Test Bank For Management Information Systems Managing the Digital Firm, 18th Edition By Kenneth C. L

Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 1 Information Systems in Global Business Today 1) As discussed in the chapter-opening case, ConocoPhillips solved the problem of supply chain challenges by using which technology?

A) 3D printing B) cloud computing C) 5G networks D) Intranet Answer: A Page Ref: 5 Difficulty: Moderate AACSB: Analytical thinking LO: 1.1: Understand how information systems transform business and careers.

2) Approximately how many people in 2024 are expected to purchase something online?

A) About 1 billion B) About 2.9 billion C) About 3.5 billion D) About 4.25 billion Answer: B Page Ref: 10 Difficulty: Moderate AACSB: Information technology LO: 1.1: Understand how information systems transform business and careers.

3) 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 Answer: D Page Ref: 17 Difficulty: Difficult AACSB: Analytical thinking LO: 1.2: Describe key challenges and opportunities created by new MIS technologies.

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4) Between 1998 and 2021, the United States lost ________ manufacturing jobs to offshore producers.

A) 3 million B) 4 million C) 5 million D) 6 million Answer: C Page Ref: 19 Difficulty: Difficult AACSB: Application of knowledge LO: 1.2: Describe key challenges and opportunities created by new MIS technologies.

5) 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.

Answer: B Page Ref: 19 Difficulty: Difficult AACSB: Information technology LO: 1.3: Describe key features of a digital firm.

6) Creating a marketing plan is an example of a business process.

Answer: TRUE Page Ref: 20 Difficulty: Easy AACSB: Application of knowledge LO: 1.3: Describe key features of a digital firm.

7) 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 Page Ref: 19 Difficulty: Easy AACSB: Application of knowledge LO: 1.3: Describe key features of a digital firm.

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8) 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.

Page Ref: 20 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1.3: Describe key features of a digital firm.

9) 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 Answer: C Page Ref: 23 Difficulty: Difficult AACSB: Information technology LO: 1.4: Describe the business objectives of information systems.

10) 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 Answer: A Page Ref: 27 Difficulty: Difficult AACSB: Information technology LO: 1.4: Describe the business objectives of information systems.

11) Which of the following companies is given as an example of a business using information systems to improve supplier intimacy?

A) Citibank B) Mandarin Oriental C) Ritz-Carlton D) Apple Answer: C Page Ref: 25 Difficulty: Difficult AACSB: Information technology LO: 1.4: Describe the business objectives of information systems.

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12) 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 Answer: B Page Ref: 24 Difficulty: Difficult AACSB: Information technology LO: 1.4: Describe the business objectives of information systems.

13) 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 Answer: A Page Ref: 25 Difficulty: Moderate AACSB: Analytical thinking LO: 1.4: Describe the business objectives of information systems.

14) A business model describes how a company produces, delivers, and sells a product or service to generate revenue.

Answer: TRUE Page Ref: 24 Difficulty: Easy AACSB: Application of knowledge LO: 1.4: Describe the business objectives of information systems.

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15) 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 systems 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 cars in for periodic checkups. 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.

Page Ref: 24 Difficulty: Difficult AACSB: Application of knowledge; Information technology; Written and oral communication LO: 1.4: Describe the business objectives of information systems.

16) 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.

Page Ref: 23 Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 1.4: Describe the business objectives of information systems.

17) 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) input, processing, and output B) input, output, and feedback C) data, information, and analysis D) data analysis, processing, and feedback Answer: A Page Ref: 32 Difficulty: Easy AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

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18) Raw data collected at checkout counters in a grocery store is an example of ________.

A) output B) processing C) feedback D) input Answer: D Page Ref: 32 Difficulty: Easy AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

19) The total number of bottles of dish detergent sold at a particular store is an example of which of the following?

A) Input B) Raw data C) Meaningful information D) Feedback Answer: C Page Ref: 31 Difficulty: Easy AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

20) 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 Answer: D Page Ref: 32 Difficulty: Easy AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

21) Converting raw data into a more meaningful form is called ________.

A) capturing B) processing C) organizing D) feedback Answer: B Page Ref: 32 Difficulty: Easy AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

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22) 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 of 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%.

Answer: C Page Ref: 32 Difficulty: Difficult AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

23) All of the following are examples of environmental actors in an information system except ________.

A) competitors B) regulatory agencies C) employees D) suppliers Answer: C Page Ref: 33 Difficulty: Moderate AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

24) 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 Answer: C Page Ref: 32 Difficulty: Moderate AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

25) 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) Management information systems C) Business processes D) Information technology infrastructure Answer: B Page Ref: 35 Difficulty: Moderate AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

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

Answer: TRUE Page Ref: 30 Difficulty: Moderate AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

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

Answer: FALSE Page Ref: 35 Difficulty: Easy AACSB: Information technology LO: 1.5: Explain what an information system is and how it works.

28) 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.

Page Ref: 30 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1.5: Explain what an information system is and how it works.

29) 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.

Page Ref: 31 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 1.5: Explain what an information system is and how it works.

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30) 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.

Page Ref: 34 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 1.5: Explain what an information system is and how it works.

31) In a hierarchical business organization, the upper level consists of ________.

A) scientists B) senior management C) service workers D) data workers Answer: B Page Ref: 37 Difficulty: Moderate AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

32) 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 Answer: A Page Ref: 39 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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33) Data management technology consists of which of the following?

A) Physical hardware and media used by an organization to store data B) Software governing the organization of data on physical storage media C) Two or more computers linked together to share data or resources D) Hardware and software used to transfer data Answer: B Page Ref: 41 Difficulty: Easy AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

34) 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 its goals.

D) It is a fundamental set of assumptions, values, and ways of doing things that has been accepted by most members of the organization.

Answer: D Page Ref: 39 Difficulty: Moderate AACSB: Analytical thinking LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

35) 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 Answer: C Page Ref: 43 Difficulty: Easy AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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36) Maintaining the organization's financial records is a central purpose of which main business function?

A) Manufacturing and accounting B) Finance and accounting C) Sales and manufacturing D) Finance and sales Answer: B Page Ref: 38 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

37) 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 Answer: D Page Ref: 37 Difficulty: Moderate AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

38) 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 Answer: A Page Ref: 37 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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39) 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 Answer: B Page Ref: 37 Difficulty: Difficult AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

40) Who of the following work at the same level as middle management?

A) Operational managers B) Production workers C) Knowledge workers D) Data workers Answer: C Page Ref: 37 Difficulty: Moderate AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

41) 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 Answer: B Page Ref: 38 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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42) 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 Answer: A Page Ref: 48 Difficulty: Difficult AACSB: Analytical thinking LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

43) 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 Answer: B Page Ref: 49 Difficulty: Moderate AACSB: Analytical thinking LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

44) 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 Answer: C Page Ref: 42 Difficulty: Easy AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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45) 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) Email D) An extranet Answer: B Page Ref: 42 Difficulty: Easy AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

46) 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 Answer: D Page Ref: 42 Difficulty: Easy AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: TRUE Page Ref: 36 Difficulty: Moderate AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: FALSE Page Ref: 37 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: FALSE Page Ref: 38 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: TRUE Page Ref: 39 Difficulty: Moderate AACSB: Analytical thinking LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: FALSE Page Ref: 39 Difficulty: Moderate AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: TRUE Page Ref: 40 Difficulty: Easy AACSB: Application of knowledge LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

Answer: FALSE Page Ref: 42 Difficulty: Moderate AACSB: Information technology LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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54) 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 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 and innovation in products, minimize warehouse overhead, and streamline distribution.

Page Ref: 40 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

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

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

Page Ref: 39 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1.6: Describe organizational, management, and technology dimensions of information systems.

56) The Internet of Everything (IoE) describes a network of physical objects that are embedded with sensors, software, and other technologies enabling them to connect and exchange data with other devices and systems via the Internet.

Answer: FALSE Page Ref: 50 Difficulty: Moderate AACSB: Information technology LO: 1.7: Understand the importance of IoT, big data, cloud computing, and AI. 57) Connected devices, as well as data from websites and other sources, generate big data.

Answer: TRUE Page Ref: 51 Difficulty: Moderate AACSB: Information technology LO: 1.7: Understand the importance of IoT, big data, cloud computing, and AI.

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58) 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 Answer: C Page Ref: 58 Difficulty: Difficult AACSB: Analytical thinking LO: 1.8: Understand why complementary assets are essential.

59) 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 Answer: A Page Ref: 58 Difficulty: Moderate AACSB: Analytical thinking LO: 1.8: Understand why complementary assets are essential.

60) 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 Answer: A Page Ref: 58 Difficulty: Moderate AACSB: Application of knowledge LO: 1.8: Understand why complementary assets are essential.

61) 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 Answer: A Page Ref: 58 Difficulty: Moderate AACSB: Application of knowledge LO: 1.8: Understand why complementary assets are essential.

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62) 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 Answer: D Page Ref: 55 Difficulty: Difficult AACSB: Information technology LO: 1.8: Understand why complementary assets are essential.

63) Which of the following is not true about Cloud computing?

A) It makes it possible for organizations to acquire much more analytical and processing power to expand the reach of their systems.

B) It provides a more robust IT infrastructure than what is typically available on-site for artificial intelligence applications.

C) Organizations and individuals can access these resources at any time and at any place using an Internet-connected device.

D) It is a model of computing in which only storage is offloaded to the Internet.

Answer: D Page Ref: 51 Difficulty: Difficult AACSB: Information technology LO: 1.8: Understand why complementary assets are essential.

64) Which of the following is not a skill connected with artificial intelligence (AI)?

A) It works with small amounts of data.

B) It is a type of artificial intelligence.

C) It is focused on building computer systems that can learn and improve on their own.

D) It uses mathematical models (algorithms) to identify patterns.

Answer: C Page Ref: 51 Difficulty: Easy AACSB: Information technology LO: 1.8: Understand why complementary assets are essential.

65) Which of the following is not true about machine learning (ML)?

A) Speech recognition B) Visual perception C) Ignoring past experiences D) Recognizing patterns Answer: A Page Ref: 52 Difficulty: Difficult AACSB: Information technology LO: 1.8: Understand why complementary assets are essential.

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66) Which of the following is not a Generative AI tool?

A) ChatGPT B) Google's Gemini C) Microsoft's Copilot D) Adobe's GAI Answer: D Page Ref: 52 Difficulty: Moderate AACSB: Information technology LO: 1.8: Understand why complementary assets are essential.

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

Answer: FALSE Page Ref: 58 Difficulty: Difficult AACSB: Application of knowledge LO: 1.8: Understand why complementary assets are essential.

68) 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.

Page Ref: 56 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 1.8: Understand why complementary assets are essential.

69) Which of the following is not one of the technical approaches to Information Systems?

A) Computer Science B) Economics C) Management Science D) Operations Research Answer: B Page Ref: 60 Difficulty: Moderate AACSB: Information technology LO: 1.9: Describe different approaches used to study information systems.

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70) Which of the following is not one of the behavioral approaches to Information Systems?

A) Computer Science B) Economics C) Sociology D) Psychology Answer: A Page Ref: 60 Difficulty: Moderate AACSB: Information technology LO: 1.9: Describe different approaches used to study information systems.

71) MIS combines the work of computer science, ________ science, and operations research with a practical orientation toward developing system solutions to real-world problems.

A) management B) behavioral C) economic D) human resource Answer: A Page Ref: 60 Difficulty: Difficult AACSB: Information technology LO: 1.9: Describe different approaches used to study information systems.

72) The behavioral approach to information systems emphasizes mathematically-based models to study information systems.

Answer: FALSE Page Ref: 61 Difficulty: Moderate AACSB: Information technology LO: 1.9: Describe different approaches used to study information systems.

73) Computer science is concerned with establishing theories of computability, methods of computation, and methods of efficient data storage and access.

Answer: TRUE Page Ref: 61 Difficulty: Moderate AACSB: Information technology LO: 1.9: Describe different approaches used to study information systems.

74) In the sociotechnical view of systems, optimal organizational performance is achieved by jointly optimizing both the social and technical systems used in production.

Answer: TRUE Page Ref: 63 Difficulty: Moderate AACSB: Information technology LO: 1.9: Describe different approaches used to study information systems.

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75) Which of the following is not one of the ways this book prepares you for the future?

A) It will give you a complete description of how to describe and analyze information systems.

B) It will help you understand the business applications of technology.

C) It will give you a framework for describing and analyzing information systems.

D) It will give you a model for problem solving.

Answer: A Page Ref: 65 Difficulty: Moderate AACSB: Information technology LO: 1.10: Understand how this book prepares you for the future.

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Management Information Systems: Managing the Digital Firm, 18e (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 Answer: C Page Ref: 39 Difficulty: Moderate AACSB: Application of knowledge LO: 2.1: Understand how business processes relate 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 Answer: C Page Ref: 39 Difficulty: Moderate AACSB: Analytical thinking LO: 2.1: Understand how business processes relate 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 Answer: D Page Ref: 39 Difficulty: Moderate AACSB: Application of knowledge LO: 2.1: Understand how business processes relate 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 Answer: D Page Ref: 39 Difficulty: Easy AACSB: Application of knowledge LO: 2.1: Understand how business processes relate 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.

Answer: C Page Ref: 38 Difficulty: Difficult AACSB: Analytical thinking LO: 2.1: Understand how business processes relate to information systems.

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

Answer: FALSE Page Ref: 39 Difficulty: Moderate AACSB: Information technology LO: 2.1: Understand how business processes relate to information systems.

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

Answer: FALSE Page Ref: 38 Difficulty: Moderate AACSB: Analytical thinking LO: 2.1: Understand how business processes relate 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.

Page Ref: 39 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2.1: Understand how business processes relate 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.

Page Ref: 39 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2.1: Understand how business processes relate to information systems.

10) 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 Answer: C Page Ref: 42 Difficulty: Moderate AACSB: Analytical thinking LO: 2.2: Explain how information systems serve different management groups.

11) 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. Answer: C Page Ref: 40 Difficulty: Difficult AACSB: Analytical thinking LO: 2.2: Explain how information systems serve different management groups.

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12) 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 Answer: C Page Ref: 40 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

A) TPS B) MIS C) ESS D) DSS Answer: A Page Ref: 41 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

14) 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) middle management functions Answer: D Page Ref: 41 Difficulty: Easy AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

15) 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 Answer: D Page Ref: 43 Difficulty: Moderate AACSB: Analytical thinking LO: 2.2: Explain how information systems serve different management groups.

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16) 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 Answer: D Page Ref: 41 Difficulty: Difficult AACSB: Analytical thinking LO: 2.2: Explain how information systems serve different management groups.

17) 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 Answer: D Page Ref: 43 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

A) Operational management B) End-users C) Middle management D) Senior management Answer: D Page Ref: 44 Difficulty: Easy AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

19) 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 Answer: B Page Ref: 44 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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20) 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 flow 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 Answer: B Page Ref: 41 Difficulty: Difficult AACSB: Application of knowledge LO: 2.2: Explain how information systems serve different management groups.

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

A) MIS B) TPS C) ESS D) CRM Answer: C Page Ref: 44 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: FALSE Page Ref: 40 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: TRUE Page Ref: 43 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: FALSE Page Ref: 40 Difficulty: Moderate AACSB: Analytical thinking LO: 2.2: Explain how information systems serve different management groups.

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25) Managers rely on TPS for nonroutine decision making.

Answer: FALSE Page Ref: 40 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: FALSE Page Ref: 40 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

27) A DSS only uses information from external sources.

Answer: FALSE Page Ref: 43 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: TRUE Page Ref: 44 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

29) Operational managers use ESS to keep track of the elementary activities and transactions of the organization.

Answer: FALSE Page Ref: 44 Difficulty: Moderate AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: TRUE Page Ref: 44 Difficulty: Easy AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: FALSE Page Ref: 46 Difficulty: Difficult AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

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

Answer: TRUE Page Ref: 40 Difficulty: Easy AACSB: Information technology LO: 2.2: Explain how information systems serve different management groups.

33) 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, 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. ESSs 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. ESSs 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. TPSs 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. Page Ref: 40 Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2.2: Explain how information systems serve different management groups.

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

Answer: A BI 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.

Page Ref: 45 Difficulty: Difficult AACSB: Application of knowledge; Information technology; Written and oral communication LO: 2.2: Explain how information systems serve different management groups.

35) What is an 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 Answer: B Page Ref: 29 Difficulty: Difficult AACSB: Analytical thinking LO: 2.3: Explain how enterprise applications improve firm performance.

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

A) DSS B) MIS C) CRM D) Enterprise applications Answer: D Page Ref: 45 Difficulty: Easy AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

37) 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 Answer: B Page Ref: 45 Difficulty: Moderate AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

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38) Which of the following is not one of the four major types of enterprise applications?

A) Enterprise systems B) Supply chain management systems C) Customer relationship management systems D) Human resources management systems Answer: D Page Ref: 46 Difficulty: Easy AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

39) 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 Answer: B Page Ref: 46 Difficulty: Moderate AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

40) 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 Answer: C Page Ref: 46 Difficulty: Moderate AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

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41) 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 Answer: C Page Ref: 47 Difficulty: Difficult AACSB: Analytical thinking LO: 2.3: Explain how enterprise applications improve firm performance.

42) 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 Answer: B Page Ref: 47 Difficulty: Moderate AACSB: Application of knowledge; Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

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

Answer: TRUE Page Ref: 45 Difficulty: Moderate AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

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

Answer: TRUE Page Ref: 46 Difficulty: Moderate AACSB: Information technology LO: 2.3: Explain how enterprise applications improve firm performance.

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45) 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 flows 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.

Page Ref: 45 Difficulty: Easy AACSB: Analytical thinking; Information technology; Written and oral communication LO: 2.3: Explain how enterprise applications improve firm performance.

46) 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) Globalization D) Support for hierarchical organizational structures Answer: D Page Ref: 47 Difficulty: Moderate AACSB: Application of knowledge LO: 2.4: Understand the importance of collaboration and social business systems.

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

Answer: TRUE Page Ref: 49 Difficulty: Moderate AACSB: Information technology LO: 2.4: Understand the importance of collaboration and social business systems.

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

Answer: TRUE Page Ref: 48 Difficulty: Moderate AACSB: Information technology LO: 2.4: Understand the importance of collaboration and social business systems.

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49) 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 would strengthen their bonds with consumers, suppliers, and employees, increasing their emotional involvement in the firm.

Page Ref: 48 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 2.4: Understand the importance of collaboration and social business systems.

50) 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 Answer: B Page Ref: 51 Difficulty: Moderate AACSB: Information technology LO: 2.5: Describe collaboration tools.

51) All of the following are videoconferencing tools except ________.

A) Salesforce Chatter B) Zoom C) Apple Facetime D) Amazon Chime Answer: A Page Ref: 51 Difficulty: Easy AACSB: Application of knowledge LO: 2.5: Describe collaboration tools.

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

Answer: TRUE Page Ref: 51 Difficulty: Moderate AACSB: Information technology LO: 2.5: Describe collaboration tools.

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53) 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.

Page Ref: 51 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2.5: Describe collaboration tools.

54) 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) supply chain management D) tagging and social bookmarking Answer: C Page Ref: 55 Difficulty: Moderate AACSB: Information technology LO: 2.6: Describe social business tools.

55) Second Life is an example of a ________.

A) virtual world B) wiki C) social network D) mind mapping tool Answer: A Page Ref: 55 Difficulty: Easy AACSB: Information technology LO: 2.6: Describe social business tools.

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56) What analytical framework helps with understanding and evaluating the benefits and uses of collaboration tools?

A) Cost/use matrix B) Task/time matrix C) Space/cost matrix D) Time/space matrix Answer: D Page Ref: 55 Difficulty: Moderate AACSB: Analytical thinking LO: 2.7: Understand how to evaluate collaboration and social business tools.

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

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

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

Page Ref: 55 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 2.7: Understand how to evaluate collaboration and social business tools.

58) A wiki is a type of collaborative ________.

A) social network B) blog C) virtual world D) website Answer: D Page Ref: 58 Difficulty: Easy AACSB: Information technology LO: 2.8: Describe knowledge management systems.

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59) The principal liaison between the information systems groups and the rest of the organization is a(n) ________.

A) programmer B) information systems manager C) systems analyst D) CTO Answer: C Page Ref: 61 Difficulty: Easy AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

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

A) CEO B) CFO C) CIO D) CTO Answer: C Page Ref: 61 Difficulty: Easy AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

61) An information systems manager ________.

A) writes software instructions for computers B) acts as the 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 Answer: D Page Ref: 61 Difficulty: Difficult AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

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

A) CTO B) CSO C) CKO D) CPO Answer: C Page Ref: 61 Difficulty: Easy AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

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63) 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 Answer: A Page Ref: 61 Difficulty: Easy AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

64) 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 Answer: C Page Ref: 62 Difficulty: Difficult AACSB: Application of knowledge LO: 2.9: Describe the role of the information systems function.

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

Answer: TRUE Page Ref: 62 Difficulty: Difficult AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

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

Answer: TRUE Page Ref: 62 Difficulty: Moderate AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

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

Answer: TRUE Page Ref: 62 Difficulty: Difficult AACSB: Information technology LO: 2.9: Describe the role of the information systems function.

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68) 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 the power to create and manage systems, and what kind of ROI is expected from systems.

Page Ref: 62 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 2.9: Describe the role of the information systems function.

69) Which of the following is not true about Customer Success Analysts?

A) They should have knowledge of Microsoft 365 tools.

B) They should have experience with Salesforce CRM software.

C) They are responsible for ensuring that customers have a positive experience.

D) Even with no prior experience, they will earn around $70,000.

Answer: D Page Ref: 63 Difficulty: Moderate AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

70) The information in Chapter 2 can help you advance your career by helping you understand the different types of systems you are likely to encounter and their role in the business.

Answer: TRUE Page Ref: 62 Difficulty: Easy AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

71) Princess Cruises, considered one of the most recognized cruise lines in the world, uses a single, well-perfected promotion concept to attract customers and remain competitive in the market.

Answer: FALSE Page Ref: 63 Difficulty: Easy AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

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72) Hanover Research is a marketing and data analytics firm with expertise in customer experience analysis.

Answer: TRUE Page Ref: 63 Difficulty: Easy AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

73) Senior customer success managers can make almost $100,000.

Answer: FALSE Page Ref: 63 Difficulty: Easy AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

74) Customer success managers collaborate with various teams to address customer's needs.

Answer: TRUE Page Ref: 63 Difficulty: Easy AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

75) On-board credit, free gratuities, and which promotional campaigns were most appealing to customers were all options that Princess Cruises considered.

Answer: TRUE Page Ref: 63 Difficulty: Easy AACSB: Information technology LO: 2.10: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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 Answer: C Page Ref: 74 Difficulty: Moderate AACSB: Information technology LO: 3.1: Discuss technical and behavioral views of organizations.

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.

Answer: D Page Ref: 74 Difficulty: Moderate AACSB: Application of knowledge LO: 3.1: Discuss technical and behavioral views of organizations.

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 Answer: A Page Ref: 75 Difficulty: Difficult AACSB: Reflective thinking LO: 3.1: Discuss technical and behavioral views of organizations.

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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.

Answer: C Page Ref: 75 Difficulty: Difficult AACSB: Analytical thinking LO: 3.1: Discuss technical and behavioral views of organizations.

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 Answer: D Page Ref: 74 Difficulty: Moderate AACSB: Application of knowledge LO: 3.1: Discuss technical and behavioral views of organizations.

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

A) structure B) culture C) labor D) feedback Answer: C Page Ref: 74 Difficulty: Easy AACSB: Application of knowledge LO: 3.1: Discuss technical and behavioral views of organizations.

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7) 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.

Page Ref: 75 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 3.1: Discuss technical and behavioral views of organizations.

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 Answer: C Page Ref: 80 Difficulty: Moderate AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

9) Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a ________.

A) machine bureaucracy B) professional bureaucracy C) divisionalized bureaucracy D) multidivisional bureaucracy Answer: A Page Ref: 80 Difficulty: Moderate AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

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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 Answer: C Page Ref: 80 Difficulty: Difficult AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

11) 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 Answer: B Page Ref: 77 Difficulty: Easy AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

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

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

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

C) Disruptive technologies may sometimes simply extend the marketplace.

