluate an information technology investment is that it is able to incorporate intangible and "soft" factors such as benefits and complexity costs.

Answer: FALSE Page Ref: 554 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

49) More timely information is a intangible benefit of information systems.

Answer: TRUE Page Ref: 555 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

50) Real options pricing models use the concept of options valuation borrowed from the financial industry.

Answer: TRUE Page Ref: 556 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

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51) ________ methods rely on measures of cash flows into and out of the firm.

Answer: Capital budgeting Page Ref: 554 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

52) In one strategic approach to determining information requirements, managers select a small number of ________ that reflect firm success and profitability.

Answer: KPIs, key performance indicators Page Ref: 552 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.3: How can firms assess the business value of information systems?

53) Differentiate between intangible and tangible benefits and list three examples of each. In what types of systems are intangible benefits more predominant?

Answer: Tangible benefits can be quantified and given a monetary value. For example, a monetary value can be given to increased productivity, lower operational costs, reduced workforce, lower computer expenses, lower outside vendor costs, lower clerical and professional costs, reduced rate of growth in expenses, and reduced facility, telecommunications, software, services, and personnel costs.

Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in the long run, such as higher sales. Examples of intangible benefits include: improved asset utilization, resource control, organizational planning, decision making, operations, increased flexibility, learning, job satisfaction, client satisfaction, employee goodwill, more timely information and more information, the fulfillment of legal requirements and a better corporate image.

Systems that produce more intangible benefits are MIS, DSS, and collaborative work systems.

Page Ref: 553-556 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 14.3: How can firms assess the business value of information systems?

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54) What is the purpose of using a real options pricing model to estimate the potential value of an information systems project?

Answer: Some information systems projects are highly uncertain, especially investments in IT infrastructure. Their future revenue streams are unclear and their up-front costs are high. For example, consider a $20 million investment to upgrade your firm's IT infrastructure. If this upgraded infrastructure were available, the organization would have the technology capabilities to respond more easily to future problems and opportunities. Although the costs of this investment can be calculated, not all of the benefits of making this investment can be established in advance. But if the firm waits a few years until the revenue potential becomes more obvious, it might be too late to make the infrastructure investment. It is in these cases that managers might benefit from using real options pricing models to evaluate information technology investments.

Real options pricing models (ROPMs) value information systems projects similar to stock options, where an initial expenditure on technology creates the right, but not the obligation, to obtain the benefits associated with further development and deployment of the technology as long as management has the freedom to cancel, restart, or change the project. ROPMs give managers the flexibility to stage their IT investment or test the waters with small pilot projects or prototypes to gain more knowledge about the risks of a project before investing in the entire implementation. Valuation borrowed from the financial industry.

Page Ref: 556-557 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.3: How can firms assess the business value of information systems?

55) Which of the following projects is the riskiest?

A) a project that managers are concerned will affect their roles and job descriptions B) a project that requires technical expertise that your firm's IT employees do not have C) a project that has a strict deadline, or sales will suffer D) a project that will automate many clerical duties E) a project that will displace employees Answer: A Page Ref: 557 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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56) Which of the following statements best describes the effect that project structure has on overall project risk?

A) Highly structured projects are more complex, and run a higher risk of programmers and users misunderstanding the ultimate goals.

B) Projects with relatively undefined goals are more likely to be subjected to users changing requirements and to run a higher risk of not satisfying project goals.

C) Highly structured projects tend to be larger, affecting more organizational units, and run both the risk of out-of-control costs and becoming too difficult to control.

D) Less structured projects are more able to be quickly developed, tested, and implemented using cutting-edge RAD and JAD development techniques, and pose less risk of running up unforeseen costs.

E) the less structured a project, the greater the freedom of users to define the system Answer: B Page Ref: 557 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

57) The project risk will rise if the project team and the IS staff lack A) legacy applications as a starting point.

B) good equipment.

C) the required technical expertise.

D) financial studies and plans.

E) a committed management group of executive leaders.

Answer: C Page Ref: 558 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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58) The organizational activities working toward the adoption, management, and routinization of a new information system are called A) production.

B) maintenance.

C) implementation.

D) acceptance.

E) final acceptance.

Answer: C Page Ref: 558 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

59) One example of an implementation problem is A) poor user interface.

B) inadequate user training.

C) project running over budget.

D) changes in job activities and responsibilities.

E) reduction in labor force.

Answer: B Page Ref: 561 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

60) According to your reading of the chapter, change management is a process that A) should be addressed before a project is developed.

B) begins when a project is implemented.

C) is used primarily to mandate user acceptance.

D) must be addressed in all systems development.

E) is introduced after the system is developed.

Answer: A Page Ref: 559 Difficulty: Easy AACSB: Analytical thinking CASE: Evaluation LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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61) Users prefer systems that A) are oriented to facilitating organizational tasks and solving business problems.

