Management Information Systems Plus MyMISLab with Pearson eText -Access Card Package, 13E Kenneth C

Management Information Systems Plus MyMISLab, 13E By Kenneth C. Laudon

Email: richard@qwconsultancy.com

Management Information Systems, 13e (Laudon/Laudon) Chapter 1 Information Systems in Global Business Today 1) Internet advertising is growing at approximately 10 percent a year.

Answer: TRUE Diff: 3 Page Ref: 6 AACSB: Reflective thinking skills CASE: Content Objective: 1.1 2) Developing a new product, fulfilling an order, and hiring a new employee are examples of business processes.

Answer: TRUE Diff: 1 Page Ref: 11 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 3) A fully digital firm produces only digital goods or services.

Answer: FALSE Diff: 2 Page Ref: 11 AACSB: Reflective thinking skills CASE: Content Objective: 1.1 4) A business model describes how a company produces, delivers, and sells a product or service to create wealth.

Answer: TRUE Diff: 1 Page Ref: 13 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 5) 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 Diff: 2 Page Ref: 15 AACSB: Use of information technology CASE: Content Objective: 1.3

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6) Computers are only part of an information system.

Answer: TRUE Diff: 1 Page Ref: 17 AACSB: Use of information technology CASE: Content Objective: 1.3 7) Information systems literacy describes the behavioral approach to information systems, whereas computer literacy describes the technical approach.

Answer: FALSE Diff: 1 Page Ref: 18 AACSB: Use of information technology CASE: Content Objective: 1.3 8) The dimensions of information systems are management, organizations, and information technology.

Answer: TRUE Diff: 2 Page Ref: 18 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 9) Knowledge workers assist with paperwork at all levels of the firm.

Answer: FALSE Diff: 1 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 10) There are four major business functions: sales and marketing; manufacturing and production; finance and accounting; and information technology.

Answer: FALSE Diff: 1 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 11) In order to understand how a specific business firm uses information systems, you need to know something about the hierarchy and culture of the company.

Answer: TRUE Diff: 2 Page Ref: 19-20 AACSB: Analytic skills CASE: Analysis Objective: 1.3

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12) Business processes are logically related tasks for accomplishing tasks that have been formally encoded by an organization.

Answer: FALSE Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 13) A substantial part of management responsibility is creative work driven by new knowledge and information.

Answer: TRUE Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 14) Intranets allow firms to work easily with third-party suppliers and vendors.

Answer: FALSE Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.2 15) Investment in IT is over 50% of all invested capital.

Answer: TRUE Diff: 2 Page Ref: 5 AACSB: Reflective thinking skills CASE: Content Objective: 1.1 16) 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 Diff: 3 Page Ref: 13, 22 AACSB: Analytic skills CASE: Analysis Objective: 1.2 17) Studies have consistently shown that firms that invest greater amounts in information technology receive greater benefits than firms that invest less.

Answer: FALSE Diff: 2 Page Ref: 26 AACSB: Use of information technology CASE: Content Objective: 1.4 3 ..

18) Government and private sector standards are examples of complementary social assets required to optimize returns from IT investments.

Answer: TRUE Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4 19) A firm that invests in efficient business processes is making an investment in organizational complementary assets.

Answer: TRUE Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4 20) The behavioral approach to information systems leaves aside technical solutions to instead analyze the psychological, social, and economic impacts of systems.

Answer: TRUE Diff: 2 Page Ref: 29 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 21) 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.

Answer: B Diff: 1 Page Ref: 12 AACSB: Use of information technology CASE: Content Objective: 1.2

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22) Dell Computer's use of information systems to improve efficiency and implement "mass customization" techniques to maintain consistent profitability and an industry lead illustrates which business objective?

A) improved flexibility B) improved business practices C) competitive advantage D) survival Answer: C Diff: 3 Page Ref: 14 AACSB: Use of information technology CASE: Synthesis Objective: 1.2 23) 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, 2, and 3 Answer: D Diff: 3 Page Ref: 14 AACSB: Analytic skills CASE: Analysis Objective: 1.2 24) The use of information systems because of necessity describes the business objective of A) survival.

B) improved business practices.

C) competitive advantage.

D) improved flexibility.

Answer: A Diff: 2 Page Ref: 15 AACSB: Use of information technology CASE: Content Objective: 1.2

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25) Verizon's implementation of a Web-based digital dashboard to provide managers with realtime information such as customer complaints is an example of A) improved flexibility.

B) improved decision making.

C) improved efficiency.

D) customer and supplier intimacy.

Answer: B Diff: 2 Page Ref: 14 AACSB: Use of information technology CASE: Analysis Objective: 1.2 26) 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 Answer: C Diff: 2 Page Ref: 15 AACSB: Use of information technology CASE: Analysis Objective: 1.2 27) Which of the following objectives best describes the business strategy behind the technologies implemented in Disney's Operational Command Center, as discussed in the chapter case?

A) operational excellence B) new products and services C) competitive advantage D) customer support Answer: D Diff: 2 Page Ref: 3-4 AACSB: Analytic skills CASE: Analysis Objective: 1.2

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28) 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) input, processing, and output.

D) data analysis, processing, and feedback.

Answer: C Diff: 1 Page Ref: 16 AACSB: Use of information technology CASE: Content Objective: 1.3 29) 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.

Answer: A Diff: 1 Page Ref: 16 AACSB: Use of information technology CASE: Content Objective: 1.3 30) The average number of tickets sold daily online is an example of A) input.

B) raw data.

C) meaningful information.

D) feedback.

Answer: C Diff: 1 Page Ref: 16 AACSB: Use of information technology CASE: Analysis Objective: 1.3 31) 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.

Answer: D Diff: 1 Page Ref: 16 AACSB: Use of information technology CASE: Content Objective: 1.3 7 ..

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

B) processing.

C) organizing.

D) feedback.

Answer: B Diff: 1 Page Ref: 16 AACSB: Use of information technology CASE: Content Objective: 1.3 33) 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, 2008 in Louisville, Kentucky.

D) all of the above.

Answer: C Diff: 3 Page Ref: 16 AACSB: Use of information technology CASE: Analysis Objective: 1.3 34) 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) management information systems.

D) information technology infrastructure.

Answer: C Diff: 2 Page Ref: 18 AACSB: Reflective thinking skills CASE: Content Objective: 1.5 35) 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.

Answer: B Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

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36) 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) development of videopresence software D) emerging mobile platform Answer: C Diff: 2 Page Ref: 6 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 37) 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.

Answer: A Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 38) 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.

Answer: A Diff: 1 Page Ref: 8 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 39) 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) software governing the organization of data on physical storage media.

D) hardware and software used to transfer data.

Answer: C Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 9 ..

40) Organizational culture is best described by which of the following statements?

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

Answer: D Diff: 2 Page Ref: 20 AACSB: Analytic skills CASE: Analysis Objective: 1.3 41) 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.

Answer: C Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 42) 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. Answer: D Diff: 3 Page Ref: 13 AACSB: Use of information technology CASE: Analysis Objective: 1.1 43) An example of a business using information systems to attain operational excellence 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. Answer: A Diff: 3 Page Ref: 13 AACSB: Use of information technology CASE: Analysis Objective: 1.1

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44) An example of a business using information systems for customer and supplier intimacy 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. Answer: B Diff: 2 Page Ref: 14 AACSB: Use of information technology CASE: Analysis Objective: 1.1 45) 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 Answer: B Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 46) Which of the following is not one of the primary environmental actors that interacts with an organization and its information systems?

A) sales force B) regulatory agencies C) customers D) suppliers Answer: A Diff: 2 Page Ref: 17 AACSB: Use of information technology CASE: Content Objective: 1.2 47) 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.

Answer: B Diff: 2 Page Ref: 22 AACSB: Use of information technology CASE: Evaluation Objective: 1.3 11 ..

48) 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 Answer: C Diff: 2 Page Ref: 27 AACSB: Analytic skills CASE: Synthesis Objective: 1.4 49) 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) competitive advantage D) improved decision making Answer: B Diff: 2 Page Ref: 15 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 50) 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.

Answer: D Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 51) 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.

Answer: A Diff: 2 Page Ref: 25 AACSB: Use of information technology CASE: Content Objective: 1.2 12 ..

52) 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 Answer: C Diff: 2 Page Ref: 27 AACSB: Analytic skills CASE: Analysis Objective: 1.4 53) Apple Computer dominates the online legal music sales industry primarily because of a failure of recording label companies to A) invest in technology.

B) adopt a new business model.

C) invest in complementary assets.

D) modernize their information value chain.

Answer: B Diff: 2 Page Ref: 27 AACSB: Use of information technology CASE: Content Objective: 1.1 54) An example of an organizational complementary asset is A) using the appropriate business model.

B) a collaborative work environment.

C) laws and regulations.

D) all of the above.

Answer: A Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4 55) 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) all of the above.

Answer: A Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4 13 ..

56) 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.

Answer: B Diff: 3 Page Ref: 28 AACSB: Use of information technology CASE: Content Objective: 1.5 57) 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) operations research.

D) utilization management.

Answer: C Diff: 3 Page Ref: 28 AACSB: Reflective thinking skills CASE: Content Objective: 1.5 58) 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.

Answer: A Diff: 2 Page Ref: 29 AACSB: Use of information technology CASE: Content Objective: 1.5 59) 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.

Answer: B Diff: 2 Page Ref: 29 AACSB: Use of information technology CASE: Content Objective: 1.5

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60) 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.

Answer: C Diff: 2 Page Ref: 8 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 61) 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 Answer: A Diff: 3 Page Ref: 12 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 62) 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 Answer: C Diff: 3 Page Ref: 19 AACSB: Analytic skills CASE: Analysis Objective: 1.2 63) 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 Answer: C Diff: 2 Page Ref: 15 AACSB: Use of information technology CASE: Analysis Objective: 1.2

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64) 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 Answer: A Diff: 2 Page Ref: 16 AACSB: Use of information technology CASE: Analysis Objective: 1.3 65) Which field of study focuses on both a behavioral and technical understanding of information systems?

A) sociology B) operations research C) economics D) management information systems Answer: D Diff: 2 Page Ref: 18 AACSB: Use of information technology CASE: Content Objective: 1.5 66) The three principle 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.

Answer: B Diff: 3 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 67) 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 Answer: C Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

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68) 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 Answer: B Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 69) 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 Answer: A Diff: 3 Page Ref: 22 AACSB: Analytic skills CASE: Synthesis Objective: 1.2 70) 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.

Answer: C Diff: 2 Page Ref: 22 AACSB: Analytic skills CASE: Synthesis Objective: 1.2 71) ________ is data that has been shaped into a form that is meaningful to human beings.

Answer: Information Diff: 1 Page Ref: 15-16 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

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

Answer: Feedback Diff: 2 Page Ref: 16 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 73) The key elements of an organization are its people, structure, business processes, politics, and ________.

Answer: culture Diff: 2 Page Ref: 18 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 74) ________ makes long-range strategic decisions about the firm's products and services.

Answer: Senior management Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 75) Computer ________ consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system.

Answer: software Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 76) ________ is a global network that uses universal standards to connect millions of different networks around the world.

Answer: The Internet Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 77) 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 Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 18 ..

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

Answer: Extranets Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 79) The enormous volume of data generated by Internet activity, such as Web traffic and e-mail, is referred to as ________.

Answer: big data Diff: 2 Page Ref: 7 AACSB: Reflective thinking skills CASE: Content Objective: 1.1 80) 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 Diff: 2 Page Ref: 30 AACSB: Use of information technology CASE: Content Objective: 1.3 81) Define operational excellence. How can information systems help achieve it?

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

Diff: 2 Page Ref: 13 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 82) 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.

Diff: 3 Page Ref: 14 AACSB: Analytic skills CASE: Analysis Objective: 1.2 19 ..

83) 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 Diff: 2 Page Ref: 15-17 AACSB: Analytic skills CASE: Evaluation Objective: 1.3 84) 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.

Diff: 3 Page Ref: 16 AACSB: Analytic skills CASE: Synthesis Objective: 1.3 85) 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.

Diff: 2 Page Ref: 11 AACSB: Analytic skills CASE: Synthesis Objective: 1.2

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86) 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.

Diff: 3 Page Ref: 11 AACSB: Analytic skills CASE: Synthesis Objective: 1.1 87) 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.

Diff: 2 Page Ref: 20 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 88) 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.

Diff: 3 Page Ref: 25 AACSB: Analytic skills CASE: Synthesis Objective: 1.2

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89) 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.

Diff: 3 Page Ref: 12 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 90) 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 implementing tablet and mobile platforms enabling work away from the office, 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.

Diff: 2 Page Ref: 7 AACSB: Analytic skills CASE: Evaluation Objective: 1.1

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Management Information Systems, 13e (Laudon/Laudon) Chapter 2 Global E-Business and Collaboration 1) Enrolling employees in benefits plans is a business process handled by the finance and accounting function.

Answer: FALSE Diff: 2 Page Ref: 44 AACSB: Use of information technology CASE: Content Objective: 2.1 2) Operational management is responsible for directing the day-to-day operations of the business and therefore needs transaction-level information.

Answer: TRUE Diff: 1 Page Ref: 46 AACSB: Reflective thinking skills CASE: Content Objective: 2.2 3) Functional systems that support business processes within a single functional group, such as human resources, are being phased out in favor of cross-functional systems.

Answer: TRUE Diff: 2 Page Ref: 45 AACSB: Use of information technology CASE: Content Objective: 2.2 4) Transaction processing systems are most commonly used by the senior management level of an organization.

Answer: FALSE Diff: 2 Page Ref: 46 AACSB: Use of information technology CASE: Content Objective: 2.2 5) In social business, firms use social networks for coordinating production tasks.

Answer: FALSE Diff: 2 Page Ref: 60 AACSB: Use of information technology CASE: Content Objective: 2.4

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6) A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business.

Answer: TRUE Diff: 1 Page Ref: 46 AACSB: Use of information technology CASE: Content Objective: 2.5 7) A hotel reservation system is a typical example of a management information system.

Answer: FALSE Diff: 2 Page Ref: 46 AACSB: Use of information technology CASE: Analysis Objective: 2.5 8) You would use an MIS to help decide whether to introduce a new product line.

Answer: FALSE Diff: 2 Page Ref: 47 AACSB: Analytic skills CASE: Analysis Objective: 2.3 9) Management information systems typically support nonroutine decision making.

Answer: FALSE Diff: 2 Page Ref: 49 AACSB: Use of information technology CASE: Content Objective: 2.2 10) Most MISs use sophisticated mathematical models or statistical techniques.

Answer: FALSE Diff: 2 Page Ref: 49 AACSB: Use of information technology CASE: Content Objective: 2.2 11) Decision-support systems help managers make decisions that are unique, rapidly changing, and not easily specified in advance.

Answer: TRUE Diff: 1 Page Ref: 49 AACSB: Use of information technology CASE: Content Objective: 2.2

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12) Decision-support systems use internal information as well as information from external sources.

Answer: TRUE Diff: 2 Page Ref: 50 AACSB: Use of information technology CASE: Content Objective: 2.2 13) Shipping a product to a customer is an example of a business process.

Answer: TRUE Diff: 2 Page Ref: 44 AACSB: Analytic skills CASE: Evaluation Objective: 2.1 14) ESSs draw summarized information from internal MIS and DSS. Answer: TRUE Diff: 2 Page Ref: 50 AACSB: Use of information technology CASE: Content Objective: 2.2 15) ESSs are designed primarily to solve specific problems.

Answer: FALSE Diff: 2 Page Ref: 52 AACSB: Use of information technology CASE: Content Objective: 2.2 16) MIS job growth is projected to be 50% greater than other jobs in the next five years.

Answer: TRUE Diff: 2 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5 17) Enterprise systems often include transactions with customers and vendors.

Answer: TRUE Diff: 2 Page Ref: 52-57 AACSB: Use of information technology CASE: Content Objective: 2.3

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

Answer: TRUE Diff: 3 Page Ref: 55-56 AACSB: Analytic skills CASE: Analysis Objective: 2.3 19) A Skype conference call using VOIP and webcams is an example of a remote, synchronous collaboration tool.

Answer: TRUE Diff: 2 Page Ref: 67 AACSB: Use of information technology CASE: Analysis Objective: 2.4 20) Synchronous collaboration tools allow global firms to collaborate from different locations at the same time.

Answer: TRUE Diff: 1 Page Ref: 67 AACSB: Use of information technology CASE: Analysis Objective: 2.4 21) Identifying customers is a responsibility of the ________ function.

A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing Answer: D Diff: 1 Page Ref: 44 AACSB: Reflective thinking skills CASE: Content Objective: 2.2 22) Producing bills of materials is a business process within the ________ function.

A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing Answer: C Diff: 1 Page Ref: 44 AACSB: Reflective thinking skills CASE: Content Objective: 2.2

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23) Which of the following is an example of a cross-functional business process?

A) identifying customers B) creating a new product C) assembling a product D) paying creditors Answer: B Diff: 2 Page Ref: 44 AACSB: Analytic skills CASE: Analysis Objective: 2.1 24) Which type of system would you use to change a production schedule if a key supplier was late in delivering goods?

A) ESS B) TPS C) MIS D) DSS Answer: B Diff: 2 Page Ref: 46 AACSB: Analytic skills CASE: Analysis Objective: 2.2 25) You have been hired by a worldwide 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 Answer: C Diff: 3 Page Ref: 46-51 AACSB: Analytic skills CASE: Synthesis Objective: 2.2

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26) 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 Diff: 2 Page Ref: 46 AACSB: Use of information technology CASE: Content Objective: 2.2 27) Which systems are typically a major source of data for other systems?

A) transaction processing systems B) management information systems C) executive support systems D) decision-support systems Answer: A Diff: 2 Page Ref: 46 AACSB: Use of information technology CASE: Content Objective: 2.2 28) 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) middle management functions.

Answer: D Diff: 1 Page Ref: 47 AACSB: Use of information technology CASE: Content Objective: 2.2 29) Which type of system would you use to determine the five suppliers with the worst record in delivering goods on time?

A) ESS B) TPS C) MIS D) DSS Answer: C Diff: 2 Page Ref: 47 AACSB: Analytic skills CASE: Analysis Objective: 2.2 6 ..

30) 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.

Answer: D Diff: 3 Page Ref: 47 AACSB: Analytic skills CASE: Analysis Objective: 2.2 31) 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 Answer: D Diff: 2 Page Ref: 49 AACSB: Use of information technology CASE: Content Objective: 2.2 32) ________ 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 Answer: C Diff: 2 Page Ref: 49 AACSB: Use of information technology CASE: Content Objective: 2.2 33) 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) DSS Answer: D Diff: 2 Page Ref: 49-50 AACSB: Analytic skills CASE: Analysis Objective: 2.2 7 ..

34) ESS are specifically designed to serve which level of the organization?

A) operational B) end-user C) middle management D) senior management Answer: D Diff: 1 Page Ref: 52 AACSB: Use of information technology CASE: Content Objective: 2.2 35) 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.

Answer: A Diff: 1 Page Ref: 50 AACSB: Use of information technology CASE: Content Objective: 2.2 36) Which systems often deliver information to senior executives through a portal, which uses a Web interface to present integrated personalized business content?

A) transaction processing systems B) executive support systems C) management information systems D) decision-support systems Answer: B Diff: 2 Page Ref: 52 AACSB: Use of information technology CASE: Content Objective: 2.2 37) Which type of system would you use to determine what trends in your supplier's industry will affect your firm the most in five years?

A) ESS B) TPS C) MIS D) DSS Answer: A Diff: 1 Page Ref: 52 AACSB: Analytic skills CASE: Analysis Objective: 2.2 8 ..

38) 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 Answer: B Diff: 3 Page Ref: 53 AACSB: Analytic skills CASE: Evaluation Objective: 2.3 39) ________ are designed to support organization-wide process coordination and integration.

A) Decision-support systems B) Management information systems C) CRM systems D) Enterprise applications Answer: D Diff: 1 Page Ref: 53 AACSB: Use of information technology CASE: Content Objective: 2.3 40) 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 Answer: B Diff: 2 Page Ref: 53 AACSB: Use of information technology CASE: Content Objective: 2.3 41) 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. Answer: D Diff: 1 Page Ref: 53 AACSB: Use of information technology CASE: Content Objective: 2.3

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42) Enterprise systems are also known as ________ systems.

A) resource planning B) enterprise resource planning C) enterprise support D) management information Answer: B Diff: 1 Page Ref: 53 AACSB: Use of information technology CASE: Content Objective: 2.3 43) An example of a highly structured decision is 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.

Answer: D Diff: 2 Page Ref: 46 AACSB: Analytic skills CASE: Analysis Objective: 2.2 44) Telus's use of SharePoint for team sites 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: A Diff: 2 Page Ref: 41-42 AACSB: Analytic skills CASE: Analysis Objective: 2.3 45) Enabling management to make better decisions regarding organizing and scheduling sourcing, production, and distribution is a central feature of A) SCMs. B) TPSs. C) KMSs. D) ERPs. Answer: A Diff: 2 Page Ref: 55 AACSB: Use of information technology CASE: Content Objective: 2.3

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46) ________ systems integrate supplier, manufacturer, distributor, and customer logistics processes.

A) Collaborative distribution B) Supply-chain management C) Reverse logistics D) Enterprise planning Answer: B Diff: 2 Page Ref: 55 AACSB: Use of information technology CASE: Content Objective: 2.3 47) ________ systems are designed to help firms manage their relationships with their customers.

A) CRM B) MIS C) CLE D) CLU Answer: A Diff: 1 Page Ref: 56 AACSB: Use of information technology CASE: Content Objective: 2.3 48) You are planning the launch of your new company, an application service provider that provides an online timesheet and project tracking application. To best communicate with and manage your relationship with your users, you would want to implement a(n) A) extranet.

B) intranet.

C) KMS. D) CMS. Answer: D Diff: 1 Page Ref: 56 AACSB: Analytic skills CASE: Evaluation Objective: 2.3

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49) Which types of systems consolidate the relevant knowledge and experience in the firm to make it available to improve business processes and management decision making?

A) TPS B) extranets C) KMS D) CRM Answer: C Diff: 2 Page Ref: 56 AACSB: Use of information technology CASE: Content Objective: 2.3 50) You work for a highly successful advertiser that is just about to expand nationally. Of utmost importance will be finding a way to store and disseminate their clients' continually updated branding guides, which include multiple image files and text documents, to all of the firm's branches. What system will best serve these needs?

A) an intranet with KMS capabilities B) an extranet with KMS capabilities C) a TPS with KMS capabilities D) a CRM Answer: B Diff: 3 Page Ref: 56-57 AACSB: Analytic skills CASE: Synthesis Objective: 2.3 51) 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 Answer: A Diff: 3 Page Ref: 46-57 AACSB: Analytic skills CASE: Synthesis Objective: 2.3

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52) 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 Answer: C Diff: 3 Page Ref: 57 AACSB: Analytic skills CASE: Evaluation Objective: 2.3 53) 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 Answer: B Diff: 1 Page Ref: 57 AACSB: Use of information technology CASE: Content Objective: 2.3 54) E-government refers to the application of ________ to digitally enable government and public sector agencies' relationships with citizens, businesses, and other arms of government.

A) the Internet and networking technologies B) e-commerce C) e-business D) any computerized technology Answer: A Diff: 1 Page Ref: 57 AACSB: Use of information technology CASE: Content Objective: 2.4

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55) Buying or selling goods over the Internet is called A) e-commerce.

B) e-business.

C) an intranet.

D) an extranet.

Answer: A Diff: 1 Page Ref: 57 AACSB: Reflective thinking skills CASE: Content Objective: 2.4 56) The use of digital technology and the Internet to execute the major business processes in the enterprise is called A) e-commerce.

B) e-business.

C) enterprise applications.

D) MIS. Answer: B Diff: 1 Page Ref: 57 AACSB: Use of information technology CASE: Content Objective: 2.4 57) 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.

Answer: C Diff: 2 Page Ref: 58-59 AACSB: Reflective thinking skills CASE: Content Objective: 2.4 58) Which of the following occupations would not be categorized as an "interaction" job?

A) sales representative B) business manager C) engineer D) operations manager Answer: C Diff: 2 Page Ref: 56 AACSB: Analytic skills CASE: Analysis Objective: 2.2 14 ..

59) 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?

Answer: B Diff: 2 Page Ref: 58 AACSB: Analytic skills CASE: Analysis Objective: 2.2 60) All of the following are direct business benefits of collaboration except for A) improved quality.

B) improved financial performance.

C) improved customer service.

D) improved compliance with government regulations.

Answer: D Diff: 1 Page Ref: 58-59 AACSB: Analytic skills CASE: Evaluation Objective: 2.4 61) Which of the following types of collaboration tools allows you to communicate with avatars using text messaging?

A) virtual worlds B) screen sharing C) collaborative writing D) large audience Webinars Answer: A Diff: 1 Page Ref: 63 AACSB: Use of information technology CASE: Content Objective: 2.4 62) Which of the following is not one of the reasons for the increased business focus on collaboration and teamwork?

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 Answer: D Diff: 2 Page Ref: 58-59 AACSB: Reflective thinking skills CASE: Content Objective: 2.4

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63) All of the following statements regarding Lotus 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.

Answer: A Diff: 2 Page Ref: 65 AACSB: Reflective thinking skills CASE: Content Objective: 2.4 64) 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 Answer: D Diff: 2 Page Ref: 67 AACSB: Analytic skills CASE: Analysis Objective: 2.4 65) An example of a collaboration tool that supports colocated, asynchronous collaboration is A) a team room.

B) e-mail.

C) a MUD. D) a wall display.

Answer: A Diff: 3 Page Ref: 67 AACSB: Analytic skills CASE: Analysis Objective: 2.4 66) 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. Answer: C Diff: 1 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5

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

A) CEO B) CFO C) CIO D) CTO Answer: C Diff: 1 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5 68) Which of the following roles falls into the duties of an information systems manager?

A) writing software instructions for computers B) acting as liaison between the information systems group and the rest of the organization C) translating business problems into information requirements D) managing data entry staff Answer: D Diff: 3 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5 69) 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 Answer: C Diff: 1 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5 70) The CPO is 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.

Answer: A Diff: 1 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5

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

Answer: business process Diff: 1 Page Ref: 43 AACSB: Reflective thinking skills CASE: Content Objective: 2.1 72) Applications that allow managers to interactively manipulate current and historical data to discover patterns and trends that will help their decision making are referred to as ________.

Answer: business intelligence Diff: 2 Page Ref: 47 AACSB: Reflective thinking skills CASE: Content Objective: 2.2 73) An ESS commonly uses a(n) ________ to display an array of charts and graphs of a business's key performance indicators.