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

Answer: B Page Ref: 79 Difficulty: Moderate AACSB: Information technology LO: 3.2: Discuss features of organizations that affect information systems.

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

A) Organizations generally change much faster than environments.

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.

Answer: A Page Ref: 76 Difficulty: Difficult AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

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

Answer: TRUE Page Ref: 77 Difficulty: Moderate AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

15) Routines are also called standard operating procedures.

Answer: TRUE Page Ref: 76 Difficulty: Easy AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

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

Answer: FALSE Page Ref: 79 Difficulty: Easy AACSB: Application of knowledge LO: 3.2: Discuss features of organizations that affect information systems.

17) 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.

Page Ref: 78 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 3.2: Discuss features of organizations that affect information systems.

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18) 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) transaction D) agency Answer: C Page Ref: 81 Difficulty: Moderate AACSB: Application of knowledge LO: 3.3: Describe the impact of information systems on organizations.

19) Which of the following statements about 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.

Answer: A Page Ref: 81 Difficulty: Moderate AACSB: Information technology LO: 3.3: Describe the impact of information systems on organizations.

20) According to agency theory, the firm is viewed as a(n) ________.

A) unified, profit-maximizing entity B) task force organization that must respond to rapidly changing environments C) entrepreneurial endeavor D) "nexus of contracts" among self-interested individuals Answer: D Page Ref: 81 Difficulty: Difficult AACSB: Application of knowledge LO: 3.3: Describe the impact of information systems on organizations.

21) According to research on organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are ________.

A) environment, people, structure, and tasks B) technology, people, culture, and structure C) tasks, culture, management, and environment D) tasks, technology, people, and structure Answer: D Page Ref: 83 Difficulty: Difficult AACSB: Information technology LO: 3.3: Describe the impact of information systems on organizations.

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22) 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.

Page Ref: 81 Difficulty: Difficult AACSB: Application of knowledge; Information technology; Written and oral communication LO: 3.3: Describe the impact of information systems on organizations.

23) 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 Answer: B Page Ref: 84 Difficulty: Moderate AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

24) All of the following are competitive forces in Porter's model except ________.

A) suppliers B) new market entrants C) disruptive technologies D) customers Answer: C Page Ref: 84 Difficulty: Moderate AACSB: Reflective thinking LO: 3.4: Discuss Porter's competitive forces model.

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25) 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.

Answer: D Page Ref: 84 Difficulty: Difficult AACSB: Analytical thinking LO: 3.4: Discuss Porter's competitive forces model.

26) All of the following could be considered substitute products for industrial electricity generation except ________.

A) solar B) wind C) coal D) ethanol Answer: D Page Ref: 85 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

27) Walmart's continuous replenishment system is an example of a firm using information systems to ________.

A) strengthen ties with its customers B) achieve low-cost leadership C) develop synergies D) focus on market niche Answer: B Page Ref: 86 Difficulty: Moderate AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

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28) 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 Answer: A Page Ref: 85 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

29) The four major competitive strategies are ________.

A) low-cost leadership, substitute products and services, customers, and suppliers B) low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy C) new market entrants, substitute products and services, customers, and suppliers D) low-cost leadership, new market entrants, product differentiation, and focus on market niche Answer: B Page Ref: 85 Difficulty: Moderate AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

30) 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 Answer: B Page Ref: 87 Difficulty: Moderate AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

31) The ability to offer individually tailored products or services using the same production resources as bulk production is known as ________.

A) mass customization B) micromarketing C) micro customization D) niche customization Answer: A Page Ref: 87 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

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32) 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 Answer: C Page Ref: 88 Difficulty: Moderate AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

33) ________ 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 Answer: A Page Ref: 86 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

34) Smart products increase rivalry among firms.

Answer: TRUE Page Ref: 89 Difficulty: Moderate AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: TRUE Page Ref: 84 Difficulty: Moderate AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: TRUE Page Ref: 89 Difficulty: Easy AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

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37) Creating brand loyalty can be accomplished through product differentiation.

Answer: TRUE Page Ref: 85 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: TRUE Page Ref: 85 Difficulty: Moderate AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: FALSE Page Ref: 88 Difficulty: Moderate AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: TRUE Page Ref: 86 Difficulty: Moderate AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: TRUE Page Ref: 86 Difficulty: Moderate AACSB: Information technology LO: 3.4: Discuss Porter's competitive forces model.

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

Answer: TRUE Page Ref: 84 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

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43) Smart products generally lower switching costs.

Answer: FALSE Page Ref: 89 Difficulty: Easy AACSB: Application of knowledge LO: 3.4: Discuss Porter's competitive forces model.

44) 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, 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, and lowering costs of globalization.

You could also view Porter's negative take on lowering the barrier to entry as a positive for new companies.

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

Page Ref: 88 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 3.4: Discuss Porter's competitive forces model.

45) 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.

Answer: D Page Ref: 91 Difficulty: Difficult AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

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46) 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 Answer: D Page Ref: 89 Difficulty: Easy AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

47) Which of the following represents 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 Answer: A Page Ref: 89 Difficulty: Moderate AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

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

A) Inbound logistics B) Technology C) Sales and marketing D) Service Answer: B Page Ref: 89 Difficulty: Moderate AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

49) Which of the following would a company employ to compare the efficiency and effectiveness of its business processes to strict standards and then measure performance against those standards?

A) Benchmarking B) Best practices C) Value chain analysis D) Strategic systems analysis Answer: A Page Ref: 90 Difficulty: Easy AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

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50) The most successful solutions or methods for achieving a business objective are called ________.

A) value activities B) best processes C) core competencies D) best practices Answer: D Page Ref: 90 Difficulty: Easy AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

51) 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 Answer: A Page Ref: 91 Difficulty: Easy AACSB: Information technology LO: 3.5: Discuss the value chain model.

52) 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 Answer: B Page Ref: 89 Difficulty: Moderate AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

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

Answer: TRUE Page Ref: 89 Difficulty: Easy AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

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

Answer: FALSE Page Ref: 89 Difficulty: Moderate AACSB: Application of knowledge LO: 3.5: Discuss the value chain model.

55) 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 Answer: A Page Ref: 93 Difficulty: Moderate AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

56) 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) synergies Answer: D Page Ref: 92 Difficulty: Easy AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

57) 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 Answer: D Page Ref: 92 Difficulty: Moderate AACSB: Information technology LO: 3.6: Discuss synergies, core competencies, and network economics.

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58) 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 Answer: B Page Ref: 93 Difficulty: Easy AACSB: Information technology LO: 3.6: Discuss synergies, core competencies, and network economics.

59) 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 Answer: A Page Ref: 93 Difficulty: Easy AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

60) A(n) ________ is an activity for which a firm is an industry leader.

A) core competency B) competitive advantage C) growth driver D) efficiency Answer: A Page Ref: 92 Difficulty: Moderate AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

61) 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 Page Ref: 92 Difficulty: Easy AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

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62) 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 Page Ref: 93 Difficulty: Moderate AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

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

Answer: TRUE Page Ref: 94 Difficulty: Moderate AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

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

Answer: FALSE Page Ref: 93 Difficulty: Easy AACSB: Application of knowledge LO: 3.6: Discuss synergies, core competencies, and network economics.

65) 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.

Page Ref: 92 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 3.6: Discuss synergies, core competencies, and network economics.

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66) Which of the following statements about AI and the value chain is not true?

A) AI is making it easier for companies to improve performance.

B) AI has given birth to new products, services, and sources of value.

C) Decision making has become less data-driven.

D) AI cannot make strategic decisions on its own.

Answer: C Page Ref: 95 Difficulty: Moderate AACSB: Analytical thinking LO: 3.7: Understand how AI can be used in competitive strategy.

67) Which of the following statements about AI and Porter's Competitive Forces Model is not true?

A) There is intense pressure on firms to build products that will supply an unassailable competitive advantage.

B) AI only increases the bargaining power of customers and suppliers.

C) The right data must be available, accurate, complete, error-free, and well-organized.

D) AI applications require expertise with technology implementations.

Answer: B Page Ref: 95 Difficulty: Moderate AACSB: Analytical thinking LO: 3.7: Understand how AI can be used in competitive strategy.

68) Many firms won't succeed because they lack the financial resources and know-how to work with AI tools.

Answer: TRUE Page Ref: 96 Difficulty: Easy AACSB: Application of knowledge LO: 3.7: Understand how AI can be used in competitive strategy.

69) AI can fully substitute for human creativity and wisdom.

Answer: FALSE Page Ref: 95 Difficulty: Easy AACSB: Application of knowledge LO: 3.7: Understand how AI can be used in competitive strategy.

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70) 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 Answer: C Page Ref: 99 Difficulty: Moderate AACSB: Analytical thinking LO: 3.8: Describe the challenges posed by strategic information systems.

71) The competitive advantages that strategic systems confer always last long enough to ensure long-term profitability.

Answer: FALSE Page Ref: 97 Difficulty: Easy AACSB: Application of knowledge LO: 3.8: Describe the challenges posed by strategic information systems.

72) Firms that can successfully align information technology with their business objectives are more likely to be profitable.

Answer: TRUE Page Ref: 98 Difficulty: Easy AACSB: Application of knowledge LO: 3.8: Describe the challenges posed by strategic information systems.

73) Crayola's popularity grew with the advent of computers and online learning.

Answer: FALSE Page Ref: 100 Difficulty: Easy AACSB: Application of knowledge LO: 3.9: Understand how the information in this chapter can help your career.

74) Crayola still produces crayons and traditional art tools, but it also has created a digital product line.

Answer: TRUE Page Ref: 100 Difficulty: Easy AACSB: Application of knowledge LO: 3.9: Understand how the information in this chapter can help your career.

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75) Crayola uses Google Analytics to make sure it is getting the most out of its marketing and ad campaigns.

Answer: TRUE Page Ref: 100 Difficulty: Easy AACSB: Application of knowledge LO: 3.9: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 4 Ethical and Social Issues in Information Systems 1) Which of the following best describes the result of new information technology and systems hitting a society more or less at rest?

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.

Answer: B Page Ref: 113 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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.

Answer: B Page Ref: 112 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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 Answer: A Page Ref: 113 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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4) 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 Answer: C Page Ref: 113 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

5) 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) Information rights and obligations D) Quality of life Answer: C Page Ref: 114 Difficulty: Difficult AACSB: Ethical understanding and reasoning LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

6) 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 Answer: A Page Ref: 114 Difficulty: Easy AACSB: Information technology LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

7) 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 Answer: C Page Ref: 115 Difficulty: Easy AACSB: Information technology LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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8) 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 Answer: C Page Ref: 111 Difficulty: Difficult AACSB: Application of knowledge LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

9) Routine violation of individual privacy is made easier by advances in data storage.

Answer: TRUE Page Ref: 113 Difficulty: Easy AACSB: Information technology LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

10) 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 Page Ref: 111 Difficulty: Moderate AACSB: Information technology LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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

Answer: TRUE Page Ref: 111 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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

Support your opinion.

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

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

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

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

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

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

Page Ref: 112 Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

13) 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.

Page Ref: 113 Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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14) 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.

Page Ref: 115 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 4.1: Describe IT/IS-related ethical, social, and political issues.

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

A) Responsibility B) Accountability C) Liability D) Due process Answer: A Page Ref: 116 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

16) ________ 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 Answer: B Page Ref: 116 Difficulty: Moderate AACSB: Application of knowledge LO: 4.2: Describe principles for ethical conduct.

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17) ________ 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 Answer: B Page Ref: 116 Difficulty: Moderate AACSB: Application of knowledge LO: 4.2: Describe principles for ethical conduct.

18) 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 Answer: A Page Ref: 116 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

19) 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 Answer: A Page Ref: 117 Difficulty: Difficult AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

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20) 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 would be defeated.

Answer: B Page Ref: 117 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

21) 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.

Answer: D Page Ref: 117 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

22) 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 Answer: D Page Ref: 117 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

23) 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 Answer: B Page Ref: 117 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

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24) 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 Answer: A Page Ref: 117 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

25) 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 Answer: D Page Ref: 117 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

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

Answer: FALSE Page Ref: 116 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

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

Answer: TRUE Page Ref: 118 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

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

Answer: FALSE Page Ref: 116 Difficulty: Easy AACSB: Application of knowledge LO: 4.2: Describe principles for ethical conduct.

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29) 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.

Page Ref: 116 Difficulty: Easy AACSB: Ethical understanding and reasoning LO: 4.2: Describe principles for ethical conduct.

30) 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.

Page Ref: 117 Difficulty: Moderate AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4.2: Describe principles for ethical conduct.

31) 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 Answer: D Page Ref: 120 Difficulty: Difficult AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

A) The Privacy Act B) The Gramm-Leach-Bliley Act C) The Freedom of Information Act D) COPPA Answer: A Page Ref: 119 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

33) 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 Answer: C Page Ref: 119 Difficulty: Difficult AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

A) HIPAA B) Gramm-Leach-Bliley Act C) Privacy Protection Act D) Freedom of Information Act Answer: A Page Ref: 120 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

A) COPPA B) HIPAA C) Gramm-Leach-Bliley Act D) Computer Matching and Privacy Protection Act Answer: D Page Ref: 119 Difficulty: Difficult AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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36) 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 Answer: B Page Ref: 122 Difficulty: Moderate AACSB: Information technology LO: 4.3: Discuss information rights and privacy issues.

37) 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) It prevents firms from using cookies.

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

D) It creates a single EU privacy policy.

Answer: B Page Ref: 120 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

A) Privacy by design agreements B) Privacy shield agreements C) PGP agreements D) FIP agreements Answer: B Page Ref: 121 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

39) 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 Answer: A Page Ref: 124 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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40) 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 Answer: A Page Ref: 123 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

A) Less than 10% B) Around 25% C) About 50% D) Over 90% Answer: D Page Ref: 42 Difficulty: Moderate AACSB: Information technology LO: 4.3: Discuss information rights and privacy issues.

42) All of the following are technical solutions to protecting user privacy except ________.

A) data use policies B) anonymous surfing C) anonymous email D) preventing client computers from accepting cookies Answer: A Page Ref: 125 Difficulty: Difficult AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

43) 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.

Answer: A Page Ref: 122 Difficulty: Difficult AACSB: Information technology LO: 4.3: Discuss information rights and privacy issues.

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44) 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 Answer: A Page Ref: 123 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

45) ________ allows an organization to collect personal information without the user's explicit consent.

A) A safe harbor B) The opt-in model C) The opt-out model D) P3P Answer: C Page Ref: 123 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

46) 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) avoid tracking Answer: C Page Ref: 121 Difficulty: Difficult AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

Answer: TRUE Page Ref: 124 Difficulty: Easy AACSB: Information technology LO: 4.3: Discuss information rights and privacy issues.

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48) The claim to privacy is protected by the U.S. Constitution.

Answer: TRUE Page Ref: 119 Difficulty: Easy AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

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

Answer: FALSE Page Ref: 120 Difficulty: Moderate AACSB: Application of knowledge LO: 4.3: Discuss information rights and privacy issues.

50) 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.

Page Ref: 119 Difficulty: Difficult AACSB: Ethical understanding and reasoning; Written and oral communication LO: 4.3: Discuss information rights and privacy issues.

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51) What is a cookie and how does it work?

Answer: A cookie is a small text file deposited on a computer's 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.

Page Ref: 122 Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 4.3: Discuss information rights and privacy issues.

52) 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) Trade secret D) Trademark Answer: C Page Ref: 123 Difficulty: Moderate AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

53) 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 Answer: C Page Ref: 125 Difficulty: Easy AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

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

A) WIPO B) NAI C) SIIA D) DMCA Answer: C Page Ref: 127 Difficulty: Easy AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

55) Which of the following adjusts copyright laws to the Internet age by making it illegal to circumvent technology-based protections of copyrighted materials?

A) Digital Millennium Copyright Act B) Privacy Act C) Freedom of Information Act D) Electronic Communications Privacy Act Answer: A Page Ref: 127 Difficulty: Difficult AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

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 Answer: C Page Ref: 126 Difficulty: Easy AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

57) 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.

Answer: D Page Ref: 126 Difficulty: Difficult AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

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58) Digital media differs from a physical book in all of the following ways except ________.

A) ease of replication B) ease of establishing uniqueness C) ease of transmission D) compactness Answer: B Page Ref: 126 Difficulty: Difficult AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

59) All of the following are, or were, file-sharing services except ________.

A) The Pirate Bay B) Megaupload C) Morpheus D) Pandora Answer: D Page Ref: 127 Difficulty: Moderate AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

60) Trade secret laws grant a monopoly on the ideas behind a work product.

Answer: TRUE Page Ref: 126 Difficulty: Moderate AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

61) The DMCA requires ISPs to take down sites of copyright infringers they are hosting when the ISPs are notified of the problem.

Answer: TRUE Page Ref: 127 Difficulty: Moderate AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

62) Software can never be considered to be a trade secret.

Answer: FALSE Page Ref: 126 Difficulty: Difficult AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

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63) One of the key concepts in patent law is originality.

Answer: TRUE Page Ref: 126 Difficulty: Easy AACSB: Application of knowledge LO: 4.4: Discuss intellectual property issues.

64) Some forms of illegal sharing of music files have declined as legitimate online music stores and streaming services have expanded.

Answer: TRUE Page Ref: 127 Difficulty: Easy AACSB: Information technology LO: 4.4: Discuss intellectual property issues.

65) 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 Answer: C Page Ref: 129 Difficulty: Difficult AACSB: Application of knowledge LO: 4.5: Discuss system quality issues.

66) Which of the following is by far the most common source of business system failure?

A) Software bugs B) Poor data quality C) Hardware failures D) Facilities failures Answer: B Page Ref: 61 Difficulty: Moderate AACSB: Information technology LO: 4.5: Discuss system quality issues.

67) The European Union has banned unsolicited commercial messaging.

Answer: TRUE Page Ref: 132 Difficulty: Easy AACSB: Application of knowledge LO: 4.6: Discuss accountability and control issues.

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68) Which of the following statements about spam is not true?

A) Most spam originates from bot networks.

B) Spamming is more tightly regulated in the United States than in Europe.

C) Spam costs for businesses are very high.

D) Spamming has mushroomed because it is so inexpensive and can reach so many people.

Answer: B Page Ref: 132 Difficulty: Moderate AACSB: Application of knowledge LO: 4.6: Discuss accountability and control issues.

69) 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 Answer: B Page Ref: 132 Difficulty: Moderate AACSB: Application of knowledge LO: 4.6: Discuss accountability and control issues.

70) 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 Answer: A Page Ref: 134 Difficulty: Moderate AACSB: Ethical understanding and reasoning LO: 4.7: Discuss quality of life issues.

71) 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 Answer: C Page Ref: 134 Difficulty: Easy AACSB: Application of knowledge LO: 4.7: Discuss quality of life issues.

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72) 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 Answer: A Page Ref: 136 Difficulty: Moderate AACSB: Application of knowledge LO: 4.7: Discuss quality of life issues.

73) Which of the following is not a job responsibility of a privacy analyst?

A) Acting as the first point of contact for internal and external privacy-related questions.

B) Proactively informing and involving stakeholders.

C) Creating best practices principles so that a different department can create the documentation.

D) Working as a part of the team in creating documentation.

Answer: C Page Ref: 138 Difficulty: Easy AACSB: Application of knowledge LO: 4.8: Understand how the information in this chapter can help your career.

74) Companies are becoming increasingly aware that ethical, social, and political issues can have a significant impact on their bottom line.

Answer: TRUE Page Ref: 137 Difficulty: Easy AACSB: Application of knowledge LO: 4.8: Understand how the information in this chapter can help your career.

75) If a firm has an ethics awareness team, it is not necessary for everyone in the company to be concerned about ethical issues.

Answer: FALSE Page Ref: 137 Difficulty: Easy AACSB: Information technology LO: 4.8: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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) Data management B) Telephone C) VOIP D) Telecommunications Answer: A Page Ref: 150 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its 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 Answer: A Page Ref: 149 Difficulty: Difficult AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

3) 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 Answer: B Page Ref: 151 Difficulty: Difficult AACSB: Analytical thinking LO: 5.1: Discuss IT infrastructure and its evolution.

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4) 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 Answer: A Page Ref: 152 Difficulty: Difficult AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

5) 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 Answer: D Page Ref: 150 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

6) In a multitiered network ________.

A) the work of the entire network is centralized B) the work of the entire network is balanced over multiple levels of servers C) processing is split between clients and servers D) processing is handled by multiple, geographically-remote clients Answer: B Page Ref: 150 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

7) During which era did business firms begin seriously to use TCP/IP? A) Enterprise computing B) General-purpose mainframe and minicomputer C) Client/server D) Personal computer Answer: A Page Ref: 152 Difficulty: Difficult AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

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8) In N-tier computing, significant parts of website content, logic, and processing are performed by a single web server.

Answer: FALSE Page Ref: 152 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

9) A web server is responsible for locating and managing stored web pages.

Answer: TRUE Page Ref: 150 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

10) IT infrastructure consists of only those physical computing devices and software required to operate the enterprise.

Answer: FALSE Page Ref: 149 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

11) An application server may reside on the same computer as a web server or on its own dedicated computer.

Answer: TRUE Page Ref: 152 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

12) In financial services firms, investments in IT infrastructure represent more than half of all capital invested.

Answer: TRUE Page Ref: 149 Difficulty: Moderate AACSB: Information technology LO: 5.1: Discuss IT infrastructure and its evolution.

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13) 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 the use of the systems.

• IT research and development services that research potential projects, products, and investments.

Page Ref: 150 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 5.1: Discuss IT infrastructure and its evolution.

14) 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. Page Ref: 152 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 5.1: Discuss IT infrastructure and its evolution.

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15) Microsoft is no longer the market leader in client/server networking.

Answer: FALSE Page Ref: 154 Difficulty: Easy AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

16) Which of the following is a leading telecommunications equipment provider?

A) Dell B) Intel C) Cisco D) IBM Answer: C Page Ref: 155 Difficulty: Easy AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

17) 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 over 68% of PCs Answer: D Page Ref: 154 Difficulty: Easy AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

18) Which of the following is not true about a legacy system?

A) It poses a security risk and should be replaced as soon as financially possible.

B) It is generally an older system.

C) It continues to be used to avoid the high cost of replacing or redesigning it.

D) Replacing it is not necessary if it can be integrated into a contemporary infrastructure.

Answer: A Page Ref: 155 Difficulty: Difficult AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

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19) 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) Qualcomm has a monopoly on the manufacture of processors for mobile devices.

Answer: D Page Ref: 153 Difficulty: Moderate AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

20) 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's staff knows more about the firm's IT infrastructure than service providers D) the firm's staff does not have the necessary experience to deploy and maintain the firm's IT infrastructure Answer: C Page Ref: 155 Difficulty: Moderate AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

21) 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 Answer: A Page Ref: 155 Difficulty: Moderate AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

22) Which of the following is the most popular smartphone operating system?

A) Linux B) Android C) Chrome OS D) iOS Answer: B Page Ref: 154 Difficulty: Moderate AACSB: Analytical thinking LO: 5.2: Describe the components of IT infrastructure.

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23) All of the following have multitouch capabilities except ________.

A) iOS B) Windows 8 C) Unix D) Windows 10 Answer: C Page Ref: 154 Difficulty: Easy AACSB: Application of knowledge LO: 5.2: Describe the components of IT infrastructure.

24) 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, and Linux D) Microsoft Windows Server, Unix, and Android Server Answer: C Page Ref: 154 Difficulty: Easy AACSB: Application of knowledge LO: 5.2: Describe the components of IT infrastructure.

25) Computers using Chrome OS store both programs and user data on Internet cloud servers.

Answer: TRUE Page Ref: 154 Difficulty: Moderate AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

26) Use of standalone server computers is increasing as organizations transition to cloud computing services.

Answer: FALSE Page Ref: 155 Difficulty: Easy AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

27) Enterprise database management software is used to manage the software applications used in business activities.

Answer: FALSE Page Ref: 154 Difficulty: Easy AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

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28) Web hosting services maintain websites for fee-paying subscribers.