B) work with existing DBMS. C) are able to provide optimum hardware and software efficiency.

D) are capable of storing much more data than they need.

E) have an easy-to-learn interface.

Answer: A Page Ref: 559 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

62) Which of the following is not one of the activities of the systems analyst?

A) acting as a change agent B) communication with users C) mediating between competing interest groups D) formulation of capital budgeting models E) deciding which systems to develop Answer: D Page Ref: 558 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

63) Which of the following types of projects is most likely to fail?

A) integration of a third-party automated payment system B) replacement of middleware with Web services for legacy application integration C) a business process redesign project that restructures workflow and responsibilities D) redesigning a user interface to an online investment site E) building a Web-based interface to an existing system Answer: C Page Ref: 560-561 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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64) Which of the following is not a responsibility of effective change management?

A) integrating legacy systems B) dealing with fear and anxiety about new systems C) training users of the new system D) enforcing user participation at all stages of system development E) ensuring users are properly trained Answer: A Page Ref: 559-560 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

65) Which of the following tools is not one you would use to control risk factors in an information systems project?

A) internal integration tools B) external integration tools C) formal planning tools and formal control tools D) real options pricing models E) Gantt charts Answer: D Page Ref: 560-561 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

66) Internal integration tools A) enable a project to have sufficient technical support for project management and development.

B) enable a project manager to properly document and monitor project plans.

C) portray a project as a network diagram with numbered nodes representing project tasks.

D) consist of ways to link the work of the implementation team with users at all organization levels.

E) enable end users to communicate with system developers.

Answer: A Page Ref: 560 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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67) An example of using an internal integration tool would be to A) define task dependencies.

B) include user representatives as active members of the project team.

C) create a PERT chart.

D) hold frequent project team meetings.

E) develop a system planning document for technical specialists.

Answer: D Page Ref: 560 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

68) Formal planning and control tools A) enable a project to have sufficient technical support for project management and development.

B) enable a project manager to properly document and monitor project plans.

C) portray a project as a network diagram with numbered nodes representing project tasks.

D) consist of ways to link the work of the implementation team with users at all organization levels.

E) enable senior management to track the development of systems.

Answer: B Page Ref: 561 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

69) Which type of planning tool shows each task as a horizontal bar whose length is proportional to the time required to complete it?

A) PERT chart B) Gantt chart C) both A and B D) neither A nor B Answer: B Page Ref: 561 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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70) To review a project's tasks and their interrelationships, you would use a A) PERT chart.

B) Gantt chart.

C) either A or B. D) neither A nor B. Answer: A Page Ref: 561 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

71) Which type of tool helps project managers identify bottlenecks in project development?

A) internal integration tools B) external integration tools C) formal planning and control tools D) both B and C Answer: C Page Ref: 561 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

72) External integration tools A) enable a project to have sufficient technical support for project management and development.

B) enable a project manager to properly document and monitor project plans.

C) portray a project as a network diagram with numbered nodes representing project tasks.

D) consist of ways to link the work of the implementation team with users at all organization levels.

Answer: D Page Ref: 561 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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73) An example of using an external integration tool would be to A) define task dependencies.

B) include user representatives as active members of the project team.

C) create a PERT chart.

D) hold frequent project team meetings.

Answer: B Page Ref: 561 Difficulty: Difficult AACSB: Analytical thinking CASE: Synthesis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

74) Which of the following is not an organizational factor in systems planning and implementation?

A) standards and performance monitoring B) government regulatory compliance C) health and safety D) user interface Answer: D Page Ref: 564 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

75) In sociotechnical design A) separate sets of technical and social design solutions are developed and compared.

B) ergonomic features of a system and the system's technical design are given equal importance.

C) systems analysts with proven backgrounds in sociological concerns rate and compare a system's social and technical aspects.

D) all of the above.

Answer: A Page Ref: 564 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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76) The most widely used project management software today is A) Vertabase.

B) IBM Project Guide.

C) Microsoft Project.

D) Microsoft Excel.

Answer: C Page Ref: 565 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

77) The larger the systems project, the greater the chance that the project will be completed on time, within budget, and according to project requirements.

Answer: FALSE Page Ref: 557 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

78) The systems analyst is the catalyst for the entire change process and is responsible for making sure that everyone involved accepts the changes created by a new system.

Answer: TRUE Page Ref: 558 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

79) The relationship between users and information systems specialists has traditionally been a problem area for information systems implementation efforts.

Answer: TRUE Page Ref: 558 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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80) User concerns and designer concerns are usually the same at the beginning of the project but may diverge later as the system is built.

Answer: FALSE Page Ref: 558- 559 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

81) A Gantt chart graphically depicts project tasks and their interrelationships.

Answer: FALSE Page Ref: 561 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

82) Mandatory use of a system is one effective way of overcoming user resistance to an information system.