Answer: digital dashboard, dashboard Diff: 2 Page Ref: 52 AACSB: Use of information technology CASE: Content Objective: 2.2 74) A Web interface used to present integrated personalized business content to users is called a(n) ________.

Answer: portal Diff: 2 Page Ref: 20 AACSB: Use of information technology CASE: Content Objective: 2.2 75) ________ applications span the entire firm, integrating information from multiple functions and business processes to enhance the performance of the organization as a whole.

Answer: Enterprise Diff: 2 Page Ref: 53 AACSB: Use of information technology CASE: Content Objective: 2.3 76) Supply chain management systems are one type of ________ system because they automate the flow of information across organizational boundaries.

Answer: interorganizational Diff: 2 Page Ref: 56 AACSB: Use of information technology CASE: Content Objective: 2.3 18 ..

77) A state Web site that allows citizens to pay parking fines online is a form of ________.

Answer: e-government Diff: 3 Page Ref: 57 AACSB: Analytic skills CASE: Analysis Objective: 2.4 78) ________ are highly trained technical specialists who write the software instructions for computers.

Answer: Programmers Diff: 1 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5 79) ________ are representatives of departments outside of the information systems group for whom applications are developed.

Answer: End users Diff: 1 Page Ref: 69 AACSB: Use of information technology CASE: Content Objective: 2.5 80) IT ________ includes the strategy and policies for using information technology within an organization.

Answer: governance Diff: 3 Page Ref: 70 AACSB: Use of information technology CASE: Content Objective: 2.5

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81) 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.

Diff: 2 Page Ref: 43-45 AACSB: Analytic skills CASE: Synthesis Objective: 2.1 82) 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.

Diff: 1 Page Ref: 44 AACSB: Analytic skills CASE: Analysis Objective: 2.1 83) 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.

Diff: 2 Page Ref: 43-45 AACSB: Analytic skills CASE: Synthesis Objective: 2.1

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84) 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.

Diff: 3 Page Ref: 45-53 AACSB: Analytic skills CASE: Evaluation Objective: 2.2 85) 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.

Diff: 2 Page Ref: 45-53 AACSB: Analytic skills CASE: Analysis Objective: 2.2

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86) 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.

Diff: 2 Page Ref: 45-53 AACSB: Analytic skills CASE: Synthesis Objective: 2.2 87) 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.

Diff: 1 Page Ref: 53-57 AACSB: Analytic skills CASE: Evaluation Objective: 2.3 88) 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.

Diff: 2 Page Ref: 62-67 AACSB: Analytic skills CASE: Synthesis Objective: 2.2

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89) 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.

Diff: 3 Page Ref: 67-68 AACSB: Analytic skills CASE: Synthesis Objective: 2.3 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.

Diff: 2 Page Ref: 70 AACSB: Analytic skills CASE: Analysis Objective: 2.5

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Management Information Systems, 13e (Laudon/Laudon) Chapter 3 Information Systems, Organizations, and Strategy 1) All organizations have bedrock, unassailable assumptions that define their goals and products.

Answer: TRUE Diff: 2 Page Ref: 84 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 2) An adhocracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.

Answer: FALSE Diff: 3 Page Ref: 88 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 3) From the point of view of economics, information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor.

Answer: TRUE Diff: 3 Page Ref: 89 AACSB: Use of information technology CASE: Content Objective: 3.1 4) A firm can be said to have competitive advantage when they have higher stock market valuations than their competitors.

Answer: TRUE Diff: 2 Page Ref: 94 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 5) The competitive forces model can be used to analyze today's digital firm as well as traditional firms.

Answer: TRUE Diff: 1 Page Ref: 94 AACSB: Reflective thinking skills CASE: Content Objective: 3.2

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

Answer: TRUE Diff: 1 Page Ref: 95 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 7) A transparent marketplace means that there is high product differentiation.

Answer: FALSE Diff: 2 Page Ref: 95 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 8) The effect of the Internet has been to raise bargaining power over suppliers.

Answer: TRUE Diff: 2 Page Ref: 101 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 9) In an efficient customer response system, digital answering systems are used to monitor and respond to customer inquiries.

Answer: FALSE Diff: 2 Page Ref: 96 AACSB: Use of information technology CASE: Content Objective: 3.2 10) In the strategy of product differentiation, information systems are used to enable new products and services.

Answer: TRUE Diff: 2 Page Ref: 97 AACSB: Use of information technology CASE: Content Objective: 3.2 11) Mass customization is a form of mass production.

Answer: TRUE Diff: 2 Page Ref: 97 AACSB: Use of information technology CASE: Content Objective: 3.2

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12) Strong linkages to customers and suppliers decrease switching costs.

Answer: FALSE Diff: 2 Page Ref: 99 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 13) Business processes are collections of standard operating procedures.

Answer: TRUE Diff: 1 Page Ref: 84 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 14) The value chain model classifies all company activities as either primary or support.

Answer: TRUE Diff: 2 Page Ref: 101 AACSB: Reflective thinking skills CASE: Content Objective: 3.3 15) In the value chain model, primary activities are most directly related to the production and distribution of the firm's products and services that create value for the customer.

Answer: TRUE Diff: 2 Page Ref: 102 AACSB: Reflective thinking skills CASE: Content Objective: 3.3 16) The idea driving synergies is that when the output of some units can be used as inputs to other units, the relationship can lower cost and generate profits.

Answer: TRUE Diff: 1 Page Ref: 106 AACSB: Reflective thinking skills CASE: Content Objective: 3.4 17) In a demonstration of network economics, the more people that use Adobe software and related products, the greater the value of the software.

Answer: TRUE Diff: 2 Page Ref: 108 AACSB: Reflective thinking skills CASE: Content Objective: 3.4

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18) The term business ecosystem describes the interplay between the various organizational forces within a firm.

Answer: FALSE Diff: 2 Page Ref: 108 AACSB: Reflective thinking skills CASE: Content Objective: 3.4 19) Research has shown that only 25% of firms are able to align their information technology with their business goals.

Answer: TRUE Diff: 3 Page Ref: 111 AACSB: Reflective thinking skills CASE: Content Objective: 3.5 20) The use of Internet technologies allows companies to more easily sustain competitive advantage.

Answer: FALSE Diff: 3 Page Ref: 111 AACSB: Use of information technology CASE: Content Objective: 3.5 21) As discussed in the chapter opening case, which of the four generic strategies did Sears employ to combat the competition offered by Target, Walmart, and Macy's?

A) low-cost leadership B) focus on market niche C) customer and supplier intimacy D) product differentiation Answer: C Diff: 2 Page Ref: 79-80 AACSB: Analytic skills CASE: Analysis Objective: 3.2 22) The interaction between information systems and organizations is influenced A) primarily by the decision making of middle and senior managers.

B) by many factors, including structure, politics, culture, and environment.

C) by two main microeconomic forces: capital and labor.

D) primarily by the organization's business processes and culture.

Answer: B Diff: 2 Page Ref: 81 AACSB: Use of information technology CASE: Content Objective: 3.1 4 ..

23) 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) collection of social elements.

D) B and C E) A, B, and C Answer: E Diff: 2 Page Ref: 82 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 24) According to the ________ definition of organizations, an organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment.

A) microeconomic B) macroeconomic C) sociotechnical D) behavioral Answer: A Diff: 3 Page Ref: 82 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 25) 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 the inputs and outputs, labor and capital, as being infinitely malleable.

D) It sees the organization as a social structure similar to a machine.

Answer: C Diff: 2 Page Ref: 83 AACSB: Analytic skills CASE: Evaluation Objective: 3.1

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26) All of the following are major features of organizations that impact the use of information systems except for A) business processes.

B) environments.

C) goals.

D) agency costs.

Answer: D Diff: 2 Page Ref: 84 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 27) Business processes are collections of A) informal practices and behaviors.

B) formalized and documented practices.

C) routines.

D) rights and privileges.

Answer: C Diff: 2 Page Ref: 84 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 28) Which of the following would not be considered a disruptive technology?

A) instant messaging B) e-mail C) Internet telephony D) PCs Answer: A Diff: 3 Page Ref: 87 AACSB: Analytic skills CASE: Analysis Objective: 3.1 29) Mintzberg's classification of organizational structure categorizes the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals as a(n) A) entrepreneurial structure.

B) divisionalized bureaucracy.

C) professional bureaucracy.

D) adhocracy.

Answer: C Diff: 2 Page Ref: 88 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 6 ..

30) A large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management making is classified by Mintzberg as a ________ bureaucracy.

A) machine B) professional C) divisionalized D) multidivisional Answer: A Diff: 2 Page Ref: 88 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 31) An example of a divisionalized bureaucracy is a A) startup firm.

B) university.

C) Fortune 500 firm.

D) midsize manufacturer.

Answer: C Diff: 3 Page Ref: 88 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 32) The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as A) switching costs.

B) transaction costs.

C) procurement.

D) agency costs.

Answer: B Diff: 2 Page Ref: 89 AACSB: Use of information technology CASE: Content Objective: 3.1 33) Which of the following statements is not true about information technology's impacts on business firms?

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.

Answer: A Diff: 2 Page Ref: 89-90 AACSB: Use of information technology CASE: Content Objective: 3.1 7 ..

34) 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.

Answer: D Diff: 3 Page Ref: 90 AACSB: Reflective thinking skills CASE: Content Objective: 3.1 35) According to Leavitt's model of 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.

Answer: D Diff: 3 Page Ref: 92 AACSB: Use of information technology CASE: Analysis Objective: 3.1 36) The ________ model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete.

A) network economics B) competitive forces C) competitive advantage D) demand control Answer: B Diff: 2 Page Ref: 94 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 37) Which of the following industries has a low barrier to entry?

A) automotive B) computer chip C) restaurant D) airline Answer: C Diff: 2 Page Ref: 94-95 AACSB: Analytic skills CASE: Analysis Objective: 3.2 8 ..

38) Which of the following is not one of the competitive forces?

A) suppliers B) other competitors C) external environment D) customers Answer: C Diff: 2 Page Ref: 94-95 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 39) 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 Answer: D Diff: 3 Page Ref: 94-95 AACSB: Analytic skills CASE: Evaluation Objective: 3.2 40) A substitute product of most concern for a cable TV distributor is A) satellite TV. B) broadcast TV. C) satellite radio.

D) the Internet.

Answer: A Diff: 2 Page Ref: 95 AACSB: Analytic skills CASE: Evaluation Objective: 3.2 41) Barnes & Noble's apps for its e-reader, the Nook, is an example of a firm using information systems to A) strengthen ties to its customers.

B) remove publishers from the industry value chain.

C) develop synergies with publishers.

D) focus on market niche.

Answer: A Diff: 2 Page Ref: 117-119 AACSB: Analytic skills CASE: Analysis Objective: 3.2

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42) A firm can exercise greater control over its suppliers by having A) more suppliers.

B) fewer suppliers.

C) global suppliers.

D) local suppliers.

Answer: A Diff: 1 Page Ref: 95 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 43) 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.

Answer: A Diff: 2 Page Ref: 96 AACSB: Analytic skills CASE: Analysis Objective: 3.2 44) The four major types of competitive strategy 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.

Answer: B Diff: 2 Page Ref: 96-98 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 45) Walmart's continuous replenishment system allows it to A) provide mass customization.

B) provide an efficient customer response system.

C) strengthen customer intimacy.

D) achieve economy of scale.

Answer: B Diff: 1 Page Ref: 96 AACSB: Use of information technology CASE: Content Objective: 3.2

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46) When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a ________ strategy.

A) product differentiation B) market niche C) mass customization D) process efficiency Answer: B Diff: 2 Page Ref: 97 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 47) ________ is the ability to offer individually tailored products or services using the same production resources as bulk production.

A) Mass customization B) Size customization C) Magnitude customization D) Dimension customization Answer: A Diff: 1 Page Ref: 97 AACSB: Use of information technology CASE: Content Objective: 3.2 48) 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.

Answer: C Diff: 2 Page Ref: 86 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 49) An information system can enable a company to focus on a market niche through A) complex trend forecasting.

B) tailoring products to the client.

C) intensive product trend analysis.

D) intensive customer data analysis.

Answer: D Diff: 3 Page Ref: 97 AACSB: Use of information technology CASE: Content Objective: 3.2

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50) 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 small groups of customers.

Answer: D Diff: 2 Page Ref: 98 AACSB: Analytic skills CASE: Analysis Objective: 3.2 51) As described in the chapter case, the competitive force of ________ resulted in Starbuck's downturn in 2008, and it employed information systems in a strategy of ________ to combat this force.

A) traditional competitors; product differentiation B) new market entrants; product specialization C) substitute products; market niche D) customers; customer intimacy Answer: A Diff: 2 Page Ref: 98 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 52) 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.

Answer: C Diff: 2 Page Ref: 98 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 53) Which of the following industries has not been disrupted by the Internet?

A) encyclopedias B) newspapers C) clothing D) air travel Answer: C Diff: 1 Page Ref: 101 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 12 ..

54) What significant competitive force is challenging the publishing industry?

A) positioning and rivalry among competitors B) low cost of entry C) substitute products or services D) customer's bargaining power Answer: C Diff: 2 Page Ref: 101 AACSB: Analytic skills CASE: Analysis Objective: 3.2 55) 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) helps a firm identify points at which information technology can most effectively enhance its competitive position.

Answer: D Diff: 1 Page Ref: 101 AACSB: Use of information technology CASE: Content Objective: 3.3 56) The primary activities of a firm include 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.

Answer: A Diff: 2 Page Ref: 102 AACSB: Reflective thinking skills CASE: Content Objective: 3.3 57) 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) technology Answer: D Diff: 2 Page Ref: 102 AACSB: Reflective thinking skills CASE: Content Objective: 3.3

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58) Which of the following activities would you perform to measure and compare your business processes to similar processes of other companies within your industry?

A) benchmarking B) best practices C) value chain analysis D) strategic systems analysis Answer: A Diff: 1 Page Ref: 103 AACSB: Reflective thinking skills CASE: Content Objective: 3.3 59) The most successful solutions or methods for achieving a business objective are called A) value activities.

B) best processes.

C) core competencies.

D) best practices.

Answer: D Diff: 1 Page Ref: 103 AACSB: Reflective thinking skills CASE: Content Objective: 3.3 60) 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 Answer: A Diff: 1 Page Ref: 103 AACSB: Use of information technology CASE: Content Objective: 3.3 61) 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.

Answer: C Diff: 2 Page Ref: 105 AACSB: Use of information technology CASE: Content Objective: 3.3

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62) If two organizations pool markets and expertise that result in lower costs and generate profits it is often referred to as creating A) a value web.

B) a value chain.

C) synergies.

D) core competencies.

Answer: C Diff: 1 Page Ref: 106 AACSB: Reflective thinking skills CASE: Content Objective: 3.4 63) An example of synergy in business is A) Amazon's use of the Internet to sell books.

B) JP Morgan Chase's mergers with other banks that provided JP Morgan with a network of retail branches in new regions.

C) Blockbuster combining traditional video rental with online video rental.

D) Walmart's order entry and inventory management system to coordinate with suppliers.

Answer: B Diff: 1 Page Ref: 106 AACSB: Analytic skills CASE: Analysis Objective: 3.4 64) An information system can enhance core competencies by A) providing better reporting facilities.

B) creating educational opportunities for management.

C) allowing operational employees to interact with management.

D) encouraging the sharing of knowledge across business units.

Answer: D Diff: 2 Page Ref: 107 AACSB: Use of information technology CASE: Content Objective: 3.4 65) 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.

Answer: B Diff: 1 Page Ref: 107 AACSB: Use of information technology CASE: Content Objective: 3.4 15 ..

66) 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.

Answer: C Diff: 2 Page Ref: 107 AACSB: Reflective thinking skills CASE: Content Objective: 3.4 67) A virtual company A) uses the capabilities of other companies without being physically tied to those companies.

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.

Answer: A Diff: 1 Page Ref: 108 AACSB: Reflective thinking skills CASE: Content Objective: 3.4 68) 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.

Answer: A Diff: 1 Page Ref: 109 AACSB: Analytic skills CASE: Analysis Objective: 3.4 69) The emergence, for Amazon.com, of new competitors in the sphere of online shopping illustrates what disadvantage posed by the use of information systems to achieve competitive advantage?

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.

Answer: B Diff: 3 Page Ref: 110 AACSB: Analytic skills CASE: Evaluation Objective: 3.5 16 ..

70) You are consulting for a beverage 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.

Answer: C Diff: 2 Page Ref: 111 AACSB: Analytic skills CASE: Synthesis Objective: 3.5 71) Capital and ________ are the primary production inputs that the organization uses to create products and services.

Answer: labor Diff: 2 Page Ref: 82 AACSB: Use of information technology CASE: Content Objective: 3.1 72) Organizational ________ describes the divergent viewpoints about how resources, rewards, and punishments should be distributed, and the struggles resulting from these differences.

Answer: politics Diff: 1 Page Ref: 84 AACSB: Use of information technology CASE: Content Objective: 3.1 73) New technologies that radically change the business landscape and environment are referred to as ________.

Answer: disruptive Diff: 1 Page Ref: 87 AACSB: Use of information technology CASE: Content Objective: 3.1 74) ________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.

Answer: Product differentiation Diff: 1 Page Ref: 96 AACSB: Reflective thinking skills CASE: Content Objective: 3.2

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75) ________ are 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.

Answer: Switching costs Diff: 2 Page Ref: 98 AACSB: Reflective thinking skills CASE: Content Objective: 3.2 76) 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.

Answer: value chain Diff: 2 Page Ref: 101 AACSB: Use of information technology CASE: Content Objective: 3.2 77) A(n) ________ activity is a part of the organization's infrastructure, human resources, technology, and procurement that makes the delivery of the firm's products or services possible.

Answer: support Diff: 2 Page Ref: 102 AACSB: Use of information technology CASE: Content Objective: 3.3 78) 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.

Answer: value web Diff: 3 Page Ref: 105 AACSB: Use of information technology CASE: Content Objective: 3.3 79) A(n) ________ is an activity at which a firm excels as a world-class leader.

Answer: core competency Diff: 2 Page Ref: 107 AACSB: Reflective thinking skills CASE: Content Objective: 3.3 80) Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can be considered ________.

Answer: strategic transitions Diff: 3 Page Ref: 112 AACSB: Use of information technology CASE: Content Objective: 3.4 18 ..

81) Differentiate between the technical and behavioral definitions of an organization.

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.

Diff: 2 Page Ref: 82-83 AACSB: Analytic skills CASE: Analysis Objective: 3.1 82) 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.

Diff: 3 Page Ref: 91-93 AACSB: Analytic skills CASE: Synthesis Objective: 3.1

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83) 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.

Diff: 3 Page Ref: 96-98 AACSB: Analytic skills CASE: Evaluation Objective: 3.2 84) 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.

Diff: 2 Page Ref: 96-98 AACSB: Analytic skills CASE: Synthesis Objective: 3.2

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85) 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.

Diff: 2 Page Ref: 98-101 AACSB: Analytic skills CASE: Evaluation Objective: 3.2 86) 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).

Diff: 2 Page Ref: 101-103 AACSB: Analytic skills CASE: Analysis Objective: 3.3

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87) 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.

Diff: 2 Page Ref: 107 AACSB: Analytic skills CASE: Evaluation Objective: 3.4 88) 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.

Diff: 2 Page Ref: 107 AACSB: Analytic skills CASE: Analysis Objective: 3.4

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89) 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).

Diff: 2 Page Ref: 108-109 AACSB: Analytic skills CASE: Analysis Objective: 3.3 90) Describe in detail the major factors to determine 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?

Diff: 3 Page Ref: 111 AACSB: Analytic skills CASE: Analysis Objective: 3.5

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Management Information Systems, 13e (Laudon/Laudon) Chapter 4 Ethical and Social Issues in Information Systems 1) Even in today's legal climate, there is little incentive for firms to cooperate with prosecutors investigating financial crimes at their firm.

Answer: FALSE Diff: 2 Page Ref: 124 AACSB: Use of information technology CASE: Comprehension Objective: 4.1 2) Advances in data storage have made routine violation of individual privacy more difficult.

Answer: FALSE Diff: 1 Page Ref: 125 AACSB: Use of information technology CASE: Comprehension Objective: 4.3 3) The last step in analyzing an ethical issue should be to identify the stakeholders—people who have a vested interest in the outcome of the decision.

Answer: FALSE Diff: 2 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 4) Professionals take on special rights and obligations because of their special claims to knowledge, wisdom, and respect.

Answer: TRUE Diff: 1 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 5) Privacy is the right to be left alone when you want to be, without surveillance or interference from other individuals or organizations.

Answer: TRUE Diff: 1 Page Ref: 132 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3

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6) Most American and European privacy law is based on a set of five principles called COPPA. Answer: FALSE Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 7) Spyware is software that comes hidden in downloaded applications and can track your online movements.

Answer: TRUE Diff: 2 Page Ref: 137 AACSB: Use of information technology CASE: Comprehension Objective: 4.3 8) Most Internet businesses do very little to protect the privacy of their customers.

Answer: TRUE Diff: 2 Page Ref: 138 AACSB: Use of information technology CASE: Comprehension Objective: 4.3 9) Data gathered by online behavioral tracking firms is limited to the user's behavior on a single Web site.

Answer: FALSE Diff: 2 Page Ref: 121 AACSB: Use of information technology CASE: Comprehension Objective: 4.3 10) Copyright is the legal protection afforded intellectual property, such as a song, book, or video game.

Answer: TRUE Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 11) In white-collar fraud, information systems are most typically used as a means to hide financial evidence of crimes.

Answer: TRUE Diff: 3 Page Ref: 124 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1

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12) The Copyright Office began registering software programs in the 1990s.

Answer: FALSE Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 13) The drawback to copyright protection is that the underlying ideas behind the work are not protected, only their reproduction in a product.

Answer: TRUE Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 14) According to the courts, in the creation of software, unique concepts, general functional features, and even colors are protectable by copyright law.

Answer: FALSE Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 15) The key concepts in patent law are originality, novelty, and value.

Answer: FALSE Diff: 3 Page Ref: 124 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 16) Despite the passage of several laws defining and addressing computer crime, accessing a computer system without authorization is not yet a federal crime.

Answer: FALSE Diff: 2 Page Ref: 148 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 17) Any unsolicited e-mail is legally considered spam.

Answer: FALSE Diff: 1 Page Ref: 149 AACSB: Use of information technology CASE: Comprehension Objective: 4.3

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18) The European Parliament has passed a ban on unsolicited commercial messaging.

Answer: TRUE Diff: 2 Page Ref: 149 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 19) The most common type of computer-related RSI is CTS. Answer: TRUE Diff: 1 Page Ref: 152 AACSB: Use of information technology CASE: Comprehension Objective: 4.4 20) Technostress is a computer-related malady whose symptoms include fatigue.

Answer: TRUE Diff: 2 Page Ref: 153 AACSB: Use of information technology CASE: Comprehension Objective: 4.4 21) The 2012 FTC report on industry-best practices for protecting individuals' privacy focused on each of the following topics except A) mobile privacy.

B) phasing out of self-regulatory codes.

C) data brokers.

D) large platform providers.

Answer: B Diff: 2 Page Ref: 122 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 22) 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.

Answer: B Diff: 2 Page Ref: 125 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation in terms of assess Objective: 4.1 4 ..

23) The introduction of new information technology has a A) dampening effect on the discourse of business ethics.

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

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

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

Answer: B Diff: 2 Page Ref: 125 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.1 24) In the information age, the obligations that individuals and organizations have concerning rights to intellectual property fall within the moral dimension of A) property rights and obligations.

B) system quality.

C) accountability and control.

D) information rights and obligations.

Answer: A Diff: 1 Page Ref: 126 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.1 25) 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) quality of life.

Answer: D Diff: 2 Page Ref: 125 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.1 26) All of the following are current key technology trends raising ethical issues except A) data storage improvements.

B) data analysis advancements.

C) increase in multimedia quality.

D) increase in use of mobile devices.

Answer: C Diff: 1 Page Ref: 127 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1

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27) The use of computers to combine data from multiple sources and create electronic dossiers of detailed information on individuals is called A) profiling.

B) phishing.

C) spamming.

D) targeting.

Answer: A Diff: 1 Page Ref: 127 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1 28) Which of the five moral dimensions of the information age do the central business activities of ChoicePoint raise?

A) property rights and obligations B) system quality C) accountability and control D) information rights and obligations Answer: D Diff: 3 Page Ref: 128 AACSB: Ethical understanding and reasoning abilities CASE: Analysis in terms of appraise Objective: 4.1 29) NORA is a A) profiling technology used by the EU. B) federal privacy law protecting networked data.

C) data analysis technology that finds hidden connections between data in disparate sources.

D) sentencing guideline adopted in 1987 mandating stiff sentences on business executives.

Answer: C Diff: 2 Page Ref: 128 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1 30) Accepting the potential costs, duties, and obligations for the decisions you make is referred to as A) responsibility.

B) accountability.

C) liability.

D) due process.

Answer: A Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 6 ..

31) The process in law-governed societies in which laws are known and understood and there is an ability to appeal to higher authorities to ensure that the laws are applied correctly is called A) liability.

B) due process.

C) the courts of appeal.

D) accountability.

Answer: B Diff: 2 Page Ref: 130 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 32) The feature of social institutions that means mechanisms are in place to determine responsibility for an action is called A) due process.

B) accountability.

C) the courts of appeal.

D) the judicial system.

Answer: B Diff: 2 Page Ref: 130 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 33) Which of the following is not one of the five steps discussed in the chapter as a process for analyzing an ethical issue?

A) Assign responsibility.

B) Identify the stakeholders.

C) Identify the options you can reasonably take.

D) Identify and clearly describe the facts.

Answer: A Diff: 2 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2

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34) A colleague of yours frequently takes for his own personal use small amounts of office supplies, noting that the loss to the company is minimal. You counter that if everyone were to take the office supplies, 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 Answer: A Diff: 3 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Analysis in terms of categorize Objective: 4.2 35) Immanuel Kant's Categorical Imperative 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) if an action is not right for everyone to take, it is not right for anyone to take.

Answer: D Diff: 2 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 36) A classic ethical dilemma is the hypothetical case of a man stealing from a grocery store in order to feed his starving family. If you used the Utilitarian Principle to evaluate this situation, you might argue that stealing the food is A) acceptable, because the grocer suffers the least harm.

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

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

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

Answer: B Diff: 2 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Analysis in terms of categorize Objective: 4.2

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37) 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.

Answer: D Diff: 2 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 38) According to the ________, you should take the action that produces the least harm.

