Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenne

Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

48) In a business hierarchy, which of the following levels is responsible for monitoring the daily activities of the business?

A) Middle management B) Service workers C) Production management D) Operational management E) Knowledge workers Answer: D 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?

49) In , raw data is systematically acquired and transformed during various stages that add value to that information.

A) an information value chain B) a firm value chain C) an industry value chain D) the feedback process E) the dissemination process Answer: A 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?

50) A corporation that funds an employee training program to enhance the development of decision making skills could be seen as investing in which main category of complementary assets?

A) Managerial B) Governmental C) Social D) Organizational E) Auxiliary Answer: A 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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

51) Which of the following is an example of an organizational complementary asset?

A) Efficient business processes B) A collaborative work environment C) Laws and regulations D) The Internet and telecommunications infrastructure E) Strong senior management Answer: A 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?

52) Which of the following is an example of a social complementary asset?

A) Technology and service firms in adjacent markets to assist implementation B) Teamwork and collaborative work environments C) Distributed decision-making rights D) Incentives for management innovation E) A strong IS development team Answer: A 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?

53) Which of the following makes long-range strategic decisions about products and services as well as ensures financial performance of the firm?

A) Senior management B) Middle management C) Production workers D) Operational management E) Knowledge workers 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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

54) Which of the following would be used as an input for an information system?

A) Sales by region report B) Sales for stores in a region C) Product ID and price D) Year to date sales of products E) Marketing costs report for each product Answer: C 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?

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

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

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

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

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

Answer: B Difficulty: Challenging 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?

56) Which of the following work at the same level as middle management??

A) Operational managers B) Production workers C) Knowledge workers D) Data workers E) Service workers Answer: C 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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

57) Which of the following business functions is responsible for maintaining employee records?

A) Sales and marketing B) Human resources C) Finance and accounting D) Manufacturing and production E) Middle management Answer: B 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?

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

A) Anchoring the system in UPS's sales and production functions.

B) Monitoring service levels C) Promoting the company strategy of low-cost, superior service D) The use of handheld computers and networks for managing package delivery E) Routing software that creates the most efficient delivery route for each driver Answer: A 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?

59) Which of the following constitutes a managerial element in the UPS tracking system described in the chapter?

A) The specifications for required procedures for identifying packages B) The decision to use computer systems to increase the ease of sending a package using UPS C) Training provided to UPS drivers D) In-house package tracking software E) The ability to embed UPS functions in external sites Answer: B 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?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

60) Which of the following is a global network that uses universal standards to connect millions of different networks around the world?

A) An extranet B) The World Wide Web C) The Internet D) An intranet E) Verizon 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?

61) Which of the following is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format on the Internet?

A) HTML B) The World Wide Web C) E-mail D) An extranet E) FTP 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?

62) Which of the following is a private corporate network extended to authorized users outside the organization?

A) An intranet B) The World Wide Web C) The Internet D) An extranet E) FTP 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?

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63) Which of the following 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?

A) Computer literacy B) Information systems architecture C) Business processes D) Information technology infrastructure E) Management information systems 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?

64) Which of the following is not an expression of a superior return on the investment in an information system?

A) Increase in productivity B) Increase in revenue C) Increase in the firm's stock market value D) Increase in firm transaction costs E) Superior long-term strategic positioning of the firm Answer: D 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?

65) Information technology (IT) consists of all hardware and software that a firm needs to use in order to achieve its business objectives.

Answer: TRUE 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?

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66) Social complementary assets are investments made by a firm to optimize its return on information technology assets.

Answer: FALSE Difficulty: Challenging 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?

67) Information systems literacy focuses primarily on knowledge of information technology.

Answer: FALSE 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?

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

Answer: TRUE 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?

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

Answer: FALSE 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?

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

Answer: FALSE 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?

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71) Parts of an organization's culture can always be found embedded in its information systems.

Answer: TRUE 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?

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

Answer: FALSE 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?

73) Creative work driven by new knowledge and information is a significant part of management responsibility.

Answer: TRUE 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?

74) Intranets are used by organization to coordinate their activities with other firms for making purchases, collaborating on design, and other interorganizational work.

Answer: FALSE 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?

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

Answer: TRUE 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?

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

Answer: FALSE 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?

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

Answer: TRUE 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?

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

Answer: TRUE 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?

79) Data is information that has been shaped into a form that is meaningful to human beings.

Answer: FALSE 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?

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

Answer: TRUE 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?

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

Answer: TRUE 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?

82) Middle managers make long-range strategic decisions about the firm's products and services.

Answer: FALSE 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?

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

Answer: TRUE 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?

84) Describe the role that management plays in an organization. What role can information technology play in helping managers?

Answer: Management's job is to make sense out of the many situations faced by organizations, make decisions, and formulate action plans to solve organizational problems. Managers perceive business challenges in the environment, they set the organizational strategy for responding to those challenges, and they allocate the human and financial resources to coordinate the work and achieve success. Throughout, they must exercise responsible leadership. But managers must do more than manage what already exists. They must also create new products and services and even re-create the organization from time to time. A substantial part of management responsibility is creative work driven by new knowledge and information. Information technology can play a powerful role in helping managers design and deliver new products and services and redirecting and redesigning their organizations. Information technology is also one of many tools managers can use to cope with change. innovation in products, minimize warehouse overhead, and streamline distribution.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication 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?

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85) What do studies of returns on information technology investments show in terms of variation of returns on investment? What accounts for these results?

Answer: Studies of returns on information technology investments show that there is considerable variation in the return firms receive. Some firms invest a great deal and receive a great deal; others invest an equal amount and receive few returns. Still other firms invest little and receive much, whereas others invest little and receive little. This suggests that investing in information technology does not by itself guarantee a good return. The reason for this variation is that information technology investment alone cannot make organizations and managers more effective unless they are accompanied by supportive values, structures, and behavior patterns in the organization and other complementary assets. Business firms often need to change how they do business before they can really reap the advantages of new information technologies.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication 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?

86) 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 has managerial and organizational components as well as technology.

An information system: • supports decision making, coordination, and control.

• helps employees analyze problems.

• helps employees visualize complex subjects.

• helps create new products.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication 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?

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87) 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 data would be the average number of tickets sold to seniors on certain days of the week.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication 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?

88) 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication 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?

89) 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 information. 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, and 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication 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?

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90) 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 depend 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication 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?

91) Why is the building of a house an appropriate analogy for the building of an information system?

Answer: Houses are built with hammers, nails, and wood, but these do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over one's head. Computers and programs are the hammer, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to these solutions.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication 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?

92) What is the single most important theme of the book?

Answer: The single most important theme of the book is that managers need to consider the broader organization and management dimensions of information systems to understand current problems as well as to derive substantial above-average returns from information technology investments.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication 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?

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93) What are complementary assets and how does investment in them impact returns on technology investments?

Answer: Complementary assets are those assets required to derive value from a primary investment. Research indicates that firms that support their technology investments with investments in complementary assets, such as new business models, new business processes, management behavior, organizational culture, or training, receive superior returns, whereas those firms failing to make these complementary investments receive less or no returns on their information technology investments.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication 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?

94) Disciplines that contribute to the technical approach to information systems include: A) computer science, engineering, and networking.

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

C) engineering, utilization management, and computer science.

D) management science, computer science, and engineering.

E) economics, sociology, and psychology.

Answer: B Difficulty: Challenging AACSB: Information technology LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

95) Which of the following disciplines focuses on mathematical techniques for optimizing parameters of organizations, such as transportation and inventory control?

A) Management science B) MIS C) Computer science D) Utilization management E) Operations research Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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

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

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

D) the production of digital goods.

E) mathematically based models and physical technology.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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

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

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

D) the production of digital goods.

E) mathematically based models and physical technology.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

98) The behavioral approach to information systems focuses on analyzing the social, psychological, and economic impacts of systems rather than the technical aspects.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

99) Describe the sociotechnical view of management information systems.

Answer: In the sociotechnical view of management information systems, optimal organizational performance is achieved by jointly optimizing both the social and technical systems used in production. Adopting a sociotechnical system's perspective helps to avoid purely technological approach to information systems. For instance, the fact that information technology is rapidly declining in cost and growing in power does not necessarily or easily translate into productivity enhancement or bottom-line profits. The fact that a firm has recently installed an enterprise-wide financial reporting system does not necessarily mean that it will be used or used effectively. Likewise, the fact that a firm has recently introduced new business procedures and processes does not necessarily mean employees will be more productive in the absence of investments in new information systems to enable those processes.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

100) Which academic disciplines contribute to the behavioral approach to information systems?

Answer: Sociologists study information systems with an eye toward how groups and organizations shape the development of systems and also how systems affect individuals, groups, and organizations. Psychologists study information systems with an interest in how human decision makers perceive and use formal information. Economists study information systems with an interest in understanding the production of digital goods, the dynamics of digital markets, and how new information systems change the control and cost structures within the firm.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1-3: What academic disciplines are used to study information systems and how does each contribute to an understanding of information systems?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 2 Global E-business and Collaboration 1) Producing a bill of materials is a business process in which of the following functional areas?

A) Finance and accounting B) Human resources C) Manufacturing and production D) Research and development E) Sales and marketing Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 2-1: What are business processes? How are they related to information systems?

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

A) Identifying customers B) Shipping a product C) Fulfilling a customer order D) Hiring employees E) Paying creditors Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 2-1: What are business processes? How are they related to information systems?

3) Order fulfillment involves all of the following business processes except: A) checking the customer's credit.

B) assembling the product.

C) submitting the order.

D) making customers aware of the product.

E) shipping the product.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 2-1: What are business processes? How are they related to information systems?

4) The function is responsible for making sure customers are aware of the company's products.

A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing E) distribution and logistics Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 2-1: What are business processes? How are they related to information systems?

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5) Which of the following is not a true statement with respect to business processes?

A) Every business can be seen as a collection of business processes.

B) Analyzing business processes can enable you to achieve a clear understanding of how a business actually works.

C) The performance of a business firm typically is not related to its business processes.

D) Business processes can be either a source of competitive strength or a liability.

E) A business process may involve a unique way in which work, information, and knowledge are coordinated within an organization.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 2-1: What are business processes? How are they related to information systems?

6) Checking for quality is a business process handled by the marketing function.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 2-1: What are business processes? How are they related to information systems?

7) A business process must be tied to just one specific functional area.

Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 2-1: What are business processes? How are they related to information systems?

8) How can information systems and information technology be used to improve business processes?

Answer: Information systems can be used to automate many steps in business processes that were formerly performed manually, such as checking a client's credit or generating an invoice and shipping order. New information technology can actually change the flow of information, making it possible for many more people to access and share information, replacing sequential steps with tasks that can be performed simultaneously, and eliminating delays in decision making. New information technology also frequently changes the way a business works and supports entirely new business models. For example, downloading a Kindle e-book from Amazon, buying a computer online at Best Buy, and downloading a music track from iTunes are entirely new business processes based on new business models that would be inconceivable without today's information technology.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2-1: What are business processes? How are they related to information systems?

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9) 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 sales department receives 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.

The order passes first to accounting to ensure the customer can pay for the order either by a credit verification or request for immediate payment prior to shipping. Once the customer credit is established, the production department pulls the product from inventory or produces the product. Then the product is shipped (and this may require working with a logistics firm, such as UPS or FedEx). A bill or invoice is generated by the accounting department, and a notice is sent to the customer indicating that the product has shipped. The sales department is notified of the shipment and prepares to support the customer by answering calls or fulfilling warranty claims.

What at first appears to be a simple process, fulfilling an order, turns out to be a very complicated series of business processes that require the close coordination of major functional groups in a firm.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2-1: What are business processes? How are they related to information systems?

10) 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 of these processes be made more efficient through the use of information systems?

Answer: The business processes of a sandwich shop 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, payroll) and information gathered from and distributed to employees.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2-1: What are business processes? How are they related to information systems?

11) Which of the following systems would an organization use to compare total annual sales for a specific product to a planned target?

A) ESS B) TPS C) MIS D) DSS E) CRM Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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12) Which of the following statements about a TPS is not true?

A) A TPS failure for even a few hours can lead to a firm's demise.

B) A TPS supports operational management.

C) TPS typically supply data to a firm's ESS. D) Tracking the flow of transactions within an organization is one of the principal purposes of a TPS. E) A payroll system is an example of a TPS. Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

13) Managers use which of the following systems to monitor the status of internal operations and the firm's relations with the external environment?

A) DSS B) KWS C) TPS D) MIS E) BIS Answer: C Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

A) TPS B) MIS C) ESS D) DSS E) KMS Answer: A Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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15) The term management information systems refers to a specific category of information systems serving: A) integrated data processing throughout the firm.

B) transaction process reporting.

C) employees with online access to historical records.

D) the information technology function.

E) middle management functions.

Answer: E Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

16) Which of the following would a manager use to determine the impact on production schedule if sales doubled in the next quarter?

A) MIS B) TPS C) ESS D) DSS E) CRM Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

17) A system that reports summaries on the total moving, house hunting, and home financing costs for employees in all company divisions is an example of which of the following?

A) KMS B) TPS C) ESS D) MIS E) DSS Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

18) Which of the following systems is used to focus on non-routine business problems that are unique and rapidly changing?

A) MIS B) TPS C) ESS D) DSS E) KMS Answer: D Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

19) Which of the following systems is especially suited to situations in which the procedure for arriving at a solution may not be fully predefined in advance?

A) MIS B) TPS C) DSS D) KMS E) SCM Answer: C Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

20) Which of the following systems would you use to forecast the return on investment if your firm planned to switch to a new supplier that offered products at a lower cost?

A) ESS B) TPS C) MIS D) CRM E) DSS Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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21) Which level of the organization is an ESS specifically designed to serve?

A) Operational management B) End-users C) Middle management D) Senior management E) Knowledge workers Answer: D Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

22) An ESS supports which of the following?

A) Long-range planning activities of senior management B) Knowledge and data workers in an organization C) Decision making and administrative activities of middle managers D) Day-to-day processes of production E) Transactional needs of the organization Answer: A Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

23) Which of the following systems incorporates data from external events as well as summarized information from internal business intelligence systems?

A) TPS B) ESS C) MIS D) DSS E) SCM Answer: B Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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24) Which of the following systems would you use to determine which trends in your supplier's industry could affect your firm the most during the next five years?

A) ESS B) TPS C) MIS D) DSS E) KMS Answer: A Difficulty: Easy AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

25) Which of the following is a question that might be answered by an MIS system?

A) What new products should our company create?

B) What is the effect on return on investment of the changing costs of supplies?

C) What is the best trucking route for product delivery?

D) How do actual sales for each quarter compare to projected sales?

E) What are employment levels in the industry likely to be in five years?

Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

B) e-business.

C) an intranet.

D) an extranet.

E) e-government.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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27) All of the following are examples of business intelligence systems except a system that: A) summarizes and reports on a company's basic operations.

B) tracks the flows of materials in a factory.

C) focuses on problems that are unique and rapidly changing.

D) compares total annual sales figures for specific products to planned targets.

E) addresses nonroutine decisions.

Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

28) Which of the following systems typically uses a digital dashboard to display an array of charts and graphs of a business's key performance indicators?

A) MIS B) TPS C) ESS D) CRM E) SCM Answer: C Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

29) What is the most important benefit of an enterprise application?

A) Enabling the creation of business intelligence B) Helping businesses become more flexible and productive by enabling business functions and departments to share information and coordinate their business processes more closely C) Providing answers to nonroutine questions D) Enabling cost-effective e-business processes E) Enabling managers to make better decisions Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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30) Which of the following systems is designed to automate business processes across the firm, spanning functional areas and organizational levels?

A) DSS B) MIS C) CRM D) Enterprise applications E) SCM Answer: D Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

31) 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 processing B) enterprise C) automatic reporting D) management information E) knowledge management Answer: B Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

32) The four major types of enterprise applications are: A) SCM, CRM, DSS, and KMS. B) SCM, CRM, ESS, and KMSs. C) ERP, SCM, DSS, and CRM. D) ERP, SCM, CRM, and KMS. E) TPS, MIS, DSS, and ESS. Answer: D Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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33) Enterprise systems are also known as which of the following?

A) SCM systems B) ERP systems C) ESS D) MIS E) DSS Answer: B Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

34) Which of the following systems helps a firm manage relationships with its suppliers?

A) SCM B) TPS C) KMS D) ERP E) MIS Answer: A Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

35) Which of the following systems integrates supplier, manufacturer, distributor, and customer logistics processes?

A) Collaborative distribution system B) Supply chain management system C) Reverse logistics system D) Enterprise planning system E) Transaction processing system Answer: B Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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36) Which of the following systems would a firm use to manage relationships with its customers?

A) CRM B) MIS C) CLE D) CLU E) KMS Answer: A Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

37) Which of the following systems would you use to consolidate the relevant knowledge and experience in the firm and make it available to improve business processes and management decision making?

A) TPS B) An extranet C) KMS D) CRM E) MIS Answer: C Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

38) You have been hired by BizCom to help it improve its business processes and financial performance. BizCom is a business communications consulting firm that services many clients in different industries throughout the United States. BizCom provides customized written recommendations about how to best use a client's existing resources to improve the client's internal communications. The company has approximately 50 consultants, all of whom are located in its central headquarters in Alexandria, Virginia. Which of the following would you recommend that BizCom install?

A) Extranet, to enable quick collaboration over the Internet, minimize the time spent communicating with its clients, 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, to minimize redundant work on similar clients D) MIS, to produce reports on the firm's operations E) TPS, to help manage all daily activities and transactions Answer: A Difficulty: Challenging AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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39) You manage the IT department for a firm that manages regional farmer's markets. You need to set up an inexpensive system that allows local vendors to see real-time statistics about which of the firm's markets have vendor openings on which days. Which of the following systems would most efficiently provide a solution?

A) CRM B) Enterprise system C) Extranet D) Intranet E) MIS Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

40) Which of the following could be used to enable different firms to work collaboratively on a product?

A) Intranet B) Extranet C) TPS D) ESS E) DSS Answer: B Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

41) E-government is intended to do all of the following except: A) transform a business firm's relationships with its customers.

B) improve delivery of government services.

C) make government operations more efficient.

D) empower citizens by giving them easier access to information.

E) provide the ability for citizens to network electronically with other citizens.

Answer: A Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

A) e-commerce B) e-business C) enterprise applications D) MIS E) SCM Answer: B Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

43) Which of the following can typically access a firm's intranet?

A) The general public B) The firm's employees C) The firm's customers D) The firm's suppliers E) The firm's outside contractors Answer: B Difficulty: Moderate AACSB: Application of knowledge; Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

44) Transaction-level information is essential for operational management to plan future production levels.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

46) A DSS enables business analysts to use sophisticated analytics and models to analyze data.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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47) You would use a TPS to help determine if your business should introduce a new product line.

Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

48) Managers rely on TPS for nonroutine decision making.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

49) Most TPS use sophisticated mathematical models or statistical techniques.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

50) Managers can use DSS to make decisions about problems that are unusual and not easily specified in advance.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

51) A DSS only uses information from external sources.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

54) A web interface used to present integrated personalized business content to users is called a portal.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

56) An SCM is considered to be an intraorganizational system because it automates the flow of information across organizational boundaries.

Answer: FALSE Difficulty: Challenging AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

57) Supply chain management systems are one type of interorganizational system.

Answer: TRUE Difficulty: Challenging AACSB: Analytical thinking LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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59) Customer relationship management systems coordinate all of the business processes that deal with customers in sales, marketing, and service.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

60) The pet products chain you work for, Pets Galore, has noticed that one of its brands of dog food 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 dog food is being sold by competitors and what these prices are. You might use DSS to see what factors could increase sales.

Assuming that the dog food is 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.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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61) Identify and discuss the major types of information systems used by different levels of management within a business. What are the relationships among these systems?

Answer: The four major categories of information systems are: 1. Transaction processing systems (TPS), such as payroll or order processing, track the flow of the daily routine transactions that are necessary to conduct business. They are used by operational managers to manage day-to-day operations.

2. Management information systems (MIS) summarize and report on the company's basic operations using data supplied by TPS. They provide middle managers with reports on the organization's current performance and are not highly analytical.

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

4. Executive support systems (ESS) support senior management. ESS filter, compress, and track critical data, and then display the data of greatest importance to senior management decision makers for their use in making nonroutine decisions requiring judgment, evaluation, and insight.

ESS present graphs and data from many sources, both external and internal, through an interface, often a portal, that is easy for senior managers to use.

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 external systems, but also draw summarized information from internal MIS and DSS. Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

62) Xoom Vacuum, a family-owned manufacturer of high-end 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 Xoom is an antiquated accounting system.

The company has one manufacturing plant located in Iowa; and three warehouses, in Iowa, New Jersey, and Nevada. The Xoom sales force is national and Xoom purchases about 25 percent of its vacuum parts and materials from a single overseas supplier. You have been hired to recommend the information systems Xoom should implement in order to maintain its 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.

Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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63) 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. For example, when a customer places an order, the order data flow automatically to other parts of the company that are affected by them. The order transaction triggers the warehouse to pick the ordered products and schedule shipment. The warehouse informs the factory to replenish whatever has been depleted. The accounting department is notified to send the customer an invoice. Customer service representatives track the progress of the order through every step to inform customers about the status of their orders. The coordination of the firm's key business processes allows the firm to respond more rapidly to customer demands. Managers are able to use firmwide information to make more-precise and timely decisions about daily operations and longer-term planning.

Difficulty: Easy AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

64) How have the technologies associated with e-business impacted government?

Answer: Governments on all levels are using Internet technology to deliver information and services to citizens, employees, and businesses with which they work. The term e-government refers to the application of the Internet and networking technologies to enable government and public sector agencies' relationships with citizens, businesses, and other arms of government digitally. In addition to improving delivery of government services, e-government can make government operations more efficient and empower citizens by giving them easier access to information and the ability to network digitally with other citizens. For example, citizens in some states can renew their driver's licenses or apply for unemployment benefits online, and the Internet has become a powerful tool for instantly mobilizing interest groups for political action and fundraising.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

65) What is a digital dashboard, and why are they becoming an increasingly popular tool?

Answer: A digital dashboard displays graphical information and charts of key performance indicators on a single screen. They are becoming increasingly popular because they provide comprehensive and accurate information for decision making that helps managers quickly spot areas that need attention.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

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66) How can a good CRM system increase profits for a company?

Answer: CRM systems help firms manage their relationships with their customers. CRM systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. The systems consolidate customer information from multiple sources - telephone, email, wireless devices, traditional sales and marketing systems, and the web - so that the firm can obtain a unified view of a customer. This information helps firms identify, attract, and retain the most profitable customers, provide better service to existing customers, and increase sales, and ultimately profits.

Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2-2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance?

67) Telepresence technology is primarily designed to: A) allow managers to observe how employees behave.

B) allow a person to give the appearance of being at a location other than his or her true physical location.

C) provide managers with a tool to visualize corporate performance.

D) store the firm's visual content like videos.

E) enable the sales force to keep track of customer orders.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

68) A wiki is a type of collaborative: A) social network.

B) blog.

C) virtual world.

D) website.

E) MIS. Answer: D Difficulty: Easy AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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69) All of the following are capabilities of enterprise social networking tools except: A) the ability to set up member profiles.

B) the ability to share, store, and manage content.

C) the ability to establish groups and team workspaces.

D) tagging and social bookmarking.

E) supply chain management.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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

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

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

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

D) One business benefit of collaboration is improved innovation.

E) Collaboration can be one-to-one or many-to-many.

Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

71) What analytical framework helps understand and evaluate the benefits and uses of collaboration tools?

A) Cost/use matrix B) Task/time matrix C) Space/cost matrix D) Time/space matrix E) Time/cost matrix Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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72) Which of the following is not an application of social business?

A) Shared workspaces B) File sharing C) Blogs D) Digital dashboard E) Communities Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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

A) Improved quality B) Improved financial performance C) Improved customer service D) Improved innovation E) Improved compliance with government regulations Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

74) Second Life is an example of a(n): A) virtual world.

B) wiki.

C) social network.

D) mind mapping tool.

E) extranet.

Answer: A Difficulty: Easy AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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75) Which of the following is not a reason for the increased business focus on collaboration and teamwork?

A) Emphasis on innovation B) Growth of professional work C) Changing nature of work D) Support for hierarchical organizational structures E) Changing scope of the firm Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

76) Which of the following statements regarding IBM Notes is not true?

A) It offers an application development environment so that users can build custom applications to suit their unique needs.

B) It is collaborative software system similar to Microsoft SharePoint.

C) It provides capabilities for wikis and microblogging.

D) It only supports asynchronous interactions.

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

Answer: D Difficulty: Moderate AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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

A) Synchronous/colocated B) Same time/remote C) Different time/remote D) Remote/colocated E) Same time/same place Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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78) All of the following are videoconferencing tools except: A) Salesforce Chatter B) Zoom C) Apple Facetime D) Amazon Chime E) Microsoft Teams Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

79) From your reading of the chapter-opening case study discussing Sharp Corporation's use of enterprise social networking, which of the following statements best expresses Sharp's experience?

A) Sharp's primary motivation was to enhance its security.

B) Sharp's primary motivation was to change its organizational culture.

C) Efforts to implement Yammer were met with significant resistance from employees.

D) Yammer provided Sharp with a single entry point to all the information and tools employees need for their jobs.

E) Sharp is primarily using Yammer to create an external network to link suppliers, customers, and others outside the organization.

Answer: B Difficulty: Moderate AACSB: Analytical thinking; Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

80) Crowdsourcing is an example of a social business application.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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82) Google Drive is an example of a cloud collaboration service.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

84) You have been hired to work with 8 employees from different branches of a national business to help create a web application to be used to train 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 email and instant messaging; wikis; virtual worlds, and collaboration and social platforms such as virtual meeting systems, cloud collaboration services, Microsoft SharePoint and IBM Notes, and enterprise social networking tools. Student answers will vary as to which single tool would be most helpful for the project: e.g., the most helpful of these might be a cloud collaboration service because it would enable people to have discussions, calendars, conferences, and share documents from many different locations.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

85) Identify and describe at least four business benefits of collaboration. Which do you feel is the most important and why?

Answer: Business benefits from collaboration are (1) productivity; (2) quality; (3) innovation; (4) customer service; and (5) financial performance. Collaboration helps productivity because people working together on a task can complete the task more quickly. It helps quality because people working together will be more able to correct each other's mistakes. It helps innovation because people working in groups come up with more ideas than those working in isolation. It helps customer service because teams can solve customer complaints more quickly together rather than working in isolation. And as a result of all of these benefits, collaboration helps finance, because collaborative firms have superior sales, sales growth, and financial performance. Student evaluations will vary as to which benefit is most important: for example, the most important of the benefits might be: innovation, because new products, services, and means of production are at the heart of being able to outperform your competitors.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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86) 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

87) How do collaborative business culture and business processes differ from "command-andcontrol" firms?

Answer: In command-and-control organizations, the top leaders determine all the really important matters and then order lower-level employees to execute senior management plans.

The job of middle management is to pass messages back and forth up and down the hierarchy.

Command-and-control firms require lower-level employees to carry out orders without asking too many questions, with no responsibility to improve processes, and with no rewards for teamwork or team performance. If workgroups need help from another work group, that is something for the bosses to figure out. Employees never communicate horizontally, always vertically, so management can control the process.

A collaborative business culture and business processes are very different. Senior managers are responsible for achieving results but rely on teams of employees to achieve and implement the results. Policies, products, designs, processes, and systems are much more dependent on teams at all levels of the organization to devise, to create, and to build. Teams are rewarded for their performance, and individuals are rewarded for their performance in a team. The function of middle managers is to build the teams, coordinate their work, and monitor their performance.

The business culture and business processes are more social. In a collaborative culture, senior management establishes collaboration and teamwork as vital to the organization, and it actually implements collaboration for the senior ranks of the business as well.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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88) Why are "conversations" relevant to social business?

Answer: Customers, suppliers, employees, managers, and even oversight agencies continually have conversations about firms, often without the knowledge of the firm or its key actors (employees and managers). Supporters of social business assert that if firms could tune into these conversations, they will strengthen their bonds with consumers, suppliers, and employees, increasing their emotional involvement in the firm.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 2-3: Why are systems for collaboration and social business so important, and what technologies do they use?

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

B) information systems manager.

C) systems analyst.

D) CTO. E) CIO. Answer: C Difficulty: Easy AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

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

A) CEO B) CFO C) CIO D) CTO E) CKO Answer: C Difficulty: Easy AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

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

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

C) translates business problems into information requirements.

D) manages computer operations and data entry staff.

E) oversees the company's security policy.

Answer: D Difficulty: Challenging AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

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

A) CTO B) CSO C) CKO D) CPO E) CEO Answer: C Difficulty: Easy AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

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

A) Ensuring that the company complies with existing data privacy laws B) Making better use of existing knowledge in organizational and management processes C) Enforcing the firm's information security policy D) Overseeing the use of information technology in the firm E) Acting as liaison between the information systems group and the rest of the company Answer: A Difficulty: Easy AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

94) All of the following job categories are expected to have above-average growth except: A) web developers.

B) cloud engineers.

C) network analysts.

D) computer programmers.

E) data scientists.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 2-4: What is the role of the information systems function in a business?

95) A firm's is responsible for enterprise-wide governance and utilization of information to maximize the value the organization can realize from its data.

A) CKO B) CIO C) CDO D) CSO E) database administrator Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 2-4: What is the role of the information systems function in a business?

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96) are responsible for translating business problems and requirements into information requirements and systems.

A) End users B) Information systems managers C) Programmers D) Systems analysts E) Database specialists Answer: D Difficulty: Moderate AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

97) End users are playing an increasingly large role in the design and development of information systems.

Answer: TRUE Difficulty: Challenging AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

98) The information systems department suggests new business strategies and new informationbased products and services.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

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

Answer: TRUE Difficulty: Challenging AACSB: Information technology LO: 2-4: What is the role of the information systems function in a business?

100) 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2-4: What is the role of the information systems function in a business?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 3 Information Systems, Organizations, and Strategy 1) The interaction between information technology and organizations is influenced: A) solely by the decision making of middle and senior managers.

B) by the development of new information technologies.

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

D) by two main macroeconomic forces: capital and labor.

E) by the rate of growth of the organization.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

2) Which of the following statements about organizations is not true?

A) An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs.

B) An organization is a formal, legal entity with internal rules and procedures that must abide by laws.

C) An organization is a collection of people and other social elements.

D) Informal groups tend to be more stable in terms of longevity and routineness than organizations.

E) An organization is a collection of rights, privileges, obligations, and responsibilities delicately balanced over a period of time through conflict and conflict resolution.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

3) According to the definition of organizations, an organization is seen as a means by which capital and labor are transformed by the organization into outputs to the environment.

A) microeconomic B) macroeconomic C) sociotechnical D) behavioral E) psychological Answer: A Difficulty: Challenging AACSB: Reflective thinking LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

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4) Which of the following statements about the technical view of organizations is not true?

A) It focuses on how inputs are combined to create outputs when technology changes are introduced into a company.

B) It sees capital and labor as being easily substituted for one another.

C) It emphasizes group relationships, values, and structures.

D) It sees the organization as a social structure.

E) It sees the firm as being infinitely malleable.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

5) Which of the following is not a mediating factor that impacts an organization's relationship with information technology?

A) Business processes B) Environment C) Structure of the organization D) Agency costs E) Politics Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

6) Which of the following statements about business processes is not true?

A) Business processes influence the relationship between an organization and information technology.

B) Business processes are a collection of standard operating procedures.

C) A business firm is a collection of business processes.

D) Business processes are usually ensconced in an organization's culture.

E) Business processes are typically unaffected by changes in information systems.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

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7) Which of the following technologies disrupted the traditional publishing industry?

A) Instant messaging B) email C) Software as a web service D) PCs E) World Wide Web Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

8) Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of: A) entrepreneurial structures.

B) divisionalized bureaucracies.

C) professional bureaucracies.

D) adhocracies.

E) machine bureaucracies.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

9) Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a(n): A) machine bureaucracy B) professional bureaucracy C) divisionalized bureaucracy D) multidivisional bureaucracy E) adhocracy Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

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10) Which of the following is an example of a divisionalized bureaucracy?

A) Startup firm B) University C) Fortune 500 firm D) Midsize manufacturer E) Consulting firm Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

11) Along with capital, is the primary production input that the organization uses to create products and services.

A) structure B) culture C) politics D) feedback E) labor Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

12) Struggles for resources, competition, and conflict within an organization that result from divergent viewpoints about how resources, rewards, and punishments should be distributed are an example of which of the following?

A) Organizational culture B) Organizational politics C) Organizational structure D) Organizational environment.

E) Business processes Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

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13) Which of the following statements about disruptive technologies is not true?

A) Disruptive technologies radically change the business landscape and environment.

B) Disruptive technologies may be substitute products that perform better than other products currently being produced.

C) Disruptive technologies may sometimes simply extend the marketplace.

D) Disruptive technologies may put entire industries out of business.

E) Firms that invent disruptive technologies as first movers always become market leaders.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

14) Which of the following statements about features of organizations is not true?

A) All modern organizations are bureaucracies with clear-cut divisions of labor and specialization.

B) Organizations are devoted to maximizing output using limited inputs.

C) Organizations and environments have a reciprocal relationship.

D) Organizational culture is a powerful restraint on technological change.

E) Organizations generally change much faster than environments.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

15) In environmental scanning, a firm may use information systems to: A) transform inputs into products and services.

B) analyze the performance of its intranet.

C) identify external events that may affect it.

D) keep track of the temperature within its data centers.

E) develop a unified organizational culture.

Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

16) All organizations have bedrock, unquestioned assumptions that define their goals and products.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

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

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

18) Routines are also called standard operating procedures.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

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

Answer: The behavioral definition of an organization is that it is a collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution. The behavioral view emphasizes group relationships, values, and structures. 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, which supplies additional capital and labor as inputs in a feedback loop. 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-1: Which features of organizations do managers need to know about to build and use information systems successfully?

20) When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as costs.

A) switching B) network C) procurement D) agency E) transaction Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 3-2: What is the impact of information systems on organizations?

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21) Which of the following statements information technology's impact on business firms is not true?

A) Information technology helps firms reduce environmental scanning.

B) Information technology helps firms lower the cost of market participation.

C) Information technology helps reduce internal management costs.

D) Information technology helps reduce transaction costs.

E) Information technology helps reduce agency costs.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 3-2: What is the impact of information systems on organizations?

22) According to agency theory, the firm is viewed as a(n): A) unified, profit-maximizing entity.

B) task force organization that must respond to rapidly changing environments.

C) entrepreneurial endeavor.

D) "nexus of contracts" among self-interested individuals.

E) entrepreneurial structure.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 3-2: What is the impact of information systems on organizations?

23) According to research on organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are: A) environment, people, structure, and tasks.

B) technology, people, culture, and structure.

C) tasks, culture, management, and environment.

D) tasks, technology, people, and structure.

E) costs, tasks, structure, and management.

Answer: D Difficulty: Challenging AACSB: Information technology LO: 3-2: What is the impact of information systems on organizations?

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24) Discuss and provide examples of how an organization's culture, politics, and structure can prevent a firm from fully realizing the benefits of a new information system.

Answer: To deliver genuine benefits, an information system must be built with a clear understanding of how it will be used. 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-2: What is the impact of information systems on organizations?

25) What is agency theory? How does information technology enable a firm to reduce agency costs?

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

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 3-2: What is the impact of information systems on organizations?

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26) Which of the following models uses a general view of the firm, its competitors, and the firm's environment to understand competitive advantage?

A) Network economics model B) Competitive forces model C) Competitive advantage model D) Demand control model E) Agency costs model Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

27) Which of the following industries has the lowest barrier to entry?

A) Automotive B) Computer chip C) Solar energy D) Airline E) Small retailer Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

28) All of the following are competitive forces in Porter's model except: A) suppliers.

B) new market entrants.

C) disruptive technologies.

D) customers.

E) substitute products.

Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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29) Which of the following statements about Porter's competitive forces model is not true?

A) Porter's competitive forces model is the most widely used model for understanding competitive advantage.

B) Porter's model focuses on a firm's general business environment.

C) The more substitute products and services in an industry, the less a firm can control pricing and the lower the firm's profit margins.

D) In a free economy, there are very low barriers to entry in all industries.

E) The power of customers grows if they can easily switch to a competitor's products and services.

Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

30) All of the following could be considered substitute products for industrial electricity generation except: A) solar B) wind C) coal D) ethanol E) hydropower Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

31) Walmart's continuous replenishment system is an example of a firm using information systems to: A) strengthen ties to its customers.

B) simplify the industry value chain.

C) develop synergies.

D) focus on market niche.

E) achieve low-cost leadership.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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32) A firm can exercise greater control over its suppliers in terms of price, quality, and delivery schedules by having: A) more suppliers.

B) fewer suppliers.

C) global suppliers.

D) local suppliers.

E) only a single supplier.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

33) Amazon's use of the Internet as a platform to enhance customer convenience illustrates which of the following strategies?

A) Low-cost leadership B) Enhancing core competencies C) Focusing on market niche D) Strengthening supplier intimacy E) Developing synergies Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

34) The four major competitive strategies are: A) low-cost leadership, substitute products and services, customers; and suppliers.

B) low-cost leadership, product differentiation, focus on market niche, and strengthening customer and supplier intimacy.

C) new market entrants, substitute products and services, customers, and suppliers.

D) low-cost leadership, new market entrants, product differentiation, and focus on market niche.

E) customers, suppliers, new market entrants, and substitute products.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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35) Walmart's continuous replenishment system allows it to do all of the following except: A) provide mass customization.

B) transmit orders to restock directly to its suppliers.

C) keep costs low.

D) better meet customer demands.

E) fine-tune merchandise availability.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

36) Firms use a strategy to provide a specialized product or service for a narrow target market better than competitors.

A) product differentiation B) market niche C) mass customization D) process efficiency E) low-cost leadership Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

37) The ability to offer individually tailored products or services using the same production resources as bulk production is known as: A) mass marketing.

B) micromarketing.

C) micro customization.

D) niche customization.

E) mass customization.

Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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38) Which of the following is not a true statement about value webs?

A) Value webs involve a collection of independent firms that use information technology to coordinate their value chains.

B) Value webs are more customer-driven than traditional value chains.

C) Value webs operate in a less linear fashion than traditional value chains.

D) Value webs are inflexible and cannot adapt quickly to changes in supply and demand.

E) Value webs involve highly synchronized industry value chains.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

39) An information system can enable a company to focus on a market niche through: A) developing intimacy with customers.

B) enabling new products and services.

C) producing products and services at a lower price than competitors.

D) intensive customer data analysis.

E) tightening linkages with suppliers.

Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

40) All of the following are IT-enabled products and services providing competitive advantage except: A) Amazon's one-click shopping.

B) Apple's iTunes.

C) Ping's golf club customization.

D) PayPal's online person-to-person payment system.

E) Nike's use of celebrities to market their products.

Answer: E Difficulty: Easy AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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41) The Internet increases the bargaining power of customers by: A) creating new opportunities for building loyal customer bases.

B) making more products available.

C) making information available to everyone.

D) lowering transaction costs.

E) enabling the development of new services.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

42) Hilton Hotels uses its OnQ system for which of the following purposes?

A) To lower its operating costs B) To benchmark its progress against competitors C) To create synergies with its suppliers D) To take advantage of network economics E) To estimate each guest's profitability and give additional privileges to profitable customers Answer: E Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

43) Which of the following is a competitive force that has challenged the music industry?

A) Positioning and rivalry among competitors B) Low cost of entry C) Substitute products or services D) Customers' bargaining power E) Suppliers' bargaining power Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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44) The value chain model: A) categorizes five related advantages for adding value to a firm's products or services.

B) sees the supply chain as the primary activity for adding value.

C) categorizes four basic strategies a firm can use to enhance its value chain.

D) highlights specific activities in the business where competitive strategies can best be applied.

E) enables more effective product differentiation.

Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

45) Which of the following represent the primary activities of a firm?

A) Inbound logistics, operations, outbound logistics, sales and marketing, and service B) Inbound logistics, operations, outbound logistics, technology, and service C) Procurement, inbound logistics, operations, technology, and outbound logistics D) Procurement, operations, technology, sales and marketing, and services E) Organization infrastructure, human resources, technology, and procurement Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

46) Which of the following is a support activity in a firm's value chain?

A) Inbound logistics B) Operations C) Sales and marketing D) Service E) Technology Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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47) Which of the following would a company employ to measure and compare its business processes to similar processes of other companies within their industry?

A) Benchmarking B) Best practices C) Value chain analysis D) Strategic systems analysis E) Secondary activities Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

48) The most successful solutions or methods for achieving a business objective are called: A) value activities.

B) best processes.

C) core competencies.

D) best practices.

E) benchmarks.

Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

49) Information systems can be used at the industry level to achieve strategic advantage by: A) building industrywide, IT-supported consortia, symposia, and communications networks.

B) raising the bargaining power of suppliers.

C) encouraging the entry of new competitors.

D) enforcing standards that reduce the differences between competitors.

E) decreasing switching costs.

Answer: A Difficulty: Easy AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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50) In network economics, the value of a commercial software vendor's software products: A) increases as more people use them.

B) decreases as more people use them.

C) increases due to higher marginal gain in output.

D) decreases according to the law of diminishing returns.

E) is unrelated to the number of people that use them.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

51) When two organizations pool markets and expertise that result in lower costs and generate profits, they are creating: A) a value web.

B) a value chain.

C) net marketplaces.