Answer: FALSE Page Ref: 563 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

83) Counterimplementation refers to a deliberate strategy to thwart the implementation of an information system or an innovation in an organization.

Answer: TRUE Page Ref: 563 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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84) The design of jobs, health issues, and the end-user interface of information systems are all considerations in the field of ergonomics.

Answer: TRUE Page Ref: 564 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

85) The goal of sociotechnical design is to create systems where the organization and the technology change and adjust to one another.

Answer: TRUE Page Ref: 564 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

86) Successful system building requires careful ________ management to minimize organizational resistance.

Answer: change Page Ref: 558 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

87) A user-designer ________ occurs when there is a difference in background, interests and priorities that impedes discussion and problem solving among users and IS specialists.

Answer: communications gap Page Ref: 558 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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88) ________ is the interaction of people and machines in the work environment, including the design of jobs, health issues, and the end-user interface of information systems.

Answer: Ergonomics Page Ref: 564 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

89) You are the senior project manager for a Web development company with upwards of 100 current client projects. You have been assigned to evaluate two upcoming projects. One project is to develop a time- tracking solution that would allow your 20 freelancers to submit daily time sheets and would report on the time spent on each project. The other project is to redesign the client interface to the company extranet to make it easier to use. The extranet allows clients to log in and view their current Web sites under development, as well as view project statistics, documents, and progress reports. Compare the two projects in terms of risk factors.

Answer: Student answers will vary but should include an understanding of the main risks factors: size, structure, and technical expertise. An example answer is: The main risk factors are size, structure, and technical expertise.

• Size. The time-tracking project is a larger project: It involves creating new programming that may interface with back-end systems and will immediately influence payment and cost. It also affects business processes. Redesigning an interface for the client extranet may simply be designing one or two pages that will be replicated for each client once the initial design is done.

• Structure. It may be easier to define the requirements of the time-tracking software, as this process is relatively straightforward. Understanding what makes the user interface problematic and defining ways to make it easier to use is somewhat of a less tangible quality than reporting on time, so this may be a concern in the second project.

• Technical expertise. Since the time-tracking project is a new application, there may be some issues of making sure any in-house staff has the appropriate level of expertise. The user interface involves working with existing programming that will not change. However, there may be a need to make sure that an expert who understands usability is present.

Page Ref: 557-558 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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90) Americlinic, a national chain of budget health-care clinics, is creating an information system that will allow patients and doctors at participating franchises to communicate online. The goal of the system is to allow doctors to respond to minor health questions quickly and more efficiently, saving patients unnecessary visits to the clinic. This will be a major procedural change. What steps would you recommend to this company to ensure the user acceptance of the system?

Answer: The first step should be to conduct an organizational impact analysis, to determine the changes in procedures, job function, organizational structure, power relationships, and behavior that this system requires or will engender. Any organizational changes should occur prior to implementing the system. In order to gain compliance and support of the doctors, I would establish a review committee of influential participating doctors and change agents to discuss the system prior to development and during development in order to meet physician needs and requirements. I would also involve focus groups of intended users to review prototypes of the system to make sure it is easy to use, and hopefully easier to use in the relevant health situations than going to the doctor. The company will need to make sure that there is also an option for users that do not have Internet access. User training for doctors and nurses will be essential. The company should also consider incentives for doctors and patients that use the system.

Page Ref: 558-565 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 14.4: What are the principal risk factors in information systems projects, and how can they be managed?

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Management Information Systems, 14e (Laudon) Chapter 15 Managing Global Systems 1) A force in the environment to which businesses must respond and that influences the direction of the business is called a business A) driver.

B) threat.

C) process.

D) matrix.

E) strategy.

Answer: A Page Ref: 578 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

2) The major dimensions of international systems architecture include each of the following except A) the global environment.

B) corporate global strategy.

C) technology platform.

D) transborder data flows.

E) management and business processes.

Answer: D Page Ref: 579 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

3) General cultural factors driving global business are A) global communication and transportation technologies, a global knowledge base, and global social norms.

B) the development of global markets, political stability, and a global workforce.

C) the rise of the global workforce, political stability, and a global knowledge base.

D) the rise of a global workforce, global economies of scale, and global production and operations.

E) growth of a global village spurred by television, the Internet, and computerization.

Answer: A Page Ref: 580 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

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4) Global coordination of all of the major business functions permits the location of business activity according to A) comparative advantage.

B) social norms and values.

C) competitive threat.

D) knowledge base.

E) labor costs.

Answer: A Page Ref: 580 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

5) International information systems refer to A) systems that talk to one another using the global Internet.

B) systems used by international businesses.

C) business processes that span the globe.

D) the basic information systems required by organizations to coordinate worldwide trade and other activities.

E) systems that are developed by global firms.

Answer: D Page Ref: 578 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

6) What is the first thing you should consider when thinking about building an international information system?