A) Categorical Imperative B) Risk Aversion Principle C) Utilitarian Principle D) Golden Rule Answer: B Diff: 2 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 39) Which U.S. act restricts the information the federal government can collect and regulates what they can do with the information?

A) Privacy Act of 1974 B) Gramm-Leach-Bliley Act of 1999 C) Freedom of Information Act D) HIPAA of 1996 Answer: A Diff: 2 Page Ref: 132-133 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 40) FIP principles are based on the notion of the A) accountability of the record holder.

B) responsibility of the record holder.

C) mutuality of interest between the record holder and the individual.

D) privacy of the individual.

Answer: C Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2

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41) 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 is a mechanism in place to enforce FIP principles.

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

Answer: D Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 42) Which of the following is not one of the practices added in 2010 by the FTP to its framework for privacy?

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.

Answer: D Diff: 3 Page Ref: 134 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 43) 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 Answer: A Diff: 2 Page Ref: 134 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 44) European privacy protection is ________ than in the United States.

A) less far-reaching B) less liable to laws C) much less stringent D) much more strict Answer: D Diff: 2 Page Ref: 135 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 10 ..

45) 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.

Answer: C Diff: 2 Page Ref: 135 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 46) The U.S. Department of Commerce developed a ________ framework in order to enable U.S. businesses to legally use personal data from EU countries.

A) COPPA B) P3P C) PGP D) safe-harbor Answer: D Diff: 2 Page Ref: 135 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 47) When a cookie is created during a Web site visit, it is stored A) on the Web site computer.

B) on the visitor's computer.

C) on the ISP's computer.

D) in a Web directory.

Answer: B Diff: 2 Page Ref: 136 AACSB: Use of information technology CASE: Comprehension Objective: 4.3 48) Flash cookies are different from ordinary cookies in that they 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.

Answer: C Diff: 2 Page Ref: 136-137 AACSB: Analytic skills CASE: Analysis in terms of compare Objective: 4.3

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49) 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.

Answer: A Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 50) A(n) ________ model of informed consent permits the collection of personal information until the consumer specifically requests that the data not be collected.

A) opt-in B) opt-out C) P3P D) PGP Answer: B Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 51) In the United States, the claim to privacy is protected primarily by each of the following except A) Constitutional guarantees of freedom of speech and association.

B) Privacy Act of 1974.

C) Fourth Amendment protections against unreasonable search and seizure.

D) COPPA. Answer: D Diff: 2 Page Ref: 132 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 52) Which of the following statements about trade secrets is not true?

A) Trade secret protections vary from state to state.

B) Any intellectual product, regardless of its purpose, can be classified as a trade secret.

C) Software that contains unique elements can be claimed as a trade secret.

D) Trade secret law protects the actual ideas in a product.

Answer: B Diff: 2 Page Ref: 139 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 4.3

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53) Intellectual property can best be described as 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.

Answer: A Diff: 3 Page Ref: 139 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 54) What legal mechanism protects the owners of intellectual property from having their work copied by others?

A) patent protection B) intellectual property law C) copyright law D) Fair Use Doctrine Answer: C Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 55) "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.

Answer: B Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 56) 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) grants a monopoly on underlying concepts and ideas.

Answer: D Diff: 3 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3

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57) One of the difficulties 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.

Answer: D Diff: 3 Page Ref: 142-143 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 58) Which of the following adjusts copyright laws to the Internet age by making it illegal to circumvent technology-based protections of copyrighted materials?

A) Digital Millennium Copyright Act B) Privacy Act C) Freedom of Information Act D) Electronic Communications Privacy Act Answer: A Diff: 3 Page Ref: 144 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 59) In general, it is very difficult to hold software producers liable for their software products when those products are considered to be A) part of a machine.

B) similar to books.

C) services.

D) artistic expressions.

Answer: B Diff: 2 Page Ref: 145 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1 60) ________ are not held liable for the messages they transmit.

A) Regulated common carriers B) Private individuals C) Organizations and businesses D) Elected officials Answer: A Diff: 2 Page Ref: 145 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1

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61) It is not feasible for companies to produce 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.

Answer: B Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1 62) The most common source of business system failure is A) software bugs.

B) software errors.

C) hardware or facilities failures.

D) data quality.

Answer: D Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1 63) The "do anything anywhere" computing environment can A) make work environments much more pleasant.

B) create economies of efficiency.

C) centralize power at corporate headquarters.

D) blur the traditional boundaries between work and family time.

Answer: D Diff: 2 Page Ref: 147 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.4 64) The practice of spamming has been growing because 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 so inexpensive and can reach so many people.

Answer: D Diff: 2 Page Ref: 149 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.4

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65) Which of the five moral dimensions of the information age does spamming raise?

A) quality of life B) system quality C) accountability and control D) information rights and obligations Answer: A Diff: 2 Page Ref: 149 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation in terms of assess Objective: 4.4 66) The Do-Not-Track Act of 2011 A) allows firms to track customers if default given is opt-in.

B) requires firms to notify customers that they are being tracked.

C) allows firms to track customers if they do not sell the information to third parties.

D) requires firms to get customer sign-off before tracking them.

Answer: B Diff: 2 Page Ref: 134 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 67) 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.

Answer: A Diff: 2 Page Ref: 149 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation in terms of assess Objective: 4.1 68) A tiny software object embedded in a Web page and used by tracking programs to monitor online user behavior is called A) spyware.

B) a super cookie.

C) a Web beacon.

D) a cookie.

Answer: C Diff: 1 Page Ref: 150 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3

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69) Which two of the following issues are privacy advocates and advertising industry most in conflict over? (Select two of the following.)

A) an opt-in policy required at all sites B) a national Do-Not-Track list C) an opt-out policy required at all sites D) disclosure and transparency in the use of Flash or super cookies Answer: A, B Diff: 2 Page Ref: 134 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 70) ________ can be induced by tens of thousands of repetitions under low-impact loads.

A) CTS B) CVS C) RSI D) Technostress Answer: C Diff: 2 Page Ref: 150-152 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.4 71) The principles of right and wrong that can be used by individuals acting as free moral agents to make choices to guide their behavior are called ________.

Answer: ethics Diff: 1 Page Ref: 125 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 72) ________ refers to the existence of laws that permit individuals to recover damages done to them by other actors, systems, or organizations.

Answer: Liability Diff: 2 Page Ref: 130 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 73) The ethical principle called ________ asks you to put yourself in the place of others, and think of yourself as the object of the decision.

Answer: the Golden Rule Diff: 3 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 17 ..

74) Descartes' rule of change, that if an action cannot be taken repeatedly, it is not right to take at all, is also known as the ________ rule.

Answer: slippery-slope Diff: 2 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Comprehension Objective: 4.2 75) ________ is permission given with knowledge of all the facts needed to make a rational decision.

Answer: Informed consent Diff: 2 Page Ref: 135 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.2 76) A wide disparity in the ability of different social groups to access computers and the Internet is referred to as ________.

Answer: digital divide, the digital divide Diff: 2 Page Ref: 137 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.4 77) Advertisers use ________ targeting in order to display more relevant ads based on user's search and browsing history.

Answer: behavioral Diff: 2 Page Ref: 137 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 78) The ________ model prohibits an organization from collecting any personal information unless the individual specifically takes action to approve information collection and use.

Answer: opt-in Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 79) A(n) ________ grants the owner an exclusive monopoly on the ideas behind an invention for 20 years.

Answer: patent Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.3 18 ..

80) The commission of acts involving the use of a computer that may not be illegal but are considered unethical is called computer ________.

Answer: abuse Diff: 2 Page Ref: 149 AACSB: Reflective thinking skills CASE: Comprehension Objective: 4.1 81) 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.

Diff: 3 Page Ref: 125-134 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation in terms of assess Objective: 4.1 82) List and describe the five moral dimensions that are involved in political, social, and ethical issues. Which do you think will be 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. 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.

Diff: 2 Page Ref: 125-126 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 4.1 19 ..

83) Discuss at least three key technology trends that raise ethical issues. Give an example of an ethical or moral impact connected to each one.

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?

Diff: 2 Page Ref: 126-129 AACSB: Analytic skills CASE: Synthesis in terms of applying Objective: 4.1 84) 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).

Diff: 3 Page Ref: 129-130 AACSB: Ethical understanding and reasoning abilities CASE: Analysis in terms of examine Objective: 4.2 85) 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.

Diff: 1 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Analysis in terms of organizing Objective: 4.2 20 ..

86) List and define the six ethical principles discussed in your text.

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.

Diff: 2 Page Ref: 131 AACSB: Ethical understanding and reasoning abilities CASE: Analysis in terms of summarize Objective: 4.2 87) 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.

Diff: 2 Page Ref: 132-139 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation in terms of assess Objective: 4.3 88) How does a cookie work?

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.

Diff: 2 Page Ref: 136 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 4.3

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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? 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.

Diff: 2 Page Ref: 146 AACSB: Ethical understanding and reasoning abilities CASE: Synthesis in terms of propose Objective: 4.1 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?

Diff: 3 Page Ref: 125-153 AACSB: Ethical understanding and reasoning abilities CASE: Synthesis in terms of applying Objective: 4.1

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Management Information Systems, 13e (Laudon/Laudon) Chapter 5 IT Infrastructure and Emerging Technologies 1) A primary example of centralized processing is client/server computing.

Answer: FALSE Diff: 2 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.1 2) In N-tier computing, significant parts of Web site content, logic, and processing are performed by different servers.

Answer: TRUE Diff: 2 Page Ref: 169 AACSB: Use of information technology CASE: Content Objective: 5.1 3) Application server software is responsible for locating and managing stored Web pages.

Answer: FALSE Diff: 2 Page Ref: 170 AACSB: Use of information technology CASE: Content Objective: 5.1 4) IT infrastructure consists of just those physical computing devices required to operate the enterprise.

Answer: FALSE Diff: 1 Page Ref: 165 AACSB: Use of information technology CASE: Content Objective: 5.1 5) An application server may reside on the same computer as a Web server or on its own dedicated computer.

Answer: TRUE Diff: 2 Page Ref: 170 AACSB: Use of information technology CASE: Content Objective: 5.1

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6) Enterprise integration requires software that can link disparate applications and enable data to flow freely among different parts of the business.

Answer: TRUE Diff: 2 Page Ref: 170 AACSB: Use of information technology CASE: Content Objective: 5.2 7) The decision to outsource software development is also referred to as the rent-versus-buy decision.

Answer: FALSE Diff: 2 Page Ref: 196 AACSB: Use of information technology CASE: Content Objective: 5.4 8) The operating system is used to manage the computer's activities.

Answer: TRUE Diff: 1 Page Ref: 177 AACSB: Use of information technology CASE: Content Objective: 5.1 9) The technology challenges facing the U.S. Army, as discussed in the chapter case, illustrates the current trend in software of outsourcing application development.

Answer: FALSE Diff: 2 Page Ref: 163-164 AACSB: Use of information technology CASE: Content Objective: 5.4 10) SANs create large central pools of storage that can be rapidly accessed and shared by multiple servers.

Answer: TRUE Diff: 2 Page Ref: 178 AACSB: Use of information technology CASE: Content Objective: 5.1 11) In green computing, reducing computer power consumption is a top priority.

Answer: TRUE Diff: 1 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.3

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12) Autonomic computing is implemented primarily with enterprise or ISP servers.

Answer: FALSE Diff: 2 Page Ref: 188 AACSB: Use of information technology CASE: Content Objective: 5.3 13) Java software is designed to run on any computing device, regardless of the specific microprocessor or operating system it uses.

Answer: TRUE Diff: 1 Page Ref: 190 AACSB: Use of information technology CASE: Content Objective: 5.4 14) Web services can exchange information between two different systems regardless of the operating system or programming languages on which the systems are based.

Answer: TRUE Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 15) Whereas XML is limited to describing how data should be presented in the form of Web pages, HTML can perform presentation, communication, and data storage tasks.

Answer: FALSE Diff: 1 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 16) Hypertext markup language specifies how text, graphics, video, and sound are placed on a Web page document.

Answer: TRUE Diff: 1 Page Ref: 190 AACSB: Use of information technology CASE: Content Objective: 5.4 17) 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 Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 3 ..

18) Today most business firms have discontinued operating their legacy systems, replacing these with inexpensive Web services and hosted software.

Answer: FALSE Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 19) 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 Diff: 1 Page Ref: 196 AACSB: Use of information technology CASE: Content Objective: 5.5 20) TCO refers to the original cost of purchased technology: both hardware and software.

Answer: FALSE Diff: 1 Page Ref: 197 AACSB: Use of information technology CASE: Content Objective: 5.5 21) Which type of infrastructure services provides voice and video connectivity to employees, customers, and suppliers?

A) networking B) telephone C) VOIP D) telecommunications Answer: D Diff: 1 Page Ref: 165 AACSB: Use of information technology CASE: Content Objective: 5.1 22) 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 facility management to manage the facilities housing physical components D) IT management services to plan and develop the infrastructure and provide project management Answer: A Diff: 1 Page Ref: 165-166 AACSB: Use of information technology CASE: Content Objective: 5.1 4 ..

23) 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) 4, 5, 3, 2, 1 B) 5, 4, 2, 3, 1 C) 4, 5, 2, 3, 1 D) 5, 4, 2, 1, 3 Answer: A Diff: 2 Page Ref: 167-171 AACSB: Analytic skills CASE: Synthesis Objective: 5.2 24) The introduction of the minicomputer A) allowed computers to be customized to the specific needs of departments or business units.

B) enabled decentralized computing.

C) offered new, powerful machines at lower prices than mainframes.

D) all of the above.

Answer: D Diff: 2 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.2 25) 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.

Answer: D Diff: 1 Page Ref: 169 AACSB: Use of information technology CASE: Content Objective: 5.2 26) 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.

Answer: B Diff: 1 Page Ref: 169 AACSB: Use of information technology CASE: Content Objective: 5.2 5 ..

27) Interpretations of Moore's law assert that A) computing power doubles every 18 months.

B) transistors decrease in size 50% every two years.

C) data storage costs decrease by 50% every 18 months.

D) none of the above.

Answer: A Diff: 2 Page Ref: 171 AACSB: Use of information technology CASE: Content Objective: 5.2 28) Which of the following factors provides an understanding of why computing resources today are ever more available than in previous decades?

A) network economics B) law of mass digital storage and Moore's law C) declining communications costs, universal standards, and the Internet D) all of the above Answer: D Diff: 2 Page Ref: 171-174 AACSB: Use of information technology CASE: Content Objective: 5.5 29) 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.

Answer: C Diff: 2 Page Ref: 172 AACSB: Reflective thinking skills CASE: Content Objective: 5.2 30) 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.

Answer: C Diff: 2 Page Ref: 175 AACSB: Use of information technology CASE: Content Objective: 5.1

6 ..

31) ________ unleash powerful economies of scale and result in declines in manufactured computer products.

A) Internet and Web technologies B) Technology standards C) Linux and open-source software D) Client/server technologies Answer: B Diff: 2 Page Ref: 175 AACSB: Use of information technology CASE: Content Objective: 5.2 32) 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. Answer: A Diff: 3 Page Ref: 175 AACSB: Use of information technology CASE: Content Objective: 5.2 33) 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. Answer: C Diff: 2 Page Ref: 175 AACSB: Use of information technology CASE: Content Objective: 5.2 34) Which of the following is a leading networking hardware provider?

A) Dell B) Cisco C) Seagate D) IBM Answer: B Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.1 7 ..

35) Software that manages the resources of the computer is called A) operating system software.

B) application software.

C) data management software.

D) network software.

Answer: A Diff: 1 Page Ref: 177 AACSB: Use of information technology CASE: Content Objective: 5.1 36) A SAN is a ________ network.

A) server area B) storage area C) scalable architecture D) service-oriented architecture Answer: B Diff: 1 Page Ref: 178 AACSB: Use of information technology CASE: Content Objective: 5.1 37) As referred to in the text, legacy systems are A) traditional mainframe-based business information systems.

B) electronic spreadsheets used on a PC. C) any pre-1990 Wintel systems.

D) systems found on older ASPs. Answer: A Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.1 38) 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.

Answer: B Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.1

8 ..

39) Which of the following is not an example of the emerging mobile computing platforms?

A) tablets B) the Kindle C) cell phones D) CRM Answer: D Diff: 1 Page Ref: 180 AACSB: Use of information technology CASE: Content Objective: 5.3 40) All of the following are current hardware platform trends except A) green computing.

B) virtualization.

C) cloud computing.

D) Unix.

Answer: D Diff: 1 Page Ref: 180 AACSB: Use of information technology CASE: Content Objective: 5.3 41) Connecting geographically remote computers in a single network to create a "virtual supercomputer" is called A) co-location.

B) edge computing.

C) grid computing.

D) utility computing.

Answer: C Diff: 1 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3 42) The business case for using grid computing involves all of the following except A) cost savings.

B) increased accuracy.

C) speed of computation.

D) agility.

Answer: B Diff: 2 Page Ref: 181 AACSB: Analytic skills CASE: Analysis Objective: 5.3

9 ..

43) Which of the following does grid computing utilize to create enormous supercomputing power?

A) massive unused data centers B) underutilized mainframe computers C) networked computers with idle resources D) networks with low usage Answer: C Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3 44) 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.

Answer: A Diff: 2 Page Ref: 183 AACSB: Use of information technology CASE: Content Objective: 5.3 45) 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 Answer: A Diff: 2 Page Ref: 185 AACSB: Use of information technology CASE: Content Objective: 5.3 46) An example of autonomic computing is A) spyware protection software that runs and updates itself automatically.

B) software programmed to run on any hardware platform.

C) cell phones taking on the functions of handheld computers.

D) programming languages that allow non-programmers to create custom applications.

Answer: A Diff: 2 Page Ref: 188 AACSB: Analytic skills CASE: Analysis Objective: 5.3 10 ..

47) An industry-wide effort to develop systems that can configure, optimize, tune, and heal themselves when broken, and protect themselves from outside intruders and self-destruction is called A) grid computing.

B) utility computing.

C) virtualization.

D) autonomic computing.

Answer: D Diff: 2 Page Ref: 188 AACSB: Use of information technology CASE: Content Objective: 5.3 48) 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 Answer: D Diff: 1 Page Ref: 189 AACSB: Use of information technology CASE: Content Objective: 5.4 49) Which of the following is not one of the current software platform trends?

A) grid computing B) open-source software C) HTML5 D) software outsourcing Answer: A Diff: 2 Page Ref: 189 AACSB: Analytic skills CASE: Analysis Objective: 5.4 50) 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.

Answer: C Diff: 2 Page Ref: 189 AACSB: Use of information technology CASE: Content Objective: 5.4 11 ..

51) 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 80 percent of the server operating system market.

D) Linux applications are embedded in cell phones, smartphones, netbooks, and other handheld devices.

Answer: C Diff: 2 Page Ref: 189 AACSB: Use of information technology CASE: Content Objective: 5.4 52) Running a Java program on a computer requires A) a Java Virtual Machine to be installed on the 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.

Answer: A Diff: 2 Page Ref: 190 AACSB: Use of information technology CASE: Content Objective: 5.4 53) 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.

Answer: C Diff: 1 Page Ref: 190 AACSB: Use of information technology CASE: Content Objective: 5.4 54) The development of TCP/IP occurred during the ________ era.

A) cloud and mobile computing B) general-purpose mainframe and minicomputer C) enterprise computing D) personal computer Answer: C Diff: 2 Page Ref: 170 AACSB: Use of information technology CASE: Content Objective: 5.2 12 ..

55) 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. Answer: A Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 56) What is the foundation technology for Web services?

A) XML B) HTML C) SOAP D) UDDI Answer: A Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 57) 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. Answer: C Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 58) 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.

Answer: A Diff: 1 Page Ref: 193 AACSB: Use of information technology CASE: Content Objective: 5.4 13 ..

59) ________ are created by combining and customizing components from different online software applications.

A) Apps B) Mashups C) SaaS D) Web services Answer: B Diff: 1 Page Ref: 194-195 AACSB: Use of information technology CASE: Content Objective: 5.4 60) 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.

Answer: A Diff: 2 Page Ref: 177 AACSB: Use of information technology CASE: Content Objective: 5.3 61) 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.

Answer: A Diff: 1 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.4 62) 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. Answer: B Diff: 1 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.4 14 ..

63) 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) hosting and managing access to software applications delivered over the Internet to clients on a subscription basis.

D) none of the above.

Answer: C Diff: 2 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.4 64) 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 Answer: B Diff: 1 Page Ref: 196 AACSB: Use of information technology CASE: Content Objective: 5.5 65) Hardware and software acquisition costs account for about ________ percent of TCO. A) 20 B) 40 C) 60 D) 80 Answer: A Diff: 2 Page Ref: 197 AACSB: Use of information technology CASE: Content Objective: 5.5

15 ..

66) Which model can be used to analyze the direct and indirect costs to help firms determine the actual cost of specific technology implementations?

A) total cost of ownership B) return on investment C) breakeven point D) cost-benefit analysis Answer: A Diff: 1 Page Ref: 197 AACSB: Use of information technology CASE: Content Objective: 5.5 67) Which of the following is the most popular mobile operating system?

A) Linux B) Android C) Chrome OS D) iOS Answer: B Diff: 2 Page Ref: 177 AACSB: Analytic skills CASE: Evaluation Objective: 5.3 68) 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.

Answer: C Diff: 1 Page Ref: 198 AACSB: Use of information technology CASE: Content Objective: 5.5 69) 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 Answer: D Diff: 2 Page Ref: 198-199 AACSB: Use of information technology CASE: Content Objective: 5.5

16 ..

70) 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) rapid elasticity D) non-measured service Answer: D Diff: 2 Page Ref: 184 AACSB: Use of information technology CASE: Content Objective: 5.3 71) The ________ PC, becoming the standard PC in the Personal Computer Era, uses the Windows operating system software on a computer with an Intel microprocessor.

Answer: Wintel Diff: 2 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.2 72) A(n)________ server is used to communicate between a Web server and an organization's back-end systems.

Answer: application Diff: 1 Page Ref: 170 AACSB: Use of information technology CASE: Content Objective: 5.1 73) ________ uses individual atoms and molecules to create computer chips and other devices thinner than a human hair.

Answer: Nanotechnology Diff: 1 Page Ref: 172 AACSB: Use of information technology CASE: Content Objective: 5.2 74) ________ states that the value or power of a network grows exponentially as a function of the number of network members.

Answer: Metcalfe's Law Diff: 3 Page Ref: 174 AACSB: Use of information technology CASE: Content Objective: 5.2

17 ..

75) ________ are computers consisting of a circuit board with processors, memory, and network connections that are stored in racks.

Answer: Blade servers Diff: 2 Page Ref: 177 AACSB: Use of information technology CASE: Content Objective: 5.1 76) ________ surfaces allow users to gesture on a screen with several fingers to execute commands.

Answer: Multitouch Diff: 2 Page Ref: 178 AACSB: Use of information technology CASE: Content Objective: 5.2 77) ________ allows a single computing resource, such as a server, to appear to the user as multiple logical resources.

Answer: Virtualization Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3 78) A(n) ________ is an integrated circuit to which two or more processors have been attached for enhanced performance and reduced power consumption.

Answer: multicore processor Diff: 2 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.3 79) ________ provides a standard format for data exchange, enabling Web services to pass data from one process to another.

Answer: XML Diff: 2 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 80) ________ takes place when a firm contracts custom software development or maintenance of existing legacy programs to outside firms.

Answer: Outsourcing Diff: 1 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.4 18 ..

81) 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. Diff: 3 Page Ref: 175 AACSB: Analytic skills CASE: Synthesis Objective: 5.2 82) Distinguish between grid computing, cloud computing, and utility computing.

Answer: Grid computing involves connecting geographically remote computers into a single network to create a computational grid that combines the computing power of all the computers on the network with which to attack large computing problems. 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. On-demand computing occurs when firms pay subscription fees or pay only for their usage of a vendor's cloud computing services.

Diff: 2 Page Ref: 181-185 AACSB: Analytic skills CASE: Analysis Objective: 5.3

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83) 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.

Diff: 2 Page Ref: 166 AACSB: Analytic skills CASE: Analysis Objective: 5.1 84) 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 or grid computing. To lower costs, they could look at on-demand or utility computing as well as virtualization and implementing multicore processors.

Diff: 3 Page Ref: 180-189 AACSB: Analytic skills CASE: Synthesis Objective: 5.3

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85) 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.

Diff: 2 Page Ref: 189 AACSB: Analytic skills CASE: Evaluation Objective: 5.4

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86) 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.

Diff: 3 Page Ref: 189-195 AACSB: Analytic skills CASE: Analysis Objective: 5.4 87) 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.

Diff: 2 Page Ref: 185 AACSB: Analytic skills CASE: Evaluation Objective: 5.3 22 ..

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.

Diff: 2 Page Ref: 196 AACSB: Analytic skills CASE: Evaluation Objective: 5.5 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 collocation, Web hosting services, and ASPs to see if their needs will be better met this way.

Diff: 3 Page Ref: 197-199 AACSB: Analytic skills CASE: Synthesis Objective: 5.5

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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.

Diff: 3 Page Ref: 198-199 AACSB: Analytic skills CASE: Synthesis Objective: 5.5

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Management Information Systems, 13e (Laudon/Laudon) Chapter 6 Foundations of Business Intelligence: Databases and Information Management 1) A grouping of characters into a word, a group of words, or a complete number is called a record.

Answer: FALSE Diff: 1 Page Ref: 211 AACSB: Use of information technology CASE: Content Objective: 6.3 2) Each characteristic or quality describing a particular entity is called an attribute.

Answer: TRUE Diff: 1 Page Ref: 211 AACSB: Use of information technology CASE: Content Objective: 6.3 3) Program-data dependence refers to the coupling of data stored in files and software programs that use this data such that changes in programs require changes to the data.

Answer: TRUE Diff: 2 Page Ref: 214 AACSB: Use of information technology CASE: Content Objective: 6.1 4) A DBMS separates the logical and physical views of data.

Answer: TRUE Diff: 2 Page Ref: 215 AACSB: Use of information technology CASE: Content Objective: 6.2 5) Every record in a file should contain at least one key field.

Answer: TRUE Diff: 1 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3 6) NoSQL technologies are used to manage sets of data that don't require the flexibility of tables and relations.

Answer: TRUE Diff: 1 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.2 1 ..

7) Data governance deals with the policies and processes for managing the integrity and security of data in a firm.

Answer: TRUE Diff: 2 Page Ref: 236 AACSB: Use of information technology CASE: Content Objective: 6.5 8) Because HTML was designed as a cross-platform language, it is the preferred method of communicating with back-end databases.