D) core competencies.

E) synergies.

Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

52) Which of the following is an example of synergy in business?

A) Amazon's use of the Internet to sell books B) Bank of America acquiring Countrywide Financial Corporation to reach a large pool of new customers C) Netflix combining traditional video rental with online video subscriptions D) Walmart's order entry and inventory management system to coordinate with suppliers E) Nike's use of technology to improve its product offerings Answer: B Difficulty: Easy AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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53) Information systems 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.

E) fostering synergies among departments.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

54) The idea that 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 value, is referred to as: A) the point of no return.

B) the law of diminishing returns.

C) supply and demand.

D) network inelasticity.

E) virtual economics.

Answer: B Difficulty: Easy AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

55) Which of the following statements about network economics is not true?

A) Uber is an example of a business model that is based on the principle of network economics.

B) The law of diminishing returns does not always apply to every situation.

C) From a network economics perspective, the value of a community of people grows as the number of participants in the community increases.

D) Information technology can be strategically useful from a network economics perspective.

E) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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56) A virtual company: A) uses networks to link people, assets, and ideas, enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations.

B) uses Internet technology to maintain a virtual storefront.

C) uses Internet technology to maintain a networked community of users.

D) provides entirely Internet-driven services or virtual products.

E) is limited by traditional organizational boundaries.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

57) Which of the following is an example of a keystone firm within a business ecosystem?

A) Apple and the mobile platform ecosystem B) GUESS and the fashion ecosystem C) Citibank and the ATM ecosystem D) American Airlines and the computerized reservation ecosystem E) Nike and the athletic apparel ecosystem Answer: A Difficulty: Easy AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

58) is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors.

A) Product differentiation B) Low-cost leadership C) Focusing on market niche D) Strengthening customer intimacy E) Strengthening supplier intimacy Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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59) The expenses incurred by a customer or company in lost time and resources when changing from one supplier or system to a competing supplier or system are known as: A) retention costs.

B) preservation costs.

C) differentiation costs.

D) switching costs.

E) variation costs.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

60) The model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position.

A) competitive forces B) value chain C) virtual company D) business ecosystem E) Mintzberg classification Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

61) The parts of an organization's infrastructure, human resources, technology, and procurement that make the delivery of the firm's products or services possible are known as activities.

A) primary B) auxiliary C) secondary D) service E) support Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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62) A(n) is a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service for a market.

A) value chain B) support web C) value web D) consortium E) virtual web Answer: C Difficulty: Challenging AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

63) A(n) is an activity for which a firm is a world-class leader.

A) expertise area B) competitive advantage C) growth driver D) efficiency E) core competency Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

64) Why does Amazon need to worry about competitors in online shopping?

A) E-commerce is affected by the law of diminishing returns.

B) Internet technologies are universal, and therefore usable by all companies.

C) Internet shopping can take place 24/7 in any location.

D) The Internet enables the creation and sale of smart products.

E) The Internet increases switching costs.

Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

65) Smart products increase rivalry among firms.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

67) The Internet of Things is an example of how the Internet is changing competition within industries and creating new products and services.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

68) The entire customer experience can be an element of product differentiation.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

69) The market power of suppliers can have a significant impact of firm profits.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

75) The value chain model classifies all company activities as either primary or support activities.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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76) In the value chain model, support activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

77) When the output of some units in a firm can be used as inputs to other units, synergies develop, which can lower costs and generate profits.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

78) According to the network economics perspective, the more people offering products on eBay's site, the greater the value of the site to all who use it.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

79) The term industry sets refers to collections of industries that provide related services and products that deliver value to the customer.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

80) A firm can be said to have competitive advantage when it has access to resources that others do not.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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81) The law of diminishing returns only applies to digital products.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

82) The inventors of a disruptive technology typically benefit the most from the technology; it is rare that fast followers catch up quickly.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

83) Smart products generally lower switching costs.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

84) Mintzberg's classification identifies five forces in an industry's environment that affect the strategic position of a firm.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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85) You are advising the owner of ABC Computers, a small local computer shop that repairs and also builds custom computers to order. What competitive strategies could ABC Computers employ? Which ones may it have difficulty executing?

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

Product differentiation: Although many national computer manufacturers sell customized computers for individuals, ABC Computers may be able to differentiate its product by using superior components and adding more services to its product.

Focus on market niche: ABC Computers could focus on being a local store with in-store technology support and assistance as a market niche.

Customer and supplier intimacy: ABC Computers 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, ABC Computers will probably not be able to exercise as much control over suppliers as does Dell or other manufacturers.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: Better Fitness could use computers, smart products, and mobile apps 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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87) What are some of the potentially negative impacts of the Internet on business firms identified

by Michael Porter? 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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88) 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.

Answer: The value chain model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive positions. 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).

In value chain analysis, you ask at each stage of the value chain, "How can we use information systems to improve operational efficiency and improve customer and supplier intimacy?" The model allows you to critically examine how you perform value-adding activities at each stage and how the business processes might be improved. You can examine how information systems can be used to improve the relationship with customers and with suppliers who are outside the firm value chain, but which belong to the firm's extended value chain, where they are critical to the firm's success. Supply chain management systems that coordinate the flow of resources into the firm, and customer relationship management systems that coordinate sales and support employees with customers are two of the most common systems that result from a business value chain analysis.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

89) How is the concept of core competency relevant to Procter & Gamble? Give examples.

Answer: A core competency is an activity for which a company is a world leader. In general, a core competency relies on knowledge that is gained over many years of practical field experience with a technology. This practical knowledge is typically supplemented with a long-term research effort and committed employees. Procter & Gamble, a world leader in brand management and consumer product innovation, uses a series of systems to enhance its core competencies by helping people working on similar problems share ideas and expertise. Employees working in research and development, engineering, purchasing, marketing, legal affairs, and business information systems around the world can share documents, reports, charts, videos, and other data from various sources online and locate employees with special expertise. P&G systems also can link to research scientists and entrepreneurs outside the company who are searching for new, innovative products worldwide.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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

Answer: Network economics refers to market situations where the economic value being produced depends on the number of people using a product. For certain products and markets, the real economic value comes from the fact that other people use the product. In these situations, "network effects" are at work. 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. Business models that are based on network effects have been highly successful on the Internet, including social networks, software, messaging apps, and on-demand companies like Uber and Airbnb. Network economics also provides strategic benefits to commercial software vendors. The value of their software and complementary software products increases as more people use them, and there is a larger installed base to justify continued use of the product and vendor support. For instance, 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication; Information technology LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

91) 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, outsourcing firms, transportation services firms, 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 For instance, both Microsoft and Facebook provide platforms composed of information systems, technologies, and services that thousands of other firms in different industries use to enhance their own capabilities.

Facebook is a platform used by billions of people and millions of businesses to interact and share information as well as to buy, market, and sell numerous products and services. Another example of a business ecosystem is the mobile Internet platform. In this ecosystem there are four industries: device makers (Apple iPhone, Samsung, LG, and others), wireless telecommunication firms (AT&T, Verizon, T-Mobile, 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).

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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92) Select a popular product or company that you are familiar with, such as Apple's iPad. Apply Porter's competitive forces model to that product and/or company. Which of the four generic strategies is the company using?

Answer: Student answers will vary. One example answer using Apple's iPad is: • Competitors to the iPad include the Microsoft Surface, Samsung Galaxy Tab, and many others, but few as widely known.

• New market entrants: There is not a huge barrier to entry in this field; many other technology companies offer tablet computers.

• Substitute products and services: Smartphones are a substitute product or service.

• Customers: The iPad still has the highest brand recognition among consumers, diminishing the bargaining power of customers. However, this advantage has diminished as other similar products that are as well designed enter the marketplace.

In terms of the iPad, Apple seems to be focused on product differentiation by creating a product with unique features and capabilities.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

93) Why are disruptive technologies "tricky"? Provide examples.

Answer: Disruptive technologies can be tricky because firms that invent disruptive technologies as first movers do not always benefit if they lack the resources to exploit the technology or fail to see the opportunity. For example, the MITS Altair 8800 is widely regarded as the first PC, but its inventors did not take advantage of their first-mover status. Second movers, so-called fast followers such as IBM and Microsoft, reaped the rewards. Citibank's ATMs revolutionized retail banking, but other banks copied them. Now all banks use ATMs, and the benefits go mostly to the consumers.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

94) Why has the Internet made competitive rivalry more intense?

Answer: The Internet has made competitive rivalry more intense because Internet technology is based on universal standards that any company can use, making it easier for rivals to compete on price alone and for new competitors to enter the market. Because information is available to everyone, the Internet also raises the bargaining power of customers, who can quickly find the lowest-cost provider on the web, which may dampen profits. The Internet also widens the geographic market, increasing the number of competitors and reducing differences among competitors, and makes it more difficult to sustain operational advantages.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 3-3: How do Porter's competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

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95) You are consulting for a natural food products distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step?

A) Identify the business ecosystem the distributor is in B) Implement a strategic transition to the new system C) Perform a strategic systems analysis D) Benchmark existing systems E) Set up a strategic transition Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 3-4: What are the challenges posed by strategic information systems, and how should they be addressed?

96) Which of the following statements about strategic information systems is not true?

A) The competitive advantages that strategic systems confer do not necessarily last long enough to ensure long-term profitability.

B) Almost all a business firm's profits can be explained by alignment of IT with business.

C) The research on IT and business performance has found that the more successfully a firm can align information technology with its business goals, the more profitable it will be.

D) To align IT with the business and use information systems effectively for competitive advantage, managers need to perform a strategic systems analysis.

E) New strategic information systems often change the organization as well as its products, services, and operating procedures.

Answer: B Difficulty: Challenging AACSB: Information technology LO: 3-4: What are the challenges posed by strategic information systems, and how should they be addressed?

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

Answer: FALSE Difficulty: Challenging AACSB: Information technology LO: 3-4: What are the challenges posed by strategic information systems, and how should they be addressed?

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

Answer: FALSE Difficulty: Challenging AACSB: Information technology LO: 3-4: What are the challenges posed by strategic information systems, and how should they be addressed?

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

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

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

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

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

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 3-4: What are the challenges posed by strategic information systems, and how should they be addressed?

100) Why is it difficult for firms to sustain a competitive advantage?

Answer: Because competitors can retaliate and copy strategic systems, competitive advantage is not always sustainable. Markets, customer expectations, and technology change; globalization has made these changes even more rapid and unpredictable. The Internet can make competitive advantages disappear very quickly because virtually all companies can use this technology.

Information systems alone cannot provide an enduring business advantage. Systems originally intended to be strategic frequently become tools for survival, required by every firm to stay in business, or they may inhibit organizations from making the strategic changes essential for future success strategy.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 3-4: What are the challenges posed by strategic information systems, and how should they be addressed?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 4 Ethical and Social Issues in Information Systems 1) Which of the following best describes how new information systems can result in legal gray areas?

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

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

C) They are implemented by technicians rather than managers.

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

E) They are little understood by politicians or lawyers.

Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

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

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

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

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

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

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

Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

3) The obligations that individuals and organizations have concerning rights to intellectual property involve which of the following moral dimensions of the information age?

A) Property rights and obligations B) System quality C) Accountability and control D) Information rights and obligations E) Quality of life Answer: A Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

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4) The obligations that individuals and organizations have regarding the preservation of existing values and institutions fall within which of the following moral dimensions of the information age?

A) Family and home B) Property rights and obligations C) System quality D) Accountability and control E) Quality of life Answer: E Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

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

A) Decline in data storage costs B) Data analysis advancements C) Increase in data quality D) Increase in use of mobile devices E) Advances in networking technology Answer: C Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

6) Which of the five moral dimensions of the information age do the central business activities of Google Marketing Platform involve?

A) Property rights and obligations B) System quality C) Accountability and control D) Quality of life E) Information rights and obligations Answer: E Difficulty: Challenging AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

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7) The use of computers to assemble data from different sources to create digital dossiers of detailed information about individuals is known as which of the following?

A) Profiling B) Phishing C) Spamming D) Targeting E) Spyware Answer: A Difficulty: Easy AACSB: Information technology LO: 4-1: What ethical, social, and political issues are raised by information systems?

8) Which of the following is a data analysis technology that finds obscure connections between data in disparate sources?

A) HIPAA B) FIP C) NORA D) COPPA E) Spyware Answer: C Difficulty: Easy AACSB: Information technology LO: 4-1: What ethical, social, and political issues are raised by information systems?

9) All of the following are factors in U.S. federal sentencing guidelines with respect to business executives except: A) the monetary value of the crime.

B) the presence of a conspiracy to prevent discovery of the crime.

C) the use of technology to commit the crime.

D) the use of structured financial transactions to hide the crime.

E) the failure to cooperate with prosecutors.

Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 4-1: What ethical, social, and political issues are raised by information systems?

10) Routine violations of individual privacy are made easier by advances in data storage.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 4-1: What ethical, social, and political issues are raised by information systems?

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11) In today's legal environment, managers who are convicted for the misuse of information systems are unlikely to be given a prison sentence.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 4-1: What ethical, social, and political issues are raised by information systems?

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

Answer: TRUE Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-1: What ethical, social, and political issues are raised by information systems?

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

Support your opinion.

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

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

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

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

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

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

Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-1: What ethical, social, and political issues are raised by information systems?

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

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

Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-1: What ethical, social, and political issues are raised by information systems?

15) What is NORA and how does it work?

Answer: NORA stands for nonobvious relationship awareness. NORA has given both the government and the private sector even more powerful profiling capabilities. NORA can take information about people from many disparate sources, such as employment applications, telephone records, customer listings, and wanted lists, and correlate relationships to find obscure connections that might help identify criminals or terrorists. NORA technology scans data and extracts information as the data are being generated so that it could, for example, instantly discover a man at an airline ticket counter who shares a phone number with a known terrorist before that person boards an airplane. The technology is considered a valuable tool for homeland security but does have privacy implications because it can provide such a detailed picture of the activities and associations of a single individual.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 4-1: What ethical, social, and political issues are raised by information systems?

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

A) Responsibility B) Accountability C) Liability D) Due process E) Duty Answer: A Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

A) Due process B) Accountability C) The courts of appeal D) The judicial system E) Liability Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

18) is a feature of law-governed society and involves having laws that are known and understood, along with the ability to appeal to higher authorities to ensure that the laws are applied correctly.

A) Liability B) Due process C) Responsibility D) Accountability E) The judicial system Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

19) All of the following are steps in the process for analyzing an ethical issue except: A) assigning responsibility.

B) identifying the stakeholders.

C) identifying the options you can reasonably take.

D) identifying and describing the facts clearly.

E) identifying the potential consequences of your options.

Answer: A Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

A) Kant's Categorical Imperative B) The Golden Rule C) The Risk Aversion Principle D) The no-free-lunch rule E) The slippery-slope rule Answer: A Difficulty: Challenging AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

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

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

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

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

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

Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

22) Which of the following best describes Immanuel Kant's categorical imperative?

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

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

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

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

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

Answer: D Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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23) 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) if something someone else has created is useful to you, it has value, and you should assume the creator wants compensation for this work.

E) if an action is not right for everyone to take, it is not right for anyone to take.

Answer: D Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

24) According to , you should take the action that produces the least harm.

A) Kant's categorical imperative B) the risk aversion principle C) the utilitarian principle D) the Golden Rule E) the "no free lunch" rule Answer: B Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

25) Which ethical rule states that if an action cannot be taken repeatedly, it is not right to take at all?

A) Slippery-slope rule B) Lemming rule C) High-failure cost rule D) Utilitarian principle E) Golden Rule Answer: A Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

26) Which of the following ethical guidelines suggests that you put yourself in the place of others, and think of yourself as the object of the decision?

A) Kant's categorical imperative B) the risk aversion principle C) the utilitarian principle D) the Golden Rule E) the no-free-lunch rule Answer: D Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

Answer: FALSE Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

Answer: TRUE Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

29) Due process is a feature of political systems and allows individuals to recover damages done to them by others.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

Answer: The steps are: (1) Identify and describe the facts clearly; (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.

Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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

Answer: The six ethical principles are the Golden Rule, Kant's categorical imperative, the slippery slope rule, the utilitarian principle, the risk aversion principle, and the no-free-lunch" rule. The Golden Rule proposes that you should do unto others as you would have them do unto you. Immanuel Kant's categorical imperative proposes that if an action is not right for everyone to take, it is not right for anyone. The slippery slope rule 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 no-free-lunch rule says: Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise. Tangible objects are owned by someone else unless there is a specific declaration otherwise.

Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

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32) 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).

Difficulty: Challenging AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-2: What specific principles for conduct can be used to guide ethical decisions?

33) All of the following are FTC privacy guidelines except: A) firms should build products and services that protect privacy.

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

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

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

E) consumers should be able to review and contest the accuracy and completeness of data collected about them in a timely, inexpensive process.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

34) Which of the following regulates the U.S. federal government collection, use, and disclosure of information?

A) The Privacy Act B) The Gramm-Leach-Bliley Act C) The Freedom of Information Act D) COPPA E) HIPPA Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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35) FIP principles are based on a belief in which of the following?

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 E) Difference between the interests of the individual and commercial organizations Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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

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

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

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

E) websites must disclose their information practices before collecting data.

Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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

A) HIPAA B) Gramm-Leach-Bliley Act C) Privacy Protection Act D) Freedom of Information Act E) COPPA Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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38) Which of the following is not a U.S. federal law affecting private institutions?

A) COPPA B) HIPAA C) Gramm-Leach-Bliley Act D) Video Privacy Protection Act E) Computer Matching and Privacy Protection Act Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

39) All of the following laws apply to actions by the federal government except the: A) Freedom of Information Act. B) Privacy Act. C) Computer Security Act. D) Children's Online Privacy Protection Act. E) Driver's Privacy Protection Act. Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

40) When a cookie is created during a website visit, it is stored: A) on the website's server.

B) on the hard drive of the visitor's computer.

C) on the ISP's servers.

D) in the browser's application settings.

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

Answer: B Difficulty: Moderate AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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41) Which of the following is not a feature of the General Data Protection Regulation (GDPR)?

A) It applies to all firms doing business in the EU. B) Its protections of the privacy rights of EU citizens apply worldwide, regardless of where processing of the data takes places.

C) It imposes fines on companies for violating the regulation up to 4 percent of a firm's global revenue.

D) It creates a single EU privacy policy.

E) It prevents firms from using cookies.

Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

42) Which of the following allows the EU to enforce GDPR requirements with non-EU countries?

A) privacy by design agreements B) P3P agreements C) PGP agreements D) FIP agreements E) privacy shield agreements Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

43) The Network Advertising Initiative is an industry association that: A) has developed privacy policies to help consumers opt out of advertising network programs and provide consumers redress from abuses.

B) protects user privacy during interactions with websites.

C) has established technical guidelines for ensuring privacy.

D) regulates the use of customer information by firms.

E) is a safe harbor program established by the U.S. government.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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44) In the model of informed consent, personal information cannot be collected until the consumer specifically agrees that his or her data can be collected.

A) opt-in B) opt-out C) P3P D) PGP E) safe harbor Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

45) What percent of global Internet users use Google Search and other Google services?

A) Less than 10 percent B) Around 25 percent C) About 50 percent D) About 80 percent E) Over 90 percent Answer: D Difficulty: Moderate AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

46) Which of the following forms of protection of intellectual property requires that the property be the subject of a nondisclosure agreement?

A) Copyright B) Patent C) All forms of intellectual property protection D) Trademark E) Trade secret Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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47) All of the following are technical solutions to protecting user privacy except: A) email encryption.

B) anonymous surfing.

C) anonymous email.

D) preventing client computers from accepting cookies.

E) data use policies.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

48) Which of the following protects the authors of a book from having their work copied by others?

A) Patent protection B) Due process C) Copyright law D) Fair Use Doctrine E) Trade Secret law Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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

B) the distinction between an idea and its expression.

C) using the graphical elements of another product.

D) using the creative elements of another product.

E) violation of a monopoly on the ideas behind a product.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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50) The NAI is an industry association formed to help with which of the following?

A) Copyright protection B) Online privacy issues C) Patent protection D) Trademark protection E) Trade secret protection Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

51) Which of the following runs an antipiracy hotline for individuals to report piracy activities?

A) WIPO B) NAI C) SIIA D) DMCA E) FCC Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

52) 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 E) Computer Software Copyright Act Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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53) Which of the following statements about cookies is not true?

A) Cookies are installed only at the user's request.

B) Cookies are stored on the user's computer.

C) It is possible to prevent a client computer from accepting cookies.

D) Cookies are used to support the user experience on websites.

E) Cookies can be combined with other website data to develop detailed profiles of customers.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

54) Advertisers use in order to display more relevant ads based on a user's search and browsing history.

A) behavioral targeting B) Web bugs C) NORA D) intelligent agents E) FIP principles Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

55) allows an organization to collect personal information without the user's explicit consent.

A) A safe harbor B) The opt-in model C) FIP principles D) P3P E) The opt-out model Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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56) grants the owner exclusive ownership of the ideas behind an invention for 20 years.

A) Copyright law B) Trademark law C) Patent law D) Trade secret protection E) Privacy law Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

57) The right to is a feature of the GDPR that allows individuals to request that organizations delete their personal data.

A) opt-out of data collection B) a safe harbor C) be forgotten D) do not track E) opt-in to data collection Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

58) Which of the following is not a difficulty in establishing patent protection?

A) Length of time required to receive protection B) The requirement that the work reflect some special understanding and contribution C) The requirement that the work must be original D) The requirement that the work must be novel E) The requirement that the work must be a secret Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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59) Which of the following statements about trademarks is not true?

A) Trademarks are the marks, symbols, and images used to distinguish products in the marketplace.

B) Trademark infringement occurs when a firm copies the marks of a competing firm.

C) Trademark infringement occurs when a firm dilutes the value of another firm's marks by weakening the connection between a mark and the product.

D) Trademark laws are designed solely to protect consumers.

E) Trademark dilution is a concern because it can create confusion in the marketplace.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

60) Digital media differs from a physical book in all of the following ways except: A) ease of replication.

B) ease of alteration.

C) ease of transmission.

D) compactness.

E) ease of establishing uniqueness.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

61) Which of the following were involved in what has been called the patent trial of the century?

A) Apple and Microsoft B) Apple and Hewlett-Packard C) Microsoft and Symantec D) Microsoft and Facebook E) Apple and Samsung Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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62) All of the following are, or were, file-sharing services except: A) The Pirate Bay. B) Megaupload.

C) Morpheus.

D) Pandora.

E) Grokster.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

63) The European Parliament has banned unsolicited commercial messaging.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

64) Trade secret laws grant a monopoly on the ideas behind a work product.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

65) Malicious software that can secretly install itself on an Internet user's computer by piggybacking on other applications and then report the user's movements on the Internet to other computers. is called spyware.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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67) The DMCA requires ISPs to take down sites of copyright infringers they are hosting when the ISPs are notified of the problem.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

68) Software can never be considered to be a trade secret.

Answer: FALSE Difficulty: Challenging AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

69) The claim to privacy is protected by the U.S. Constitution.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

71) Websites using cookie technology cannot directly obtain visitors' names and addresses from the cookie.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

72) Privacy protection in Europe has historically been much stronger than in the United States.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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73) One of the key concepts in patent law is originality.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

74) Some forms of illegal sharing of music files have declined as legitimate online music stores and streaming services have expanded.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

76) Advertising networks such as Microsoft Advertising, Yahoo, and Google's Marketing Platform are capable of tracking personal browsing behavior across thousands of websites.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

77) Web beacons are tiny, invisible software programs embedded in email messages and web pages that are used to track and report a user's online behavior.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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78) What are Fair Information Practices (FIP)? Why are they important?

Answer: Fair Information Practices (FIP) is a set of principles governing the collection and use of information about individuals. They are important because they form the basis for most American and European privacy law. FIP principles are based on the notion of a mutuality of interest between the record holder and the individual. The individual has an interest in engaging in a transaction, and the record keeper–-usually a business or government agency–requires information about the individual to support the transaction. After information is gathered, the individual maintains an interest in the record, and the record may not be used to support other activities without the individual's consent. The FIP are as follows: 1. Notice/awareness (core principle). Websites must disclose their information practices before collecting data. Includes identification of collector; uses of data; other recipients of data; nature of collection (active/inactive); voluntary or required status; consequences of refusal; and steps taken to protect confidentiality, integrity, and quality of the data.

2. Choice/consent (core principle). A choice regime must be in place allowing consumers to choose how their information will be used for secondary purposes other than supporting the transaction, including internal use and transfer to third parties.

3. Access/participation. Consumers should be able to review and contest the accuracy and completeness of data collected about them in a timely, inexpensive process.

4. Security. Data collectors must take responsible steps to ensure that consumer information is accurate and secure from unauthorized use.

5. Enforcement. A mechanism must be in place to enforce FIP principles. This can involve selfregulation, legislation giving consumers legal remedies for violations, or federal statutes and regulations.

Difficulty: Challenging AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

79) What is a cookie and how does it work?

Answer: A cookie is a small text file deposited on a computer hard drive when a user visits a website. Cookies identify the visitor's web browser software and track visits to the website. It works as follows: A user opens a web browser and selects a website to visit. The user's computer sends a request for information to the server running the website. At the same time the server 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 website, the server running the site retrieves the cookie to help identify the user.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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80) How does protection of privacy in Europe differ from the United States?

Answer: In 2018, the European Commission implemented the EU General Data Protection Regulation (GDPR), which is arguably the most important privacy legislation in the last twenty years since the FTC's Fair Information Practices Principles. It applies to all firms and organizations that collect, store, or process personal information of EU citizens, and these protections apply worldwide regardless of where the processing takes place. The GDPR is an updated framework for protecting PII (personally identifiable information) and replaces an earlier Data Protection Directive of 1998. In Europe, privacy protection is historically much stronger than it is in the United States. In the United States, there is no federal agency charged with enforcing privacy laws. And there is no single privacy statute governing private corporation use of PII. Instead, privacy laws are piecemeal, sector by sector, for example, medical privacy, educational privacy, and financial privacy laws. These are enforced by the FTC, through selfregulation by businesses, and by individuals who must sue agencies or companies in court to recover damages. This is expensive and rarely done. In the EU, data protection laws are comprehensive, apply to all organizations, and enforced by data protection agencies in each country to pursue complaints brought by citizens and actively enforce privacy laws. The GDPR protects a wide variety of PII: basic identity information such as name, address, and ID numbers; web data such as location, IP address, cookie data, and RFID tags; health and genetic data; mobile phone number; driver's license and passport number; biometric and facial data; racial and ethnic data; political opinions; and sexual orientation. The main objective of the GDPR is to strengthen the rights of citizens to their own personal information and to strengthen oversight of firms to ensure they implement these individual rights. A second thrust was to harmonize conflicting data protection standards among the 28 European bloc nations and create a single EU agency to implement and enforce the regulation. And third, to enforce these conditions worldwide for all organizations that operate in the EU, or process data pertaining to EU citizens, regardless of where the organization is located. For individuals, the GDPR requires organizations to allow consumers to access all their personal information without charge within one month; delete personal data (right to be forgotten); ensure data portability so consumers are not locked into a particular service; and guarantee the right to sue providers for damages or abuse of PII, including class action law suits. Organizational requirements have been strengthened to include requiring organizations to have a data protection officer that reports to senior management; requiring explicit consent before collecting data (positive opt-in), and eliminating default opt-in processes; publishing the rationale for data collection and the length of retention; reporting of breaches and hacks within 72 hours; liability for data they share with partners or other firms, and a listing of all firms they share data with; building privacy protections into all new systems (privacy by design); limit targeting and retargeting of individuals to audience-level, anonymized data, rather than targeting based on intimate, personal profiles; limiting the collection of personal data to only that which is needed to support a task, or a transaction, and then deleting it shortly thereafter. Abuse of PII can be fined up to $20 million or 4% of the organization's global revenue, whichever is greater. Finally, the EU will enforce the GDPR requirements with non-EU countries like the United States using intergovernmental privacy shield agreements that ensure that EU data processed in non-EU nations meets GDPR standards.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

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81) Discuss the issues raised by Apple and Samsung's patent battle against each other.

Answer: In 2011, Apple sued Samsung for violating its patents for iPhones, iPads, and iPods.

The patent battle is indicative of the complex relationships among the leading computer firms.

One company (Apple) was a major customer of the other, Samsung, and used many of Samsung's components in its products. Each of the companies claimed that the other company was infringing on its patents. It also raised the issue of how to determine the appropriate criteria for how close a competitor can come to copying the features of an industry-leading and standardsetting product and how to calculate damages caused by infringement.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 4-3: Why do contemporary information systems technology and the Internet pose challenges to the protection of individual privacy and intellectual property?

82) Which of the following is not a principal cause of poor system performance?

A) Software bugs B) Hardware failures C) Computer abuse D) Facility failures E) Poor input data quality Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

83) Which of the following is by far the most common source of business system failure?

A) Software bugs B) Software errors C) Hardware failures D) Facilities failures E) Data quality Answer: E Difficulty: Moderate AACSB: Information technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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

A) It makes work environments less pleasant.

B) It creates a digital divide.

C) It centralizes power at corporate headquarters.

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

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

Answer: D Difficulty: Moderate AACSB: Information technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

85) Which of the following statements about spam is not true?

A) Most spam originates from bot networks.

B) Cell phone spam usually comes in the form of SMS text messages.

C) Spam costs for business are very high.

D) Spamming has mushroomed because it is so inexpensive and can reach so many people.

E) Spamming is more tightly regulated in the United States than in Europe.

Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

86) The U.S. CAN-SPAM Act: A) makes spamming illegal.

B) requires commercial email senders to identify themselves.

C) has dramatically cut down spamming.

D) makes it difficult for recipients to remove their names from email lists.

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

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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87) Which of the five moral dimensions of the information age does the weakening of boundaries between work and family life involve?

A) Quality of life B) System quality C) Accountability and control D) Information rights and obligations E) Property rights and obligations Answer: A Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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

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

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

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

E) it can concentrate power in the hands of senior executives.

Answer: A Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

89) Which of the following terms refers to significant disparities in access to computers and the Internet among different social groups and different locations?

A) CVS B) Technostress C) Digital divide D) RSI E) CTS Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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

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

C) carpal vision syndrome.

D) a type of antivirus protection software.

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

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

91) Which of the following occurs when muscle groups are forced through tens of thousands of repetitions under low-impact loads?

A) CTS B) CVS C) RSI D) Technostress E) RSS Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

92) Big Tech firms are facing increasing scrutiny with respect to alleged anticompetitive and unfair practices.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

93) Oligopolies and monopolies dominate the Web and mobile platform.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

94) Some experts believe that exposure to computers reduces intelligence and cognitive abilities.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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95) Computer abuse refers to acts involving a computer that may not be illegal but are considered unethical.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

96) Can software producers be held liable for harm done by software?

Answer: Insofar as computer software controls or is part of a machine, and the machine injures someone physically or economically, such as in the case of the Boeing 737 MAX plane, where software and sensors malfunctioned or were poorly designed, the producer of the software and the operator can be held liable for damages. Insofar as the software acts like a book, storing and displaying information, courts have been reluctant to hold authors, publishers, and booksellers liable for contents (the exception being instances of fraud or defamation); hence, courts have been wary of holding software authors liable. In general, it is very difficult (if not impossible) to hold software producers liable for their software products that are considered to be like books, regardless of the physical or economic harm that results. Historically, print publishers of books and periodicals have not been held liable because of fears that liability claims would interfere with First Amendment rights guaranteeing freedom of expression.

Difficulty: Challenging AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

97) 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 and reliability and has been sufficiently tested? The leading social issue raised by quality is: how is our society affected by low-quality software and is this a concern? And how much accountability should the software manufacturer have? The central political concern raised by software quality is whether and how to enforce software quality minimums and standards, and what institutions are thus also held accountable.

Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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98) Discuss some of the possible implications of the increasing economic and political power of so-called "Big Tech".

Answer: In 2019, Amazon accounted for over half of all e-commerce retail sales, along with 75 percent of all book sales. Google accounts for 87 percent of online search. Facebook (including Instagram) accounts for over 86 percent of all social network users and has 60 percent of the total Internet audience. Ninety percent of new online ad dollars went to Google or Facebook.

Seventy-five percent of video streamers use Netflix, 53 percent use YouTube, and 33 percent use Amazon. In the office, Microsoft dominates with over 90 percent of the world's 2 billion PCs using Windows software and software products. Apple accounts for 48 percent of the US market in smartphones (Google accounts for the remaining 52 percent). The millions of Apple apps run only on Apple phones, likewise for Android apps running only on Android phones. In the new world of these so-called Big Tech firms, oligopolies and monopolies dominate the Web and mobile platforms. The wealth created by these firms inevitably translates into political influence: these same firms have amassed an army of lobbyists in Washington and state capitals to ensure legislation, or legislative inquiries, that might affect their market and tax concerns, reflects their interests. Big Tech firms have increased their lobbying efforts in Washington to over $30 billion annually, second only to financial firm lobbying. Concentrations of market power are not new in the United States or Europe. Beginning in 1890 with the Sherman Antitrust Act in the United States, and continuing through the 1960s, monopolies have been considered threats to competition and to smaller start-up businesses, generally restraining free trade. Monopolies typically achieve their size by purchasing smaller competitors, or crushing them by developing similar products, or engaging in predatory pricing by dropping prices drastically for short periods of time to force smaller firms out of business. Big Tech firms have a well-documented history of these behaviors. But antitrust thinking changed in the 1970s to a different standard of harm: consumer welfare. In this view, bigness per se was not a danger, or even anticompetitive behavior. Instead price and consumer welfare became paramount. As long as consumers were not forced to pay higher prices, then market power was not important, not a social or economic harm. In this view, because the offerings of Facebook, Google, and Amazon are either free or very low cost, there can be no harm. Critics point out that consumer welfare is harmed in other ways than price, namely, by preventing new, innovative companies from market access, or surviving long enough to prosper as independent firms. Complaints and lawsuits originated by small start-up firms alleging anticompetitive and unfair practices, and concerns about the abuse of personal privacy by Big Tech firms, have led to a torrent of critical articles and several congressional investigations. Heretofore the poster children of American capitalism at its best, Big Tech firms are today the targets of stinging public criticism, legislative investigations, and regulatory actions. Many commentators are calling for breaking up Big Tech firms into separate businesses much as the Sherman Antitrust act broke up Standard Oil in 1911, as well as other monopolies in photography, tobacco, steel, railroads, meat packing, telecommunications, and computers.

Difficulty: Challenging AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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99) What is the digital divide and how does it impact society?

Answer: The digital divide relates to the fact that information, knowledge, computers, and access to digital and information resources through educational institutions and public libraries are inequitably distributed along ethnic and social class lines. Several studies have found that poor and minority groups in the United States are less likely to have computers or online Internet access even though computer ownership and Internet access have soared in the past five years.

Although the gap in computer access is narrowing, higher-income families in each ethnic group are still more likely to have home computers and broadband Internet access than lower-income families in the same group. Moreover, the children of higher-income families are far more likely to use their Internet access to pursue educational goals, whereas lower-income children are much more likely to spend time on entertainment and games. Left uncorrected, this digital divide could lead to a society of information haves, computer literate and skilled, versus a large group of information have-nots, computer illiterate and unskilled. Public interest groups want to narrow this digital divide by making digital information services—including the Internet—available to virtually everyone, just as basic telephone service is now.

Difficulty: Challenging AACSB: Ethical understanding and reasoning; Written and oral communication; Information technology LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

100) What are some of the potential health risks associated with use of computers?

Answer: A common occupational disease today is repetitive stress injury (RSI). RSI occurs when muscle groups are forced through repetitive actions often with high-impact loads (such as tennis) or tens of thousands of repetitions under low-impact loads (such as working at a computer keyboard). The incidence of repetitive stress syndrome is estimated to be as much as one-third of the labor force and accounts for one-third of all disability cases. The single largest source of RSI is computer keyboards. The most common kind of computer-related RSI is carpal tunnel syndrome (CTS), in which pressure on the median nerve through the wrist's bony structure, called a carpal tunnel, produces pain. The pressure is caused by constant repetition of keystrokes. Symptoms of carpal tunnel syndrome include numbness, shooting pain, inability to grasp objects, and tingling. Millions of workers have been diagnosed with carpal tunnel syndrome. It affects an estimated 3 percent to 6 percent of the workforce. RSI is not the only occupational illness computers cause. Back and neck pain, leg stress, and foot pain also result from poor ergonomic designs of workstations. Computer vision syndrome (CVS) refers to any eyestrain condition related to display screen use in desktop computers, laptops, e-readers, smartphones, and handheld video games. CVS affects about 90 percent of people who spend three hours or more per day at a computer. Its symptoms, which are usually temporary, include headaches, blurred vision, and dry and irritated eyes.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 4-4: How have information systems affected laws for establishing accountability and liability and the quality of everyday life?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 5 IT Infrastructure and Emerging Technologies 1) Which type of infrastructure service stores and manages corporate data and provides capabilities for analyzing the data?

A) Networking B) Telephone C) VOIP D) Telecommunications E) Data management Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

2) Which of the following is not an IT infrastructure service component?

A) Operating system software services B) Computing services that connect employees, customers, and suppliers into a coherent digital environment C) Physical facilities management services to manage the facilities housing physical components D) IT management services to plan and develop the infrastructure and provide project management E) IT education services that provide training to employees Answer: A Difficulty: Challenging AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

3) Which of the following is a multitasking, multiuser, operating system developed by Bell Laboratories that operates on a wide variety of computers from different manufacturers?

A) Unix B) Wintel C) OS X D) COBOL E) DOS Answer: A Difficulty: Challenging AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

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4) A(n) is used to communicate between a user and an organization's back-end systems.

A) public server B) private server C) legacy server D) application server E) blade server Answer: D Difficulty: Easy AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

5) Place the following eras of IT infrastructure evolution in order, from earliest to most recent: 1.

Cloud Computing Era; 2. Client/Server; 3. Enterprise Era; 4. Personal Computer; and 5.

Mainframe and Minicomputer.

A) 5, 2, 3, 4, 1 B) 5, 4, 2, 3, 1 C) 4, 5, 2, 3, 1 D) 5, 4, 2, 1, 3 E) 4, 5, 3, 2, 1 Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

6) The introduction of the minicomputer: A) allowed computers to be customized to the specific needs of departments or business units.

B) strengthened centralized computing.

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

D) represented the rise of Microsoft.

E) was dominated by IBM. Answer: A Difficulty: Challenging AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

7) 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) multitiered client/server architecture.

D) two-tiered client/server architecture.

E) divided architecture.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

8) In a multitiered network: A) the work of the entire network is centralized.

B) the work of the entire network is balanced over several levels of servers.

C) processing is split between clients and servers.

D) processing is handled by multiple, geographically-remote clients.

E) processing is located in the cloud.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

9) Interpretations of Moore's law assert that: A) computing power will eventually level off.

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

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

D) PCs decrease in market share by 9% every 5 years.

E) computing power doubles every 18 months.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

10) Nanotubes are about 10,000 times thinner than: A) a fingernail.

B) a human hair.

C) a virus.

D) an atom.

E) a grain of sand.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

11) Which of the following became the standard PC in the Personal Computer Era? A) Wintel PC B) Unix PC C) MITS PC D) Altair E) Apple Macintosh Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

12) uses individual atoms and molecules to create computer chips and other devices.

A) Virtualization B) Nanotechnology C) Quantum computing D) A minicomputer E) On-demand computing Answer: B Difficulty: Easy AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

13) states that the value or power of a network grows exponentially as a function of the number of network members.

A) Metcalfe's Law B) Moore's Law C) The Law of Scalability D) The Law of Mass Digital Storage E) The Law of Networks Answer: A Difficulty: Challenging AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

14) Which of the following is not a technology driver transforming IT infrastructure?

A) Network economics B) Law of Mass Digital Storage C) Moore's Law D) Declining communications costs and exponential growth in the size of the Internet E) Widespread rejection of technology standards Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

15) Which of the following is 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?

A) TCP/IP B) COBOL C) Ethernet D) ASCII E) Linux Answer: C Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

16) During which era did business firms begin seriously to use TCP/IP? A) cloud and mobile computing B) general-purpose mainframe and minicomputer C) client/server D) personal computer E) enterprise computing Answer: E Difficulty: Challenging AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

17) In N-tier computing, significant parts of website content, logic, and processing are performed by a single web server.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

18) A web server is responsible for locating and managing stored web pages.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

19) IT infrastructure consists of only those physical computing devices and software required to operate the enterprise.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

20) An application server may reside on the same computer as a web server or on its own dedicated computer.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

22) In financial services firms, investments in IT infrastructure represent more than half of all capital investment.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

23) Microsoft is no longer the market leader in client/server networking.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

24) Cloud computing is the fastest growing form of computing.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

25) Exponential growth in the number of transistors and the power of processors is expected to decrease in the foreseeable future.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

26) List and describe four services that comprise IT infrastructure, beyond physical devices and software applications.

Answer: The services that comprise IT infrastructure, beyond physical devices and software applications are: • 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

27) Explain why standards are so important in information technology. What standards have been important for the growth of Internet technologies?

Answer: Technology standards are specifications that establish the compatibility of products and the ability to communicate in a network. Standards are important because they enable different manufacturers to create 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.

Technology standards also unleash powerful economies of scale and result in price declines as manufacturers focus on the products built to a single standard. Without these economies of scale, computing of any sort would be far more expensive than is currently the case.

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. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

28) Which of the following is a leading networking hardware provider?