A) the state of world politics B) look for new technologies that will help you achieve your goals C) consider the global environment where your business will operate, and identify the business drivers for your firm and industry D) the business challenges you face in the global environment E) the different computing and communication standards in the world Answer: C Page Ref: 579 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

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7) Global markets, production, and administration create the conditions for: A) global systems B) global economies of scale C) a truly global labor force D) domestic exporter kinds of businesses E) localized software Answer: B Page Ref: 580 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

8) Transborder data flow refers to A) the flow of information in international systems.

B) the ways in which a countries laws change the flow of data from one country to another.

C) the business of moving information from one country to another.

D) the movement of information across international boundaries.

E) the business process of coordinating information from many different countries.

Answer: D Page Ref: 582 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

9) Global business drivers can be divided into two groups: general cultural factors and specific business factors.

Answer: TRUE Page Ref: 580 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

10) The growth of powerful communications technologies and the emergence of world cultures create the condition for global markets.

Answer: TRUE Page Ref: 580 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

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11) The collapse of the Eastern block has retarded the growth of a world culture.

Answer: FALSE Page Ref: 580 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

12) Micromarketing describes the direct marketing of products to individuals rather than groups.

Answer: FALSE Page Ref: 580 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

13) A powerful strategic advantage for a globalized firm is lowered cost factors in production.

Answer: TRUE Page Ref: 581 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

14) Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services.

Answer: FALSE Page Ref: 581 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

15) In international companies, English has become a kind of standard business language.

Answer: TRUE Page Ref: 582 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.1: What major factors are driving the internationalization of business?

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16) What steps do the authors recommend be taken to develop an international information systems architecture?

Answer: • Begin by developing an understanding of the overall market forces, or business drivers, that are pushing your industry toward global competition, i.e., the global environment. Also examine the inhibitors or negative factors that could scuttle the development of a global business.

• Develop a corporate strategy for competing in the global environment.

• Plan how to structure your organization so that it can pursue the strategy you have developed.

• Consider the management issues in implementing your strategy and making the organization design a reality. The key here will be the design of business procedures.

• Consider the technology platform. You must have a corporate strategy instructor before you can choose the right technology.

Page Ref: 579-580 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 15.1: What major factors are driving the internationalization of business?

17) List at least four general cultural factors and four specific business factors driving global business. Which two factors (one of each) do you feel are most problematic at the current moment? Why? Answer: General cultural factors include global communication and transportation technologies, development of the global culture, emergency global social norms, political stability, and a global knowledge base. Specific business factors include global markets, global production operations, global coordination, global workforce, and global economies of scale.

One answer might be that two general cultural factors most in danger at the current moment are political stability and development of a global culture (either would be a good answer). Two business factors most problematic at the moment are global coordination and global workforce.

Coordinating work on a truly global scale requires a fairly high level of corporation sophistication that only a small number of large firms are truly capable of on a real-time basis; and there is significant opposition in both developed and under-developed countries to changes in local labor markets which are threatened by global trade.

Page Ref: 579-580 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 15.1: What major factors are driving the internationalization of business?

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18) What are the four specific types of business challenges to global business systems? Which one do you think will be easiest to solve? Why? Answer: • Standards: Different EDI, e-mail, telecommunications standards.

• Reliability: Phone networks are not uniformly reliable.

• Speed: Different data transfer speeds; many are slower than United States speeds.

• Personnel: Shortages of skilled consultants.

Answers will vary, but an example answer is: The easiest challenge to solve is that of standards because of the growth of universal, Internet-based standards, Web services, and componentbased programming.

Page Ref: 580 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 15.1: What major factors are driving the internationalization of business?

19) How do cultural, legal, political, and social expectations affect global business?

Answer: At a cultural level, particularism in all its forms rejects the very concept of a shared global culture and rejects the penetration of domestic markets by foreign goods and services.

Differences among cultures produce differences in social expectations, politics, and ultimately in legal rules. Different cultures produce different political regimes, with different laws governing the movement of information, information privacy of their citizens, origins of software and hardware in systems, and radio and satellite telecommunications. Even the hours of business and terms of business trade vary greatly across political cultures.

Cultural and political differences profoundly affect organizations' standard operating procedures.

Everything from the different reliability of telephone systems to the shortage of skilled consultants creates barriers. National laws and traditions have created different accounting practices in various countries, which impact the way profits and losses are analyzed. These accounting practices are tightly intertwined with each country's legal system, business philosophy, and tax code. Cultural differences can also affect the way organizations use information technology. Japanese firms, for example, use fax technologies intensively but are not comfortable with e-mail. Language is a significant barrier. Software may have to be built with local language interfaces before a new information system can be successfully implemented.

Currency fluctuations can play havoc with planning models and projections. Some of these problems will diminish in parts of the world when the Euro becomes more widely used.

Page Ref: 581-582 Difficulty: Difficult AACSB: Analytical thinking CASE: Analysis LO: 15.1: What major factors are driving the internationalization of business?

