(Test Bank) Management Information Systems Managing The Digital Firm

Laudon,Laudon, 17

Computer Science & Engineering

Test Bank

17th Edition

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Author(s): Laudon, Laudon

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1 Copyright © 2022 Pearson Education, Inc. Management Information Systems, 17e (Laudon/Laudon) Chapter 1 Information Systems in Global Business Today 1) Which of the following is not one of the six strategic business objectives that businesses are seeking to achieve when they invest in information systems? A) Operational excellence B) Improved decision making C) Improved community relations D) Competitive advantage E) Survival Answer: C Difficulty: Challenging AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 2) Verizon Corporation uses a web-based digital dashboard to provide managers with real-time information in order to: A) comply with regulations. B) improve decision making. C) create customer intimacy. D) improve employee morale. E) create supplier intimacy. Answer: B Difficulty: Challenging AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 3) Which of the following may lead to competitive advantage? 1. New products, services, and business models 2. Charging less for superior products 3. Responding to customers in real time A) 1 only B) 1 and 2 C) 2 and 3 D) 1 and 3 E) 1, 2, and 3 Answer: E Difficulty: Challenging AACSB: Analytical thinking LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 2 Copyright © 2022 Pearson Education, Inc. 4) A firm that invests in an information system because it is a necessity of doing business does so because it is seeking to achieve which of the following business objectives? A) Operational excellence B) Improved decision making C) Competitive advantage D) Customer intimacy E) Survival Answer: E Difficulty: Moderate AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 5) The Mandarin Oriental uses computer systems to keep track of guests' preferences in order to: A) Improve flexibility B) Improve decision making C) Increase efficiency D) Enhance customer intimacy E) Achieve operational excellence Answer: D Difficulty: Moderate AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 6) All of the following are examples of challenges that required companies to create information systems as a necessity of doing business except: A) Walmart's development of Retail Link. B) Citibank's development of an ATM network. C) the passage of the Toxic Substances Control Act. D) the passage of the Sarbanes-Oxley Act. E) the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Answer: A Difficulty: Challenging AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 3 Copyright © 2022 Pearson Education, Inc. 7) As discussed in the chapter-opening case, AWM Smart Shelf can help brands and retailers achieve which of the following? A) Increased customer intimacy B) Survival C) Improved employee morale D) Development of new products E) Increased supplier intimacy Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 8) Which of the following is an example of a business using information systems to improve supplier intimacy? A) Citibank's ATM system B) The Mandarin Oriental's use of computers to keep track of guest preferences C) Verizon Corporation's use of a web-based digital dashboard to provide real-time information for managers D) Apple's creation of the iPad E) JCPenney's information system that allows its contract manufacturers to see what garments have been sold and need to be replaced Answer: E Difficulty: Challenging AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 9) Walmart exemplifies the power of information systems coupled with state-of-the-art business practices and supportive management to achieve which of the following? A) The development of new products and services B) Operational efficiency C) Survival D) Customer intimacy E) Competitive advantage Answer: B Difficulty: Challenging AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 4 Copyright © 2022 Pearson Education, Inc. 10) In each of the years between 1999 and 2019, capital investment in information technology, consisting of IT equipment, software, and research and development (R&D), accounted for over ________ percent of U.S. total capital spending (in nominal GDP). A) 40 B) 50 C) 55 D) 65 E) 70 Answer: A Difficulty: Moderate AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 11) To make sure it stocks clothes that its customers will purchase, a department store implements a new application that analyzes spending levels at its stores and cross-references this data to popular clothing styles. Which of the following business objectives is this information intended to support? A) Customer intimacy B) Survival C) New business models D) Supplier intimacy E) New services Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 12) Approximately how much revenue was generated by e-commerce sales worldwide in 2019? A) About $3.6 billion B) About $36 billion C) About $360 billion D) About $3.6 trillion E) About $36 trillion Answer: D Difficulty: Moderate AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 5 Copyright © 2022 Pearson Education, Inc. 13) All of the following are new technology-related innovations in MIS except: A) cloud computing. B) big data. C) IoT. D) the mobile digital platform. E) co-creation of business value. Answer: E Difficulty: Moderate AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 14) Which of the following statements about digital firms is not true? A) In digital firms, time shifting and space shifting are the norm. B) Today, most firms are fully digital. C) Digital firms offer extraordinary opportunities for flexible global organization and management. D) Digital firms sense and respond to their environments more rapidly than traditional firms. E) Digital firms have more flexibility to survive in turbulent times. Answer: B Difficulty: Challenging AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 15) A firm that must invest in new information systems capabilities in order to comply with federal legislation is investing to achieve which business objective? A) Customer intimacy B) Operational excellence C) Survival D) Creation of new products E) Improved decision making Answer: C Difficulty: Moderate AACSB: Information technology LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 6 Copyright © 2022 Pearson Education, Inc. 16) All of the following exemplify the new face of e-commerce in the twenty-first century except: A) Netflix B) Tumblr C) Apple Music D) Facebook E) GE Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 17) All of the following are characteristics of twenty-first digital firms except: A) use of social media to enter into conversations with customers. B) greater awareness of changes in technology, consumer attitudes, and culture. C) better understanding of the importance of information technology in creating and managing the firm. D) greater emphasis on hierarchy and structure. E) more emphasis on decision-making based on data and analysis. Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 18) Journalist Thomas Friedman's description of the world as "flat" refers to the: A) reduction of economic and cultural advantages of developed countries. B) use of social media for instantaneous communication. C) reduction in travel times and the ubiquity of global exchange and travel. D) flattened hierarchies in digital firms. E) increased use of global currencies. Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 7 Copyright © 2022 Pearson Education, Inc. 19) In 2019, what percent of the world economy resulted from foreign trade? A) 10 percent B) 25 percent C) 30 percent D) 50 percent E) 66 percent Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 20) All of the following describe the effects of globalization except: A) significant decreases in operating costs. B) ability to reliably obtain price and quality information worldwide. C) increased ability to find low-cost suppliers. D) increases in transaction costs. E) ability of firms to replicate their business models in multiple countries without having to redesign expensive fixed-cost information systems infrastructure. Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 21) How many service jobs move offshore to lower-wage countries in a typical year? A) 3,000 B) 30,000 C) 300,000 D) 3 million E) 30 million Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 8 Copyright © 2022 Pearson Education, Inc. 22) Which of the following statements is not true? A) In 2019, global spending on information technology (IT) and IT services was nearly $3.8 trillion. B) In 2019, firms spent $160 billion on management consulting and services. C) In 2019, U.S. spending on IT equipment, software, and research and development accounted for about 35 percent of total U.S. capital spending (in nominal GDP) D) Most of the business value of IT investment derives from organizational, management, and cultural changes inside firms. E) Much of the money spent by businesses on management consulting and services involves redesigning firms' business operations to take advantage of new technologies. Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 23) What percent of Facebook's users access the service from mobile phones and tablets? A) 90 percent B) 93 percent C) 95 percent D) 98 percent E) 100 percent Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 24) Which of the following statements is not true? A) Half of Fortune 500 U.S. firms derive nearly 50 percent of their revenues from foreign operations. B) More than 50 percent of Intel's revenues in 2019 came from overseas sales of its microprocessors. C) Since 2000, the United States has lost an estimated 5 million manufacturing jobs to offshore, low-wage producers. D) The Internet has eased competitive tensions among nations as global trade expands. E) A growing percent of the economy in the United States depends on imports and exports. Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 9 Copyright © 2022 Pearson Education, Inc. 25) Outsourcing has accelerated the development of new information systems in the United States. Answer: TRUE Difficulty: Challenging AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 26) Creating a marketing plan is an example of a business process. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 27) In order to be considered a digital firm, all of the firm's significant business relationships and core business processes must be digitally enabled. Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 28) A business model describes how a company produces, delivers, and sells a product or service to create wealth. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 29) In 2019, the supply of applicants far exceeded the number of job openings in information systems and technologies. Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 10 Copyright © 2022 Pearson Education, Inc. 30) You work for an auto dealer. How could you use information systems to achieve greater customer intimacy? Answer: When a business really knows its customers and serves them well (customer intimacy), the customers generally respond by returning and purchasing more. This raises revenues and profits. To use information system to achieve greater customer intimacy for an auto dealer, you could create a website and/or mobile app that allows customers to order customized cars and communicate with support personnel and other car owners. You could create an automated email service reminding car owners to take their car in for periodic check-ups. You could have an information system that tracks customer preferences in your local area, so you can offer cars that reflect local customer needs and desires. Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 31) Define operational excellence. How have information systems helped Walmart achieve it? Answer: Operational excellence involves the achievement of higher levels of efficiency and productivity. Walmart, the largest retailer on earth, exemplifies the power of information systems coupled with state-of-the-art business practices and supportive management to achieve operational excellence. Information systems such as Walmart's Retail Link system, which digitally links its suppliers to every one of Walmart's stores, have helped Walmart achieve operational excellence by improving communications with suppliers and optimizing its supply chain. As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement to the shelf. Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 32) Define business process. What might be a business process used at a hospital? Answer: A business process is a set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated. Hiring a new employee, customer intake, and filing medical records are examples of business processes at a hospital. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1-1: How are information systems transforming business, and why are they so essential for running and managing a business today? 11 Copyright © 2022 Pearson Education, Inc. 33) The three activities in an information system that produce the information organizations use to make decisions, control operations, analyze problems, and create new products are: A) information, research, and analysis. B) input, output, and feedback. C) data, information, and analysis. D) data analysis, processing, and feedback. E) input, processing, and output. Answer: E Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 34) Raw data collected at checkout counters in a grocery store is an example of: A) output. B) processing. C) feedback. D) input. E) information systems. Answer: D Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 35) The total number of food items with storage temperature problems is an example of which of the following? A) Input B) Raw data C) Meaningful information D) Feedback E) Processing Answer: C Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 12 Copyright © 2022 Pearson Education, Inc. 36) 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) transforms raw data into processed information. D) transfers processed information to the people who will use it or to the activities for which it will be used. E) is a stream of raw facts representing events occurring in organizations or the physical environment. Answer: D Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 37) Converting raw data into a more meaningful form is called: A) capturing. B) processing. C) organizing. D) feedback. E) inputting. Answer: B Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 38) Which of the following is an example of raw data from an automobile manufacturer? A) An average of 120 Subarus sold daily in New York in 2020 B) 1,200 Subaru Outbacks sold during the first quarter 2020 in New York C) One Subaru Outback sold July 27, 2020 in Mohegan Lake, New York for $24,000 D) Annual sales of Subaru Outbacks increased 5.3 percent E) An average sale price of $25,500 for all Subaru Outbacks sold during July 2020 in Mohegan Lake, New York Answer: C Difficulty: Challenging AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 13 Copyright © 2022 Pearson Education, Inc. 39) In a hierarchical business organization, the upper level consists of: A) scientists. B) senior management. C) service workers. D) data workers. E) knowledge workers. Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 40) The fundamental set of assumptions, values, and ways of doing things that has been accepted by most of an organization's members is called its: A) culture. B) environment. C) atmosphere. D) business process. E) mission. Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 41) Data management technology consists of which of the following? A) Physical hardware and media used by an organization to store data B) Detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system C) Two or more computers linked together to share data or resources D) Hardware and software used to transfer data E) Software governing the organization of data on physical storage media Answer: E Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 14 Copyright © 2022 Pearson Education, Inc. 42) Which of the following statements best describes organizational culture? A) It encompasses the sum of beliefs and assumptions by all members. B) It enables the organization to transcend the different levels and specialties of its employees. C) It reflects the senior management's perspective on the organization and goals. D) It allows a company to achieve greater operational efficiency. E) It is a fundamental set of assumptions, values, and ways of doing things that has been accepted by most members of the organization. Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 43) 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) information technology (IT) infrastructure. D) information system. E) culture. Answer: C Difficulty: Easy AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 44) Maintaining the organization's financial records is a central purpose of which main business function? A) Manufacturing and accounting B) Finance and accounting C) Sales and manufacturing D) Finance and sales E) Human resources Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 15 Copyright © 2022 Pearson Education, Inc. 45) All of the following are examples of environmental actors in an information system except: A) competitors. B) regulatory agencies. C) customers. D) suppliers. E) employees. Answer: E Difficulty: Moderate AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 46) Which of the following best describes the primary reason for implementing a new information system, from a business perspective? A) The system enables the firm to create new products and services. B) The system will create new value for the firm, beyond its costs. C) The system will automate key business processes. D) The system is in use by our primary competitors. E) The system integrates well with the Web. Answer: B Difficulty: Moderate AACSB: Information technology LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations? 47) Which of the following is not a key organizational complementary asset? A) Supportive business culture that values efficiency and effectiveness. B) Efficient business processes C) Incentive systems that monitor and reward individual innovation D) A strong information systems development team E) Decentralization of authority Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 1-2: What is an information system? How does it work? What are its management, organization, and technology components? Why are complementary assets essential for ensuring that information systems provide genuine value for organizations?