A) Dell B) Intel C) Seagate D) IBM E) Cisco Answer: E Difficulty: Easy AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

29) The Windows operating system: A) was an early PC operating system.

B) is used on virtually all tablet and mobile devices today.

C) is a data management application used on PCs. D) is an operating system used by nearly 88 percent of PCs. E) is a web-based operating system for the Internet era.

Answer: D Difficulty: Easy AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

30) Which of the following is an example of a legacy system?

A) Transaction processing system running on a mainframe B) Scalable grid computing system C) Web services running on a cloud computing platform D) MDM software E) Quantum computing system Answer: A Difficulty: Challenging AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

31) Which of the following statements about mobile devices is not true?

A) The introduction of mobile computing devices changed the computer platform dramatically.

B) Mobile devices consume less power than computers.

C) Mobile devices are not required to perform as many tasks as computers.

D) Mobile devices generate less heat than computers.

E) Qualcomm has a monopoly on manufacture of processers for mobile devices.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

32) All of the following are typically factors in a firm's decision to engage consulting and system integration services except: A) the firm does not have the staff necessary to deploy and maintain the firm's IT infrastructure.

B) the firm's staff do not have the skills necessary to deploy and maintain the firm's IT infrastructure.

C) The firm does not have the budget to deploy and maintain a firm's IT infrastructure.

D) The firm's staff does not have the necessary experience to deploy and maintain the firm's IT infrastructure.

E) The firm's staff knows more about the firm's IT infrastructure than service providers.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

33) The Internet hardware server marketplace: A) has become increasingly concentrated in top firms.

B) has expanded to include a wide variety of start-up and mobile-computing firms.

C) has moved significantly to Asian firms.

D) has been decimated by mobile and cloud computing.

E) has begun moving away from blade servers.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

34) Which of the following is the most popular smartphone operating system?

A) Linux B) Android C) Chrome OS D) iOS E) Unix Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 5-2: What are the components of IT infrastructure?

35) All of the following have multitouch capabilities except: A) iOS B) Windows 8 C) some Android devices D) Windows 10 E) Unix Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 5-2: What are the components of IT infrastructure?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

36) Which of the following are the leading operating systems for corporate servers?

A) Microsoft Windows Server, Chrome OS Server, and Android Server B) Unix, Linux, and Android Server C) Microsoft Windows Server, Unix, and Linux D) Microsoft Windows Server, Linux, and Android Server E) Microsoft Windows Server, Unix, and Android Server Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 5-2: What are the components of IT infrastructure?

37) Computers using Chrome OS store both programs and user data on Internet cloud servers.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

38) Use of standalone server computers is increasing as organizations transition to cloud computing services.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 5-1: What is IT infrastructure and what are the stages and drivers of IT infrastructure evolution?

39) Enterprise database management software is used to manage the software applications used in business activities.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

40) Web hosting services maintain a large web server, or series of servers. and provide feepaying subscribers with space to maintain their websites.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-2: What are the components of IT infrastructure?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

41) Have mainframes disappeared?

Answer: Mainframes have not disappeared. They continue to be used to reliably and securely handle huge volumes of transactions, for analyzing very large quantities of data, and for handling large workloads in cloud computing centers. The mainframe is still the digital workhorse for banking and telecommunications networks that are often running software programs that are older and require a specific hardware platform. However, the number of providers has dwindled to one: IBM. IBM has also repurposed its mainframe systems so they can be used as giant servers for enterprise networks and corporate websites. A single IBM mainframe can run thousands of instances of Linux or Windows Server software and is capable of replacing thousands of smaller servers.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 5-2: What are the components of IT infrastructure?

42) Briefly explain why corporations are interested in using Unix or Linux as the operating system for their corporate servers.

Answer: Unix is a powerful multitasking, multiuser, portable operating system that operates on a wide variety of computers from different manufacturers. Linux is an inexpensive and robust open-source relative of Unix. The major providers of Unix operating systems are IBM, HP, and Oracle-Sun with slightly different and partially incompatible versions. 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 5-2: What are the components of IT infrastructure?

43) Which of the following is not an example of a wearable computing device?

A) Smartwatches B) Smart glasses C) Smartphones D) Activity trackers E) Smart ID badges Answer: C Difficulty: Challenging AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

44) Which of the following is not an example of the mobile digital platform?

A) iPad B) Kindle C) Smartphones D) SDS devices E) Smartwatches Answer: D Difficulty: Easy AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

45) All of the following are current hardware platform trends except: A) consumerization of IT. B) virtualization.

C) cloud computing.

D) SOA. E) quantum computing.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

46) The ability to be in multiple states at once, dramatically increasing processing power, is a hallmark of: A) colocation.

B) edge computing.

C) grid computing.

D) utility computing.

E) quantum computing.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

47) Which of the following is a recent addition to the mobile digital platform?

A) Quantum computing devices B) Wearable computing devices C) Cloud computing devices D) Grid computing devices E) Green computing devices Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

48) At what percent of capacity do most servers operate?

A) 100% B) 80-90% C) Approximately 70 percent D) 40-50% E) 15-20% Answer: E Difficulty: Challenging AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

49) Which of the following enables a single physical resource (such as a server or a storage device) to appear to the user as multiple logical resources?

A) Cloud computing B) Autonomic computing C) Virtualization D) Multicore processing E) Ubiquitous computing Answer: C Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

50) Which of the following types of computing involves purchasing computing power from a remote provider and paying only for the computing power used?

A) On-demand B) Grid C) Edge D) Autonomic E) Quantum Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

51) All of the following are cloud computing services except: A) IaaS B) PaaS C) SaaS D) utility computing.

E) system integration services.

Answer: E Difficulty: Challenging AACSB: Analytical thinking LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

52) Firms that allow employees to use their own devices are embracing which of the following?

A) Wearable computing B) Mobile consolidation C) Cloud computing D) BYOD E) Self computing Answer: D Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

53) Which of the following is not one of the characteristics of cloud computing, as defined by the U.S. National Institute of Standards and Technology?

A) Ubiquitous network access B) Location-independent resource pooling C) On-demand self service D) Measured service E) Reduced elasticity Answer: E Difficulty: Challenging AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

54) Which of the following is not an example of the consumerization of IT? A) Google Maps B) Dropbox C) Facebook D) Gmail E) Amazon Web Services Answer: E Difficulty: Challenging AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

55) A(n) is an integrated circuit which contains two or more processors to enhance performance and reduce power consumption.

A) multicore processor B) virtualized processor C) scalable processor D) edge processor E) hybrid processor Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

56) Which of the following involves hosting and managing access to software applications delivered over the Internet to clients on a subscription basis?

A) PaaS B) Virtualization C) Quantum computing D) IaaS E) SaaS Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

57) Which of the following involves practices and technologies to minimize the environmental effects of manufacturing and managing computing devices?

A) Edge computing B) Cloud computing C) Green computing D) Utility computing E) On-demand computing Answer: C Difficulty: Easy AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

58) Virtualization has become one of the principal technologies for promoting green computing.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

59) Quantum computing is a common method of reducing technology costs by providing the ability to host multiple systems on a single physical machine.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

60) Quantum computing is not yet available to the general public.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

61) Briefly describe and distinguish between cloud computing, green computing, and quantum computing.

Answer: Cloud computing is a model of computing in which computer processing, storage, software, and other services are provided as a shared pool of virtualized resources over a network, primarily the Internet. These "clouds" of computing resources can be accessed on an asneeded basis from any connected device and location. These may be infrastructure services, such as storage or networking, or platform services, such as Microsoft's PaaS tools and services for software development and testing, or software services, such as Google's G Suite, which provides common business applications online. Green computing refers to practices and technologies for designing computer equipment to minimize impact on the environment.

Quantum computing refers to emerging technology that uses the principles of quantum physics to dramatically boost computer processing power.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-3: What are the current trends in computer hardware platforms?

62) Discuss the differences between a private, public, and hybrid cloud. Which type of companies are likely to use each type?

Answer: A public cloud is owned and maintained by a cloud service provider, such as Amazon Web Services, and made available to the general public or industry group. Public cloud services are often used for websites with public information and product descriptions, one-time large computing projects, developing and testing new applications, and consumer services such as online storage of data, music, and photos. Google Drive, Dropbox, and Apple iCloud are leading examples of these consumer public cloud services. Companies without major privacy concerns, companies seeking pay-as-you go IT services, and companies lacking IT resources and resources are the most likely to use a public cloud. A private cloud is operated solely for an organization. It may be managed by the organization or a third party and may be hosted either internally or externally. Like public clouds, private clouds are able to allocate storage, computing power, or other resources seamlessly to provide computing resources on an as-needed basis. With stringent privacy and security requirements, companies that must have control over their data, and companies that want flexible IT resources and a cloud service model while retaining control over their own IT infrastructure, are most likely to use a private clouds. With a hybrid cloud, companies use their own infrastructure for their most essential core activities and adopt public cloud computing for less critical systems or for additional processing capacity during peak business periods Companies that require some in-house control of IT that are also willing to assign part of their IT infrastructure to a public cloud are most likely to use a hybrid cloud model.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

63) 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. One example is: The disadvantages of cloud computing might outweigh the advantages if data being stored 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-3: What are the current trends in computer hardware platforms?

64) What are the essential characteristics of cloud computing?

Answer: As defined by the U.S. National Institute of Standards and Technology, cloud computing is characterized by on-demand self-service, ubiquitous network access, locationindependent resource pooling, rapid elasticity, and measured service. On-demand self-service means that consumers can use server time and network storage as they need it on their own.

Ubiquitous network refers to the ability to access cloud resources across all devices and platforms, including mobile. Location independent resource pooling describes the ability to allocate resources to any part of the world without a dip in service quality. Rapid elasticity is the capacity for resources to be increased or decreased as needed to meet demand. Lastly, measured service refers to the payment technique whereby users are charged based on the resources they use, as opposed to monthly or yearly rates.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 5-3: What are the current trends in computer hardware platforms?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

65) What is virtualization and how and why is it used?

Answer: Virtualization is 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. Virtualization enables a single physical resource (such as a server or a storage device) to appear to the user as multiple logical resources.

For example, a server or mainframe can be configured to run many instances of an operating system (or different operating systems) so that it acts like many different machines. Each virtual server "looks" like a real physical server to software programs, and multiple virtual servers can run in parallel on a single machine. Server virtualization is a common method of reducing technology costs by providing the ability to host multiple systems on a single physical machine.

Most servers run at just 15 to 20 percent of capacity, and virtualization can boost utilization server utilization rates to 70 percent or higher. Higher utilization rates translate into fewer computers required to process the same amount of work, reduced data center space to house machines, and lower energy usage. Virtualization also facilitates centralization and consolidation of hardware administration. Virtualization also enables multiple physical resources (such as storage devices or servers) to appear as a single logical resource, as in software-defined storage (SDS), which separates the software for managing data storage from storage hardware. Using software, firms can pool and arrange multiple storage infrastructure resources and efficiently allocate them to meet specific application needs. SDS enables firms to replace expensive storage hardware with lower-cost commodity hardware and cloud storage hardware. There is less underor over-utilization of storage resources.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 5-3: What are the current trends in computer hardware platforms?

66) ZipRealty, which combines Google Maps with real estate data, is an example of: A) cloud computing.

B) SOA. C) a widget.

D) a web mashup.

E) a web service.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

67) Which type of software is created and updated by a worldwide community of programmers and available for free?

A) Software packages B) Mashups C) Outsourced D) Open source E) Closed source Answer: D Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

68) Which of the following is not one of the current software platform trends?

A) Web services and service-oriented architecture B) Open source software C) Cloud services D) Software outsourcing E) Software-defined storage Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 5-4: What are the current computer software platforms and trends?

69) Linux is: A) primarily concerned with the tasks of end users.

B) designed for specific machines and specific microprocessors.

C) an example of open-source software.

D) especially useful for processing numeric data.

E) poorly suited to power fast computers.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

70) Which of the following statements about Linux is not true?

A) Linux can be used as an operating system for mainframe computers.

B) It is available in free versions downloadable from the Internet.

C) Linux is the leading operating system for desktop systems.

D) Linux applications are embedded in cell phones, smartphones, tablet computers. and consumer electronics.

E) Linux works on all the major hardware platforms.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

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71) Which of the following statements about Java is not true?

A) To run a Java program, a Java Virtual Machine must be installed on the computer.

B) Java is an operating system-independent, processor-independent, object-oriented programming language.

C) Java programs cannot be used on mobile devices.

D) Java software is designed to run on any computer or computing device, regardless of the specific microprocessor or operating system the device uses.

E) Java developers can create small applet programs that can be embedded in web pages and downloaded to run on a web browser.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

72) Which of the following is an easy-to-use software program with a graphical user interface for displaying web pages and for accessing the web and other Internet resources?

A) Web service B) Web client C) Web browser D) Web app E) Web beacon Answer: C Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

73) Which of the following refers to a set of loosely coupled software components that exchange information with each other using standard web communication standards and languages?

A) web services B) EAI software C) SOA D) SOAP E) SaaS Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

74) Which of the following is the foundation technology for web services?

A) XML B) HTML C) SOAP D) UDDI E) SCSI Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

75) Which of the following refers to a set of self-contained services that communicate with each other to create a working software application?

A) web services B) EAI software C) SOA D) SOAP E) SaaS Answer: C Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

76) Prewritten, commercially available sets of software programs that eliminate the need for a firm to write its own software programs for certain functions, are referred to as: A) software packages.

B) mashups.

C) outsourced software.

D) open-source software.

E) service level agreements.

Answer: A Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

77) are small, specialized software programs that run on the Internet, on a computer, or on a mobile phone or tablet and are generally delivered over the Internet.

A) Apps B) Web browsers C) SaaS D) Web services E) Web mashups Answer: A Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

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78) The practice of contracting custom software development to an outside firm is commonly referred to as: A) outsourcing.

B) scaling.

C) service-oriented architecture.

D) application integration.

E) utility computing.

Answer: A Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

79) A formal contract between customers and their service providers that outlines the specific responsibilities of the service provider and to the customer is called a(n): A) SOA. B) SLA. C) TCO. D) RFQ. E) SaaS. Answer: B Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

80) provides a standard format for data exchange, enabling web services to pass data from one process to another.

A) HTML B) HTML5 C) Java D) Chrome OS E) XML Answer: E Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

81) HTML5 makes it easier for web pages to function across different display devices.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

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82) Web services can exchange information between two different systems only if the operating systems and programming languages upon which the systems are based are identical.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

83) Whereas HTML is limited to describing how data should be presented in the form of web pages, XML can perform presentation, communication, and data storage tasks.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

84) Hypertext markup language specifies how text, graphics, video, and sound are placed on a webpage.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

85) Ruby is an object-oriented programming language known for speed and ease of use in building web applications.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

86) Today, many business firms continue to operate legacy systems because they meet a business need and would be costly to replace.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-4: What are the current computer software platforms and trends?

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87) Identify and briefly describe five or more current trends in contemporary software platforms.

Answer: Current trends in contemporary software platforms include: 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. Growing use of HTML5—This is the next evolution of HTML which simplifies embedding multimedia, rich media, and animation in the browser.

3. 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.

4. 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.

5. Cloud-based services and tools—Companies are leasing infrastructure, hardware, and software from vendors, paying on a subscription or per-transaction basis.

6. 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-4: What are the current computer software platforms and trends?

88) Define outsourcing and explain some of the computing tasks that are well suited to outsourcing.

Answer: Outsourcing is the shift of IT infrastructure and systems development to external vendors. This is a good option for companies without the resources or technical capability to perform certain computing tasks. Tasks well suited to outsourcing include website hosting, Web design, development of custom software, and software maintenance. More basic tasks such as data entry and call center operation is often outsourced as well. Outsourcing often requires firms to enter into a service level agreement (SLA) that defines the specific responsibilities of the service provider.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 5-4: What are the current computer software platforms and trends?

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89) Which of the following refers to the ability of a computer, product, or system to expand to serve a larger number of users without breaking down?

A) Modality B) Scalability C) Expandability D) Disintermediation E) Customizability Answer: B Difficulty: Easy AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

90) Hardware and software acquisition costs account for about percent of TCO. A) 20 B) 40 C) 50 D) 75 E) 90 Answer: A Difficulty: Moderate AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

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

A) Supply and demand B) Return on investment C) Breakeven point D) Cost-benefit analysis E) Total cost of ownership Answer: E Difficulty: Easy AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

92) 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 whether your services are meeting the needs of your customers.

D) Perform an information technology assessment.

E) Perform a stress test Answer: C Difficulty: Easy AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

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93) Which of the following is not one of the main six factors to consider when evaluating how much your firm should spend on IT infrastructure?

A) Your firm's business strategy B) The IT investments made by competitor firms C) Market demand for your firm's services D) Your firm's organizational culture E) Information technology assessment Answer: D Difficulty: Moderate AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

94) The decision to purchase your own IT assets or rent them from external providers is also referred to as the rent-versus-buy decision.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

95) Downtime is a component of TCO. Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

96) TCO refers just to the original cost of purchased technology: both hardware and software.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

97) 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 serve larger numbers of users without breaking down. New applications, mergers and acquisitions, and changes in business volume all affect computer workload and must be considered when planning hardware capacity. Scalability is important because as firms grow, they can quickly outgrow their IT 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

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98) A small design agency you are consulting for will be creating client websites and wants to purchase a web server so they can host the sites themselves. How will you advise them on this purchase?

Answer: The agency needs to understand total cost of ownership: the costs will go beyond the cost of the server, as they will also need to purchase the server software and any application software they will be using. They will also need someone in their IT department to manage and maintain the computers. They will also incur facilities costs for running the computer. They need to have a backup plan should the server fail. The design agency will need to add up all the potential costs and risks. Additionally, they need to prepare for their plan if they need more servers. Will they eventually have to run and maintain their own server farm? What if one of their clients' sites is more popular than anticipated and the server has difficulty handling the load? How quickly can they add servers or processing power? The company should look at colocation, Web hosting services, and cloud services to see if their needs will be better met this way.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

99) You are starting a market research company with a single business partner and are planning the hardware and software needs 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 market demand for the firm's services: Make an inventory of the services you intend to provide to customers to make sure they will meet their needs.

• 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 intent to offer 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?

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

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100) What are the components that must be considered in a TCO analysis?

Answer: TCO cost components include hardware acquisition, which includes the purchase price of computer hardware equipment, including computers, terminals, storage, and printers; software acquisition, which includes the purchase or license of software for each user; installation, which includes the cost to install computers and software; training, which includes the cost to provide training to information systems specialists and end users; support, which includes the cost to provide ongoing technical support; maintenance, which includes the cost to upgrade hardware and software; infrastructure, which includes the cost to acquire, maintain, and support related infrastructure, such as networks and specialized equipment; downtown, which includes the cost of lost productivity if hardware or software failures cost the system to be unavailable; and space and energy, such as real estate and utility costs.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 5-5: What are the challenges of managing IT infrastructure and management solutions?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 6 Foundations of Business Intelligence: Databases and Information Management 1) 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 E) The entity PURCHASE with the attribute CUSTOMER Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 6-1: What are the problems of managing data resources in a traditional file environment?

2) All of the following are issues with the traditional file environment except: A) data inconsistency.

B) inability to develop specialized applications for functional areas.

C) lack of flexibility in creating ad-hoc reports.

D) poor security.

E) data sharing.

Answer: B Difficulty: Challenging AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

3) A characteristic or quality that describes a particular database entity is called a(n): A) field.

B) tuple.

C) key field.

D) attribute.

E) relationship.

Answer: D Difficulty: Easy AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

4) A database describes a database entity.

A) byte B) field C) record D) value E) file Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

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5) creates confusion that hampers the creation of information systems that integrate data from different sources.

A) Batch processing B) Data redundancy C) Data independence D) Online processing E) Data distribution Answer: B Difficulty: Easy AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

6) Data occurs when the same data is duplicated in multiple files of a database.

A) redundancy B) repetition C) independence D) partitions E) discrepancy Answer: A Difficulty: Easy AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

7) Which of the following occurs when the same attribute in related data files has different values?

A) Data redundancy B) Data duplication C) Data dependence D) Data discrepancy E) Data inconsistency Answer: E Difficulty: Challenging AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

8) Which of the following is a grouping of characters into a word, a group of words, or a complete number?

A) File B) Table C) Entity D) Field E) Tuple Answer: D Difficulty: Easy AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

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9) The fact that a traditional file system cannot respond to unanticipated information requirements in a timely fashion is an example of which of the following issues with traditional file systems?

A) Program-data dependence B) Lack of flexibility C) Poor security D) Lack of data sharing E) Data redundancy Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

10) Which common database challenge is illustrated by a person receiving multiple copies of an L.L. Bean catalog, each addressed to a slightly different variation of his or her full name?

A) Data normalization B) Data accuracy C) Data redundancy D) Data inconsistency E) Data duplication Answer: D Difficulty: Challenging AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

11) In a database, a bit represents a single character, which can be a letter, a number, or another symbol.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

12) Program-data dependence refers to the coupling of data stored in files and the specific programs required to update and maintain those files such that changes in programs require changes to the data.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-1: What are the problems of managing data resources in a traditional file environment?

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13) Describe the data hierarchy.

Answer: A computer system organizes data in a hierarchy that starts with bits and bytes and progresses to fields, records, files, and databases. A bit represents the smallest unit of data a computer can handle. A group of bits, called a byte, represents a single character, which can be a letter, a number, or another symbol. A grouping of characters into a word, a group of words, or a complete number (such as a person's name or age) is called a field. A group of related fields, such as the student's name, the course taken, the date, and the grade, comprises a record; a group of related records is called a file. Related files can be organized into a database.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6-1: What are the problems of managing data resources in a traditional file environment?

14) List at least three conditions that contribute to data redundancy and inconsistency.

Answer: Data redundancy occurs when different groups in an organization independently collect the same piece of data. 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.

Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 6-1: What are the problems of managing data resources in a traditional file environment?

15) Which of the following enables a DBMS to reduce data redundancy and inconsistency A) Ability to enforce referential integrity B) Ability to couple program and data C) Use of a data dictionary D) Ability to create two-dimensional tables E) Ability to minimize isolated files with repeated data Answer: E Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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

B) relational database available for different logical views.

C) physical database available for different analytic views.

D) relational database available for different analytic views.

E) logical database available for different analytic views.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

17) The logical view of a database: A) displays the organization and structure of data on the physical storage media.

B) includes a digital dashboard.

C) allows the creation of supplementary reports.

D) enables users to manipulate the logical structure of the database.

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

Answer: E Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

18) Which of the following is a DBMS for desktop computers?

A) DB2 B) Oracle Database C) Microsoft SQL Server D) Microsoft Access E) Microsoft Exchange Answer: D Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

19) A(n) represent data as two-dimensional tables.

A) non-relational DBMS B) mobile DBMS C) relational DBMS D) hierarchical DBMS E) object-oriented DBMS Answer: C Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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20) Microsoft SQL Server is a(n): A) DBMS for both desktops and mobile devices.

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

E) DBMS for mobile devices.

Answer: D Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

21) In a relational database table for customers, the information about a single customer resides in a single: A) field.

B) row.

C) column.

D) table.

E) entity.

Answer: B Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

22) In a relational database, a record is referred to in technical terms as a(n): A) tuple.

B) table.

C) entity.

D) field.

E) key.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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23) A common field that links two different tables and serves as a primary key to one of these tables is called the: A) foreign key.

B) secondary key C) primary field.

D) unique ID. E) primary entity.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

24) A field identified in a record as holding the unique identifier for a record is called the: A) identifier key.

B) key field.

C) primary field.

D) unique ID. E) key attribute.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

25) In a relational database, the three basic operations used to develop useful sets of data are: A) select, project, and where.

B) select, join, and where.

C) select, project, and join.

D) where, from, and join.

E) where, find, and select.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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26) 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 a file.

E) creates a subset consisting of rows in a table that meet stated criteria.

Answer: E Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

27) The join operation: A) combines relational tables to provide the user with more information than is otherwise available.

B) identifies the table from which the columns will be selected.

C) creates a subset consisting of columns in a table.

D) organizes elements into segments.

E) creates a subset consisting of rows in a table.

Answer: A Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

28) The project operation: A) combines relational tables to provide the user with more information than is otherwise available.

B) creates a subset consisting of columns in a table.

C) organizes elements into segments.

D) identifies the table from which the columns will be selected.

E) creates a subset consisting of rows in a table.

Answer: B Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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29) Microsoft Access's data dictionary displays all of the following information about a field except the: A) size of the field.

B) format of the field.

C) description of the field.

D) type of the field.

E) ownership of the field.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

30) Which of the following is an automated or manual file that stores information about data elements and data characteristics such as usage, physical representation, ownership, authorization, and security?

A) Data dictionary B) Data definition diagram C) Entity-relationship diagram D) Relationship dictionary E) Data table Answer: A Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

31) Which of the following is a specialized language that programmers use to add and change data in the database?

A) Data access language B) Data manipulation language C) Database language D) Data definition language E) DBMS Answer: B Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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32) Which of the following is the most prominent data manipulation language today?

A) Access B) DB2 C) SQL D) Crystal Reports E) NoSQL Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

33) DBMSs typically include report generating tools in order to: A) retrieve and display data.

B) display data in a more structured and polished format than would be possible just by querying.

C) display data in graphs.

D) perform predictive analysis.

E) analyze the database's performance.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

34) The process of streamlining data to minimize redundancy and awkward many-to-many relationships is called: A) normalization.

B) data scrubbing.

C) data cleansing.

D) data defining.

E) optimization.

Answer: A Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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35) A schematic of the entire database that describes the relationships in a database is called a(n): A) data dictionary.

B) intersection relationship diagram.

C) entity-relationship diagram.

D) data definition diagram.

E) data analysis table.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

36) A one-to-many relationship between two entities is symbolized in a diagram by a line that ends with: A) one short mark.

B) two short marks.

C) three short marks.

D) a crow's foot.

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

Answer: E Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

37) You are creating a database to store temperature and wind data from various airports. Which of the following fields is the most likely candidate to use as the basis for a primary key in the Airport table?

A) Address B) City C) Airport code D) State E) Day Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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38) Which of the following is not one of the benefits of a blockchain database?

A) It enables the ability to use relational databases.

B) It prevents data from being altered retroactively.

C) It allows administrators to manage data more effectively.

D) It enables firms to create and verify transactions on a network very rapidly.

E) It provides users with an integrated view of the data.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

39) A distributed database: A) uses predictive analysis.

B) uses SQL. C) is a database that is stored in multiple physical locations.

D) is a database that is distributed across many business firms.

E) uses Hadoop to process information.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

40) Which of the following is an example of a NoSQL database?

A) Crystal Reports B) Microsoft Access C) SimpleDB D) DB2 E) Oracle.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

41) A query is a request for data from a database.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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42) Encryption is a key feature of a blockchain database.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

43) Spanner is an example of a distributed database.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

44) NoSQL technologies are useful for accelerating simple queries against large volumes of structured and unstructured data.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

45) An unnormalized relation contains repeating groups.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

46) Complex groupings of data in a relational database need to be adjusted to minimize awkward many-to-many relationships.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

47) A physical view shows data as it is actually organized and structured on the data storage media.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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48) DBMS have a data definition capability to specify the structure of the content of the database.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

49) Relational DBMSs use key field rules to ensure that relationships between coupled tables remain consistent.

Answer: FALSE Difficulty: Challenging AACSB: Information technology LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

50) The small publishing company you work for wants to create a new database for storing information about all of its 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. One example is as follows: To create a database, you must understand the relationships among the data, the type of data that will be maintained in the database, how the data will be used, and how the organization will need to change to manage data from a companywide perspective. The database requires both a conceptual design and a physical design. The conceptual, or logical, design of a database is an abstract model of the database from a business perspective, whereas the physical design shows how the database is actually arranged on direct-access storage devices. In designing the database, factors to consider include 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; 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; and what methods to use to cleanse the data.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

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51) List and briefly describe three main capabilities or tools of a DBMS. Answer: A DBMS includes capabilities and tools for organizing, managing, and accessing the data in the database. Its most important capabilities and tools are data definition, data dictionary, and data manipulation language. The data definition capability enables a user to be able to specify the structure of the content of the database. This capability is used to create database tables and to define the characteristics of the fields in each table. The data dictionary is used to store definitions of data elements and their characteristics in the database. 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.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

52) Identify and briefly 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.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6-2: What are the major capabilities of database management systems (DBMS), and why is a relational DBMS so powerful?

53) Which of the following statements about big data is not true?

A) Big data refers solely to data in the petabyte range.

B) Big data can reveal more patterns and interesting relationships than smaller data sets.

C) Big data are produced in much larger quantities and much more rapidly than traditional data.

D) Big data is finding many uses in the public sector.

E) Big data is characterized by the 3Vs: volume, variety, and velocity.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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54) Which of the following technologies would you use to analyze the social media data collected by a major online retailer?

A) OLAP B) Data warehouse C) Data mart D) Hadoop E) DBMS Answer: D Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

55) Which of the following is not one of the techniques used in web mining?

A) Content mining B) Structure mining C) Server mining D) Usage mining E) Data mining Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

56) You work for a retail clothing chain whose primary outlets are in shopping malls and 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 the data mining software you are using to do which of the following?

A) Identify associations B) Identify clusters C) Identify sequences D) Classify data E) Create a forecast Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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57) You work for a car rental agency and want to determine what characteristics are shared among your most loyal customers. To do this, you will want to use the data mining software you are using to do which of the following?

A) Identify associations B) Identify clusters C) Identify sequences D) Classify data E) Create a forecast Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

58) A data lake is composed of: A) historical data from legacy systems.

B) unstructured and structured data that has not been analyzed.

C) internal and external data sources.

D) historic and current internal data.

E) historic external data.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

59) All of the following are technologies used to analyze and manage big data except: A) relational DBMS. B) NoSQL C) in-memory computing.

D) analytic platforms.

E) Hadoop.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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60) A household appliances manufacturer has hired you to help analyze its social media data sets to determine which of its refrigerators are seen as the most reliable. Which of the following tools would you use to analyze this data?

A) Text mining tools B) Sentiment analysis software C) Web mining technologies D) Data mining software E) Data governance software Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

61) OLAP enables: A) users to obtain online answers to ad-hoc questions in a rapid amount of time.

B) users to view both logical and physical views of data.

C) programmers to quickly diagram data relationships.

D) programmers to normalize data.

E) users to quickly generate reports using multidimensional views of data.

Answer: E Difficulty: Easy AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

62) Data mining allows users to: A) quickly compare transaction data gathered over many years.

B) find hidden relationships in large databases.

C) obtain online answers to ad-hoc questions in a rapid amount of time.

D) summarize massive amounts of data into much smaller, traditional reports.

E) access the vast amounts of data in a data warehouse.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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63) In the context of data mining, the term associations refers to: A) events linked over time.

B) patterns that describe a group to which an item belongs.

C) occurrences linked to a single event.

D) undiscovered groupings.

E) relationships between different customers.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

64) tools can be used to rapidly analyze large unstructured data sets, such as email, memos, and survey responses to discover patterns and relationships.

A) OLAP B) Text mining C) In-memory D) Clustering E) Classification Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

65) Which of the following statements about Hadoop is not true?

A) Hadoop is proprietary software sold by the Apache Software Foundation.

B) Hadoop runs on a cluster of inexpensive servers.

C) Companies use Hadoop as for a staging area for unstructured and semistructured data before they are loaded into a data warehouse.

D) Hadoop breaks a big data problem down into subproblems.

E) Hadoop consists of several key services.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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66) Which of the following is software that handles all application operations between browserbased computers and a company's back-end business applications or databases?

A) Database server software B) Application server software C) Web browser software D) Data mining software E) Web server software Answer: B Difficulty: Easy AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

67) In data mining, which of the following involves using a series of existing values to determine what other future values will be?

A) Associations B) Sequences C) Classifications D) Clustering E) Forecasting Answer: E Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

68) In data mining, which of the following involves recognizing patterns that describe the group to which an item belongs by examining existing items and inferring a set of rules?

A) Associations B) Sequences C) Classifications D) Clustering E) Forecasting Answer: C Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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69) In data mining, which of the following involves events linked over time?

A) Associations B) Sequences C) Classifications D) Clustering E) Forecasting Answer: B Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

70) Which of the following would you use to find patterns in user interaction data recorded by a web server?

A) Web usage mining B) Web server mining C) Web structure mining D) Web content mining E) Web protocol mining Answer: A Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

71) Core operational transaction systems provide data to data warehouses.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

72) Multiple data marts are combined and streamlined to create a data warehouse.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

73) You can use OLAP to perform multidimensional data analysis.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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74) OLAP can manage and handle queries with very large sets of data.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

75) In-memory computing relies primarily on a computer's disk drives for data storage.

Answer: FALSE Difficulty: Challenging AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

76) Middleware is an application that transfers information from an organization's internal database to a web server for delivery to a user as part of a web page.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

77) Implementing a web interface for an organization's internal database usually requires substantial changes to be made to the database.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

78) Many back-end databases cannot interpret commands written in HTML. Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

79) Structured data accounts for the majority of organizational information and is one of the major sources of big data.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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80) In a client/server environment, a DBMS is located on a dedicated computer called a web server.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

81) Clusters are occurrences linked to multiple events.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

82) High-speed analytic platforms use both relational and non-relational tools to analyze large data sets.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

83) You have been hired by a furniture leasing company to implement its first business intelligence systems and infrastructure. To prepare for your initial report, describe the types of data and data management tools the firm can use to support business intelligence and the systems that you will implement to support both 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 data, historical data, machine-generated (IoT) data, Web and social media data, audio and video data, and external data. The large data sets 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.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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84) 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.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

85) 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.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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86) 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.

Student answers about the type of circumstance in which they would advise a company to use data mining will vary. One example is: 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.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

87) What are the differences between data mining and OLAP? Answer: Data mining uncovers hidden relationships and is used when you are trying to discover data and new relationships. Data mining provides insights into corporate data that cannot be obtained with OLAP by finding hidden patterns and relationships in large databases and inferring rules from them to predict future behavior. 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?

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

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88) What are the similarities and differences between a data warehouse and a data mart?

Answer: A data warehouse stores current and historical data of potential interest throughout a company. Data warehouses gather data from multiple operational systems inside the organization. Data warehouses make data available, but do not allow that information to be altered. Data marts are subsets of data warehouses, in which a highly focused portion of an organization's data is placed in a separate database for specific users. Data marts are decentralized, whereas data warehouses are enterprise-wide, central locations for data.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

89) Explain what the term big data refers to. What benefits does it have, and what challenges does it pose?

Answer: The term big data is used to describe data sets with volumes so huge that they are beyond the ability of typical DBMS to capture, store, and analyze. Big data is created by the explosion of data coming from the web, such as web traffic, email, Twitter, and Facebook, as well as information from other electronic and networked devices such as sensors and meters.

Businesses are interested in big data because it contains more patterns and interesting anomalies than smaller data sets, with the potential to provide new insights into customer behavior, weather patterns, financial market activity, or other phenomena. However, to derive business value from big data, organizations need new technologies and tools capable of managing and analyzing nontraditional data along with their traditional enterprise data. They also need to know what questions to ask of the data and the limitations of big data. Capturing, storing, and analyzing big data can be expensive, and information from big data may not necessarily help decision-makers.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 6-3: What are the principal tools and technologies for accessing information from databases to improve business performance and decision making?

90) establishes an organization's rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information.

A) Data scrubbing B) Data definition C) Data quality assurance D) Data governance E) Data policy Answer: D Difficulty: Moderate AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

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91) According to Gartner, more than percent of the critical data in large Fortune 1000 companies' databases are inaccurate or incomplete.

A) 25 B) 35 C) 50 D) 55 E) 75 Answer: A Difficulty: Easy AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

92) 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 cleansing.

D) data optimization.

E) data normalization.

Answer: C Difficulty: Easy AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

93) Data cleansing not only corrects errors but also: A) establishes logical relationships between data.

B) structures data.

C) normalizes data.

D) removes duplicate data.

E) enforces consistency among different sets of data that originated in a separate information system.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

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94) Which of the following is not a true statement about performing a data quality audit?

A) A data quality audit can be performed by surveying entire data files.

B) A data quality audit can be performed by surveying samples from data files C) A data quality audit can be performed by surveying data definition and query files D) A data quality audit can be performed by surveying end users about their perceptions of data quality E) A data quality audit is a structured survey of the accuracy and level of completeness of the data in an information system.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

95) A data governance policy specifies all of the following except: A) which type of business intelligence tool should be used.

B) which users and organizational units can share information.

C) where information can be distributed.

D) who is responsible for updating and maintaining information.

E) how data resources should be secured.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

96) The term data governance encompasses policies and procedures through which data can be managed as an organizational resource.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

97) Data scrubbing is a more intensive corrective process than data cleansing.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

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98) Why is data quality assurance important for businesses?

Answer: Data that are inaccurate, untimely, or inconsistent with other sources of information create serious operational and financial problems for businesses, even with a well-designed database and information policy. When faulty data go unnoticed, they often lead to incorrect decisions, product recalls, and even financial losses.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

99) Distributors for a furniture manufacturer are complaining that the billing for goods they order is frequently not correct, and sometimes are sent to the wrong email and postal addresses. What steps would you take to improve the quality of data in the manufacturer's databases?

Answer: The first step is to perform a data quality audit, a survey of the accuracy and level of completeness in all the firm's major databases. Once issues are identified, initiate a program for data cleansing to correct data that is incomplete, improperly formatted, redundant, or just plain wrong.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

100) Why are data quality problems not just a business problem?

Answer: Data quality problems are not just business problems because they also pose serious problems for individuals, affecting their financial condition and even their jobs. For example, inaccurate or outdated data about consumers' credit histories maintained by credit bureaus can prevent creditworthy individuals from obtaining loans or lower their chances of finding or keeping a job.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 6-4: Why are data governance and data quality assurance essential for managing the firm's data resources?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 7 Telecommunications, the Internet, and Wireless Technology 1) Which of the following is a device that sends packets of data through different networks ensuring they go to the correct address?

A) Hub B) Switch C) Router D) NIC E) Modem Answer: C Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

2) The Internet is based on which three key technologies?

A) TCP/IP, HTML, and HTTP B) TCP/IP, HTTP, and packet switching C) Client/server computing, packet switching, and the development of communications standards for linking networks and computers D) Client/server computing, packet switching, and HTTP E) Email, instant messaging, and newsgroups Answer: C Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

3) Which of the following involves slicing digital messages into parcels, transmitting them along different communication paths, and reassembling them at their destinations?

A) Multiplexing B) Packet shifting C) Packet routing D) ATM E) Packet switching Answer: E Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

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4) The traditional telephone system is an example of a network.

A) peer-to-peer B) wireless C) packet-switched D) circuit-switched E) client/server Answer: D Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

5) Which of the following is not a characteristic of packet switching?

A) Packets travel independently of each other.

B) Packets are routed through many different paths.

C) Packet switching requires point-to-point circuits.

D) Packets include data for checking transmission errors.

E) Packets are reassembled into the original message when they reach their destinations.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

6) In TCP/IP, IP is responsible for which of the following?

A) Disassembling and reassembling packets during transmission B) Establishing an Internet connection between two computers C) Moving packets over the network D) Sequencing the transfer of packets E) Breaking messages down into packets Answer: A Difficulty: Challenging AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

7) Which of the following is the best description of a protocol in a telecommunications network architecture?

A) A device that handles the switching of voice and data in a local area network B) A standard set of rules and procedures for control of communications in a network C) A communications service for microcomputer users D) The main computer in a telecommunications network E) A pathway through which packets are routed Answer: B Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

8) What are the four layers of the TCP/IP reference model?

A) Physical, Application, Transport, and Network Interface B) Physical, Application, Internet, and Network Interface C) Application, Transport, Internet, and Network Interface D) Application, Hardware, Internet, and Network Interface E) Software, Hardware, Network Interface, Internet Answer: C Difficulty: Challenging AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

9) Each computer on a network must contain which of the following?

A) network interface device B) switch C) router D) hub E) SDN Answer: A Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

10) Client/server computing is a: A) network that connects sensors to desktop computers.

B) network where centralized mainframe computers serve local devices.

C) centralized model of computing for large corporations.

D) distributed computing model where clients are linked to one another through a network that is controlled by a network server computer.

E) centralized computing model where local computers are connected to one another by a network.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

11) Computer networks are based on the same principles as traditional telephone networks.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

12) A NOS must reside on all the local computers in a network.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

13) A hub is a networking device that sends packets of data to all other devices on the network.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

14) In a client/server network, the client sets the rules of communication for the network.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

15) A computer network consists of at least three computers.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

16) Client/server computing has largely replaced centralized mainframe computing.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

17) Computer networks that use packet switching are less efficient than telephone networks that use circuit switching.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

18) Two computers using TCP/IP can communicate even if they are based on different hardware and software platforms.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

19) In a large company today, you will often find an infrastructure that includes a large number of small LANs linked to each other as well as to corporate-wide networks.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

20) The Internet is the largest implementation of client/server computing.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

21) How does packet switching work?

Answer: Packet switching is a method of slicing digital messages into parcels called packets, sending the packets along different communication paths as they become available, and then reassembling the packets once they arrive at their destinations. Packet switching makes much more efficient use of the communications capacity of a network than did circuit-switching. In packet-switched networks, messages are first broken down into small, fixed bundles of data called packets. The packets include information for directing the packet to the right address and for checking transmission errors along with the data. The packets are transmitted over various communication channels using routers, each packet traveling independently. Packets of data originating at one source will be routed through many different paths and networks before being reassembled into the original message when they reach their destinations.

Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

22) 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.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

23) How are modern telephone and computer networks different from what firms used in the past?

Answer: Modern telephone and computer networks are converging into a single digital network using shared Internet-based standards and technology. Telecommunications providers such as AT&T and Verizon offer data transmission, Internet access, mobile phone service, and television programming as well as voice service. Computer networks have expanded to include Internet telephone and video services. . In the past, these two types of networks were distinct–telephone networks and computer networks performed completely different services and were not affiliated with one another. Additionally, both voice and data communication networks have also become more powerful (faster), more portable (smaller and mobile), and less expensive. Voice and data communication, as well as Internet access, are increasingly taking place over broadband wireless platforms such as mobile phones, mobile handheld devices, and PCs in wireless networks.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7-1: What are the principal components of telecommunications networks and key networking technologies?

24) Which signal types are represented by a continuous waveform?

A) Laser B) Optical C) Digital D) RFID E) Analog Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

25) Which of the following is a device that makes possible the translation of digital signals to analog sound signals used by a computer network?

A) Local area network B) Modem C) DSL D) Twisted wire E) TCP/IP Answer: B Difficulty: Easy AACSB: Information technology LO: 7-2: What are the different types of networks?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

26) Which type of network is used to connect digital devices within a city or metropolitan area?

A) Wi-Fi B) LAN C) WAN D) MAN E) SAN Answer: D Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

27) Which type of network treats all processors equally and allows peripheral devices to be shared without going to a separate server?

A) MAN B) Wireless C) LAN D) Windows domain network E) Peer-to-peer Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

28) Which type of network would be most appropriate for a business comprised of three employees and a manager located in the same office space, whose primary need is to share documents?

A) MAN B) Domain-based LAN C) Peer-to-peer network D) WAN E) SAN Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 7-2: What are the different types of networks?

29) A network that spans a college or corporate facility is called a: A) CAN. B) MAN. C) LAN. D) WAN. E) WSN. Answer: A Difficulty: Easy AACSB: Information technology LO: 7-2: What are the different types of networks?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

30) A network that covers entire geographical regions is most commonly referred to as a(n): A) local area network.

B) intranet.

C) peer-to-peer network.

D) wide area network.

E) metropolitan area network.

Answer: D Difficulty: Easy AACSB: Information technology LO: 7-2: What are the different types of networks?

31) Bandwidth is the: A) number of frequencies that can be broadcast through a medium.

B) number of cycles per second that can be sent through a medium.

C) difference between the highest and lowest frequencies that can be accommodated on a single channel.

D) total number of bytes that can be sent through a medium per second.

E) geographical distance spanned by a network.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

32) The total amount of digital information that can be transmitted through any telecommunications medium is measured in: A) bps.

B) Hertz.

C) baud.

D) gigaflops.

E) RPMs. Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

33) A(n) signal is a discrete, binary waveform that transmits data coded into two discrete states: 1-bits and 0-bits.

A) modulated B) broadband C) T1 D) analog E) digital Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

34) Coaxial cable is similar to that used for cable television and consists of thickly insulated copper wire.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

35) Fiber-optic cable is more expensive and harder to install than other physical transmission media.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

36) The Internet is the most universal and powerful WAN. Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-2: What are the different types of networks?

37) You have been hired by a small new web design firm to set up a network for its single office location. The network is primarily needed for exchanging files, accessing and managing beta websites on the firm's 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. A wired local area network (LAN) with a dedicated network server would connect the firm's computers and provide users with access to shared computing resources in the network, including software programs, data files and the firm's web server. A router on the LAN would enable it to also connect via cable or DSL service to the Internet. Freelancers could connect wirelessly via access points.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 7-2: What are the different types of networks?

38) What are the two types of signals used to communicate a message in a network and how are they different? What device converts one type to the other type?

Answer: The two ways to communicate a message in a network are analog signals and digital signals. An analog signal is represented by a continuous waveform that passes through a communications medium and is used for voice communication. Examples include the telephone handset and other types of speakers that generate analog sound. On the other hand, digital signals are binary waveforms (not continuous) that communicate information as strings of two discrete states: one bit or zero bits (often depicted as strings of zeroes and ones). Computers use these types of signals and use modems to convert digital signals to analog signals.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 7-2: What are the different types of networks?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

39) What are some of the common types of physical and wireless transmission media and what differentiates them from one another?

Answer: Common types of physical transmission media include twisted pair wire, coaxial cable, fiber-optic cable, and wireless transmission media. Twisted pair wire consists of strands of copper wire twisted in pairs for voice and data communications. Coaxial cable consists of thickly insulated copper wires capable of high-speed data transmission and resistance to interference.

Fiber-optic cable consists of strands of clear glass fiber that transmit data at very high speeds as pulses of light generated by lasers. Wireless transmission media is based on radio signals and involves both terrestrial and satellite microwave systems and cellular networks.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 7-2: What are the different types of networks?

40) Which of the following is not one of the top five search engines?

A) Facebook B) Yahoo C) Microsoft Bing D) Baidu E) Google Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

41) Digital subscriber lines: A) operate over existing telephone lines to carry voice, data, and video.

B) operate over coaxial cable lines to deliver Internet access.

C) are very-high-speed data lines typically leased from long-distance telephone companies.

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

E) are assigned to every computer on the Internet.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

42) T1 and T3 lines: A) operate over existing telephone lines to carry voice, data, and video.

B) operate over coaxial lines to deliver Internet access.

C) do not provide guaranteed service levels, but simply "best effort."

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

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

Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

43) What service converts natural language names to IP addresses?

A) HTML B) FTP C) IP D) HTTP E) DNS Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

44) The domain .gov is a(n): A) Internet root domain.

B) top-level domain.

C) host domain.

D) network domain.

E) third level domain.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

45) In the domain name "http://books.pearson.com", which element is the second-level domain?

A) books B) pearson.com C) com D) none; there is no second-level domain in this name E) books.pearson Answer: B Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

46) Which organization manages the domain name system of the Internet?

A) None (no one "owns" the Internet) B) W3C C) ICANN D) The Department of Commerce (U.S.) E) IAB Answer: C Difficulty: Challenging AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

47) IPv6 has been developed in order to: A) update the packet transmission protocols for higher bandwidth.

B) create more IP addresses.

C) allow for different levels of service.

D) support Internet2.

E) reduce excess IP addresses.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

48) Predictive search in Google's search engine: A) maintains a history of your searches and then predicts what you will search on next.

B) uses a tracking service and cookies on your browser to predict search results.

C) uses a knowledge graph of what similar people searched on to predict your search interests.

D) uses a semantic approach to predict what you are looking for.

E) predicts what you are looking for as you enter words into the query box.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

49) Instant messaging is a type of service.

A) chat B) cellular C) email D) wireless E) network Answer: A Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

50) integrate disparate channels for voice communications, data communications, instant messaging, email, and electronic conferencing into a single experience.

A) Wireless networks B) Intranets C) Virtual private networks D) Modems E) Unified communications Answer: E Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

51) A VPN: A) is an encrypted private network configured within a public network.

B) is more expensive than a dedicated network.

C) provides secure, encrypted communications using Telnet.

D) is an Internet-based service for delivering voice communications.

E) is a proprietary networking service technology developed by individual corporations.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

52) Web browser software requests web pages from the Internet using which of the following protocols?

A) URL B) HTTP C) DNS D) HTML E) FTP Answer: B Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

53) Together, a protocol prefix, a domain name, a directory path, and a document name, are called a(n): A) uniform resource locator.

B) IP address.

C) third-level domain.

D) root domain.

E) child domain.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

54) Which of the following Internet services enables logging on to one computer system and doing work on another?

A) Email B) FTP C) Newsgroups D) Instant messaging E) Telnet Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

55) Which of the following pulls content from websites and feeds it automatically to users' computers?

A) FTP B) RSS C) HTTP D) Bluetooth E) IPv6 Answer: B Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

56) Which of the following can be used to help a website achieve a higher ranking with the major search engines?

A) VPN B) shopping bots C) SEM D) SEO E) RSS Answer: D Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

57) Which of the following statements is not true about search engines?

A) They are arguably the "killer app" of the Internet era.

B) They attempt to solve the problem of finding useful information on the web nearly instantly.

C) They have become major advertising platforms and shopping tools.

D) There are hundreds of search engines vying for user attention, with no clear leader having yet emerged.

E) Users are increasingly using search engines on mobile devices.

Answer: D Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

58) Which process is used to protect transmitted data in a VPN? A) Tunneling B) PPP C) VOIP D) Packet-switching E) Chaining Answer: A Difficulty: Challenging AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

59) monetizes the value of the data stored by search engines.

A) TCP/IP B) RSS C) WiMax D) IoT E) SEM Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

60) Which of the following is an open source blogging tool and content management system?

A) Twitter B) RSS C) WordPress D) Wikipedia E) Baidu Answer: C Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

61) Which one of the following statements is not true?

A) The Internet backbone is owned entirely by the federal government in the United States.

B) ICANN manages the domain name system.

C) The IAB establishes the overall structure of the Internet.

D) The Internet must conform to laws of the nation-states in which it operates.

E) W3C determines programming standards for the Internet.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

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

A) RSS B) WAN C) NFP D) ISP E) FTP Answer: D Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

63) Companies that own Internet backbone networks are called: A) regional network providers.

B) enhanced service providers.

C) internet bulk providers.

D) backbone providers.

E) network service providers.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

64) A(n) is software for locating and managing stored web pages.

A) web server B) net server C) router D) modem E) hub Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

65) The NHL Puck and Player Tracking system described in the chapter opening case is an example of which of the following?

A) Visual web application B) 3D web application C) IoT application D) Intelligent agent software E) App Internet Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

66) More than 80 percent of mobile minutes in the United States are generated through apps.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

67) Wikis allow visitors to change or add to the original posted material.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

68) SaaS business models are one of the trends leading toward a future web.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

69) VoIP technology delivers voice information in digital form using circuit switching.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

70) Mobile search makes up less than 50% of all Internet searches.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

71) SEM saves consumers cognitive energy and increases search costs.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

72) DNS has a hierarchical structure.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

73) In addition to being an online retailer, Amazon is also a powerful product search engine.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

74) The Internet of Things is based on billions of Internet-connected sensors throughout the physical world.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

75) What is IPv6 and why is it necessary?

Answer: The Internet was not originally designed to handle the transmission of massive quantities of data and billions of users. Because of sheer Internet population growth, the world is about to run out of available IP addresses using the old addressing convention. The old addressing system is being replaced by a new version of the IP addressing schema called IPv6 (Internet Protocol version 6), which contains 128-bit addresses (2 to the power of 128), or more than a quadrillion possible unique addresses. IPv6 is compatible with most modems and routers sold today, and IPv6 will fall back to the old addressing system if IPv6 is not available on local networks. The transition to IPv6 will take several years as systems replace older equipment.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

76) What is VoIP and what business advantages does it provide?

Answer: Voice over IP (VoIP) technology delivers voice information in digital form using packet switching, avoiding the tolls charged by local and long-distance telephone networks. Calls that would ordinarily be transmitted over public telephone networks travel over the corporate network based on the Internet protocol, or over the public Internet. Voice calls can be made and received with a computer equipped with a microphone and speakers or with a VoIP-enabled telephone. Cable firms such as Time Warner and Cablevision provide VoIP service bundled with their high-speed Internet and cable offerings. Skype offers free VoIP worldwide using a peer-topeer network, and Google has its own free VoIP service. Although up-front investments are required for an IP phone system, VoIP can reduce communication and network management costs by 20 to 30 percent. For example, VoIP saves Virgin Entertainment Group $700,000 per year in long-distance bills. In addition to lowering long-distance costs and eliminating monthly fees for private lines, an IP network provides a single voice-data infrastructure for both telecommunications and computing services. Companies no longer have to maintain separate networks or provide support services and personnel for each type of network.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

77) What are some of the key features of the future Web and Internet?

Answer: The key features of the future Web and Internet are more tools for individuals to make sense out of the trillions of pages on the Internet, or the millions of apps available for smartphones and a visual, even three-dimensional (3D), web where you can walk through pages in a 3D environment. Even closer in time is a pervasive web that controls everything from a city's traffic lights and water usage, to the lights in your living room, to your car's rear-view mirror, not to mention managing your calendar and appointments. This is referred to as the Internet of Things (IoT) and is based on billions of Internet-connected sensors throughout our physical world. Objects, animals, or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. The App Internet is another element in the future web. The growth of apps within the mobile platform is astounding. More than 80 percent of mobile minutes in the United States are generated through apps, as opposed to browsers. Apps give users direct access to content and are much faster than loading a browser and searching for content. Other complementary trends leading toward a future web include more widespread use of cloud computing and software as a service (SaaS) business models, ubiquitous connectivity among mobile platforms and Internet access devices, and the transformation of the web from a network of separate siloed applications and content into a more seamless and interoperable whole.

Difficulty: Challenging AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

78) 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 blogs, wikis, and social networking sites to reach out and market to potential new customers, to support and give added value to existing customers and and also use these tools within their company to communicate between departments and share knowledge.

Social networking, in particular, has radically changed how business people stay in touch with customers, suppliers, and employees; how providers of goods and services learn about their customers; and how advertisers reach potential customers.Student answers with respect to specific examples will vary. One answer might be: For example, a software company could have a blog that discusses in-depth use of a software product. The U.S. Department of Homeland Security's National Cyber Security Center (NCSC) deployed a wiki to facilitate information sharing with other federal agencies on threats, attacks, and responses and as a repository for technical and standards information. Pixar Wiki is a collaborative community wiki for publicizing the work of Pixar Animation Studios. The wiki format allows anyone to create or edit an article about a Pixar film. Many businesses have Facebook pages to market their product to specific groups on Facebook.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

79) 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 keywords 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, including its Hummingbird search algorithm that enables semantic search, its Knowledge Graph, which is an effort of the search algorithm to anticipate what you might want to know more about as you search on a topic; its use of predictive search, which attempts to guess what you are looking for and suggests search terms as you type your search words, and other refinements to its search algorithms using mathematical models and artificial intelligence machine learning to make its responses to queries even more accurate and intelligent has made Google very successful.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

80) Explain the Domain Name System. What are some of the common domain name extensions currently available and what types of services do they designate?

Answer: The Domain Name System (DNS) converts domain names to IP addresses. Domain names are the English-like names that correspond to the unique 32-bit numeric IP address for each computer connected to the Internet. DNS is a hierarchy, with the root domain at the top, top-level domains such as .com and .edu one level below, and second-level domains designate a top-level name and a second-level name, like amazon.com. Common domain name extensions include .edu (educational institutions), .gov (government agencies), .mil (military), .net (network computers), .org (nonprofit organizations and foundations), .biz (business firms), and .info (information providers). Additionally, countries have their own domain names. Answers may cite a variety of other domain name extensions.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 7-3: How do the Internet and Internet technology work, and how do they support communication and e-business?

81) All of the following are physical components of an RFID system except: A) bar codes.

B) antennas.

C) radio transmitters.

D) tags.

E) readers.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

82) Which digital cellular standard is used widely throughout the world except the United States?

A) GSM B) CDMA C) WLAN D) LTD E) 4G Answer: A Difficulty: Challenging AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

83) Which of the following is the popular name for the 802.15 wireless networking standard?

A) Bluetooth B) WiMax C) WLAN. D) Wi-Fi E) RFID Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

84) Which of the following statements about RFID is not true?

A) RFIDs transmit only over a short range.

B) RFIDs use an antenna to transmit data.

C) Microchips embedded in RFIDs are used to store data.

D) RFIDs require line-of-sight contact to be read.

E) RFID tags and antennas come in a variety of shapes and sizes.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

85) Wireless sensor networks (WSNs) are used for the following tasks except: A) processing consumer transactions.

B) monitoring traffic.

C) detecting radioactive materials.

D) protecting property.

E) identifying vehicles for trucking firms.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

86) 4G networks use which of the following standards?

A) GSM and LTD B) CDMA and PAN C) LTE and LTD D) T-Mobile and AT&T E) LTE and WiMax Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

87) Which of the following statements about 5G is true?

A) 5G is based on the GSM standard.

B) 5G's top data transmission rate is in the megabyte range.

C) 5G will be able to transmit data in the gigabit range.

D) 5G will have longer transmission delays.

E) 5G networks have not yet been launched by Internet network providers.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

88) Bluetooth can be used to link up to devices within a 10-meter area using lowpower, radio-based communication.

A) two B) five C) eight D) fifteen E) twenty Answer: C Difficulty: Challenging AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

89) Which of the following technologies is used to reduce Wi-Fi network interference from nearby systems in the same spectrum?

A) RFID B) Hotspots C) Bluetooth D) WiMax E) MIMO Answer: E Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

90) The 802.11 set of standards is known as: A) RFID. B) WSN. C) Wi-Fi. D) WiMax. E) WAN. Answer: C Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

91) The WiMax standard can transmit up to a distance of approximately: A) 30 meters.

B) 500 meters.

C) 30 miles.

D) 5 miles.

E) 70 miles.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

92) Based on your reading of the examples in the chapter, which of the following would be the best use of RFID for a business?

A) Logging transactions B) Managing the supply chain C) Lowering network costs D) Enabling client communication E) Improving employee engagement Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

93) Which of the following technologies does Walmart use to track items for sale on store shelves?

A) Web 3.0 B) CDMA C) BLE D) GPS E) RFID Answer: E Difficulty: Challenging AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

94) A(n) is a box consisting of a radio receiver/transmitter and antennas that links to a wired network, router, or hub.

A) RFID receiver B) WiMax receiver C) access point D) hub E) PAN receiver Answer: C Difficulty: Challenging AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

95) Mobile is the leading digital platform, with total activity on smartphones and tablets accounting for two-thirds of digital media time spent.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

96) Apple Pay uses an RFID-related technology called near field communication.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

97) NFC tags are always passive.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

98) 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.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

99) 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.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

100) What are some of the standards and networks used in digital cellular service, and where are they in use?

Answer: Common cellular system standards include the Global System for Mobile Communications (GSM), which is used in Europe and much of the world outside of the United States and is known for its international roaming capability. In the U.S., Code Division Multiple Access is used by Verizon and Sprint. It is a more efficient system than GSM. The generations of networks in use today by cellular systems includes 3G, 4G, and 5G. 4G networks offer higher speeds than 3G. The standards in use by 4G Networks are Long Term Evolution (LTE) and Worldwide Interoperability for Microwave Access (WiMax). The next generation of wireless technology, called 5G, is designed to support transmission of huge amounts of data in the gigabit range, with fewer transmission delays and the ability to connect many more devices (such as sensors and smart devices) at once than existing cellular systems. 5G technology will be needed for self-driving vehicles, smart cities, and extensive use of the Internet of Things. AT&T, Verizon, and other carriers are starting to launch 5G networks, which will also improve the speed and intensive data-handling of smartphones. Mobile Internet users will be able to download entire movies within seconds.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 7-4: What are the principal technologies and standards for wireless networking, communication, and Internet access?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

Management Information Systems, 17e (Laudon/Laudon) Chapter 8 Securing Information Systems 1) Which of the following refers to policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems?

A) Security B) Controls C) Benchmarking D) Algorithms E) Identity management Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

2) Which of the following refers to all of the methods, policies, and organizational procedures that ensure the safety of the organization's assets, the accuracy and reliability of its accounting records, and operational adherence to management standards?

A) Legacy systems B) SSID standards C) Vulnerabilities D) Security policy E) Controls Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

3) Most computer viruses deliver a: A) worm.

B) Trojan horse.

C) drive-by download.

D) keylogger.

E) payload.

Answer: E Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

4) Which of the following statements about wireless security is not true?

A) LANs using the 802.11 standard can be easily penetrated by outsiders.

B) Wi-Fi networks are susceptible to hacking by eavesdroppers.

C) War driving involves eavesdroppers driving by buildings or parking outside and trying to intercept a wireless network.

D) Intruders can force a user's NIC to associate with a rogue access point.

E) Bluetooth is the only wireless technology that is not susceptible to hacking by eavesdroppers.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

5) All of the following are specific security challenges that threaten the communications lines in a client/server environment except: A) phishing.

B) tapping.

C) theft and fraud.

D) radiation.

E) message alteration.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

6) All of the following are specific security challenges that threaten corporate servers in a client/server environment except: A) hacking.

B) malware.

C) denial-of-service attacks.

D) sniffing.

E) vandalism.

Answer: D Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

7) All of the following are specific security challenges that threaten corporate systems in a client/server environment except: A) theft of data.

B) copying of data.

C) alteration of data.

D) radiation.

E) hardware failure.

Answer: D Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

8) CryptoLocker is an example of which of the following?

A) Worm B) SQL injection attack C) Sniffer D) Evil twin E) Ransomware/Trojan Answer: E Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

9) Which of the following statements about Internet security vulnerabilities is not true?

A) Sharing files over a P2P network can expose information on a corporate computer to outsiders.

B) Large public networks, such as the Internet, are less vulnerable than internal networks.

C) Employees can pose a security threat.

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

E) Email attachments can serve as a springboard for malicious software.

Answer: B Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

10) A Trojan horse: A) is software that appears to be benign but does something other than expected.

B) is a virus installed as a drive-by download.

C) is malware named for a breed of fast-moving Near-Eastern horses.

D) installs spyware on users' computers.

E) is a type of sniffer used to infiltrate corporate networks.

Answer: A Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

11) A salesperson clicks repeatedly on the online ads of a competitor in order to drive the competitor's advertising costs up. This is an example of: A) phishing.

B) pharming.

C) spoofing.

D) evil twins.

E) click fraud.

Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

12) Which of the following is a worm that uses flaws in Windows software to take over a computer remotely?

A) Sasser B) Zeus C) Cryptolocker D) ILOVEYOU E) Conficker Answer: E Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

13) is malware that hijacks a user's computer and demands payment in return for giving back access.

A) A Trojan horse B) Ransomware C) Spyware D) A virus E) An evil twin Answer: B Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

14) is spyware that logs and transmits everything a user types.

A) Keyware B) A Trojan horse C) A keylogger D) A worm E) A sniffer Answer: C Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

15) Which of the following statements about botnets is not true?

A) Eighty percent of the world's malware is delivered by botnets.

B) Botnets are often used to perpetrate DDoS attacks.

C) Ninety percent of the world's spam is delivered by botnets.

D) Botnets are often used for click fraud.

E) It is not possible to make a smartphone part of a botnet.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

16) Using numerous computers to inundate and overwhelm the network from numerous launch points is called a(n) attack.

A) DDoS B) DoS C) SQL injection D) phishing E) botnet Answer: A Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

17) Which of the following is not an example of a computer used as a target of crime?

A) Knowingly accessing a protected computer to commit fraud B) Accessing a computer system without authority C) Illegally accessing stored electronic communication D) Threatening to cause damage to a protected computer E) Breaching the confidentiality of protected computerized data Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

18) An employee clicks on a link in an email from what looks like a fellow employee and is taken to a fraudulent website which asks for personal information is an example of: A) click fraud.

B) DDOS attack.

C) spear phishing.

D) pharming.

E) identity theft.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

19) Which of the following specifically makes malware distribution and hacker attacks to disable websites a federal crime?

A) Computer Fraud and Abuse Act B) Economic Espionage Act C) Electronic Communications Privacy Act D) Data Security and Breach Notification Act E) National Information Infrastructure Protection Act Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

20) The intentional defacement or destruction of a website is called: A) spoofing.

B) cybervandalism.

C) cyberwarfare.

D) phishing.

E) pharming.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

21) Evil twins are: A) Trojan horses that appear to the user to be a legitimate commercial software application.

B) email messages that mimic the email messages of a legitimate business.

C) fraudulent websites that mimic a legitimate business's website.

D) computers that fraudulently access a website or network using the IP address and identification of an authorized computer.

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

Answer: E Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

22) Pharming involves: A) redirecting users to a fraudulent website 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 website to ask users for confidential information.

D) using emails for threats or harassment.

E) setting up fake Wi-Fi access points that look as if they are legitimate public networks.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

23) Which of the following is the single greatest cause of network security breaches?

A) Viruses B) User lack of knowledge C) Trojan horses D) Cyberwarfare E) Bugs Answer: B Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

24) When a hacker discovers a security hole in software that is unknown to the software's creator, it is an example of: A) sniffing.

B) social engineering.

C) phishing.

D) a zero-day vulnerability.

E) snooping.

Answer: D Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

25) According to Accenture and Ponemon Institute's Ninth Annual Cost of Cyber Crime Study, the average annualized cost of cybercrime in 2018 for benchmarked organizations was approximately: A) $1.3 million.

B) $13 million.

C) $130 million.

D) $13 billion.

E) $130 billion.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

26) Which of the following refers to eavesdroppers driving by buildings or parking outside and trying to intercept wireless network traffic?

A) War driving B) Sniffing C) Cybervandalism D) Drive-by tapping E) Snooping Answer: A Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

27) When hackers gain access to a database containing your personal private information, this is an example of: A) phishing.

B) spoofing.

C) social engineering.

D) identity theft.

E) pharming.

Answer: D Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

28) Dyn suffered which of the following types of attacks?

A) SQL injection B) Data breach C) Cyberwarfare D) Ransomware E) DDoS Answer: E Difficulty: Challenging AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

29) A foreign country attempting to access government networks in order to disable a national power grid is an example of: A) phishing.

B) denial-of-service attacks.

C) cyberwarfare.

D) war driving.

E) evil twins.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

30) According to the 2020 Identity Fraud Study by Javelin Strategy & Research, how much did consumers lose to identity fraud in 2019?

A) $1.69 million B) $16.9 million C) $169 million D) $1.69 billion E) $16.9 billion Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

31) All of the following have contributed to an increase in software flaws except: A) the growing complexity of software programs.

B) the growing size of software programs.

C) demands for timely delivery to markets.

D) the inability to fully test programs.

E) the increase in the number of computer hackers in the world.

Answer: E Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

32) Which of the following is an example of a keylogger?

A) Zeus B) Conficker C) Sasser D) ILOVEYOU E) Cryptolocker Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

33) Legislation requiring private or governmental entities to notify individuals of security breaches involving personally identifiable information has been enacted in all 50 states.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

34) Smartphones are not vulnerable to malicious software or penetration from outsiders.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

35) The Mirai botnet infected numerous IoT devices and then used them to launch a DDoS attack Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

36) A computer worm is a program that can copy itself to other computers on the network.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

37) The term cracker is used to identify a hacker with criminal or malicious intent.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

38) Apple's iOS is the mobile platform targeted by most hackers.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

39) A computer virus replicates more quickly than a computer worm.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

40) Phishing is a form of spoofing.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

41) Sniffers enable hackers to steal proprietary information from anywhere on a network, including email messages, company files, and confidential reports.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

42) DoS attacks flood a network server with thousands of requests for service.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

43) 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 Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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44) Most IoT devices support sophisticated security approaches.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

45) Malicious software programs referred to as spyware include a variety of threats such as computer viruses, worms, and Trojan horses.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

46) What are the security challenges faced by wireless networks?

Answer: Both Bluetooth and Wi-Fi networks are susceptible to hacking by eavesdroppers.

Local area networks (LANs) using the 802.11 standard can be easily penetrated by outsiders armed with laptops, wireless cards, external antennae, and hacking software. Hackers use these tools to detect unprotected networks, monitor network traffic, and, in some cases, gain access to the Internet or to corporate networks. Wi-Fi transmission technology was designed to make it easy for stations to find and hear one another. The service set identifiers (SSIDs) identifying the access points in a Wi-Fi network are broadcast multiple times and can be picked up fairly easily by intruders' sniffer programs. Wireless networks in many locations do not have basic protections against war driving, in which eavesdroppers drive by buildings or park outside and try to intercept wireless network traffic. A hacker can employ an 802.11 analysis tool to identify the SSID. An intruder that has associated with an access point by using the correct SSID is capable of accessing other resources on the network, using the Windows operating system to determine which other users are connected to the network, access their computer hard drives, and open or copy their files. Intruders also use the information they have gleaned to set up rogue access points on a different radio channel in physical locations close to users to force a user's radio NIC to associate with the rogue access point. Once this association occurs, hackers using the rogue access point can capture the names and passwords of unsuspecting users.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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47) Explain how an SQL injection attack works and what types of systems are vulnerable to this type of attack.

Answer: SQL injection attacks take advantage of vulnerabilities in poorly coded web application software to introduce malicious code into a company's systems and networks. These vulnerabilities occur when a web application fails to properly validate or filter data entered by a user on a web page, which might occur when ordering something online. An attacker uses this input validation error to send a rogue SQL query to the underlying database to access the database, plant malicious code, or access other systems on the network. Large web applications using databases are most vulnerable, as they may have hundreds of places for inputting user data, each of which creates an opportunity for an SQL injection attack.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

48) What is cyberwarfare? Provide examples and discuss the risks that it poses.

Answer: Cyberwarfare is a state-sponsored activity designed to cripple and defeat another state or nation by penetrating its computers or networks to cause damage and disruption. Examples include efforts of Russian hackers to disrupt recent U.S. 2016 presidential elections and to penetrate the U.S. power grid, described in the chapter-opening case. Cyberwarfare also includes defending against these types of attacks. Cyberwarfare is more complex than conventional warfare. Although many potential targets are military, a country's power grids, dams, financial systems, communications networks, and voting systems can also be crippled. Nonstate actors such as terrorists or criminal groups can mount attacks, and it is often difficult to tell who is responsible. Nations must constantly be on the alert for new malware and other technologies that could be used against them, and some of these technologies developed by skilled hacker groups are openly for sale to interested governments. Cyberwarfare attacks have become much more widespread, sophisticated, and potentially devastating. Foreign hackers have stolen source code and blueprints to the oil and water pipelines and power grid of the United States and infiltrated the Department of Energy's networks hundreds of times. Over the years, hackers have stolen plans for missile tracking systems, satellite navigation devices, surveillance drones, and leadingedge jet fighters. According to U.S. intelligence, more than 30 countries are developing offensive cyberattack capabilities, including Russia, China, Iran, and North Korea. Their cyberarsenals include collections of malware for penetrating industrial, military, and critical civilian infrastructure controllers; email lists and text for phishing attacks on important targets; and algorithms for DoS attacks. U.S. cyberwarfare efforts are concentrated in the United States Cyber Command, which coordinates and directs the operations and defense of Department of Defense information networks and prepares for military cyberspace operations. Cyberwarfare poses a serious threat to the infrastructure of modern societies, since their major financial, health, government, and industrial institutions rely on the Internet for daily operations.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 8-1: Why are information systems vulnerable to destruction, error, and abuse?

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49) The HIPAA Act of 1996: A) requires financial institutions to ensure the security of customer data.

B) specifies best practices in information systems security and control.

C) imposes responsibility on companies and management to safeguard the accuracy of financial information.

D) outlines medical security and privacy rules.

E) identifies computer abuse as a crime and defines abusive activities.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 8-2: What is the business value of security and control?

50) The Gramm-Leach-Bliley Act: A) requires financial institutions to ensure the security of customer data.

B) specifies best practices in information systems security and control.

C) imposes responsibility on companies and management to safeguard the accuracy of financial information.

D) outlines medical security and privacy rules.

E) identifies computer abuse as a crime and defines abusive activities.

Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 8-2: What is the business value of security and control?

51) The Sarbanes-Oxley Act: A) requires financial institutions to ensure the security of customer data.

B) specifies best practices in information systems security and control.

C) imposes responsibility on companies and management to safeguard the accuracy of financial information.

D) outlines medical security and privacy rules.

E) identifies computer abuse as a crime and defines abusive activities.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 8-2: What is the business value of security and control?

52) Which of the following is a type of ambient data?

A) Computer log containing recent system errors B) A file deleted from a hard disk C) A file that contains an application's user settings D) A set of raw data from an environmental sensor E) Data stored on a portable storage device Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 8-2: What is the business value of security and control?

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53) Computer forensics tasks include all of the following except: A) presenting collected evidence in a court of law.

B) securely storing recovered electronic data.

C) collecting physical evidence on the computer.

D) finding significant information in a large volume of electronic data.

E) recovering data from computers while preserving evidential integrity.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 8-2: What is the business value of security and control?

54) What is the Sarbanes-Oxley Act and how does it relate to the security of information systems?

Answer: The Public Company Accounting Reform and Investor Protection Act of 2002, better known as the Sarbanes-Oxley Act after its sponsors Senator Paul Sarbanes of Maryland and Representative Michael Oxley of Ohio, was designed to protect investors after the financial scandals at Enron, WorldCom, and other public companies. It imposes responsibility on companies and their management to safeguard the accuracy and integrity of financial information that is used internally and released externally. Sarbanes-Oxley is fundamentally about ensuring that internal controls are in place to govern the creation and documentation of information in financial statements. Because information systems are used to generate, store, and transport such data, the legislation requires firms to consider information systems security and other controls required to ensure the integrity, confidentiality, and accuracy of their data. Each system application that deals with critical financial reporting data requires controls to make sure the data are accurate. Controls to secure the corporate network, prevent unauthorized access to systems and data, and ensure data integrity and availability in the event of disaster or other disruption of service are essential as well.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 8-2: What is the business value of security and control?

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55) Why is an effective electronic document retention policy important?

Answer: Security, control, and electronic records management have become essential for responding to legal actions. Much of the evidence today for stock fraud, embezzlement, theft of company trade secrets, computer crime, and many civil cases is in digital form. In addition to information from printed or typewritten pages, legal cases today increasingly rely on evidence represented as digital data stored on portable storage devices and computer hard disk drives as well as in email, text messages, and e-commerce transactions over the Internet. In a legal action, a firm is obligated to respond to a discovery request for access to information that may be used as evidence, and the company is required by law to produce those data. The cost of responding to a discovery request can be enormous if the company has trouble assembling the required data or the data have been corrupted or destroyed. Courts now impose severe financial and even criminal penalties for improper destruction of electronic documents.An effective electronic document retention policy ensures that electronic documents, email, and other records are well organized, accessible, and neither retained too long nor discarded too soon. It also reflects an awareness of how to preserve potential evidence for computer forensics.

Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 8-2: What is the business value of security and control?

56) Define computer forensics and describe the types of problems it is designed to address.

Answer: Computer forensics involves 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. It deals with the following problems: • Recovering data from computers while preserving evidential integrity • Securely storing and handling recovered electronic data • Finding significant information in a large volume of electronic data • Presenting the information to a court of law Electronic evidence may reside on computer storage media in the form of computer files and as ambient data, which are not visible to the average user. An example might be a file that has been deleted on a PC hard drive. Data that a computer user may have deleted on computer storage media can be recovered through various techniques. Computer forensics experts try to recover such hidden data for presentation as evidence. An awareness of computer forensics should be incorporated into a firm's contingency planning process.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 8-2: What is the business value of security and control?

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57) Your company, an online discount pet supply store, has calculated that a loss of Internet connectivity for 3 hours results in a potential loss of $2,000 to $3,000 and that there is a 50% chance of this occurring each year. What is the annual expected loss from this exposure?

A) $500 B) $1,000 C) $1,250 D) $1,500 E) $2,500 Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 8-3: What are the components of an organizational framework for security and control?

58) Implementation controls: A) can be classified as input controls, processing controls, and output controls.

B) govern the design, security, and use of computer programs and the security of data files in general throughout the organization.

C) apply to all computerized applications and consist of a combination of hardware, software, and manual procedures that create an overall control environment.

D) include software controls, computer operations controls, and implementation controls.

E) audit the systems development process at various points to ensure that the process is properly controlled and managed.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 8-3: What are the components of an organizational framework for security and control?

59) controls formalize standards, rules, procedures, and control disciplines to ensure that the organization's general and application controls are properly executed and enforced.

A) Software B) Administrative C) Data security D) Implementation E) Input Answer: B Difficulty: Challenging AACSB: Information technology LO: 8-3: What are the components of an organizational framework for security and control?

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60) An analysis of an information system that rates the likelihood of a security incident occurring and its cost would be included in which of the following?

A) Security policy B) AUP C) Risk assessment D) Business impact analysis E) Business continuity plan Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 8-3: What are the components of an organizational framework for security and control?

61) A statement ranking information risks and identifying security goals would be included in which of the following?

A) Security policy B) AUP C) Risk assessment D) Business impact analysis E) Business continuity plan Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 8-3: What are the components of an organizational framework for security and control?

62) Which of the following defines acceptable uses of a firm's information resources and computing equipment?

A) An information systems audit policy B) A CA policy C) A MSSP D) A UTM system E) An AUP Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 8-3: What are the components of an organizational framework for security and control?

63) Which of the following focuses primarily on the technical issues of keeping systems up and running?

A) Business continuity planning B) Security policies C) Disaster recovery planning D) An AUP E) An information systems audit Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 8-3: What are the components of an organizational framework for security and control?

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64) All of the following are types of information systems general controls except: A) application controls.

B) computer operations controls.

C) hardware controls.

D) software controls.

E) administrative controls.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 8-3: What are the components of an organizational framework for security and control?

65) An acceptable use policy defines acceptable uses of the firm's information resources and computing equipment.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 8-3: What are the components of an organizational framework for security and control?

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66) How can a firm's security policies contribute and relate to the following business objectives: operational excellence; new products, services, and business models; customer and supplier intimacy; improved decision making; competitive advantage; and survival? Give examples.

Answer: A firm's security policies can contribute and relate to the six main business objectives as follows: (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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 8-3: What are the components of an organizational framework for security and control?

67) What is the role of an information systems audit?

Answer: An information systems audit examines the firm's overall security environment as well as controls governing individual information systems. The auditor should trace the flow of sample transactions through the system and perform tests, using, if appropriate, automated audit software. The information systems audit may also examine data quality.

The audit should review technologies, procedures, documentation, training, and personnel. A thorough audit will even simulate an attack or disaster to test the response of the technology, information systems staff, and business employees.

The audit lists and ranks all control weaknesses and estimates the probability of their occurrence.

It then assesses the financial and organizational impact of each threat. It includes a section for notifying management of such weaknesses and for management's response. Management is expected to devise a plan for countering significant weaknesses in controls.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 8-3: What are the components of an organizational framework for security and control?

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68) How does disaster recovery planning differ from business continuity planning?

Answer: Disaster recovery planning devises plans for the restoration of disrupted computing and communications services. Disaster recovery plans focus primarily on the technical issues involved in keeping systems up and running, such as which files to back up and the maintenance of backup computer systems or disaster recovery services. Business continuity planning, on the other hand, focuses on how the company can restore business operations after a disaster strikes.

The business continuity plan identifies critical business processes and determines action plans for handling mission-critical functions if systems go down.

Difficulty: Easy AACSB: Application of knowledge; Written and oral communication LO: 8-3: What are the components of an organizational framework for security and control?

69) Which of the following is the most recent specification of the security standard developed for Wi-Fi? A) WEP B) 802.11i C) WPA3 D) S-HTTP E) TLS Answer: C Difficulty: Challenging AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

70) Which of the following statements about passwords is not true?

A) Authentication cannot be established by the use of a password.

B) Password systems that are too rigorous may hinder employee productivity.

C) Passwords can be stolen through social engineering.

D) A user's actions with respect to passwords can compromise security.

E) Passwords can be sniffed when being transmitted over a network.

Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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71) Two-factor authentication utilizes a(n): A) unique password.

B) encrypted connection.

C) a multistep process of authentication.

D) a firewall.

E) a digital certificate.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

72) All of the following are currently being used as human traits that can be profiled by biometric authentication except: A) fingerprints.

B) facial characteristics.

C) body odor.

D) retinal images.

E) voice.

Answer: C Difficulty: Easy AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

73) A firewall allows the organization to: A) prevent unauthorized communication into and out of its network.

B) check the accuracy of all transactions between its network and the Internet.

C) create an enterprise system on the Internet.

D) check the content of all incoming and outgoing email messages.

E) create access rules for a network.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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74) use scanning software to look for known problems such as bad passwords, the removal of important files, security attacks in progress, and system administration errors.

A) Stateful inspections B) Intrusion detection systems C) Application proxy filtering technologies D) Packet filtering technologies E) Firewalls Answer: B Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

75) Currently, the protocols used for secure information transfer over the Internet are: A) TCP/IP and SSL. B) S-HTTP and CA. C) HTTP and TCP/IP. D) S-HTTP and SHTML. E) SSL, TLS, and S-HTTP. Answer: E Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

76) In which method of encryption is a single encryption key sent to the receiver so both sender and receiver share the same key?

A) SSL/TLS B) Symmetric key encryption C) Public key encryption D) Private key encryption E) Distributed encryption Answer: B Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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77) 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) uses government-issued certificates of authority.

E) protects a user's identity by substituting a certificate in place of identifiable traits.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

78) Fault tolerant information systems create an environment designed to provide continuous, uninterrupted services by using: A) high-capacity storage.

B) a multitier server network.

C) redundant hardware, software, and power supplies.

D) dedicated phone lines.

E) a digital certificate system.

Answer: C Difficulty: Easy AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

79) Blockchain refers to a technology that: A) uses a chain of digital "blocks" that contain records of transactions.

B) uses a centralized data store in the cloud.

C) relies on the Internet to provide secure transactions.

D) uses existing banking systems to transfer funds.

E) relies on peer-to-peer networks.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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80) Which of the following statements about blockchain is not true?

A) Once recorded, a blockchain transaction cannot be changed.

B) The data represented in a blockchain is maintained in a central database.

C) The records in a blockchain are secured through cryptography.

D) Each block in a blockchain is connected to all the blocks before and after it.