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20) In a multinational business strategy, the ________ business function is decentralized, dispersed to foreign units.

A) finance/accounting B) production C) human resources D) strategic management E) sales/marketing Answer: B Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

21) In terms of global business strategy and structure, a multinational strategy A) centralizes production and accounting and decentralizes marketing and human resources.

B) concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries.

C) centralizes production, accounting, marketing, and human resources.

D) disperses production and marketing, with centralized accounting, human resources and strategic management.

E) concentrates production and marketing in each country, and decentralizes accounting and human resources.

Answer: B Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

22) Most companies pursuing a global strategy begin as A) domestic exporters.

B) multinationals.

C) franchisers.

D) transnationals.

E) conglomerate corporations.

Answer: A Page Ref: 583 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

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23) A company that controls finances in the home country and decentralizes production, sales, and marketing operations to other countries is using a ________ strategy.

A) domestic exporter B) franchising C) transnational D) multinational E) conglomerate Answer: D Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

24) In terms of global business strategy and structure, a multinational company will use a policy of A) mixed sales and marketing, with centralized production, accounting, human resources, and strategic management.

B) centralized production, accounting, marketing, human resources, with strategic management.

C) dispersed production, accounting, human resources, with centralized strategic management, and marketing.

D) dispersed production and marketing, with centralized accounting and strategic management.

E) making local units that are clones of the mother country units.

Answer: D Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

25) Which of the following is not one of the system configurations used by global firms?

A) centralized B) duplicated C) decentralized coordinated D) networked E) localized Answer: D Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

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26) In terms of global business strategy and structure, a franchise company will use a policy of A) centralized production, accounting, marketing, human resources, with strategic management.

B) dispersed production, accounting, human resources, with centralized strategic management, and marketing.

C) dispersed production and marketing, with centralized accounting, human resources and strategic management.

D) dispersed production, marketing, and human resources, with centralized strategic management and finance/accounting.

E) decentralized production, accounting, human resources, with a decentralized management.

Answer: D Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

27) Which of the following is not one of the primary types of firm strategy discussed in the chapter?

A) domestic exporter B) multinational C) franchiser D) transnational E) international exporter Answer: E Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

28) In terms of global business strategy, the governance of ________ firms has been likened to a federal structure—strong central management core of decision making, but considerable dispersal of power and financial resources.

A) domestic exporter B) multinational C) franchiser D) transnational E) domestic importer Answer: D Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

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29) Which of the following is not a business driver of global business?

A) global communication and transportation technologies B) development of global culture C) emergence of global social norms D) political stability E) growth of international systems Answer: E Page Ref: 583 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

30) Transnational firms have A) no single national headquarters but many regional headquarters and perhaps a world headquarters.

B) headquarters in each country where they do business.

C) headquarters in the home country with smaller headquarters around the world.

D) no single headquarters.

E) a centralized headquarters but not in the home country.

Answer: A Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

31) In a transnational business strategy, all of the regional units participate and coordinate over all activities, from production to sales.

Answer: TRUE Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

32) In a franchiser business strategy, each foreign unit designs its own solutions and systems.

Answer: FALSE Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

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33) There are two primary global organization types: management centralized in the home country or distributed to foreign centers.

Answer: FALSE Page Ref: 583 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

34) In a multinational strategy, financial management is centralized while production and sales are decentralized.

Answer: TRUE Page Ref: 584 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.2: What are the alternative strategies for developing global businesses?

35) Describe the four main global strategies that form the basis for global firms' organizational structure.

Answer: The domestic exporter strategy is characterized by heavy centralization of corporate activities in the home country of origin. The multinational strategy concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. For franchisers, their product is created, designed, financed, and initially produced in the home country, but for product-specific reasons must rely heavily on foreign personnel for further production, marketing, and human resources.

Transnational firms are the stateless, truly globally managed firms that may represent a larger part of international business in the future. Transnational firms have no single national headquarters, but instead have many regional headquarters and perhaps a world headquarters.

Page Ref: 583-584 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 15.2: What are the alternative strategies for developing global businesses?

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36) What are the organizational principles a company should follow to develop a global company and its information systems support structure? Do you agree? Would you change these principles, or add others? Support your answer.

Answer: Student answers will vary, but should include an understanding of the following three principles.

1. Organized value-adding activities along lines of comparative advantage.

2. Develop and operate systems units at each level of corporate activity—regional, national, and international.

3. Establish at world headquarters a single office responsible for development of international systems, a global chief information officer position.

Page Ref: 585-587 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 15.2: What are the alternative strategies for developing global businesses?

37) Making judgments and taking action on the basis of narrow or personal characteristics is referred to as A) localization.

B) cooptation.

C) particularism.

D) prejudicial.

E) globalization.

Answer: C Page Ref: 581 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

38) All of the following present challenges to developing global business systems except A) foreign accounting practices.

B) production costs.