Answer: TRUE Page Ref: 155 Difficulty: Moderate AACSB: Information technology LO: 5.2: Describe the components of IT infrastructure.

29) 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.

Page Ref: 154 Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 5.2: Describe the components of IT infrastructure.

30) 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.

Page Ref: 154 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 5.2: Describe the components of IT infrastructure.

31) Which of the following is not an example of a wearable computing device?

A) Smartwatches B) Smart glasses C) Smartphones D) Activity trackers Answer: C Page Ref: 156 Difficulty: Difficult AACSB: Information technology LO: 5.3: Discuss the mobile platform, apps, and BYOD. 8 Copyright © 2026 Pearson Education, Inc.

32) Which of the following is not an example of the mobile platform?

A) iPad B) Kindle C) Smartphones D) SDS devices Answer: D Page Ref: 156 Difficulty: Easy AACSB: Information technology LO: 5.3: Discuss the mobile platform, apps, and BYOD. 33) 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 Answer: B Page Ref: 156 Difficulty: Moderate AACSB: Analytical thinking LO: 5.3: Discuss the mobile platform, apps, and BYOD. 34) 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 Answer: D Page Ref: 156 Difficulty: Moderate AACSB: Information technology LO: 5.3: Discuss the mobile platform, apps, and BYOD. 35) Which of the following is not an example of the consumerization of IT? A) Google Maps B) Dropbox C) Amazon Web Services D) Gmail Answer: C Page Ref: 157 Difficulty: Difficult AACSB: Information technology LO: 5.3: Discuss the mobile platform, apps, and BYOD.

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36) 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) quantum computing Answer: D Page Ref: 158 Difficulty: Moderate AACSB: Information technology LO: 5.4: Discuss quantum computing and green computing.

37) 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 Answer: C Page Ref: 158 Difficulty: Easy AACSB: Information technology LO: 5.4: Discuss quantum computing and green computing.

38) Quantum computing is not yet available to the general public.

Answer: TRUE Page Ref: 158 Difficulty: Moderate AACSB: Information technology LO: 5.4: Discuss quantum computing and green computing.

39) At what percent of capacity do most servers operate?

A) 100% B) 15-20% C) Approximately 70% D) 40-50% Answer: B Page Ref: 161 Difficulty: Difficult AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

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40) 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 Answer: C Page Ref: 160 Difficulty: Moderate AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

41) 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 Answer: A Page Ref: 164 Difficulty: Moderate AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

42) All of the following are cloud computing services except ________.

A) IaaS B) PaaS C) SaaS D) system integration services Answer: D Page Ref: 161 Difficulty: Difficult AACSB: Analytical thinking LO: 5.5: Discuss virtualization and cloud computing.

43) 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) Reduced elasticity C) On-demand self service D) Measured service Answer: B Page Ref: 161 Difficulty: Difficult AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

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44) 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) SaaS C) Quantum computing D) IaaS Answer: B Page Ref: 161 Difficulty: Moderate AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

45) Virtualization has become one of the principal technologies for promoting green computing.

Answer: TRUE Page Ref: 161 Difficulty: Easy AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

46) 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 Page Ref: 161 Difficulty: Moderate AACSB: Information technology LO: 5.5: Discuss virtualization and cloud computing.

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47) 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 cloud. 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 and are also willing to assign part of their IT infrastructure to a public cloud are most likely to use a hybrid cloud model.

Page Ref: 165 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 5.5: Discuss virtualization and cloud computing.

48) 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.

Page Ref: 163 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 5.5: Discuss virtualization and cloud computing.

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49) 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% of capacity, and virtualization can boost utilization server utilization rates to 70% 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 under- or overutilization of storage resources.

Page Ref: 160 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 5.5: Discuss virtualization and cloud computing.

50) Which type of software is created and updated by a worldwide community of programmers and available for free?

A) Software packages B) Mashups C) Outsourced D) Open-source Answer: D Page Ref: 166 Difficulty: Easy AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

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51) Which of the following is not one of the current software platform trends?

A) Software-defined storage B) Open-source software C) Cloud services D) Software outsourcing Answer: A Page Ref: 166 Difficulty: Moderate AACSB: Analytical thinking LO: 5.6: Describe contemporary software platforms.

52) Linux is ________.

A) primarily concerned with the tasks of end users B) designed for specific machines and specific microprocessors C) an example of open-source software D) especially useful for processing numeric data Answer: C Page Ref: 166 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

53) 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.

Answer: C Page Ref: 166 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

54) 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.

Answer: C Page Ref: 166 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

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55) 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 Answer: C Page Ref: 167 Difficulty: Easy AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

56) 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 Answer: A Page Ref: 167 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

57) Which of the following is the foundation technology for web services?

A) XML B) HTML C) SOAP D) UDDI Answer: A Page Ref: 167 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

58) ________ 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) XML Answer: D Page Ref: 168 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

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59) HTML5 makes it easier for web pages to function across different display devices.

Answer: TRUE Page Ref: 167 Difficulty: Easy AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

60) Web services can exchange information between two different systems only if the operating systems and programming languages upon which the systems are based are identical.

Answer: FALSE Page Ref: 167 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

61) Whereas HTML is limited to describing how data should be presented in the form of Web pages, XML can perform presentation, communication, and data storage tasks.

Answer: TRUE Page Ref: 167 Difficulty: Easy AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

62) Hypertext markup language specifies how text, graphics, video, and sound are placed on a web page.

Answer: TRUE Page Ref: 167 Difficulty: Easy AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

63) Ruby is an object-oriented programming language known for speed and ease of use in building web applications.

Answer: TRUE Page Ref: 167 Difficulty: Moderate AACSB: Information technology LO: 5.6: Describe contemporary software platforms.

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64) 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.

Page Ref: 166 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 5.6: Describe contemporary software platforms.

65) Prewritten, commercially available sets of software programs that eliminate the need for a firm to write its own software programs for certain functions, are referred to as ________.

A) software packages B) mashups C) outsourced software D) open-source software Answer: A Page Ref: 169 Difficulty: Easy AACSB: Information technology LO: 5.7: Discuss alternative ways of obtaining software.

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66) The practice of contracting custom software development to an outside firm is commonly referred to as ________.

A) outsourcing B) scaling C) service-oriented architecture D) application integration Answer: A Page Ref: 169 Difficulty: Easy AACSB: Information technology LO: 5.7: Discuss alternative ways of obtaining software.

67) A formal contract between customers and their service providers that outlines the specific responsibilities of the service provider and the level of service expected by the customer is called a(n) ________.

A) SOA B) SLA C) TCO D) RFQ Answer: B Page Ref: 169 Difficulty: Easy AACSB: Information technology LO: 5.7: Discuss alternative ways of obtaining software.

68) Which of the following is not a hardware component in AI listed in the chapter?

A) CPU B) GPU C) ROM D) TPU Answer: C Page Ref: 170 Difficulty: Easy AACSB: Information technology LO: 5.8: Describe IT infrastructure for AI. 69) Which of the following is not a software component in AI listed in the chapter?

A) Operating system B) AI web browser C) Version control D) Cloud services Answer: B Page Ref: 170 Difficulty: Easy AACSB: Information technology LO: 5.8: Describe IT infrastructure for AI. 19 Copyright © 2026 Pearson Education, Inc.

70) Edge artificial intelligence (Edge AI) refers to the deployment of AI algorithms and AI models directly on local edge devices such as smartphones, sensors, or Internet of Things (IoT) devices.

Answer: TRUE Page Ref: 172 Difficulty: Moderate AACSB: Information technology LO: 5.8: Describe IT infrastructure for AI. 71) Which of the following refers to the ability of a computer, product, or system to expand to serve a larger number of users without breaking down?

A) Modality B) Scalability C) Expandability D) Disintermediation E) Customizability Answer: B Page Ref: 172 Difficulty: Easy AACSB: Information technology LO: 5.9: Discuss IT infrastructure management challenges.

72) Hardware and software acquisition costs account for about ________% of TCO. A) 20 B) 40 C) 50 D) 75 Answer: A Page Ref: 174 Difficulty: Moderate AACSB: Information technology LO: 5.9: Discuss IT infrastructure management challenges.

73) "Information technology assessment" is listed in the chapter as one of the six factors to consider when using a competitive forces model.

Answer: TRUE Page Ref: 174 Difficulty: Moderate AACSB: Information technology LO: 5.9: Discuss IT infrastructure management challenges.

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74) CloudCall enlisted AWS Training and Certification to help people build their Amazon cloud skills.

Answer: TRUE Page Ref: 176 Difficulty: Easy AACSB: Information technology LO: 5.10: Understand how the information in this chapter can help your career.

75) 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.

Page Ref: 157 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: Multiple objectives

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Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 6 Foundations of Business Intelligence: Databases and Information Management 1) 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 Answer: B Page Ref: 188 Difficulty: Difficult AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

2) A characteristic or quality that describes a particular database entity is called a(n) ________.

A) field B) tuple C) key field D) attribute Answer: D Page Ref: 186 Difficulty: Easy AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

3) A database ________ describes a database entity.

A) byte B) field C) record D) value Answer: C Page Ref: 186 Difficulty: Moderate AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

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4) ________ is the presence of duplicate data in multiple data files so that the same data are stored in more than one place or location.

A) Batch processing B) Data redundancy C) Data independence D) Online processing Answer: B Page Ref: 188 Difficulty: Easy AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

5) Which of the following occurs when the same attribute in related data files has different values?

A) Data inconsistency B) Data duplication C) Data dependence D) Data discrepancy Answer: A Page Ref: 188 Difficulty: Difficult AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

6) 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 Answer: D Page Ref: 186 Difficulty: Easy AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

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7) 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 Answer: B Page Ref: 188 Difficulty: Moderate AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

8) Which common database challenge is illustrated by Sally receiving multiple copies of an L.L. Bean catalog, each addressed to a slightly different variation of her full name?

A) Data normalization B) Data accuracy C) Data redundancy D) Data inconsistency Answer: D Page Ref: 188 Difficulty: Difficult AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

9) In a database, a bit represents a single character, which can be a letter, a number, or another symbol.

Answer: FALSE Page Ref: 186 Difficulty: Easy AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

10) 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 Page Ref: 188 Difficulty: Moderate AACSB: Information technology LO: 6.1: Describe traditional file environment data management problems.

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11) 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.

Page Ref: 187 Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6.1: Describe traditional file environment data management problems.

12) 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.

Page Ref: 188 Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 6.1: Describe traditional file environment data management problems.

13) 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 Answer: A Page Ref: 189 Difficulty: Difficult AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

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14) 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) presents data as they would be perceived by end users Answer: D Page Ref: 189 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

15) Which of the following is a DBMS for desktop computers?

A) DB2 B) Oracle Database C) Microsoft SQL Server D) Microsoft Access Answer: D Page Ref: 190 Difficulty: Difficult AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

16) A ________ represents data as two-dimensional tables.

A) non-relational DBMS B) mobile DBMS C) relational DBMS D) hierarchical DBMS Answer: C Page Ref: 190 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

17) 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 Answer: D Page Ref: 190 Difficulty: Difficult AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

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18) 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 Answer: B Page Ref: 191 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

19) A ________ is essentially a lookup field to look up data in another table.

A) foreign key B) secondary key C) primary field D) unique ID Answer: A Page Ref: 191 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

20) A field identified in a record as holding the unique identifier for a record is called the ________.

A) identifier key B) primary key C) primary field D) unique ID Answer: B Page Ref: 191 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

21) 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 Answer: C Page Ref: 191 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

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22) The select operation ________.

A) combines relational tables to provide the user with more information than is otherwise available B) creates a subset consisting of rows in a table that meet stated criteria C) identifies the table from which the columns will be selected D) creates a subset consisting of all records in a file Answer: B Page Ref: 191 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

23) The join operation ________.

A) combines relational tables to provide the user with more information than is otherwise available B) identifies the table from which the columns will be selected C) creates a subset consisting of columns in a table D) organizes elements into segments Answer: A Page Ref: 191 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

24) The project operation ________.

A) combines relational tables to provide the user with more information than is otherwise available B) creates a subset consisting of columns in a table C) organizes elements into segments D) identifies the table from which the columns will be selected Answer: B Page Ref: 191 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

25) 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) ownership of the field Answer: D Page Ref: 193 Difficulty: Difficult AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

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26) 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 Answer: A Page Ref: 191 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

27) 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 Answer: B Page Ref: 191 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

28) Which of the following is the most prominent data manipulation language today?

A) Access B) DB2 C) SQL D) Crystal Reports Answer: C Page Ref: 193 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

29) DBMSs typically include report generation 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 Answer: B Page Ref: 193 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

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30) A query is a request for data from a database.

Answer: TRUE Page Ref: 193 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

31) A logical view shows data as it is actually organized and structured on the data storage media.

Answer: FALSE Page Ref: 189 Difficulty: Easy AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

32) DBMS have a data definition capability to specify the structure of the content of the database.

Answer: TRUE Page Ref: 191 Difficulty: Moderate AACSB: Information technology LO: 6.2: Describe DBMS and relational DBMS capabilities.

33) 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, is used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications.

Page Ref: 191 Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6.2: Describe DBMS and relational DBMS capabilities.

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34) 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.

Page Ref: 191 Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6.2: Describe DBMS and relational DBMS capabilities.

35) The process of streamlining data to minimize redundancy and awkward many-to-many relationships is called ________.

A) normalization B) data scrubbing C) data cleansing D) data defining Answer: A Page Ref: 194 Difficulty: Easy AACSB: Information technology LO: 6.3: Discuss relational database design principles.

36) A schematic of the entire database that describes the relationships in a database is called a(n) ________.

A) data dictionary B) intersection relationship diagram C) entity-relationship diagram D) data definition diagram Answer: C Page Ref: 195 Difficulty: Moderate AACSB: Information technology LO: 6.3: Discuss relational database design principles.

37) A one-to-many relationship between two entities is symbolized in a diagram by a line that ends with ________.

A) a crow's foot topped by a short mark B) two short marks C) three short marks D) a crow's foot Answer: A Page Ref: 195 Difficulty: Difficult AACSB: Information technology LO: 6.3: Discuss relational database design principles.

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38) An unnormalized relation contains repeating groups.

Answer: TRUE Page Ref: 194 Difficulty: Easy AACSB: Information technology LO: 6.3: Discuss relational database design principles.

39) Relational DBMSs use key field rules to ensure that relationships between coupled tables remain consistent.

Answer: FALSE Page Ref: 194 Difficulty: Difficult AACSB: Information technology LO: 6.3: Discuss relational database design principles.

40) 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.

Answer: A Page Ref: 198 Difficulty: Difficult AACSB: Information technology LO: 6.4: Describe non-relational, cloud, and blockchain database capabilities.

41) 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 Answer: C Page Ref: 197 Difficulty: Difficult AACSB: Information technology LO: 6.4: Describe non-relational, cloud, and blockchain database capabilities.

42) Which of the following is an example of a NoSQL database?

A) Crystal Reports B) Microsoft Access C) SimpleDB D) DB2 Answer: C Page Ref: 196 Difficulty: Moderate AACSB: Information technology LO: 6.4: Describe non-relational, cloud, and blockchain database capabilities.

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43) Encryption is a key feature of a blockchain database.

Answer: TRUE Page Ref: 197 Difficulty: Easy AACSB: Information technology LO: 6.4: Describe non-relational, cloud, and blockchain database capabilities.

44) Spanner is an example of a distributed database.

Answer: TRUE Page Ref: 197 Difficulty: Moderate AACSB: Information technology LO: 6.4: Describe non-relational, cloud, and blockchain database capabilities.

45) NoSQL technologies are only useful for accelerating simple queries against small volumes of structured and unstructured data.

Answer: FALSE Page Ref: 196 Difficulty: Easy AACSB: Information technology LO: 6.4: Describe non-relational, cloud, and blockchain database capabilities.

46) 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.

Answer: A Page Ref: 199 Difficulty: Difficult AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

47) Which of the following technologies would you use to analyze the social media data collected by a major online retailer?

A) OLAP B) Data warehouse C) Data mart D) Hadoop Answer: D Page Ref: 200 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

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48) 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 Answer: C Page Ref: 205 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

49) A data lake is composed of ________.

A) historical data from legacy systems B) raw unstructured and structured data that has not been analyzed C) internal and external data sources D) historic and current internal data Answer: B Page Ref: 200 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

50) 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 Answer: B Page Ref: 204 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

51) OLAP enables ________.

A) users to quickly obtain online answers to ad-hoc questions even when the data are stored in very large databases B) users to view both logical and physical views of data C) programmers to quickly diagram data relationships D) programmers to normalize data Answer: A Page Ref: 202 Difficulty: Easy AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

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52) Data mining allows users to ________.

A) quickly compare transaction data gathered over many years B) find hidden patterns and 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 Answer: B Page Ref: 203 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

53) 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 Answer: C Page Ref: 203 Difficulty: Difficult AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

54) ________ 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 Answer: B Page Ref: 204 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

55) 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 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.

Answer: A Page Ref: 200 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

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56) 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 Answer: B Page Ref: 206 Difficulty: Easy AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

57) In data mining, which of the following involves using a series of existing values to determine what other future values will be?

A) Forecasting B) Sequences C) Classifications D) Clustering Answer: A Page Ref: 204 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

58) 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 Answer: C Page Ref: 203 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

59) In data mining, which of the following involves events linked over time?

A) Associations B) Sequences C) Classifications D) Clustering Answer: B Page Ref: 203 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

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60) Core operational transaction systems provide data to data warehouses.

Answer: TRUE Page Ref: 200 Difficulty: Easy AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

61) Multiple data marts are combined and streamlined to create a data warehouse.

Answer: FALSE Page Ref: 200 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

62) You can use OLAP to perform multidimensional data analysis.

Answer: TRUE Page Ref: 202 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

63) In-memory computing relies primarily on a computer's disk drives for data storage.

Answer: FALSE Page Ref: 201 Difficulty: Difficult AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

64) 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 Page Ref: 205 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

65) Implementing a web interface for an organization's internal database usually requires substantial changes to be made to the database.

Answer: FALSE Page Ref: 206 Difficulty: Easy AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

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66) Many back-end databases cannot interpret commands written in HTML. Answer: TRUE Page Ref: 205 Difficulty: Moderate AACSB: Information technology LO: 6.5: Describe tools used to analyze data in databases.

67) 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.

• Classifications, 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.

Page Ref: 203 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 6.5: Describe tools used to analyze data in databases.

68) 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?

Page Ref: 203 Difficulty: Moderate AACSB: Information technology; Written and oral communication LO: 6.5: Describe tools used to analyze data in databases.

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69) ________ 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 Answer: D Page Ref: 206 Difficulty: Moderate AACSB: Information technology LO: 6.6: Discuss data governance, data quality assurance, and data management.

70) 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 Answer: C Page Ref: 207 Difficulty: Easy AACSB: Information technology LO: 6.6: Discuss data governance, data quality assurance, and data management.

71) Data cleansing not only corrects errors but also ________.

A) establishes logical relationships between data B) structures data C) normalizes data D) enforces consistency among different sets of data that originated in a separate information system Answer: D Page Ref: 207 Difficulty: Moderate AACSB: Information technology LO: 6.6: Discuss data governance, data quality assurance, and data management.

72) 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.

Answer: C Page Ref: 207 Difficulty: Difficult AACSB: Analytical thinking LO: 6.6: Discuss data governance, data quality assurance, and data management.

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73) The term data governance encompasses policies and procedures through which data can be managed as an organizational resource.

Answer: TRUE Page Ref: 206 Difficulty: Moderate AACSB: Information technology LO: 6.6: Discuss data governance, data quality assurance, and data management.

74) Data scrubbing is a more intensive corrective process than data cleansing.

Answer: FALSE Page Ref: 207 Difficulty: Easy AACSB: Information technology LO: 6.6: Discuss data governance, data quality assurance, and data management.

75) A data quality analyst should be proficient in SQL and JavaScript.

Answer: TRUE Page Ref: 210 Difficulty: Easy AACSB: Information technology LO: 6.7: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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 Answer: C Page Ref: 222 Difficulty: Easy AACSB: Information technology LO: 7.1: Describe key components of telecommunications networks.

2) Each computer on a network must contain which of the following?

A) Network interface card B) Switch C) Router D) Hub Answer: A Page Ref: 221 Difficulty: Easy AACSB: Information technology LO: 7.1: Describe key components of telecommunications networks.

3) Computer networks are based on the same principles as traditional telephone networks.

Answer: FALSE Page Ref: 221 Difficulty: Easy AACSB: Information technology LO: 7.1: Describe key components of telecommunications networks.

4) A NOS must reside on all the local computers in a network.

Answer: FALSE Page Ref: 222 Difficulty: Moderate AACSB: Information technology LO: 7.1: Describe key components of telecommunications networks.

5) A hub is a networking device that sends packets of data to all other devices on the network.

Answer: TRUE Page Ref: 222 Difficulty: Moderate AACSB: Information technology LO: 7.1: Describe key components of telecommunications networks.

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6) 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 Page Ref: 223 Difficulty: Easy AACSB: Information technology LO: 7.1: Describe key components of telecommunications networks.

7) 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.

Page Ref: 221 Difficulty: Difficult AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7.1: Describe key components of telecommunications networks.

8) The Internet is based on which three key technologies?

A) TCP/IP, HTML, and HTTP B) TCP/IP, HTTP, and packet switching C) Client/server computing, packet switching, and the development of communications standards for linking networks and computers D) Client/server computing, packet switching, and HTTP Answer: C Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

9) Which of the following involves slicing digital messages into parcels, transmitting them along different communication paths, and reassembling them at their destinations?

A) Packet switching B) Packet shifting C) Packet routing D) Packet directing Answer: A Page Ref: 224 Difficulty: Easy AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

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10) The traditional telephone system is an example of a ________ network.

A) peer-to-peer B) wireless C) packet-switched D) circuit-switched Answer: D Page Ref: 224 Difficulty: Easy AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

11) Which of the following is not a characteristic of packet switching?

A) Packets travel independently of each other.

B) Packets are routed through many different paths.

C) Packet switching requires point-to-point circuits.

D) Packets include data for checking transmission errors.

Answer: C Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

12) 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 Answer: A Page Ref: 225 Difficulty: Difficult AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

13) 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 governing transmission of information between two points in a network C) A communications service for microcomputer users D) The main computer in a telecommunications network Answer: B Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

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14) What are the four layers of the TCP/IP reference model?

A) Physical, Application, Transport, and Network Interface B) Physical, Application, Internet, and Network Interface C) Application, Transport, Internet, and Network Interface D) Application, Hardware, Internet, and Network Interface Answer: C Page Ref: 225 Difficulty: Difficult AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

15) 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 Answer: D Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

16) In a client/server network, the client sets the rules of communication for the network.

Answer: FALSE Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

17) Client/server computing has largely replaced centralized mainframe computing.

Answer: TRUE Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

18) Computer networks that use packet switching are less efficient than telephone networks that use circuit switching.

Answer: FALSE Page Ref: 224 Difficulty: Easy AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

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19) Two computers using TCP/IP can communicate even if they are based on different hardware and software platforms.

Answer: TRUE Page Ref: 225 Difficulty: Easy AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

20) The Internet is the largest implementation of client/server computing.

Answer: TRUE Page Ref: 224 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

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 circuit-switching. In packet-switched networks, messages are first broken down into small, fixed bundles of data called packets. The packets include information for directing the packet to the right address and for checking transmission errors along with the data. The packets are transmitted over various communication channels using routers, each packet traveling independently. Packets of data originating at one source will be routed through many different paths and networks before being reassembled into the original message when they reach their destinations.

Page Ref: 224 Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7.2: Describe key digital networking technologies.

22) Which signal types are represented by a continuous waveform?

A) Laser B) Optical C) Digital D) Analog Answer: D Page Ref: 226 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

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23) 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 Answer: B Page Ref: 226 Difficulty: Easy AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

24) 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) digital D) analog Answer: C Page Ref: 226 Difficulty: Moderate AACSB: Information technology LO: 7.2: Describe key digital networking technologies.

25) 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.

Page Ref: 226 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 7.2: Describe key digital networking technologies.