E) Blockchain is vulnerable in some of the same ways as conventional, centralized recordkeeping systems.

Answer: B Difficulty: Challenging AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

81) An authentication system in which a user must provide two types of identification, such as a bank card and PIN, is called: A) smart card authentication.

B) biometric authentication.

C) two-factor authentication.

D) symmetric key authorization.

E) token authentication.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

82) Which of the following techniques stops data packets originating outside the organization, inspects them, and uses a proxy to pass packet information to the other side of an organization's firewall?

A) NAT B) Packet filtering C) Two-factor authentication D) Stateful inspection E) Application proxy filtering Answer: E Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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83) Comprehensive security management products, with tools for firewalls, VPNs, intrusion detection systems, and more, are called systems.

A) DPI B) MSSP C) NSP D) PKI E) UTM Answer: E Difficulty: Challenging AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

84) Digital resiliency focuses solely on the resiliency of the IT function.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

85) In cloud computing, accountability and responsibility for protection of sensitive data resides with the company owning the data.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

86) Biometric authentication uses systems that read and interpret individual human traits.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

87) Packet filtering catches most types of network attacks.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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88) A NAT conceals the IP addresses of the organization's internal host computer(s) to prevent sniffer programs outside the firewall from ascertaining them and using that information to penetrate internal systems.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

89) S-HTTP is a protocol used to establish a secure connection between two computers.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

90) Public key encryption uses one key.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

91) Mobile devices typically feature state-of-the-art encryption and security features, making them highly secure tools for businesses, and therefore do not require any special protections.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

92) Authentication refers to verifying that people are who they claim to be.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

93) Symmetric encryption is more secure than public key encryption.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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94) A firewall is a combination of hardware and software that controls the flow of incoming and outgoing network traffic.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

95) Is the cloud a safer and more secure computing environment than an in-house network? Why or why not?

Answer: Student answers will vary, but should include the understanding that using the cloud for computing distributes data to remote services that a company will not have final control of, that a company's cloud data will be stored alongside the data of other companies, and that various safeguards should be in place to protect your data. A sample answer is: The safety of cloud computing as compared to in-house network computing depends on the security implemented both at the corporation and at the service provider. For example, the company will need to ensure secure procedures and make sure that employees have secure passwords and access levels. The cloud service provider should use encryption for all data, at a minimum.

Clients should make sure that the service provider complies with local privacy rules, external security audits, and certifications and provides proof of encryption mechanisms.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

96) Why is software quality important to security? What specific steps can an organization take to improve system quality and reliability?

Answer: Software flaws not only impede performance but also create security vulnerabilities.

Organizations can improve system quality and reliability by employing software metrics and rigorous software testing. Software metrics are objective assessments of the system in the form of quantified measurements 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.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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97) Discuss the concept of digital resiliency. What is it and why are firms today embracing the concept?

Answer: Today's organizations are much more hypernetworked and interconnected than in the past, with important parts of their IT infrastructures maintained remotely in the cloud, managed by outsiders, and accessible by mobile devices. Firms are embracing the concept of digital resiliency to deal with the realities of this new digital environment. Digital resiliency deals with how to maintain and increase the resilience of an organization and its business processes in an all-pervasive digital environment, not just the resiliency of the IT function. In addition to computing, storage, and networking technologies, digital resiliency calls attention to managerial and organizational issues such as corporate policies and goals, business processes, organizational culture, business requirements, accountability, and business risk management. These factors can affect how well an organization can actually utilize and manage network connectivity, applications, databases, and data centers, its ability to provide 24/7 availability for business, and its ability to respond to changing business conditions. A single weak link in this chain can cause an outage or prevent the firm from responding to new challenges and opportunities, if resiliency has not been explicitly designed in, measured, and tested.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

98) 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 (CA), 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.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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99) Name and briefly describe four firewall screening technologies.

Answer: There are a number of firewall screening technologies, including static packet filtering, stateful inspection, Network Address Translation, and application proxy filtering. They are frequently used in combination to provide firewall protection.

• Packet filtering examines selected fields in the headers of data packets flowing back and forth between the trusted network and the Internet, examining individual packets in isolation.

This filtering technology can miss many types of attacks.

• Stateful inspection provides additional security by determining whether packets are part of an ongoing dialogue between a sender and a receiver. It sets up state tables to track information over multiple packets. Packets are accepted or rejected based on whether they are part of an approved conversation or attempting to establish a legitimate connection.

• Network Address Translation (NAT) can provide another layer of protection when static packet filtering and stateful inspection are employed. NAT conceals the IP addresses of the organization's internal host computer(s) to prevent sniffer programs outside the firewall from ascertaining them and using that information to penetrate internal systems.

• Application proxy filtering examines the application content of packets. A proxy server stops data packets originating outside the organization, inspects them, and passes a proxy to the other side of the firewall. If a user outside the company wants to communicate with a user inside the organization, the outside user first communicates with the proxy application, and the proxy application communicates with the firm's internal computer. Likewise, a computer user inside the organization goes through the proxy to talk with computers on the outside Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

100) Explain how two-factor authentication increases security.

Answer: Two-factor authentication increases security by validating users by a multistep process. To be authenticated, a user must provide two means of identification, one of which is typically a physical token, such as a smartcard or chip-enabled bank card, and the other of which is typically data, such as a password or PIN (personal identification number). Biometric data, such as fingerprints, iris prints, or voice prints, can also be used as one of the authenticating mechanisms. A common example of two-factor authentication is a bank card; the card itself is the physical item, and the PIN is the data that go with it.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 8-4: What are the most important tools and technologies for safeguarding information resources?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 1) From your reading of the chapter's opening case, which of the answers below is not a reason why Lenzing chose JDA's Sales & Operations Planning software?

A) Minimize the environmental impact of its products B) Create an end-to-end supply chain planning process C) Improve sales forecast accuracy D) Eliminate manual processes E) Develop a new business model Answer: E Difficulty: Easy AACSB: Analytical thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

2) Which of the following provides a suite of integrated software modules and a common central database that allows data to be used by multiple functions and business processes?

A) Process management software B) ERP systems C) Groupware D) CRM software E) Supply chain management systems Answer: B Difficulty: Moderate AACSB: Information technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

3) Enterprise software is built around thousands of predefined business processes that reflect: A) government regulations.

B) industry benchmarks.

C) best practices.

D) cutting edge workflow analyses.

E) the firm's culture.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

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4) Which of the following is not true about enterprise systems?

A) Enterprise systems help firms respond rapidly to customer requests for information or products.

B) Enterprise system data have standardized definitions and formats that are accepted by the entire organization.

C) Enterprise software is expressly built to allow companies to support their existing business practices.

D) Enterprise software includes analytical tools to evaluate overall organizational performance.

E) Enterprise systems provide firmwide information to help managers make better decisions.

Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

5) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take?

A) Rewrite the software to support the way the company's business processes work.

B) Select the business processes you wish to automate.

C) Map the company's business processes to the software's business processes.

D) Map the software's business processes to the company's business processes.

E) Select the functions of the system you wish to use.

Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

6) Which of the following enables a company to tailor a particular aspect of enterprise software to the way a company does business?

A) Configuration tables B) Web services C) Data dictionaries D) Middleware E) Groupware Answer: A Difficulty: Moderate AACSB: Information technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

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7) To achieve the maximum benefit of a new ERP system, Tasty Baking implemented an enterprise system by: A) using only the pre-defined processes in the ERP software that matched its own processes.

B) retaining its legacy systems to operate as a backup to the new enterprise system.

C) customizing less than 5 percent of the enterprise system processes.

D) changing the ERP software as needed to match their own processes.

E) using a cloud-based version of the ERP. Answer: C Difficulty: Moderate AACSB: Information technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

8) Coca-Cola implemented enterprise software from SAP that enabled it to achieve all of the following except: A) standardizing business processes worldwide.

B) improving its bargaining power with suppliers.

C) reacting faster to market changes.

D) reducing the number of employees.

E) reducing the cost of raw materials.

Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

9) Enterprise systems improve management decision making in all the following ways except: A) providing up-to-the-minute data on sales, inventory, and production.

B) providing more accurate sales and production forecasts.

C) improving forecasts of consumer behavior.

D) implementing standard definitions and formats worldwide.

E) determining the profitability of products.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

10) The total time it takes to complete a business process, from start to finish, is called its time.

A) development B) cycle C) fulfillment D) service E) actualization Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

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11) Enterprise systems are built around a small number of predefined business processes.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

12) Organizations can rewrite enterprise system software to support their existing business processes.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

13) To reap the maximum benefits from enterprise software, companies should customize it to conform to their existing business processes.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

14) What business processes are supported by enterprise systems? Give specific examples.

Answer: The four major business processes supported by enterprise systems are: • Financial and accounting processes, including general ledger, accounts payable, accounts receivable, fixed assets, cash management and forecasting, product-cost accounting, cost-center accounting, asset accounting, tax accounting, credit management, and financial reporting.

• Human resources processes, including personnel administration, time accounting, payroll, personnel planning and development, benefits accounting, applicant tracking, time management, compensation, workforce planning, performance management, and travel expense reporting.

• Manufacturing and production processes, including procurement, inventory management, purchasing, shipping, production planning, production scheduling, material requirements planning, quality control, distribution, transportation execution, and plant and equipment maintenance.

• Sales and marketing processes, including order processing, quotations, contracts, product configuration, pricing, billing, credit checking, incentive and commission management, and sales planning.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

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15) 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 versions of enterprise software packages that are are designed for small and medium-sized businesses and on-demand software services running in the cloud 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 the versions of enterprise software packages that are are designed for small and medium-sized businesses and on-demand software services running in the cloud 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.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

16) What is an ERP system and how does it enable a firm to integrate firmwide information?

Answer: An enterprise resource planning (ERP) systems (also sometimes known as just an enterprise system) is based on a suite of integrated software modules and a common central database. The database collects data from many divisions and departments in a firm and from a large number of key business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources, making the data available for applications that support nearly all an organization's internal business activities. When new information is entered by one process, the information is made immediately available to other business processes. For example, if a sales representative places an order for tire rims, the system verifies the customer's credit limit, schedules the shipment, identifies the best shipping route, and reserves the necessary items from inventory. If inventory stock is insufficient to fill the order, the system schedules the manufacture of more rims, ordering the needed materials and components from suppliers. Sales and production forecasts are immediately updated. General ledger and corporate cash levels are automatically updated with the revenue and cost information from the order. Users can tap into the system and find out where that particular order is at any minute.

Management can obtain information at any point in time about how the business is operating.

The system can also generate enterprise-wide data for management analyses of product cost and profitability.

Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 9-1: How do enterprise systems help businesses achieve operational excellence?

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17) 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(n): A) distribution channel.

B) supply chain.

C) value chain.

D) marketing channel.

E) information system.

Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

18) In the supply chain, components or parts are referred to as: A) upstream materials, organizations, and processes.

B) raw materials.

C) secondary products.

D) intermediate products.

E) downstream organizations and processes.

Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

19) The includes a company's suppliers, the suppliers' suppliers, and the processes for managing relationships with them?

A) supplier's internal supply chain B) logistics supply chain C) downstream portion of the supply chain D) upstream portion of the supply chain E) intermediate portion of the supply chain Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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20) Distribution and delivery of products to retailers is part of the: A) downstream portion of the supply chain.

B) external supply chain.

C) upstream portion of the supply chain.

D) supplier's internal supply chain.

E) intermediate portion of the supply chain.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

21) All of the following are examples of supply chain inefficiencies except: A) parts shortages.

B) just-in-time production.

C) underused plant capacity.

D) excessive finished goods.

E) high transportation costs.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

22) Supply chain inefficiencies waste as much as percent of a company's operating costs?

A) 10 B) 15 C) 25 D) 35 E) 50 Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

23) To eliminate excessively high inventories of its Pampers disposable diapers at various points along its supply chain because of such distorted information, Procter & Gamble did all of the following except: A) revise its marketing processes.

B) revise its sales processes.

C) add safety stock.

D) revise its supply chain processes.

E) use more accurate demand forecasting.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

24) In a strategy, components arrive exactly at the moment they are needed and finished goods are shipped as soon as they leave the assembly line.

A) just-in-time B) frictionless C) bullwhip D) safety-stock E) streamlined Answer: A Difficulty: Easy AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

25) A distortion of information about the demand for a product as it passes from one entity to the next across the supply chain is called the effect.

A) network B) bullwhip C) ripple D) whirlpool E) diffraction Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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26) Supply chain software can be classified as either supply chain systems or supply chain systems.

A) push; pull B) demand; continual C) upstream; downstream D) planning; execution E) maintenance; development Answer: D Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

27) Which of the following enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product?

A) Supply chain demand system B) Supply chain delivery system C) Supply chain optimization system D) Supply chain execution system E) Supply chain planning system Answer: E Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

28) Supply chain planning systems perform all of the following functions except: A) establish inventory levels for raw materials and finished goods.

B) identify the transportation mode to use for product delivery.

C) determine where to store finished goods.

D) determine how much product to manufacture in a given time period.

E) track the physical status of goods.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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29) Which supply chain planning function determines how much product is needed to satisfy all customer demands?

A) Distribution management B) Replenishment planning C) Demand planning D) Order planning E) Customer planning Answer: C Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

30) Which of the following 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?

A) Supply chain demand system B) Supply chain delivery system C) Supply chain planning system D) Supply chain execution system E) Supply chain optimization system Answer: D Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

31) Supply chain execution systems provide all of the following functions except: A) generating demand forecasts for products.

B) tracking the flow of finished goods.

C) managing materials.

D) managing warehouse operations.

E) managing the financial information involving all parties.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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32) A supply chain driven by forecasts or best guesses of consumer demand follows a(n) model.

A) pull-based B) build-to-order C) push-based D) demand -driven E) optimized Answer: C Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

33) A supply chain driven by actual customer orders is called a model.

A) supply-based B) build-to-stock C) replenishment-driven D) pull-based E) market-driven Answer: D Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

34) Schneider National is an example of which of the following?

A) Contract manufacturer B) Third-party logistics provider C) Tier 1 supplier D) Distributor E) Tier 2 supplier Answer: B Difficulty: Easy AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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35) The business value of an effective supply chain management system includes all of the following except: A) faster time to market.

B) cost reduction.

C) supply matched to demand.

D) improved delivery service.

E) increased inventory levels.

Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

36) The bullwhip effect can be countered by: A) globalization.

B) disintermediation.

C) implementing a CRM. D) reducing information uncertainty.

E) product differentiation.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

37) Which of the following is the last entity in the downstream portion of a supply chain?

A) Customers B) Retailers C) Distributors D) Manufacturers E) Tier 3 suppliers Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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38) Which of the following is not a major entity in Nike's supply chain?

A) Nike's contract suppliers B) Nike's employees C) Nike's distributors D) Nike's retailers E) Nike's customers Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

39) A company having difficulty with timely delivery of parts to its manufacturing plants should implement a system.

A) supply chain execution B) supply chain planning C) continuous replenishment D) bullwhip E) demand forecasting Answer: A Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

40) The difference between push- and pull-based models is summarized by which of the following slogans?

A) Sell what we make, not make what we sell.

B) Push what we make, not pull what we make.

C) Make what we sell, not sell what we make.

D) Pull what we make, not push what we sell.

E) Make what we push, not push what we sell.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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41) Walmart's continuous replenishment system is an example of a(n) model.

A) push-based B) pull-based C) build-to-stock D) supply chain optimization E) forecast-based Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

42) The WMS that Haworth Incorporated uses is an example of which of the following?

A) Supply chain execution system B) Supply chain planning system C) Just-in-time strategy D) Continuous replenishment system E) Build-to-order model Answer: A Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

43) Managing a global supply chain is more complex than managing a domestic supply chain.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

44) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers.

Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

45) In some industries, total supply chain costs can approach 75 percent of a company's operating budget.

Answer: TRUE Difficulty: Challenging AACSB: Reflective thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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46) Firms in the supply chain develop safety stocks in order to reduce the cost of inventory.

Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

47) The bullwhip effect leads to declining inventory costs across the entire supply chain.

Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

48) Supply chain planning systems enable the firm to model its existing supply chain.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

49) Before the Internet, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes.

Answer: TRUE Difficulty: Moderate AACSB: Reflective thinking LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

50) Inefficiencies in a supply chain are caused by inaccurate or untimely information.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

51) In a push-based model, transactions to produce and deliver only what customers have ordered move up the supply chain from retailers to distributors to manufacturers and eventually to suppliers.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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52) Contemporary supply chain management systems are driven by a push-based model in which production master schedules are based on forecasts of demand for products.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

53) Procter & Gamble (P&G) experienced a growth in its Pampers diapers inventory due to the bullwhip effect.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

54) The emerging Internet-driven supply chain provides multidirectional communication among firms, networks of firms, and e-marketplaces.

Answer: TRUE Difficulty: Challenging AACSB: Application of knowledge LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

55) Identify two classifications for supply chain software. What are the capabilities of each type?

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 model its existing supply chain, generate demand forecasts for products, and develop optimal sourcing and manufacturing plans for those products. Capabilities include determining how much of a specific product to manufacture in a given time period; establishing inventory levels for raw materials, intermediate products, and finished goods; determining where to store finished goods; and identifying the transportation mode to use for product delivery. 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 determining how much of a specific product to manufacture in a given time period; establishing inventory levels for raw materials, intermediate products, and finished goods; determining where to store finished goods; and identifying the transportation mode to use for product delivery.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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56) 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 its 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. The Internet and Internet technology make it possible to move from sequential supply chains, where information and materials flow sequentially from company to company, to concurrent supply chains, where information flows in many directions simultaneously among members of a supply chain network. Complex supply networks of manufacturers, logistics suppliers, outsourced manufacturers, retailers, and distributors can adjust immediately to changes in schedules or orders.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

57) How does a push-based model of manufacturing differ from a pull-based model? Which is better and why?

Answer: A push-based model of manufacturing refers to a supply chain driven by production master schedules based on forecasts or best guesses of demand for products. A pull-based model 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. A pull-based model is better because it enables the business to be driven more by actual customer demand, which is more efficient and reduces costs Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

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58) Plant Away is an Oregon-based retailer and distributor of trees and shrubs. It has hundreds of smaller nurseries based around the country that grow the plant stock. The majority of its business is conducted online. Consumers typically purchase small quantities of products online and Plant Away coordinates the shipping from the most appropriate nursery. What unique problems might you anticipate it has in its supply chain? What might remedy these problems?

Answer: Typical problems in supply chains arise from uncertainties and unforeseen events. In a plant nursery, variations in the weather, growing season, plant diseases, and crop output would be uncertainties and/or unforeseen events. 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

59) Discuss the business value of supply chain management systems.

Answer: Supply chain management systems enable firms to streamline both their internal and external supply chain processes and provide management with more accurate information about what to produce, store, and move. By implementing a networked and integrated supply chain management system, companies match supply to demand, reduce inventory levels, improve delivery service, speed product time to market, and use assets more effectively.

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. Reducing supply chain costs has a major impact on firm profitability.

In addition to reducing costs, supply chain management systems help increase sales. If a product is not available when a customer wants it, customers often try to purchase it from someone else.

More precise control of the supply chain enhances the firm's ability to have the right product available for customer purchases at the right time.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 9-2: How do supply chain management systems coordinate planning, production, and logistics with suppliers?

60) A is an interaction with a customer.

A) point of presence B) touch point C) sales point D) client channel E) point of service Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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61) Which of the following would not be considered a contact point?

A) Email B) Website C) Intranet D) Retail store E) Facebook Answer: C Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

62) software modules deal with setting employee objectives, performance, and compensation.

A) SCM B) SFA C) ERM D) DRM E) PRM Answer: C Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

63) software modules seek to enhance collaboration between a company and its selling partners.

A) SCM B) SFA C) ERM D) DRM E) PRM Answer: E Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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64) CRM systems typically provide software and online tools for sales, customer service, and: A) marketing.

B) account management.

C) advertising.

D) public relations.

E) human resources.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

65) SFA modules in CRM systems provide tools for all of the following except: A) team selling.

B) territory management.

C) sales forecasting.

D) managing sales prospect and contact information.

E) managing customer service requests.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

66) CRM systems help businesses achieve which of the following business objectives?

A) Automated accounting processes B) Automated production forecasts C) Faster time to market with new products and services D) Enhanced supplier intimacy E) Enhanced customer intimacy Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

67) Customer service modules in CRM systems provide tools for: A) assigning and managing customer service requests.

B) capturing prospect and customer data.

C) identifying profitable and unprofitable customers.

D) managing sales prospect and contact information.

E) organizing effective marketing campaigns.

Answer: A Difficulty: Easy AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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68) Marketing modules in CRM systems provide tools for all of the following except: A) tools for assessing its selling partners' performance.

B) capturing prospect and customer data.

C) identifying profitable and unprofitable customers.

D) qualifying leads.

E) identifying opportunities for cross-selling.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

69) Selling a customer with a checking account a home improvement loan is an example of: A) operational CRM. B) direct marketing.

C) sales force automation.

D) cross-channel promotions.

E) cross-selling.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

70) Major CRM products typically have all of the following service capabilities except: A) customer satisfaction management.

B) returns management.

C) call center & help desk.

D) service analytics.

E) order management.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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71) Major CRM software products include which of the following capabilities to support the sales process?

A) Returns management B) Lead management C) Channel promotions management D) Events management E) Customer satisfaction management Answer: B Difficulty: Challenging AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

72) Which of the following applications provides analysis of customer data?

A) Operational CRM B) Analytical CRM C) Operational SCM D) Analytical ERM E) Operational ERM Answer: B Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

73) Operational CRM applications include tools for all of the following except: A) sales force automation.

B) call center support.

C) marketing automation.

D) customer service support.

E) calculating CLTV. Answer: E Difficulty: Challenging AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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74) Which of the following tools is used to analyze customer buying patterns?

A) CLTV B) Analytical CRM C) Operational CRM D) Demand planning E) SFA Answer: B Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

75) 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 E) Customer average value Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

76) The measurement of the number of customers who stop using or purchasing products or services from a company is called: A) switching costs.

B) churn rate.

C) CLTV. D) switch rate.

E) turnover percentage.

Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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77) modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services.

A) Customer B) SOA C) Marketing D) Complex E) SFA Answer: E Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

78) Which of the following is not a major CRM application software vendor?

A) Microsoft B) Oracle C) SAP D) JDA Software E) Salesforce.com Answer: D Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

79) All CRM packages contain modules for PRM and ERM. Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

80) CRM software incorporates hundreds of business processes.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

81) Cross-selling is the marketing of products to different customers.

Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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82) A PRM module in CRM software helps organizations identify high-value customers for preferential treatments.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

83) Analytical CRM uses tools to analyze customer data collected from the firm's customer touch points and from other sources.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

84) Churn rate is an important indicator of the growth or decline of a company's customer base.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

85) Discuss the difference between operational CRM and analytical CRM. Answer: Operational CRM and analytical CRM are two types of CRM. Operational CRM includes customer-facing applications, such as tools for sales force automation, call center and customer service support, and marketing automation. Analytical CRM includes applications that analyze customer data generated by operational CRM applications to provide information for improving business performance.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

86) Discuss the business value of having an effective CRM system.

Answer: Companies with an effective customer relationship management system realize many benefits, including increased customer satisfaction, reduced direct-marketing costs, more effective marketing, and lower costs for customer acquisition and retention. Information from a CRM system increases sales revenue by identifying the most profitable customers and segments for focused marketing and cross-selling.

Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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87) 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 mobile devices 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.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

88) What are four questions that a good CRM system can help answer and how do firms use the answers to those questions?

Answer: Four questions that a good CRM system can help answer are: (1) What is the value of a particular customer to the firm over his or her lifetime? (2) Who are our most loyal customers?

(3) Who are our most profitable customers? and (4) What do these profitable customers want to buy?

Firms use the answers to these questions to acquire new customers, provide better service and support to existing customers, customize their offerings more precisely to customer preferences, and provide ongoing value to retain profitable customers.

Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

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89) What is a PRM module? How does it differ from an ERM module?

Answer: The more comprehensive CRM packages contain modules for partner relationship management (PRM) and employee relationship management (ERM).

PRM uses many of the same data, tools, and systems as customer relationship management to enhance collaboration between a company and its selling partners. If a company does not sell directly to customers but rather works through distributors or retailers, PRM helps these channels sell to customers directly. It provides a company and its selling partners with the ability to trade information and distribute leads and data about customers, integrating lead generation, pricing, promotions, order configurations, and availability. It also provides a firm with tools to assess its partners' performances so it can make sure its best partners receive the support they need to close more business.

ERM software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training. Major CRM application software vendors include Oracle, SAP, Salesforce.com, and Microsoft Dynamics CRM. Difficulty: Challenging AACSB: Information technology; Written and oral communication LO: 9-3: How do customer relationship management systems help firms achieve customer intimacy?

90) Which of the following statements about enterprise applications is not true?

A) Enterprise applications require organizational learning.

B) Enterprise applications involve complex software.

C) Some enterprise applications, such as SCM systems, require multiple organizations to share information and business processes.

D) Some enterprise applications, such as CRM systems, typically require some data cleansing work.

E) Companies adopting enterprise applications can also save time and money by extensively customizing their applications to fit their business processes.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

91) Which of the following is not an example of a next-generation enterprise application?

A) SAP S/4HANA Cloud B) Social CRM C) SAP R/3 D) Salesforce.com's Einstein AI E) Microsoft Dynamics 365 Answer: C Difficulty: Challenging AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

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92) According to a 2020 survey of 181 ERP users conducted by Panorama Consulting Group, 38 percent of ERP projects experienced cost overruns, and these overruns averaged percent over budget.

A) 25 B) 33 C) 50 D) 66 E) 75 Answer: D Difficulty: Moderate AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

93) Which of the following is not a business intelligence feature of SAP's next generation business intelligence applications?

A) Employee relationship management B) What-if scenario analysis C) Interactive dashboards D) AI machine learning E) Ad hoc analysis Answer: A Difficulty: Challenging AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

94) Which of the following enables a business to connect customer conversations and relationships from social networking sites to CRM processes?

A) Analytical CRM B) Social CRM C) Operational CRM D) PRM module E) ERM module Answer: B Difficulty: Easy AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

95) Enterprise systems do not require fundamental changes in the way the business operates.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

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96) Enterprise applications reduce switching costs.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

97) Enterprise applications are based on organization-wide definitions of data.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

98) Stand-alone enterprise systems are becoming a thing of the past.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

99) What is social CRM and how is it being used?

Answer: Social CRM tools enable a business to connect customer conversations and relationships from social networking sites to CRM processes. They enable businesses to better engage with their customers by, for example, analyzing their sentiments about their products and services. These social enhancements help firms identify new ideas more rapidly, improve team productivity, and deepen interactions with customers. SAP, Salesforce.com, and Oracle CRM products feature technology to monitor, track, and analyze social media activity in Facebook, LinkedIn, Twitter, YouTube, and other sites. For example, Salesforce.com connected its system for tracking leads in the sales process with social-listening and social-media marketing tools, enabling users to tailor their social-marketing dollars to core customers and observe the resulting comments. If an ad agency wants to run a targeted Facebook or Twitter ad, these capabilities make it possible to aim the ad specifically at people in the client's lead pipeline who are already being tracked in the CRM system. Users will be able to view tweets as they take place in real time and perhaps uncover new leads. They can also manage multiple campaigns and compare them all to figure out which ones generate the highest click-through rates and cost per click.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

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100) Identify and briefly describe at least four challenges involved in implementing an enterprise system.

Answer: Many firms have implemented enterprise systems because they are such powerful instruments for achieving operational excellence and enhancing decision making. But precisely because they are so powerful in changing the way the organization works, they are challenging to implement. Challenges include the expense of the software and related costs; the time and expense required for implementation; the deep-seated technological changes and organizational changes required; overcoming organizational resistance; switching costs; and the need to understand exactly how the business uses its data and how the data would be organized in the system, potentially requiring additional data cleansing work.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 9-4: What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 10 E-Commerce: Digital Markets, Digital Goods 1) What event marked the beginning of e-commerce?

A) The first product sold online B) The first domain name registered C) The first e-mail sent D) The first paid advertisements placed on a website E) The first product advertised online Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

2) All of the following are examples of social commerce companies except: A) Uber.

B) Facebook.

C) Twitter.

D) Pinterest.

E) Instagram.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

3) A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location is called a(n): A) exchange.

B) marketspace.

C) online marketplace.

D) e-hub.

E) net marketplace.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

4) When did e-commerce begin?

A) 1965 B) 1983 C) 1995 D) 1999 E) 2000 Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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5) The universal standards of the Internet and e-commerce lower which of the following?

A) Market entry costs B) Richness C) Information density D) Ubiquity E) Interactivity Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

6) All of the following are unique features of e-commerce technology, except: A) personalization/customization.

B) interactivity.

C) transparency.

D) richness.

E) global reach.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

7) Which of the following dimensions of e-commerce technology involves engaging consumers in a dialogue that dynamically adjusts the experience to the individual?

A) Ubiquity B) Personalization/customization C) Richness D) Interactivity E) Information density Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

8) Which of the following dimensions of e-commerce technology involves the integration of video, audio, and text marketing messages into a single marketing message and consumer experience?

A) Ubiquity B) Personalization/customization C) Richness D) Interactivity E) Social technology Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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9) Which of the following dimensions of e-commerce technology has the potential to raise the quality of information?

A) Information density B) Richness C) Customization D) Interactivity E) Global reach Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

10) The effort required to locate a suitable product is called: A) price discrimination.

B) search costs.

C) menu costs.

D) shopping costs.

E) location costs.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

11) Information density refers to the: A) richness—complexity and content—of a message.

B) total amount and quantity of information delivered to consumers by merchants.

C) total amount and quantity of information available to all market participants.

D) amount of information available to reduce price transparency.

E) amount of physical storage space needed to store data about a specific entity, such as a product or consumer.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

12) Selling the same goods to different targeted groups at different prices is called: A) cost customization.

B) cost optimization.

C) price gouging.

D) cost personalization.

E) price discrimination.

Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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13) Information exists when one party in a transaction has more information that is important for the transaction than the other party.

A) transparency B) asymmetry C) complexity D) discrimination E) competition Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

14) Changing the prices of products based on the level of demand characteristics of the customer is called pricing.

A) menu B) dynamic C) flexible D) asymmetric E) customized Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

15) Removing the business process layers in a distribution channel is called: A) disintermediation.

B) BPR. C) market segmentation.

D) network effects.

E) market transparency.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

16) In digital markets: A) search costs increase.

B) menu costs are lower.

C) switching costs decline.

D) network costs decline.

E) information asymmetry increases.

Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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17) Compared to traditional markets, digital markets have: A) lower search costs.

B) weaker network effects.

C) higher menu costs.

D) greater asymmetry.

E) higher transaction costs.

Answer: A Difficulty: Challenging AACSB: Analytical thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

18) Compared to traditional goods, digital goods have: A) a lower marginal cost of production on a per unit basis.

B) higher delivery costs.

C) lower initial production costs.

D) higher inventory costs.

E) higher marginal costs.

Answer: A Difficulty: Challenging AACSB: Analytical thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

19) Compared to digital goods, traditional goods have: A) lower inventory costs.

B) lower marginal costs per unit.

C) lower copying costs.

D) more variable pricing.

E) higher costs of distribution.

Answer: E Difficulty: Challenging AACSB: Analytical thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

20) What is the primary benefit to consumers of disintermediation?

A) Faster service B) Lower costs C) Higher quality D) Greater choices E) None, because disintermediation primarily benefits manufacturers.

Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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21) What is the difference between personalization and customization, as applied to e-commerce technologies?

A) Customization is any type of adjustment made to a product by the user; personalization refers to a business changing a product or service for the user.

B) Personalization is any type of adjustment made to a product by the user; customization refers to a business changing a product or service for the user.

C) Customization refers to adjusting marketing messages for a consumer; personalization refers to adjusting a product or service based on a user's preferences.

D) Personalization refers to adjusting marketing messages for a specific consumer; customization refers to adjusting a product or service based on a user's preferences.

E) There is no difference. Both terms refer to changing a product or communication for the consumer.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

22) E-commerce refers to the use of the Internet and the web to transact business.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

23) In 2020, B2C e-commerce revenues are expected to grow at single-digit rates.

Answer: FALSE Difficulty: Challenging AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

24) The Internet increases information asymmetry.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

25) 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 Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

26) Disintermediation does not benefit the consumer.

Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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27) In general, for digital goods, the marginal cost of producing another unit is about zero.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

28) Using the number of unique visitors a website produces as a measure of marketing success is a carryover from the world of television.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

29) Information asymmetry exists when there is more information about one product than there is about a similar product.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

30) Cost transparency refers to the ability of consumers to discover what merchants actually pay for products.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

31) The term switching costs refers to a merchant's costs of changing prices.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

32) Behavioral targeting refers to targeting ad messages to a person's clickstream behavior.

Answer: TRUE Difficulty: Moderate AACSB: Analytical thinking LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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33) What is the most profound way in which e-commerce and the Internet have changed the relationship between companies and their customers? Support your answer.

Answer: Student answers will vary. A sample answer is: The most profound way in which ecommerce and the Internet have changed the relationship between companies and their customers 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 websites 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.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

34) Discuss the concept of information density as it relates to e-commerce. What advantages does information density provide for consumers and merchants?

Answer: The term information density refers to the total amount and quality of information available to all market participants, consumers, and merchants alike. The Internet and the web vastly increase information density. E-commerce technologies reduce information collection, storage, processing, and communication costs while greatly increasing the currency, accuracy, and timeliness of information. Information density in e-commerce markets make prices and costs more transparent. Price transparency refers to the ease with which consumers can find out the variety of prices in a market; cost transparency refers to the ability of consumers to discover the actual costs merchants pay for products. There are advantages for merchants as well. Online merchants can discover much more about consumers than in the past. This allows merchants to segment the market into groups that are willing to pay different prices and permits the merchants to engage in price discrimination–selling the same goods, or nearly the same goods, to different targeted groups at different prices. For instance, an online merchant can discover a consumer's avid interest in expensive, exotic vacations and then pitch high-end vacation plans to that consumer at a premium price, knowing this person is willing to pay extra for such a vacation. At the same time, the online merchant can pitch the same vacation plan at a lower price to a more price-sensitive consumer. Information density also helps merchants differentiate their products in terms of cost, brand, and quality.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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35) What are digital goods, and how do they differ from traditional goods in terms of marginal costs per unit, cost of production, distributed delivery cost, inventory cost, marketing cost, and pricing?

Answer: Digital goods are goods that can be delivered over a digital network. Music tracks, video, Hollywood movies, software, newspapers, magazines, and books can all be expressed, stored, delivered, and sold as purely digital products. For the most part, digital goods are intellectual property, which is defined as "works of the mind." Intellectual property is protected from misappropriation by copyright, patent, and trade secret laws. Today, all these products are delivered as digital streams or downloads while their physical counterparts decline in sales. The impact of the Internet on the market for digital goods is nothing short of revolutionary.

In general, for digital goods, the marginal cost of producing another unit is about zero (it costs nothing to make a copy of a digital file such as a music file). However, the cost of producing the original first unit is relatively high–in fact, it is nearly the total cost of the product because there are few other costs of inventory and distribution. Costs of delivery over the Internet and inventory costs are low, while those costs for traditional goods can be high. On the Internet, the pricing can be more variable, since merchants can change prices more frequently because of low menu costs, while pricing for traditional goods is typically fixed and based on unit costs.

Marketing costs, however, can be the same for both digital and traditional goods.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

36) What is dynamic pricing and how is it used in e-commerce?

Answer: In dynamic pricing, the price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller. For instance, online retailers from Amazon to Walmart change prices on many products based on time of day, demand for the product, and users' prior visits to their sites. Using big data analytics, some online firms can adjust prices at the individual level based on behavioral targeting parameters such as whether the consumer is a price haggler (who will receive a lower price offer) versus a person who accepts offered prices and does not search for lower prices. Prices can also vary by zip code, with higher prices set for poor sections of a community. Uber, along with other ride services, uses surge pricing to adjust prices of a ride based on demand (which always rises during storms and major conventions).

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

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37) Describe the use of personalization and customization in e-commerce. What business value do these techniques have?

Answer: Personalization enables merchants to target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. The ability of Internet technology to track customer behavior at websites, 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. For example, Amazon.com greets logged in users with their usernames. The business value of personalization is reduced marketing costs, as you spend only the money to target customers that are more likely to be receptive and are more profitable, and improved sales results, from increased customer response to personalized sites that better serve their own purposes and shopping needs. Personalization can achieve some of the benefits of using individual salespeople for dramatically lower costs.

Customization enables merchants to change the delivered product or service based on a user's preferences or prior behavior. For instance, 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 business value of customization is improved sales results.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10-1: What are the unique features of e-commerce, digital markets, and digital goods?

38) Amazon.com is known primarily for its use of which of the following business models?

A) Content provider B) Portal C) Market creator D) E-tailer E) Transaction broker Answer: D Difficulty: Easy AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

39) Craigslist is an example of: A) C2C e-commerce.

B) B2B e-commerce.

C) B2C e-commerce.

D) M-commerce.

E) B2G commerce.

Answer: A Difficulty: Easy AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

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40) Which of the following types of e-commerce involves businesses selling goods and services directly to individuals via the Internet?

A) B2C e-commerce B) B2B e-commerce C) C2C e-commerce D) M-commerce E) P2P e-commerce Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

41) Which of the following is an example of a company primarily engaged in B2B e-commerce?

A) Uber B) Walmart C) Elemica D) Yahoo E) eBay Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

42) Transaction brokers: A) generate revenue from advertising or from directing buyers to sellers.

B) save users money and time by processing transactions normally handled in person, by phone, or by mail online.

C) provide a digital environment where buyers and sellers can meet, display products, search for products, and establish prices.

D) sell physical products directly to consumers or individual businesses.

E) provide online meeting places where people with similar interests can communicate.

Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

43) Which of the following Internet business models involves a merchant creating an online digital environment that enables people with like interests to share information?

A) Community provider B) Service provider C) Market creator D) Transaction broker E) Portal Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

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44) Market creators: A) save users money and time by processing online sales transactions.

B) provide a digital environment where buyers and sellers can establish prices for products.

C) create revenue by providing digital content over the web.

D) sell physical products directly to consumers or individual businesses.

E) generate revenue from advertising or from directing buyers to sellers.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

45) 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) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.

C) Pandora provides basic services for free but charges a premium for advanced services.

D) Apple accepts micropayments for single music track downloads.

E) Netflix charges customers a monthly fee for access to its library of movies.

Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

46) Airbnb uses the business model.

A) service provider B) market creator C) community provider D) portal E) transaction broker Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

47) 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) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.

C) Pandora provides basic services for free but charges a premium for advanced services.

D) Apple accepts micropayments for single music track downloads.

E) Netflix charges customers a monthly fee for access to its library of movies.

Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

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48) In the revenue models, a firm offers some services for free but charges a subscription fee for premium services.

A) free/freemium B) subscription C) transaction fee D) affiliate E) sales Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

49) Content providers use systems to process large amounts of very small monetary transactions cost-effectively.

A) subscription B) mobile payment C) transaction fee D) micropayment E) affiliate revenue Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

50) Which of the following best illustrates the advertising revenue model?

A) eBay receives a small fee from a seller if a seller is successful in selling an item.

B) Yelp receives a fee after steering a customer to a participating website where he or she makes a purchase.

C) Facebook provides a social network for free but shows sponsored content in users' News Feeds.

D) Apple accepts micropayments for single music track downloads.

E) Netflix charges customers a monthly fee for access to its library of movies.

Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

51) Which of the following companies uses the subscription revenue model?

A) Expedia B) E*Trade C) Facebook D) Netflix E) Yelp Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

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52) Which of the following revenue models generates almost all of Yahoo's revenue?

A) Advertising B) Transaction fee C) Subscription D) Freemium E) Affiliate Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

53) Streaming is a publishing method for music and video files that flows a continuous stream of content to a user's device without being stored locally on the device.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

54) Apple Music is an example of the market creator business model.

Answer: FALSE Difficulty: Easy AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

55) eBay is an example of the portal business model.

Answer: FALSE Difficulty: Easy AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

56) Podcasting allows subscribers to listen to live, streaming radio and other audio content.

Answer: TRUE Difficulty: Easy AACSB: Analytical thinking LO: 10-2: What are the principal e-commerce business and revenue models?

57) In the affiliate revenue model, firms derive revenue by referring consumers to other firms selling online.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 10-2: What are the principal e-commerce business and revenue models?

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58) List at least five different Internet business models. Which of these models do you think would be the riskiest 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 provider. Student answers as to the riskiest model for a startup business today will vary. A sample answer is: Today the riskiest model would be a content-provider, 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.

Difficulty: Easy AACSB: Application of knowledge; Written and oral communication LO: 10-2: What are the principal e-commerce business and revenue models?

59) List and describe the three main categories of e-commerce. Which do you think is ultimately the most valuable to the individual consumer? Support your answer.

Answer: The three main categories of e-commerce are business-to-consumer (B2C) ecommerce, business-to-business (B2B) e-commerce, and consumer-to-consumer (C2C) ecommerce. Student answers as to which is the most valuable to the individual consumer will vary. A sample answer might be: All three are valuable to the consumer, but in the long run, B2C e-commerce may be the most valuable to the individual consumer because it involves retailing and services to the consumers, while B2B focuses primarily on retailing and services to businesses. (Other opinions, of course, are potentially supportable.)

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10-2: What are the principal e-commerce business and revenue models?