Answer: FALSE Diff: 2 Page Ref: 232 AACSB: Use of information technology CASE: Content Objective: 6.4 9) A data dictionary is a language associated with a database management system that end users and programmers use to manipulate data in the database.

Answer: FALSE Diff: 1 Page Ref: 219 AACSB: Use of information technology CASE: Content Objective: 6.2 10) In a relational database, complex groupings of data must be streamlined to eliminate awkward many-to-many relationships.

Answer: TRUE Diff: 1 Page Ref: 222 AACSB: Use of information technology CASE: Content Objective: 6.3 11) A data warehouse may be updated by a legacy system.

Answer: TRUE Diff: 1 Page Ref: 225 AACSB: Use of information technology CASE: Content Objective: 6.4 12) A data warehouse is typically comprised of several smaller data marts.

Answer: FALSE Diff: 2 Page Ref: 225 AACSB: Use of information technology CASE: Content Objective: 6.4

2 ..

13) OLAP is used for multidimensional data analysis.

Answer: TRUE Diff: 2 Page Ref: 227 AACSB: Use of information technology CASE: Content Objective: 6.4 14) OLAP enables users to obtain online answers to ad-hoc questions in a fairly rapid amount of time, except when the data are stored in very large databases.

Answer: FALSE Diff: 2 Page Ref: 227-228 AACSB: Use of information technology CASE: Content Objective: 6.4 15) With in-memory computing, a computer's primary memory (RAM) is used for processing.

Answer: TRUE Diff: 3 Page Ref: 226 AACSB: Use of information technology CASE: Content Objective: 6.4 16) In a Web-based database, middleware is used to transfer information from the organization's internal database back to the Web server for delivery in the form of a Web page to the user.

Answer: TRUE Diff: 2 Page Ref: 233 AACSB: Use of information technology CASE: Content Objective: 6.4 17) The disadvantage of using a Web interface for a database is that it typically requires substantial changes to the internal database.

Answer: FALSE Diff: 1 Page Ref: 233 AACSB: Use of information technology CASE: Content Objective: 6.4 18) Common Gateway Interface is a specification for processing data on a Web server.

Answer: TRUE Diff: 2 Page Ref: 233 AACSB: Use of information technology CASE: Content Objective: 6.4

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19) Data administration is a special organizational function that manages the policies and procedures through which data can be managed as an organizational resource.

Answer: TRUE Diff: 2 Page Ref: 235 AACSB: Use of information technology CASE: Content Objective: 6.5 20) Data cleansing is the same process as data scrubbing.

Answer: TRUE Diff: 1 Page Ref: 237 AACSB: Use of information technology CASE: Content Objective: 6.5 21) Which of the following best illustrates the relationship between entities and attributes?

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 Answer: B Diff: 3 Page Ref: 211 AACSB: Analytic skills CASE: Analysis Objective: 6.3 22) Which of the following is not one of the main problems with a traditional file environment?

A) data inconsistency B) program-data independence C) lack of flexibility in creating ad-hoc reports D) poor security Answer: B Diff: 2 Page Ref: 212-213 AACSB: Use of information technology CASE: Analysis Objective: 6.1 23) A DBMS reduces data redundancy and inconsistency by A) enforcing referential integrity.

B) uncoupling program and data.

C) utilizing a data dictionary.

D) minimizing isolated files with repeated data.

Answer: D Diff: 3 Page Ref: 215 AACSB: Use of information technology CASE: Content Objective: 6.1 4 ..

24) A characteristic or quality describing an entity is called a(n) A) field.

B) tuple.

C) key field.

D) attribute.

Answer: D Diff: 1 Page Ref: 211 AACSB: Use of information technology CASE: Content Objective: 6.3 25) Which of the following non-digital data storage items is most similar to a database?

A) library card catalog B) cash register receipt C) doctor's office invoice D) list of sales totals on a spreadsheet Answer: A Diff: 2 Page Ref: 211-212 AACSB: Analytic skills CASE: Analysis Objective: 6.1 26) The confusion created by ________ makes it difficult for companies to create customer relationship management, supply chain management, or enterprise systems that integrate data from different sources.

A) batch processing B) data redundancy C) data independence D) online processing Answer: B Diff: 1 Page Ref: 213 AACSB: Use of information technology CASE: Content Objective: 6.1 27) Duplicate data in multiple data files is called data ________.

A) redundancy B) repetition C) independence D) partitions Answer: A Diff: 1 Page Ref: 213 AACSB: Use of information technology CASE: Content Objective: 6.1 5 ..

28) A DBMS makes the A) physical database available for different logical views.

B) logical database available for different analytical views.

C) physical database available for different analytical views.

D) logical database available for different physical views.

Answer: A Diff: 2 Page Ref: 215 AACSB: Use of information technology CASE: Content Objective: 6.2 29) The logical view A) shows how data are organized and structured on the storage media.

B) presents an entry screen to the user.

C) allows the creation of supplementary reports.

D) presents data as they would be perceived by end users.

Answer: D Diff: 2 Page Ref: 215 AACSB: Use of information technology CASE: Content Objective: 6.2 30) DBMS for midrange computers include all of the following except A) DB2.

B) Oracle.

C) Microsoft SQL Server.

D) Microsoft Access.

Answer: D Diff: 3 Page Ref: 216 AACSB: Use of information technology CASE: Content Objective: 6.2 31) The type of logical database model that treats data as if they were stored in two-dimensional tables is the A) non-relational DBMS. B) mobile DBMS. C) relational DBMS. D) hierarchical DBMS. Answer: C Diff: 1 Page Ref: 216 AACSB: Use of information technology CASE: Content Objective: 6.2

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32) Oracle Database Lite is a(n) A) DBMS for small handheld computing devices.

B) Internet DBMS. C) mainframe relational DBMS. D) DBMS for midrange computers.

Answer: A Diff: 3 Page Ref: 216 AACSB: Use of information technology CASE: Content Objective: 6.2 33) Microsoft SQL Server is a(n) A) DBMS for small handheld computing devices.

B) Internet DBMS. C) desktop relational DBMS. D) DBMS for midrange computers.

Answer: D Diff: 3 Page Ref: 216 AACSB: Use of information technology CASE: Content Objective: 6.2 34) In a table for customers, the information about a single customer would reside in a single A) field.

B) row.

C) column.

D) table.

Answer: B Diff: 1 Page Ref: 217 AACSB: Use of information technology CASE: Analysis Objective: 6.3 35) In a relational database, a record is referred to in technical terms as a(n) A) tuple.

B) row.

C) entity.

D) field.

Answer: A Diff: 2 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3

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36) 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. Answer: A Diff: 2 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3 37) 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. Answer: B Diff: 2 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3 38) 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) select, from, and join.

Answer: C Diff: 2 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3 39) 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.

Answer: D Diff: 1 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3

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40) 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.

Answer: A Diff: 1 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3 41) 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.

Answer: B Diff: 1 Page Ref: 217 AACSB: Use of information technology CASE: Content Objective: 6.3 42) 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).

Answer: A Diff: 2 Page Ref: 224 AACSB: Use of information technology CASE: Analysis Objective: 6.4 43) 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 Answer: D Diff: 2 Page Ref: 225 AACSB: Use of information technology CASE: Analysis Objective: 6.4 9 ..

44) 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.

Answer: B Diff: 2 Page Ref: 219 AACSB: Use of information technology CASE: Content Objective: 6.2 45) 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.

Answer: A Diff: 2 Page Ref: 219 AACSB: Use of information technology CASE: Content Objective: 6.2 46) 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.

Answer: B Diff: 1 Page Ref: 220 AACSB: Use of information technology CASE: Content Objective: 6.2 47) The most prominent data manipulation language today is A) Access.

B) DB2.

C) SQL. D) Crystal Reports.

Answer: C Diff: 2 Page Ref: 220 AACSB: Use of information technology CASE: Content Objective: 6.2

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48) 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.

Answer: B Diff: 2 Page Ref: 221 AACSB: Use of information technology CASE: Content Objective: 6.1 49) 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.

Answer: A Diff: 1 Page Ref: 222 AACSB: Use of information technology CASE: Content Objective: 6.3 50) 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.

Answer: C Diff: 2 Page Ref: 223 AACSB: Use of information technology CASE: Content Objective: 6.3 51) A one-to-one relationship between two entities is symbolized in a diagram by a line that ends with A) two short marks.

B) one short mark.

C) a crow's foot.

D) a crow's foot topped by a short mark.

Answer: A Diff: 3 Page Ref: 223 AACSB: Use of information technology CASE: Content Objective: 6.3

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52) Which of the following is not one of the techniques used in Web mining?

A) content mining B) structure mining C) server mining D) user mining Answer: D Diff: 2 Page Ref: 230 AACSB: Reflective thinking skills CASE: Content Objective: 6.4 53) 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.

Answer: C Diff: 2 Page Ref: 229 AACSB: Analytic skills CASE: Synthesis Objective: 6.4 54) 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.

Answer: D Diff: 3 Page Ref: 229 AACSB: Analytic skills CASE: Synthesis Objective: 6.4

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55) 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.

Answer: D Diff: 2 Page Ref: 225 AACSB: Use of information technology CASE: Content Objective: 6.4 56) 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.

Answer: A Diff: 2 Page Ref: 225-227 AACSB: Use of information technology CASE: Content Objective: 6.4 57) A nationwide magazine publisher has hired you to help analyze their social media datasets to determine which of their news publications are seen as the most trustworthy. 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 Answer: B Diff: 2 Page Ref: 230 AACSB: Use of information technology CASE: Evaluation Objective: 6.4 58) 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.

Answer: C Diff: 3 Page Ref: 227-228 AACSB: Use of information technology CASE: Content Objective: 6.4 13 ..

59) 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.

Answer: A Diff: 1 Page Ref: 228 AACSB: Use of information technology CASE: Content Objective: 6.4 60) 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.

Answer: B Diff: 2 Page Ref: 228 AACSB: Use of information technology CASE: Content Objective: 6.4 61) 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.

Answer: C Diff: 3 Page Ref: 229 AACSB: Use of information technology CASE: Content Objective: 6.4 62) ________ 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 Answer: B Diff: 2 Page Ref: 229-230 AACSB: Use of information technology CASE: Content Objective: 6.4

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63) An alternative to using application server software for interfacing between a Web server and back-end databases is A) CGI. B) HTML. C) Java.

D) SQL. Answer: A Diff: 1 Page Ref: 233 AACSB: Use of information technology CASE: Content Objective: 6.4 64) 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.

Answer: A Diff: 2 Page Ref: 235 AACSB: Use of information technology CASE: Content Objective: 6.5 65) 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.

Answer: B Diff: 1 Page Ref: 236 AACSB: Use of information technology CASE: Content Objective: 6.5 66) 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 Answer: D Diff: 3 Page Ref: 236 AACSB: Use of information technology CASE: Analysis Objective: 6.5 15 ..

67) 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.

Answer: C Diff: 1 Page Ref: 237 AACSB: Use of information technology CASE: Content Objective: 6.5 68) 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 Answer: C Diff: 2 Page Ref: 217 AACSB: Analytic skills CASE: Analysis Objective: 6.3 69) Data cleansing not only corrects errors but also A) establishes logical relationships between data.

B) structures data.

C) normalizes data.

D) enforces consistency among different sets of data.

Answer: D Diff: 2 Page Ref: 237 AACSB: Use of information technology CASE: Content Objective: 6.5 70) 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 Answer: C Diff: 3 Page Ref: 237 AACSB: Analytic skills CASE: Analysis Objective: 6.5 16 ..

71) Databases record information about general categories of information referred to as ________.

Answer: entities Diff: 1 Page Ref: 211 AACSB: Use of information technology CASE: Content Objective: 6.1 72) To analyze unstructured data, such as memos and legal cases, you would use ________ tools.

Answer: text mining Diff: 2 Page Ref: 230 AACSB: Use of information technology CASE: Content Objective: 6.1 73) A(n) ________ view shows data as it is actually organized and structured on the data storage media.

Answer: physical Diff: 1 Page Ref: 215 AACSB: Use of information technology CASE: Content Objective: 6.1 74) DBMS have a(n) ________ capability to specify the structure of the content of the database.

Answer: data definition Diff: 2 Page Ref: 219 AACSB: Use of information technology CASE: Content Objective: 6.2 75) Relational DBMSs use ________ rules to ensure that relationships between coupled tables remain consistent.

Answer: referential integrity Diff: 3 Page Ref: 223 AACSB: Use of information technology CASE: Content Objective: 6.2 76) In a client/server environment, a DBMS is located on a dedicated computer called a(n) ________.

Answer: database server Diff: 2 Page Ref: 232-233 AACSB: Use of information technology CASE: Content Objective: 6.3 17 ..

77) In ________, a data mining tool discovers different groupings within data, such as finding affinity groups for bank cards.

Answer: clustering Diff: 2 Page Ref: 229 AACSB: Use of information technology CASE: Content Objective: 6.4 78) High-speed ________ use both relational and non-relational tools to analyze large datasets.

Answer: analytic platforms Diff: 2 Page Ref: 226 AACSB: Reflective thinking skills CASE: Content Objective: 6.4 79) A(n) ________ is software that handles all application operations between browser-based computers and a company's back-end business applications or databases.

Answer: application server Diff: 1 Page Ref: 233 AACSB: Use of information technology CASE: Content Objective: 6.4 80) In data mining, the technique of ________ uses a series of existing values to predict what other values will be.

Answer: forecasting Diff: 2 Page Ref: 229 AACSB: Use of information technology CASE: Content Objective: 6.4 81) 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.

Diff: 2 Page Ref: 211-223 AACSB: Analytic skills CASE: Synthesis Objective: 6.5 18 ..

82) 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).

Diff: 2 Page Ref: 211-217 AACSB: Analytic skills CASE: Synthesis Objective: 6.1 83) 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.

Diff: 2 Page Ref: 213 AACSB: Analytic skills CASE: Analysis Objective: 6.1 84) 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.

Diff: 2 Page Ref: 219-220 AACSB: Analytic skills CASE: Analysis Objective: 6.2

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85) 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.

Diff: 3 Page Ref: 226-227 AACSB: Use of information technology CASE: Synthesis Objective: 6.4 86) 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.

Diff: 2 Page Ref: 217 AACSB: Use of information technology CASE: Analysis Objective: 6.2 87) 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.

Diff: 3 Page Ref: 224-235 AACSB: Use of information technology CASE: Evaluation Objective: 6.4

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88) 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.

Diff: 3 Page Ref: 224-235 AACSB: Use of information technology CASE: Evaluation Objective: 6.4 89) 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.

Diff: 3 Page Ref: 229 AACSB: Use of information technology CASE: Evaluation Objective: 6.4 90) 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?

Diff: 2 Page Ref: 227-229 AACSB: Use of information technology CASE: Evaluation Objective: 6.4 21 ..

Management Information Systems, 13e (Laudon/Laudon) Chapter 7 Telecommunications, the Internet, and Wireless Technology 1) Telephone networks are fundamentally different from computer networks.

Answer: TRUE Diff: 2 Page Ref: 249 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 2) Wikis allow visitors to change or add to the original posted material.

Answer: TRUE Diff: 1 Page Ref: 275 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 3) An NOS must reside on a dedicated server computer in order to manage a network.

Answer: FALSE Diff: 2 Page Ref: 251 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 4) 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 Diff: 2 Page Ref: 251 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 5) 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 Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 6) A computer network consists of at least three computers.

Answer: FALSE Diff: 2 Page Ref: 250 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 1 ..

7) Central large mainframe computing has largely replaced client/server computing.

Answer: FALSE Diff: 2 Page Ref: 253 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 8) Circuit switching makes much more efficient use of the communications capacity of a network than does packet switching.

Answer: FALSE Diff: 1 Page Ref: 253 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 9) Two computers using TCP/IP can communicate even if they are based on different hardware and software platforms.

Answer: TRUE Diff: 1 Page Ref: 255 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 10) Over 80% of U.S. Internet users access the Internet via mobile devices.

Answer: FALSE Diff: 3 Page Ref: 250 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 11) Coaxial cable is similar to that used for cable television and consists of thickly insulated copper wire.

Answer: TRUE Diff: 2 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 12) Fiber-optic cable is more expensive and harder to install than wire media.

Answer: TRUE Diff: 2 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.1

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13) The number of cycles per second that can be sent through any telecommunications medium is measured in kilobytes.

Answer: FALSE Diff: 2 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 14) The Domain Name System (DNS) converts IP addresses to domain names.

Answer: TRUE Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 15) VoIP technology delivers video information in digital form using packet switching.

Answer: TRUE Diff: 1 Page Ref: 265 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 16) 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 Diff: 2 Page Ref: 276 AACSB: Reflective thinking skills CASE: Comprehension Objective: 7.3 17) 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 Diff: 1 Page Ref: 251 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 18) TCP/IP was developed in the 1960s to enable university scientists to locate other computers on the Internet.

Answer: FALSE Diff: 2 Page Ref: 254 AACSB: Reflective thinking skills CASE: Comprehension Objective: 7.2

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19) Mobile search makes up 20% of all Internet searches.

Answer: TRUE Diff: 1 Page Ref: 272 AACSB: Reflective thinking skills CASE: Comprehension Objective: 7.4 20) RFID technology is being gradually replaced by less costly technologies such as WSNs. Answer: FALSE Diff: 2 Page Ref: 280-282 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 21) 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. Answer: B Diff: 1 Page Ref: 251 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 22) 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 Answer: C Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Comprehension Objective: 7.1

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23) 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 switching.

C) packet routing.

D) ATM. Answer: B Diff: 1 Page Ref: 253 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 24) The telephone system is an example of a ________ network.

A) peer-to-peer B) wireless C) packet-switched D) circuit-switched Answer: D Diff: 1 Page Ref: 253 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 25) 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.

Answer: C Diff: 2 Page Ref: 253 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 26) 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.

Answer: A Diff: 3 Page Ref: 254 AACSB: Use of information technology CASE: Comprehension Objective: 7.1

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27) 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.

Answer: B Diff: 2 Page Ref: 254 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 28) 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 Answer: C Diff: 3 Page Ref: 255 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 29) Which signal types are represented by a continuous waveform?

A) laser B) optical C) digital D) analog Answer: D Diff: 2 Page Ref: 255 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 30) 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.

Answer: A Diff: 1 Page Ref: 255 AACSB: Use of information technology CASE: Comprehension Objective: 7.1

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31) 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 Answer: B Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 32) Which type of network treats all processors equally, and allows peripheral devices to be shared without going to a separate server?

A) peer-to-peer B) wireless C) LAN D) Windows domain network Answer: A Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 33) 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 Answer: C Diff: 2 Page Ref: 256 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 7.2 34) WSNs are designed for A) connecting multiple wireless computing devices.

B) monitoring the physical environment.

C) increasing the reach of Wi-Fi networks.

D) tracking the movement of goods in a supply chain.

Answer: B Diff: 2 Page Ref: 283 AACSB: Use of information technology CASE: Comprehension Objective: 7.5 7 ..

35) All of the following are physical components of an RFID system except A) bar code.

B) antenna.

C) radio transmitters.

D) tags.

Answer: A Diff: 2 Page Ref: 280-281 AACSB: Use of information technology CASE: Comprehension Objective: 7.5 36) Which digital cellular standard is used widely throughout the world except the United States?

A) GSM B) CDMA C) WLAN D) LTD Answer: A Diff: 3 Page Ref: 277 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 37) A network that spans a city, and sometimes its major suburbs as well, is called a A) CAN. B) MAN. C) LAN. D) WAN. Answer: B Diff: 1 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 38) 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.

Answer: D Diff: 1 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.2

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39) 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 Web of things.

B) the Semantic Web. C) Internet2.

D) a 3-D Web. Answer: A Diff: 2 Page Ref: 276 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 40) 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.

Answer: C Diff: 2 Page Ref: 258 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 41) 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.

Answer: A Diff: 2 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 42) Digital subscriber lines A) operate over existing telephone lines to carry voice, data, and video.

B) operate over coaxial 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.

Answer: A Diff: 2 Page Ref: 258 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 9 ..

43) T1 lines A) operate over existing telephone lines to carry voice, data, and video.

B) operate over coaxial lines to deliver Internet access.

C) are high-speed, leased data lines providing guaranteed service levels.

D) have up to twenty-four 64-Kbps channels.

Answer: C Diff: 2 Page Ref: 258 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 44) Which protocol is the Internet based on?

A) TCP/IP B) FTP C) packet-switching D) HTTP Answer: A Diff: 1 Page Ref: 258 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 45) What service converts IP addresses into more recognizable alphanumeric names?

A) HTML B) DNS C) IP D) HTTP Answer: B Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 46) The child domain of the root is the A) top-level domain.

B) second-level domain.

C) host name.

D) domain extension.

Answer: A Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Comprehension Objective: 7.3

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47) 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 Answer: B Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Analysis in terms of compare Objective: 7.3 48) Which organization helps define the overall structure of the Internet?

A) none (no one "owns" the Internet) B) W3C C) ICANN D) IAB Answer: D Diff: 3 Page Ref: 261 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 49) 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.

Answer: B Diff: 2 Page Ref: 261 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 50) Which of the following services enables logging on to one computer system and working on another?

A) FTP B) World Wide Web C) newsgroups D) telnet Answer: D Diff: 3 Page Ref: 264 AACSB: Use of information technology CASE: Comprehension Objective: 7.3

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51) Instant messaging is a type of ________ service.

A) chat B) cellular C) e-mail D) wireless Answer: A Diff: 1 Page Ref: 264 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 52) 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.

Answer: D Diff: 2 Page Ref: 280-281 AACSB: Reflective thinking skills CASE: Comprehension Objective: 7.5 53) ________ integrate(s) 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) Unified communications Answer: D Diff: 1 Page Ref: 268 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 54) 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.

Answer: A Diff: 2 Page Ref: 268 AACSB: Use of information technology CASE: Comprehension Objective: 7.3

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55) Web browser software requests Web pages from the Internet using which protocol?

A) URL B) HTTP C) DNS D) HTML Answer: B Diff: 2 Page Ref: 269 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 56) 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.

Answer: A Diff: 2 Page Ref: 269 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 57) The most common Web server today, controlling 59 percent of the market, is A) Microsoft IIS. B) WebSTAR. C) Apache HTTP Server.

D) Netscape Server.

Answer: C Diff: 2 Page Ref: 270 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 58) 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 Answer: B Diff: 2 Page Ref: 274-275 AACSB: Use of information technology CASE: Comprehension Objective: 7.3

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59) 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. Answer: D Diff: 1 Page Ref: 272 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 60) 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.

Answer: D Diff: 1 Page Ref: 270-272 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 61) Which of the following is the first generation of cellular systems suitable for watching videos?

A) 2G B) 2.5G C) 3G D) 4G Answer: D Diff: 2 Page Ref: 277 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 62) 4G networks are also known as ________ networks.

A) GSM B) CDMA C) LTD D) T-Mobile Answer: C Diff: 2 Page Ref: 277 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 14 ..

63) The most appropriate wireless networking standard for creating PANs is A) I-mode.

B) IEEE 802.11b.

C) Wi-Fi. D) Bluetooth.

Answer: D Diff: 2 Page Ref: 278 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 64) Bluetooth can be used to link up to ________ devices within a 10-meter area using lowpower, radio-based communication.

A) four B) six C) eight D) ten Answer: C Diff: 3 Page Ref: 278 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 65) Which process is used to protect transmitted data in a VPN? A) tunneling B) PPP C) VOIP D) packet-switching Answer: A Diff: 3 Page Ref: 268 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 66) 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) hotspots.

C) hot points.

D) wireless hubs.

Answer: B Diff: 2 Page Ref: 280 AACSB: Use of information technology CASE: Comprehension Objective: 7.4

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67) The 802.11 set of standards is known as A) WLAN. B) WSN. C) Wi-Fi. D) WiMax. Answer: C Diff: 2 Page Ref: 279 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 68) The WiMax standard can transmit up to a distance of approximately A) 30 meters.

B) 500 meters.

C) 30 miles.

D) 5 miles.

Answer: C Diff: 3 Page Ref: 280 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 69) Passive RFID tags A) have their own power source.

B) have a range of several feet.

C) enable data to be rewritten and modified.

D) are used in automated toll-collection systems.

Answer: B Diff: 2 Page Ref: 281 AACSB: Use of information technology CASE: Comprehension Objective: 7.5 70) 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 Answer: B Diff: 2 Page Ref: 280-282 AACSB: Analytic skills CASE: Comprehension Objective: 7.5

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71) ________ monetizes the value of the data stored by search engines.

Answer: Search engine marketing Diff: 2 Page Ref: 272 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 72) A(n) ________ is a device that forwards packets of data through different networks, ensuring that the data gets to the right address.

Answer: router Diff: 2 Page Ref: 251 AACSB: Use of information technology CASE: Comprehension Objective: 7.1 73) ________ combine the functionality of a cell phone with the computing of a laptop.

Answer: Smartphones Diff: 2 Page Ref: 277 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 74) A(n) ________ signal is a discrete, binary waveform that transmits data coded into two discrete states such as 1-bits and 0-bits.

Answer: digital Diff: 2 Page Ref: 255 AACSB: Use of information technology CASE: Comprehension Objective: 7.2 75) Shopping bots use ________ software for searching the Internet.

Answer: intelligent agent Diff: 2 Page Ref: 274 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 76) Web sites that enable users to share information, collaborate, and create new services and content are called ________ sites.

Answer: Web 2.0, second generation Diff: 2 Page Ref: 274 AACSB: Use of information technology CASE: Comprehension Objective: 7.3

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77) A(n) ________ is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers.

Answer: Internet service provider, ISP Diff: 2 Page Ref: 258 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 78) The backbone networks of the Internet are typically owned by long-distance telephone companies called ________.

Answer: network service providers Diff: 2 Page Ref: 260 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 79) A(n) ________ is software for locating and managing stored Web pages.

Answer: Web server Diff: 2 Page Ref: 257 AACSB: Use of information technology CASE: Comprehension Objective: 7.3 80) A(n) ________ is a box consisting of a radio receiver/transmitter and antennas that links to a wired network, router, or hub.

Answer: access point Diff: 2 Page Ref: 279 AACSB: Use of information technology CASE: Comprehension Objective: 7.4 81) 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 communications 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.

Diff: 2 Page Ref: 253 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 7.1 18 ..

82) 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.

Diff: 3 Page Ref: 254-255 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 7.1 83) 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.

Diff: 2 Page Ref: 262-263 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 7.3

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84) 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.

Diff: 3 Page Ref: 256-280 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 7.2 85) 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.

Diff: 2 Page Ref: 265-268 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 7.3 86) 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.

Diff: 1 Page Ref: 280-282 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 7.5

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87) 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.