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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 Answer: D Page Ref: 227 Difficulty: Moderate AACSB: Information technology LO: 7.3: Describe 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) Peer-to-peer C) LAN D) Windows domain network Answer: B Page Ref: 227 Difficulty: Moderate AACSB: Information technology LO: 7.3: Describe the different types of networks.

28) A network that spans a college or corporate facility is called a ________.

A) CAN B) MAN C) LAN D) WAN Answer: A Page Ref: 227 Difficulty: Easy AACSB: Information technology LO: 7.3: Describe the different types of networks.

29) A network that covers entire geographical regions is most commonly referred to as a(n) ________.

A) local area network B) intranet C) peer-to-peer network D) wide area network Answer: D Page Ref: 227 Difficulty: Easy AACSB: Information technology LO: 7.3: Describe the different types of networks.

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30) 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) measurement of how much data can be transferred over a communications medium within a fixed period of time D) total number of bytes that can be sent through a medium per second Answer: C Page Ref: 228 Difficulty: Moderate AACSB: Information technology LO: 7.3: Describe the different types of networks.

31) The total amount of digital information that can be transmitted through any telecommunications medium is measured in ________.

A) bps B) Hertz C) baud D) gigaflops Answer: A Page Ref: 228 Difficulty: Moderate AACSB: Information technology LO: 7.3: Describe the different types of networks.

32) The Internet is the most universal and powerful WAN. Answer: TRUE Page Ref: 227 Difficulty: Moderate AACSB: Information technology LO: 7.3: Describe the different types of networks.

33) 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.

Page Ref: 228 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 7.3: Describe the different types of networks.

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34) 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 Answer: A Page Ref: 231 Difficulty: Moderate AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

35) T1 and T3 lines ________.

A) operate over existing telephone lines to carry voice, data, and video B) are high-speed, leased data lines providing guaranteed service levels C) do not provide guaranteed service levels, but simply "best effort" D) have up to twenty-four 64-Kbps channels Answer: B Page Ref: 231 Difficulty: Moderate AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

36) What service converts domain names to IP addresses?

A) DNS B) FTP C) IP D) HTTP Answer: A Page Ref: 229 Difficulty: Moderate AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

37) The domain .gov is a(n) ________.

A) Internet root domain B) top-level domain C) host domain D) network domain Answer: B Page Ref: 229 Difficulty: Moderate AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

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38) 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.

Answer: B Page Ref: 229 Difficulty: Moderate AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

39) 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.) Answer: C Page Ref: 229 Difficulty: Difficult AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

40) 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 Answer: B Page Ref: 229 Difficulty: Moderate AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

41) 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 the laws of the nation-states in which it operates.

Answer: A Page Ref: 229 Difficulty: Difficult AACSB: Information technology LO: 7.4: Understand what the Internet is and how it works.

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42) DNS has a hierarchical structure.

Answer: TRUE Page Ref: 229 Difficulty: Easy AACSB: Application of knowledge LO: 7.4: Understand what the Internet is and how it works.

43) 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.

Page Ref: 229 Difficulty: Difficult AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7.4: Understand what the Internet is and how it works.

44) 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 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.

Page Ref: 229 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 7.4: Understand what the Internet is and how it works.

45) Instant messaging is a type of ________ service.

A) chat B) cellular C) email D) wireless Answer: A Page Ref: 233 Difficulty: Easy AACSB: Information technology LO: 7.5: Explain how Internet services support business.

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46) ________ 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) Unified communications Answer: D Page Ref: 234 Difficulty: Easy AACSB: Information technology LO: 7.5: Explain how Internet services support business.

47) A VPN ________.

A) is an encrypted private network configured within a public network B) is more expensive than a dedicated network C) provides secure, encrypted communications using Telnet D) is an Internet-based service for delivering voice communications Answer: A Page Ref: 234 Difficulty: Moderate AACSB: Information technology LO: 7.5: Explain how Internet services support business.

48) Which process is used to protect transmitted data in a VPN? A) Tunneling B) PPP C) VOIP D) Packet-switching Answer: A Page Ref: 235 Difficulty: Difficult AACSB: Information technology LO: 7.5: Explain how Internet services support business.

49) VoIP technology delivers voice information in digital form using circuit switching.

Answer: FALSE Page Ref: 233 Difficulty: Easy AACSB: Information technology LO: 7.5: Explain how Internet services support business.

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50) 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%. 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.

Page Ref: 233 Difficulty: Difficult AACSB: Application of knowledge; Information technology; Written and oral communication LO: 7.5: Explain how Internet services support business.

51) Which of the following is not one of the top five search engines?

A) Facebook B) Yahoo C) Microsoft Bing D) Baidu Answer: A Page Ref: 236 Difficulty: Moderate AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

52) 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) predicts what you are looking for as you enter words into the query box Answer: D Page Ref: 238 Difficulty: Difficult AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

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53) Web browser software requests web pages from the Internet using ________ protocol.

A) URL B) HTTP C) DNS D) HTML Answer: B Page Ref: 235 Difficulty: Moderate AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

54) Together, a protocol prefix, a domain name, a directory path, and a document name are called a(n) ________.

A) uniform resource locator B) IP address C) third-level domain D) root domain Answer: A Page Ref: 235 Difficulty: Moderate AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

55) Which of the following pulls content from websites and feeds it automatically to users' computers?

A) FTP B) RSS C) HTTP D) Bluetooth Answer: B Page Ref: 238 Difficulty: Moderate AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in 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 Answer: D Page Ref: 237 Difficulty: Easy AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

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57) A ________ is software for locating and managing stored web pages.

A) web server B) net server C) router D) modem Answer: A Page Ref: 235 Difficulty: Moderate AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

58) Wikis allow visitors to change or add to the original posted material.

Answer: TRUE Page Ref: 238 Difficulty: Easy AACSB: Information technology LO: 7.6: Discuss how the web works and how it can be used in business.

59) Mobile search makes up less than 50% of all Internet searches.

Answer: FALSE Page Ref: 236 Difficulty: Easy AACSB: Application of knowledge LO: 7.6: Discuss how the web works and how it can be used in business.

60) Search engine marketing saves consumers cognitive energy and increases search costs.

Answer: FALSE Page Ref: 237 Difficulty: Moderate AACSB: Application of knowledge LO: 7.6: Discuss how the web works and how it can be used in business.

61) The Internet of Things is based on billions of Internet-connected sensors throughout the physical world.

Answer: TRUE Page Ref: 239 Difficulty: Easy AACSB: Application of knowledge LO: 7.6: Discuss how the web works and how it can be used in business.

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62) 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 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.

Page Ref: 238 Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication LO: 7.6: Discuss how the web works and how it can be used in business.

63) The NFL's Next Gen Stats 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 Answer: C Page Ref: 246 Difficulty: Moderate AACSB: Application of knowledge LO: 7.7: Describe the principal wireless technologies and standards.

64) All of the following are physical components of an RFID system except ________.

A) bar codes B) antennas C) radio transmitters D) tags Answer: A Page Ref: 244 Difficulty: Moderate AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

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65) Which of the following is the popular name for the 802.15 wireless networking standard?

A) Bluetooth B) WiMax C) WLAN D) Wi-Fi Answer: A Page Ref: 242 Difficulty: Moderate AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

66) 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 Answer: A Page Ref: 246 Difficulty: Moderate AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

67) 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.

Answer: C Page Ref: 240 Difficulty: Moderate AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

68) 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 Answer: C Page Ref: 242 Difficulty: Difficult AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

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69) Which of the following technologies is used to reduce Wi-Fi network interference from nearby systems in the same spectrum?

A) MIMO B) Hotspots C) Bluetooth D) WiMax Answer: A Page Ref: 244 Difficulty: Moderate AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

70) The 802.11 set of standards is known as ________.

A) RFID B) WSN C) Wi-Fi D) WiMax Answer: C Page Ref: 242 Difficulty: Moderate AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

71) The WiMax standard can transmit up to a distance of approximately ________.

A) 31 meters B) 500 meters C) 31 miles D) 5 miles Answer: C Page Ref: 244 Difficulty: Difficult AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

72) 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 Answer: C Page Ref: 243 Difficulty: Difficult AACSB: Information technology LO: 7.7: Describe the principal wireless technologies and standards.

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73) Apple Pay uses an RFID-related technology called near field communication.

Answer: TRUE Page Ref: 245 Difficulty: Easy AACSB: Application of knowledge LO: 7.7: Describe the principal wireless technologies and standards.

74) How are RFID systems used in inventory control and supply chain management?

Answer: In inventory control and supply chain management, RFID systems capture and manage more detailed information about items in warehouses or in production than bar coding systems. If a large number of items are shipped together, RFID systems track each pallet, lot, or even unit item in the shipment. This technology may help companies improve receiving and storage operations by enhancing their ability to "see" exactly what stock is stored in warehouses or on retail store shelves.

Page Ref: 245 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 7.7: Describe the principal wireless technologies and standards.

75) A network specialist must have a master's degree in computer science, information science, or similar.

Answer: FALSE Page Ref: 247 Difficulty: Easy AACSB: Application of knowledge LO: 7.8: Understand how the information in the chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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 Answer: A Page Ref: 256 Difficulty: Moderate AACSB: Application of knowledge LO: 8.1: Understand why information systems are vulnerable.

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) Controls C) Vulnerabilities D) Security policy Answer: B Page Ref: 256 Difficulty: Moderate AACSB: Application of knowledge LO: 8.1: Understand why information systems are vulnerable.

3) Which of the following statements about wireless security is not true?

A) Bluetooth is the only wireless technology that is not susceptible to hacking by eavesdroppers.

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.

Answer: A Page Ref: 257 Difficulty: Difficult AACSB: Information technology LO: 8.1: Understand why information systems are vulnerable.

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4) 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 Answer: A Page Ref: 257 Difficulty: Difficult AACSB: Information technology LO: 8.1: Understand why information systems are vulnerable.

5) 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 Answer: D Page Ref: 257 Difficulty: Difficult AACSB: Information technology LO: 8.1: Understand why information systems are vulnerable.

6) 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 Answer: A Page Ref: 258 Difficulty: Moderate AACSB: Information technology LO: 8.1: Understand why information systems are vulnerable.

7) Smartphones are not vulnerable to malicious software or penetration from outsiders.

Answer: FALSE Page Ref: 257 Difficulty: Easy AACSB: Information technology LO: 8.1: Understand why information systems are vulnerable.

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8) Sniffers enable hackers to steal proprietary information from anywhere on a network, including email messages, company files, and confidential reports.

Answer: TRUE Page Ref: 257 Difficulty: Moderate AACSB: Information technology LO: 8.1: Understand why information systems are vulnerable.

9) Most computer viruses deliver a ________.

A) worm B) Trojan horse C) drive-by download D) payload Answer: D Page Ref: 259 Difficulty: Easy AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

10) A Trojan horse ________.

A) is a software program that appears to be legitimate but which contains hidden functionality that may cause damage 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 Answer: A Page Ref: 259 Difficulty: Easy AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

11) ________ 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 Answer: B Page Ref: 259 Difficulty: Moderate AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

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12) ________ is spyware that logs and transmits everything a user types.

A) Keyware B) A Trojan horse C) A keylogger D) A worm Answer: C Page Ref: 259 Difficulty: Easy AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

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

A) Eighty percent of the world's malware is delivered by botnets.

B) It is not possible to make a smartphone part of a botnet.

C) Ninety percent of the world's spam is delivered by botnets.

D) Botnets are often used for click fraud.

Answer: B Page Ref: 259 Difficulty: Difficult AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

14) Which of the following is an example of a keylogger?

A) Zeus B) Conficker C) Sasser D) ILOVEYOU Answer: A Page Ref: 259 Difficulty: Easy AACSB: Application of knowledge LO: 8.2: Describe the most prevalent and dangerous types of malware.

15) A computer worm is a program that can copy itself to other computers on the network.

Answer: TRUE Page Ref: 259 Difficulty: Easy AACSB: Application of knowledge LO: 8.2: Describe the most prevalent and dangerous types of malware.

16) Apple's iOS is the mobile platform targeted by most hackers.

Answer: FALSE Page Ref: 260 Difficulty: Moderate AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

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17) A PUP and a PUA are two different forms of malicious software.

Answer: FALSE Page Ref: 259 Difficulty: Moderate AACSB: Information technology LO: 8.2: Describe the most prevalent and dangerous types of malware.

18) Using numerous computers to inundate and overwhelm the network from numerous launch points is called a(n) ________ attack.

A) DDoS B) DoS C) SQL injection D) phishing Answer: A Page Ref: 262 Difficulty: Moderate AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

19) 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 Answer: C Page Ref: 261 Difficulty: Difficult AACSB: Analytical thinking LO: 8.3: Understand the dangers posed by threat actors.

20) 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) National Information Infrastructure Protection Act D) Data Security and Breach Notification Act Answer: C Page Ref: 264 Difficulty: Moderate AACSB: Application of knowledge LO: 8.3: Understand the dangers posed by threat actors.

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21) The intentional defacement or destruction of a website is called ________.

A) spoofing B) cybervandalism C) cyberwarfare D) phishing Answer: B Page Ref: 261 Difficulty: Moderate AACSB: Application of knowledge LO: 8.3: Understand the dangers posed by threat actors.

22) Evil twins are ________.

A) bogus wireless network access points that look legitimate to users 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 Answer: A Page Ref: 261 Difficulty: Easy AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

23) Pharming involves ________.

A) redirecting users to a bogus 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 websites to ask users for confidential information D) using emails for threats or harassment Answer: A Page Ref: 261 Difficulty: Moderate AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

24) Which of the following is the single greatest cause of network security breaches?

A) Viruses B) Lack of user knowledge C) Trojan horses D) Cyberwarfare Answer: B Page Ref: 264 Difficulty: Moderate AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

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25) 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 Answer: D Page Ref: 262 Difficulty: Easy AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

26) Dyn suffered which of the following types of attacks?

A) SQL injection B) DDoS C) Cyberwarfare D) Ransomware Answer: B Page Ref: 262 Difficulty: Difficult AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

27) 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 Answer: C Page Ref: 263 Difficulty: Moderate AACSB: Application of knowledge LO: 8.3: Understand the dangers posed by threat actors.

28) 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 Page Ref: 264 Difficulty: Moderate AACSB: Application of knowledge LO: 8.3: Understand the dangers posed by threat actors.

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29) The Mirai botnet infected numerous IoT devices and then used them to launch a DDoS attack Answer: TRUE Page Ref: 262 Difficulty: Easy AACSB: Application of knowledge LO: 8.3: Understand the dangers posed by threat actors.

30) Phishing is a form of spoofing.

Answer: TRUE Page Ref: 261 Difficulty: Moderate AACSB: Information technology LO: 8.3: Understand the dangers posed by threat actors.

31) 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.

Page Ref: 263 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 8.3: Understand the dangers posed by threat actors.

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32) 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) zero-day vulnerability Answer: D Page Ref: 265 Difficulty: Easy AACSB: Information technology LO: 8.4: Describe the security issues raised by software vulnerabilities.

33) 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 increase in the number of computer hackers in the world Answer: D Page Ref: 265 Difficulty: Easy AACSB: Information technology LO: 8.4: Describe the security issues raised by software vulnerabilities.

34) Zero defects cannot be achieved in larger software programs because fully testing programs that contain thousands of choices and millions of paths would require thousands of years.

Answer: TRUE Page Ref: 265 Difficulty: Moderate AACSB: Information technology LO: 8.4: Describe the security issues raised by software vulnerabilities.

35) Explain how an SQL injection attack works and what types of systems are vulnerable to this type of attack.

Answer: SQL injection attacks take advantage of vulnerabilities in poorly coded web application software to introduce malicious code into a company's systems and networks. These vulnerabilities occur when a web application fails to properly validate or filter data entered by a user on a web page, which might occur when ordering something online. An attacker uses this input validation error to send a rogue SQL query to the underlying database to access the database, plant malicious code, or access other systems on the network. Large web applications using databases are most vulnerable, as they may have hundreds of places for inputting user data, each of which creates an opportunity for an SQL injection attack.

Page Ref: 266 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 8.4: Describe the security issues raised by software vulnerabilities.

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36) Phishing emails can often be identified because they contain typographical or grammatical errors or awkward phrasing.

Answer: TRUE Page Ref: 266 Difficulty: Moderate AACSB: Information technology LO: 8.5: Describe the security issues raised by artificial intelligence.

37) The term deepfake refers to the use of AI to create highly realistic, but digitally fabricated or fake, images or audio.

Answer: TRUE Page Ref: 267 Difficulty: Moderate AACSB: Information technology LO: 8.5: Describe the security issues raised by artificial intelligence.

38) Security researchers believe that most LLMs are immune to injection or jailbreaking attacks.

Answer: FALSE Page Ref: 267 Difficulty: Moderate AACSB: Information technology LO: 8.5: Describe the security issues raised by artificial intelligence.

39) DarkGemini is an AI-powered malicious front-end service being sold on a subscription basis.

Answer: TRUE Page Ref: 267 Difficulty: Moderate AACSB: Information technology LO: 8.5: Describe the security issues raised by artificial intelligence.

40) WormGPT has pre-installed ethical boundaries and limitations and was trained with a focus on malware-related data.

Answer: FALSE Page Ref: 267 Difficulty: Moderate AACSB: Information technology LO: 8.5: Describe the security issues raised by artificial intelligence.

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41) The HIPAA Act ________.

A) requires financial institutions to ensure the security of customer data B) specifies best practices in information systems security and control C) imposes responsibility on companies and management to safeguard the accuracy of financial information D) outlines medical security and privacy rules Answer: D Page Ref: 268 Difficulty: Moderate AACSB: Application of knowledge LO: 8.6: Describe the business value of security and control.

42) The Gramm-Leach-Bliley Act ________.

A) requires financial institutions to ensure the security of customer data B) specifies best practices in information systems security and control C) imposes responsibility on companies and management to safeguard the accuracy of financial information D) outlines medical security and privacy rules Answer: A Page Ref: 268 Difficulty: Difficult AACSB: Application of knowledge LO: 8.6: Describe the business value of security and control.

43) The Sarbanes-Oxley Act ________.

A) requires financial institutions to ensure the security of customer data B) specifies best practices in information systems security and control C) imposes responsibility on companies and management to safeguard the accuracy of financial information D) outlines medical security and privacy rules Answer: C Page Ref: 268 Difficulty: Moderate AACSB: Application of knowledge LO: 8.6: Describe the business value of security and control.

44) 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 Answer: B Page Ref: 269 Difficulty: Easy AACSB: Application of knowledge LO: 8.6: Describe the business value of security and control.

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45) Digital forensics tasks include all of the following except ________.

A) presenting collected evidence in a court of law B) securely storing recovered electronic data C) collecting physical evidence on the computer D) finding significant information in a large volume of electronic data Answer: C Page Ref: 269 Difficulty: Moderate AACSB: Application of knowledge LO: 8.6: Describe the business value of security and control.

46) 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 a disaster or other disruption of service are essential as well.

Page Ref: 268 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 8.6: Describe the business value of security and control.

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47) Why is an effective electronically stored information (ESI) 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, emails, 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.

Page Ref: 269 Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 8.6: Describe the business value of security and control.

48) Define digital 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.

Page Ref: 269 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 8.6: Describe the business value of security and control.

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49) 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 Answer: C Page Ref: 270 Difficulty: Moderate AACSB: Application of knowledge LO: 8.7: Describe an organizational framework for security and control.

50) 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 Answer: A Page Ref: 271 Difficulty: Moderate AACSB: Application of knowledge LO: 8.7: Describe an organizational framework for security and control.

51) Which of the following defines acceptable uses of a firm's information resources and computing equipment?

A) An AUP B) A CA policy C) An MSSP D) A UTM system Answer: A Page Ref: 271 Difficulty: Easy AACSB: Application of knowledge LO: 8.7: Describe an organizational framework for security and control.

52) 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 Answer: C Page Ref: 272 Difficulty: Moderate AACSB: Application of knowledge LO: 8.7: Describe an organizational framework for security and control.

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53) 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 Answer: A Page Ref: 270 Difficulty: Moderate AACSB: Information technology LO: 8.7: Describe an organizational framework for security and control.

54) An acceptable use policy defines acceptable uses of the firm's information resources and computing equipment.

Answer: TRUE Page Ref: 271 Difficulty: Moderate AACSB: Application of knowledge LO: 8.7: Describe an organizational framework for security and control.

55) 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.

Page Ref: 273 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 8.7: Describe an organizational framework for security and control.

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56) 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.

Page Ref: 272 Difficulty: Easy AACSB: Application of knowledge; Written and oral communication LO: 8.7: Describe an organizational framework for security and control.

57) Most IoT devices support sophisticated security approaches.

Answer: FALSE Page Ref: 282 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

58) 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.

Page Ref: 277 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 8.8: Discuss technologies for safeguarding information resources.

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59) 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 Answer: C Page Ref: 277 Difficulty: Difficult AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

60) 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.

Answer: A Page Ref: 274 Difficulty: Difficult AACSB: Application of knowledge LO: 8.8: Discuss technologies for safeguarding information resources.

61) Two-factor authentication utilizes a(n) ________.

A) unique password B) encrypted connection C) multistep process of authentication D) firewall Answer: C Page Ref: 275 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

62) 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 Answer: C Page Ref: 274 Difficulty: Easy AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

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63) 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 Answer: A Page Ref: 275 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

64) ________ 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 Answer: B Page Ref: 277 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

65) Currently, the protocols used for secure information transfer over the Internet are ________.

A) TCP/IP and SSL B) S-HTTP and CA C) TLS, and HTTPS D) S-HTTP and SHTML Answer: C Page Ref: 278 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

66) 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 Answer: B Page Ref: 278 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

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67) A digital certificate system ________.

A) uses a third-party CA 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 Answer: A Page Ref: 278 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

68) 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 Answer: C Page Ref: 280 Difficulty: Easy AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

69) 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 Answer: A Page Ref: 279 Difficulty: Moderate AACSB: Application of knowledge LO: 8.8: Discuss technologies for safeguarding information resources.

70) 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.

Answer: B Page Ref: 279 Difficulty: Difficult AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

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71) Which of the following techniques uses a proxy server to stop data packets originating outside the organization, inspect them, and pass a proxy to the other side of an organization's firewall?

A) Application gateways B) Packet filtering C) Two-factor authentication D) Stateful inspection Answer: A Page Ref: 276 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

72) Comprehensive security management products, with tools for firewalls, VPNs, intrusion detection systems, and more, are called ________ systems.

A) DPI B) MSSP C) UTM D) PKI Answer: C Page Ref: 277 Difficulty: Difficult AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

73) Digital resiliency focuses solely on the resiliency of the IT function.

Answer: FALSE Page Ref: 280 Difficulty: Moderate AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

74) Biometric authentication uses systems that read and interpret individual human traits.

Answer: TRUE Page Ref: 274 Difficulty: Easy AACSB: Information technology LO: 8.8: Discuss technologies for safeguarding information resources.

75) Between June 2021 and January 2023, the notorious Behive ransomware group targeted more than 1,500 victims, including hospitals, school districts, and financial firms.

Answer: FALSE Page Ref: 285 Difficulty: Easy AACSB: Application of knowledge LO: 8.9: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 1) 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 Answer: B Page Ref: 297 Difficulty: Moderate AACSB: Information technology LO: 9.1: Understand ERP systems.

2) 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 Answer: C Page Ref: 298 Difficulty: Moderate AACSB: Information technology LO: 9.1: Understand ERP systems.

3) 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.

Answer: C Page Ref: 299 Difficulty: Moderate AACSB: Analytical thinking LO: 9.1: Understand ERP systems.

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4) 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) Select the functions of the system you wish to use.

Answer: D Page Ref: 298 Difficulty: Moderate AACSB: Analytical thinking LO: 9.1: Understand ERP systems.

5) 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 Answer: A Page Ref: 298 Difficulty: Moderate AACSB: Information technology LO: 9.1: Understand ERP systems.

6) 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% of the enterprise system processes D) changing the ERP software as needed to match their own processes Answer: C Page Ref: 298 Difficulty: Moderate AACSB: Information technology LO: 9.1: Understand ERP systems.