C) language differences.

D) exchange rates.

E) shortages of skilled consultants.

Answer: B Page Ref: 581 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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39) Which of the following is not a specific challenge to global business systems?

A) shortages of skilled consultants B) cultural expectations C) different telecommunication standards D) different data transfer speeds E) unreliable phone networks Answer: B Page Ref: 581 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

40) To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms A) maintain a master database at their head offices.

B) develop a master system that meets the standards of all the countries concerned.

C) use microwave satellite transmission to move data.

D) develop separate systems within each country.

E) use a cloud-based service.

Answer: D Page Ref: 582 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

41) German companies A) do not recognize the profit until the project is completely finished and they have been paid.

B) recognize profits before the project is finished.

C) recognize profits when the project is initialized.

D) do not recognize the profits until they have been formally audited.

E) do not have profits, but instead report dividends.

Answer: A Page Ref: 582 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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42) Most large companies with overseas operations have inherited A) recently built technology platforms for international systems.

B) batch-oriented reporting from independent foreign divisions to corporate headquarters.

C) transaction-oriented reporting based at the home office for overseas business.

D) global marketing systems developed domestically.

E) enterprise systems developed by local firms.

Answer: B Page Ref: 582 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

43) Which of the following is not one of the main organizational issues facing firms who are seeking to globalize?

A) choosing a global strategy B) organizing the global business structure C) organizing the systems management D) defining the global environment E) organizing the business Answer: D Page Ref: 583 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

44) In centralized systems A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) systems development and operations occur totally at the domestic home base.

E) systems development is a combined effort of domestic and international units.

Answer: D Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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45) In duplicated systems A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) foreign units design the solutions and systems used at the domestic home base.

E) systems development is a combined effort of domestic and international units which are then duplicated across the world.

Answer: A Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

46) In decentralized systems A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) foreign units design the solutions and systems used at the domestic home base.

E) all systems are designed in domestic headquarters and then distributed to foreign units.

Answer: B Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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47) In networked systems A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) foreign units design the solutions and systems used at the domestic home base.

E) development occurs at the home base but operations are handed over to autonomous units in foreign locations.

Answer: C Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

48) Domestic exporters typically have highly ________ systems.

A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: B Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

49) Multinational companies tend to dominantly have ________ systems.

A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: D Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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50) Franchise companies have typically had ________ systems.

A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: A Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

51) Transnational companies have tended to use a(n) ________ systems configuration.

A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: C Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

52) The network systems structure is the most visible in ________ services.

A) production B) financial C) marketing D) software design E) administrative Answer: B Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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53) Effective networked systems must have a A) powerful telecommunications backbone.

B) culture of shared applications development.

C) shared management culture that crosses cultural barriers.

D) both B and C. E) A, B, and C. Answer: E Page Ref: 585 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

54) Of the following, which is one of the central principles recommended in this chapter for a firm organizing itself for international business?

A) Organize value-adding activities along lines of comparative advantage.

B) Establish multiple offices for international systems and a global CIO position.

C) Disperse production and marketing to regional centers and establish a single center for world headquarters and strategic management.

D) Develop and operate systems units at the international level first.

E) Centralize production, but decentralize marketing and sales to be close to the customer.

Answer: A Page Ref: 586 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

55) In cooptation A) the new global system replaces all unit systems, including systems in the home territory.

B) the systems used on the company's home country are modified to communicate with the systems of foreign units so that each unit can retain their unique business processes.

C) the systems of specific foreign units are chosen to duplicate for use by other units.

D) opponents to a planned global system are brought into the process of designing and implementing the solution.

E) all the relevant parties are asked to participate in the design of global systems.

Answer: D Page Ref: 590 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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56) Which of the following is not one of the principal management challenges in developing global systems?

A) encouraging local users to support global systems B) coordinating applications development C) defining an acceptable test plan D) agreeing on common user requirements E) introducing changes in business processes Answer: C Page Ref: 586 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

57) As a firm moves from local option systems to regional and global systems A) agency costs increase.

B) coordination costs decrease.

C) transaction costs increase.

D) both transaction and agency costs increase.

E) all costs increase.

Answer: A Page Ref: 588 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

58) From your reading of the chapter case, which of the following best describes the challenge Unilever was facing as a global company?

A) inadequate information for managerial decision making B) lack of buy-in for global systems by foreign units C) too many systems in too many data centers, making it difficult to process transactions in a timely fashion D) poor governance of global systems E) managing a global supply chain Answer: C Page Ref: 601 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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59) In order to define centers of excellence in a global firm, you would first need to identify A) functional areas.

B) core business processes.

C) SOPs. D) core competencies.

E) international best practices.

Answer: B Page Ref: 588 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

60) Which of the following is not one of the main benefits to implementing global systems?