Diff: 1 Page Ref: 283 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 7.5 88) 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.

Diff: 2 Page Ref: 275-276 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 7.3 89) 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.

Diff: 2 Page Ref: 275 AACSB: Analytic skills CASE: Synthesis in terms of build, model Objective: 7.3

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90) 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.

Diff: 2 Page Ref: 271 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 7.3

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Management Information Systems, 13e (Laudon/Laudon) Chapter 8 Securing Information Systems 1) A drive-by download is a technique used by hackers to enable accessing files on a wireless network.

Answer: FALSE Diff: 1 Page Ref: 298 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 2) Computers using cable modems to connect to the Internet are more open to penetration than those connecting via dial-up.

Answer: TRUE Diff: 2 Page Ref: 296 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 3) Wireless networks are vulnerable to penetration because radio frequency bands are easy to scan.

Answer: TRUE Diff: 2 Page Ref: 297 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 4) Mobile devices are not targeted as extensively by malware as traditional computers.

Answer: TRUE Diff: 3 Page Ref: 298 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 5) A Trojan horse is a software program that appears to be benign but then does something other than expected.

Answer: TRUE Diff: 1 Page Ref: 299 AACSB: Use of information technology CASE: Comprehension Objective: 8.1

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6) Viruses can be spread through e-mail.

Answer: TRUE Diff: 1 Page Ref: 298 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 7) Computer worms spread much more rapidly than computer viruses.

Answer: TRUE Diff: 2 Page Ref: 298 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 8) 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 Diff: 2 Page Ref: 301 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 9) Sniffers enable hackers to steal proprietary information from anywhere on a network, including e-mail messages, company files, and confidential reports.

Answer: TRUE Diff: 2 Page Ref: 301 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 10) DoS attacks are used to destroy information and access restricted areas of a company's information system.

Answer: FALSE Diff: 2 Page Ref: 301 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 11) In a walkthrough, hackers are able to bypass security controls of a system with little opposition.

Answer: FALSE Diff: 2 Page Ref: 325 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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12) 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 Diff: 2 Page Ref: 305-307 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 13) An acceptable use policy defines the acceptable level of access to information assets for different users.

Answer: FALSE Diff: 2 Page Ref: 312 AACSB: Use of information technology CASE: Comprehension Objective: 8.3 14) Biometric authentication is the use of physical characteristics such as retinal images to provide identification.

Answer: TRUE Diff: 1 Page Ref: 316 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.4 15) Packet filtering catches most types of network attacks.

Answer: FALSE Diff: 2 Page Ref: 318 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 16) NAT conceals the IP addresses of the organization's internal host computers to deter sniffer programs.

Answer: TRUE Diff: 2 Page Ref: 318 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 17) SSL is a protocol used to establish a secure connection between two computers.

Answer: TRUE Diff: 2 Page Ref: 319 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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18) Public key encryption uses two keys.

Answer: TRUE Diff: 2 Page Ref: 320 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.4 19) High-availability computing is also referred to as fault tolerance.

Answer: FALSE Diff: 2 Page Ref: 321 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 20) Unauthorized access is a security challenge that is most likely to occur in a network at the point of client computers.

Answer: TRUE Diff: 2 Page Ref: 295 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 21) ________ refers to policies, procedures, and technical measures used to prevent unauthorized access, alternation, theft, or physical damage to information systems.

A) "Security" B) "Controls" C) "Benchmarking" D) "Algorithms" Answer: A Diff: 2 Page Ref: 295 AACSB: Use of information technology CASE: Comprehension Objective: 8.3 22) ________ 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) "Controls" Answer: D Diff: 2 Page Ref: 295 AACSB: Use of information technology CASE: Comprehension Objective: 8.3 4 ..

23) Which of the following is not one of the challenges in securing wireless networks?

A) broadcasted SSIDs B) scannability of radio frequency bands C) SQL injection attacks D) geographic range of wireless signals Answer: C Diff: 1 Page Ref: 297 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 8.1 24) Electronic data are more susceptible to destruction, fraud, error, and misuse because information systems concentrate data in computer files that A) are usually bound up in legacy systems that are difficult to access and difficult to correct in case of error.

B) are not secure because the technology to secure them did not exist at the time the files were created.

C) have the potential to be accessed by large numbers of people and by groups outside of the organization.

D) are frequently available on the Internet.

Answer: C Diff: 2 Page Ref: 295 AACSB: Analytic skills CASE: Analysis in terms of compare Objective: 8.1 25) All of the following are methods of ensuring software quality except for A) systems analysis.

B) walkthroughs.

C) software testing.

D) internal corporate back-end system.

Answer: A Diff: 3 Page Ref: 324-325 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 8.4

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26) Sniffing is a security challenge that is most likely to occur in which of the following points of a corporate network?

A) client computer B) communications lines C) corporate servers D) internal corporate back-end system Answer: B Diff: 2 Page Ref: 295 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 8.1 27) Inputting data into a poorly programmed Web form in order to disrupt a company's systems and networks is called A) a Trojan horse.

B) an SQL injection attack.

C) key logging.

D) a DDoS attack.

Answer: B Diff: 2 Page Ref: 300 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 8.1 28) 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.

Answer: A Diff: 2 Page Ref: 296 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 29) 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 provides access.

C) VoIP is more secure than the switched voice network.

D) Instant messaging can provide hackers access to an otherwise secure network.

Answer: C Diff: 2 Page Ref: 296 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 8.1

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30) An independent computer program that copies itself from one computer to another over a network is called a A) worm.

B) Trojan horse.

C) bug.

D) pest.

Answer: A Diff: 2 Page Ref: 298 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 31) 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) click fraud.

Answer: D Diff: 2 Page Ref: 304 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 8.2 32) In 2004, ICQ users were enticed by a sales message from a supposed anti-virus vendor. On the vendor's site, a small program called Mitglieder was downloaded to the user's machine. The program enabled outsiders to infiltrate the user's machine. What type of malware is this an example of?

A) Trojan horse B) virus C) worm D) spyware Answer: A Diff: 2 Page Ref: 299 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 8.1

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33) Redirecting a Web link to a different address is a form of A) snooping.

B) spoofing.

C) sniffing.

D) war driving.

Answer: B Diff: 2 Page Ref: 301 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 34) A keylogger is a type of A) worm.

B) Trojan horse.

C) virus.

D) spyware.

Answer: D Diff: 1 Page Ref: 300 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 35) 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.

Answer: C Diff: 2 Page Ref: 301 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 36) 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 Answer: A Diff: 2 Page Ref: 301 AACSB: Use of information technology CASE: Comprehension Objective: 8.1

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37) 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) accessing a computer system without authority C) illegally accessing stored electronic communication D) threatening to cause damage to a protected computer Answer: C Diff: 2 Page Ref: 302 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 8.1 38) 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 Answer: D Diff: 2 Page Ref: 302 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 8.1 39) Approximately how many new threats from malware were detected by Internet security firms in 2012?

A) 400 thousand B) 4 million C) 40 million D) 400 million Answer: A Diff: 2 Page Ref: 299 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 40) An example of phishing is A) setting up bogus Wi-Fi hot spots.

B) setting up a fake medical Web site that asks users for confidential information.

C) pretending to be a utility company's employee in order to garner information from that company about their security system.

D) sending bulk e-mail that asks for financial aid under a false pretext.

Answer: B Diff: 2 Page Ref: 303 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 8.1

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41) 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) bogus wireless network access points that look legitimate to users.

Answer: D Diff: 1 Page Ref: 303 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 42) 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.

Answer: A Diff: 2 Page Ref: 303 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 43) You have been hired as a security consultant for a law firm. Which of the following constitutes the greatest source of security threats to the firm?

A) wireless network B) employees C) authentication procedures D) lack of data encryption Answer: B Diff: 2 Page Ref: 305 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 8.1 44) 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.

Answer: B Diff: 1 Page Ref: 305 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 10 ..

45) How do software vendors correct flaws in their software after it has been distributed?

A) issue bug fixes B) issue patches C) re-release software D) issue updated versions Answer: B Diff: 2 Page Ref: 307 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 46) The HIPAA 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.

Answer: D Diff: 2 Page Ref: 308 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 47) 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.

Answer: A Diff: 3 Page Ref: 309 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 48) 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.

Answer: C Diff: 2 Page Ref: 309 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 11 ..

49) The most common type of electronic evidence is A) voice-mail.

B) spreadsheets.

C) instant messages.

D) e-mail.

Answer: D Diff: 2 Page Ref: 309 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 50) Electronic evidence on computer storage media that is not visible to the average user is called ________ data.

A) defragmented B) ambient C) forensic D) fragmented Answer: B Diff: 2 Page Ref: 310 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 51) 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.

Answer: A Diff: 2 Page Ref: 310 AACSB: Use of information technology CASE: Comprehension Objective: 8.3 52) ________ 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 Answer: C Diff: 3 Page Ref: 311 AACSB: Use of information technology CASE: Comprehension Objective: 8.3 12 ..

53) 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.

Answer: C Diff: 2 Page Ref: 311 AACSB: Use of information technology CASE: Comprehension Objective: 8.3 54) A(n) ________ system is used to identify and authorize different categories of system users and specify which portions of the organization's systems each user can access.

A) identity management B) AUP C) authentication D) firewall Answer: A Diff: 1 Page Ref: 312 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 55) Which of the following is not one of the main firewall screening techniques?

A) application proxy filtering B) static packet filtering C) NAT D) secure socket filtering Answer: D Diff: 2 Page Ref: 318 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 56) 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 Diff: 2 Page Ref: 316 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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57) 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 Diff: 2 Page Ref: 316 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 58) Which of the following is not a trait used for identification in biometric systems?

A) retinal image B) voice C) hair color D) face Answer: C Diff: 1 Page Ref: 316 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.4 59) A firewall allows the organization to A) prevent unauthorized communication both into and out of the network.

B) monitor network hot spots for signs of intruders.

C) prevent known spyware and malware from entering the system.

D) all of the above.

Answer: A Diff: 2 Page Ref: 317 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 60) In which technique are network communications analyzed to see whether packets are part of an ongoing dialogue between a sender and a receiver?

A) stateful inspection B) intrusion detection system C) application proxy filtering D) packet filtering Answer: A Diff: 3 Page Ref: 318 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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61) Which of the following is the greatest threat that employees pose to an organization's information systems?

A) forgetting passwords B) lack of knowledge C) entering faulty data D) introducing software errors Answer: B Diff: 2 Page Ref: 305 AACSB: Use of information technology CASE: Comprehension Objective: 8.1 62) 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) SSL, TLS, and S-HTTP. Answer: D Diff: 1 Page Ref: 319 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 63) 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.

Answer: D Diff: 2 Page Ref: 318 AACSB: Analytic skills CASE: Synthesis in terms of applying Objective: 8.4 64) 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 B) symmetric key encryption C) public key encryption D) private key encryption Answer: B Diff: 2 Page Ref: 319 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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65) 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.

Answer: A Diff: 2 Page Ref: 320 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 66) Downtime refers to periods of time in which a A) computer system is malfunctioning.

B) computer system is not operational.

C) company or organization is not operational.

D) computer is not online.

Answer: B Diff: 2 Page Ref: 321 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 67) For 100% availability, online transaction processing requires A) high-capacity storage.

B) a multi-tier server network.

C) fault-tolerant computer systems.

D) dedicated phone lines.

Answer: C Diff: 1 Page Ref: 321 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 68) 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 Answer: B Diff: 3 Page Ref: 322 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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69) The development and use of methods to make computer systems resume their activities more quickly after mishaps is called A) high availability computing.

B) recovery oriented computing.

C) fault tolerant computing.

D) disaster recovery planning.

Answer: B Diff: 2 Page Ref: 322 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 70) Smaller firms may outsource some or many security functions to A) ISPs. B) MISs. C) MSSPs. D) CAs. Answer: C Diff: 2 Page Ref: 322 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 71) A practice in which eavesdroppers drive by buildings or park outside and try to intercept wireless network traffic is referred to as ________.

Answer: war driving Diff: 2 Page Ref: 297 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 72) Malicious software programs referred to as ________ include a variety of threats such as computer viruses, worms, and Trojan horses.

Answer: malware Diff: 1 Page Ref: 298 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.1 73) ________ is a crime in which an imposter obtains key pieces of personal information to impersonate someone else.

Answer: Identity theft Diff: 1 Page Ref: 302 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 17 ..

74) ________ is the scientific collection, examination, authentication, preservation, and analysis of data held on or retrieved from computer storage media in such a way that the information can be used as evidence in a court of law.

Answer: Computer forensics Diff: 2 Page Ref: 310 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 75) The intentional disruption of a Web site or information system is called ________.

Answer: cybervandalism Diff: 3 Page Ref: 310 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 76) A(n) ________ examines the firm's overall security environment as well as the controls governing individual information systems.

Answer: MIS audit Diff: 2 Page Ref: 314 AACSB: Use of information technology CASE: Comprehension Objective: 8.2 77) ________ refers to the ability to know that a person is who he or she claims to be.

Answer: Authentication Diff: 2 Page Ref: 316 AACSB: Reflective thinking skills CASE: Comprehension Objective: 8.2 78) Comprehensive security management products, with tools for firewalls, VPNs, intrusion detection systems, and more, are called ________ systems.

Answer: unified threat management Diff: 3 Page Ref: 319 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 79) PKI is the use of public key cryptography working with a(n) ________.

Answer: certificate authority Diff: 2 Page Ref: 320 AACSB: Use of information technology CASE: Comprehension Objective: 8.4

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80) When errors are discovered in software programs, the sources of the errors are found and eliminated through a process called ________.

Answer: debugging Diff: 1 Page Ref: 325 AACSB: Use of information technology CASE: Comprehension Objective: 8.4 81) Discuss the issue of security challenges on the Internet as that issue applies to a global enterprise. List at least five Internet security challenges.

Answer: Large public networks, including the Internet, are more vulnerable because they are virtually open to anyone and because they are so huge that when abuses do occur, they can have an enormously widespread impact. When the Internet becomes part of the corporate network, the organization's information systems can be vulnerable to actions from outsiders. Computers that are constantly connected to the Internet via cable modem or DSL line are more open to penetration by outsiders because they use a fixed Internet address where they can be more easily identified. The fixed Internet address creates the target for hackers. To benefit from electronic commerce, supply chain management, and other digital business processes, companies need to be open to outsiders such as customers, suppliers, and trading partners. Corporate systems must be extended outside the organization so that employees working with wireless and other mobile computing devices can access them. This requires a new security culture and infrastructure, allowing corporations to extend their security policies to include procedures for suppliers and other business partners.

Diff: 2 Page Ref: 296-297 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 8.2

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82) 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.

Diff: 3 Page Ref: 295-326 AACSB: Analytic skills CASE: Synthesis in terms of applying Objective: 8.2 83) 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.

Diff: 2 Page Ref: 295-326 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 8.2

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84) 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 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.

Diff: 3 Page Ref: 297-298 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 8.1

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85) 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.

Diff: 2 Page Ref: 305-306 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 8.2 86) 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.

Diff: 2 Page Ref: 315-326 AACSB: Analytic skills CASE: Synthesis in terms of applying Objective: 8.4

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87) 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 an MIS audit, 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.

Diff: 3 Page Ref: 310-326 AACSB: Analytic skills CASE: Synthesis in terms of build, model Objective: 8.4 88) 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.

Diff: 2 Page Ref: 320 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 8.4

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89) Define a fault-tolerant computer system and a high-availability computer system. How do they differ? When would each be used?

Answer: Both systems use backup hardware resources. Fault-tolerant computer systems contain extra memory chips, processors, and disk storage devices that can back the system up and keep it running to prevent a system failure. High-availability computing places the emphasis on quick recovery from a system crash. A high-availability system includes redundant servers, mirroring, load balancing, clustering, storage area networks, and a good disaster recovery plan. The main difference between them is that fault-tolerant computer systems don't go down; high-availability computer systems go down, but can recover quickly.

Companies needing a technology platform with 100 percent, 24-hr system availability, use fault-tolerant computer systems. High-availability computing environments are a minimum requirement for firms with heavy electronic commerce processing or that depend on digital networks for their internal operations.

Diff: 2 Page Ref: 321 AACSB: Analytic skills CASE: Evaluation in terms of compare, assess Objective: 8.4 90) 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, the usability of its security processes.

Diff: 3 Page Ref: 295-326 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 8.2

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Management Information Systems, 13e (Laudon/Laudon) Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 1) Firms can use social networking sites to improve their efficiency in customer service.

Answer: TRUE Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Comprehension Objective: 9.5 2) PRM provides a firm and its distributors trade information and distributes leads about customers.

Answer: TRUE Diff: 2 Page Ref: 353 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.3 3) Enterprise systems are strictly internally oriented; other types of enterprise applications must be used for communicating with customers and suppliers.

Answer: FALSE Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Analysis in terms of examine Objective: 9.1 4) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers.

Answer: FALSE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 5) Supply chain inefficiencies can waste as much as 25 percent of a company's operating costs.

Answer: TRUE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2

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6) Safety stock acts as an inexpensive buffer for the lack of flexibility in the supply chain.

Answer: FALSE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 7) The bullwhip effect is the distortion of information about the demand for a product as it passes from one entity to the next across the supply chain.

Answer: TRUE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 8) 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 Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 9) In the pre-Internet environment, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes.

Answer: TRUE Diff: 2 Page Ref: 346 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 10) Inefficiencies in a supply chain are primarily caused by inaccurate information.

Answer: TRUE Diff: 1 Page Ref: 344 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.2 11) In a push-based model of SCM systems, actual customer orders or purchases trigger events in the supply chain.

Answer: FALSE Diff: 2 Page Ref: 349 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2

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12) In a pull-based model of SCM systems, production master schedules are based on forecasts of demand for products.

Answer: FALSE Diff: 2 Page Ref: 346 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 13) Dell Inc. is an example of a push-based model.

Answer: FALSE Diff: 2 Page Ref: 349 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 14) 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 Diff: 2 Page Ref: 350 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 15) All CRM packages contain modules for PRM and ERM. Answer: FALSE Diff: 1 Page Ref: 352 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 16) Major CRM application software vendors include Oracle and SAP. Answer: TRUE Diff: 3 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 17) Cross-selling is the marketing of complementary products to customers.

Answer: TRUE Diff: 2 Page Ref: 354 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.3

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18) CRM software can help organizations identify high-value customers for preferential treatments.

Answer: TRUE Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 19) Analytical CRM uses tools to analyze customer data collected from the firm's customer touch points and from other sources.

Answer: TRUE Diff: 2 Page Ref: 356 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 20) Enterprise systems require fundamental changes in the way the business operates.

Answer: TRUE Diff: 2 Page Ref: 357 AACSB: Use of information technology CASE: Comprehension Objective: 9.4 21) From your reading of the chapter's opening case, NVIDIA 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 Answer: D Diff: 3 Page Ref: 337-338 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 9.1 22) Which of the following is not an example of the benefits enterprise systems provide to firms?

A) Products are shipped to stores more quickly.

B) When products are ordered, the manufacturing and logistics teams are notified immediately.

C) There is more accurate sales information for managers to analyze.

D) The cost of information systems falls, making the firm more productive.

Answer: D Diff: 2 Page Ref: 341-342 AACSB: Use of information technology CASE: Comprehension Objective: 9.1

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23) 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.

Answer: C Diff: 2 Page Ref: 340 AACSB: Use of information technology CASE: Comprehension Objective: 9.1 24) 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.

Answer: C Diff: 2 Page Ref: 341-342 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.1 25) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take?

A) Select the functions of the system you wish to use.

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.

Answer: A Diff: 2 Page Ref: 340 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.1

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26) 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.

Answer: A Diff: 2 Page Ref: 340 AACSB: Use of information technology CASE: Comprehension Objective: 9.1 27) 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.

Answer: C Diff: 2 Page Ref: 341 AACSB: Use of information technology CASE: Evaluation in terms of assess Objective: 9.1 28) Supply chain complexity and scale increases when firms A) move to globalization.

B) manage the procurement, manufacturing, and distribution functions themselves.

C) produce products and services that coordinate with hundreds or more firms and suppliers.

D) modify their existing workflows to comply with supply-chain management systems.

Answer: C Diff: 3 Page Ref: 343 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 9.2 29) 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.

Answer: B Diff: 2 Page Ref: 342 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 6 ..

30) Components or parts of finished products are referred to as A) upstream materials.

B) raw materials.

C) secondary products.

D) intermediate products.

Answer: D Diff: 2 Page Ref: 343 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 31) 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.

Answer: C Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 32) 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.

Answer: D Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 33) Uncertainties arise in any supply chain because of A) inaccurate or untimely information.

B) poor integration between systems of suppliers, manufacturers, and distributors.

C) inefficient or inaccurate MIS. D) unforeseeable events.

Answer: D Diff: 2 Page Ref: 344 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 9.2

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34) 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.

Answer: D Diff: 2 Page Ref: 344 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 9.2 35) 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 Answer: A Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 36) 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 Answer: A Diff: 2 Page Ref: 344 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 37) Which of the following is not one of the key challenges facing global supply chains?

A) geographical distances B) increased costs C) time zones D) cultural differences Answer: B Diff: 1 Page Ref: 348 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 8 ..

38) 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 Answer: D Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 39) 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) planning D) execution Answer: C Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 40) Supply chain planning systems A) track the physical status of goods.

B) identify the transportation mode to use for product delivery.

C) track the financial information involving all parties.

D) track the status of orders.

Answer: B Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 41) 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 Answer: C Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 9 ..

42) 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 Answer: D Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 43) 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.

Answer: A Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 44) Which of the following is not one of the main challenges in implementing enterprise applications?

A) high cost of software B) loss of ownership of data C) complex to install and configure D) dependence on third-party vendors Answer: B Diff: 2 Page Ref: 357-358 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.4 45) A supply chain driven by actual customer orders or purchases follows a ________ model.

A) pull-based model B) build-to-stock C) push-based D) replenishment-driven Answer: A Diff: 2 Page Ref: 349 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 10 ..

46) A build-to-order supply-chain model is also called a ________ model.

A) supply-based B) demand-driven C) replenishment-driven D) push-based Answer: B Diff: 2 Page Ref: 349 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 47) Which of the following is not a potential "switching cost"?

A) employee training B) upgrading software C) new hardware D) new documentation Answer: B Diff: 1 Page Ref: 358 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 9.4 48) 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) increased inventory levels.

Answer: D Diff: 2 Page Ref: 349-350 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.2 49) 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 Answer: B Diff: 2 Page Ref: 351 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.3 11 ..

50) Which of the following would not be considered a contact point?

A) e-mail B) Web site C) Intranet D) retail store Answer: C Diff: 2 Page Ref: 351 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 51) ________ 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) PRM Answer: D Diff: 2 Page Ref: 352 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 52) ________ modules deal with issues such as setting objectives, employee performance management, and performance-based compensation.

A) SCM B) SFA C) ERM D) PRM Answer: C Diff: 2 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 53) 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.

Answer: A Diff: 2 Page Ref: 351-352 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 12 ..

54) 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.

Answer: D Diff: 1 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 55) ________ software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training.

A) Enterprise B) ERM C) PRM D) ERP Answer: B Diff: 2 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 56) 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.

Answer: A Diff: 1 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 57) 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.

Answer: C Diff: 1 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3

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58) Selling a customer with a checking account a home improvement loan is an example of A) operational CRM. B) direct marketing.

C) cross-selling.

D) cross-channel promotions.

Answer: C Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 59) ________ management is an important capability for customer service processes that is found in most major CRM software products.

A) Returns B) Lead C) Account D) Events Answer: A Diff: 2 Page Ref: 355 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 60) 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 Answer: B Diff: 3 Page Ref: 355 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 61) 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 Answer: B Diff: 2 Page Ref: 356 AACSB: Use of information technology CASE: Synthesis in terms of applying Objective: 9.3 14 ..

62) Operational CRM applications include tools for A) identifying buying patterns.

B) calculating CLTV. C) salesforce automation.

D) pinpointing unprofitable customers.

Answer: C Diff: 2 Page Ref: 356 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 63) Analytical CRM applications A) include tools for marketing automation.

B) provide consolidated data for operational CRM applications.

C) are based on data consolidated from operational CRM applications.

D) provide customer-facing applications.

Answer: C Diff: 2 Page Ref: 356 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 64) Analyzing customer buying patterns is an example of A) CLTV. B) analytical CRM. C) operational CRM. D) demand planning.

Answer: B Diff: 2 Page Ref: 356 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 65) 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) CLTV C) cost per lead D) cost per sale Answer: B Diff: 2 Page Ref: 356 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.3

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66) 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.

Answer: B Diff: 2 Page Ref: 357 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.3 67) 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 are best implemented when few changes in business processes are required.

Answer: D Diff: 2 Page Ref: 357-358 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 9.4 68) 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 Answer: C Diff: 3 Page Ref: 358-359 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.5 69) 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 Answer: A Diff: 1 Page Ref: 358 AACSB: Use of information technology CASE: Comprehension Objective: 9.5 16 ..

70) The bullwhip effect is countered by A) globalization.

B) disintermediation.

C) implementing an SCM. D) reducing information uncertainty.

Answer: D Diff: 2 Page Ref: 345 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 71) ________ systems are based on a suite of software models used to support business activities across the firm.

Answer: Enterprise, Enterprise resource planning, ERP Diff: 2 Page Ref: 339 AACSB: Use of information technology CASE: Comprehension Objective: 9.1 72) As they move through the ________, raw materials are transformed into finished products and shipped to retailers and customers.

Answer: supply chain Diff: 1 Page Ref: 343 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 73) The total time it takes to complete a business process, from start to finish, is called its ________ time.

Answer: cycle Diff: 2 Page Ref: 342 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.2 74) Next-generation enterprise suites use ________ and SOA to link to systems of customers and suppliers.

Answer: Web services Diff: 3 Page Ref: 358 AACSB: Use of information technology CASE: Comprehension Objective: 9.4

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75) With new flows of information made possible by Web-based tools, supply chain management can more easily follow a(n) ________ model.

Answer: pull-based Diff: 2 Page Ref: 349 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.3 76) ________ 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.

Answer: Sales force automation, SFA Diff: 2 Page Ref: 353 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 77) ________ CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation.

Answer: Operational Diff: 2 Page Ref: 356 AACSB: Use of information technology CASE: Comprehension Objective: 9.3 78) Using social networking tools to converse with customers is called ________.

Answer: social CRM Diff: 1 Page Ref: 344 AACSB: Reflective thinking skills CASE: Comprehension Objective: 9.5 79) A company having difficulty with timely delivery of parts to its manufacturing plants should look to implementing a supply chain ________ system.