60) 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 answers as to which might be the most successful and why 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.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10-2: What are the principal e-commerce business and revenue models?

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61) 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 10-2: What are the principal e-commerce business and revenue models?

62) Pepsico using Super Bowl viewers to build an online video is an example of: A) prediction markets.

B) behavioral targeting.

C) long-tail marketing.

D) social shopping.

E) crowdsourcing.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

63) Using the Internet to find potential customers inexpensively for products that have low demand is an example of: A) clickstream advertising.

B) behavioral targeting.

C) online profiling.

D) long tail marketing.

E) crowdsourcing.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

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64) According to small world theory, you are only on earth.

A) 5 B) 6 C) 10 D) 2550 E) 100 Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

links away from any other person

65) Which of the following marketing formats is sales-oriented, rather than branding-oriented or a mix?

A) Lead generation B) Search engine C) Rich media D) Display ads E) Video Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 10-3: How has e-commerce transformed marketing?

66) Facebook's "like" button is an example of which of the following?

A) Social sign-on B) Collaborative shopping C) Network notification D) Social search E) Newsfeed Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

67) An environment where consumers can share their shopping experiences with one another by viewing products, chatting, or texting about brands, products, and services is an example of: A) network notification.

B) web personal marketing.

C) collaborative shopping.

D) social search.

E) social sign-on.

Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

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68) involves placing ads in social network newsfeeds or within traditional editorial content, such as a newspaper article.

A) Behavioral targeting B) Crowdsourcing C) Native advertising D) Demand prediction software E) Lead generation marketing Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

69) Social marketing enables firms to tightly control their brands.

Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 10-3: How has e-commerce transformed marketing?

70) Behavioral targeting cannot be used if a consumer is using a mobile app.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

71) Advertising networks track a user's behavior at thousands of websites.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

72) Viral marketing is like traditional word-of-mouth marketing except that it is spread via online communities.

Answer: TRUE Difficulty: Challenging AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

73) A majority of Americans want a Do Not Track option in browsers that will stop websites from collecting information about their online behavior.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 10-3: How has e-commerce transformed marketing?

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Test Bank for Management Information Systems Managing the Digital Firm, 17th Edition by Laudon Kenneth & Laudon Jane. (Complete Chapters 1-15).

74) What is an advertising network? Why are they controversial?

Answer: Advertising networks enable advertisers to reach millions of consumers without having to work with individual websites by creating a network of several thousand of the most popular websites millions of people visit, tracking the behavior of these users across the entire network, building profiles of each user, and then selling these profiles to advertisers in a realtime bidding environment. Popular websites download dozens of webtracking cookies, bugs, and beacons, which report user online behavior to remote servers without the users' knowledge.

Advertising networks can identify and deliver thousands of people who fit a specific profile, such as young, single consumers with college degrees, living in the Northeast, in the 18-34 age range who are interested in purchasing a European car, and expose them to ads for European cars as they move from one website to another. Estimates vary, but behaviorally targeted ads are generally 10 times more likely to produce a consumer response than a randomly chosen banner or video ad. Advertising networks and their use of tracking programs have become controversial among privacy advocates because of their ability to track individual consumers across the Internet.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 10-3: How has e-commerce transformed marketing?

75) Website tracking software can log the path a customer took through the website, 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 the customer's operating system and browser interact technologically with a website and might be relevant in data analysis. An example is: Customers' operating systems and browsers could help a company determine what technical functionalities are being used to access its site. For example, if the company found out that a significant percentage of its users were using mobile browsers, it might want to make sure that its website 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 its 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 cashmere sweaters and other similar items to those customers.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 10-3: How has e-commerce transformed marketing?

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76) Which of the following statements about EDI is not true?

A) Each major industry in the United States has EDI standards.

B) Today, EDI is only used for document automation.

C) Many organizations still use private networks for EDI. D) EDI systems are increasingly web-enabled.

E) About 80 percent of online B2B e-commerce is still based on EDI. Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

77) 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) distribution E) production.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

78) A secure website that links a large firm to its suppliers and other key business partners is called a(n): A) e-hub.

B) marketspace.

C) exchange.

D) private industrial network.

E) net marketplace.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 10-4: How has e-commerce affected business-to-business transactions?

79) Which of the following statements about Net marketplaces is not true?

A) Some Net marketplaces sell direct goods.

B) Some Net marketplaces serve vertical markets.

C) Some Net marketplaces sell indirect goods.

D) Some Net marketplaces support contractual purchases based on long-term relationships.

E) Some Net marketplaces are owned by a single firm and used to link solely to the firm's suppliers and key business partners.

Answer: E Difficulty: Challenging AACSB: Analytical thinking LO: 10-4: How has e-commerce affected business-to-business transactions?

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80) Which of the following statements about exchanges is not true?

A) Exchanges are independently owned third-party Net marketplaces.

B) Some exchanges provide vertical markets.

C) Exchanges are the most successful form of B2B commerce.

D) Some exchanges enable a spot market.

E) Go2Paper is an example of an exchange.

Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

81) Which of the following is an example of a direct good in the automobile industry?

A) Computer equipment B) Paper C) Office furniture D) Roofing shingles E) Sheet steel Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

82) Which of the following is an example of a private industrial network?

A) Exostar B) Go2Paper C) Elemica D) Expedia E) VW Group Supply Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

83) Procurement involves all of the following except: A) negotiating with suppliers.

B) paying for goods.

C) making delivery arrangements.

D) sourcing.

E) production scheduling.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

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84) EDI can be used as a system for continuous replenishment.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 10-4: How has e-commerce affected business-to-business transactions?

85) Net marketplaces may either support contractual purchasing based on long-term relationships with designated suppliers or short-term spot purchasing.

Answer: TRUE Difficulty: Challenging AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

86) Exchanges have become one of the most popular types of Net marketplace because they encourage competitive bidding that drives prices down.

Answer: FALSE Difficulty: Challenging AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

87) Indirect goods are goods that are not directly involved in the production process.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 10-4: How has e-commerce affected business-to-business transactions?

88) What is an exchange, and why did many early exchanges fail?

Answer: Exchanges are independently owned third-party Net marketplaces that connect thousands of suppliers and buyers for spot purchasing. Many exchanges provide vertical markets for a single industry, such as food, electronics, or industrial equipment, and they primarily deal with direct inputs. Exchanges proliferated during the early years of e-commerce, but many failed.

Suppliers were reluctant to participate because the exchanges encouraged competitive bidding that drove prices down and did not offer any long-term relationships with buyers or services to make lowering prices worthwhile. Also, many essential direct purchases are not conducted on a spot basis because they require contracts and consideration of issues such as delivery timing, customization, and quality of products.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10-4: How has e-commerce affected business-to-business transactions?

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89) Which of the following is the largest mobile advertising market?

A) Google B) Yahoo C) Facebook/Instagram D) Microsoft E) Twitter Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

90) A new social mobile app you are developing allows users to find friends who are logged in and within a 10-mile radius. This would be categorized as a service.

A) geosocial B) geoinformation C) geoadvertising D) geomapping E) geolocating Answer: A Difficulty: Easy AACSB: Analytical thinking LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

91) Geoadvertising sends ads to users based on their: A) GPS locations.

B) home addresses.

C) shopping preferences.

D) website behaviors.

E) Google Maps settings.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

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92) What percent of top retailers now have m-commerce websites?

A) 17 percent B) 27 percent C) 47 percent D) 57 percent E) 67 percent Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

93) Which of the following is not an example of location-based services?

A) Foursquare B) Google Maps C) Waze D) Uber E) Netflix Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

94) Define location-based services and briefly describe the main categories of these services.

Which of the categories do you feel has the most potential in terms of e-commerce revenues, and why?

Answer: Location-based services are services that use GPS mapping services available on smartphones to deliver value-added services. They include geosocial services, geoadvertising, and geoinformation services. A geosocial service can tell you where your friends are meeting.

Geoadvertising services can tell you where to find the nearest Italian restaurant, and geoinformation services can tell you the price of a house you are looking at, or about special exhibits at a museum you are passing. Student answers as to the most valuable of these services will vary; an example is: I feel that geoadvertising services have the most potential for profit, as it is based on a profit-making mechanism: advertising. Geosocial services and geoinformation services, by themselves, are more content- and communication-oriented.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

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95) What are geosocial services and how are they being used?

Answer: Geosocial services help you find friends, or your friends to find you, by checking in to the service, announcing your presence in a restaurant or other place. Your friends are instantly notified. One example of a firm using geosocial services is Foursquare. Foursquare provides a location-based social networking service to over 55 million registered individual users, who may connect with friends, update their location, and provide reviews and tips for enjoying a location.

Points are awarded for checking in at designated venues. Users choose to post their check-ins on their accounts on Twitter, Facebook, or both. Users also earn badges by checking in at locations with certain tags, for check-in frequency, or for the time of check-in.

Difficulty: Easy AACSB: Application of knowledge; Written and oral communication LO: 10-5: What is the role of m-commerce in business, and what are the most important mcommerce applications?

96) Which of the following is a milestone for the Phase 1: Planning phase of developing an ecommerce presence?

A) Website plan B) Web mission statement C) Functional website D) Social media plan E) Mobile media plan Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence?

97) Which of the following is a milestone for the website development phase of building an ecommerce presence?

A) Web mission statement B) Social media plan C) Website plan D) Web presence map E) Functional website Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence?

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98) In planning a robust e-commerce presence, you will want to consider the blog platform as part of your presence.

A) social media B) e-mail C) community D) website E) offline media Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 10-6: What issues must be addressed when building an e-commerce presence?

99) Which of the following is not one of four types of presence to be considered when building an e-commerce presence?

A) Offline media B) Websites C) Social media D) Corporate E) Email Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 10-6: What issues must be addressed when building an e-commerce presence?

100) What are the steps involved in developing an e-commerce presence for a start-up company?

Answer: A one-year timeline for developing an e-commerce presence for a start-up company would involve the following: Phase 1: Planning, which involves envisioning the company's web presence and determining personnel, and producing a web mission statement; Phase 2: Website development, which involves acquiring content, developing a website design, arranging for hosting a website, and producing a website plan; Phase 3: Web implementation, which involves developing keywords and metatags, focusing on search engine optimization, identifying potential sponsors, and producing a functional website; Phase 4: Social media plan, which involves identifying appropriate social platforms and content for the company's products and services, and producing a social media plan; Phase 5: Social media implementation, which involves developing Facebook/Instagram, Twitter and Pinterest presences, and results in a functioning social media presence; and Phase 6: Mobile plan, which involves developing a mobile media plan and considering options for porting the website.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 10-6: What issues must be addressed when building an e-commerce presence?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 11 Managing Knowledge and Artificial Intelligence 1) Which of the following is the first value-adding step of information system activities in the knowledge management value chain?

A) Feedback B) Acquire C) Disseminate D) Store E) Apply Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

2) Which of the following involves where, when, and how to apply knowledge?

A) Data B) Wisdom C) Tacit knowledge D) Explicit knowledge E) Organizational learning Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

3) Which of the following statements best describes the relationship between collaboration and knowledge management?

A) Collaboration is impossible without knowledge.

B) Knowledge is impossible without collaboration.

C) Knowledge that cannot be communicated and shared with others is nearly useless.

D) As knowledge improves, so does collaboration.

E) Knowledge is the result of collaboration.

Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 11-1: What is the role of knowledge management systems in business?

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4) The text defines as flows of events or transactions captured by an organization's systems.

A) information B) data C) wisdom D) knowledge E) experience Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

5) The text defines as expertise of organizational members that has not been formally documented.

A) wisdom B) information C) data D) experience E) tacit knowledge Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

6) Which of the following statements is not an accurate description of the importance of knowledge to a firm?

A) The value of knowledge increases as more people share it.

B) Knowledge is an intangible asset.

C) Knowledge is both an individual attribute and collective attribute of a firm.

D) Knowledge is subject to the law of diminishing returns.

E) The transformation of data into useful information and knowledge requires organizational resources.

Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 11-1: What is the role of knowledge management systems in business?

7) What is meant by the statement "knowledge is sticky"?

A) Knowledge is hard to move.

B) Knowledge is universally applicable.

C) Knowledge works only in certain situations.

D) Knowledge is intangible.

E) Knowledge is enmeshed in a firm's culture.

Answer: A Difficulty: Challenging AACSB: Analytical thinking LO: 11-1: What is the role of knowledge management systems in business?

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8) Which of the following is not one of the main four dimensions of knowledge described in the chapter?

A) Knowledge is a firm asset.

B) Knowledge has different forms.

C) Knowledge has a location.

D) Knowledge is situational.

E) Knowledge is timeless.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

9) Changing organizational behavior by sensing and responding to new experience and knowledge is called: A) change management.

B) knowledge leveraging.

C) the knowledge value chain.

D) organizational learning.

E) knowledge management.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

10) What is the second value-adding step in information system activities in the knowledge management value chain?

A) Acquire B) Feedback C) Store D) Disseminate E) Apply Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

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11) The set of business processes, culture, and behavior required to obtain value from investments in information systems is one type of: A) knowledge culture.

B) knowledge discovery.

C) organizational and management capital.

D) organizational routine.

E) knowledge.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 11-1: What is the role of knowledge management systems in business?

12) Which of the following are the three major types of knowledge management systems?

A) MIS, DSS, and TPS B) CRM, SCM, and CAD C) DBMS, DSS, and ECM D) COPs, ECM, and MIS E) Enterprise-wide knowledge management systems, KWS, and intelligent techniques Answer: E Difficulty: Moderate AACSB: Information technology LO: 11-1: What is the role of knowledge management systems in business?

13) Specialized systems that enable scientists and engineers to create and discover new knowledge for a company are called: A) KWS. B) LMS. C) wikis.

D) COPs. E) enterprise-wide knowledge management systems.

Answer: A Difficulty: Easy AACSB: Information technology LO: 11-1: What is the role of knowledge management systems in business?

14) Which of the following statements about knowledge is not true?

A) Knowledge involves knowing how to follow procedures.

B) Knowledge involves causality.

C) Knowledge is not subject to network effects.

D) Knowledge is a cognitive event involving mental models.

E) Knowledge can be either tacit or explicit.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 11-1: What is the role of knowledge management systems in business?

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15) Informal social networks of professionals and employees within and outside the firm who have similar work-related activities and interests are called communities of: A) practice.

B) professionals.

C) interest.

D) knowledge.

E) expertise.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

16) All of the following are intangible assets of a firm except its: A) brand.

B) reputation.

C) knowledge.

D) information technology.

E) unique business processes.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

17) COPs can make it easier for people to reuse knowledge.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 11-1: What is the role of knowledge management systems in business?

18) Knowledge is conditional.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

19) One apt slogan of the knowledge management field is "Effective knowledge management is 80 percent technological and 20 percent managerial and organizational."

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

20) The impacts of knowledge-based investments are easy to measure.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 11-1: What is the role of knowledge management systems in business?

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21) Document management systems are essentially large databases.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 11-1: What is the role of knowledge management systems in business?

22) Briefly define the term knowledge management. What types of knowledge might a company such as a taxi service have, and how 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. Knowledge management increases the ability of the organization to learn from its environment and to incorporate knowledge into its business processes. A taxi company's knowledge might include both explicit knowledge, such as maps and routes between destinations, and tacit knowledge. 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 also benefit from an enterprise-wide knowledge management system such as a learning management system (LMS) that trained drivers for locations, destinations, and alternate routes.

Difficulty: Easy AACSB: Analytical thinking; Written and oral communication LO: 11-1: What is the role of knowledge management systems in business?

23) Briefly outline the information system and management and organizational activities in a knowledge management value chain as it might apply to the online catalog system of a public library.

Answer: Information system activities in a knowledge management value chain for an online catalog system of a public library include: Acquisition: for an online catalog of a library this would be getting the book classification and identification data into digital format.

Storage: This would involve system for storing this data, such as a content management system.

Dissemination: The library would need to determine how the card catalog information is accessed by the public or by staff, for example via a portal or search engine.

Application: This would involve the online 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 involve various enabling activities, such as the development of new organizational routines at the library, training of library workers, and the creation of new IT-based processes or services, such as 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 11-1: What is the role of knowledge management systems in business?

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24) Identify the three major types of knowledge management systems. Provide two examples of each.

Answer: The major types of knowledge management systems are enterprise-wide knowledge management systems, knowledge work systems (KWS), and intelligent techniques.

Enterprise-wide knowledge management systems include: enterprise content management (ECM) systems, collaboration and social tools, and learning management systems (LMS). Types of KWS include: computer-aided design (CAD) systems, and virtual reality (VR) systems.

Intelligent techniques include: data mining, expert systems, machine learning, neural networks, natural language processing, computer vision systems, robotics, genetic algorithms, and intelligent agents.

Difficulty: Easy AACSB: Information technology; Written and oral communication LO: 11-1: What is the role of knowledge management systems in business?

25) What is a community of practice, and how do they make it easier for people to reuse knowledge?

Answer: A communities of practice (COP) is an informal social network of professionals and employees within and outside the firm who have similar work-related activities and interests.

The activities of these communities include self-education and group education, conferences, online newsletters, and day-to-day sharing of experiences and techniques to solve specific work problems. Many organizations, such as IBM, the U.S. Federal Highway Administration, and the World Bank, have encouraged the development of thousands of online communities of practice.

These communities of practice depend greatly on software environments that enable collaboration and communication. COPs can make it easier for people to reuse knowledge by pointing community members to useful documents, creating document repositories, and filtering information for newcomers. COPs' members act as facilitators, encouraging contributions and discussion. COPs can also reduce the learning curve for new employees by providing contacts with subject matter experts and access to a community's established methods and tools. Finally, COPs can act as a spawning ground for new ideas, techniques, and decision-making behavior.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 11-1: What is the role of knowledge management systems in business?

26) What are the four dimensions of knowledge?

Answer: The four dimensions of knowledge are that it is a firm asset, it has different forms, it has a location, and it is situational. Knowledge is a firm asset, although it is intangible, and its value to the firm increases as more people share it. The different forms of knowledge are tacit (knowledge residing in the minds of a firm's employees that has not been documented) or explicit (codified), and involves know-how, craft, and skill as well as how to follow procedures and why things occur. Knowledge is generally believed to have a location, either in the minds of humans or in specific business processes. Knowledge has both a social and individual basis, and is "sticky", and enmeshed within a firm's culture. Finally, knowledge is situational — it is dependent on context, and knowing when to apply a procedure is just as important as knowing the procedure itself.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 11-1: What is the role of knowledge management systems in business?

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27) Which of the following statements about genetic algorithms is not true?

A) Genetic algorithms are based on techniques inspired by evolutionary biology.

B) Genetic algorithms are used to solve problems that are very dynamic and complex, involving hundreds or thousands of variables or formulas.

C) Genetic algorithms are able to evaluate many solution alternatives quickly to find the best one.

D) Genetic algorithms use an iterative process to refine initial solutions so that better ones are more likely to emerge as the best solution.

E) Genetic algorithms discover knowledge by using hardware and software that parallel the processing patterns of the biological or human brain.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 28) Which of the following is an intelligent personal assistant?

A) GE's Predix B) Amazon's Alexa C) Facebook's DeepFace D) IBM's Watson E) WellsFargo's Aiera Answer: B Difficulty: Easy AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 29) Apple's Siri application is an example of which of the following?

A) Neural network B) Augmented reality C) Genetic algorithm D) Intelligent agent E) Robotics Answer: D Difficulty: Easy AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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30) An inference engine is: A) a neural network that can make inferences.

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 an expert system's collection of rules and formulate conclusions.

E) a programming algorithm used to create a virtual world using a deep learning system.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 31) Which of the following is not true about the evolution of AI technologies?

A) There have been many fundamental conceptual breakthroughs in AI during the last decade.

B) Natural language speech recognition errors have dropped from 15 percent to 5 percent.

C) Advances in image and speech recognition have made intelligent personal assistants like Siri and Alexa possible.

D) Image recognition programs have gone from 25 percent error rates down to less than 3 percent.

E) The development of Big Data databases is a major force driving the rapid evolution of AI. Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 32) Which of the following is not a major benefit of expert systems?

A) Improved decisions B) Better quality and service C) Ability to scale to deal with very large data sets D) Reduced errors E) Reduced training time Answer: C Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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33) Which of the following statements about expert systems is not true?

A) Expert systems were the first large-scale applications of AI in business.

B) Expert systems account for an estimated 20 percent of all AI systems today.

C) Expert system development has grown rapidly in the last decade.

D) Expert systems are not useful for dealing with unstructured problems.

E) Expert systems are expensive to build.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 34) An expert system would be an appropriate application for making decisions for all of the following except: A) legal research B) medical diagnostics C) a recommender system D) civil engineering E) personalized learning and responsive testing Answer: C Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 35) Which of the following statements about machine learning is not true?

A) More than 75% of AI development today involves some kind of machine learning.

B) Machine learning is based on a different AI paradigm than expert systems.

C) Machine learning involves finding patterns in large data sets.

D) Genetic algorithms are a form of machine learning.

E) Machine learning is based on computer code that reflects rules underlying an expert's understanding.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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36) Supervised machine learning involves: A) programmers supervising the machine learning program.

B) training a system by providing specific examples of desired inputs and outputs identified by humans in advance.

C) programs that process a development database and report whatever patterns they find.

D) complex computer programs that decide what they want to learn.

E) using very large databases to store common sense knowledge, then searching the database for patterns.

Answer: B Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 37) Unsupervised machine learning involves: A) using very large databases to store common sense knowledge, then searching the database for patterns.

B) using algorithms to simulate the neurons and synapses of human brains.

C) programs that can "teach themselves" without human intervention.

D) using labeled inputs identified by humans to recognize objects.

E) using genetic algorithms to identify patterns in large datasets.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 38) Neural networks: A) are based on the theory of natural selection and mutation.

B) rely on rules similar to an expert system.

C) use Learning Rules to identify the optimal path through the network.

D) have a sense of ethics.

E) function similar to the human brain in recognizing objects.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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39) Which of the following has a hidden layer that processes inputs?

A) Business intelligence system B) Expert system C) Neural network D) Knowledge management system E) Genetic algorithm Answer: C Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 40) Which of the following best describes a difference between neural networks and genetic algorithms?

A) Genetic algorithms are designed to process large amounts of information, while neural networks are designed to process small amounts of information.

B) Genetic algorithms are a type of knowledge discovery, while neural networks are an intelligent technique.

C) Genetic algorithms are used to evaluate alternative solutions to problems, whereas neural networks are used to discover patterns in data.

D) Genetic algorithms are designed to work with small amounts of data, while neural networks can handle large quantities of data.

E) Neural networks are a type of machine learning, whereas genetic algorithms are static programs.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 41) Genetic algorithms: A) are a form of machine learning.

B) represent knowledge as groups of characteristics.

C) consist of many layers of neural networks working in a hierarchical fashion.

D) are based on logic.

E) seek to emulate a human expert's way of solving problems.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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42) 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) deep learning neural networks.

C) expert systems.

D) machine learning systems.

E) genetic algorithms.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 43) All of the following are examples of machine learning except: A) CAD systems B) Netflix's recommender system C) PayPal's fraud detection system D) Schindler Group's maintenance prediction system E) WellsFargo's Aiera system Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 44) Deep learning networks: A) rely on humans to help it identify patterns.

B) use multiple layers of neural networks to detect patterns in input data.

C) rely on experts to tell the system what patterns to expect in the data.

D) require labeled data as input.

E) require explicit programming by humans to identify patterns in unlabeled data.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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45) The seminal research effort often referred to as "The Cat Paper" involved which of the following?

A) Expert system B) Natural language processing C) Genetic algorithms D) Unsupervised learning E) Supervised learning Answer: D Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 46) Which of the following statements about natural language processing (NLP) is not true?

A) NLP is used by Google to return more meaningful search engine results based on the user's search language.

B) NLP is typically based on machine learning techniques.

C) NLP relies on the use of an expert system.

D) NLP can infer customers' specific needs when they call help centers.

E) NLP often uses neural networks.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 47) GumGum's system relies on which of the following?

A) Genetic algorithms B) Expert systems C) Human monitoring D) Intelligent personal agents E) Computer vision system Answer: E Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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48) A chatbot is an example of which of the following?

A) Computer vision system B) Genetic algorithm C) Augmented reality D) Virtual reality system E) Intelligent agent Answer: E Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 49) In an expert system, the set of rules that models human knowledge is called: A) the knowledge base.

B) a deep learning neural network.

C) a genetic algorithm.

D) the Internet of Things (IoT).

E) an inference engine.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 50) A(n) is a type of intelligent technique that finds patterns and relationships in massive data sets too large for a human to analyze.

A) inference engine B) CAD C) expert system D) genetic algorithm E) neural network Answer: E Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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51) Which of the following statements about robotics is not true?

A) Robotics involves the creation and use of machines than can substitute for humans.

B) Robotics cannot substitute entirely for people.

C) Robotics can be used for surgery, bomb deactivation, and other dangerous environments.

D) Robotics does not require programming but instead relies solely on AI. E) Robotics has widespread use in manufacturing.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 52) Some commentators believe which of the following comes closest to the "Grand Vision" of AI? A) Expert systems B) Deep learning networks C) Genetic algorithms D) Intelligent agents E) Robotics Answer: B Difficulty: Challenging AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 53) Which of the following statements about neural networks is not true?

A) Software programs and mathematical models perform the function of biological neurons in a neural network.

B) The strength of the connections between neurons in a neural network cannot be altered.

C) Neural networks are pattern detection programs.

D) Humans can train a neural network by feeding it a set of outcomes they want the system to learn.

E) Facial recognition is an example of a neural network application.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 54) An expert system cannot consider multiple rules at the same time.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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55) 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 Difficulty: Easy AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 56) Expert systems use real-time data to guide their decisions.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 57) Expert systems work by applying a set of decision cases against a knowledge base, both of which are extracted from human experts.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 58) Neural networks are not well-suited for diagnostic systems in medicine.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 59) Deep learning neural networks are used almost exclusively for pattern detection on unlabeled data.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 60) Some intelligent agent systems are capable of learning from experience and adjusting their behavior.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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61) Neural network applications explain why they arrive at a particular solution.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 62) AI applications are used by search engines and social networks to target ads.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 63) Facebook's DeepFace is an example of a computer vision system.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 64) Babies have a huge computational advantage over even the biggest machine language research systems.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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65) What is the difference between a neural network and a genetic algorithm? 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. 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 answers as to which would be most useful to an organization of astronomers analyzing gamma ray emissions reach the Earth 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 66) What are the differences between human intelligence and artificial intelligence?

Answer: Human intelligence relies on an estimated 86 billion neurons (brain cells), each with thousands of connections to other neurons (synapses), and over 100 trillion total connections in its network (the brain). Modern human beings have been "programmed" (by nature) for an estimated 300,000 years, and their predecessors for 2.5 million years. In contrast, AI uses machine learning techniques (including statistics), and very large arrays of computers, to identify patterns in very large databases. AI systems lack the flexibility, breadth, and generality of human intelligence. Today's AI techniques are applicable today in a very limited number of situations where there are very large databases and computing facilities, most desired outcomes are already defined by humans, and the output is binary (0,1), yes/no, or classifying photos as either cats, or other. Alan Turing defined an artificially intelligent computer program as one that a human could have a conversation with and not be able to tell it was a computer. Today's AI systems do not yet meet this criterion, because we still cannot have a genuine conversation with a computer AI system because it has no genuine understanding of the world, no common sense, and does not truly understand humans. Nevertheless, AI systems can be enormously helpful to humans and business firms.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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67) What is a chatbot and how are they used in business?

Answer: Chatbots (chatterbots) are software agents designed to simulate a conversation with one or more human users via textual or auditory methods. They try to understand what you type or say and respond by answering questions or executing tasks. Chatbots are typically used in systems for customer service or information acquisition. For example, UK package delivery firm Hermes created a chatbot called Holly to help its call center handle customer service inquiries.

The chatbot helps customers track shipments, change delivery orders, update account preferences, and handle other essential tasks quickly. Facebook has integrated chatbots into its Messenger messaging app, so that any outside company with a Facebook brand page can interact with Facebook users through the chat program. Today's chatbots perform very basic functions.

As chatbots become more technologically advanced, people will increasingly use these "conversational agents" for interacting with IT systems.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 68) How do machine learning systems like neural networks actually "learn"?

Answer: Machine learning systems based on neural networks do not learn like human beings learn. Humans use billions of neurons and connections called synapses to sense, learn, and store information. Instead, machine learning systems like neural networks are pattern-detection software-based programs that use thousands of connected nodes to discern patterns in very large datasets by sifting through the data, and ultimately finding pathways through the network of thousands of neurons. There may be millions of paths through this network. The question is: which of these paths produces a satisfactory result, e.g. identify cancer tumors. Once this path, or collection of paths, is discovered, after thousands or millions of runs through the data, it is said to have "learned" how to identify tumors. In actual practice, for some tumors, machine learning can produce results nearly as good, or even better, than humans.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI?

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69) Describe some of the ways we use machine learning technologies every day.

Answer: Machine learning is omnipresent in modern technology. More than 75 percent of AI development today involves some kind of machine learning accomplished by neural networks, deep learning networks, and genetic algorithms. For instance, PayPal uses machine learning algorithms to identify patterns of fraud. Facebook uses machine learning technologies to deliver targeted advertising. All of the very large Internet consumer firms, including Amazon, Alphabet's Google, Microsoft, Alibaba, Tencent, Netflix, and Baidu, use similar machine learning algorithms Netflix's recommendations for TV and movies to watch are generated using machine learning based on your prior purchases and online behavior. Natural language processing algorithms are typically based on machine learning, including deep learning.

Computer vision systems, robotics, and some intelligent agents also use machine learning.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 11-2: What are artificial intelligence (AI) and machine learning? How do businesses use AI? 70) knowledge exists in formal documents, as well as in formal rules that organizations derive by observing experts and their decision-making behaviors.

A) Unstructured B) Tacit C) Management D) Explicit E) Structured Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

71) Which of the following types of system enables organizations to digitize, index, and tag structured and unstructured knowledge and documents according to a coherent framework?

A) Wikis B) CAD C) ECM D) LMS E) VR Answer: C Difficulty: Easy AACSB: Information technology LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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72) All of the following are typical components or capabilities of an ECM system except: A) knowledge portals.

B) distribution tools.

C) tagging tools.

D) interfacing with corporate databases.

E) artificial intelligence tools.

Answer: E Difficulty: Challenging AACSB: Analytical thinking LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

73) Which of the following would not be considered semistructured knowledge?

A) Corporate annual report B) Voice mail C) Videos D) Email E) Bulletin board posting Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

74) Which of the following statements about an ECM system is not true?

A) Each knowledge object in an ECM system needs to be tagged.

B) ECM systems only enable users to access internal sources of information.

C) Oracle is a leading vendor of ECM software.

D) ECM systems enable a single point of access to information resources.

E) ECM systems can act as a corporate repository of best practices.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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75) You are advising a video production company on the best type of knowledge management system to help them archive digital video and sound clips. Which of the following will best suit their needs?

A) MOOC B) Digital asset management system C) CAD system D) Virtual reality system E) LMS Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

76) A MOOC is: A) a type of online course.

B) an intelligent technique.

C) a VR system.

D) a machine learning system.

E) a type of content management system.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

77) Which of the following provides tools for the management, delivery, tracking, and assessment of various types of employee learning?

A) Employee asset management systems B) VR systems C) CAD systems D) LMS E) ECM systems Answer: D Difficulty: Moderate AACSB: Information technology LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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78) A key problem in managing knowledge is the creation of a(n) to organize the information into meaningful categories.

A) intelligent agent model B) COP C) neural network D) MOOC E) taxonomy Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

79) Coca-Cola uses a in order to classify, store and distribute all the images of the brand.

A) digital asset management system B) virtual reality system C) learning management system D) neural network E) knowledge base Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

80) MOOCs are designed to serve a limited number of participants.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

81) According to experts, at least 80 percent of an organization's business content is semistructured or unstructured.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

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82) Semistructured information is all the knowledge in a firm that resides in the heads of experienced employees.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

83) How can knowledge be gathered from the personal and undocumented expertise of professionals within a firm?

Answer: Some of the knowledge businesses need is not in the form of a digital document but instead resides in the personal and undocumented expertise of professionals within the firm.

Contemporary enterprise content management systems, along with the systems for collaboration and social business have capabilities for locating experts and tapping their knowledge. These include online directories of corporate experts and their profiles with details about their job experience, projects, publications, and educational degrees, and repositories of expert-generated content. Specialized search tools make it easier for employees to find the appropriate expert in a company.

Difficulty: Challenging AACSB: Application of knowledge; Written and oral communication LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

84) 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 and semistructured documents, such as plans, blueprints, email; collaboration tools, the ability to reference up-todate local or national building codes, a system for storing case studies, best practices, and corporate standards. Also of importance is a KWS or CAD to aid in engineering and design.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 11-3: What types of systems are used for enterprise-wide knowledge management and how do they provide value for businesses?

85) Which of the following statements about 3-D printing is not true?

A) It is able to create solid objects.

B) It is also called additive manufacturing.

C) It often results in wasted materials.

D) It creates objects layer by layer.

E) It uses specifications in a digital file.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

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86) All of the following are considered to be knowledge workers except: A) designers.

B) engineers.

C) architects.

D) executives.

E) scientists.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

87) CAD workstations: A) enables design specifications for tooling and manufacturing processes to be easily tested and changed.

B) are an example of an expert system.

C) create computer-generated simulations that are so close to reality that users almost believe they are participating in a real-world situation.

D) are high-end PCs used in the financial sector to analyze trading situations instantaneously and facilitate portfolio management.

E) provide users with additional information to enhance their perception of reality.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

88) Which of the following would not be classified as a KWS? A) CAD system B) 3-D printing system C) AR application D) Expert system E) VR system Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

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89) VR systems: A) consolidate mixed-media training, automates the selection and administration of courses, assembles and delivers learning content, and measures learning effectiveness.

B) are a new way to design and deliver online learning where learners can collaborate with each other, watch short videos, and participate in threaded discussion groups.

C) let workers model an object on a computer and print it out with plastic, metal, or composite materials.

D) sometimes require the user to don special clothing, headgear, or equipment.

E) enable acquiring, storing, and disseminating knowledge documents in a virtual world.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

90) Which of the following seeks to enhance human perception by combining a live direct view of the physical world with computer-generated images?

A) Augmented reality B) Expert system C) CAD system D) KWS E) Machine learning system Answer: A Difficulty: Moderate AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

91) Which of the following statements about augmented reality is not true?

A) Augmented reality makes the surrounding real world more interactive and meaningful.

B) Image-guided surgery, where data acquired from computerized tomography (CT) and magnetic resonance imaging (MRI) scans or from ultrasound imaging are superimposed on the patient in the operating room, is an example of augmented reality.

C) Augmented reality is a method of organizing expert system knowledge into chunks.

D) Augmented reality enhances visualization by overlaying digital data and images onto a physical real-world environment.

E) Augmented reality is used in robotics.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

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92) 3-D printers can produce fully functioning components, such as working batteries and LEDs. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

93) CAD and virtual reality are both types of KWS. Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

94) 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 Difficulty: Easy AACSB: Application of knowledge LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

95) Knowledge work systems require strong links to external knowledge bases.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

96) Today's 3-D printers can create objects out of human cartilage.

Answer: TRUE Difficulty: Challenging AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

97) The yellow first-down markers shown on televised football games are examples of AR. Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

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98) Describe the typical characteristics of knowledge workers and the roles they play within a firm. 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: Knowledge workers include researchers, designers, architects, scientists, and engineers who primarily create knowledge and information for the organization. Knowledge workers usually have high levels of education and memberships in professional organizations and are often asked to exercise independent judgment as a routine aspect of their work. For example, knowledge workers create new products or find ways of improving existing ones.

Student answers as to why knowledge workers are so important to the digital firm will vary. An example answer is: Without knowledge workers, 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

99) What are three important qualities or capabilities of a KWS? Answer: A KWS must give knowledge workers the specialized tools they need, such as powerful graphics, analytical tools, and communications and document-management tools.

These systems require sufficient computing power to handle the sophisticated graphics or complex calculations necessary for such knowledge workers as scientific researchers, engineers, and product designers. Because knowledge workers need knowledge from the external world, these systems also must give the worker quick and easy access to external databases. A KWS must also 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. A KWS must be carefully designed to optimize the performance of the specific tasks of the pertinent knowledge worker.

Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

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100) Discuss the concept of virtual reality, especially with regard to its applications in the business arena.

Answer: Virtual reality (VR) systems have visualization, rendering, and simulation capabilities that go far beyond those of conventional CAD systems. VR systems use interactive graphics software and hardware to create computer-generated simulations that are so close to reality that users almost believe they are participating in a real-world situation. The original applications were in gaming, but new uses in education, science, and business are being developed and have great promise. For example, Volkswagen Group has been experimenting with virtual reality to speed up vehicle design and development and to identify potentially costly design problems earlier in the development cycle. Volkswagen has been able to cut out costly physical prototypes and replace them with immersive, 360-degree views of digitally constructed interior and exterior components of a vehicle using virtual reality HTC Vive headsets. Virtual components of a car, including interior and exterior parts such as buttons, lights, or consoles, can be switched out and replaced easily with a few lines of software code during the design process.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 11-4: What are the major types of knowledge work systems, and how do they provide value for firms?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 12 Enhancing Decision Making 1) Which of the following statements best describes the business value of improved decision making at all levels of a firm?

A) Improved decision making creates better products.

B) Improved decision making results in a large monetary value for the firm as numerous small daily decisions affecting efficiency, production, costs, and more add up to large annual values.

C) Improved decision making enables senior executives to more accurately foresee future financial trends.

D) Improved decision making strengthens customer and supplier intimacy, which reduces costs.

E) Improved decision making creates a better organizational culture.

Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

2) When there is no well-understood or agreed-on procedure for making a decision, it is said to be: A) undocumented.

B) unstructured.

C) documented.

D) semistructured.

E) random.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

3) If you can follow a definite procedure to make a business decision, you are making a(n) decision.

A) ad-hoc B) procedural C) unstructured D) semistructured E) structured Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

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4) Which type of decision is determining vacation eligibility for an employee?

A) Semistructured B) Procedural C) Structured D) Unstructured E) Ad hoc Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

5) Which type of decision is deciding whether to introduce a new product line?

A) Structured B) Unstructured C) Recurring D) Nonrecurring E) Predictive Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

6) Establishing a firm's long-term goals is an example of a(n) decision.

A) structured B) analytic C) semistructured D) undocumented E) unstructured Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

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7) The decisions involved in creating and producing a corporate intranet can be classified as decisions.

A) semistructured B) procedural C) analytic D) structured E) unstructured Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

8) Checking store inventory is an example of a(n) decision.

A) procedural B) structured C) ad hoc D) unstructured E) semistructured Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

9) Which of the following typically makes the unstructured decisions for a firm?

A) Senior management B) Middle management C) Operational management D) Individual employees E) Teams Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

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10) The phase of decision making involves identifying and exploring various solutions to a problem.

A) choice B) design C) implementation D) analysis E) intelligence Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

11) If an inventory manager is required to make a daily decision about parts inventory levels, and the estimated value to the firm of a single improved decision by that manager is $2,500, what is the annual business value of that enhanced decision?

A) $2,500 B) $30,000 C) $130,000 D) $300,000 E) $912,500 Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

12) Which of the following is not one of Simon's four stages of decision making?

A) Implementation B) Intelligence C) Prediction D) Choice E) Design Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

13) Some decision scenarios made by middle managers may have unstructured components.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

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14) A structured decision is repetitive and routine.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

15) Unstructured decision making is most prevalent at lower organizational levels.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

16) The design phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

17) The choice phase of Simon's decision-making model includes choosing among solution alternatives.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

18) The first stage in Simon's decision-making process model is the intelligence stage.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

19) An unstructured decision is novel and important and requires the decision maker to provide judgment, evaluation, and insight.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

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20) The third stage in Simon's description of decision-making is implementation.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

21) Operational management face primarily semistructured decisions.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

22) A semistructured decision is one in which only part of the problem has a clear-cut answer provided by an accepted procedure.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

23) In your position of office manager at an accounting firm, you are in charge of hiring temporary 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

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24) You are the CIO at an insurance firm and a manager has proposed implementing expensive new project management software that would help increase the efficiency of the IT staff. The idea of improved efficiency sounds good, but is there any way you can evaluate her decision before purchasing the software? Be specific.

Answer: Student answers will vary but should utilize the steps of the decision-making process and/or the qualities of decisions as a means of evaluation. A sample answer is: Yes, you can ask the manager to describe her decision-making process and evaluate the decision according to the steps she has taken. For example, how was she able to identify efficiency as a problem that needed solving? Is it the most pressing problem? What were the various solutions considered to the problem and what criteria did she choose to evaluate them? You can also evaluate the manager's decision according to the various qualities of decision making: Accuracy (does the decision reflects reality?), comprehensiveness: (does the decision reflects a full consideration of the facts and circumstances?), fairness (does the decision faithfully reflects the concerns and interests of affected parties?), speed (is the decision making efficient with respect to time and other resources?), coherence (does the decision reflects a rational process that can be explained to others and made understandable?), and due process (is the decision the result of a known process and can it be appealed to a higher authority?).

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-1: What are the different types of decisions, and how does the decision-making process work?

25) 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) Most managerial activities take at least one hour to perform.

C) Managers prefer current, specific, ad hoc information.

D) Managers prefer oral forms of communication.