7) 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 Answer: D Page Ref: 299 Difficulty: Difficult AACSB: Analytical thinking LO: 9.1: Understand ERP systems.

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8) 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 Answer: C Page Ref: 299 Difficulty: Difficult AACSB: Analytical thinking LO: 9.1: Understand ERP systems.

9) Enterprise systems are built around a small number of predefined business processes.

Answer: FALSE Page Ref: 298 Difficulty: Easy AACSB: Information technology LO: 9.1: Understand ERP systems.

10) To reap the maximum benefits from enterprise software, companies should customize it to conform to their existing business processes.

Answer: FALSE Page Ref: 298 Difficulty: Easy AACSB: Application of knowledge LO: 9.1: Understand ERP systems.

11) 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.

Page Ref: 298 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 9.1: Understand ERP systems.

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12) 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 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 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.

Page Ref: 297 Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication LO: 9.1: Understand ERP systems.

13) What is an ERP system and how does it enable a firm to integrate firmwide information?

Answer: An enterprise resource planning (ERP) system (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.

Page Ref: 297 Difficulty: Moderate AACSB: Application of knowledge; Information technology; Written and oral communication LO: 9.1: Understand ERP systems.

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14) A network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers is called a ________.

A) distribution channel B) supply chain C) value chain D) marketing channel Answer: B Page Ref: 299 Difficulty: Easy AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

15) 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 Answer: D Page Ref: 300 Difficulty: Easy AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

16) 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 Answer: D Page Ref: 300 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

17) 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 Answer: A Page Ref: 300 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

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18) 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 Answer: B Page Ref: 301 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

19) Supply chain inefficiencies waste as much as ________% of a company's operating costs.

A) 10 B) 15 C) 25 D) 35 Answer: C Page Ref: 301 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

20) 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 Answer: A Page Ref: 301 Difficulty: Easy AACSB: Information technology LO: 9.2: Understand SCM systems.

21) 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 Answer: B Page Ref: 301 Difficulty: Easy AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

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22) Supply chain software can be classified as either supply chain ________ systems or supply chain ________ systems.

A) push; pull B) demand; continual C) upstream; downstream D) planning; execution Answer: D Page Ref: 302 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

23) Which of the following enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product? Supply chain ________ system.

A) planning B) delivery C) optimization D) execution Answer: A Page Ref: 302 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

24) 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) track the physical status of goods D) determine how much product to manufacture in a given time period Answer: C Page Ref: 302 Difficulty: Difficult AACSB: Information technology LO: 9.2: Understand SCM systems.

25) Which supply chain planning function determines how much product is needed to satisfy all customer demands?

A) Distribution management B) Replenishment planning C) Demand planning D) Order planning Answer: C Page Ref: 302 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

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26) 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 Answer: D Page Ref: 303 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

27) 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 Answer: A Page Ref: 303 Difficulty: Difficult AACSB: Information technology LO: 9.2: Understand SCM systems.

28) A supply chain driven by forecasts or best guesses of consumer demand follows a ________ model.

A) pull-based B) build-to-order C) push-based D) demand-driven Answer: C Page Ref: 303 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

29) 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 Answer: D Page Ref: 303 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

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30) The bullwhip effect can be countered by ________.

A) reducing information uncertainty B) disintermediation C) implementing a CRM D) globalization Answer: A Page Ref: 302 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

31) Which of the following is the last entity in the downstream portion of a supply chain?

A) Customers B) Retailers C) Distributors D) Manufacturers Answer: A Page Ref: 302 Difficulty: Easy AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

32) 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 Answer: B Page Ref: 301 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

33) 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 Answer: A Page Ref: 303 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

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34) 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.

Answer: C Page Ref: 303 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

35) Walmart's continuous replenishment system is an example of a ________ model.

A) push-based B) pull-based C) build-to-stock D) supply chain optimization Answer: B Page Ref: 303 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

36) 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 Answer: A Page Ref: 303 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

37) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers.

Answer: FALSE Page Ref: 300 Difficulty: Moderate AACSB: Reflective thinking LO: 9.2: Understand SCM systems.

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38) In some industries, total supply chain costs can approach 75% of a company's operating budget.

Answer: TRUE Page Ref: 304 Difficulty: Difficult AACSB: Reflective thinking LO: 9.2: Understand SCM systems.

39) Firms in the supply chain develop safety stocks in order to reduce the cost of inventory.

Answer: FALSE Page Ref: 301 Difficulty: Moderate AACSB: Reflective thinking LO: 9.2: Understand SCM systems.

40) The bullwhip effect leads to declining inventory costs across the entire supply chain.

Answer: FALSE Page Ref: 301 Difficulty: Moderate AACSB: Reflective thinking LO: 9.2: Understand SCM systems.

41) Supply chain planning systems enable the firm to model its existing supply chain.

Answer: TRUE Page Ref: 302 Difficulty: Moderate AACSB: Information technology LO: 9.2: Understand SCM systems.

42) Before the Internet, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes.

Answer: TRUE Page Ref: 304 Difficulty: Moderate AACSB: Reflective thinking LO: 9.2: Understand SCM systems.

43) 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 Page Ref: 303 Difficulty: Moderate AACSB: Application of knowledge LO: 9.2: Understand SCM systems.

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44) 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.

Page Ref: 302 Difficulty: Difficult AACSB: Information technology; Written and oral communication LO: 9.2: Understand SCM systems.

45) 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.

Page Ref: 303 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 9.2: Understand SCM systems.

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46) 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% 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.

Page Ref: 304 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 9.2: Understand SCM systems.

47) Inefficiencies in a supply chain are caused by inaccurate or untimely information.

Answer: TRUE Page Ref: 304 Difficulty: Easy AACSB: Application of knowledge LO: 9.3: Describe global supply chain management challenges.

48) A ________ is an interaction with a customer.

A) point of presence B) touch point C) sales point D) client channel Answer: B Page Ref: 308 Difficulty: Moderate AACSB: Application of knowledge LO: 9.4: Understand CRM systems.

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49) Which of the following would not be considered a contact point?

A) Email B) Website C) Intranet D) Retail store Answer: C Page Ref: 308 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

50) CRM systems typically provide software and online tools for sales, customer service, and ________.

A) marketing B) account management C) advertising D) public relations Answer: A Page Ref: 309 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

51) SFA modules in CRM systems provide tools for all of the following except ________.

A) team selling B) managing customer service requests C) sales forecasting D) managing sales prospect and contact information Answer: B Page Ref: 309 Difficulty: Difficult AACSB: Information technology LO: 9.4: Understand CRM systems.

52) Customer service modules in CRM systems provide tools for ________.

A) assigning and managing customer service requests B) capturing prospect and customer data C) identifying profitable and unprofitable customers D) managing sales prospect and contact information Answer: A Page Ref: 309 Difficulty: Easy AACSB: Information technology LO: 9.4: Understand CRM systems.

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53) 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 Answer: A Page Ref: 309 Difficulty: Difficult AACSB: Information technology LO: 9.4: Understand CRM systems.

54) Selling a customer with a checking account a home improvement loan is an example of ________.

A) operational CRM B) direct marketing C) cross-selling D) cross-channel promotions Answer: C Page Ref: 309 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

55) Which of the following applications provides analysis of customer data?

A) Operational CRM B) Analytical CRM C) Operational SCM D) Analytical ERM Answer: B Page Ref: 310 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

56) Operational CRM applications include tools for all of the following except ________.

A) sales force automation B) calculating CLTV C) marketing automation D) customer service support Answer: B Page Ref: 310 Difficulty: Difficult AACSB: Information technology LO: 9.4: Understand CRM systems.

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57) Which of the following tools is used to analyze customer buying patterns?

A) CLTV B) Analytical CRM C) Operational CRM D) Demand planning Answer: B Page Ref: 311 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

58) Which metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the company?

A) Churn rate B) CLTV C) Cost per lead D) Cost per sale Answer: B Page Ref: 312 Difficulty: Moderate AACSB: Reflective thinking LO: 9.4: Understand CRM systems.

59) The measurement of the number of customers who stop using or purchasing products or services from a company is called ________.

A) switching costs B) churn rate C) CLTV D) switch rate Answer: B Page Ref: 312 Difficulty: Moderate AACSB: Reflective thinking LO: 9.4: Understand CRM systems.

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60) ________ 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) SFA B) SOA C) Marketing D) Complex Answer: A Page Ref: 309 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

61) All CRM packages contain modules for PRM and ERM. Answer: FALSE Page Ref: 309 Difficulty: Easy AACSB: Information technology LO: 9.4: Understand CRM systems.

62) CRM software incorporates hundreds of business processes.

Answer: TRUE Page Ref: 310 Difficulty: Easy AACSB: Information technology LO: 9.4: Understand CRM systems.

63) Cross-selling is the marketing of products to different customers.

Answer: FALSE Page Ref: 309 Difficulty: Moderate AACSB: Reflective thinking LO: 9.4: Understand CRM systems.

64) Analytical CRM uses tools to analyze customer data collected from the firm's customer touch points and from other sources.

Answer: TRUE Page Ref: 310 Difficulty: Moderate AACSB: Information technology LO: 9.4: Understand CRM systems.

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65) 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.

Page Ref: 310 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 9.4: Understand CRM systems.

66) 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) Companies adopting enterprise applications can also save time and money by extensively customizing their applications to fit their business processes.

Answer: D Page Ref: 313 Difficulty: Moderate AACSB: Information technology LO: 9.5: Discuss enterprise application challenges.

67) According to a 2024 survey of 131 ERP users conducted by Panorama Consulting Group, ________% of ERP projects experienced cost overruns.

A) 27.5 B) 30 C) 32.5 D) 40 Answer: A Page Ref: 313 Difficulty: Moderate AACSB: Information technology LO: 9.5: Discuss enterprise application challenges.

68) Enterprise systems do not require fundamental changes in the way the business operates.

Answer: FALSE Page Ref: 313 Difficulty: Easy AACSB: Information technology LO: 9.5: Discuss enterprise application challenges.

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69) Enterprise applications reduce switching costs.

Answer: FALSE Page Ref: 314 Difficulty: Easy AACSB: Information technology LO: 9.5: Discuss enterprise application challenges.

70) Enterprise applications are based on organization-wide definitions of data.

Answer: TRUE Page Ref: 314 Difficulty: Easy AACSB: Information technology LO: 9.5: Discuss enterprise application challenges.

71) 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 on 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.

Page Ref: 314 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 9.5: Discuss enterprise application challenges.

72) AI-enabled tools are capable of much more rapid and complex data analysis than traditional software.

Answer: TRUE Page Ref: 315 Difficulty: Easy AACSB: Information technology LO: 9.6: Describe how enterprise applications are using AI.

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73) Microsoft targets their CRM and ERP solutions to mainly very large companies.

Answer: FALSE Page Ref: 315 Difficulty: Moderate AACSB: Information technology LO: 9.6: Describe how enterprise applications are using AI. 74) Salesforce focuses on ERP solutions.

Answer: FALSE Page Ref: 315 Difficulty: Moderate AACSB: Information technology LO: 9.6: Describe how enterprise applications are using AI. 75) Skullcandy runs the BusinessByDesign software in SAP cloud computing centers.

Answer: TRUE Page Ref: 316 Difficulty: Moderate AACSB: Information technology LO: 9.7: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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 email sent D) The first paid advertisements placed on a website Answer: D Page Ref: 326 Difficulty: Difficult AACSB: Application of knowledge LO: 10.1: Discuss the evolution of e-commerce.

2) All of the following are examples of social network companies except ________.

A) Uber B) Facebook C) X (formerly Twitter) D) Pinterest Answer: A Page Ref: 326 Difficulty: Easy AACSB: Application of knowledge LO: 10.1: Discuss the evolution of e-commerce.

3) When did e-commerce begin?

A) 1965 B) 1983 C) 1995 D) 1999 Answer: C Page Ref: 326 Difficulty: Easy AACSB: Application of knowledge LO: 10.1: Discuss the evolution of e-commerce.

4) E-commerce refers to the use of the Internet and the web to transact business.

Answer: TRUE Page Ref: 326 Difficulty: Moderate AACSB: Application of knowledge LO: 10.1: Discuss the evolution of e-commerce.

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5) E-commerce grew at single-digit rates from 1998 until the recession of 2008-2009.

Answer: FALSE Page Ref: 327 Difficulty: Difficult AACSB: Application of knowledge LO: 10.1: Discuss the evolution of e-commerce.

6) 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 Page Ref: 326 Difficulty: Moderate AACSB: Application of knowledge LO: 10.1: Discuss the evolution of e-commerce.

7) 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 Answer: B Page Ref: 329 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

8) The universal technical standards of the Internet and e-commerce lower which of the following?

A) Market entry costs B) Richness C) Information density D) Ubiquity Answer: A Page Ref: 329 Difficulty: Easy AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

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9) All of the following are unique features of e-commerce technology, except ________.

A) personalization/customization B) interactivity C) transparency D) richness Answer: C Page Ref: 329 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

10) 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 Answer: D Page Ref: 331 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

11) ________ refers to the complexity and content of a message.

A) Ubiquity B) Personalization/customization C) Richness D) Interactivity Answer: C Page Ref: 330 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

12) 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 Answer: A Page Ref: 330 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

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13) The effort required to locate suitable products is called ________.

A) price discrimination B) search costs C) menu costs D) shopping costs Answer: B Page Ref: 329 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

14) Selling the same goods to different targeted groups at different prices is called ________.

A) price discrimination B) cost optimization C) price gouging D) cost personalization Answer: A Page Ref: 330 Difficulty: Easy AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

15) 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.

Answer: D Page Ref: 330 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

16) All mass media before the Internet in modern history, including the printing press, use a broadcast model where content is created in a central location by experts.

Answer: TRUE Page Ref: 331 Difficulty: Moderate AACSB: Application of knowledge LO: 10.2: Describe the unique features of e-commerce.

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17) 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 makes 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.

Page Ref: 330 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 10.2: Describe the unique features of e-commerce.

18) Information ________ exists when one party in a transaction has more information that is important for the transaction than the other party.

A) transparency B) asymmetry C) complexity D) discrimination Answer: B Page Ref: 332 Difficulty: Easy AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

19) 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 Answer: B Page Ref: 332 Difficulty: Moderate AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

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20) Removing business process layers in a value chain is called ________.

A) disintermediation B) BPR C) market segmentation D) network effects Answer: A Page Ref: 332 Difficulty: Moderate AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

21) In digital markets ________.

A) search costs increase B) menu costs are lower C) switching costs decline D) network costs decline Answer: B Page Ref: 332 Difficulty: Difficult AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

22) 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 Answer: A Page Ref: 334 Difficulty: Difficult AACSB: Analytical thinking LO: 10.3: Describe digital markets and digital goods.

23) What is the primary benefit to consumers of disintermediation?

A) Faster service B) Lower costs C) Higher quality D) Greater choices Answer: B Page Ref: 333 Difficulty: Easy AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

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24) The Internet increases information asymmetry.

Answer: FALSE Page Ref: 332 Difficulty: Moderate AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

25) Disintermediation does not benefit the consumer.

Answer: FALSE Page Ref: 333 Difficulty: Moderate AACSB: Analytical thinking LO: 10.3: Describe digital markets and digital goods.

26) In general, for digital goods, the marginal cost of producing another unit is about zero.

Answer: TRUE Page Ref: 334 Difficulty: Moderate AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

27) Information asymmetry exists when there is more information about one product than there is about a similar product.

Answer: FALSE Page Ref: 332 Difficulty: Easy AACSB: Application of knowledge LO: 10.3: Describe digital markets and digital goods.

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28) 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.

Page Ref: 332 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10.3: Describe digital markets and digital goods.

29) 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.

Page Ref: 333 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 10.3: Describe digital markets and digital goods.

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30) 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 Answer: D Page Ref: 335 Difficulty: Easy AACSB: Analytical thinking LO: 10.4: Describe types of e-commerce and e-commerce business models.

31) Craigslist is an example of ________.

A) C2C e-commerce B) B2B e-commerce C) B2C e-commerce D) M-commerce Answer: A Page Ref: 334 Difficulty: Easy AACSB: Analytical thinking LO: 10.4: Describe types of e-commerce and e-commerce business models.

32) Which of the following types of e-commerce involves businesses selling goods and services directly to individuals via the Internet?

A) B2C B) B2B C) C2C D) C2B Answer: A Page Ref: 334 Difficulty: Easy AACSB: Application of knowledge LO: 10.4: Describe types of e-commerce and e-commerce business models.

33) Which of the following is an example of a company primarily engaged in B2B e-commerce?

A) Uber B) Walmart C) Grainger D) Yahoo Answer: C Page Ref: 334 Difficulty: Moderate AACSB: Application of knowledge LO: 10.4: Describe types of e-commerce and e-commerce business models.

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34) 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 Answer: A Page Ref: 336 Difficulty: Moderate AACSB: Application of knowledge LO: 10.4: Describe types of e-commerce and e-commerce business models.

35) Market creators ________.

A) save users money and time by processing online sales transactions B) provide a digital environment where buyers and sellers can establish prices for products C) create revenue by providing digital content over the web D) sell physical products directly to consumers or individual businesses Answer: B Page Ref: 335 Difficulty: Moderate AACSB: Application of knowledge LO: 10.4: Describe types of e-commerce and e-commerce business models.

36) Airbnb uses the ________ business model.

A) service provider B) market creator C) community provider D) portal Answer: B Page Ref: 335 Difficulty: Moderate AACSB: Application of knowledge LO: 10.4: Describe types of e-commerce and e-commerce business models.

37) 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 Page Ref: 336 Difficulty: Moderate AACSB: Application of knowledge LO: 10.4: Describe types of e-commerce and e-commerce business models.

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38) Apple Music is an example of the market creator business model.

Answer: FALSE Page Ref: 336 Difficulty: Easy AACSB: Analytical thinking LO: 10.4: Describe types of e-commerce and e-commerce business models.

39) eBay is an example of the portal business model.

Answer: FALSE Page Ref: 335 Difficulty: Easy AACSB: Analytical thinking LO: 10.4: Describe types of e-commerce and e-commerce business models.

40) List at least five different e-commerce 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.

Page Ref: 335 Difficulty: Easy AACSB: Application of knowledge; Written and oral communication LO: 10.4: Describe types of e-commerce and e-commerce business models.

41) 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.)

Page Ref: 334 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10.4: Describe types of e-commerce and e-commerce business models.

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42) 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.

Page Ref: 336 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10.4: Describe types of e-commerce and e-commerce business models.

43) The ________ revenue model is based on generating revenue from the sale of goods, content, and/or services to customers.

A) advertising B) subscription C) transaction Fee D) sales Answer: D Page Ref: 338 Difficulty: Moderate AACSB: Analytical thinking LO: 10.5: Describe e-commerce revenue models.

44) 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.

Answer: A Page Ref: 339 Difficulty: Moderate AACSB: Analytical thinking LO: 10.5: Describe e-commerce revenue models.

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45) In the ________ revenue model, 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 Answer: A Page Ref: 338 Difficulty: Moderate AACSB: Application of knowledge LO: 10.5: Describe e-commerce revenue models.

46) 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.

Answer: C Page Ref: 338 Difficulty: Moderate AACSB: Analytical thinking LO: 10.5: Describe e-commerce revenue models.

47) Which of the following companies uses the subscription revenue model?

A) Expedia B) E*Trade C) Facebook D) Netflix Answer: D Page Ref: 338 Difficulty: Easy AACSB: Application of knowledge LO: 10.5: Describe e-commerce revenue models.

48) In the affiliate revenue model, firms derive revenue by referring consumers to other firms selling online.

Answer: TRUE Page Ref: 339 Difficulty: Easy AACSB: Application of knowledge LO: 10.5: Describe e-commerce revenue models.

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49) Behavioral targeting refers to targeting ad messages to a person's clickstream behavior.

Answer: TRUE Page Ref: 339 Difficulty: Moderate AACSB: Analytical thinking LO: 10.6: Explain how e-commerce has transformed marketing.

50) 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) long tail marketing D) online profiling Answer: C Page Ref: 339 Difficulty: Moderate AACSB: Application of knowledge LO: 10.6: Explain how e-commerce has transformed marketing.

51) ________ 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 Answer: C Page Ref: 342 Difficulty: Difficult AACSB: Application of knowledge LO: 10.6: Explain how e-commerce has transformed marketing.

52) Behavioral targeting cannot be used if a consumer is using a mobile app.

Answer: FALSE Page Ref: 339 Difficulty: Moderate AACSB: Application of knowledge LO: 10.6: Explain how e-commerce has transformed marketing.

53) Advertising networks track a user's behavior on thousands of websites.

Answer: TRUE Page Ref: 339 Difficulty: Moderate AACSB: Application of knowledge LO: 10.6: Explain how e-commerce has transformed marketing.

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54) What is an advertising network? Why is it 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 web-tracking 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.

Page Ref: 339 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 10.6: Explain how e-commerce has transformed marketing.

55) 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.

Page Ref: 339 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 10.6: Explain how e-commerce has transformed marketing.

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56) According to small world theory, you are only ________ links away from any other person on earth.

A) 5 B) 6 C) 10 D) 2550 Answer: B Page Ref: 346 Difficulty: Moderate AACSB: Application of knowledge LO: 10.7: Describe social networks, social marketing, and social e-commerce.

57) Social marketing enables firms to tightly control their brands.

Answer: FALSE Page Ref: 326 Difficulty: Moderate AACSB: Analytical thinking LO: 10.7: Describe social networks, social marketing, and social e-commerce.

58) 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.

Answer: B Page Ref: 346 Difficulty: Difficult AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

59) 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 Answer: C Page Ref: 347 Difficulty: Moderate AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

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60) 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.

Answer: C Page Ref: 349 Difficulty: Difficult AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

61) Which of the following is an example of a direct good in the automobile industry?

A) Computer equipment B) Sheet steel C) Office furniture D) Roofing shingles Answer: B Page Ref: 348 Difficulty: Easy AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

62) Which of the following is an example of a private B2B network?

A) Exostar B) Go2Paper C) VW Group Supply D) Expedia Answer: C Page Ref: 347 Difficulty: Moderate AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

63) EDI can be used as a system for continuous replenishment.

Answer: TRUE Page Ref: 347 Difficulty: Moderate AACSB: Information technology LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

64) B2B e-commerce marketplaces may either support contractual purchasing based on longterm relationships with designated suppliers or short-term spot purchasing.

Answer: TRUE Page Ref: 349 Difficulty: Difficult AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

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65) Exchanges have become one of the most popular types of third-party B2B e-commerce marketplaces because they encourage competitive bidding that drives prices down.

Answer: FALSE Page Ref: 349 Difficulty: Difficult AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

66) Indirect goods are goods that are not directly involved in the production process.

Answer: TRUE Page Ref: 348 Difficulty: Easy AACSB: Application of knowledge LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

67) What is an exchange, and why did many early exchanges fail?

Answer: Exchanges are independently owned third-party B2B 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.

Page Ref: 349 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10.8: Understand how e-commerce has affected business-to-business transactions.

68) Which of the following is the largest mobile advertising platform?

A) Google B) Yahoo C) Facebook/Instagram D) Twitter Answer: A Page Ref: 350 Difficulty: Moderate AACSB: Application of knowledge LO: 10.9: Describe m-commerce and m-commerce applications.

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69) 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 Answer: A Page Ref: 350 Difficulty: Easy AACSB: Analytical thinking LO: 10.9: Describe m-commerce and m-commerce applications.

70) Geoadvertising sends ads to users based on their ________.

A) locations B) home addresses C) shopping preferences D) website behaviors Answer: A Page Ref: 350 Difficulty: Moderate AACSB: Application of knowledge LO: 10.9: Describe m-commerce and m-commerce applications.

71) Which of the following is not an example of location-based services?

A) Netflix B) Google Maps C) Waze D) Uber Answer: A Page Ref: 350 Difficulty: Moderate AACSB: Application of knowledge LO: 10.9: Describe m-commerce and m-commerce applications.

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72) 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.

Page Ref: 350 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 10.9: Describe m-commerce and m-commerce applications.