Answer: execution Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Comprehension Objective: 9.2 80) Enterprise application vendors are now including ________ features, such as tools for data visualization, flexible reporting, and ad-hoc analysis, as part of the application.

Answer: business intelligence Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Comprehension Objective: 9.5 18 ..

81) 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.

Diff: 2 Page Ref: 339-357 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 9.1 82) 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.

Diff: 2 Page Ref: 342-358 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.1 19 ..

83) 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.

Diff: 2 Page Ref: 346 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 9.2 84) 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.

Diff: 2 Page Ref: 348-349 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.2 85) 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.

Diff: 1 Page Ref: 349 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.2 20 ..

86) 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.

Diff: 1 Page Ref: 356 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 9.3 87) 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.

Diff: 2 Page Ref: 356-357 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.3 88) 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.

Diff: 3 Page Ref: 339-361 AACSB: Analytic skills CASE: Synthesis in terms of devising Objective: 9.1

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89) 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.

Diff: 3 Page Ref: 342-351 AACSB: Analytic skills CASE: Synthesis in terms of devising Objective: 9.2 90) 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.

Diff: 3 Page Ref: 351-357 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 9.3

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Management Information Systems, 13e (Laudon/Laudon) Chapter 10 E-commerce: Digital Markets, Digital Goods 1) E-commerce refers to the use of any networking technologies to transact business.

Answer: FALSE Diff: 2 Page Ref: 373 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 2) Consumer e-commerce is still growing at approximately 25% annually.

Answer: FALSE Diff: 3 Page Ref: 373 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 3) The Internet shrinks information asymmetry.

Answer: TRUE Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 4) Eighty-five percent of online retailers now have m-commerce Web sites.

Answer: FALSE Diff: 2 Page Ref: 404 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.5 5) 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 Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 6) Disintermediation provides major benefits to the distributor.

Answer: FALSE Diff: 2 Page Ref: 380 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.1

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7) In general, for digital goods, the marginal cost of producing another unit is about zero.

Answer: TRUE Diff: 2 Page Ref: 381 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 8) Telecommunications hardware and software is typically the least costly portion of a Web site budget.

Answer: TRUE Diff: 2 Page Ref: 408 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.6 9) An example of the content provider business model is Barnesandnoble.com, a retailer of printed books.

Answer: FALSE Diff: 1 Page Ref: 385 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2 10) Amazon's recommender system is an example of the network notification feature of social ecommerce.

Answer: FALSE Diff: 3 Page Ref: 396 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 10.3 11) Podcasting allows subscribers to listen to live, streaming radio and other audio content.

Answer: FALSE Diff: 1 Page Ref: 385 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 10.2 12) Intellectual property refers to all forms of human expression, both tangible and intangible.

Answer: FALSE Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2

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13) Ninety-six percent of all U.S. households with Internet access use a broadband connection.

Answer: TRUE Diff: 2 Page Ref: 374 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 14) Behavioral targeting occurs at two levels: individual Web sites and through ISPs. Answer: FALSE Diff: 2 Page Ref: 391 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 15) EDI standards that take advantage of network communications have yet to be fully implemented at the industry level.

Answer: FALSE Diff: 2 Page Ref: 399 AACSB: Use of information technology CASE: Comprehension Objective: 10.4 16) Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing.

Answer: TRUE Diff: 3 Page Ref: 400 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 17) Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down.

Answer: FALSE Diff: 3 Page Ref: 401 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 18) Automobile manufacturing is an example of a vertical market.

Answer: TRUE Diff: 2 Page Ref: 400 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.4

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19) In general, the cost of hardware, software, and telecommunications for building and operating a Web site has fallen by over 50 percent since 2000.

Answer: TRUE Diff: 2 Page Ref: 408 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.6 20) Because of outsourcing and increased automation, the costs of system maintenance and content creation have fallen and typically make up less than a quarter of Web site budgets.

Answer: FALSE Diff: 1 Page Ref: 408 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.6 21) Through what channel did e-commerce first evolve?

A) online advertising sales B) Internet portals C) online book sales D) Internet service providers Answer: A Diff: 3 Page Ref: 373 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 22) Which of the following is not one of the current main areas of growth in mobile ecommerce?

A) sales of financial services B) retail sales at the top mobile companies C) sales of digital content D) sales of apps Answer: A Diff: 2 Page Ref: 402 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.5

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23) Which of the following is an example of a geosocial mobile service?

A) Kickstarter.com B) Foursquare C) Shopkick D) Facebook Answer: B Diff: 2 Page Ref: 403 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.5 24) How are the Internet and e-commerce causing severe disruption to the existing advertising business model?

A) Ties between customer and businesses are being rethought.

B) Technology players such as Yahoo! seek to dominate online advertising and expand into offline ad brokerage.

C) New methods of advertising, such as blog advertising, are emerging.

D) The market entry costs for online advertising services are extremely low.

Answer: B Diff: 3 Page Ref: 376 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.3 25) The quality of ubiquity, as it relates to e-commerce, is illustrated by A) the same set of standards being used across the globe.

B) the spread of plentiful, cheap information.

C) the enabling of commerce worldwide.

D) the availability of the Internet everywhere and anytime.

Answer: D Diff: 2 Page Ref: 375 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 26) Which of the following is not a recent development in e-commerce?

A) Mobile e-commerce takes off.

B) Social networking sites become a new platform for e-commerce.

C) The music recording industry is disrupted as music creation and distribution become decentralized.

D) Online entertainment business models surge.

Answer: C Diff: 3 Page Ref: 377 AACSB: Analytic skills CASE: Analysis in terms of examine Objective: 10.1 5 ..

27) Which of the following is not one of the unique features of e-commerce technology?

A) information density B) transparency C) richness D) social technology Answer: B Diff: 2 Page Ref: 377 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 28) Which feature of Internet technology has had the most effect in the Internet's rapid spread across the globe?

A) ubiquity B) global reach C) universal standards D) social technology Answer: C Diff: 2 Page Ref: 377 AACSB: Analytic skills CASE: Evaluation in terms of appraise, assess Objective: 10.1 29) 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 Answer: D Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 30) 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 Answer: C Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 6 ..

31) 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 Answer: A Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 32) The effort required to locate a suitable product is called A) price discrimination.

B) search costs.

C) menu costs.

D) shopping costs.

Answer: B Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 33) 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.

Answer: C Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 34) Selling the same goods to different targeted groups at different prices is called A) cost customization.

B) cost optimization.

C) price gouging.

D) price discrimination.

Answer: D Diff: 1 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1

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35) 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 Diff: 1 Page Ref: 379 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 36) Varying a product's price according to the supply situation of the seller is called ________ pricing.

A) menu B) flexible C) dynamic D) asymmetric Answer: C Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 37) Reducing the business process layers in a distribution channel is called A) disintermediation.

B) BPR. C) market segmentation.

D) network effects.

Answer: A Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 38) Digital goods are goods that are A) produced digitally.

B) sold over digital networks.

C) delivered digitally.

D) used with digital equipment.

Answer: C Diff: 2 Page Ref: 381 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1

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39) Compared to digital markets, traditional markets have A) lower search costs.

B) stronger network effects.

C) higher delayed gratification effects.

D) higher transaction costs.

Answer: D Diff: 3 Page Ref: 381 AACSB: Analytic skills CASE: Analysis in terms of compare Objective: 10.1 40) Compared to traditional goods, digital goods have A) greater pricing flexibility.

B) lower marketing costs.

C) higher production costs.

D) higher inventory costs.

Answer: A Diff: 3 Page Ref: 381 AACSB: Analytic skills CASE: Analysis in terms of compare Objective: 10.1 41) Compared to traditional markets, digital markets have A) lower distributed delivery costs.

B) higher marginal costs per unit.

C) equivalent copying costs.

D) similar inventory costs.

Answer: A Diff: 3 Page Ref: 381 AACSB: Analytic skills CASE: Analysis in terms of compare Objective: 10.1 42) eBay is an example of A) C2C e-commerce.

B) B2B e-commerce.

C) B2C e-commerce.

D) M-commerce.

Answer: A Diff: 2 Page Ref: 383 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2

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43) Selling products and services directly to individual consumers via the Internet best describes A) B2B e-commerce.

B) C2C e-commerce.

C) M-commerce.

D) B2C e-commerce.

Answer: D Diff: 1 Page Ref: 383 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2 44) Consumers selling goods and services electronically to other consumers best describes A) disintermediation.

B) C2C e-commerce.

C) M-commerce.

D) B2C e-commerce.

Answer: B Diff: 1 Page Ref: 383 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2 45) Which of the following businesses utilizes the content provider Internet business model?

A) Amazon.com B) eBay.com C) CNN.com D) Motocross.com Answer: C Diff: 2 Page Ref: 385 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2 46) Which of the following Internet business models does Amazon.com use?

A) content provider B) portal C) market creator D) e-tailer Answer: D Diff: 2 Page Ref: 384 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2

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47) 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.

Answer: B Diff: 1 Page Ref: 385 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2 48) 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.

Answer: B Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2 49) Which of the following best describes why small world theory is important to e-commerce?

A) The products bought online by one individual will influence purchases by others.

B) The greater the number of people using your product, the more valuable it becomes.

C) You do not need to attract a large consumer base to become profitable.

D) Global products create a global community.

Answer: A Diff: 2 Page Ref: 395 AACSB: Analytic skills CASE: Analysis in terms of differentiate and appraise Objective: 10.2 50) 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.

Answer: D Diff: 2 Page Ref: 388 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2

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51) In which of the following revenue models does a Web site charge a fee for access to some or all of its offerings on a continual, regular basis?

A) subscription B) free/freemium C) transaction fee D) sales Answer: A Diff: 2 Page Ref: 389 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2 52) 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.

Answer: B Diff: 2 Page Ref: 390 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2 53) 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.

Answer: A Diff: 2 Page Ref: 389 AACSB: Analytic skills CASE: Analysis in terms of categorize Objective: 10.2 54) ________ describes the concept that a large group of people is better at making correct decisions than a single person.

A) The wisdom of crowds B) Outsourcing C) Crowdsourcing D) Social graphing Answer: A Diff: 2 Page Ref: 390 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.2 12 ..

55) 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) crowdsourcing.

Answer: D Diff: 2 Page Ref: 390-391 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 56) 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.

Answer: B Diff: 2 Page Ref: 391 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 57) Which of the following was the leading online advertising format in 2012?

A) display ads B) e-mail C) classifieds D) search engine Answer: D Diff: 3 Page Ref: 392 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 58) Which of the following statements about B2B commerce is not true?

A) Eighty percent of online B2B e-commerce is still based on EDI. B) B2B e-commerce represents approximately three-quarters of the overall B2B marketplace.

C) B2B e-commerce only includes commercial transactions between firms.

D) B2B e-commerce revenues in 2012 were over $4 trillion.

Answer: B Diff: 3 Page Ref: 398-399 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 13 ..

59) 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.

Answer: B Diff: 2 Page Ref: 399 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 60) 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.

Answer: C Diff: 2 Page Ref: 399 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 61) An extranet 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.

Answer: D Diff: 2 Page Ref: 400 AACSB: Use of information technology CASE: Comprehension Objective: 10.4 62) E-hubs are more ________ than private industrial networks.

A) transaction-oriented B) collaborative C) independent D) supply-chain oriented Answer: A Diff: 3 Page Ref: 400 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.4

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63) A mapping of a person's significant online, personal relationships is called a social A) Web. B) graph.

C) community.

D) map.

Answer: B Diff: 1 Page Ref: 395 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 64) 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.

Answer: A Diff: 2 Page Ref: 401 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 65) 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.

Answer: B Diff: 1 Page Ref: 400 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 66) Which of the following statements about m-commerce is not true?

A) In 2012, m-commerce represented less than 10 percent of all e-commerce.

B) M-commerce is the fastest growing form of e-commerce.

C) M-commerce annual revenues are approximately $30 billion.

D) In 2012, the top-grossing category of m-commerce was e-book sales.

Answer: D Diff: 2 Page Ref: 403 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.5

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67) You are building an e-commerce Web site that will sell e-books and are looking for a hosted solution. Which of the following functionalities is least important for your business goals?

A) site tracking system B) inventory management C) digital catalog D) customer database Answer: B Diff: 1 Page Ref: 406 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 10.6 68) You are planning the requirements for a site tracking and reporting system for your company Web site. Which of the following information requirements would not be essential for this function?

A) number of unique visitors B) pages visited C) products purchased D) secure credit card clearing Answer: D Diff: 2 Page Ref: 406 AACSB: Analytic skills CASE: Synthesis in terms of build, model Objective: 10.6 69) Which of the following is the least costly way to build a Web site?

A) Outsource the Web site development to overseas vendors.

B) Use a hosted solution and pre-built templates.

C) Build your site yourself from scratch using existing software.

D) Use a site-building package.

Answer: B Diff: 2 Page Ref: 407 AACSB: Analytic skills CASE: Analysis in terms of appraise Objective: 10.6 70) You are advising an accounting firm that wants to establish its first Web site. Approximately how much of the Web site budget should you assign to purchasing software?

A) 10 percent B) 25 percent C) 50 percent D) none, as no software will need to be purchased Answer: A Diff: 1 Page Ref: 408 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.1 16 ..

71) ________ refers to the ability of consumers to discover what merchants actually pay for products.

Answer: Cost transparency Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 72) ________ are the merchants' costs of changing prices.

Answer: Menu costs Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.1 73) Pinterest and Kaboodle are examples of ________ shopping sites.

Answer: social Diff: 1 Page Ref: 389 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 74) The Internet enables ________ marketing, by leveraging the fact that there is always some demand, however small, for a product.

Answer: long-tail Diff: 3 Page Ref: 391 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 75) A(n) ________ market is a peer-to-peer market in which participants bet on the outcomes of current events or business or social trends.

Answer: prediction Diff: 2 Page Ref: 391 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 76) The ________ targeting of ads results in consumers responding ten times more frequently than when delivered ads randomly.

Answer: behavioral Diff: 3 Page Ref: 394 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 17 ..

77) ________ goods, such as office supplies, are those not involved firsthand in the production process.

Answer: Indirect Diff: 2 Page Ref: 400 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.4 78) Online ________ marketing is like traditional word-of-mouth marketing except that it is spread via online communities.

Answer: viral Diff: 3 Page Ref: 390 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.3 79) Before building an e-commerce site, business objectives and functionalities must be translated into a set of precise information ________.

Answer: requirements Diff: 2 Page Ref: 405 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.6 80) In Web server ________, a firm purchases or leases a Web server but locates the server in a vendor's physical facility.

Answer: co-location Diff: 2 Page Ref: 407 AACSB: Reflective thinking skills CASE: Comprehension Objective: 10.6

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81) What is the most profound way in which e-commerce and the Internet has 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 has 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.

Diff: 2 Page Ref: 371-404 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.1 82) "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.

Diff: 3 Page Ref: 379-382 AACSB: Analytic skills CASE: Synthesis in terms of bringing information together Objective: 10.1

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83) 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.

Diff: 3 Page Ref: 373-404 AACSB: Analytic skills CASE: Synthesis in terms of bringing information together Objective: 10.1 84) 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.

Diff: 2 Page Ref: 378-379 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.3

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85) List and describe the four main features of social e-commerce and their value to marketers.

Answer: The four main features are: 1. social sign-on, 2. collaborative shopping, 3. network notification, and 4. social search.

Social sign-on is using a social networking logon, such as your Facebook logon, to log on to a Web site. This allows the Web site owners to gather information from your Facebook account and use it for marketing research and targeting ads to you. Collaborative shopping describes features that enable consumers to share their shopping experiences with each other. This allows marketers to see what products create the biggest reactions and allow them to track and analyze groups of shoppers. In network notification, users notifies others in their network about their approval or disapproval of a product, for example, Liking a product so your Facebook friends will see, or tweeting about a product to your followers. Marketers can track the number of Likes and Tweets to track responses to a product, and analyze textual content, for example from Tweets, to gather feedback. Social search describes features that allow a consumer to evaluate a product through the evaluations of friends. For example, Amazon's social recommender system can use your Facebook social profile to recommend products. All of these four features are valuable for gathering information for profiling not just individuals but also groups of individuals to market to, as well as understand how social influencing works with your products.

Diff: 2 Page Ref: 383-396 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.3 86) 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.

Diff: 1 Page Ref: 383-386 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.2

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87) 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.

Diff: 2 Page Ref: 386-390 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.2 88) 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 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.

Diff: 3 Page Ref: 391-395 AACSB: Analytic skills CASE: Synthesis in terms of bringing information together Objective: 10.3

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89) 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.

Diff: 2 Page Ref: 391-395 AACSB: Analytic skills CASE: Evaluation in terms of assess Objective: 10.3 90) Describe the overall process and main decisions involved in planning a new e-commerce site.

Answer: There are two main challenges to building an e-commerce site. The first is to clearly identify the business objectives of the site. The second is to select the right technologies for achieving those objectives. Once you have determined the objectives of the site, you will need to establish the system functionalities. For example, if you were planning an e-tailing site, one functionality you would need would be a shopping cart. Once all of the intended capabilities of the site are understood, you can then define the information requirements needed to build the site. For example, an information requirement for building a shopping cart is a method to secure credit cards. Other major planning issues include selecting a team to build the site, and selecting the site's hardware, software, and telecommunications infrastructure. You will need to decide on the site's design, and any social or information policies at the site. You will need to decide if any development or hosting will be outsourced or whether you will build the site from a software package. Many of these decisions will depend on the budget allocated for the site.

Diff: 2 Page Ref: 404-408 AACSB: Analytic skills CASE: Analysis in terms of summarize Objective: 10.6

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Management Information Systems, 13e (Laudon/Laudon) Chapter 11 Managing Knowledge 1) Enterprise content management systems are designed to manage structured information, while other systems, such as KWS, are designed to manage semistructured and unstructured information.

Answer: FALSE Diff: 1 Page Ref: 417 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 2) Knowledge residing in the minds of employees that has not been documented is called explicit knowledge.

Answer: FALSE Diff: 2 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 3) Knowledge can reside in e-mail, voice mail, graphics, and unstructured documents as well as structured documents.

Answer: TRUE Diff: 1 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 4) Knowledge is universally applicable and easily moved.

Answer: FALSE Diff: 1 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 5) CAD is a type of intelligent technique.

Answer: FALSE Diff: 1 Page Ref: 424 AACSB: Reflective thinking skills CASE: Content Objective: 11.3

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6) 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 Diff: 1 Page Ref: 429 AACSB: Reflective thinking skills CASE: Content Objective: 11.3 7) Structured knowledge is explicit knowledge that exists in informal documents.

Answer: FALSE Diff: 1 Page Ref: 425 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 8) Semistructured information is all the knowledge in a firm that resides in the heads of experienced employees.

Answer: FALSE Diff: 2 Page Ref: 425 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 9) VRML requires the use of a powerful server as well as large amounts of bandwidth.

Answer: FALSE Diff: 2 Page Ref: 434 AACSB: Use of information technology CASE: Content Objective: 11.3 10) Expert systems are the primary tools used for knowledge discovery.

Answer: FALSE Diff: 1 Page Ref: 435 AACSB: Use of information technology CASE: Content Objective: 11.4 11) 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 Diff: 1 Page Ref: 435 AACSB: Use of information technology CASE: Content Objective: 11.4

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12) Expert systems are typically used in business in discrete, highly structured decision-making situations.

Answer: TRUE Diff: 2 Page Ref: 435 AACSB: Use of information technology CASE: Content Objective: 11.4 13) 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 Diff: 2 Page Ref: 435 AACSB: Use of information technology CASE: Content Objective: 11.4 14) Case-based reasoning is not well-suited for diagnostic systems in medicine.

Answer: FALSE Diff: 1 Page Ref: 438 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 15) Fuzzy logic can describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules.

Answer: TRUE Diff: 2 Page Ref: 439 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 16) 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 Diff: 2 Page Ref: 439 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 17) 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 Diff: 2 Page Ref: 441 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 3 ..

18) 3D printing today is used to create small objects such as hip replacements.

Answer: TRUE Diff: 2 Page Ref: 431 AACSB: Use of information technology CASE: Content Objective: 11.3 19) Intelligent agents can discover underlying patterns, categories, and behaviors in large data sets.

Answer: FALSE Diff: 2 Page Ref: 443 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 20) For a firm, organizational resources are needed to transform data into knowledge.

Answer: TRUE Diff: 2 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 21) From your reading of the chapter case, which of the following was the primary knowledge management challenge facing the city of Denver?

A) inadequate storage facilities B) lack of integration C) lack of training support D) out-of-date modes of dissemination Answer: B Diff: 2 Page Ref: 427 AACSB: Analytic skills CASE: Analysis Objective: 11.2 22) The percentage of gross domestic product of the United States that is produced by the knowledge and information sectors is estimated to be about ________ percent.

A) 25 B) 45 C) 65 D) 85 Answer: B Diff: 3 Page Ref: 419 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 4 ..

23) 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.

Answer: C Diff: 2 Page Ref: 419 AACSB: Analytic skills CASE: Analysis Objective: 11.1 24) The flow of events or transactions captured by an organization's system describes A) information.

B) data.

C) wisdom.

D) knowledge.

Answer: B Diff: 1 Page Ref: 419 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 25) Expertise and experience of organizational members that has not been formally documented best describes A) wisdom.

B) information.

C) data.

D) tacit knowledge.

Answer: D Diff: 2 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 26) 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.

Answer: D Diff: 3 Page Ref: 420 AACSB: Analytic skills CASE: Analysis Objective: 11.1 5 ..

27) 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.

Answer: A Diff: 3 Page Ref: 420 AACSB: Analytic skills CASE: Analysis Objective: 11.1 28) 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 no locations.

D) Knowledge is situational.

Answer: C Diff: 3 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 29) 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.

Answer: D Diff: 1 Page Ref: 421 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 30) In order, which are the value-adding steps in the knowledge business value chain?

A) acquire, store, disseminate, apply, feedback B) data and information acquisition, acquire, store, disseminate, apply C) acquire, disseminate, apply, feedback, management and organizational activities D) data and information acquisition, store, disseminate, feedback, apply Answer: B Diff: 2 Page Ref: 421 AACSB: Analytic skills CASE: Analysis Objective: 11.1

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31) 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.

Answer: C Diff: 3 Page Ref: 422 AACSB: Use of information technology CASE: Content Objective: 11.1 32) Which of the following systems digitizes, indexes, and tags documents according to a coherent framework?

A) wikis B) CAD C) document management D) LMS Answer: C Diff: 1 Page Ref: 422 AACSB: Use of information technology CASE: Content Objective: 11.2 33) 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.

Answer: A Diff: 2 Page Ref: 423 AACSB: Reflective thinking skills CASE: Content Objective: 11.2

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34) 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 Answer: D Diff: 2 Page Ref: 423 AACSB: Use of information technology CASE: Content Objective: 11.2 35) 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.

Answer: A Diff: 1 Page Ref: 424 AACSB: Use of information technology CASE: Content Objective: 11.2 36) Which of the following is not a typical component or capability of an enterprise-wide knowledge management system?

A) collaboration tools B) KWS C) document management D) LMS Answer: B Diff: 2 Page Ref: 424 AACSB: Analytic skills CASE: Analysis Objective: 11.2 37) Which of the following would not be considered semistructured knowledge?

A) request for proposals B) voice-mail C) videos D) e-mail Answer: A Diff: 2 Page Ref: 424 AACSB: Analytic skills CASE: Analysis Objective: 11.2 8 ..

38) In content management, once a taxonomy is developed, documents must then be ________ with the proper classification.

A) tagged B) linked C) tupled D) referenced Answer: A Diff: 2 Page Ref: 426 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 39) 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) knowledge network system D) VRML system Answer: B Diff: 2 Page Ref: 426 AACSB: Analytic skills CASE: Analysis Objective: 11.2 40) Which of the following is not a Web 2.0 tool firms are using to foster collaboration?

A) blogs B) intranets C) wikis D) social bookmarking Answer: B Diff: 2 Page Ref: 426 AACSB: Analytic skills CASE: Analysis Objective: 11.2 41) 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.

Answer: C Diff: 2 Page Ref: 431 AACSB: Reflective thinking skills CASE: Content Objective: 11.3 9 ..

42) 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.

Answer: D Diff: 2 Page Ref: 428-429 AACSB: Use of information technology CASE: Content Objective: 11.2 43) 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.

Answer: A Diff: 2 Page Ref: 429 AACSB: Use of information technology CASE: Content Objective: 11.3 44) Apple's Siri application is an example of A) neural networks.

B) CBR. C) artificial intelligence.

D) intelligent agents.

Answer: D Diff: 1 Page Ref: 443 AACSB: Use of information technology CASE: Content Objective: 11.3 45) ________ often are designed and optimized for the specific tasks to be performed.

A) Graphics programs B) Knowledge workstations C) Virtual simulators D) CAD stations Answer: B Diff: 2 Page Ref: 430 AACSB: Use of information technology CASE: Content Objective: 11.3

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46) 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.

Answer: A Diff: 2 Page Ref: 430 AACSB: Use of information technology CASE: Content Objective: 11.3 47) 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 Answer: D Diff: 2 Page Ref: 430-434 AACSB: Analytic skills CASE: Analysis Objective: 11.3 48) 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.

Answer: D Diff: 2 Page Ref: 431-434 AACSB: Use of information technology CASE: Content Objective: 11.3

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49) 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 in the financial sector to analyze trading situations instantaneously and facilitate portfolio management.

Answer: D Diff: 1 Page Ref: 434 AACSB: Use of information technology CASE: Content Objective: 11.3 50) Which of the following systems is not used to capture tacit knowledge?

A) expert system B) case-based reasoning C) fuzzy logic D) neural network Answer: D Diff: 3 Page Ref: 434 AACSB: Reflective thinking skills CASE: Content Objective: 11.3 51) Which of the following is a type of intelligent technique?

A) knowledge networks B) case-based reasoning C) computer-aided design D) VRML Answer: B Diff: 3 Page Ref: 434 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 52) Which of the following techniques is used for knowledge discovery?

A) expert system B) transaction processing systems C) case-based reasoning D) data mining Answer: D Diff: 2 Page Ref: 434 AACSB: Use of information technology CASE: Content Objective: 11.4

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53) 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.

Answer: C Diff: 2 Page Ref: 435 AACSB: Use of information technology CASE: Content Objective: 11.4 54) 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.

Answer: D Diff: 2 Page Ref: 435 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 55) 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.

Answer: A Diff: 2 Page Ref: 435 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 56) 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.

Answer: D Diff: 2 Page Ref: 437 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 13 ..

57) 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.

Answer: C Diff: 2 Page Ref: 435 AACSB: Use of information technology CASE: Content Objective: 2.1 58) 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.