A) superior management and coordination B) vast improvements in operation C) new economies of scale at production facilities D) reduced hardware costs E) optimize use of corporate funds Answer: D Page Ref: 589 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

61) When developing a global system, bringing the opposition of local groups into the process of designing and implementing the solution without giving up control over the direction and nature of the change is called A) cooptation.

B) change management.

C) implementation.

D) advocacy.

E) cooperation.

Answer: A Page Ref: 589 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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62) A global firm can develop transnational centers of excellence as an effective technique to A) ensure connectivity between regional systems.

B) encourage user support of global systems.

C) effectively identify global business processes.

D) develop a merit-based hierarchy among regional groups.

E) identify who opposes the proposed global changes.

Answer: C Page Ref: 591 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

63) Software localization is the process of A) translating a user interface into a second language.

B) converting software programming to run on a different platform.

C) converting software to operate in a second language and with local conventions.

D) modifying software so that it can be adopted in other countries without engineering changes.

E) modifying software so executives can understand its command language.

Answer: C Page Ref: 593 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

64) Japanese consumers who only want to purchase products made in Japan are an example of A) cultural particularism.

B) political culture.

C) universal global attitudes.

D) different laws in different countries.

E) different business standards.

Answer: A Page Ref: 581 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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65) Which of the following is not an important factor when implementing a global information system solution?

A) agreeing on common user requirements B) understanding if your computer system can operate in a global environment C) introducing changes in business processes D) coordinating applications development E) coordinating software releases Answer: B Page Ref: 590 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

66) Which of the following is not an important technology issue to consider when developing an international information system?

A) standardizing the global computing platform B) deciding how mobile computing will fit into your international system C) finding specific software applications that are user friendly and enhance productivity D) building sufficient connectivity E) developing common data standards Answer: B Page Ref: 592 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

67) Software localization is important for global systems because A) all users need to be trained in English to use global systems.

B) only some users need to know English, while others can use their local languages.

C) productivity of employees rises when systems use their local languages.

D) computer programs are almost always written in English.

E) most managers around the world use English as their business language.

Answer: C Page Ref: 593 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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68) European countries have very strict laws concerning transborder data flows and privacy.

Answer: TRUE Page Ref: 582 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

69) To comply with European privacy laws, many multinational firms have developed information systems within each European country.

Answer: TRUE Page Ref: 582 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

70) With the growth of the Internet and reliable phone networks, skilled consultants are readily available to companies operating in global markets.

Answer: FALSE Page Ref: 582 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

71) Accounting practices can vary significantly from country to country.

Answer: TRUE Page Ref: 582 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

72) Global systems allow fixed costs to be amortized over a much smaller customer base.

Answer: FALSE Page Ref: 589 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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73) One major telecommunications challenge in an international setting is making data flow seamlessly across networks shaped by disparate national standards.

Answer: TRUE Page Ref: 591 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

74) List at least four difficult problems for management in the development of the international information system. Which do you see as the most problematic, and why?

Answer: Student answers will vary, but should include four of the five following problems.

1. Agreeing on user requirements.

2. Introducing changes in business processes.

3. Coordinating applications development.

4. Coordinating software releases.

5. Encouraging local users to support global systems.

Page Ref: 586 Difficulty: Moderate AACSB: Analytical thinking CASE: Evaluation LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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75) You are working for a global electronic parts manufacturing company with divisions in Taiwan, Malaysia, Australia, and Germany, that has embarked on developing a global enterprise system. To ensure that overseas divisions comply with the new system, they are considering a cooptation strategy in which they will permit each country unit the opportunity to develop one transnational application first in its home territory, and then throughout the world. What are the benefits and drawbacks to this approach? Are there any other solutions for the company's cooptation strategy?

Answer: With this strategy, local units will feel a sense of ownership in the transnational effort.

On the downside, this assumes the ability to develop high-quality systems is widely distributed, and that a German team can successfully implement systems in Taiwan or Malaysia. This will not always be the case. Another cooptation strategy would be to develop new transnational centers of excellence, or a single center of excellence. In this, you would identify a regional location with excellent implementation of specific business processes. These centers draw heavily from local national units, are based on multinational teams, and must report to worldwide management. The centers of excellence would perform the initial identification and specification of business processes, define the information requirements, perform the business and systems analysis, and accomplish all design and testing. Implementation, however, and pilot testing are rolled out to other parts of the globe. Recruiting a wide range of local groups to transnational centers of excellence helps send the message that all significant groups are involved in the design and will have an influence.

Page Ref: 590 Difficulty: Difficult AACSB: Analytical thinking CASE: Evaluation LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

76) You work for a business consulting firm, and you have been asked to advise Bamboo Home, a home furniture retailer on implementing a global information systems. What general benefits can Bamboo Home expect from a globalized system?