E) Managers give high priority to maintaining a diverse web of contacts.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

26) The role of spokesperson falls into which of Mintzberg's managerial classifications?

A) Decisional B) Informational C) Interpersonal D) Symbolic E) Organizational Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

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27) Mintzberg outlined three categories of managerial roles: A) interpersonal, informational, and decisional.

B) control, leadership, oversight.

C) operational, management, and executive.

D) symbolic, organizational, and technical.

E) operational management, middle management, senior management.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

28) The role of negotiator falls into which of Mintzberg's managerial classifications?

A) Decisional B) Informational C) Interpersonal D) Symbolic E) Organizational Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

29) According to Mintzberg, managers in their informational role act as: A) figureheads for the organization.

B) leaders.

C) nerve centers of the organization.

D) negotiators.

E) liaisons.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

30) Which of the following systems support a manager's role as figurehead of an organization?

A) DSS B) Telepresence systems C) Email D) MIS E) ESS Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 12-2: How do information systems support the activities of managers and management decision making?

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31) All of the following managerial roles can be supported by information systems except: A) liaison.

B) resource allocator.

C) nerve center.

D) disseminator.

E) disturbance handler.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

32) When managers represent their company in the outside world and perform symbolic duties, they are acting in their: A) decisional role.

B) managerial role.

C) informational role.

D) interpersonal role.

E) leadership role.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

33) As discussed in the chapter text, the three main reasons that investments in information technology do not always produce positive results are: A) management support, technical logistics, and user compliance.

B) organization, environment, culture.

C) information quality, information integrity, and information accuracy.

D) information quality, organizational culture, and management filters.

E) organization, culture, and technology.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 12-2: How do information systems support the activities of managers and management decision making?

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34) The concept of management involves situations in which managers act on preconceived notions that reject information that does not conform to their prior conceptions.

A) filters B) backgrounds C) inertia D) inefficiency E) politics Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

35) Which quality dimension of information is concerned that all the necessary data needed to make a decision is present?

A) Timeliness B) Consistency C) Completeness D) Accessibility E) Validity Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

36) The dimension of describes whether data elements are consistently defined.

A) completeness B) accuracy C) validity D) consistency E) integrity Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

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37) Google's search engine is an example of which of the following types of decision?

A) Semi-structured B) Financial C) Analytic D) High-velocity E) Highly structured Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

38) Which of the following describes how the Simon framework of decision-making works in high-velocity decision environments?

A) Only the initial step is performed by the software; the final three steps are handled by humans.

B) The first two steps of Simon's framework are eliminated and the final two steps are handled by software algorithms.

C) The first three steps of the process are handled by software algorithms and the final step is handled by experienced managers.

D) All four steps are performed by humans with the support of high-speed, high-volume DSS and ESS. E) All four steps of the process are handled by software algorithms; humans are eliminated from the decisions because they are too slow.

Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 12-2: How do information systems support the activities of managers and management decision making?

39) A drawback to high-velocity, automated decision-making systems is that: A) they are unable to handle high volumes of decisions.

B) they are unable to handle structured decisions.

C) they only can be applied to semi-structured decisions.

D) great care needs to be taken to ensure the proper operation of the systems, since they are making decisions faster than managers can monitor or control.

E) they are only useful in the financial services industries.

Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 12-2: How do information systems support the activities of managers and management decision making?

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40) Behavioral models of management see managers as being than does the classical model.

A) more systematic B) more informal C) more reflective D) more well organized E) less reactive Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

41) Which of the following is not one of the five classical functions of managers?

A) Creating B) Deciding C) Planning D) Organizing E) Controlling Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

42) The dimension of in information quality describes whether the structure of data is consistent.

A) integrity B) accuracy C) timeliness D) completeness E) consistency Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

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43) Which of the following information systems supports a manager's role as a resource allocator?

A) MIS B) DSS C) ESS D) Social network E) Telepresence systems Answer: B Difficulty: Moderate AACSB: Information technology LO: 12-2: How do information systems support the activities of managers and management decision making?

44) The classical model of management describes what managers do when they plan, decide things, and control the work of others.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

45) Experts from a variety of fields have found that managers are poor at assessing risk.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

46) Studies have found that firms systematically blame poor performance on the external business environment.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-2: How do information systems support the activities of managers and management decision making?

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47) What are managerial roles and how did Mintzberg categorize them?

Answer: Managerial roles are expectations of the activities that managers should perform. The three main categories of managerial roles are interpersonal, informational, and decisional.

Interpersonal roles involve representing companies and performing symbolic duties as a figurehead, acting as a leader by attempting to motivate, counsel, and support subordinates, and also acting as liaisons between other levels of the firm. Informational roles require the managers to act as a nerve center for their organizations, to distribute information to those who need to have it, and to act as a spokesperson for the organization. Decisional roles require managers to act as entrepreneurs by initiating new activities, to handle disturbances within the organization, allocate resources, and negotiate conflicts.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12-2: How do information systems support the activities of managers and management decision making?

48) Describe high-velocity automated decision making and its dangers.

Answer: High-velocity automated decision making involve a class of decisions that are highly structured and performed in a manner of milliseconds or even nanoseconds, like a Google search or an automated stock trade. The danger of these types of decisions is that they are made faster than a manager can supervise or control, so mistakes can be disastrous. Humans who write the software enabling these types of decisions must be careful to ensure that the systems operate properly to prevent significant harm Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-2: How do information systems support the activities of managers and management decision making?

49) 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 decision is based on. For example: One way to evaluate 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? You could evaluate the data informing the decision along the information quality dimensions: accuracy, integrity, consistency, completeness, validity, timeliness, and accessibility.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12-2: How do information systems support the activities of managers and management decision making?

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50) 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, a high-quality decision requires high-quality information. If the data input into the system does not have a high degree of accuracy, lacks data integrity, is not consistent, is incomplete, is not valid, is not available when needed, and/or is not accessible, then the quality of the output of the system will be impacted and will degrade the quality of decisions made based on that output. 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 it in order to maintain the status quo in roles and responsibilities.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12-2: How do information systems support the activities of managers and management decision making?

51) Which of the following BI tools or abilities has been driving the movement toward "smart cities"?

A) OLAP B) Chi-square analysis C) Predictive analytics D) Data mining E) Big data analytics Answer: E Difficulty: Moderate AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

52) Which of the following statements best describes the term business intelligence?

A) Software developed exclusively for business management B) The tools and techniques used to analyze and understand business data C) The infrastructure for warehousing, integrating, reporting, and analyzing business data D) Information systems involved in business decision making E) Enterprise systems used to make business decisions Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

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53) Decisions regarding managing and monitoring day-to-day business activities are referred to as intelligence.

A) business B) analytical C) operational D) transactional E) production Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

54) Which of the following companies is not identified in the text as one of the leading producers of business intelligence and analytics products?

A) Google B) Microsoft C) SAP D) IBM E) SAS Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

55) 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 culture C) User interface D) Data from the business environment E) Delivery platform Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

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56) Which of the following is not one of the six main analytic functionalities of BI systems for helping decision makers understand information and take action?

A) Production reports B) Parameterized reports C) Business case archives D) Forecasts, scenarios, and models E) Drill down Answer: C Difficulty: Moderate AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

57) are visual tools for presenting performance data in a BI system.

A) Dashboards and scorecards B) Parameterized reports C) Reports and the drill-down feature D) Scenarios and models E) Ad hoc report creation Answer: A Difficulty: Moderate AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

58) Which of the following is not a part of business intelligence infrastructure?

A) Databases B) Balanced scorecards C) Data warehouses D) Data marts E) Analytic platforms Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

59) A(n) report is produced when a user enters various values in a pivot table to filter data.

A) drill-down B) SQL C) ad hoc D) production E) parameterized Answer: E Difficulty: Moderate AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

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60) A(n) is a BI feature that presents performance data defined by users.

A) ad hoc query B) parameterized report C) interface D) portal E) dashboard Answer: E Difficulty: Moderate AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

61) BI that is designed to determine the most likely effects of changes in the business environment is called: A) statistical modeling.

B) environmental analytics.

C) predictive analytics.

D) big data analytics.

E) parameterized reports.

Answer: C Difficulty: Easy AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

62) As discussed in the chapter text, Slack Technologies uses which of the following to identify customers who are most likely to uses its products frequently and upgrade to its paid services?

A) Predictive analytics B) Big data analytics C) Operational analytics D) Predictive maintenance E) Location analytics Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

63) Which type of information system uses data visualization technology to analyze and display data for planning and decision making in the form of digitized maps?

A) GIS B) DSS C) Location analytics D) Executive support systems E) ESS Answer: A Difficulty: Easy AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

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64) Predictive analytics is used for all of the following except: A) anticipating customer response to price changes.

B) identifying the most profitable customers.

C) performing a bills of material analysis.

D) establishing consumer credit scores.

E) forecasting driver safety.

Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 12-3: How do business intelligence and business analytics support decision making?

65) Which of the following is not an example of a BI predefined production report?

A) Workforce demographics B) Order cycle time C) What-if scenario analysis D) Churn rate E) Direct and indirect spending Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 12-3: How do business intelligence and business analytics support decision making?

66) Location analytics can be used for all of the following except: A) helping a marketer to determine which people to target with mobile ads.

B) quantifying the impact of mobile ads on in-store visits.

C) package tracking and delivery routing systems.

D) determining where to open a new store.

E) determining call center resolution rates.

Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 12-3: How do business intelligence and business analytics support decision making?

67) Business intelligence and analytics can deliver nearly real-time information to decision makers.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

68) GIS software ties location data about the distribution of people or other resources to points, lines, and areas on a map.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

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69) Big data is used to analyze consumer preferences for both in-store and online purchases.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

70) Data visualization technologies are used to help human users see patterns and relationships in large amounts of data.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 12-3: How do business intelligence and business analytics support decision making?

71) GIS are useful for businesses, but not as much for state and local governments.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

72) The data-driven farming systems described in the chapter-opening case are an example of operational intelligence.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-3: How do business intelligence and business analytics support decision making?

73) You are an analyst for a firm that imports and distributes specialty oils and vinegars. The firm is considering the development of a business intelligence capability and has asked you to identify the key elements that will be required.

Answer: There are six elements of a business intelligence environment, all of which are needed to build a BI capability. These are 1) data from the business environment; 2) business intelligence infrastructure; such as a database system, data warehouse, and data marts; 3) a business analytics toolset: a set of software tools used to analyze the data; 4) managerial users and methods: a group of trained analytic managers with appropriate methods and skills for analyzing data; 5) a delivery platform, such as MSS, DSS, and ESS; and 6) a user interface, including social media, so that the data and results can be displayed in a convenient, and powerful, manner.

Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

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74) You are evaluating BI software from a variety of vendors. Use your understanding of the importance of the six elements of the BI environment to formulate a question to ask the vendor with respect to each element in order to determine how their software will interplay with your needs.

Answer: Student answers will vary. A sample answer is as follows: 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.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

75) What is a GIS? Describe at least three ways in which a GIS could be used.

Answer: Geographic information systems (GIS) use data visualization technology to analyze and display data for planning and decision making in the form of digitized maps. GIS software ties location data about the distribution of people or other resources to points, lines, and areas on a map multidimensional data analysis, which is a key business intelligence technology 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. 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 a new business location. 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. GIS might be used to help state and local governments calculate response times to natural disasters and other emergencies, or to help police forces pinpoint locations with the highest incidence of crime.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

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76) Why are managerial users and methods considered to be an important part of the BI environment?

Answer: Managerial users and methods are an important part because the hardware and software of business intelligence are only tools — they are only as useful or intelligent as their users. The managers using the BI tools will decide how important or unimportant various business goals are, choose what analytic tools are used, and determine whether and how to measure progress towards those goals, and how they evaluate the tools themselves.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

77) You are a city transportation planner and are interested in improving the city's bus service.

What types of business intelligence analytic tools might help you do this, and how would you use them?

Answer: To help plan an efficient bus system you could use some kind of decision support system (DSS). Ideally, you will want to use predictive analytics to see how potential changes in the service would affect various elements such as riders and speed. You could use big data predictive modeling and location analytics to gain insight from existing service and routes and prioritize service. You could also use a geographic information system (GIS) to help visualize the problem and potential solutions.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

78) How is big data being used in predictive analytics?

Answer: Predictive analytics are starting to use big data from both private and public sectors, including data from social media, customer transactions, and output from sensors and machines.

In e-commerce, many online retailers have capabilities for making personalized online product recommendations to their website visitors to help stimulate purchases and guide their decisions about what merchandise to stock. However, most of these product recommendations have been based on the behaviors of similar groups of customers, such as those with incomes under $50,000 or whose ages are between 18 and 25 years. Now some retailers are starting to analyze the tremendous quantities of online and in-store customer data they collect along with social media data to make these recommendations more individualized. These efforts are translating into higher customer spending and customer retention rates.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

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79) What is behind the movement towards "smart cities"?

Answer: "Smart cities" make use of big data analytics and digital technology to make better decisions about running cities. Most cities have stockpiles of tax records, crime data, health stats, educational records, and much more. Until now, there's been no good way to synthesize all of that raw data into actionable information. Using big data analytics and predictive modeling, cities can make better decisions on transportation operation, public safety, health care, and utility management, and to determine the impacts of changing one service on the rest of their services, enabling holistic problem solving that could only be dreamed of a generation ago.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-3: How do business intelligence and business analytics support decision making?

80) 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 semi-structured problems appropriate for middle management decision making.

D) assumptions, responses to ad-hoc queries, and graphic representations of existing data.

E) scorecards of overall firm performance along predefined key indicators.

Answer: B Difficulty: Easy AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

81) 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) BPM. B) MIS. C) OLAP. D) sensitivity analysis.

E) balanced scorecard.

Answer: B Difficulty: Easy AACSB: Analytical thinking LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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82) A pivot table is a(n): A) spreadsheet tool that displays two or more dimensions of data in a convenient format.

B) type of relational database.

C) chart tool that can rotate columnar data quickly and visually.

D) tool for performing sensitivity analysis.

E) integral data visualization tool used in digital dashboards and scorecards.

Answer: A Difficulty: Easy AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

83) An information system that combines data from internal MIS 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) BPM. D) TPS E) GIS. Answer: B Difficulty: Easy AACSB: Analytical thinking LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

84) The leading methodology for understanding the really important information needed by a firm's executives is called the method.

A) digital dashboard B) balanced scorecard C) KPI D) data visualization E) predictive analytics Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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85) Which of the following type of system would be used to present senior marketing executives with high-level information about customer retention, satisfaction, and quality performance?

A) High velocity automated decision-making system B) MIS C) DSS D) TPS E) ESS Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

86) Measures defined by management and used to internally evaluate the success of a firm's financial, business process, customer, and learning and growth are called: A) benchmarks.

B) KPIs. C) the balanced scorecard method.

D) BPM. E) parameters.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

87) Which of the following is a management methodology that attempts to systematically translate a firm's strategy into generate operational targets?

A) Benchmarks B) Sensitivity analysis C) Balanced scorecard D) BPM E) Parameterized reporting Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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88) Which of the following is not a true statement about ESS? A) They support the structured decision making of senior executives.

B) They have significant drill-down capabilities.

C) They incorporate data from a firm's existing enterprise applications.

D) They can provide access to external data.

E) They require both a methodology for understanding performance information and a system capable of delivering that information.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

89) Which of the following statements about DSS is not true?

A) They rely more heavily on modeling than MIS. B) They are BI delivery platforms for casual users.

C) They can support semistructured decision making D) They can be used to perform a sensitivity analysis.

E) They can be used to test specific hypotheses.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

90) Resource efficiency is a KPI for which of the following dimensions?

A) Financial B) Business processes C) Learning D) Growth E) Customers Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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91) A well-designed ESS helps senior executives do all of the following except: A) monitor organizational performance.

B) track the activity of competitors.

C) recognize changing market conditions.

D) identify problems and opportunities.

E) make high-velocity automated decisions.

Answer: E Difficulty: Moderate AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

92) More than 80 percent of the audience for BI consists of power users.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

93) ESS typically produce fixed, regularly scheduled reports based on data extracted and summarized from the firm's underlying transaction processing systems.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

94) BPM uses ideas similar to the balanced scorecard framework with a stronger emphasis on strategy.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

95) What-if analysis works forward from known or assumed conditions.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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96) Sensitivity analysis predicts outcomes from constant inputs.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

97) KPIs are used both in the balanced scorecard framework and BPM. Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

98) Describe MIS and DSS and differentiate between them.

Answer: MIS provide operational and middle management with information on the firm's performance to help managers monitor and control the performance of key aspects of a business.

MIS reports typically are based on routine flows of data and are used to support structured decision making. They typically produce fixed, regularly scheduled reports based on data extracted and summarized from the organization's underlying transaction processing systems.

Increasingly, middle managers receive these reports online and are able to interactively query the data to find out why events are happening. Managers at this level often turn to exception reports, which highlight only exceptional conditions, such as when the sales quotas for a specific territory fall below an anticipated level or employees have exceeded their spending limits in a dental care plan. DSS provide new sets of capabilities for nonroutine decisions and user control. DSS rely more heavily on modeling than MIS, using mathematical or analytical models to perform what-if or other kinds of analysis. They emphasize change, flexibility, and rapid response to semistructured and unstructured problems.

Difficulty: Challenging AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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99) 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. Once a scorecard is developed by consultants and senior executives, the next step is automating a flow of information to executives and other managers for each of the key performance indicators. Once these systems are implemented, they are often referred to as ESS. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

100) Not all business intelligence users are managers interested in forecasting sales figures for the next quarter. What different types of users are there for a business's intelligence systems?

Answer: Business intelligence users include everyone from operational employees, customers, and suppliers, through managers, knowledge workers, and senior executives. These users can be ordinary or casual users, who rely on the pre-packaged reports given by the system, or they can be super users, who create custom reports and use the more advanced features of the system for custom analyses. Super users can occur at any level of the organization. An operational level super user is likely to be involved in IT development, while a managerial level super user is more likely to be a business analyst.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-4: How do different decision-making constituencies in an organization use business intelligence?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 13 Building Information Systems 1) The four kinds of structural organizational change enabled by IT, in order from least to most risky, are: A) rationalization, automation, reengineering, and redesign.

B) rationalization, automation, reengineering, and paradigm shift.

C) automation, rationalization, redesign, and paradigm shift.

D) automation, redesign, restructuring, and paradigm shift.

E) paradigm shift, reengineering, rationalization, and automation.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

2) In automation: A) more manual steps are required.

B) business processes are reorganized to cut waste and eliminate repetitive, paper-intensive tasks.

C) new products are explored first.

D) employees are enabled to perform their tasks more efficiently.

E) business processes are added.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

3) Which of the following offers the highest reward but also the most substantial chance of failure?

A) Business process redesign B) TQM C) Automation D) Six Sigma E) Rationalization Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

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4) A bank has reworked its mortgage application process so that several steps are handled by computer software, and some steps are combined to reduce bottlenecks in processing. The goal is to gradually improve its efficiency over time. This is an example of: A) automation.

B) business process redesign.

C) paradigm shift.

D) TQM. E) Six Sigma.

Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 13-1: How does building new systems produce organizational change?

5) An upscale restaurant supply business is implementing an information system that will enable it to add same-day home delivery of groceries to consumers. This is an example of: A) automation.

B) rationalization of procedures.

C) paradigm shift.

D) business process redesign.

E) TQM. Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 13-1: How does building new systems produce organizational change?

6) The idea that the achievement of quality control is an end in itself describes a main concept of: A) BPM. B) business process redesign.

C) Six Sigma.

D) TQM. E) automation.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

7) provide(s) a methodology and tools for dealing with the organization's ongoing need to revise and optimize its numerous business processes.

A) Paradigm shifts B) BPM C) Six Sigma D) TQM E) Automation Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

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8) In order, what are the first three steps in BPM? A) 1. identifying processes for change, 2. analyzing existing processes, 3. designing the new process.

B) 1. analyzing existing processes, 2. identifying processes for change, 3. designing the new process.

C) 1. identifying processes for change, 2. designing the new process, 3. implementing the new process.

D) 1. analyzing processes to change, 2. designing the new process, 3. measuring the optimized process.

E) 1. designing new processes, 2. analyzing existing processes, 3. identifying processes for change.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

9) What is the most significant barrier to successful business process change?

A) Ineffective project management B) Usability of implemented solution C) Selecting the correct process to change D) Organizational culture E) Poor choice of technology Answer: D Difficulty: Easy AACSB: Analytical thinking LO: 13-1: How does building new systems produce organizational change?

10) BPM tools help businesses do all of the following except: A) integrate existing systems to support business processes improvements.

B) capture and enforce business rules.

C) identify and document business processes.

D) complete a systems analysis study.

E) create models of improved processes.

Answer: D Difficulty: Easy AACSB: Information technology LO: 13-1: How does building new systems produce organizational change?

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11) As discussed in the chapter case, Tommy Hilfiger used which of the following to transform its wholesale sales process?

A) Automation B) TQM C) Six Sigma D) Business process redesign E) Paradigm shift Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 13-1: How does building new systems produce organizational change?

12) A(n) is an organizational change that involves rethinking the nature of the business and the nature of the organization itself.

A) automation program B) rationalization program C) systems analysis D) paradigm shift E) business process redesign program Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

13) Automation is the most common form of IT-enabled organizational change.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-1: How does building new systems produce organizational change?

14) Business process redesign involves a radical rethinking of the business model.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

15) Process improvement requires continual change.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

16) Six Sigma describes the measurement of quality as 60 defects per million.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 13-1: How does building new systems produce organizational change?

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17) Briefly 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.

Difficulty: Challenging AACSB: Analytical thinking LO: 13-1: How does building new systems produce organizational change?

18) 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13-1: How does building new systems produce organizational change?

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19) Which conversion process introduces the system first to a limited portion of the organization?

A) Pilot study strategy B) Phased approach strategy C) Limited cutover strategy D) Parallel strategy E) Audit strategy Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 13-2: What are the core activities in the systems development process?

20) Which process develops a detailed description of the functions that a new information system must perform?

A) Feasibility study B) Requirements analysis C) Systems design D) Test plan development E) Management plan Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

21) Systems design: A) determines whether a solution is feasible from a financial and organizational standpoint.

B) shows how the new system will fulfill the information requirements.

C) identifies the information requirements for a system.

D) is concerned with the logical view of the system solution.

E) translates system specifications into software program code.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

22) Which of the following steps in the system development process involves the process of changing from an old system to a new system?

A) Programming B) Testing C) Maintenance D) Conversion E) Production Answer: D Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

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23) 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) involves testing the entire system with real-world data.

D) provides the final certification that the system is ready to be used in a production setting.

E) tests each program separately.

Answer: E Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

24) System testing: A) includes all the preparations for the series of tests to be performed on the system.

B) tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned.

C) tests each program separately.

D) provides the final certification that the system is ready to be used in a production setting.

E) tests the information requirements of a system.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

25) 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.

C) tests each program separately in the system.

D) provides the final certification that the system is ready to be used in a production setting.

E) tests the conversion of legacy data to the new system.

Answer: D Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

26) In a parallel conversion strategy, the new system: A) is tested by an outsourced company.

B) replaces the old one on an appointed day.

C) and the old are run together for a time.

D) is introduced only to a limited area first.

E) is slowly converted from the old system.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

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27) In the direct cutover conversion strategy, the new system: A) is tested by an outsourced company.

B) replaces the old one on an appointed day.

C) and the old are run together.

D) is introduced in stages.

E) the old and new systems are run in parallel.

Answer: B Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

28) Changes in hardware, software, documentation, or production to a production system to correct errors, meet new requirements, or improve processing efficiencies are termed: A) acceptance.

B) production.

C) maintenance.

D) post-implementation.

E) implementation.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

29) In what stage of systems development are design specifications created?

A) Systems analysis B) Systems design C) Testing D) Conversion E) Implementation Answer: B Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

30) A systems analysis includes a that is used to determine whether the solution is achievable, from a financial, technical, and organizational standpoint.

A) feasibility study B) data flow diagram C) logical design D) systems design document E) request for proposal Answer: A Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

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31) provide(s) a detailed statement of the information needs that a new system must satisfy; identifies who needs what information, and when, where, and how the information is needed.

A) Systems analysis and design documents B) Information requirements C) A data flow diagram D) A feasibility study E) Requests for proposal Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

32) A(n) is the model or blueprint for an information system solution and consists of all the specifications that will deliver the functions identified during systems analysis.

A) feasibility study B) data flow diagram C) systems design document D) information requirements document E) request for proposal Answer: C Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

33) During the stage of system development, systems tests are evaluated by users and reviewed by management.

A) programming B) systems analysis and design C) implementation D) conversion E) acceptance testing Answer: E Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

34) Which of the following statements about systems development is not true?

A) Systems development is a structured kind of problem solving.

B) Systems development activities must always take place in a defined sequential order.

C) Some systems development activities may need to be repeated.

D) Some systems development activities may take place simultaneously.

E) Maintenance is considered to be a systems development activity.

Answer: B Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

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35) Which of the following should drive the entire system-building effort?

A) Six Sigma B) Feasibility studies C) Documentation D) User information requirements E) Available information technology Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 13-2: What are the core activities in the systems development process?

36) A phased approach conversion strategy introduces a new system in stages, either by functions or organizational units.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

37) Documentation reveals how well a system works from both a technical standpoint and enduser standpoint.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

38) Test plans require input from both end users and information systems specialists.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-2: What are the core activities in the systems development process?

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39) 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-2: What are the core activities in the systems development process?

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40) List 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 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 13-2: What are the core activities in the systems development process?

41) Discuss the role end users play in the systems-building effort.

Answer: User information requirements should drive the entire systems-building effort.

Insufficient user involvement in the design effort is a major cause of system failure. 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13-2: What are the core activities in the systems development process?

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42) You work for the IT department of a startup, 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, with input from end-users as well as the systems development team. Any individual software 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-2: What are the core activities in the systems development process?

43) Briefly describe the four main conversion strategies for changing from an old system to a new system.

Answer: The four main conversion strategies are the parallel strategy, the direct cutover strategy, the pilot study strategy, and the phased approach strategy. The parallel strategy involves running the old system and its replacement concurrently until the organization is sure that the new one will work properly. The direct cutover strategy replaces the old system with the new one entirely on a specific date, which could be risky. The pilot study strategy introduces the new system to a limited area of the organization to test its efficacy. The phased approach strategy introduces the system in stages, either by functions or by organizational units.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-2: What are the core activities in the systems development process?

44) What are the main activities in the Production and Maintenance phase of system development?

Answer: The three main activities in the Production and Maintenance phase of system development are (1) operation of the system, (2) evaluation of the system's performance, and (3) on-going modification of the system.

Once a new system has been installed and conversion is complete, the system is said to be in production. During this stage, the system will be reviewed by both users and technical specialists to determine how well it has met its original objectives and to decide whether any revisions or modifications are in order. In some instances, a formal post-implementation audit document is prepared.

After the system has been fine-tuned, it must be maintained while it is in production to correct errors, meet requirements, or improve processing efficiency. Changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency are termed maintenance. Routine maintenance consumes a large percentage of many firms' IT budgets but could be reduced significantly through more upto-date systems-building practices and technology.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13-2: What are the core activities in the systems development process?

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45) The primary tool for representing a system's component processes and the flow of data between them is the: A) data dictionary.

B) data flow diagram.

C) process specifications diagram.

D) structure chart.

E) object-oriented chart.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

46) Which of the following shows the most abstract level of design, providing an overview of an entire information system?

A) High-level structure chart B) Low-level data flow diagram C) Process specification D) High-level data flow diagram E) Logical design diagram Answer: A Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

47) To understand and define the contents of data flows and data stores, system builders use: A) a data dictionary.

B) process specifications diagrams.

C) user documentation.

D) data flow diagrams.

E) systems analysis.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

48) Which of the following is used to show each level of a system's design, its relationship to other levels, and its place in the overall design structure?

A) Structure charts B) Gantt and PERT charts C) Process specifications D) Data flow diagrams E) User documentation Answer: A Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

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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.

E) data and processes are separated.

Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 13-3: What are the principal methodologies for modeling and designing systems?

50) In an object-oriented development framework for a university, how would the classes Degree, Mathematics, and Physics be related?

A) Degree would be unrelated to Mathematics and Physics.

B) Degree is a superclass to Mathematics and Physics.

C) Mathematics and Physics would be common ancestors to Degree.

D) Degree would be a subclass to Mathematics and Physics.

E) Math, Physics and Degree are sister classes.

Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 13-3: What are the principal methodologies for modeling and designing systems?

51) Which of the following statements about objects is not true?

A) Objects belonging to a certain class have the features of that class.

B) Classes of objects inherit all the structure and behaviors of a more general class.

C) An object combines data and the specifications of processes that operate on those data.

D) Programs pass data to procedures which then send a message to the object.

E) New classes of objects are created by choosing an existing class and specifying how the new class differs from the existing class.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

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.

E) it's not necessary to use a formal methodology to design a system.

Answer: C Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

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53) Which of the following statements about objective-oriented development is not true?

A) It uses the object as the basic unit of systems design and analysis.

B) It is less iterative and incremental than traditional structured development.

C) A system created with object-oriented development is modeled on a collection of objects and the relationships among them.

D) Objects must collaborate with each other to make a system created with object-oriented development work.

E) The object-oriented design phase describes how the objects will behave and how they will interact with one another.

Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

54) describe the transformation occurring within the lowest level of the data flow diagrams.

A) Design requirements B) Information requirements C) Technology design plans D) Object-oriented frameworks E) Process specifications Answer: E Difficulty: Challenging AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

55) Structured development methods are process-oriented.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

56) Data flow diagrams are only used to depict higher-level processes.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

57) Objects are grouped into hierarchies, and hierarchies into classes.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

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58) Structured methods handle the modeling of data better than the modeling of processes.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

59) Structured methods treat data and processes as logically separate entities.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-3: What are the principal methodologies for modeling and designing systems?

60) What qualities of object-oriented development enable a reduction of time and cost in software development?

Answer: Object-oriented development uses the object as the basic unit of systems analysis and design. Object-oriented development can potentially reduce the time and cost of writing software because organizations can reuse software objects that have already been created as building blocks for other applications. New systems can be created by using some existing objects, changing others, and adding a few new objects, saving money and development time.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13-3: What are the principal methodologies for modeling and designing systems?

61) Which of the following statements about the traditional systems life cycle is not true?

A) the systems life cycle is predominantly a "waterfall" approach.

B) The systems life cycle is still used for building large, complex systems.

C) The systems life cycle approach is suitable for small desktop systems, which tend to be less structured and more individualized.

D) The systems life cycle approach can be costly, time-consuming, and inflexible.

E) The systems life cycle methodology is a phased approach to building a system.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

62) Commercial software packages often include features that allow the software to be modified to meet organizational requirements.

A) automation B) object-oriented C) programming D) design E) customization Answer: E Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

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63) The oldest method for building information systems is: A) agile development.

B) prototyping.

C) object-oriented development.

D) the systems life cycle.

E) rapid application development.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

64) In the traditional systems life cycle, end users: A) are important and ongoing members of the team from the original analysis phase through maintenance.

B) are important only in the testing phases.

C) have no input.

D) are limited to providing information requirements and reviewing the technical staff's work.

E) control the development of the system.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

65) 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) Systems life cycle B) Prototyping C) RAD D) JAD E) Object-oriented development Answer: A Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

66) Which of the following statements about prototyping is not true?

A) Prototyping is least useful when there is some uncertainty about requirements or design solutions.

B) Prototyping replaces unplanned rework with planned iteration, with each version more accurately reflecting users' requirements.

C) The process of developing a prototype can be broken down into four steps.

D) Sometimes a prototype is adopted as the production version of a system.

E) Prototyping is often used for designing an information system's end-user interface.

Answer: A Difficulty: Challenging AACSB: Analytical thinking LO: 13-4: What are alternative methods for building information systems?

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67) Which of the following statements about outsourcing is not true?

A) Domestic outsourcing is much more cost-driven than offshore outsourcing.

B) Many offshore outsourcing firms offer world-class technology assets and skills C) Wage inflation outside the United States has recently eroded some of the advantages of offshore outsourcing.

D) Firms often outsource daily operation of IT systems.

E) Hidden costs can increase the total cost of an offshore outsourcing project by an extra 15 to 57 percent.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

68) Which of the following is not a hidden cost of offshore outsourcing?

A) Transition costs B) Cultural issues C) Layoffs D) The cost of skilled programmers E) Vendor selection Answer: D Difficulty: Moderate AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

69) What is the primary driving factor for firms in selecting domestic outsourcing firms to build system solutions?

A) To take advantage of technical skills the firm does not have B) To save labor costs C) To avoid change management issues D) To reduce the cost of hardware E) To avoid offshore outsourcing Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 13-4: What are alternative methods for building information systems?

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70) A software package evaluation process is often based on a series of detailed questions sent to vendors, called a(n): A) systems design document.

B) strategic planning document.

C) information systems management plan.

D) RFP. E) logical design document.

Answer: D Difficulty: Moderate AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

71) 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 basic requirements, develop the prototype, use the prototype, revise and enhance the prototype.

C) Define the requirements, develop solutions, select the best prototype, and implement the prototype.

D) Define the requirements, develop the prototype, revise and enhance the prototype.

E) Select the best prototype, define the requirements, and implement the prototype.

Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 13-4: What are alternative methods for building information systems?

72) The systems life cycle methodology maintains a formal division of labor between end users and information systems specialists.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

73) Prototyping is more iterative than the systems design life cycle approach.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

74) A prototype is a working version of an information system that serves as the final version.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

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75) Prototyping is less likely than other types of system development to produce a system that fulfils user requirements.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

76) Firms generally do not outsource the conception, systems analysis, and design of IT systems to offshore firms.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

77) Cloud computing is a form of outsourcing.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-4: What are alternative methods for building information systems?

78) Identify and briefly describe at least 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 or cloud software service (SaaS) is commercial software that eliminates the need for internally developed software programs.

4. In outsourcing, systems are built and sometimes operated by an external vendor.

5. New approaches for systems building include rapid application development (the process of creating workable systems in a very short period of time with some flexibility to adapt as a project evolves), agile development (which focuses on rapid delivery of working software by breaking a large project into a series of small subprojects that are completed in short periods of time using iteration, continuous feedback, and ongoing user involvement), DevOps (which emphasizes close collaboration between the software developers who create applications and the IT operational staff who run and maintain the applications, low-code development (a software development approach that enables the delivery of applications faster and with minimal handcoding using visual modeling in a graphical interface to assemble and configure applications) and no-code development (tools are even easier for non-IT business people to use, with everything the software vendor thinks the user needs to create an app already built into the tool, with no coding required).

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-4: What are alternative methods for building information systems?

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79) 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-4: What are alternative methods for building information systems?

80) Why might an organization seek application software packages that offer customization features?

Answer: Customization features allow a commercial software package or cloud-based software to be modified to meet an organization's unique requirements without destroying the integrity of the software. However, if a great deal of customization is required, the effort required to customize the software may become so expensive and time-consuming that it negates the advantages of the software in the first place.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13-4: What are alternative methods for building information systems?

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81) 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 system 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-4: What are alternative methods for building information systems?

82) A native mobile app is: A) a mobile website.

B) a mobile web app.

C) a standalone application that does not use a browser.

D) a responsive mobile app.

E) one that can operate on all platforms and devices.

Answer: C Difficulty: Challenging AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

83) What is the purpose of responsive web design?

A) It allows one website to serve different platforms, such as tablets, desktops, laptops, and mobile phones.

B) It allows websites to respond quickly to changing user needs.

C) It enables websites to customize design according to user preferences.

D) It enables websites to customize content based on user location and preferences.

E) It enables different people to responsively program the system.

Answer: A Difficulty: Challenging AACSB: Analytical thinking LO: 13-5: What are new approaches for system building in the digital firm era?

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84) A "responsive design" for mobile applications is a design that responds to a user's: A) needs.

B) location.

C) voice commands.

D) digital device and screen resolution.

E) gestures.

Answer: D Difficulty: Challenging AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

85) Which of the following is not a true statement about native mobile apps?

A) A native app is installed directly on a mobile device.

B) Native apps can only operate if they are connected to the Internet C) Native mobile apps provide fast performance.

D) Native mobile apps provide a high degree of reliability.

E) The Kindle e-reading app is an example of a native mobile app.

Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 13-5: What are new approaches for system building in the digital firm era?

86) The process of creating workable information systems in a very short period of time with some flexibility to adapt as a project evolves is called: A) RAD. B) JAD. C) object-oriented development.

D) systems analysis and design.

E) No-code development.

Answer: A Difficulty: Moderate AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

87) Which type of systems development is characterized by bringing end users and information systems specialists together in an interactive session to discuss the system's design?

A) RAD B) JAD C) Prototyping D) No-code development E) Traditional Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

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88) Which of the following is not a feature of agile development?

A) Sprints B) Waterfall approach C) Continuous integration D) Cross-functional teams E) Early testing Answer: B Difficulty: Moderate AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

89) development focuses on rapid delivery of working software by breaking a large project into a series of small subprojects that are completed in short periods of time using iteration, continuous feedback and ongoing user development.

A) Agile B) No-code C) Low-code D) Traditional systems life cycle E) DevOps Answer: A Difficulty: Moderate AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

90) Which of the following statements about RAD is not true?

A) RAD includes the use of visual programming tools.

B) RAD includes iterative prototyping of key systems elements.

C) RAD involves close teamwork among end users and information systems specialists.

D) RAD includes automation of program code generation.

E) RAD requires that key parts of the development process occur sequentially.

Answer: E Difficulty: Challenging AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

91) Which of the following statements about mobile web apps is true?

A) Users access mobile web apps through their mobile device's web browser.

B) A mobile web app resides on the user's device.

C) A mobile web app only works on certain mobile platforms.

D) A mobile web app requires the user to sign onto a web page.

E) A mobile web app requires the user to login to a web service.

Answer: A Difficulty: Challenging AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

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92) Many no-code applications have very limited functionality.

Answer: TRUE Difficulty: Moderate AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

93) HTML5 can support cross-platform mobile applications.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

94) Native apps are inexpensive to develop and only one version is required for different mobile operating systems.

Answer: FALSE Difficulty: Easy AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

95) No-code applications are easy to customize.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

96) DevOps stands for "development operations."

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

97) DevOps emphasizes close collaboration between the software developers and IT operational staff.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

98) DevOps helps developers at Netflix make hundreds of software changes every day.

Answer: TRUE Difficulty: Easy AACSB: Information technology LO: 13-5: What are new approaches for system building in the digital firm era?

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99) How is the relationship between software developers and operational staff different under DevOps compared to the traditional systems life cycle?

Answer: DevOps emphasizes close collaboration between the software developers who create applications and the IT operational staff who run and maintain the applications. Traditionally, in a large enterprise, an application development team would be in charge of gathering business requirements for an application, designing the application, and writing and testing the software.

The operations team would run and maintain the software once it was put into production.

Problems arise when the development team is unaware of operational issues that prevent the software from working as expected, requiring additional time and rework to fix the software.

DevOps tries to change this relationship by promoting better and more frequent communication and collaboration between systems development and operations groups and a fast and stable workflow throughout the entire application development life cycle.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-5: What are new approaches for system building in the digital firm era?

100) You are a software developer for a large online retailing site with a cloud-based IT infrastructure with hundreds of small software applications that communicate with each other.

What approach might you recommend for managing your software infrastructure?

Answer: Student answers will vary. One sample answer is as follows: A good fit for this type of organization is the DevOps framework, which allows these types of companies, like Netflix, to automatically create software code that integrates within the existing infrastructure, and allows companies to update their production systems with new software within hours, as opposed to months. Students may also mention rapid application development, agile development, automated software testing, and low-code and no-code development.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 13-5: What are new approaches for system building in the digital firm era?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 14 Making the Business Case for Information Systems and Managing Projects 1) Which of the following serves as 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?

A) Project management plan B) Portfolio analysis C) Information systems plan.

D) Scoring model E) TCO analysis Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

2) Which of the following best describes the central method used in a portfolio analysis?

A) Performing an inventory of all of the organization's information systems projects and assets B) Performing a weighted comparison of the criteria used to evaluate a system C) Surveying a large sample of managers on their objectives, decision-making process, and uses and needs for data and information D) Interviewing a small number of top managers to identify their goals and criteria for achieving success E) Scoring proposed systems on a number of dimensions, and selecting the one with the highest score Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

3) A firm in the finance industry should do which of the following to ensure that it stays current with technology?

A) Select only low-cost, low risk projects B) Limit work to those projects with great rewards C) Select only low-risk, high-reward projects D) Have a few high-risk, high-benefit projects E) Avoid projects that are very costly Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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4) 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 analysis E) Strategic analysis Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

5) You have been hired by a firm in a non-information-intensive industry to evaluate its inventory of systems and IT projects. Which types of projects should the firm focus on?

A) High-risk projects B) Low cost, low-benefit projects C) High-benefit, low-risk projects D) Any project that might be beneficial E) Low cost, high benefit projects Answer: C Difficulty: Challenging AACSB: Analytical thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

6) Which of the following best describes the central method used in a scoring model?

A) Performing an inventory of all of the organization's information systems projects and assets B) Performing a weighted comparison of the criteria used to evaluate a system C) Surveying a large sample of managers on their objectives, decision-making process, and uses and needs for data and information D) Interviewing a small number of top managers to identify their goals and criteria for achieving success E) Calculating the return on investment for each system, and choosing the system with the best return Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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7) 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 analysis E) Capital budget Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

8) Which of the following statements about scoring models is not true?