73) Which of the following is a milestone for Phase 1 of developing an e-commerce presence?

A) Website plan B) Web mission statement C) Functional website D) Social media plan Answer: B Page Ref: 353 Difficulty: Easy AACSB: Application of knowledge LO: 10.10: Discuss how to build an e-commerce presence.

74) 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 Answer: C Page Ref: 353 Difficulty: Difficult AACSB: Application of knowledge LO: 10.10: Discuss how to build an e-commerce presence.

75) E-commerce is the fastest-growing form of commerce, but is expected to slow down soon because the current growth cannot be sustained long term.

Answer: FALSE Page Ref: 353 Difficulty: Easy AACSB: Application of knowledge LO: 10.11: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 11 Artificial Intelligence 1) 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.

Page Ref: 363 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.1: Understand artificial intelligence.

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

A) Machine learning uses mathematical models.

B) Machine learning is based on computer code that reflects rules underlying an expert's understanding.

C) Machine learning enables a computer system to continue learning and improving on its own.

D) Machine learning systems are trained on large sets of data.

Answer: B Page Ref: 365 Difficulty: Difficult AACSB: Information technology LO: 11.2: Describe machine learning.

3) 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 Answer: B Page Ref: 366 Difficulty: Difficult AACSB: Information technology LO: 11.2: Describe machine learning.

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4) 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) allowing the algorithm to identify patterns and relationships on its own and then report whatever patterns it finds D) using labeled inputs identified by humans to recognize objects Answer: C Page Ref: 366 Difficulty: Moderate AACSB: Information technology LO: 11.2: Describe machine learning.

5) Describe some of the ways we use machine learning technologies every day.

Answer: Machine learning is omnipresent in modern technology. More than 75% 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.

Page Ref: 365 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.2: Describe machine learning.

6) Neural networks ________.

A) are based on the theory of natural selection and mutation B) rely on rules similar to an expert system C) are pattern detection programs that learn patterns from large quantities of data D) have a sense of ethics Answer: C Page Ref: 367 Difficulty: Difficult AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

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7) 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 Answer: C Page Ref: 367 Difficulty: Moderate AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

8) Deep learning neural networks ________.

A) rely on humans to help them 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 Answer: B Page Ref: 368 Difficulty: Moderate AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

9) 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) neural network C) expert system D) genetic algorithm Answer: B Page Ref: 367 Difficulty: Moderate AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

10) 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.

Answer: B Page Ref: 367 Difficulty: Moderate AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

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11) Neural networks are not well-suited for diagnostic systems in medicine.

Answer: FALSE Page Ref: 368 Difficulty: Easy AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

12) Deep learning neural networks are used almost exclusively for pattern detection on unlabeled data.

Answer: TRUE Page Ref: 368 Difficulty: Moderate AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

13) Neural network applications explain why they arrive at a particular solution.

Answer: FALSE Page Ref: 367 Difficulty: Moderate AACSB: Information technology LO: 11.3: Describe neural networks and deep learning.

14) 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. identifying 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.

Page Ref: 367 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.3: Describe neural networks and deep learning.

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15) Which statement below is not true about Generative AI (GenAI)?

A) Gen AI cannot produce new software programs yet, but it should be able to soon.

B) GenAI is a machine learning model that is trained to generate content.

C) GenAI tools can identify patterns and structures within existing data.

D) GenAI tools can produce new and original content, including textual responses to questions.

Answer: A Page Ref: 369 Difficulty: Difficult AACSB: Information technology LO: 11.4: Discuss generative AI. 16) Which statement below is not true about a foundation model?

A) It is the underlying model that enables GenAI to work.

B) It uses powerful neural networks designed to mimic how the human brain works.

C) It is trained on small quantities of unstructured, unlabeled data.

D) Companies can use the same model for multiple activities and forms of content.

Answer: C Page Ref: 369 Difficulty: Difficult AACSB: Information technology LO: 11.4: Discuss generative AI. 17) Which statement below is not true about large language (LL) models?

A) They are foundation models trained on immense amounts of unstructured data.

B) They are able to infer from context and generate coherent and contextually relevant responses.

C) They are revolutionizing applications in various fields, including "intelligent" chatbots.

D) They cannot yet, but will soon be able to translate languages.

Answer: D Page Ref: 370 Difficulty: Difficult AACSB: Information technology LO: 11.4: Discuss generative AI. 18) Which statement below is not true about transformers?

A) They are limited to words.

B) They are key components of foundation models.

C) They are types of neural network architectures.

D) They have made it possible to train increasingly larger foundation models without having to label all of the data in advance.

Answer: A Page Ref: 370 Difficulty: Difficult AACSB: Information technology LO: 11.4: Discuss generative AI.

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19) ChatGPT is an example of a GenAI Tool.

Answer: TRUE Page Ref: 370 Difficulty: Moderate AACSB: Information technology LO: 11.4: Discuss generative AI. 20) Google Search is an example of a GenAI Tool.

Answer: FALSE Page Ref: 371 Difficulty: Moderate AACSB: Information technology LO: 11.4: Discuss generative AI. 21) Conventional machine learning is capable of a limited range of tasks, but is not good at pattern recognition or making predictions.

Answer: FALSE Page Ref: 369 Difficulty: Moderate AACSB: Information technology LO: 11.4: Discuss generative AI. 22) GenAI starts with a prompt that could be in the form of text, an image, a video, a design, musical notes, or any input that the AI system can process.

Answer: TRUE Page Ref: 369 Difficulty: Moderate AACSB: Information technology LO: 11.4: Discuss generative AI. 23) A transformer changes an input sequence into an output sequence.

Answer: TRUE Page Ref: 370 Difficulty: Moderate AACSB: Information technology LO: 11.4: Discuss generative AI. 24) Which of the following is an intelligent virtual assistant?

A) GE's Predix B) Amazon's Alexa C) Facebook's DeepFace D) IBM's Watson Answer: B Page Ref: 372 Difficulty: Easy AACSB: Information technology LO: 11.5: Discuss intelligent agents.

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25) Apple's Siri application is an example of which of the following?

A) Neural network B) Augmented reality C) Genetic algorithm D) Virtual assistant Answer: D Page Ref: 372 Difficulty: Easy AACSB: Information technology LO: 11.5: Discuss intelligent agents.

26) 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 Answer: A Page Ref: 370 Difficulty: Moderate AACSB: Information technology LO: 11.5: Discuss intelligent agents.

27) A chatbot is an example of which of the following?

A) Computer vision system B) Intelligent agent C) Augmented reality D) Virtual reality system Answer: B Page Ref: 371 Difficulty: Moderate AACSB: Information technology LO: 11.5: Discuss intelligent agents.

28) Some intelligent agent systems are capable of learning from experience and adjusting their behavior.

Answer: TRUE Page Ref: 370 Difficulty: Moderate AACSB: Information technology LO: 11.5: Discuss intelligent agents.

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29) 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" to interact with IT systems.

Page Ref: 371 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 11.5: Discuss intelligent agents.

30) Which of the following statements about natural language processing (NLP) is not true?

A) It is a technology that gives computers the ability to interpret, manipulate, and comprehend human language.

B) It struggles to understand the nuances of human language.

C) It relies on the use of an expert system.

D) It struggles to understand the context in which words are used.

Answer: C Page Ref: 373 Difficulty: Difficult AACSB: Information technology LO: 11.6: Understand natural language processing.

31) AI applications are used by search engines and social networks.

Answer: TRUE Page Ref: 373 Difficulty: Moderate AACSB: Information technology LO: 11.6: Understand natural language processing.

32) Which statement below is not true about computer vision systems?

A) They use machine learning and deep learning neural networks to emulate the human visual system.

B) They are able to understand and identify objects and people in images and videos.

C) Input must come from sensing devices such as cameras.

D) They run on algorithms that are trained on massive amounts of visual data or images.

Answer: C Page Ref: 373 Difficulty: Difficult AACSB: Information technology LO: 11.7: Understand computer vision systems.

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33) Computer vision systems can view and extract information from real-world images.

Answer: TRUE Page Ref: 373 Difficulty: Moderate AACSB: Information technology LO: 11.7: Understand computer vision systems.

34) Computer vision systems can be used to allow precision agriculture.

Answer: TRUE Page Ref: 374 Difficulty: Moderate AACSB: Information technology LO: 11.7: Understand computer vision systems.

35) Describe a computer vision system and list some real-world applications.

Answer: A computer vision system uses machine learning and deep learning neural networks to emulate the human visual system to view and extract information from real-world images. These systems are able to understand and identify objects and people in images and videos, with input coming from sensing devices such as cameras and interpreting devices such as computers to process visual data and extract meaning. Computer vision applications run on algorithms that are trained on massive amounts of visual data or images. They recognize patterns in this visual data and use those patterns to determine the content of other images. Examples include: facial recognition, self-driving cars, manufacturing fault detection, medical imaging, sports performance analysis, and precision agriculture.

Page Ref: 373 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.7: Understand computer vision systems.

36) Which of the following statements about robotics is not true?

A) Robotics involves the creation and use of machines that 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. Answer: D Page Ref: 375 Difficulty: Moderate AACSB: Information technology LO: 11.8: Describe robotics.

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37) 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 discover knowledge by using hardware and software that parallel the processing patterns of the biological or human brain.

Answer: D Page Ref: 376 Difficulty: Difficult AACSB: Information technology LO: 11.9: Discuss genetic algorithms.

38) 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.

Answer: C Page Ref: 376 Difficulty: Difficult AACSB: Analytical thinking LO: 11.9: Discuss genetic algorithms.

39) 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 Answer: A Page Ref: 376 Difficulty: Moderate AACSB: Information technology LO: 11.9: Discuss genetic algorithms.

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40) 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 Answer: D Page Ref: 379 Difficulty: Moderate AACSB: Information technology LO: 11.10: Discuss expert systems.

41) 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 Answer: C Page Ref: 378 Difficulty: Moderate AACSB: Information technology LO: 11.10: Discuss expert systems.

42) Which of the following statements about expert systems is not true?

A) The knowledge base can become chaotic as the number of rules can reach into the many thousands.

B) Expert systems do not scale well.

C) Expert system development has grown rapidly in the last decade.

D) Expert systems are not useful for dealing with unstructured problems.

Answer: C Page Ref: 378 Difficulty: Difficult AACSB: Information technology LO: 11.10: Discuss expert systems.

43) 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 Answer: C Page Ref: 378 Difficulty: Difficult AACSB: Information technology LO: 11.10: Discuss expert systems.

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44) 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) Answer: A Page Ref: 379 Difficulty: Moderate AACSB: Information technology LO: 11.10: Discuss expert systems.

45) An expert system cannot consider multiple rules at the same time.

Answer: FALSE Page Ref: 378 Difficulty: Easy AACSB: Information technology LO: 11.10: Discuss expert systems.

46) Expert systems capture the knowledge of skilled employees in the form of a set of rules in a software system that can be used by others in the organization.

Answer: TRUE Page Ref: 378 Difficulty: Easy AACSB: Information technology LO: 11.10: Discuss expert systems.

47) Expert systems use real-time data to guide their decisions.

Answer: FALSE Page Ref: 379 Difficulty: Moderate AACSB: Information technology LO: 11.10: Discuss expert systems.

48) Expert systems work by applying a set of decision cases against a knowledge base, both of which are extracted from human experts.

Answer: FALSE Page Ref: 378 Difficulty: Moderate AACSB: Information technology LO: 11.10: Discuss expert systems.

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49) Which statement below is not true about fuzzy logic?

A) It is a form of AI that imitates human reasoning and cognition by representing imprecision in the form of rules that use approximate or subjective values rather than just 0 or 1.

B) It can describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules.

C) It allows incremental changes in inputs to produce smooth changes in outputs.

D) It can best be thought of as making decisions based on IF-THEN rules.

Answer: D Page Ref: 379 Difficulty: Difficult AACSB: Information technology LO: 11.11: Describe fuzzy logic systems.

50) Which of the following is not listed in the text as an application for which fuzzy logic is suitable?

A) Automobiles B) Sports education C) Copy machines D) Aerospace Answer: B Page Ref: 380 Difficulty: Difficult AACSB: Information technology LO: 11.11: Describe fuzzy logic systems.

51) Humans tend to categorize things precisely.

Answer: FALSE Page Ref: 379 Difficulty: Moderate AACSB: Information technology LO: 11.11: Describe fuzzy logic systems.

52) Fuzzy logic uses rules that use subjective values rather than just 0 or 1.

Answer: TRUE Page Ref: 379 Difficulty: Moderate AACSB: Information technology LO: 11.11: Describe fuzzy logic systems.

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53) Describe fuzzy logic systems.

Answer: Fuzzy logic is a form of AI that imitates human reasoning and cognition by representing imprecision in the form of rules that use approximate or subjective values rather than just 0 or 1. It can describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules. Fuzzy logic allows incremental changes in inputs to produce smooth changes in outputs instead of discontinuous ones, making it useful for consumer electronics and engineering applications. For example, fuzzy logic is widely used in washing machines and dryers. Fuzzy logic-powered washing machines feature sensors that continually monitor temperature fluctuations, and the system modifies the controls and processes.

Page Ref: 379 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.11: Describe fuzzy logic systems.

54) Which of the following is not true about AI hallucinations?

A) Analysts have estimated that by 2023, GenAI chatbots hallucinated as much as 45% of the time B) They are incorrect or misleading results generated by an LLM that are presented as facts.

C) They can be caused by a variety of factors, including insufficient training data.

D) They are especially problematic when they occur in AI systems used for important decisions.

Answer: A Page Ref: 380 Difficulty: Difficult AACSB: Information technology LO: 11.12: Understand the challenges of AI. 55) Which of the following is not a common type of AI hallucination list in the text?

A) Incorrect predictions B) Sports statistics C) False positives D) False negatives Answer: B Page Ref: 380 Difficulty: Difficult AACSB: Information technology LO: 11.12: Understand the challenges of AI. 56) Transparency in AI refers to the ability to examine the workings of an AI model and understand how it reaches its decisions.

Answer: TRUE Page Ref: 381 Difficulty: Moderate AACSB: Information technology LO: 11.12: Understand the challenges of AI.

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57) Without transparency, AI systems could inadvertently perpetuate harmful biases.

Answer: TRUE Page Ref: 381 Difficulty: Moderate AACSB: Information technology LO: 11.12: Understand the challenges of AI. 58) Better transparency is required for all new AI regulations.

Answer: TRUE Page Ref: 381 Difficulty: Moderate AACSB: Information technology LO: 11.12: Understand the challenges of AI. 59) Which of the following is not true about AI bias?

A) It refers to the occurrence of biased results due to human biases.

B) AI bias can impact an organization's success and hinder people's ability to participate in the economy and society.

C) Biased results can also lead to unfair treatment of women, people of color, people with disabilities, and other marginalized groups.

D) Bias increases AI's accuracy, and therefore its potential as a solution.

Answer: D Page Ref: 381 Difficulty: Difficult AACSB: Information technology LO: 11.12: Understand the challenges of AI. 60) Which of the following is not true about cybersecurity problems associated with AI? A) AI has helped organizations improve cybersecurity.

B) AI accelerates incident response, allowing faster identification and mitigation of cyberattacks.

C) AI has made it harder for hackers and cybercriminals to subvert cybersecurity protection systems.

D) AI-generated deepfakes may be able to undermine facial and voice recognition systems.

Answer: C Page Ref: 381 Difficulty: Difficult AACSB: Information technology LO: 11.12: Understand the challenges of AI.

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61) What is not true about AI-generated deepfakes?

A) They are synonymous with identify theft.

B) They are not to the level yet of undermining facial recognition systems, but might someday.

C) They are artificial images, videos, and/or audio that have been digitally manipulated to replace one person's likeness and/or voice convincingly with that of another.

D) Most Large Language models are immune to deepfakes because of the amount of information they contain.

Answer: C Page Ref: 381 Difficulty: Difficult AACSB: Information technology LO: 11.12: Understand the challenges of AI. 62) Which of the following is not true about AI bias?

A) AI systems learn to make decisions based on training data, and bias can be embedded in training data.

B) Amazon began using a hiring algorithm after finding it favored applicants based on certain words.

C) AI bias may include training data bias, algorithmic bias, and cognitive bias.

D) Algorithmic bias can be caused by programming errors.

Answer: B Page Ref: 381 Difficulty: Difficult AACSB: Information technology LO: 11.12: Understand the challenges of AI.

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63) Describe the concerns with AI and job loss.

Answer: AI-driven job loss is a major concern as the technology is adopted more widely, affecting not only low-skilled repetitive jobs in manufacturing and food service but also whitecollar jobs. White-collar jobs in fields such as bookkeeping, accounting, law, and medicine have many tasks that AI can take over, and many of these tasks involve higher-level skills. The Chapter Case Study, Is AI Coming for Your Job?, discusses the impact of AI on jobs in more detail. Recent studies indicate that AI is likely to create disproportionate job losses among female, Black, and Hispanic workers. Although AI is projected to create 97 million new jobs by 2025, many employees won't have the skills or technical expertise needed for these new roles and could get left behind if companies don't provide their workforces with more education and training. AI could also affect income and wealth inequality, with workers who can take advantage of AI seeing an increase in their productivity and wages–and those who cannot falling behind. AI may prove more beneficial to younger workers because it may be easier for them to adapt to technological change than older workers. The effect on income will largely depend on the extent to which AI will complement jobs rather than eliminate them and how those jobs are distributed in the labor force. If AI significantly complements higher-income jobs, it may lead to a disproportionate increase in their income. Moreover, gains in productivity from firms that adopt AI will likely boost capital returns, which may also favor high earners. Both of these phenomena could exacerbate inequality. In most scenarios, AI will likely worsen overall inequality. Governments and businesses must proactively take measures to prevent AI technology from amplifying existing inequalities. It is crucial for countries to establish comprehensive social safety nets and offer retraining programs for vulnerable workers.

Page Ref: 382 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.12: Understand the challenges of AI.

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64) Describe the environmental impact that AI can have.

Answer: AI has been both a plus and a minus in terms of environmental impact. On the plus side, AI systems are being used to help maximize the utilization of renewable energy sources like wind and solar, resulting in more environmentally friendly farming methods as well as carbon reductions for daily living. AI is also being used to optimize logistics and reduce waste in supply chains, monitor and enforce environmental regulations, and optimize data center operations through ML algorithms that dynamically adjust temperature settings, workload distribution, and server utilization. AI significantly boosts efficiency and productivity by optimizing processes and reducing the time and resources required to complete tasks. AI systems can analyze data, predict outcomes, and suggest improvements, allowing businesses to streamline operations and eliminate bottlenecks. This leads to faster production cycles, reduced operational costs, and higher output quality. AI systems include tools to predict weather, monitor carbon emissions, and identify pollution. On the minus side, AI systems consume much more energy and cooling water than traditional systems, and the amount of carbon they are throwing into the atmosphere negates many of their benefits. Google Search receives an average of 150 million search queries per hour. Each search that uses AI might require five to ten times as much power as a traditional one.

Data center power consumption has already risen because of AI, and McKinsey global management consultants predict that data center electricity use will more than double by 2030.

Page Ref: 382 Difficulty: Difficult AACSB: Application of knowledge; Written and oral communication LO: 11.12: Understand the challenges of AI. 65) Disinformation is false information that is spread by people who think it's true.

Answer: FALSE Page Ref: 383 Difficulty: Moderate AACSB: Information technology LO: 11.12: Understand the challenges of AI. 66) Misinformation is information that has been deliberately falsified.

Answer: FALSE Page Ref: 383 Difficulty: Moderate AACSB: Information technology LO: 11.12: Understand the challenges of AI. 67) Surveillance systems using AI facial recognition technology have become increasingly accurate.

Answer: TRUE Page Ref: 384 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI.

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68) Web pulling is often used by AI developers and vendors to extract content from publicly available sources on the Internet.

Answer: FALSE Page Ref: 384 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI. 69) AI systems consume much less energy and cooling water than traditional systems.

Answer: FALSE Page Ref: 383 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI. 70) By 2030, the world is expected to be littered with 74 million metric tons of e-waste.

Answer: TRUE Page Ref: 383 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI. 71) AI-generated misinformation can be more persuasive than false content created by humans.

Answer: TRUE Page Ref: 383 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI. 72) One of the minor challenges in AI is defining the level of human involvement required for AI-generated works to qualify for copyright protection.

Answer: FALSE Page Ref: 384 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI. 73) Responsible AI is a set of practices to ensure that AI is designed, deployed, and used in an ethical and legal way.

Answer: TRUE Page Ref: 386 Difficulty: Easy AACSB: Information technology LO: 11.12: Understand the challenges of AI.

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74) Understanding AI and familiarity with AI tools will be essential requirements for doing business.

Answer: TRUE Page Ref: 386 Difficulty: Easy AACSB: Information technology LO: 11.13: Understand how the information in this chapter can help your career.

75) 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, and 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 reaching 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.

Page Ref: 367 and 376 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: Multiple objectives

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Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 12 Enhancing Decision Making with Data Analytics and Business Intelligence 1) When there is no well-understood or agreed-on procedure for making a decision, it is said to be ________.

A) undocumented B) unstructured C) documented D) semistructured Answer: B Page Ref: 397 Difficulty: Moderate AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

2) If you can follow a definite procedure to make a business decision, you are making a(n) ________ decision.

A) structured B) procedural C) unstructured D) semistructured Answer: A Page Ref: 397 Difficulty: Moderate AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

3) Which of the following typically makes the unstructured decisions for a firm?

A) Senior management B) Middle management C) Operational management D) Individual employees Answer: A Page Ref: 397 Difficulty: Easy AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

4) Some decision scenarios made by middle managers may have unstructured components.

Answer: TRUE Page Ref: 397 Difficulty: Moderate AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

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5) A structured decision is repetitive and routine.

Answer: TRUE Page Ref: 397 Difficulty: Easy AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

6) Unstructured decision making is most prevalent at lower organizational levels.

Answer: FALSE Page Ref: 397 Difficulty: Easy AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

7) An unstructured decision is novel and important and requires the decision maker to provide judgment, evaluation, and insight.

Answer: TRUE Page Ref: 397 Difficulty: Easy AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

8) Operational management faces primarily semistructured decisions.

Answer: FALSE Page Ref: 397 Difficulty: Moderate AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

9) A semistructured decision is one in which only part of the problem has a clear-cut answer provided by an accepted procedure.

Answer: TRUE Page Ref: 397 Difficulty: Easy AACSB: Application of knowledge LO: 12.1: Describe the different types of business decisions.

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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 Answer: B Page Ref: 398 Difficulty: Easy AACSB: Application of knowledge LO: 12.2: Describe the decision-making process.

11) Which of the following is not one of Simon's four stages of decision making?

A) Implementation B) Intelligence C) Prediction D) Choice Answer: C Page Ref: 398 Difficulty: Moderate AACSB: Application of knowledge LO: 12.2: Describe the decision-making process.

12) The design phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization.

Answer: FALSE Page Ref: 398 Difficulty: Easy AACSB: Application of knowledge LO: 12.2: Describe the decision-making process.

13) The choice phase of Simon's decision-making model includes choosing among solution alternatives.

Answer: TRUE Page Ref: 398 Difficulty: Moderate AACSB: Application of knowledge LO: 12.2: Describe the decision-making process.

14) The first stage in Simon's decision-making process model is the intelligence stage.

Answer: TRUE Page Ref: 398 Difficulty: Moderate AACSB: Application of knowledge LO: 12.2: Describe the decision-making process.

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15) The third stage in Simon's description of decision making is implementation.

Answer: FALSE Page Ref: 398 Difficulty: Moderate AACSB: Application of knowledge LO: 12.2: Describe the decision-making process.

16) In your position as 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.

Page Ref: 398 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12.2: Describe the decision-making process.

17) 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.

Answer: B Page Ref: 399 Difficulty: Moderate AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

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18) The role of spokesperson falls into which of Mintzberg's managerial classifications?

A) Decisional B) Informational C) Interpersonal D) Organizational Answer: B Page Ref: 400 Difficulty: Difficult AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

19) 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 Answer: A Page Ref: 399 Difficulty: Moderate AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

20) The role of negotiator falls into which of Mintzberg's managerial classifications?