Answer: C Diff: 2 Page Ref: 420 AACSB: Analytic skills CASE: Analysis Objective: 11.1 59) Virtually all expert systems deal with problems of A) policy development.

B) classification.

C) logic and control.

D) high complexity.

Answer: B Diff: 3 Page Ref: 437 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 60) 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.

Answer: C Diff: 3 Page Ref: 437 AACSB: Analytic skills CASE: Analysis Objective: 11.4

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61) 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 Answer: A Diff: 1 Page Ref: 437-438 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 62) 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.

Answer: D Diff: 2 Page Ref: 439 AACSB: Analytic skills CASE: Synthesis Objective: 11.4 63) 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.

Answer: C Diff: 2 Page Ref: 439 AACSB: Analytic skills CASE: Evaluation Objective: 11.4

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64) Fuzzy logic is a type of A) data mining.

B) neural network.

C) intelligent technique.

D) business intelligence.

Answer: C Diff: 2 Page Ref: 439 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 65) Hardware and software that attempts to emulate the processing patterns of the biological brain best describes A) a neural network.

B) an expert system.

C) case-based reasoning.

D) fuzzy logic.

Answer: A Diff: 2 Page Ref: 440 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 66) 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) all of the above Answer: C Diff: 3 Page Ref: 440-442 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 67) 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.

Answer: A Diff: 2 Page Ref: 442 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 16 ..

68) 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.

Answer: A Diff: 2 Page Ref: 443 AACSB: Use of information technology CASE: Content Objective: 11.4 69) 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) none of the above Answer: B Diff: 2 Page Ref: 443 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 70) 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.

Answer: D Diff: 2 Page Ref: 443 AACSB: Analytic skills CASE: Analysis Objective: 11.4 71) ________ is thought to be the collective and individual experience of applying knowledge to the solution of problems.

Answer: Wisdom Diff: 1 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

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72) ________ is explicit knowledge that exists in formal documents, as well as in formal rules that organizations derive by observing experts and their decision-making behaviors.

Answer: Structured knowledge Diff: 1 Page Ref: 424 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 73) A(n) ________ is a scheme for classifying information and knowledge in such a way that it can be easily accessed.

Answer: taxonomy Diff: 2 Page Ref: 426 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 74) ________ is the study of how computer programs can improve their performance without explicit programming.

Answer: Machine learning Diff: 2 Page Ref: 440 AACSB: Use of information technology CASE: Content Objective: 11.4 75) The terms used in a fuzzy logic system to describe imprecise states or conditions are referred to as ________.

Answer: membership functions Diff: 3 Page Ref: 439 AACSB: Use of information technology CASE: Content Objective: 11.4 76) User-created taxonomies created for shared bookmarks are called ________.

Answer: folksonomies Diff: 2 Page Ref: 426 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 77) ________ seeks to enhance human perception by combining a live direct view of the physical world with computer-generated images.

Answer: AR, augmented reality Diff: 2 Page Ref: 433 AACSB: Use of information technology CASE: Content Objective: 11.3 18 ..

78) The model of human knowledge used by expert systems is called the ________.

Answer: knowledge base Diff: 2 Page Ref: 435 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 79) A(n) ________ is a type of intelligent technique that finds patterns and relationships in massive data sets too large for a human to analyze.

Answer: neural network Diff: 2 Page Ref: 440 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 80) Systems that integrate genetic algorithms, fuzzy logic, neural networks, and expert systems are called ________ systems.

Answer: hybrid AI Diff: 2 Page Ref: 444 AACSB: Use of information technology CASE: Content Objective: 11.4 81) 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.

Diff: 1 Page Ref: 421-422 AACSB: Analytic skills CASE: Evaluation Objective: 11.1

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82) Briefly outline the knowledge management 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.

Diff: 2 Page Ref: 421-423 AACSB: Analytic skills CASE: Synthesis Objective: 11.1 83) Identify the three major types of knowledge management systems. Provide two examples of each.

Answer: The major types of knowledge management systems are enterprise knowledge management systems, knowledge work systems, and intelligent techniques.

Enterprise knowledge management systems include: enterprise content management systems, digital asset management systems, learning management systems, and knowledge networks.

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.

Diff: 1 Page Ref: 423-434 AACSB: Analytic skills CASE: Analysis Objective: 11.2 84) 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. There is commercially available software for enterprise-wide knowledge network system, but other tools you can use include best-practices documents, FAQs, social bookmarking, collaboration tools, wikis, and blogs for helping gather and disseminate tacit knowledge.

Diff: 2 Page Ref: 424-429 AACSB: Analytic skills CASE: Analysis Objective: 11.2 20 ..

85) 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.

Diff: 2 Page Ref: 419-425 AACSB: Analytic skills CASE: Evaluation Objective: 11.2 86) 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.

Diff: 2 Page Ref: 430 AACSB: Analytic skills CASE: Analysis Objective: 11.3

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87) 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.

Diff: 2 Page Ref: 431-434 AACSB: Analytic skills CASE: Analysis Objective: 11.3 88) 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.

Diff: 3 Page Ref: 438-443 AACSB: Analytic skills CASE: Synthesis Objective: 11.4

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89) 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.

Diff: 3 Page Ref: 419-426 AACSB: Analytic skills CASE: Evaluation Objective: 11.1 90) 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.

Diff: 3 Page Ref: 419-444 AACSB: Analytic skills CASE: Evaluation Objective: 11.2

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Management Information Systems, 13e (Laudon/Laudon) Chapter 12 Enhancing Decision Making 1) 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 Diff: 2 Page Ref: 455 AACSB: Use of information technology CASE: Content Objective: 12.3 2) Unstructured decisions are novel and nonroutine, and there is no well-understood or agreed-on procedure for making them.

Answer: TRUE Diff: 1 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 3) A structured decision can be made by following a well-defined set of procedures. No "feel" or intuition is necessary.

Answer: TRUE Diff: 1 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 4) Middle management face primarily unstructured decisions.

Answer: FALSE Diff: 2 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 5) Structured decision making is most prevalent at lower organizational levels.

Answer: TRUE Diff: 1 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

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6) Big data is commonly used to analyze and predict consumer preferences.

Answer: TRUE Diff: 1 Page Ref: 469 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 7) The intelligence phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization.

Answer: TRUE Diff: 1 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 8) The implementation phase of Simon's decision-making model includes choosing among solution alternatives.

Answer: FALSE Diff: 2 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 9) The first stage in Simon's decision-making process model is the design stage.

Answer: FALSE Diff: 2 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 10) 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 Diff: 2 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 11) DSS are a special category of GIS. Answer: FALSE Diff: 1 Page Ref: 471 AACSB: Use of information technology CASE: Content Objective: 12.2

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12) A geographic information system is a decision support system designed specifically to work with spatial information.

Answer: TRUE Diff: 1 Page Ref: 469 AACSB: Use of information technology CASE: Content Objective: 12.4 13) MIS typically produce fixed, regularly scheduled reports based on data extracted and summarized from the firm's underlying transaction processing systems.

Answer: TRUE Diff: 1 Page Ref: 471 AACSB: Use of information technology CASE: Content Objective: 12.2 14) Data visualization technologies are used to help human users see patterns and relationships in large amounts of data.

Answer: TRUE Diff: 1 Page Ref: 469 AACSB: Use of information technology CASE: Content Objective: 12.3 15) DSS primarily address structured problems.

Answer: FALSE Diff: 1 Page Ref: 471 AACSB: Use of information technology CASE: Content Objective: 12.3 16) What-if analysis works forward from known or assumed conditions.

Answer: TRUE Diff: 1 Page Ref: 472 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 17) Backward sensitivity analysis software is used for goal seeking.

Answer: TRUE Diff: 1 Page Ref: 472 AACSB: Reflective thinking skills CASE: Content Objective: 12.3

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18) 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 Diff: 1 Page Ref: 475 AACSB: Use of information technology CASE: Content Objective: 12.5 19) Web-based tools for videoconferencing and electronic meetings are the primary tools for GDSS. Answer: FALSE Diff: 3 Page Ref: 475 AACSB: Use of information technology CASE: Content Objective: 12.5 20) During a GDSS meeting, the attendees control the use of GDSS tools.

Answer: FALSE Diff: 1 Page Ref: 477 AACSB: Use of information technology CASE: Content Objective: 12.5 21) 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.

Answer: B Diff: 1 Page Ref: 455 AACSB: Analytic skills CASE: Analysis Objective: 12.2

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22) 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.

Answer: B Diff: 1 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 23) The type of decision that can made by following a definite procedure is called a(n) ________ decision.

A) structured B) unstructured C) semistructured D) procedural Answer: A Diff: 1 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 24) Which type of decision is deciding whether to introduce a new product line?

A) structured B) unstructured C) recurring D) nonrecurring Answer: B Diff: 1 Page Ref: 456 AACSB: Analytic skills CASE: Analysis Objective: 12.1 25) Which type of decision is calculating gross pay for hourly workers?

A) structured B) unstructured C) semistructured D) none of the above Answer: A Diff: 1 Page Ref: 456 AACSB: Analytic skills CASE: Analysis Objective: 12.1

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26) The decision to approve a capital budget is an example of a(n) ________ decision.

A) semistructured B) unstructured C) structured D) undocumented Answer: B Diff: 2 Page Ref: 456 AACSB: Analytic skills CASE: Analysis Objective: 12.1 27) The decisions involved in creating and producing a corporate intranet can be classified as ________ decisions.

A) procedural B) unstructured C) structured D) semistructured Answer: D Diff: 2 Page Ref: 456 AACSB: Analytic skills CASE: Analysis Objective: 12.1 28) Checking store inventory is an example of a(n) ________ decision.

A) semistructured B) unstructured C) structured D) none of the above Answer: C Diff: 2 Page Ref: 456 AACSB: Analytic skills CASE: Analysis Objective: 12.1 29) Simon's description of decision making consists of which four stages?

A) planning, financing, implementation, and maintenance B) planning, design, implementation, and maintenance C) intelligence, design, choice, and implementation D) intelligence, design, financing, and implementation Answer: C Diff: 2 Page Ref: 457 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

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30) Which phase of decision making finds or recognizes a problem, need, or opportunity?

A) design B) intelligence C) choice D) implementation Answer: B Diff: 1 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 31) The five classical functions of managers are planning, organizing, deciding, controlling, and A) coordinating.

B) leading.

C) managing.

D) negotiating.

Answer: A Diff: 3 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 32) In contrast to the classical model of management, behavioral models see the actual behavior of managers as being more A) systematic.

B) informal.

C) reflective.

D) well organized.

Answer: B Diff: 2 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 33) Behavioral models of managers find that, from observation, managers A) perform often fewer than 100 activities a day.

B) operate best with standardized, predictable, printed information.

C) create a formalized, hierarchic structure of contacts to provide filtered information.

D) typically work in a fragmented manner, with only 10% of activities exceeding an hour in duration.

Answer: D Diff: 2 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

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34) Mintzberg's classification of managerial roles outlines which three main categories?

A) interpersonal, informational, and decisional B) symbolic, decisional, and interpersonal C) symbolic, interpersonal, and technical D) technical, interpersonal, and informational Answer: A Diff: 2 Page Ref: 459 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 35) The role of liaison falls into which of Mintzberg's managerial classifications?

A) decisional B) informational C) interpersonal D) symbolic Answer: C Diff: 3 Page Ref: 459 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 36) The role of entrepreneur falls into which of Mintzberg's managerial classifications?

A) decisional B) informational C) interpersonal D) symbolic Answer: A Diff: 3 Page Ref: 459 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 37) 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.

Answer: C Diff: 2 Page Ref: 459 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

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38) Which of the following managerial roles is not supported by information systems?

A) liaison B) nerve center C) leader D) negotiator Answer: D Diff: 3 Page Ref: 459 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 39) 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.

Answer: D Diff: 2 Page Ref: 460 AACSB: Use of information technology CASE: Content Objective: 12.2 40) The concern that data values of an information source fall within a defined range reflects which quality dimension of information?

A) accuracy B) integrity C) validity D) consistency Answer: C Diff: 3 Page Ref: 460 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 41) The concern that the structure of data is consistent within an information source reflects which quality dimension of information?

A) accuracy B) integrity C) validity D) consistency Answer: B Diff: 3 Page Ref: 460 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 9 ..

42) Which types of decisions are automated for high-velocity decision making?

A) highly-structured decisions B) semi-structured financial decisions C) unstructured financial decisions D) all of the above Answer: A Diff: 1 Page Ref: 461 AACSB: Reflective thinking skills CASE: Analysis Objective: 12.1 43) Which of the following describes how the Simon framework of decision-making works in high-velocity decision environments?

A) All four steps of the process are handled by software algorithms; humans are eliminated from the decisions because they are too slow.

B) The first three steps of the process are handled by software algorithms and the final step is handled by experienced managers.

C) The first two steps of Simon's framework are eliminated and the final two steps are handled by software algorithms.

D) All fours steps are performed by humans with the support of high-speed, high-volume DSS and ESS. Answer: A Diff: 2 Page Ref: 461 AACSB: Analytic skills CASE: Evaluation Objective: 12.1 44) Which of the following is a disadvantage of high-velocity, automated decision-making systems?

A) inability to handle high volumes of decisions B) inability to handle structured decisions C) inability to handled semi-structured decisions D) inability to control themselves and respond to new environments Answer: D Diff: 2 Page Ref: 461 AACSB: Use of information technology CASE: Analysis Objective: 12.1

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45) 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 Answer: B Diff: 1 Page Ref: 459 AACSB: Analytic skills CASE: Analysis Objective: 12.2 46) 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 Answer: A Diff: 2 Page Ref: 462 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 47) Business intelligence would be useful for analyzing and decision making in which of the following situations?

A) deciding what marketing techniques are most successful with high-value customers B) identifying the most efficient methods for packing and delivering finished products to destinations C) forecasting the effect on sales given projected future variations in weather and other environmental variables D) all of the above Answer: D Diff: 2 Page Ref: 462 AACSB: Analytic skills CASE: Analysis Objective: 12.3 48) 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 Answer: A Diff: 2 Page Ref: 463 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 11 ..

49) 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 Answer: B Diff: 2 Page Ref: 463-466 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 50) Which of the following is not one of the five main analytic functionalities of BI systems for helping decision makers understand information and take action?

A) production reports B) business case archives C) parameterized reports D) forecasts, scenarios, and models Answer: B Diff: 1 Page Ref: 466-467 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 51) ________ 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 Answer: A Diff: 1 Page Ref: 466 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 52) 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) managers C) operational employees D) business analysts Answer: B Diff: 2 Page Ref: 466-467 AACSB: Analytic skills CASE: Analysis Objective: 12.4 12 ..

53) Which of the following are most likely to rely primarily on production reports for their decision-making needs?

A) operational employees and supervisors B) senior managers C) analytic modelers D) business analysts Answer: A Diff: 2 Page Ref: 467 AACSB: Analytic skills CASE: Analysis Objective: 12.4 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) MIS D) TPS Answer: A Diff: 1 Page Ref: 9 AACSB: Use of information technology CASE: Content Objective: 12.3 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.

Answer: C Diff: 2 Page Ref: 468 AACSB: Analytic skills CASE: Analysis Objective: 12.3 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 Answer: C Diff: 3 Page Ref: 467-468 AACSB: Analytic skills CASE: Synthesis Objective: 12.3

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57) 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.

Answer: B Diff: 1 Page Ref: 471 AACSB: Use of information technology CASE: Content Objective: 12.4 58) 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. Answer: B Diff: 1 Page Ref: 471-472 AACSB: Analytic skills CASE: Analysis Objective: 12.4 59) 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.

Answer: C Diff: 2 Page Ref: 458 AACSB: Use of information technology CASE: Analysis Objective: 12.2 60) A pivot table is a 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.

Answer: A Diff: 1 Page Ref: 472 AACSB: Use of information technology CASE: Content Objective: 12.3

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61) The information system used by Caesar's Entertainment, 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. Answer: B Diff: 1 Page Ref: 474 AACSB: Analytic skills CASE: Analysis Objective: 12.4 62) 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 Answer: B Diff: 2 Page Ref: 474 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 63) 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) ESS Answer: D Diff: 2 Page Ref: 474 AACSB: Analytic skills CASE: Analysis Objective: 12.4

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64) 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. Answer: B Diff: 2 Page Ref: 474 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 65) 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. Answer: D Diff: 2 Page Ref: 475 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 66) 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.

Answer: B Diff: 2 Page Ref: 475 AACSB: Use of information technology CASE: Content Objective: 12.4 67) A well-designed ESS will allow management to A) have greater span of control.

B) assign lower levels of management greater control.

C) reduce their need to review lower levels of operation.

D) all of the above.

Answer: D Diff: 2 Page Ref: 475 AACSB: Use of information technology CASE: Content Objective: 12.4

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68) 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.

Answer: D Diff: 2 Page Ref: 475-477 AACSB: Use of information technology CASE: Content Objective: 12.5 69) 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.

Answer: D Diff: 1 Page Ref: 477 AACSB: Reflective thinking skills CASE: Content Objective: 12.5 70) 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.

Answer: B Diff: 2 Page Ref: 477 AACSB: Reflective thinking skills CASE: Content Objective: 12.5 71) A(n) ________ decision is repetitive and routine, for which known procedures provide solutions.

Answer: structured Diff: 1 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

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72) The third stage in Simon's description of decision making is ________.

Answer: choice Diff: 2 Page Ref: 457 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 73) When managers represent their company in the outside world and perform symbolic duties, they are acting in their ________ role.

Answer: interpersonal Diff: 2 Page Ref: 459 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 74) The concept of management ________ describes situations in which managers act on biases that reject information that does not conform to their expectations.

Answer: filters Diff: 2 Page Ref: 460 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 75) The dimension of ________ in information quality describes whether data is available when needed.

Answer: timeliness Diff: 2 Page Ref: 460 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 76) BI that is designed to determine the most likely effects of changes in the business environment is called ________.

Answer: predictive analytics Diff: 1 Page Ref: 467 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 77) A(n)________ report is produced when a user enters various values in a pivot table to filter data.

Answer: parameterized Diff: 1 Page Ref: 466 AACSB: Use of information technology CASE: Content Objective: 12.3 18 ..

78) A(n) ________ is a BI feature that presents users with an easy-to-understand display of information designed to convey a comprehensive view of firm performance.

Answer: dashboard, scorecard Diff: 2 Page Ref: 466 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 79) The ________ is the leading methodology for understanding the most important information needed by a firm's executives.

Answer: balanced scorecard method Diff: 2 Page Ref: 474 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 80) A(n) ________ facilitates the solution to unstructured problems by a set of decision makers working together as a group.

Answer: group decision-support systems, GDSS Diff: 2 Page Ref: 475 AACSB: Use of information technology CASE: Content Objective: 12.5 81) 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.

Diff: 2 Page Ref: 457 AACSB: Analytic skills CASE: Synthesis Objective: 12.1

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82) 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.

Diff: 2 Page Ref: 460 AACSB: Analytic skills CASE: Synthesis Objective: 12.2 83) 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.

Diff: 2 Page Ref: 463-466 AACSB: Analytic skills CASE: Synthesis Objective: 12.3

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84) 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.

Diff: 3 Page Ref: 469 AACSB: Analytic skills CASE: Synthesis Objective: 12.3 85) 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.

Diff: 2 Page Ref: 470 AACSB: Analytic skills CASE: Evaluation Objective: 12.3

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86) 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.

Diff: 2 Page Ref: 471-472 AACSB: Analytic skills CASE: Analysis Objective: 12.4 87) 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.

Diff: 2 Page Ref: 472 AACSB: Analytic skills CASE: Analysis Objective: 12.3 88) 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.

Diff: 2 Page Ref: 471-474 AACSB: Analytic skills CASE: Analysis Objective: 12.4 22 ..

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.

Diff: 2 Page Ref: 474 AACSB: Analytic skills CASE: Analysis Objective: 12.4

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Management Information Systems, 13e (Laudon/Laudon) Chapter 13 Building Information Systems 1) The most common form of IT-enabled organizational change is automation.

Answer: TRUE Diff: 2 Page Ref: 490 AACSB: Use of information technology CASE: Content Objective: 13.1 2) Rationalization of procedures describes a radical rethinking of the business models.

Answer: FALSE Diff: 2 Page Ref: 491 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 3) Failure to address properly the organizational changes surrounding the introduction of a new system can cause the demise of an otherwise good system.

Answer: TRUE Diff: 2 Page Ref: 491 AACSB: Analytic skills CASE: Evaluation Objective: 13.1 4) TQM describes the measurement of quality as 3.4 defects per million.

Answer: FALSE Diff: 2 Page Ref: 491 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 5) In component-based development, applications are developed one small portion at a time, with each portion able to function independently.

Answer: FALSE Diff: 2 Page Ref: 515 AACSB: Reflective thinking skills CASE: Content Objective: 13.5 6) The system is not in production until conversion is complete.

Answer: TRUE Diff: 2 Page Ref: 501 AACSB: Use of information technology CASE: Content Objective: 13.2 1 ..

7) Documentation reveals how well the system has met its original objectives.

Answer: FALSE Diff: 3 Page Ref: 501 AACSB: Use of information technology CASE: Content Objective: 13.2 8) 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 Diff: 2 Page Ref: 503 AACSB: Use of information technology CASE: Content Objective: 13.3 9) 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 Diff: 2 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.3 10) Objects are grouped into hierarchies, and hierarchies into classes.

Answer: FALSE Diff: 2 Page Ref: 505 AACSB: Use of information technology CASE: Content Objective: 13.3 11) Object-oriented development is more incremental than traditional structured development.

Answer: TRUE Diff: 2 Page Ref: 505 AACSB: Use of information technology CASE: Content Objective: 13.3 12) CASE tools facilitate the creation of clear documentation and the coordination of team development efforts.

Answer: TRUE Diff: 1 Page Ref: 506 AACSB: Use of information technology CASE: Content Objective: 13.3

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13) The oldest method for building information systems is prototyping.

Answer: FALSE Diff: 2 Page Ref: 507 AACSB: Use of information technology CASE: Content Objective: 13.4 14) Prototyping is more iterative than the conventional lifecycle.

Answer: TRUE Diff: 2 Page Ref: 508 AACSB: Use of information technology CASE: Content Objective: 13.4 15) A problem with prototyping is that the systems constructed using this method may not be able to handle large quantities of data in a production environment.

Answer: TRUE Diff: 2 Page Ref: 509 AACSB: Use of information technology CASE: Content Objective: 13.4 16) End-user-developed systems can be completed more rapidly than those developed through the conventional systems lifecycle.

Answer: TRUE Diff: 1 Page Ref: 510 AACSB: Use of information technology CASE: Content Objective: 13.4 17) Responsive Web design enables Web sites to change layouts according to the user's screen size.

Answer: TRUE Diff: 1 Page Ref: 515 AACSB: Use of information technology CASE: Content Objective: 13.5 18) The three main platforms for mobile apps are iPhone/iPad, iOS, and Android.

Answer: FALSE Diff: 1 Page Ref: 516 AACSB: Use of information technology CASE: Content Objective: 13.5

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19) A primary benefit of offshore outsourcing is that this can substantially reduce hidden costs.

Answer: FALSE Diff: 1 Page Ref: 513 AACSB: Use of information technology CASE: Content Objective: 13.4 20) Systems development activities always take place in sequential order.

Answer: FALSE Diff: 2 Page Ref: 514 AACSB: Use of information technology CASE: Content Objective: 13.5 21) 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, reengineering, and paradigm shift.

D) automation, redesigning, restructuring, and paradigm shift.

Answer: C Diff: 2 Page Ref: 490 AACSB: Analytic skills CASE: Analysis Objective: 13.1 22) 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.

Answer: D Diff: 2 Page Ref: 490 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

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23) Business processes are analyzed, simplified, and redesigned in A) business process redesign.

B) rationalization of procedures.

C) automation.

D) paradigm shifts.

Answer: A Diff: 2 Page Ref: 491 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 24) 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.

Answer: B Diff: 2 Page Ref: 491 AACSB: Analytic skills CASE: Analysis Objective: 13.1 25) 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.

Answer: C Diff: 2 Page Ref: 490 AACSB: Analytic skills CASE: Analysis Objective: 13.1 26) 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. Answer: D Diff: 3 Page Ref: 491 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 5 ..

27) ________ 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 Answer: B Diff: 3 Page Ref: 492 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 28) 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 Answer: A Diff: 1 Page Ref: 501 AACSB: Reflective thinking skills CASE: Content Objective: 13.2 29) 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.

Answer: A Diff: 2 Page Ref: 492-493 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

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30) 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 Answer: D Diff: 1 Page Ref: 494 AACSB: Analytic skills CASE: Analysis Objective: 13.1 31) 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.

Answer: D Diff: 1 Page Ref: 494-495 AACSB: Use of information technology CASE: Content Objective: 13.1 32) 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 Answer: B Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.2 33) 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.

Answer: B Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.2

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34) 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.

Answer: A Diff: 3 Page Ref: 515 AACSB: Analytic skills CASE: Analysis Objective: 13.5 35) 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 Answer: D Diff: 3 Page Ref: 499 AACSB: Use of information technology CASE: Content Objective: 13.2 36) Which of the following is not an example of fourth generation development tools?

A) Microsoft Excel B) graphics software, such as Photoshop C) report generator D) very high-level programming language Answer: B Diff: 1 Page Ref: 510 AACSB: Use of information technology CASE: Content Objective: 13.4 37) The entire system-building effort is driven by A) organizational change.

B) feasibility studies.

C) the information value chain.

D) user information requirements.

Answer: D Diff: 2 Page Ref: 499 AACSB: Analytic skills CASE: Analysis Objective: 13.3

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38) 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.

Answer: C Diff: 1 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.2 39) 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.

Answer: B Diff: 2 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.2 40) 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.

Answer: D Diff: 1 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.2 41) 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 together.

D) is introduced in stages.

Answer: C Diff: 2 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.2 9 ..

42) 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.

Answer: B Diff: 1 Page Ref: 501 AACSB: Use of information technology CASE: Content Objective: 13.2 43) 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.

Answer: C Diff: 2 Page Ref: 502 AACSB: Use of information technology CASE: Content Objective: 13.2 44) In what stage of systems development are design specifications created?

A) systems analysis B) systems design C) testing D) conversion Answer: B Diff: 2 Page Ref: 502 AACSB: Use of information technology CASE: Content Objective: 13.2 45) 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.

Answer: D Diff: 2 Page Ref: 503 AACSB: Use of information technology CASE: Content Objective: 13.3

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46) 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.

Answer: A Diff: 2 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.3 47) 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.

Answer: A Diff: 3 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.3 48) 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.