A) There are many qualitative judgments involved in using a scoring model.

B) A scoring model is useful for selecting projects where many criteria must be considered.

C) The most important outcome of a scoring model is the score.

D) Agreement on the criteria used in a scoring model often requires lengthy discussions among the decision-making group.

E) Weights assigned in a scoring model indicate which criteria are considered the most important by the decision-making group.

Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

9) Which of the following would not be covered in the Strategic Business Plan Rationale section of an information systems plan?

A) Current situation B) Current business organization C) Firm's strategic plan D) Changing environments E) Current infrastructure capabilities Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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10) Which of the following would not be covered in the Management Strategy section of an information systems plan?

A) Acquisition plans B) Progress reports C) Organizational realignment D) Management controls E) Major training initiatives Answer: B Difficulty: Easy AACSB: Analytical thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

11) Which of the following would not be covered in the New Developments section of an information systems plan?

A) Project descriptions B) Business rationale C) Applications' role in strategy D) Human resources strategy E) Hardware Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

12) Which of the following strategies represents the proper approach to a low risk, high reward project?

A) Identify and develop B) Avoid C) Treat as a routine project D) Pursue after all other projects are complete E) Cautiously examine Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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13) 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) Hardware, software, and labor expenditures Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

14) The value of systems from a financial perspective essentially revolves around the issue of: A) total cost of ownership.

B) adherence to information requirements.

C) asset utilization.

D) return on invested capital.

E) the cost of computing equipment.

Answer: D Difficulty: Easy AACSB: Analytical thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

15) All of the following are intangible benefits of information systems except: A) improved asset utilization.

B) increased organizational learning.

C) improved operations.

D) cost reduction.

E) improved decision making.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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16) Which of the following is not a tangible benefit of information systems?

A) Reduced rate of growth in expenses B) Lower computer expenses C) Improved resource control D) Increased productivity E) Reduced facility costs Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

17) The principal capital budgeting models for evaluating information technology projects are the payback method, the accounting rate of return on investment (ROI), net present value, and the: A) future present value.

B) internal rate of return.

C) external rate of return.

D) ROPM (real options pricing model).

E) present value of future cash flows.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

18) Enhanced employee goodwill falls under what category of costs and benefits of information systems?

A) Costs B) Tangible benefits C) Cost savings D) Intangible costs E) Intangible benefits Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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19) Which of the following is a limitation of using a financial approach to evaluate information systems?

A) Inability to measure ROI B) Inability to control vendor costs C) Inability to assess risk D) Inability to assess costs from organizational disruption E) Inability to assess the cost of technology Answer: D Difficulty: Easy AACSB: Analytical thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

20) methods rely on measures of cash flows into and out of the firm.

A) Scoring model B) Portfolio analysis C) Real options pricing D) Capital budgeting E) Risk profiling Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

21) All of the following are long-term strategic factors that should be considered in making the business case for a new information system except: A) lowering production costs B) differentiation of products and services C) increasing the scope of the firm D) current relationships with suppliers E) matching or exceeding competitor capabilities Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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22) Which of the following is not one of the seven major factors that should be addressed when making the business case for a specific new information system?

A) Improved decision making B) Survival C) Results of a portfolio analysis of alternative solutions D) Customer and supplier relationships E) New products and services Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

23) A business case does all of the following except: A) describe the rationale for proceeding with an investment.

B) show how the investment supports the firm's strategic goals.

C) detail the specific hardware and software needed to implement the investment.

D) explain how the investment will provide value for the business.

E) identify any risks that could negatively affect outcomes.

Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

24) According to the chapter text, BDO Canada obtained all of the following benefits from implementing a new system except: A) increased productivity.

B) lower operational costs.

C) reduced workforce D) more timely and complete information.

E) improved decision making.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

25) The CEO and Board of Directors of a company are responsible for developing a corporatewide information systems plan.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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26) An information systems plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

27) 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 Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

28) An information systems plan focuses solely on the technology needed to implement the proposed new information system.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

29) There is a very high failure rate among information systems projects because organizations have incorrectly assessed their business value.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

30) Transaction and clerical systems that displace labor and save space typically produce less tangible benefits than management information systems.

Answer: FALSE Difficulty: Challenging AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

31) Intangible benefits may lead to quantifiable gains in the long run.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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32) 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 Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

33) More timely information is an intangible benefit of information systems.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

34) The difference between cash outflows and cash inflows is used for calculating the financial worth of an investment.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

35) List at least five general categories of information that should be included in an information systems plan and give examples of the type of information that should be included in each category.

Answer: An information systems plan includes the following general categories and specific types of information • Purpose of the plan, including an overview of plan contents, the current business organization and future organization, and key business processes • Strategic business plan rationale, including the current situation, current business organization, changing environments, major goals of the business plan, and the firm's strategic plan • Current systems, including the major systems supporting business functions and processes, current infrastructure capabilities, hardware, software, database, networking and Internet, cloud services, difficulties meeting business requirements, and anticipated future demand • New developments, including new systems projects, project descriptions, business rationale, applications' role in strategy, new infrastructure capabilities required, hardware, software, database, networking and Internet, and cloud services • Management strategy, including acquisition plans, organizational realignment, management controls, major training initiatives, and human resources strategy • Implementation of the plan, including anticipated difficulties in implementation and progress reports and milestones Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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36) You have been hired as a consultant for a nationwide real estate firm, Cross & Deptford, which is interested in achieving better organization between branches by updating its information systems, but is not sure what will suit its needs. What will you recommend it does in order to determine the most effective IT projects?

Answer: Cross & Deptford first should have an information systems plan created to determine its information requirements and what systems will support its business goals. It will need to inventory its existing systems and develop metrics to quantify any future improvements are made. It can use portfolio analysis and/or scoring models to help determine the most important information systems projects to pursue.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

37) 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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38) 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.

It is evaluating two commercially available software packages. What systems evaluation model will help it 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

39) You are the IT manager for a small online marketing firm looking to determine the best way to budget more capital in information systems projects your firm has completed within the last year. How would you evaluate the worth of your firm's completed projects?

Answer: Capital budgeting models are techniques used to measure the value of investing in long-term capital investment projects like information systems. The principal capital budgeting models for evaluating an IT project are the payback method, accounting rate of return on investment (ROI), net present value, and the internal rate of return. Each of these methods measures cash flows into and out of the firm, taking account of investment costs of systems as well as the increased sales of products and services made possible by the new systems.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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40) Differentiate between intangible and tangible benefits and list three examples of each. In what types of systems are tangible 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. Transactional and clerical systems that displace labor and save space always produce more measurable, tangible benefits than management information systems, decision support systems, and systems for collaborative work.

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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

41) You are a senior manager at a mid-sized regional retail chain. The company's IT manager approaches you with a project that would completely overhaul the company's information system infrastructure, generating significant risk; but if executed successfully, would dramatically improve the company's overall efficiency. How should you proceed?

Answer: Using the portfolio analysis approach, this type of project is a high-risk, high-reward project, and should be considered carefully. Student answers may vary about how to proceed, but should involve mention of a scoring model to compare the system to other choices and soliciting input from employees across many areas of the firm to determine their willingness to take on risk and endure organizational change.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

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42) Why is the development of a business case for the acquisition and development for a new information system important, and what are the major factors that it should address?

Answer: A business case for an IT investment describes the problem facing the organization that can be solved by investing in a proposed system solution. It provides an analysis of all the costs, benefits, and risks associated with that investment and the justification for that proposed course of action. The business case describes the rationale for proceeding with an investment and shows how the investment supports the firm's strategic goals and business objectives and how it fits in with the overall information systems plan of the firm. It also provides the information necessary to make an informed decision about whether to proceed with the investment and in what form. The business case explains how this investment will provide value for the business and identifies any risks that could negatively affect outcomes. The business case identifies alternative solutions, along with the deciding factors for selecting the preferred option. A good business case will also describe how the proposed solution may require changes in organizational culture, systems, processes, and jobs. Major factors that should be addressed in making the business case for a specific new system include: (1) long-term strategic factors, such as lowering production costs, differentiation of products and services, increasing the scope of the firm (e.g., global expansion), and matching or exceeding competitor capabilities; (2) improved decision making; (3) customer and supplier relationships; (4) survival (required by the market); (5) new products and services; (6) financial rationale; and (7) fitting with the long-term IT plan of the firm. Smaller systems that focus on a single problem will focus on just a few of these elements, such as "improved decision making," "customer relationships," and "lowering costs," whereas larger system projects may well include all of these factors in making the business case.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-1: How should managers build a business case for the acquisition and development of new information systems?

43) On average, private sector IT projects are underestimated by percent in terms of budget and time required to deliver the complete system promised by the system plan.

A) 30 B) 40 C) 50 D) 70 E) 80 Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

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44) 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) Reduced workforce C) Time slippage D) Technical shortfalls E) Failure to obtain anticipated benefits Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

45) 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 website has fewer visits to the customer support pages.

D) employees require training to properly use the system.

E) the system is not being used by anyone.

Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

46) Which of the following project management variables defines what work is or is not included in a project?

A) Goals B) Risk C) Quality D) Scope E) Cost Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

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47) As described in the text, which of the following statements about runaway or failed IT projects is not true?

A) Large software projects on average run 33 percent over schedule.

B) Large software projects on average run 66 percent over budget.

C) 50% of businesses have experienced IT project failure in the last year.

D) IT projects often fail because they lack sufficient computing capacity.

E) One study found that private sector projects underestimate costs and time required by half.

Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

48) Which of the following variables in project management is an indicator of how well the project satisfies management objectives?

A) Scope B) Quality C) Time D) Cost E) Risk Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

49) Which of the following statements about project management is not true?

A) Project management should ensure that the scope of a project does not expand beyond what was originally intended.

B) Project management for information systems must deal with risk.

C) Acquiring human and material resources is not considered to be part of project management.

D) Information system project costs include the cost of works space.

E) Project management involves breaking down each of the major components of a project into activities and tasks.

Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

50) The cost of a project is based solely on the time to complete a project multiplied by the cost of computer resources required to complete the project.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

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51) The way an information systems project is executed is likely to be the least important factor influencing its success or failure.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

52) Project management refers to the application of knowledge, skills, tools, and techniques to achieve specific targets within specified budget and time constraints.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

53) A data entry screen is an example of a user interface.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

54) Risk is an important variable that project management must deal with.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

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55) 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?

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-2: What are the objectives of project management, and why is it so essential in developing information systems?

56) As described in the text, which of the following does not have an impact on the level of risk in information systems projects?

A) Project size B) Organizational complexity of the system C) Project structure D) Experience with technology E) The capital budgeting model chosen to evaluate the system Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

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57) Successful system building requires careful management to minimize organizational resistance.

A) cost B) technology C) change D) supply chain E) system application Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

58) Which of the following statements about the user-designer communications gap is not true?

A) It occurs because users and information systems specialists tend to have different backgrounds, interests, and priorities.

B) It is one of the major reasons why user requirements are not properly incorporated into information systems.

C) It is one of the major reasons why users are driven out of the implementation process.

D) When it is pronounced, it creates a very high risk of failure for a systems development project.

E) Information systems specialists prefer systems that are oriented toward solving business problems or facilitating organizational tasks.

Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

59) Which of the following best describes the relationship between system implementation and user involvement and management support?

A) System implementation rarely benefits from user involvement.

B) System implementation benefits from user support but does not require management support.

C) System implementation generally benefits from high levels of user involvement and management support.

D) System implementation benefits from management support but does not require user support.

E) System implementation rarely benefits from management support.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

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60) The differing background between users and information systems specialists is referred to as the: A) user expertise gap.

B) information system specialist inefficiency.

C) user-designer paradigm.

D) user-designer expertise gap.

E) user-designer communications gap.

Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

61) Information systems specialists often tend to seek solutions that: A) are oriented towards solving business problems.

B) facilitate organizational tasks.

C) optimize hardware and software efficiency at the expense of ease of use.

D) are simplistic for end users to understand.

E) employ clear documentation.

Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

62) According to the Project Management Institute, what is the leading factor in project success?

A) Upper management that financially backs the project B) Executive sponsors who are actively engaged C) Carefully monitored changes in work habits and procedures D) Communication between technicians and end users E) End users who communicate their needs for the project Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

63) While users are concerned about an information system delivering the information needed for work, designers might be concerned about: A) accessing the data on iPhones and tablets.

B) the procedures required to enter data into the system.

C) how operation of the system will change their daily routines.

D) what demands the system will place on the company servers.

E) opening lines of communication with end users.

Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

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64) All of the following are directly correlated with increased risk except: A) a large amount of technical expertise from project team and information team staff.

B) a large amount of dollars spent.

C) a large number of implementation staff.

D) a large amount of time allocated for implementation.

E) a large number of organizational units affected.

Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 14-3: What are the principal risk factors in information systems projects?

65) 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 pose less risk of running up unforeseen costs.

E) The less structured a project, the higher the likelihood that its outputs and processes can be easily defined.

Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 14-3: What are the principal risk factors in information systems projects?

66) Which of the following statements about project risk is not true?

A) The more dollars spent on a project, the greater the risk.

B) The higher the number of implementation staff on a project, the lower the risk.

C) The higher the number of organizational units affected by a project, the greater the risk.

D) Very large-scale systems project have a failure rate that is 50 to 75 percent higher than that for other projects.

E) The organizational complexity of a system contributes to the complexity of large-scale systems projects.

Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

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67) Which of the following refers to all organizational activities working toward the adoption, management, and routinization of a new information system?

A) Production B) Maintenance C) Implementation D) Acceptance E) Final acceptance Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

68) Which of the following is not one of the activities of the systems analyst?

A) Acting as a change agent B) Communicating with users C) Mediating between competing interest groups D) Formulating of capital budgeting models E) Deciding which systems to develop Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

69) Which of the following types of projects have a higher likelihood of failure?

A) Creating a spreadsheet-based payroll register.

B) Upgrading a contact management system based on a software package to the most recent version C) Very large-scale or complex systems projects D) Redesigning a user interface to an online investment site E) Building a web-based interface to an existing system Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 14-3: What are the principal risk factors in information systems projects?

70) Which of the following is not a factor in the high failure rate of reengineering systems projects?

A) Employees' concerns about change B) Resistance by key managers C) Changes in career paths signaled by the new system D) Changes in job descriptions signaled by the new system E) Failures of the new technologies to perform according to plan Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 14-3: What are the principal risk factors in information systems projects?

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71) 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 Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

72) The relationship between users and information systems specialists has traditionally been a problem area for information systems implementation efforts.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

73) 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 Difficulty: Moderate AACSB: Application of knowledge LO: 14-3: What are the principal risk factors in information systems projects?

74) What is the user-designer communications gap? Describe the differences between the types of concerns users and designers have about information systems.

Answer: The user-designer communication gap refers to the tendency for users and information systems specialists to have different backgrounds, interests, and priorities. This often manifests itself in the types of concerns the two groups have about information systems; for example, while a user might simply be concerned whether the information system works properly, the designer is concerned with the demands that the system will put on the company servers. While users might be concerned with the procedures required to enter data into a new system, the designers are likely to be focused on where the data will be stored and the most effective technique to store it.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 14-3: What are the principal risk factors in information systems projects?

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75) 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 existing client interface to the company extranet to make it easier to use. The extranet allows clients to log in and view their current websites 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 risk 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 underlying programming that will not change. However, there may be a need to make sure that an expert who understands usability is present and that either internal IT staff or external consultants have the expertise to build web-based front ends to systems.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-3: What are the principal risk factors in information systems projects?

76) Which of the following is not something you would use to control risk factors in an information systems project?

A) Internal integration tools B) External integration tools C) Formal planning tools and formal control tools D) Capital budgeting models E) Gantt charts Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

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77) Project management software typically has all of the following capabilities except: A) identifying and quantifying project risk.

B) assigning resources to tasks.

C) tracking progress at both individual and team levels.

D) establishing starting and ending dates for tasks.

E) facilitating modifications to tasks and resources.

Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

78) Which of the following is an example of using an internal integration tool?

A) Creating a Gantt chart B) Including user representatives as active members of the project team C) Creating PERT chart D) Holding frequent project team meetings E) Developing a scoring model Answer: D Difficulty: Moderate AACSB: Analytical thinking LO: 14-4: How can project risks be managed?

79) Formal planning and control tools: A) are used to select projects where many criteria must be considered.

B) enable a project manager to properly document and monitor project plans.

C) are used to evaluate alternative systems projects.

D) link the work of the implementation team with users at all organization levels.

E) serve as a road map indicating the direction of systems development.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

80) 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 PERT chart and a Gannt chart D) Scoring model E) Portfolio analysis Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

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81) To review a project's tasks and their interrelationships, you would use which of the following?

A) PERT chart B) Gantt chart C) PERT chart or a Gantt chart D) Scoring model E) Portfolio analysis Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

82) Which of the following helps project managers identify bottlenecks in project development?

A) Internal integration tools B) External integration tools C) Formal planning and control tools D) Both internal and external integration tools E) Portfolio analysis tools Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

83) 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.

E) enable project team members to keep track of external costs of a project.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

84) Which of the following is an example of using an external integration tool?

A) Creating a Gantt chart B) Including user representatives as active members of the project team C) Creating a PERT chart D) Using portfolio analysis E) Developing a scoring model Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 14-4: How can project risks be managed?

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85) Which of the following is not an organizational factor to be addressed when designing a new system to fit the organization?

A) Job design B) Government regulatory compliance C) Health and safety D) Return on investment E) Ergonomics Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

86) In sociotechnical design: A) separate sets of technical and social design solutions are developed and compared.

B) ergonomic features of a system are considered to be the most important consideration.

C) systems analysts with proven backgrounds in sociological concerns rate and compare a system's social and technical aspects.

D) human needs are given more importance than technical needs.

E) technical needs are given more importance than organizational needs.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

87) Which of the following is the most widely used project management software today?

A) Vertabase B) IBM Project Guide C) Microsoft Project D) Microsoft Excel E) Zoho Projects Answer: C Difficulty: Easy AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

88) You have been hired to implement an enterprise system that will automate much of the billing and accounting work for a statewide HVAC services company. Which of the following would you prepare to describe how the new system will affect a firm's structure and operations?

A) Information systems plan B) Internal integration report C) Sociotechnical design report D) Organizational impact analysis E) Strategic planning document Answer: D Difficulty: Challenging AACSB: Analytical thinking LO: 14-4: How can project risks be managed?

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89) Counterimplementation is best defined as: A) multiple implementations that are run in parallel.

B) deliberate attempts to thwart the implementation of a system.

C) critiquing the implementation of a system constructively.

D) all of the organizational challenges involved in implementing a system.

E) strategies used to overcome user resistance to change.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

90) Projects with many undefined requirements must involve users fully at all stages.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

91) A Gantt chart portrays a project as a network diagram consisting of numbered nodes representing project tasks.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

92) Mandatory use of a system is one effective way of overcoming user resistance to an information system.

Answer: FALSE Difficulty: Moderate AACSB: Analytical thinking LO: 14-4: How can project risks be managed?

93) Increased error rates may be a sign of user resistance to a new system.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

94) The design of jobs, health issues, and the end-user interface of information systems are all considerations in the field of ergonomics.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

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95) The goal of sociotechnical design is to create systems where the organization changes to fit the requirements of the technology.

Answer: FALSE Difficulty: Challenging AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

96) Ergonomics 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: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 14-4: How can project risks be managed?

97) 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: Student answers will vary. One example answer is as follows: 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 be identified 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 (including patients) 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 and clear and simple instructions for patients will be essential. The company should also consider incentives for doctors and patients that use the system.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 14-4: How can project risks be managed?

98) What is counterimplementation and what are some of the strategies that organizations can use to avoid it?

Answer: Counterimplementation is a deliberate strategy to thwart the implementation of a new information system or innovation in general. Organizations can overcome this resistance by soliciting user participation in the design of a new system, to ensure that employees feel invested in the change; user education and training; encouraging management policies; and employee incentives for those who cooperate and participate.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 14-4: How can project risks be managed?

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99) What are the benefits of the sociotechnical design approach to information systems?

Answer: The sociotechnical design approach features designers setting forth two separate plans–technical solutions and social design solutions. The social design plan will emphasize workgroup structures, allocation of tasks, and the design of individual jobs. If the technical solutions enable the social design plan to also be achieved, then the design can move forward.

The result is an information system that blends technical efficiency with sensitivity to organizational and human needs, as opposed to an information system that works properly but is poorly suited to the social environment of the workplace.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 14-4: How can project risks be managed?

100) What are Gantt charts and PERT charts? In what way might a PERT chart be a better option than a Gantt chart?

Answer: Gantt charts lists project activities and corresponding start and completion dates and visually shows the duration of tasks in a project along with their human resource requirements.

Tasks are displayed as horizontal bars whose length represents the amount of time required to complete the task. However, Gantt charts don't show how one task is affected by others. For example, if delays in a task cause a ripple effect in other tasks, this renders the Gantt chart obsolete. PERT charts graphically depict project tasks and their inter-relationships, much like a flow chart. PERT charts show the activities that must be completed before the next activity can begin. Both types of charts might be necessary because they are depicting different things that are important for project managers to track.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 14-4: How can project risks be managed?

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Management Information Systems, 17e (Laudon/Laudon) Chapter 15 Managing Global Systems 1) Much of the final assembly of Apple's iPhone occurs in which of the following locations?

A) United States B) Japan C) South Korea D) China E) Germany Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

2) Considering how to accomplish a division of labor across a global environment is an aspect of which of the following dimensions of developing an international systems architecture?

A) Global environment B) Corporate global strategy C) Technology platform D) Organization structure E) Management and business processes Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

3) Which of the following is not a general cultural factor driving global business?

A) Global communication and transportation technologies B) Political stability C) Global knowledge base D) Rise of digital nationalism E) Global social norms Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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4) New levels of global coordination of all of the major business functions permit the location of business activity according to: A) comparative advantage.

B) social norms and values.

C) competitive threat.

D) knowledge base.

E) labor costs.

Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

5) Which of the following is the best definition of international information systems?

A) Systems that talk to one another using the global Internet B) Systems used by international businesses C) Business processes that span the globe D) Basic information systems required by organizations to coordinate worldwide trade and other activities E) Systems that are developed by global firms Answer: D Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

6) What is the first thing you should consider when thinking about building an international information system?

A) Corporate strategies for competing the domestic environment B) New technologies that will help you achieve your goals C) The global environment where your business will operate and the business drivers for your firm and industry D) Organizational structure E) The different computing and communication standards in the world Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

7) Which of the following industries is most affected by globalization?

A) Telecommunications B) Manufacturing C) Law D) Entertainment E) Transportation Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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8) Which of the following is the best definition of the term transborder data flow?

A) The flow of information in international systems B) The ways in which a country's laws change the flow of data from one country to another C) The business of moving information from one country to another D) The movement of information across international boundaries in any form E) The business process of coordinating information from many different countries Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

9) Which of the following is not a specific business factor in the global environment?

A) Global communication and transportation technologies B) Global markets C) Global workforce D) Global economies of scale E) Global production and operations Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

10) Making judgments and taking action on the basis of narrow or personal characteristics at a cultural level is referred to as: A) localization.

B) cooptation.

C) particularism.

D) prejudice.

E) globalization.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

11) All of the following present challenges to developing global business systems except: A) foreign accounting practices.

B) the growth of a global knowledge base.

C) language differences.

D) currency fluctuations.

E) shortages of skilled consultants.

Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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12) Which of the following is not a specific challenge to global business systems?

A) Shortages of skilled consultants B) Different social expectations C) Different telecommunication standards D) Different data transfer speeds E) Unreliable phone networks Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

13) Which of the following statements about laws concerning transborder data flow is not true?

A) The European Data Directive of 1998 standardized privacy protection among EU nations.

B) The European Data Directive of 1998 allowed for the transfer of personal data to systems located in the United States and other nations where these systems met European privacy standards.

C) The General Data Protection Regulation (GDPR) provides additional privacy protection for European citizens and applies to all data produced by EU citizens.

D) The GDPR applies to all companies collecting data on EU citizens even if they are not located in the EU. E) The GDPR applies only to citizens of the EU and does not apply to non-citizen residents.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

14) Which of the following statements about accounting practices in different countries is not true?

A) German companies generally do not recognize a profit from a venture until the project is completely finished and they have been paid.

B) British firms recognize profits before a project is finished, once they are reasonably certain they will get the money.

C) Dutch firms separate tax calculations from reports to shareholders.

D) Continental European accounting practices focus on demonstrating compliance with strict rules.

E) German firms focus on showing shareholders how fast profits are growing.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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15) Most large companies with overseas operations have: A) rationally developed international systems architectures.

B) inherited patchwork international systems from the distant past.

C) transaction-oriented reporting based at the home office for overseas business.

D) global marketing systems developed domestically.

E) enterprise systems developed by local firms.

Answer: B Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

16) The EU General Data Protection Regulation (GDPR): A) requires that European companies meet U.S. data privacy standards.

B) provides additional privacy protections for Americans doing business in Europe.

C) provides additional privacy protection for European citizens and applies to all data produced

by EU citizens or processed in Europe.

D) prevents the transfer of private personal information among EU nations.

E) allows European countries to adopt their own privacy legislation.

Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

17) Consumers who only want to purchase products made in their own country are an example of: A) cultural particularism.

B) political culture.

C) universal global attitudes.

D) different laws in different countries.

E) different business standards.

Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 15-1: What major factors are driving the internationalization of business?

18) Global business drivers can be divided into two groups: general cultural factors and specific business factors.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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19) The growth of powerful communications technologies and the emergence of world cultures create the condition for global markets.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

20) The coronavirus pandemic has called into question the dependence on global supply chains where sourcing is concentrated in a single country.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

21) Micromarketing involves marketing to specific countries rather than global markets.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

22) Firms that can organize globally have a powerful strategic advantage.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

23) Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services.

Answer: FALSE Difficulty: Challenging AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

24) Language remains a significant challenge to the implementation of an international information system.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

25) Today, knowledge, education, science, and industrial skills are highly concentrated in North America, Western Europe, and Japan.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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26) A business driver is a force in the environment to which businesses must respond that influences the direction of the business.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

27) Different EDI standards is one obstacle to global business systems.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

28) Legal practices are largely standard among developed countries.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

29) The cost of moving goods and services to and from geographically dispersed locations has dramatically increased.

Answer: FALSE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

30) The design of business processes is a major dimension in developing an international information systems architecture.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

31) Global economies of scale are facilitated by global markets, production, and administration.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

32) The growth of international trade has radically altered domestic economies around the globe.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-1: What major factors are driving the internationalization of business?

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33) What steps should you take 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 and structure before you can choose the right technology.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business?

34) List at least four general cultural factors and four specific business factors driving global business. Which two factors of each type 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, emergence of 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.

Student answers as to which two factors of each type that are most problematic at the current moment will vary. 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 realtime 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business?

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35) 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, email, 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.

Student answers as to which challenge will be easiest to solve will vary, but an example answer is: The easiest challenge to solve is that of standards because of the growth of universal, Internetbased standards, web services, and component-based programming.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business?

36) 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. 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business?

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37) Define transborder data flow and explain what makes it a business challenge for global companies.

Answer: Transborder data flow is defined as the movement of information across international boundaries in any form. What makes this a challenge for firms is that different countries have different standards for privacy protection and data transfer. In the European Union, these standards are more comprehensive and stricter than they have been historically in the U.S. For instance, the General Data Protection Regulation (GDPR) requires all firms doing business in the EU and collecting data on citizens and non-citizen residents to meet the privacy standards of the EU. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-1: What major factors are driving the internationalization of business?

38) In a multinational business strategy, the finance/accounting function is: A) centralized.

B) dispersed.

C) coordinated.

D) mixed.

E) performed by local divisions in different countries.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

39) The domestic exporter strategy is characterized by which of the following?

A) Heavy centralization of corporate activities in the home country of origin B) Financial management and control out of a central home base, but decentralized production, sales, and marketing operations in other countries.

C) Adaptation of products and services on sale in different countries to suit local markets D) Confederation of production and marketing facilities in different countries E) Many regional headquarters Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

40) Most companies pursuing a global strategy begin as: A) domestic exporters.

B) multinationals.

C) franchisers.

D) transnationals.

E) conglomerate corporations.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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41) A company that controls finances in the home country and decentralizes production, sales, and marketing operations to other countries is using a strategy.

A) domestic exporter B) franchising C) transnational D) multinational E) conglomerate Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

42) In terms of global business strategy and structure, a multinational company will use a policy of: A) mixed sales and marketing, with centralized production, accounting, human resources, and strategic management.

B) centralized production, accounting, marketing, human resources, with strategic management.

C) dispersed production, accounting, human resources, with centralized strategic management, and marketing.

D) dispersed production and marketing, with centralized accounting and strategic management.

E) making local units that are clones of the mother country units.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

43) Which of the following is the dominant pattern of governance used by transnational firms?

A) Centralized B) Duplicated C) Decentralized D) Federal structure E) Localized Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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44) 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) coordinated and dispersal of production, marketing, and human resources, with centralized strategic management and finance/accounting.

E) decentralized production, accounting, human resources, with a decentralized management.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

45) Which of the following is not one of the primary types of firm strategy discussed in the chapter?

A) Domestic exporter B) Multinational C) Franchiser D) Transnational E) International exporter Answer: E Difficulty: Easy AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

46) In which of the following strategies are nearly all value-added activities managed from a global perspective without reference to national borders?

A) Domestic exporter B) Multinational C) Franchiser D) Transnational E) Domestic importer Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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47) Which of the following statements about transnational firms is not true?

A) Transnational firms have many regional headquarters and perhaps a world headquarters.

B) Transnational firms are stateless.

C) Transnational firms view the entire globe as their management frame of reference.

D) Transnational firms have no single headquarters.

E) Many firms have attained transnational status.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

48) Which of the following business functions is not centralized in the domestic exporter business strategy?

A) Production B) Finance/accounting C) Sales/marketing D) Human resources E) Strategic management Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

49) In centralized systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) systems development and operations occur totally at the domestic home base.

E) systems development is a combined effort of domestic and international units.

Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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50) In duplicated systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) foreign units design the solutions and systems used at the domestic home base.

E) systems development is a combined effort of domestic and international units which are then duplicated across the world.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

51) In decentralized systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) foreign units design the solutions and systems used at the domestic home base.

E) all systems are designed in domestic headquarters and then distributed to foreign units.

Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

52) In networked systems: A) development occurs at the home base and operations are handed over to autonomous units in foreign locations.

B) each foreign unit designs its own unique solutions and systems.

C) systems development and operations occur in an integrated and coordinated fashion across all units.

D) foreign units design the solutions and systems used at the domestic home base.

E) development occurs at the home base but operations are handed over to autonomous units in foreign locations.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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53) Domestic exporters typically have highly systems.

A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

54) Multinational companies predominantly have systems.

A) duplicated B) centralized C) networked D) decentralized E) autonomous Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

55) systems are an emerging pattern for Franchise companies.

A) Duplicated B) Centralized C) Networked D) Decentralized E) Autonomous Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

56) Which of the following is an emerging pattern of system configuration for multinational companies?

A) Duplicated B) Centralized C) Networked D) Decentralized E) Autonomous Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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57) The network systems structure is the most visible in services.

A) production B) financial C) marketing D) software design E) administrative Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

58) Which of the following statements about networked systems is not true?

A) Networked systems require a powerful telecommunications backbone.

B) Networked systems require a culture of shared applications development.

C) Networked systems require a shared management culture that crosses cultural barriers.

D) Networked systems are those in which there is a solid, singular global environment for developing and operating systems.

E) Networked systems are an emerging trend for domestic exporters.

Answer: E Difficulty: Challenging AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

59) Of the following, which is one of the central principles recommended in this chapter for a firm organizing itself for international business?

A) Organize value-adding activities along lines of comparative advantage.

B) Establish multiple offices for international systems and a global CIO position.

C) Disperse production and marketing to regional centers and establish a single center for world headquarters and strategic management.

D) Develop and operate systems units at the international level first.

E) Centralize production but decentralize marketing and sales to be close to the customer.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

60) In a transnational business strategy, there is a strong central management core of decision making but considerable dispersal of power throughout the global divisions.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

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61) In a franchiser business strategy, strategic management and finance/accounting are coordinated and production, sales/marketing, and human resources are centralized.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

62) Transnational systems units should handle telecommunications and systems development across national boundaries that take place within major geographic regions, such as Europe, Asia, and the Americas.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

63) In a transnational strategy, financial management is centralized while production and sales are decentralized.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 15-2: What are the alternative strategies for developing global businesses?

64) Briefly 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-2: What are the alternative strategies for developing global businesses?

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65) What are the organizational principles a company should follow to develop a global company and its information systems support structure? Do you agree? Would you change these principles, or add others? Support your answer.

Answer: Student answers will vary but should include an understanding of the following three principles.

1. Organized value-adding activities along lines of comparative advantage.

2. Develop and operate systems units at each level of corporate activity—regional, national, and international.

3. Establish at world headquarters a single office responsible for development of international systems: a global chief information officer position.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-2: What are the alternative strategies for developing global businesses?

66) Briefly describe four types of systems configurations used by international firms to fit their global strategies.

Answer: Centralized systems are those in which systems development and operation occur totally at the domestic home base. Duplicated systems are those in which development occurs at the home base, but operations are turned over to autonomous units in locations across the globe.

Decentralized systems are those in which foreign units design their own unique solutions.

Networked systems are those in which systems development and operations occur in an integrated and coordinated fashion across all units.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-2: What are the alternative strategies for developing global businesses?

67) Which of the following methods of encouraging local users to support global systems should be avoided as much as possible?

A) Permitting each country unit the opportunity to develop a transnational application first in its home territory and then throughout the world B) Developing transnational centers of excellence C) Requiring local units to agree on a short list of transnational systems D) Using raw power E) Involving users in the creation of the design without giving up control over the development of the project to parochial interests Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

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68) Which of the following is not one of the principal management challenges in developing global systems?

A) Encouraging local users to support global systems B) Coordinating applications development C) Defining an acceptable test plan D) Agreeing on common user requirements E) Introducing changes in business processes Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

69) Which of the following occurs as a firm moves from local option systems to regional and global systems?

A) Agency costs increase.

B) Coordination costs decrease.

C) Transaction costs increase.

D) Both transaction and agency costs increase.

E) All costs increase.

Answer: A Difficulty: Challenging AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

70) In order to define centers of excellence in a global firm, you first need to identify: A) functional areas.

B) core business processes.

C) SOPs. D) core competencies.

E) international best practices.

Answer: B Difficulty: Easy AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

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71) 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 and software costs E) Optimization of the use of corporate funds Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

72) When developing a global system, bringing the opposition of local groups into the process of designing and implementing the solution without giving up control over the direction and nature of the change is called: A) cooptation.

B) change management.

C) implementation.

D) advocacy.

E) cooperation.

Answer: A Difficulty: Easy AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

73) Transnational centers of excellence do all of the following except: A) perform initial identification and specification of business processes.

B) define information requirements.

C) perform business and systems analysis.

D) accomplish all design and testing.

E) implement the system throughout the world.

Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

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74) Which of the following is not an important challenge when implementing a global information system solution?

A) Agreeing on common user requirements B) Identifying providers of global software C) Introducing changes in business processes D) Coordinating applications development E) Coordinating software releases Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

75) Which of the following statements about the challenges posed by global information systems is not true?

A) Only some core systems are worth coordinating on a transnational basis.

B) A sensible strategy is to reduce agency costs by developing only a few core global systems.

C) Rank-ordering business processes enables you to decide which should be considered core applications.

D) The financial and political costs of defining and implementing transnational systems are extremely high.

E) A grand design approach is the most effective way to implement a transnational system.

Answer: E Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

76) The chapter outlines four major steps in developing an effective global system solution.

Which of the following is not one of these steps?

A) Identify which local systems need to be replaced.

B) Identify the core systems to coordinate centrally.

C) Choose a developmental approach.

D) Make the benefits clear.

E) Define the core business processes.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

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77) The way to identify core business processes is to conduct a: A) cost-benefit analysis.

B) work-flow analysis.

C) business process analysis.

D) feasibility analysis.

E) systems analysis.

Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

78) Global systems allow fixed costs to be amortized over a much larger customer base.

Answer: TRUE Difficulty: Moderate AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

79) Success as a change agent depends on legitimacy, authority, and ability to involve users in the change design process.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

80) 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: Management challenges in developing global information systems include the following: 1. Agreeing on common user requirements.

2. Introducing changes in business processes.

3. Coordinating applications development.

4. Coordinating software releases.

5. Encouraging local users to support global systems.

Student answers as to the most problematic, and why, will vary.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

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81) 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, the company is considering a cooptation strategy in which it 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.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

82) 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 system. What general benefits can Bamboo Home expect from a globalized system?

Answer: Bamboo Home can expect a number of benefits from a globalized system. For instance, global systems can contribute to superior management and coordination. For example, they can enable 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, Bamboo Home 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.

Difficulty: Easy AACSB: Analytical thinking; Written and oral communication LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

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83) Why should only some core systems be coordinated on a transnational basis?

Answer: Although core systems support functions that are absolutely critical to the organization, only some core systems are worth sharing globally from a cost and feasibility point of view. Participating in global markets reduces transaction costs, but agency costs increase with global systems compared to local systems. Some systems should be partially coordinated because they share key elements, but they do not have to be totally common across national boundaries. For such systems, a good deal of local variation is possible and desirable. A final group of systems is peripheral, truly provincial, and needed to suit local requirements only. The best mix for most organizations is a combination of global systems and regional systems, developing core systems for only the most vital business functions.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-3: What are the challenges posed by global information systems and management solutions for these challenges?

84) Software localization is the process of: A) developing a purely graphical user interface.

B) converting software programming to run on a different platform.

C) converting software to operate in a second language.

D) modifying software so that it can be adopted in other countries without engineering changes.

E) modifying software so executives can understand its command language.

Answer: C Difficulty: Challenging AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

85) Which of the following is not an important technology issue to consider when developing an international information system?

A) Standardizing the global computing platform B) Developing a global knowledge base C) Finding specific software applications that are user friendly and enhance productivity D) Building sufficient connectivity E) Developing common data standards Answer: B Difficulty: Moderate AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

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86) Which of the following countries has the highest percentage of its total population using the Internet?

A) United States B) China C) Peru D) Norway E) Somalia Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

87) All of the following are important worldwide tools for knowledge and data-based firms except: A) email B) enterprise social networking systems C) videoconferencing D) SCM systems E) Collaboration tools Answer: D Difficulty: Challenging AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

88) Which of the following statements about connectivity in relation to global systems is not true?

A) Few global corporations trust the security of the Internet.

B) The public Internet guarantees a basic level of service.

C) Many global corporations use private networks to communicate sensitive data.

D) Not all countries support basic Internet service.

E) The Internet provides a powerful foundation for providing connectivity among the dispersed units of global firms.

Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

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89) Which of the following countries has the second-highest percentage of its total population using the Internet?

A) China B) Peru C) United States D) Norway E) Egypt Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

90) Which of the following is not one of the challenges posed by international networks, including the Internet?

A) Quality of service B) Security C) Costs and tariffs D) Differences in Internet protocols E) Network management Answer: D Difficulty: Moderate AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

91) Which of the following is not one of the principal challenges of international networks?

A) Network capacity B) Poor quality of international service C) Inability of companies to create a global intranet for internal communications.

D) Regulatory constraints E) Installation delays Answer: C Difficulty: Moderate AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

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92) In developing countries, use of the Internet is limited by all of the following except: A) use of mobile telephones.

B) high cost of Internet access.

C) poor bandwidth capacity.

D) unreliable power grids.

E) claims of digital sovereignty.

Answer: A Difficulty: Moderate AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

93) Which types of systems are widely used by manufacturing and distribution firms to connect to suppliers on a global basis?

A) TPS B) EDI C) CRM D) Enterprise social networking systems E) MIS Answer: B Difficulty: Easy AACSB: Information technology LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

94) One major telecommunications challenge in an international setting is making data flow seamlessly across networks shaped by disparate national standards.

Answer: TRUE Difficulty: Easy AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

95) While private networks have guaranteed service levels and better security than the Internet, the Internet is the primary foundation for global corporate networks when lower security and service levels are acceptable.

Answer: TRUE Difficulty: Challenging AACSB: Information technology LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

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96) Internet-based VPNs provide the same level of quick and predictable response as private networks.

Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

97) The rate of growth in the Internet population is far faster in North America and Europe than it is in Africa and the Middle East.

Answer: FALSE Difficulty: Moderate AACSB: Application of knowledge LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

98) 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.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

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99) List and briefly describe four of the challenges involved with international networks.

Answer: Answers may include the following: 1. Quality of service — the public Internet doesn't guarantee any level of service.

2. Security — most companies use private networks to communicate data and do not trust the security of the public Internet.

3. Costs and tariffs.

4. Network management — not all countries support basic Internet service.

5. Installation delays.

6. Poor quality of international service — Internet connectivity varies worldwide.

7. Regulatory constraints — some countries employ comprehensive blocking and monitoring techniques, slowing down traffic.

8. Network capacity — the Internet can support different amounts of traffic at different times depending on worldwide usage.

Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

100) What is software localization and why is it important for global companies?

Answer: Software localization is the process of converting software to operate in a second language. Although English is the assumed standard for graphical user interfaces for global systems, many systems are in use in areas where there is no common language. When this happens, software localization is necessary to build new interfaces for different languages, taking care to account for differences in meaning and expression.

Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 15-4: What are the issues and technical alternatives to be considered when developing international information systems?

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