Answer: Benefits in globalizing include superior management and coordination. This may not show up on balance sheets, but will affect profitability in the long run. Related benefits are the ability to switch suppliers quickly if there is a crisis and the ability to use excess capacity in one region to fulfill demand in another. Additionally, they can expect major improvements in production, operation, and supply and distribution. Value-adding activities can be concentrated in regions where they are most economical and efficient. Also, with global systems, fixed costs around the world can be amortized over a much larger customer base. In addition, corporate funds can be used over a much larger capital base.

Page Ref: 589 Difficulty: Easy AACSB: Analytical thinking CASE: Analysis LO: 15.3: What are the challenges posed by global information systems and management solutions for these challenges?

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77) Which systems are worth sharing on a transnational basis, from a cost and feasibility point of view?

A) only systems that support functions that are absolutely critical to the organization B) core systems and worthwhile provincial systems C) core systems and any financial systems that can be easily integrated with each other D) financial and accounting systems E) systems that support decentralized units Answer: A Page Ref: 587 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

78) The chapter outlines four steps in developing an effective global system solution. Which of the following is not one of these steps?

A) Identify outdated legacy systems to be replaced.

B) Identify the core systems to coordinate centrally.

C) Choose a developmental approach, incremental, evolutionary, or other.

D) Make the benefits clear.

E) Define the core business processes.

Answer: A Page Ref: 587-589 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

79) The way to identify core business processes is to conduct a A) cost-benefit analysis.

B) work-flow analysis.

C) business process analysis.

D) feasibility analysis.

E) systems analysis.

Answer: C Page Ref: 588 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

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80) Based on your reading of the chapter, why should companies avoid creating an allencompassing, new global system when moving towards global operations?

A) This approach may fail due to a lack of visibility.

B) It is difficult to quantify and explain the benefits of information systems that are large.

C) "Grand design" approaches typically fail to identify centers of excellence.

D) Opposition is strengthened because of requirements for huge resources.

E) This approach will fail because of a lack of concrete objectives.

Answer: D Page Ref: 589 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

81) In relation to global systems building, the Internet A) allows the seamless flow of information through the enterprise.

B) affords local groups stable broadband access.

C) has reduced networking problems.

D) reduced the need for skilled IT employees.

E) has increased the need for private networks.

Answer: C Page Ref: 593 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

82) A critical necessity for ensuring the integration of local systems into a global system is A) adherence to data and technical standards.

B) use of standard hardware at the local level.

C) use of standard user software at the local level.

D) using standard computers throughout the system.

E) using localized software.

Answer: A Page Ref: 593 Difficulty: Moderate AACSB: Analytical thinking CASE: Analysis LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

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83) VPNs A) use the public Internet for communications.

B) provide guaranteed levels of service.

C) provide all the same services as private networks.

D) are expensive to develop and maintain.

E) can be used only for data but not voice traffic.

Answer: D Page Ref: 592 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

84) Which of the following is not one of the principal problems of international networks?

A) network capacity B) poor quality of international service C) network standards D) regulatory constraints E) installation delays Answer: C Page Ref: 592 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

85) In developing countries, use of the Internet is limited by all of the following except A) use of mobile telephones.

B) high cost of PCs. C) poor bandwidth capacity.

D) unreliable power grids.

E) political disruptions.

Answer: A Page Ref: 593 Difficulty: Moderate AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

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86) Which types of systems are widely used by manufacturing and distribution firms to connect to suppliers on a global basis?

A) TPS systems B) EDI systems C) CRM systems D) enterprise systems E) management information systems Answer: B Page Ref: 597 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

87) The growth of powerful communications technologies and the emergence of world cultures have failed to create a foundation for global markets.

Answer: FALSE Page Ref: 580 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

88) While private networks have guaranteed service levels and better security than the Internet, the Internet is the primary foundation for global corporate networks when lower security and service levels are acceptable.

Answer: TRUE Page Ref: 592 Difficulty: Difficult AACSB: Reflective thinking CASE: Content LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

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89) How does the Internet benefit the development of a global information system? Should all global systems be based on the Internet?

Answer: The Internet allows anyone connected to it to communicate and compute at any time, or anywhere. Satellite systems, digital cell phones, and personal communications services will make it even easier to coordinate work and information in many parts of the globe that cannot be reached by existing ground-based systems. Companies can use Internet technology to construct virtual private networks to reduce wide-area networking costs and staffing requirements. If it wishes, the company can outsource the virtual private network to an Internet service provider.

All global systems can't be based primarily on the Internet because currently not all countries have the same access to the Internet. Additionally, high-traffic volumes at certain times of the day in various regions may impede responsiveness.

Page Ref: 592-593 Difficulty: Moderate AACSB: Analytical thinking CASE: Synthesis LO: 15.4: What are the issues and technical alternatives to be considered when developing international information systems?

90) The last step in establishing a corporate strategy and structure for globalization is to determine the appropriate technology platform.

Answer: TRUE Page Ref: 579 Difficulty: Easy AACSB: Reflective thinking CASE: Content LO: 5.1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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