Answer: A Diff: 2 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.3 49) 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.

Answer: C Diff: 2 Page Ref: 505 AACSB: Analytic skills CASE: Evaluation Objective: 13.3

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50) 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.

Answer: B Diff: 2 Page Ref: 505 AACSB: Analytic skills CASE: Analysis Objective: 13.3 51) 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.

Answer: C Diff: 2 Page Ref: 505 AACSB: Use of information technology CASE: Content Objective: 13.3 52) 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.

Answer: C Diff: 2 Page Ref: 506 AACSB: Use of information technology CASE: Content Objective: 13.3 53) CASE tools automate A) documentation.

B) code generation.

C) creating data dictionaries.

D) all of the above.

Answer: D Diff: 2 Page Ref: 506 AACSB: Use of information technology CASE: Content Objective: 13.3

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54) The oldest method for building information systems is A) component-based development.

B) prototyping.

C) object-oriented development.

D) the systems development lifecycle.

Answer: D Diff: 2 Page Ref: 507 AACSB: Use of information technology CASE: Content Objective: 13.4 55) 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.

Answer: D Diff: 2 Page Ref: 507 AACSB: Use of information technology CASE: Content Objective: 13.4 56) 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) all of the above Answer: A Diff: 1 Page Ref: 508 AACSB: Use of information technology CASE: Content Objective: 13.4

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57) 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.

Answer: B Diff: 2 Page Ref: 508 AACSB: Analytic skills CASE: Synthesis Objective: 13.5 58) 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 Answer: D Diff: 2 Page Ref: 508 AACSB: Analytic skills CASE: Synthesis Objective: 13.4 59) 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.

Answer: B Diff: 2 Page Ref: 508 AACSB: Use of information technology CASE: Content Objective: 13.4

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60) Which type of fourth-generation language tools are end users most likely to work with?

A) report generators and query languages B) report generators and application generators C) PC software tools and query languages D) PC software tools and report generators Answer: C Diff: 3 Page Ref: 510 AACSB: Use of information technology CASE: Content Objective: 13.4 61) Which type of fourth-generation language tool contains preprogrammed modules that can be used to create entire applications?

A) PC software tools B) report generators C) application generators D) application software packages Answer: C Diff: 2 Page Ref: 510 AACSB: Use of information technology CASE: Content Objective: 13.4 62) Fourth-generation tools cannot replace conventional development tools because they A) cannot handle large numbers of transactions or extensive procedural logic.

B) are not designed to integrate with legacy systems.

C) do not incorporate methods for documentation.

D) do not incorporate methods for testing.

Answer: A Diff: 3 Page Ref: 510-511 AACSB: Use of information technology CASE: Content Objective: 13.4 63) 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.

Answer: D Diff: 2 Page Ref: 511 AACSB: Use of information technology CASE: Content Objective: 13.4

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64) 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 Answer: D Diff: 2 Page Ref: 515 AACSB: Analytic skills CASE: Analysis Objective: 13.5 65) 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) all of the above Answer: A Diff: 2 Page Ref: 512 AACSB: Reflective thinking skills CASE: Content Objective: 13.4 66) The process of creating workable information systems in a very short period of time is called A) RAD. B) JAD. C) prototyping.

D) B and C. Answer: A Diff: 2 Page Ref: 514 AACSB: Use of information technology CASE: Content Objective: 13.5 67) 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 Answer: B Diff: 2 Page Ref: 514 AACSB: Use of information technology CASE: Content Objective: 13.5

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68) 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 Answer: B Diff: 2 Page Ref: 514-515 AACSB: Use of information technology CASE: Content Objective: 13.5 69) ________ 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 Answer: A Diff: 2 Page Ref: 514 AACSB: Use of information technology CASE: Content Objective: 13.5 70) 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) the use of universal standards.

C) the ubiquity of the Internet.

D) the ability to reuse Web services components.

Answer: B Diff: 2 Page Ref: 515 AACSB: Use of information technology CASE: Content Objective: 13.5 71) A software package evaluation process is often based on a series of questions sent to vendors, called a(n) ________.

Answer: RFP, request for proposal Diff: 2 Page Ref: 511 AACSB: Reflective thinking skills CASE: Content Objective: 13.4

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72) A(n) ________ is an organizational change that involves rethinking the nature of the business and the nature of the organization itself.

Answer: paradigm shift Diff: 2 Page Ref: 491 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 73) A systems analysis includes a(n) ________ that is used to determine whether the solution is achievable, from a financial, technical, and organizational standpoint.

Answer: feasibility study Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.2 74) ________ contain 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.

Answer: Information requirements Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.2 75) 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.

Answer: systems design Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.2 76) During the ________ stage of system development, system specifications that were prepared during the design stage are translated into software code.

Answer: programming Diff: 1 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.2 77) ________ is the process of changing from the old system to the new system.

Answer: Conversion Diff: 2 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.2 18 ..

78) ________ describe the transformation occurring within the lowest level of the data flow diagrams.

Answer: Process specifications Diff: 3 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.3 79) ________ are software tools that enable end users to create reports or develop software applications with minimal or no technical assistance.

Answer: Fourth-generation languages Diff: 3 Page Ref: 509 AACSB: Use of information technology CASE: Content Objective: 13.4 80) Organizational software packages often include ________ features that allow the software to be modified to meet organizational requirements.

Answer: customization Diff: 1 Page Ref: 511 AACSB: Use of information technology CASE: Content Objective: 13.3 81) 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.

Diff: 2 Page Ref: 490-491 AACSB: Analytic skills CASE: Synthesis Objective: 13.1 19 ..

82) 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.

Diff: 2 Page Ref: 491 AACSB: Analytic skills CASE: Analysis Objective: 13.1 83) 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.

Diff: 3 Page Ref: 498 AACSB: Analytic skills CASE: Synthesis Objective: 13.2 20 ..

84) 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 Diff: 2 Page Ref: 499 AACSB: Analytic skills CASE: Analysis Objective: 13.2 85) 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.

Diff: 2 Page Ref: 498-515 AACSB: Analytic skills CASE: Synthesis Objective: 13.2

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86) 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.

Diff: 3 Page Ref: 500 AACSB: Analytic skills CASE: Synthesis Objective: 13.2 87) 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.

Diff: 2 Page Ref: 504-506 AACSB: Analytic skills CASE: Evaluation Objective: 13.3 88) 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.

Diff: 2 Page Ref: 507-513 AACSB: Analytic skills CASE: Analysis Objective: 13.4

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89) 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.

Diff: 2 Page Ref: 508-509 AACSB: Analytic skills CASE: Evaluation Objective: 13.4 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.

Diff: 2 Page Ref: 512-513 AACSB: Analytic skills CASE: Evaluation Objective: 13.5

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Management Information Systems, 13e (Laudon/Laudon) Chapter 14 Managing Projects 1) The cost of a project is based on the time taken to complete the project.

Answer: TRUE Diff: 2 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 2) An information system project's scope is directly related to its business requirements.

Answer: TRUE Diff: 2 Page Ref: 533 AACSB: Analytic skills CASE: Analysis Objective: 14.1 3) 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 Diff: 3 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 4) An information systems plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals.

Answer: TRUE Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 5) 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 Diff: 2 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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6) Scoring models are used most commonly to support decisions rather than as the final arbiters of system selection.

Answer: TRUE Diff: 2 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 7) Transaction and clerical systems that displace labor and save space typically produce more measurable, tangible benefits than management information systems.

Answer: TRUE Diff: 3 Page Ref: 538 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 8) Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in the long run.

Answer: TRUE Diff: 1 Page Ref: 538 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 9) 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 Diff: 2 Page Ref: 538-539 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 10) More timely information is a tangible benefit of information systems.

Answer: FALSE Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 11) Real options pricing models use the concept of options valuation borrowed from the financial industry.

Answer: TRUE Diff: 1 Page Ref: 540 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 2 ..

12) The larger the systems project, the more risk the project runs in terms of being completed on time, within budget, and according to project requirements.

Answer: TRUE Diff: 1 Page Ref: 541 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 13) 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 Diff: 1 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 14) The relationship between users and information systems specialists has traditionally been a problem area for information systems implementation efforts.

Answer: TRUE Diff: 1 Page Ref: 543 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 15) 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 Diff: 2 Page Ref: 543 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 16) A Gantt chart graphically depicts project tasks and their interrelationships.

Answer: FALSE Diff: 2 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 17) Mandatory use of a system is one effective way of overcoming user resistance to an information system.

Answer: FALSE Diff: 2 Page Ref: 547 AACSB: Analytic skills CASE: Analysis Objective: 14.5 3 ..

18) Counterimplementation refers to a deliberate strategy to thwart the implementation of an information system or an innovation in an organization.

Answer: TRUE Diff: 2 Page Ref: 547 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 19) The design of jobs, health issues, and the end-user interface of information systems are all considerations in the field of ergonomics.

Answer: TRUE Diff: 2 Page Ref: 549 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 20) The goal of sociotechnical design is to create systems with better user interfaces and contribute to fewer health issues.

Answer: FALSE Diff: 3 Page Ref: 550 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 21) On average, private sector IT projects underestimated budget and delivery time of systems by ________ percent.

A) 30 B) 40 C) 50 D) 60 Answer: C Diff: 2 Page Ref: 529 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 22) 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) organizational conflict C) time slippage D) technical shortfalls Answer: B Diff: 1 Page Ref: 529 AACSB: Analytic skills CASE: Analysis Objective: 14.1 4 ..

23) Which of the following is not one of the five main variables affecting project success?

A) risk B) goals C) time D) quality Answer: B Diff: 2 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 24) 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.

Answer: C Diff: 2 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 25) 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 Answer: C Diff: 2 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 26) 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 Answer: B Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 5 ..

27) 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 Answer: B Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 28) 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.

Answer: C Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 29) 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 Answer: D Diff: 2 Page Ref: 550 AACSB: Analytic skills CASE: Synthesis Objective: 14.1

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30) 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.

Answer: D Diff: 2 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 31) Which of the following project management variables indicates how well the project satisfies management objectives?

A) goals B) risk C) quality D) scope Answer: C Diff: 1 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 32) 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.

Answer: A Diff: 2 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 33) 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.

Answer: D Diff: 2 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 7 ..

34) 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 Answer: C Diff: 2 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 35) 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 Answer: C Diff: 2 Page Ref: 536 AACSB: Analytic skills CASE: Analysis Objective: 14.2 36) 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.

Answer: B Diff: 2 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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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 A and D F) both B and C G) A, B, C and D Answer: F Diff: 2 Page Ref: 539-540 AACSB: Analytic skills CASE: Evaluation Objective: 14.3 38) 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 Answer: B Diff: 1 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 39) 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.

Answer: A Diff: 3 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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40) 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.

Answer: D Diff: 1 Page Ref: 537-538 AACSB: Analytic skills CASE: Evaluation Objective: 14.3 41) 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.

Answer: D Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 42) 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 Answer: C Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 43) 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. Answer: B Diff: 2 Page Ref: 540 AACSB: Reflective thinking skills CASE: Content Objective: 14.3

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44) In working with ROPMs 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.

Answer: D Diff: 2 Page Ref: 540 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 45) ROPMs 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.

Answer: C Diff: 2 Page Ref: 540 AACSB: Analytic skills CASE: Analysis Objective: 14.3 46) 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.

Answer: B Diff: 2 Page Ref: 540 AACSB: Analytic skills CASE: Analysis Objective: 14.3 47) 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 Answer: D Diff: 1 Page Ref: 541 AACSB: Analytic skills CASE: Evaluation Objective: 14.3 11 ..

48) 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 Answer: A Diff: 2 Page Ref: 529-551 AACSB: Analytic skills CASE: Synthesis Objective: 14.5 49) 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.

Answer: B Diff: 2 Page Ref: 541-542 AACSB: Analytic skills CASE: Analysis Objective: 14.4 50) 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.

Answer: C Diff: 3 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

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51) 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.

Answer: C Diff: 1 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 52) 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.

Answer: B Diff: 2 Page Ref: 542 AACSB: Analytic skills CASE: Analysis Objective: 14.4 53) 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.

Answer: A Diff: 1 Page Ref: 542 AACSB: Analytic skills CASE: Evaluation Objective: 14.4 54) 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.

Answer: A Diff: 2 Page Ref: 543 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

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55) 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 Answer: D Diff: 1 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 56) Which of the following statistics from studies on failed projects is not true?

A) Between 30 and 40 percent of software projects fail in terms of budget, schedule, and quality.

B) Thirty-two percent of technology investments are completed on time, within budget, and with requirements met.

C) The average cost overrun of IT projects is 60 percent.

D) One in six IT projects have an average cost overrun of 200 percent.

Answer: C Diff: 2 Page Ref: 529 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 57) 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 Answer: C Diff: 2 Page Ref: 543-544 AACSB: Analytic skills CASE: Evaluation Objective: 14.4 58) 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 Answer: A Diff: 2 Page Ref: 543-544 AACSB: Analytic skills CASE: Analysis Objective: 14.4

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59) Which of the following tools would you 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) A and B E) A and C F) all of the above Answer: F Diff: 1 Page Ref: 544-545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 60) 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.

Answer: A Diff: 3 Page Ref: 544-545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 61) 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.

Answer: D Diff: 2 Page Ref: 545 AACSB: Analytic skills CASE: Synthesis Objective: 14.5

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62) 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.

Answer: B Diff: 2 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 63) 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 Diff: 2 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 64) 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 Diff: 2 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 65) 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 Diff: 1 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 16 ..

66) 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 Diff: 2 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 67) 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 Diff: 3 Page Ref: 545 AACSB: Analytic skills CASE: Synthesis Objective: 14.5 68) 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 Diff: 1 Page Ref: 550 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 69) 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 Diff: 2 Page Ref: 550 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 17 ..

70) The most widely used project management software today is A) Vertabase.

B) IBM Project Guide.

C) Microsoft Project.

D) Microsoft Excel.

Answer: C Diff: 1 Page Ref: 550 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 71) ________ refers to the application of knowledge, skills, tools and techniques to achieve specific targets within specified budget and time constraints.

Answer: Project management Diff: 1 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 72) One of the five major variables in project management, ________ is an indicator of how well the project satisfies management objectives.

Answer: quality Diff: 1 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 73) A(n) ________ is a method for deciding among alternative systems based on a system of ratings for selected objectives.

Answer: scoring model Diff: 2 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 74) The ________ is the part of the system that users interact with.

Answer: user interface Diff: 1 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.1

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75) ________ methods rely on measures of cash flows into and out of the firm.

Answer: Capital budgeting Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 76) A planned series of related activities for achieving a specific business goal is called a(n) ________.

Answer: project Diff: 1 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 77) Successful system building requires careful ________ management to minimize organizational resistance.

Answer: change Diff: 2 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 78) 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 Diff: 2 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 79) 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 Diff: 2 Page Ref: 543 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 80) ________ 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 Diff: 2 Page Ref: 549 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 19 ..

81) 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?

Diff: 2 Page Ref: 529-533 AACSB: Analytic skills CASE: Synthesis Objective: 14.2 82) 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.

Diff: 2 Page Ref: 533-534 AACSB: Analytic skills CASE: Analysis Objective: 14.2

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83) 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 Diff: 3 Page Ref: 534-536 AACSB: Analytic skills CASE: Analysis Objective: 14.2 84) 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.

Diff: 2 Page Ref: 534-537 AACSB: Analytic skills CASE: Evaluation Objective: 14.2 85) 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.

Diff: 1 Page Ref: 536 AACSB: Analytic skills CASE: Evaluation Objective: 14.2

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86) 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.

Diff: 2 Page Ref: 537 AACSB: Analytic skills CASE: Analysis Objective: 14.2 87) 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.

Diff: 2 Page Ref: 538-539 AACSB: Analytic skills CASE: Evaluation Objective: 14.3

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88) 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.

Diff: 2 Page Ref: 540-541 AACSB: Analytic skills CASE: Analysis Objective: 14.3

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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.

Diff: 2 Page Ref: 541-542 AACSB: Analytic skills CASE: Evaluation Objective: 14.4

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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.

Diff: 2 Page Ref: 542-550 AACSB: Analytic skills CASE: Synthesis Objective: 14.5

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Management Information Systems, 13e (Laudon/Laudon) Chapter 15 Managing Global Systems 1) The first step in establishing a corporate strategy and structure for globalization is to determine the appropriate technology platform.

Answer: FALSE Diff: 1 Page Ref: 564 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 2) Global business drivers can be divided into two groups: general cultural factors and specific business factors.

Answer: TRUE Diff: 2 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 3) The growth of powerful communications technologies and the emergence of world cultures create the condition for global markets.

Answer: TRUE Diff: 2 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 4) The collapse of the Eastern block has speeded the growth of a world culture.

Answer: TRUE Diff: 1 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 5) Micromarketing describes the direct marketing of products to individuals rather than groups.

Answer: FALSE Diff: 2 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 6) A powerful strategic advantage for a globalized firm is lowered cost factors in production.

Answer: TRUE Diff: 2 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 1 ..

7) Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services.

Answer: FALSE Diff: 3 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 8) Developing international networks has few problems today because of the global acceptance of Internet standards.

Answer: FALSE Diff: 1 Page Ref: 580 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 9) In a transnational business strategy, all of the regional units participate and coordinate over all activities, from production to sales.

Answer: TRUE Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 10) European countries have very strict laws concerning transborder data flows and privacy.

Answer: TRUE Diff: 1 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 11) In a duplicated systems building strategy, each foreign unit designs its own solutions and systems.

Answer: FALSE Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 12) To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms have developed information systems within each European country.

Answer: TRUE Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 2 ..

13) With the growth of the Internet and reliable phone networks, skilled consultants are readily available to companies operating in global markets.

Answer: FALSE Diff: 1 Page Ref: 567-568 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 14) Accounting practices can vary significantly from country to country.

Answer: TRUE Diff: 1 Page Ref: 568 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 15) In international companies, English has become a kind of standard business language.

Answer: TRUE Diff: 2 Page Ref: 568 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 16) There are two primary global organization types: management centralized in the home country or distributed to foreign centers.

Answer: FALSE Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 17) In a multinational strategy, financial management is centralized while production and sales are decentralized.

Answer: TRUE Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 18) Global systems allow fixed costs to be amortized over a much smaller customer base.

Answer: FALSE Diff: 2 Page Ref: 575 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

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19) One major telecommunications challenge in an international setting is making data flow seamlessly across networks shaped by disparate national standards.

Answer: TRUE Diff: 2 Page Ref: 579-580 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 20) Private networks may not provide the same level of quick and predictable response as VPNs. Answer: FALSE Diff: 3 Page Ref: 580 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 21) 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.

Answer: A Diff: 1 Page Ref: 564 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 22) 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.

Answer: D Diff: 2 Page Ref: 564 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

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23) 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.

Answer: A Diff: 3 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 24) Global coordination of all of the major business functions permits the location of business activity according to A) social norms and values.

B) comparative advantage.

C) competitive threat.

D) knowledge base.

Answer: B Diff: 3 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 25) 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.

Answer: C Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

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26) 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 Answer: B Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 27) All of the following present challenges to developing a global business except A) foreign accounting practices.

B) production costs.

C) language differences.

D) exchange rates.

Answer: B Diff: 3 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 28) Which of the following is not a specific challenge to global business system?

A) shortages of skilled consultants B) language differences C) different telecommunication standards D) different data transfer speeds Answer: B Diff: 3 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 29) 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.

Answer: D Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

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30) 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.

Answer: A Diff: 3 Page Ref: 568 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 31) 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.

Answer: B Diff: 3 Page Ref: 568 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 32) In terms of global business strategy and structure, a domestic exporter will use a policy of A) some dispersed sales, with centralized production, accounting, human resources, and strategic management.

B) centralized production and accounting with decentralized marketing and human resources.

C) centralized production, accounting, marketing, and human resources.

D) dispersed production and marketing, with centralized accounting, human resources and strategic management.

Answer: A Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 33) 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 Answer: D Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 7 ..

34) Most companies pursuing a global strategy begin as A) domestic exporters.

B) multinationals.

C) franchisers.

D) transnationals.

Answer: A Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 35) 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 Answer: D Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 36) 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.

Answer: D Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

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37) Which of the following is not one of the three kinds of organizational governance used by global companies?

A) centralized B) decentralized C) coordinated D) localized Answer: D Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 38) 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.

Answer: D Diff: 2 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 39) Which of the following is not one of the primary types of system configuration discussed in the chapter?

A) decentralized B) duplicated C) coordinated D) networked Answer: C Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

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40) 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 Answer: D Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 41) 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.

Answer: D Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 42) 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.

Answer: A Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

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43) 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.

Answer: B Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 44) 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.

Answer: C Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 45) Domestic exporters typically have highly ________ systems.

A) duplicated B) centralized C) networked D) decentralized Answer: B Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 46) Multinational companies tend to have ________ systems.

A) duplicated B) centralized C) networked D) decentralized Answer: D Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 11 ..

47) Franchise companies have typically had ________ systems.

A) duplicated B) centralized C) networked D) decentralized Answer: A Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 48) Transnational companies have tended to use a ________ systems configuration.

A) duplicated B) centralized C) networked D) decentralized Answer: C Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 49) The network systems structure is the most visible in ________ services.

A) production B) financial C) marketing D) software design Answer: B Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 50) 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. F) none of the above.

Answer: E Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 12 ..

51) Of the following, which is not one of the three 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 a single office responsible 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 each level of corporate activity—regional, national, and international.

Answer: C Diff: 2 Page Ref: 571-572 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 52) 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.

Answer: D Diff: 2 Page Ref: 576 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 53) Which of the following is not one of the principle 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 Answer: C Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

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54) 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.

Answer: A Diff: 3 Page Ref: 573 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 55) 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 Answer: A Diff: 2 Page Ref: 573-574 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 56) The chapter outlines three 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) Define the core business processes.

Answer: A Diff: 2 Page Ref: 574-575 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 57) 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.

Answer: C Diff: 2 Page Ref: 574 AACSB: Reflective thinking skills CASE: Content Objective: 15.5

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58) Based on your reading of the chapter, why should companies avoid creating an allencompassing, new global system when moving towards global operations?

A) These may fail due to lack of visibility.

B) It is difficult to quantify and explain the benefits of information systems that are that large.

C) "Grand design" approaches typically fail to identify centers of excellence.

D) Opposition is strengthened because of requirements for huge resources.

Answer: D Diff: 3 Page Ref: 574-575 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 59) From your reading of the chapter case, which of the following best describes the challenge Primark 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) diverse information systems throughout foreign units D) managing a global supply chain Answer: C Diff: 2 Page Ref: 583 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 60) 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.

Answer: B Diff: 1 Page Ref: 574 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 61) 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 Answer: D Diff: 2 Page Ref: 575 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

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62) 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.

Answer: A Diff: 1 Page Ref: 576 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 63) 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.

Answer: C Diff: 2 Page Ref: 576 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 64) 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 some networking problems.

D) all of the above.

Answer: C Diff: 2 Page Ref: 579 AACSB: Analytic skills CASE: Analysis Objective: 15.5 65) 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) all of the above.

Answer: A Diff: 2 Page Ref: 579 AACSB: Analytic skills CASE: Analysis Objective: 15.5

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66) VPNs A) use the public Internet for communications.

B) may not be able to support large numbers of remote users, due to the variable traffic on the Internet.

C) provide many of the same services as private networks.

D) all of the above.

Answer: D Diff: 2 Page Ref: 580 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 67) Which of the following is not one of the principle problems of international networks?

A) network capacity B) poor quality of international service C) network standards D) regulatory constraints Answer: C Diff: 2 Page Ref: 580 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 68) 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.

Answer: A Diff: 2 Page Ref: 580 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 69) 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.

Answer: C Diff: 3 Page Ref: 581 AACSB: Reflective thinking skills CASE: Content Objective: 15.5

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70) 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) none of the above Answer: B Diff: 1 Page Ref: 582 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 71) A(n) international information systems ________ consists of the basic information systems required by organizations to coordinate worldwide trade and other activities.

Answer: architecture Diff: 1 Page Ref: 564 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 72) The global ________ created by television, the Internet, and other globally shared media permits different peoples around the world to develop common expectations and values.

Answer: culture Diff: 2 Page Ref: 565-566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 73) A(n) ________ is formed by consumers around the world who are interested in consuming similar products that are culturally approved.

Answer: global market Diff: 2 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 74) Global markets, production, and administration create the conditions for powerful global economies of ________.

Answer: scale Diff: 2 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

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75) Japanese consumers who only want to purchase products made in Japan are an example of cultural ________.

Answer: particularism Diff: 2 Page Ref: 567 AACSB: Analytic skills CASE: Analysis Objective: 15.4 76) The movement of information across international boundaries is called ________.

Answer: transborder data flow Diff: 3 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 77) ________ firms have no single national headquarters but have many regional headquarters and perhaps a world headquarters.

Answer: Transnational Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 78) ________ systems support functions that are absolutely critical to the organization.

Answer: Core Diff: 2 Page Ref: 574 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 79) ________ is defined as the extent to which your authority is accepted on grounds of competence, vision, or other qualities.

Answer: Legitimacy Diff: 2 Page Ref: 576 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 80) ________ is defined as bringing the opposing local organization groups into the process of designing and implementing an information systems solution without giving up control over the direction and nature of the change.

Answer: Cooptation Diff: 3 Page Ref: 576 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 19 ..

81) 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.

Diff: 2 Page Ref: 564-565 AACSB: Analytic skills CASE: Analysis Objective: 15.5 82) 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.

Diff: 2 Page Ref: 565 AACSB: Analytic skills CASE: Analysis Objective: 15.1

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83) 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 component-based programming.

Diff: 2 Page Ref: 567 AACSB: Analytic skills CASE: Analysis Objective: 15.4 84) 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.

Diff: 3 Page Ref: 567-568 AACSB: Analytic skills CASE: Analysis Objective: 15.1

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85) 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.

Diff: 1 Page Ref: 569-570 AACSB: Analytic skills CASE: Analysis Objective: 15.2 86) 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, an international.

3. Establish at world headquarters a single office responsible for development of international systems, a global chief information officer position.

Diff: 1 Page Ref: 571-572 AACSB: Analytic skills CASE: Analysis Objective: 15.2 87) 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.

Diff: 2 Page Ref: 572 AACSB: Analytic skills CASE: Evaluation Objective: 15.5

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88) 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.

Diff: 3 Page Ref: 572-579 AACSB: Analytic skills CASE: Evaluation Objective: 15.4 89) 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.

Diff: 1 Page Ref: 575 AACSB: Analytic skills CASE: Analysis Objective: 15.3

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90) 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.

Diff: 2 Page Ref: 580-581 AACSB: Analytic skills CASE: Synthesis Objective: 15.5

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