A) Decisional B) Informational C) Interpersonal D) Symbolic Answer: A Page Ref: 400 Difficulty: Difficult AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

21) According to Mintzberg, managers in their informational role act as ________.

A) figureheads for the organization B) leaders C) nerve centers of the organization D) negotiators Answer: C Page Ref: 400 Difficulty: Moderate AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

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22) In their ________ role, managers act as figureheads for the organization when they represent their companies to the outside world.

A) informational B) interpersonal C) decisional D) HR Answer: B Page Ref: 399 Difficulty: Difficult AACSB: Analytical thinking LO: 12.3: Describe the different roles managers play.

23) The behavioral model of management sees managers as being ________ than does the classical model.

A) more systematic B) more informal C) more reflective D) more well organized Answer: B Page Ref: 399 Difficulty: Moderate AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

24) Which of the following is not one of the five classical functions of managers?

A) Creating B) Deciding C) Planning D) Organizing Answer: A Page Ref: 399 Difficulty: Difficult AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

25) The classical model of management describes what managers do when they plan, decide things, and control the work of others.

Answer: FALSE Page Ref: 399 Difficulty: Moderate AACSB: Application of knowledge LO: 12.3: Describe the different roles managers play.

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26) 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, distribute information to those who need to have it, and act as a spokesperson for the organization. Decisional roles require managers to act as entrepreneurs by initiating new activities, handle disturbances within the organization, allocate resources, and negotiate conflicts.

Page Ref: 399 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12.3: Describe the different roles managers play.

27) 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 valueqs.

C) Improved decision making enables senior executives to more accurately foresee future financial trends.

D) Improved decision making strengthens customer and supplier intimacy, which reduces costs.

Answer: B Page Ref: 400 Difficulty: Difficult AACSB: Analytical thinking LO: 12.4: Understand the value of improved decision making.

28) 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 $5,000, what is the annual business value of that enhanced decision?

A) $2,500 B) $30,000 C) $130,000 D) $1,825,000 Answer: D Page Ref: 401 Difficulty: Difficult AACSB: Application of knowledge LO: 12.4: Understand the value of improved decision making.

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29) 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, and culture C) information quality, information integrity, and information accuracy D) information quality, organizational culture, and management filters Answer: D Page Ref: 401 Difficulty: Moderate AACSB: Information technology LO: 12.5: Understand why information systems do not always result in better decisions.

30) 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 Answer: C Page Ref: 401 Difficulty: Difficult AACSB: Application of knowledge LO: 12.5: Understand why information systems do not always result in better decisions.

31) The dimension of ________ describes whether data elements are consistently defined.

A) completeness B) accuracy C) validity D) consistency Answer: D Page Ref: 401 Difficulty: Difficult AACSB: Application of knowledge LO: 12.5: Understand why information systems do not always result in better decisions.

32) Humans are eliminated from the decision chain because they are too slow in which decisionmaking process?

A) Semi-structured B) High-velocity C) Analytic D) Financial Answer: B Page Ref: 402 Difficulty: Easy AACSB: Application of knowledge LO: 12.5: Understand why information systems do not always result in better decisions.

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33) 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 Answer: D Page Ref: 402 Difficulty: Difficult AACSB: Analytical thinking LO: 12.5: Understand why information systems do not always result in better decisions.

34) Experts from a variety of fields have found that managers are poor at assessing risk.

Answer: TRUE Page Ref: 402 Difficulty: Easy AACSB: Application of knowledge LO: 12.5: Understand why information systems do not always result in better decisions.

35) Studies have found that firms systematically blame poor performance on the external business environment.

Answer: TRUE Page Ref: 402 Difficulty: Easy AACSB: Application of knowledge LO: 12.5: Understand why information systems do not always result in better decisions.

36) Describe high-velocity automated decision making and its dangers.

Answer: High-velocity automated decision making involves 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.

Page Ref: 402 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 12.5: Understand why information systems do not always result in better decisions.

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37) 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.

Page Ref: 401 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12.5: Understand why information systems do not always result in better decisions.

38) Which of the following companies is not identified in the text as one of the leading providers of business intelligence and analytics products?

A) Google B) Microsoft C) SAP D) IBM Answer: A Page Ref: 403 Difficulty: Moderate AACSB: Application of knowledge LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

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39) 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 Answer: B Page Ref: 403 Difficulty: Moderate AACSB: Application of knowledge LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

40) Data visualization technologies are used to help human users see patterns and relationships in large amounts of data.

Answer: TRUE Page Ref: 404 Difficulty: Easy AACSB: Information technology LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

41) 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.

Page Ref: 403 Difficulty: Moderate AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

42) 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.

Page Ref: 404 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

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43) The underlying foundation of BI is a powerful database system that captures all the relevant data to operate the business.

Answer: TRUE Page Ref: 403 Difficulty: Moderate AACSB: Application of knowledge LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

44) Data analytics involves collecting, storing, inspecting, cleaning, modeling, and querying data.

Answer: TRUE Page Ref: 403 Difficulty: Moderate AACSB: Application of knowledge LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

45) Tableau Software is a leading BI and data visualization tool owned by Salesforce.

Answer: TRUE Page Ref: 404 Difficulty: Moderate AACSB: Application of knowledge LO: 12.6: Discuss how data analytics, BI, and AI support decision making.

46) Which of the following BI tools or abilities has been driving the movement toward "smart cities"?

A) Big data analytics B) Chi-square analysis C) Predictive analytics D) Data mining Answer: A Page Ref: 409 Difficulty: Moderate AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

47) Decisions regarding managing and monitoring day-to-day business activities are referred to as ________ intelligence.

A) business B) analytical C) operational D) transactional Answer: C Page Ref: 410 Difficulty: Moderate AACSB: Application of knowledge LO: 12.7: Describe the capabilities of BI systems.

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48) 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 Answer: C Page Ref: 406 Difficulty: Moderate AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

49) ________ 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 Answer: A Page Ref: 406 Difficulty: Moderate AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

50) A(n) ________ report is produced when a user enters various values in a pivot table to filter data.

A) drill-down B) parameterized C) ad hoc D) production Answer: B Page Ref: 406 Difficulty: Moderate AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

51) A(n) ________ is a BI feature that presents performance data defined by users.

A) ad hoc query B) parameterized report C) dashboard D) portal Answer: C Page Ref: 406 Difficulty: Moderate AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

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52) BI that is designed to determine the most likely effects of changes in the business environment is called ________.

A) statistical modeling B) environmental analytics C) predictive analytics D) big data analytics Answer: C Page Ref: 407 Difficulty: Easy AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

53) 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 Answer: A Page Ref: 411 Difficulty: Easy AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

54) 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 call center resolution rates Answer: D Page Ref: 410 Difficulty: Moderate AACSB: Analytical thinking LO: 12.7: Describe the capabilities of BI systems.

55) Business intelligence and analytics can deliver nearly real-time information to decision makers.

Answer: TRUE Page Ref: 406 Difficulty: Easy AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

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56) GIS software ties location data about the distribution of people or other resources to points, lines, and areas on a map.

Answer: TRUE Page Ref: 411 Difficulty: Easy AACSB: Information technology LO: 12.7: Describe the capabilities of BI systems.

57) GIS are useful for businesses, but not as much for state and local governments.

Answer: FALSE Page Ref: 411 Difficulty: Easy AACSB: Application of knowledge LO: 12.7: Describe the capabilities of BI systems.

58) One example of operational intelligence is the use of data generated by sensors on trucks, trailers, and intermodal containers owned by Schneider National.

Answer: TRUE Page Ref: 410 Difficulty: Easy AACSB: Application of knowledge LO: 12.7: Describe the capabilities of BI systems.

59) 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.

Page Ref: 411 Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12.7: Describe the capabilities of BI systems.

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60) A pivot table is a ________.

A) spreadsheet tool that displays two or more dimensions of data in a convenient format B) type of relational database C) chart tool that can rotate columnar data quickly and visually D) tool for performing sensitivity analysis Answer: A Page Ref: 412 Difficulty: Easy AACSB: Information technology LO: 12.8: Understand the different types of BI users.

61) The leading methodology for understanding the really important information needed by a firm's executives is called the ________ method.

A) digital dashboard B) balanced scorecard C) KPI D) data visualization Answer: B Page Ref: 414 Difficulty: Moderate AACSB: Application of knowledge LO: 12.8: Understand the different types of BI users.

62) 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) parameters D) BPM Answer: B Page Ref: 415 Difficulty: Moderate AACSB: Application of knowledge LO: 12.8: Understand the different types of BI users.

63) Which of the following is a management methodology that attempts to systematically translate a firm's strategy into generating operational targets?

A) Benchmarks B) Sensitivity analysis C) Balanced scorecard D) BPM Answer: D Page Ref: 415 Difficulty: Moderate AACSB: Application of knowledge LO: 12.8: Understand the different types of BI users.

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64) 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.

Answer: A Page Ref: 415 Difficulty: Moderate AACSB: Information technology LO: 12.8: Understand the different types of BI users.

65) 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 semi-structured decision making D) They can be used to perform a sensitivity analysis.

Answer: B Page Ref: 412 Difficulty: Moderate AACSB: Information technology LO: 12.8: Understand the different types of BI users.

66) A well-designed ESS helps senior executives do all of the following except ________.

A) monitor organizational performance B) make high-velocity automated decisions C) recognize changing market conditions D) identify problems and opportunities Answer: B Page Ref: 415 Difficulty: Moderate AACSB: Information technology LO: 12.8: Understand the different types of BI users.

67) More than 80% of the audience for BI consists of power users.

Answer: FALSE Page Ref: 411 Difficulty: Easy AACSB: Information technology LO: 12.8: Understand the different types of BI users.

68) BPM uses ideas similar to the balanced scorecard framework with a stronger emphasis on strategy.

Answer: TRUE Page Ref: 415 Difficulty: Easy AACSB: Information technology LO: 12.8: Understand the different types of BI users.

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69) What-if analysis works forward from known or assumed conditions.

Answer: TRUE Page Ref: 412 Difficulty: Easy AACSB: Application of knowledge LO: 12.8: Understand the different types of BI users.

70) Sensitivity analysis predicts outcomes from constant inputs.

Answer: FALSE Page Ref: 412 Difficulty: Easy AACSB: Application of knowledge LO: 12.8: Understand the different types of BI users.

71) KPIs are used both in the balanced scorecard framework and BPM. Answer: TRUE Page Ref: 415 Difficulty: Moderate AACSB: Application of knowledge LO: 12.8: Understand the different types of BI users.

72) 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.

Page Ref: 412 Difficulty: Difficult AACSB: Analytical thinking; Information technology; Written and oral communication LO: 12.8: Understand the different types of BI users.

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73) Describe the balanced scorecard method and its role in ESS. Answer: The balanced scorecard method 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. Page Ref: 414 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 12.8: Understand the different types of BI users.

74) 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.

Page Ref: 411 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 12.8: Understand the different types of BI users.

75) A senior data analyst earns an average of between $75,000-$100,000.

Answer: FALSE Page Ref: 416 Difficulty: Moderate AACSB: Application of knowledge LO: 12.9: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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 Answer: C Page Ref: 427 Difficulty: Moderate AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote 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 Answer: D Page Ref: 427 Difficulty: Moderate AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote 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 Answer: A Page Ref: 428 Difficulty: Easy AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote organizational change.

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4) The idea that the achievement of quality is an end in itself describes a main concept of ________.

A) BPM B) business process redesign C) Six Sigma D) TQM Answer: D Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote organizational change.

5) 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 Answer: D Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote organizational change.

6) Automation is the most common form of IT-enabled organizational change.

Answer: TRUE Page Ref: 427 Difficulty: Easy AACSB: Information technology LO: 13.1: Explain how new information systems can promote organizational change.

7) Business process redesign involves a radical rethinking of the business model.

Answer: FALSE Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote organizational change.

8) Six Sigma describes the measurement of quality as 60 defects per million.

Answer: FALSE Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.1: Explain how new information systems can promote organizational change.

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9) 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 a paradigm shift, the very nature of the business is rethought and new business models are defined. In a hotel, this might mean that the idea of renting rooms on a night-by-night basis to clients might be rethought of as an extended stay place, or perhaps even as a condominium or other business type.

Page Ref: 427 Difficulty: Difficult AACSB: Analytical thinking LO: 13.1: Explain how new information systems can promote organizational change.

10) What is the business importance of managing the quality of business processes? Describe two methods of quality management.

Answer: Quality management is one area of continuous process improvement. Quality improvements in business processes can increase efficiency, reduce waste, lower costs, and can raise the level of product and service quality. Two methods for achieving greater quality are Total Quality Management (TQM) and Six Sigma. In TQM, quality is the responsibility of all people and functions within an organization. Everyone is expected to contribute to the overall improvement of quality. Six Sigma is a specific measure of quality, representing 3.4 defects per million opportunities. Most companies cannot achieve this level of quality but use Six Sigma as a goal to implement a set of methodologies and techniques for improving quality and reducing costs.

Page Ref: 428 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13.1: Explain how new information systems can promote organizational change.

11) ________ 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 Answer: B Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.2: Understand how IT can be used to manage and redesign business processes.

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12) In order, what are the first three steps in BPM? A) Identifying processes for change, analyzing existing processes, designing the new process B) Analyzing existing processes, identifying processes for change, designing the new process C) Identifying processes for change, designing the new process, implementing the new process D) Analyzing processes to change, designing the new process, measuring the optimized process Answer: A Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.2: Understand how IT can be used to manage and redesign business processes.

13) 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 Answer: D Page Ref: 430 Difficulty: Easy AACSB: Analytical thinking LO: 13.2: Understand how IT can be used to manage and redesign business processes.

14) BPM tools help businesses do all of the following except ________.

A) integrate existing systems to support business process improvements B) complete a systems analysis C) identify and document business processes D) study capture and enforce business rules Answer: B Page Ref: 431 Difficulty: Easy AACSB: Information technology LO: 13.2: Understand how IT can be used to manage and redesign business processes.

15) Process improvement requires continual change.

Answer: TRUE Page Ref: 428 Difficulty: Moderate AACSB: Application of knowledge LO: 13.2: Understand how IT can be used to manage and redesign business processes.

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16) 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 Answer: A Page Ref: 435 Difficulty: Easy AACSB: Application of knowledge LO: 13.3: Describe the core activities in the systems development process.

17) Which process develops a detailed description of the functions that a new information system must perform?

A) Feasibility study B) Requirements analysis C) Systems design D) Test plan development Answer: B Page Ref: 432 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

18) 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 Answer: B Page Ref: 432 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

19) Which of the following steps in the systems development process involves the process of changing from an old system to a new system?

A) Programming B) Testing C) Maintenance D) Conversion Answer: D Page Ref: 434 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

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20) Unit testing ________.

A) tests each program separately 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 Answer: A Page Ref: 434 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

21) System testing ________.

A) includes all the preparations for the series of tests to be performed on the system B) tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned C) tests each program separately D) provides the final certification that the system is ready to be used in a production setting Answer: B Page Ref: 434 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

22) 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 Answer: D Page Ref: 434 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

23) 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 Answer: C Page Ref: 435 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

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24) 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 Answer: B Page Ref: 435 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

25) 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 Answer: C Page Ref: 435 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

26) In what stage of systems development are design specifications created?

A) Systems analysis B) Systems design C) Testing D) Conversion Answer: B Page Ref: 435 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

27) 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 Answer: A Page Ref: 431 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

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28) ________ 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 Answer: B Page Ref: 432 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

29) 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 Answer: C Page Ref: 432 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

30) During the ________ stage of system development, systems tests are evaluated by users and reviewed by management.

A) programming B) acceptance testing C) implementation D) conversion Answer: B Page Ref: 434 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

31) Which of the following statements about systems development is not true?

A) Systems development is a structured kind of problem solved with distinct activities.

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.

Answer: B Page Ref: 431 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

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32) Which of the following should drive the entire system-building effort?

A) Six Sigma B) Feasibility studies C) Documentation D) User information requirements Answer: D Page Ref: 433 Difficulty: Moderate AACSB: Analytical thinking LO: 13.3: Describe the core activities in the systems development process.

33) A phased approach conversion strategy introduces a new system in stages, either by functions or organizational units.

Answer: TRUE Page Ref: 435 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

34) Documentation shows how a system works from both a technical standpoint and end-user standpoint.

Answer: TRUE Page Ref: 435 Difficulty: Moderate AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

35) Test plans require input from both end users and information systems specialists.

Answer: TRUE Page Ref: 434 Difficulty: Easy AACSB: Information technology LO: 13.3: Describe the core activities in the systems development process.

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36) 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 Page Ref: 433 Difficulty: Moderate AACSB: Application of knowledge; Written and oral communication LO: 13.3: Describe the core activities in the systems development process.

37) 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.

Page Ref: 433 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13.3: Describe the core activities in the systems development process.

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38) Which of the following statements about the traditional systems development 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.

Answer: C Page Ref: 436 Difficulty: Difficult AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

39) Commercial software packages often include ________ features that allow the software to be modified to meet organizational requirements.

A) automation B) object-oriented C) customization D) design Answer: C Page Ref: 439 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

40) The oldest method for building information systems is ________.

A) agile development B) prototyping C) object-oriented development D) the systems development life cycle Answer: D Page Ref: 436 Difficulty: Moderate AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

41) In the traditional systems development 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 Answer: D Page Ref: 436 Difficulty: Moderate AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

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42) 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 development life cycle B) Prototyping C) RAD D) JAD Answer: A Page Ref: 436 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

43) 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.

Answer: A Page Ref: 437 Difficulty: Difficult AACSB: Analytical thinking LO: 13.4: Discuss methods for building and acquiring information systems.

44) 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 the daily operation of IT systems Answer: A Page Ref: 439 Difficulty: Moderate AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

45) 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 Answer: D Page Ref: 440 Difficulty: Moderate AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

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46) 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 Answer: A Page Ref: 439 Difficulty: Difficult AACSB: Application of knowledge LO: 13.4: Discuss methods for building and acquiring information systems.

47) 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 Answer: D Page Ref: 439 Difficulty: Moderate AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

48) 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, and revise and enhance the prototype.

B) Identify user requirements, develop the prototype, use the prototype, and 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, and revise and enhance the prototype.

Answer: B Page Ref: 437 Difficulty: Difficult AACSB: Analytical thinking LO: 13.4: Discuss methods for building and acquiring information systems.

49) The systems development life cycle methodology maintains a formal division of labor between end users and information systems specialists.

Answer: TRUE Page Ref: 436 Difficulty: Moderate AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

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50) Prototyping is more iterative than the systems design life cycle approach.

Answer: TRUE Page Ref: 437 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

51) A prototype is a working version of an information system that serves as the final version.

Answer: FALSE Page Ref: 437 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

52) Prototyping is less likely than other types of system development to produce a system that fulfills user requirements.

Answer: FALSE Page Ref: 437 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

53) Firms generally do not outsource the conception, systems analysis, and design of IT systems to offshore firms.

Answer: TRUE Page Ref: 439 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

54) Cloud computing is a form of outsourcing.

Answer: TRUE Page Ref: 439 Difficulty: Easy AACSB: Information technology LO: 13.4: Discuss methods for building and acquiring information systems.

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55) Identify and briefly describe at least five systems development approaches.

Answer: 1. The systems development life cycle is a sequential step-by-step formal process defined by written specifications and approvals, and a 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).

Page Ref: 436 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 13.4: Discuss methods for building and acquiring information systems.

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56) 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, and 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 idea of what their information requirements are.

Page Ref: 437 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 13.4: Discuss methods for building and acquiring information systems.

57) In object-oriented development ________.

A) the class is used as the basic unit of systems analysis and design B) an object is a collection of data that is acted on by external processes C) processing logic resides within objects D) a strict, step-by-step development process is essential Answer: C Page Ref: 441 Difficulty: Moderate AACSB: Analytical thinking LO: 13.5: Describe methods that enable rapid systems development.

58) 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.

Answer: B Page Ref: 441 Difficulty: Difficult AACSB: Analytical thinking LO: 13.5: Describe methods that enable rapid systems development.

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59) 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.

Answer: D Page Ref: 441 Difficulty: Moderate AACSB: Information technology LO: 13.5: Describe methods that enable rapid systems development.

60) Object-oriented development could potentially reduce the time and cost of writing software because ________.

A) object-oriented programming requires less training B) iterative prototyping is not required C) objects are reusable D) a single user interface object can be used for the entire application Answer: C Page Ref: 442 Difficulty: Moderate AACSB: Information technology LO: 13.5: Describe methods that enable rapid systems development.

61) Which of the following statements about object-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.

Answer: B Page Ref: 441 Difficulty: Moderate AACSB: Information technology LO: 13.5: Describe methods that enable rapid systems development.

62) Objects are grouped into hierarchies, and hierarchies into classes.

Answer: FALSE Page Ref: 441 Difficulty: Easy AACSB: Information technology LO: 13.5: Describe methods that enable rapid systems development.

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63) 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.

Page Ref: 442 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 13.5: Describe methods that enable rapid systems development.

64) 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 Answer: A Page Ref: 442 Difficulty: Moderate AACSB: Information technology LO: 13.5: Describe methods that enable rapid systems development.

65) Which statement below is not true about open-source software (OSS)?

A) It is distributed with its source code.

B) Programmers can modify a program by adding to it or changing it.

C) It does not need a distribution license.

D) It is now considered a major software development approach.

Answer: C Page Ref: 443 Difficulty: Moderate AACSB: Information technology LO: 13.6: Discuss the increasing democratization of software development.

66) Which statement below is not true about the security risks associated with open-source software (OSS)?

A) OSS is not completely bug-free (as opposed to commercial software).

B) Security bugs and code flaws still exist and pose significant risk.

C) OSS source code is open for review by anyone and everyone.

D) Organizations using OSS must be able to clearly understand what is in the OSS code.

Answer: A Page Ref: 444 Difficulty: Moderate AACSB: Information technology LO: 13.6: Discuss the increasing democratization of software development.

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67) Low-code development ________.

A) cannot produce entirely operational applications B) increases the amount of hand-coding C) requires formal programming skills D) is a software development approach that enables the delivery of workable applications faster Answer: D Page Ref: 445 Difficulty: Moderate AACSB: Information technology LO: 13.6: Discuss the increasing democratization of software development.

68) A citizen developer is a business user who builds new applications or modifies existing ones to create applications on their own with IT approval or with minimal help from IT staff.

Answer: TRUE Page Ref: 445 Difficulty: Easy AACSB: Information technology LO: 13.6: Discuss the increasing democratization of software development.

69) Which of the following statements about the challenges of developing AI software is not true?

A) One of the biggest challenges is the need for more software developer expertise in AI. B) Pretrained models can cut AI application development time by up to a year, but can cost hundreds of thousands of dollars more than the traditional model.

C) There is a need for very large amounts of high-quality data to train AI models.

D) Training AI models is very resource-intensive.

Answer: B Page Ref: 449 Difficulty: Difficult AACSB: Information technology LO: 13.7: Understand the impact of AI on software development.

70) AI as a Service (AIaaS) is a cloud-based machine learning platforms that offer scalable infrastructure and pre-built tools.

Answer: TRUE Page Ref: 449 Difficulty: Easy AACSB: Information technology LO: 13.7: Understand the impact of AI on software development.

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71) It takes specialized AI cloud service to offer the benefits of scalability, subscription-based or pay-as-you-go pricing, AI-optimized hardware, pre-built AI models and tools, and data management and storage.

Answer: FALSE Page Ref: 449 Difficulty: Easy AACSB: Information technology LO: 13.7: Understand the impact of AI on software development.

72) 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 Answer: C Page Ref: 449 Difficulty: Difficult AACSB: Information technology LO: 13.8: Discuss approaches for building mobile applications.

73) 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.

Answer: A Page Ref: 450 Difficulty: Difficult AACSB: Analytical thinking LO: 13.8: Discuss approaches for building mobile applications.

74) 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.

Answer: B Page Ref: 449 Difficulty: Difficult AACSB: Analytical thinking LO: 13.8: Discuss approaches for building mobile applications.

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75) Process mining enables organizations to find and fix inefficiencies in their business processes by giving them complete real-time visibility.

Answer: TRUE Page Ref: 452 Difficulty: Easy AACSB: Information technology LO: 13.9: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (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 Answer: C Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

2) 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) Project descriptions Answer: D Page Ref: 464 Difficulty: Moderate AACSB: Analytical thinking LO: 14.1: Explain how to build a business case.

3) 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 Answer: B Page Ref: 464 Difficulty: Easy AACSB: Analytical thinking LO: 14.1: Explain how to build a business case.

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4) 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 Answer: D Page Ref: 464 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

5) 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 Answer: D Page Ref: 462 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

6) 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 Answer: C Page Ref: 462 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

7) 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 Answer: C Page Ref: 462 Difficulty: Moderate AACSB: Reflective thinking LO: 14.1: Explain how to build a business case.

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8) The CEO and Board of Directors of a company are responsible for developing a corporatewide information systems plan.

Answer: FALSE Page Ref: 463 Difficulty: Easy AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

9) An information systems plan contains a statement of organizational goals and specifies how information technology will support the attainment of those goals.

Answer: TRUE Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

10) If an intended benefit of an IT project is improved decision making, managers should develop a set of metrics to quantify the value of an improved decision.

Answer: TRUE Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

11) An information systems plan focuses solely on the technology needed to implement the proposed new information system.

Answer: FALSE Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.1: Explain how to build a business case.

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12) 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 Page Ref: 463 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 14.1: Explain how to build a business case.

13) 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 Answer: A Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

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14) 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 Answer: D Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

15) 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 Answer: C Page Ref: 463 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

16) 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 Answer: B Page Ref: 465 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

17) 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 Answer: B Page Ref: 465 Difficulty: Easy AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

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18) Which of the following statements about scoring models is not true?

A) Weights assigned in a scoring model indicate which criteria are considered the most important by the decision-making group.

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.

Answer: C Page Ref: 465 Difficulty: Difficult AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

19) 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 Answer: A Page Ref: 465 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

20) 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) Hardware, software, and labor expenditures B) Hardware and software expenditures C) Labor expenditures D) Reduced costs in production and operation Answer: A Page Ref: 466 Difficulty: Moderate AACSB: Analytical thinking LO: 14.2: Describe methods for evaluating IT investments.

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21) 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 Answer: D Page Ref: 466 Difficulty: Easy AACSB: Analytical thinking LO: 14.2: Describe methods for evaluating IT investments.

22) 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 Answer: D Page Ref: 467 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

23) Which of the following is not a tangible benefit of information systems?

A) Reduced rate of growth in expenses B) Lower computer expenses C) Improved resource control D) Increased productivity Answer: C Page Ref: 467 Difficulty: Difficult AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

24) 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) Answer: B Page Ref: 466 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

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25) Enhanced employee goodwill falls under what category of costs and benefits of information systems?

A) Intangible benefits B) Tangible benefits C) Cost savings D) Intangible costs Answer: A Page Ref: 467 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

26) Which of the following is a limitation of using a financial approach to evaluate information systems?

A) Inability to measure ROI B) Inability to control vendor costs C) Inability to assess risk D) Inability to assess costs from organizational disruption Answer: D Page Ref: 467 Difficulty: Easy AACSB: Analytical thinking LO: 14.2: Describe methods for evaluating IT investments.

27) ________ 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 Answer: D Page Ref: 466 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

28) Transaction and clerical systems that displace labor and save space typically produce less tangible benefits than management information systems.

Answer: FALSE Page Ref: 466 Difficulty: Difficult AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

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29) Intangible benefits may lead to quantifiable gains in the long run.

Answer: TRUE Page Ref: 466 Difficulty: Easy AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

30) A benefit of using TCO analysis to evaluate an information technology investment is that it is able to incorporate intangible and "soft" factors such as benefits and complexity costs.

Answer: FALSE Page Ref: 466 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

31) More timely information is an intangible benefit of information systems.

Answer: TRUE Page Ref: 467 Difficulty: Moderate AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

32) The difference between cash outflows and cash inflows is used for calculating the financial worth of an investment.

Answer: TRUE Page Ref: 466 Difficulty: Easy AACSB: Application of knowledge LO: 14.2: Describe methods for evaluating IT investments.

33) Describe the process of portfolio analysis. In what situations is this evaluation method useful?

Answer: Portfolio analysis inventories all of the organization's information systems projects and assets, including infrastructure, outsourcing contracts, and licenses. Each project can be described as having a profile of risk and benefit to the firm, similar to the financial portfolio. In a portfolio analysis, you would list the various systems projects and rate them according to their potential risks and benefits. You would use the portfolio analysis to determine which potential projects should be pursued and which should be modified or abandoned. High-risk, low-benefit projects should be avoided, while low-risk, high-benefit projects would be at the top of the list.

High-benefit, high-risk projects and low-risk, low-benefit projects would be reexamined to see if they could be modified to better fit with the company's strategic plans. A mix of profiles could also be defined as acceptable in terms of the company's overall plans, much as is done with a financial portfolio.

Page Ref: 463 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 14.2: Describe methods for evaluating IT investments.

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34) 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.

Page Ref: 466 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 14.2: Describe methods for evaluating IT investments.

35) 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 Answer: D Page Ref: 469 Difficulty: Easy AACSB: Application of knowledge LO: 14.3: Describe project management methodologies and variables.

36) 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 Answer: B Page Ref: 469 Difficulty: Easy AACSB: Application of knowledge LO: 14.3: Describe project management methodologies and variables.

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37) 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.

Answer: C Page Ref: 468 Difficulty: Moderate AACSB: Reflective thinking LO: 14.3: Describe project management methodologies and variables.

38) 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 Page Ref: 469 Difficulty: Moderate AACSB: Application of knowledge LO: 14.3: Describe project management methodologies and variables.

39) Project management refers to the application of knowledge, skills, tools, and techniques to achieve specific targets within specified budget and time constraints.

Answer: TRUE Page Ref: 468 Difficulty: Easy AACSB: Application of knowledge LO: 14.3: Describe project management methodologies and variables.

40) Risk is an important variable that project management must deal with.

Answer: TRUE Page Ref: 469 Difficulty: Easy AACSB: Application of knowledge LO: 14.3: Describe project management methodologies and variables.

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41) You are working as a project manager for a small IT consulting firm and have been asked to create a plan for reviewing and auditing completed projects in order to gauge their success. What factors will you use to measure the success of a project? What questions would you ask in order to understand why a project succeeded or failed?

Answer: Student answers will vary but should include an understanding of the main project variables: scope, time, cost, quality, and risk. A sample answer is: The factors I would use are: • Cost: What was the original budget and final budget?

• Time: What was the original schedule and final schedule?

• Quality: Did the project meet the requirements outlined in the project plan?

• Scope: Did the scope of the project change?

Questions I would ask to understand the success or failure of the project would be: • What technical difficulties were experienced and which could have been foreseen?

• What risks did the project entail?

• What events led to the scope changing?

• What difficulties occurred that were a consequence of personal, employee-oriented problems?

• What difficulties occurred that were a consequence of environmental, organizational, or managerial challenges?

• What do project team members consider as the primary challenges?

• What do clients or stakeholders consider as the primary challenges?

Page Ref: 469 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 14.3: Describe project management methodologies and variables.

42) There is a very high failure rate among information systems projects because organizations have incorrectly assessed their business value.

Answer: TRUE Page Ref: 469 Difficulty: Easy AACSB: Application of knowledge LO: 14.4: Understand the importance of effective project management.

43) On average, private sector IT projects are underestimated by ________% 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 Answer: C Page Ref: 470 Difficulty: Difficult AACSB: Application of knowledge LO: 14.4: Understand the importance of effective project management.

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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 Answer: B Page Ref: 470 Difficulty: Difficult AACSB: Analytical thinking LO: 14.4: Understand the importance of effective project management.

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 Answer: D Page Ref: 470 Difficulty: Difficult AACSB: Analytical thinking LO: 14.4: Understand the importance of effective project management.

46) 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% over schedule.

B) Large software projects on average run 66% over budget.

C) 45% of digital transformation projects delivered less profit than expected.

D) IT projects often fail because they lack sufficient computing capacity.

Answer: D Page Ref: 470 Difficulty: Difficult AACSB: Application of knowledge LO: 14.4: Understand the importance of effective project management.

47) The way an information systems project is executed is likely to be the least important factor influencing its success or failure.

Answer: FALSE Page Ref: 470 Difficulty: Easy AACSB: Application of knowledge LO: 14.4: Understand the importance of effective project management.

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48) A data entry screen is an example of a user interface.

Answer: TRUE Page Ref: 470 Difficulty: Easy AACSB: Application of knowledge LO: 14.4: Understand the importance of effective project management.

49) 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 Answer: B Page Ref: 471 Difficulty: Difficult AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

50) Successful system building requires careful ________ management to minimize organizational resistance.

A) cost B) technology C) change D) supply chain Answer: C Page Ref: 471 Difficulty: Moderate AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

51) 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) Information systems specialists prefer systems that are oriented toward solving business problems or facilitating organizational tasks.

D) When it is pronounced, it creates a very high risk of failure for a systems development project.

Answer: C Page Ref: 472 Difficulty: Moderate AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

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52) 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.

Answer: C Page Ref: 472 Difficulty: Moderate AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

53) 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 Answer: C Page Ref: 472 Difficulty: Easy AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

54) What is a 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 Answer: B Page Ref: 473 Difficulty: Easy AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

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55) 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.

Answer: B Page Ref: 471 Difficulty: Moderate AACSB: Analytical thinking LO: 14.5: Discuss project risk factors.

56) 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 Answer: C Page Ref: 472 Difficulty: Easy AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

57) 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 Answer: D Page Ref: 472 Difficulty: Easy AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

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58) 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 Answer: C Page Ref: 471 Difficulty: Moderate AACSB: Analytical thinking LO: 14.5: Discuss project risk factors.

59) Which of the following is not a factor in the high failure rate of reengineering systems projects?

A) Employees' concerns about change B) Failures of the new technologies to perform according to plan C) Changes in career paths signaled by the new system D) Changes in job descriptions signaled by the new system Answer: B Page Ref: 473 Difficulty: Moderate AACSB: Analytical thinking LO: 14.5: Discuss project risk factors.

60) The systems analyst is the catalyst for the entire change process and is responsible for making sure that everyone involved accepts the changes created by a new system.

Answer: TRUE Page Ref: 472 Difficulty: Easy AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

61) The relationship between users and information systems specialists has traditionally been a problem area for information systems implementation efforts.

Answer: TRUE Page Ref: 472 Difficulty: Easy AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

62) User concerns and designer concerns are usually the same at the beginning of the project but may diverge later as the system is built.

Answer: FALSE Page Ref: 472 Difficulty: Moderate AACSB: Application of knowledge LO: 14.5: Discuss project risk factors.

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63) 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.

Page Ref: 472 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 14.5: Discuss project risk factors.

64) 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 Answer: D Page Ref: 475 Difficulty: Easy AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

65) 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 Answer: A Page Ref: 479 Difficulty: Difficult AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

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66) 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 organizational levels Answer: B Page Ref: 475 Difficulty: Moderate AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

67) 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 Gantt chart D) Scoring model Answer: B Page Ref: 475 Difficulty: Moderate AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

68) 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 Answer: A Page Ref: 475 Difficulty: Moderate AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

69) 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 Answer: C Page Ref: 475 Difficulty: Easy AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

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70) 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 organizational levels Answer: D Page Ref: 476 Difficulty: Moderate AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

71) 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 Answer: A Page Ref: 478 Difficulty: Moderate AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

72) 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 Answer: C Page Ref: 479 Difficulty: Easy AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

73) Counterimplementation is best defined as ________.

A) multiple implementations that are run in parallel B) deliberate strategy 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 Answer: B Page Ref: 478 Difficulty: Moderate AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

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74) Projects with many undefined requirements must involve users fully at all stages.

Answer: TRUE Page Ref: 476 Difficulty: Easy AACSB: Application of knowledge LO: 14.6: Understand how project risks can be managed.

75) Microsoft is a leading provider of financial management software and tools for consumers and business professionals such as TurboTax and QuickBooks.

Answer: FALSE Page Ref: 480 Difficulty: Moderate AACSB: Application of knowledge LO: 14.7: Understand how the information in this chapter can help your career.

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Management Information Systems: Managing the Digital Firm, 18e (Laudon) Chapter 15 Managing Global Information 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 or India Answer: D Page Ref: 490 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

2) Which of the following is not a general cultural factor driving global business?

A) Global communication and transportation technologies B) Rise of digital nationalism C) Global knowledge base D) Development of global culture Answer: B Page Ref: 490 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

3) 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 Answer: A Page Ref: 491 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

4) Which of the following industries is most affected initially by globalization?

A) Telecommunications B) Manufacturing C) Law D) Entertainment Answer: B Page Ref: 491 Difficulty: Moderate AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

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5) 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 movement of information across international boundaries in any form.

D) The business process of coordinating information from many different countries.

Answer: C Page Ref: 492 Difficulty: Moderate AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

6) 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 Answer: A Page Ref: 490 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

7) 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 Answer: C Page Ref: 492 Difficulty: Moderate AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

8) 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 Answer: B Page Ref: 492 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

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9) Which of the following statements about laws concerning transborder data flow is not true?

A) The European Data Directive of 2018 standardized privacy protection among EU nations.

B) The European Data Directive of 2018 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 GDPR applies only to citizens of the EU and does not apply to non-citizen residents.

D) The GDPR applies to all companies collecting data on EU citizens even if they are not located in the EU. Answer: C Page Ref: 492 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

10) Today, world trade constitutes almost ________% of overall global economic activity.

A) 50 B) 60 C) 70 D) 80 Answer: B Page Ref: 490 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

11) ________ takes place when communication (by telephone, television, radio, or computer network) around the globe is no more difficult than communication down the block.

A) Global communication B) Multinational communication C) A global village D) A multinational village Answer: C Page Ref: 490 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

12) Global business drivers can be divided into two groups: general cultural factors and specific business factors.

Answer: TRUE Page Ref: 490 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

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13) The growth of powerful communications technologies and the emergence of world cultures create the conditions for global markets.

Answer: TRUE Page Ref: 491 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

14) The Covid-19 pandemic has called into question the dependence on global supply chains where sourcing is concentrated in a single country.

Answer: TRUE Page Ref: 491 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

15) Firms that can organize globally have a powerful strategic advantage.

Answer: TRUE Page Ref: 491 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

16) Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services.

Answer: FALSE Page Ref: 492 Difficulty: Difficult AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

17) With all of the translation tools available, language has ceased to be a significant challenge to the implementation of an international information system.

Answer: FALSE Page Ref: 492 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

18) Today, knowledge, education, science, and industrial skills are highly concentrated in North America, Western Europe, and Japan.

Answer: FALSE Page Ref: 491 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

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19) A business driver is a force in the environment to which businesses must respond that influences the direction of the business.

Answer: TRUE Page Ref: 490 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

20) Legal practices are largely standard among developed countries.

Answer: FALSE Page Ref: 492 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

21) The cost of moving goods and services to and from geographically dispersed locations has dramatically increased.

Answer: FALSE Page Ref: 491 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

22) Global economies of scale are facilitated by global markets, production, and administration.

Answer: TRUE Page Ref: 491 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

23) The growth of international trade has radically altered domestic economies around the globe.

Answer: TRUE Page Ref: 490 Difficulty: Easy AACSB: Application of knowledge LO: 15.1: Discuss factors impacting development of global information systems.

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24) 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, the development of the global culture, the 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 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 the 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.

Page Ref: 490 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 15.1: Discuss factors impacting development of global information systems.

25) 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 United States. 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. Page Ref: 492 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15.1: Discuss factors impacting development of global information systems.

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26) Which of the following is the best definition of an international information systems architecture?

A) Basic information systems required by organizations to coordinate worldwide trade and other activities B) Systems used by international businesses C) Business processes that span the globe D) Systems that talk to one another using the global Internet Answer: A Page Ref: 493 Difficulty: Easy AACSB: Application of knowledge LO: 15.2: Discuss how to develop effective global information systems architecture.

27) What is the first thing you should consider when thinking about building an international information system?

A) Corporate strategies for competing in 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 Answer: C Page Ref: 493 Difficulty: Moderate AACSB: Application of knowledge LO: 15.2: Discuss how to develop effective global information systems architecture.

28) Many 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 Answer: B Page Ref: 493 Difficulty: Difficult AACSB: Application of knowledge LO: 15.2: Discuss how to develop effective global information systems architecture.

29) The design of business processes is a major dimension in developing an international information systems architecture.

Answer: TRUE Page Ref: 494 Difficulty: Easy AACSB: Application of knowledge LO: 15.2: Discuss how to develop effective global information systems architecture.

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30) 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.

Page Ref: 493 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 15.2: Discuss how to develop effective global information systems architecture.

31) 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) Organizational structure Answer: D Page Ref: 494 Difficulty: Difficult AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

32) In a multinational business strategy, the finance/accounting function is ________.

A) centralized B) dispersed C) coordinated D) performed by local divisions in different countries.

Answer: A Page Ref: 494 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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33) The domestic exporter strategy is characterized by which of the following?

A) Heavy centralization of business 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 Answer: A Page Ref: 494 Difficulty: Difficult AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

34) 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, and human resources, with strategic management B) centralized production, accounting, marketing, and human resources, with strategic management C) dispersed production, accounting, and human resources, with centralized strategic management, and marketing D) dispersed production and marketing, with centralized accounting and strategic management Answer: D Page Ref: 494 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

35) Which of the following is the dominant pattern of governance used by transnational firms?

A) Centralized B) Duplicated C) Decentralized D) Federal structure Answer: D Page Ref: 495 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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36) Which of the following is not one of the primary types of firm strategy discussed in the chapter?

A) Domestic exporter B) International exporter C) Franchiser D) Transnational Answer: B Page Ref: 494 Difficulty: Easy AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

37) In which of the following strategies are nearly all value-adding activities managed from a global perspective without reference to national borders?

A) Domestic exporter B) Multinational C) Franchiser D) Transnational Answer: D Page Ref: 495 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

38) Which of the following statements about transnational firms is not true?

A) Many firms have attained transnational status.

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.

Answer: A Page Ref: 495 Difficulty: Difficult AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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39) 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 Answer: C Page Ref: 494 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

40) In centralized systems, ________.

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations B) each foreign unit designs its own unique solutions and systems C) systems development and operations occur in an integrated and coordinated fashion across all units D) systems development and operations occur totally at the domestic home base Answer: D Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

41) In duplicated systems, ________.

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations B) each foreign unit designs its own unique solutions and systems C) systems development and operations occur in an integrated and coordinated fashion across all units D) foreign units design the solutions and systems used at the domestic home base Answer: A Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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42) In decentralized systems, ________.

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations B) each foreign unit designs its own unique solutions and systems C) systems development and operations occur in an integrated and coordinated fashion across all units D) foreign units design the solutions and systems used at the domestic home base Answer: B Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

43) In networked systems ________.

A) development occurs at the home base and operations are handed over to autonomous units in foreign locations B) each foreign unit designs its own unique solutions and systems C) systems development and operations occur in an integrated and coordinated fashion across all units D) foreign units design the solutions and systems used at the domestic home base Answer: C Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

44) Domestic exporters typically have highly ________ systems.

A) duplicated B) centralized C) networked D) decentralized Answer: B Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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45) Multinational companies predominantly have ________ systems.

A) duplicated B) centralized C) networked D) decentralized Answer: D Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

46) ________ systems are an emerging pattern for franchiser companies.

A) Duplicated B) Decentralized C) Networked D) Centralized Answer: B Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

47) Which of the following is an emerging pattern of system configuration for multinational companies?

A) Duplicated B) Centralized C) Networked D) Decentralized Answer: C Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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48) The network systems structure is the most visible in ________ services.

A) production B) financial C) marketing D) software design Answer: B Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

49) Which of the following statements about networked systems is not true?

A) Networked systems are an emerging trend for domestic exporters.

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.

Answer: A Page Ref: 496 Difficulty: Difficult AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

50) 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 Page Ref: 495 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

51) In a franchiser business strategy, strategic management and finance/accounting are coordinated and production, sales/marketing, and human resources are centralized.

Answer: FALSE Page Ref: 494 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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52) Transnational systems units should handle telecommunications and systems development within national boundaries in major geographic regions, such as Europe, Asia, and the Americas.

Answer: FALSE Page Ref: 496 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

53) In a transnational strategy, financial management is centralized while production and sales are decentralized.

Answer: FALSE Page Ref: 494 Difficulty: Moderate AACSB: Application of knowledge LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

54) 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.

Page Ref: 494 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

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55) 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 the development of international systems: a global chief information officer position.

Page Ref: 496 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15.3: Discuss strategies and organizational structures for global businesses and information systems.

56) Which of the following is not one of the principal management challenges in developing global systems?

A) Encouraging local users to support global systems B) Coordinating applications development C) Defining an acceptable test plan D) Agreeing on common user requirements Answer: C Page Ref: 497 Difficulty: Moderate AACSB: Application of knowledge LO: 15.4: Discuss management challenges in developing global information systems.

57) 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.

Page Ref: 497 Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 15.4: Discuss management challenges in developing global information systems.

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58) 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 Answer: D Page Ref: 500 Difficulty: Difficult AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

59) 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 Answer: B Page Ref: 498 Difficulty: Easy AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

60) Which of the following is not one of the main benefits of 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 Answer: D Page Ref: 499 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

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61) When developing a global system, bringing the opposition of local groups into the process of designing and implementing the solution without giving up control over the direction and nature of the change is called ________.

A) co-optation B) change management C) implementation D) advocacy Answer: A Page Ref: 500 Difficulty: Easy AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

62) Transnational centers of excellence do all of the following except ________.

A) perform initial identification and specification of business processes B) define information requirements C) implement the system throughout the world D) accomplish all design and testing Answer: C Page Ref: 500 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

63) 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 Answer: B Page Ref: 500 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

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64) 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) A grand design approach is the most effective way to implement a transnational system.

Answer: D Page Ref: 498 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

65) 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.

Answer: A Page Ref: 498 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

66) The way to identify core business processes is to conduct a ________.

A) cost-benefit analysis B) work-flow analysis C) business process analysis D) feasibility analysis Answer: C Page Ref: 498 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

67) Global systems allow fixed costs to be amortized over a much larger customer base.

Answer: TRUE Page Ref: 499 Difficulty: Moderate AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

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68) Success as a change agent depends on legitimacy, authority, and ability to involve users in the change design process.

Answer: TRUE Page Ref: 500 Difficulty: Easy AACSB: Application of knowledge LO: 15.5: Discuss management solutions for global information systems development challenges.

69) 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.

Page Ref: 498 Difficulty: Difficult AACSB: Analytical thinking; Written and oral communication LO: 15.5: Discuss management solutions for global information systems development challenges.

70) 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 Answer: C Page Ref: 504 Difficulty: Difficult AACSB: Application of knowledge LO: 15.6: Discuss technology issues and alternatives in developing global information systems.

71) Which of the following regions has the highest percentage of its total population using the Internet?

A) North America B) Western Europe C) Central/Eastern Europe D) Latin America Answer: A Page Ref: 502 Difficulty: Difficult AACSB: Application of knowledge LO: 15.6: Discuss technology issues and alternatives in developing global information systems.

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72) 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 Answer: D Page Ref: 501 Difficulty: Difficult AACSB: Application of knowledge LO: 15.6: Discuss technology issues and alternatives in developing global information systems.

73) 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.

Answer: B Page Ref: 502 Difficulty: Moderate AACSB: Analytical thinking LO: 15.6: Discuss technology issues and alternatives in developing global information systems.

74) 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 Answer: A Page Ref: 502 Difficulty: Moderate AACSB: Application of knowledge LO: 15.6: Discuss technology issues and alternatives in developing global information systems.

75) Because Stellantis multinational automotive conglomerate had developed their own legacy, tailor-made systems, business processes, and reporting standards they were able to effectively coordinate global operations.

Answer: FALSE Page Ref: 505 Difficulty: Easy AACSB: Application of knowledge LO: 15.7: Understand how the information in this chapter can help your career.

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