File: ch02, Chapter 2: Information Systems: Concepts and Management
True/False
1. The two major determinants of information systems support are the functions that employees perform within organizations and the cost of the information systems.
Ans: False
Response: Types of Information Systems
Difficulty: Easy
2. Information systems tend to follow the structure of organizations and they are based on the needs of employees.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
3. Software is a set of programs that enable the hardware to process data.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
4. Procedures are the set of instructions about how to use information systems to process information and generate desired output.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
5. Enterprise resource planning systems tightly integrate the functional area information systems via a common database.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
6. Transaction processing systems tightly integrate the functional area information systems via a common database.
Ans: False
Response: Types of Information Systems
Difficulty: Easy
7. Transaction processing systems provide the input for the organization’s databases.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
8. An organization’s supply chain describes the flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
9. Supply chains are composed of only physical product flows.
Ans: False
Response: Types of Information Systems
Difficulty: Easy
10. If you order a computer from Dell, the process of approving your credit card is an information flow along Dell’s supply chain.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
11. Clerical workers are supported mainly by office automation systems.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
12. Functional area information systems summarize data and prepare reports, and provide the major support for middle-level managers.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
13. Lower level managers make tactical decisions, which generally deal with activities such as short-term planning, organizing, and control.
Ans: False
Response: Types of Information Systems
Difficulty: Easy
14. Dashboards provide rapid access to timely information and direct access to structured information in the form of reports.
Ans: True
Response: Types of Information Systems
Difficulty: Easy
15. Competitive advantage helps a company control a market and generate larger-than-average profits.
Ans: True
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
16. Michael Porter concludes that the overall impact of the Internet is to increase competition, which positively impacts profitability.
Ans: False
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
17. The Internet increases traditional barriers to entry into a market.
Ans: False
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
18. The Internet decreases customers’ bargaining power.
Ans: False
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
19. Information-based industries face the most danger from substitutes.
Ans: True
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
20. The music industry is a good example of the extremely low variable costs of digital products.
Ans: True
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
21. The introduction of the ATM in the banking industry is an example of the innovation strategy.
Ans: True
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Easy
22. Information technology makes managers more productive.
Ans: True
Response: Why Are Information Systems Important to Organizations and Society?
Difficulty: Easy
23. Information technology increases the number of employees who can report to a single manager.
Ans: True
Response: Why Are Information Systems Important to Organizations and Society?
Difficulty: Easy
24. As computers gain in intelligence and capabilities, the competitive advantage of replacing people with machines is decreasing rapidly.
Ans: False
Response: Why Are Information Systems Important to Organizations and Society?
Difficulty: Easy
25. End user computing is when employees directly use computers in their work.
Ans: True
Response: Managing Information Resources
Difficulty: Easy
Multiple Choice
1. What was the main problem at Johnny’s Lunch?
A. a weak brand
B. a lack of customers
C. lack of new product offerings
D. difficulty in expanding nationally
E. lack of profits
Ans: D
Response: Chapter opening case
Difficulty: Hard
2. Pitney Bowes SmartSite solution at Johnny’s Lunch did which of the following?
A. enabled Johnny’s Lunch to expand its product offerings
B. helped Johnny’s Lunch to pinpoint optimal sites for new restaurants
C. enabled Johnny’s Lunch to increase profits
D. enabled Johnny’s Lunch to hire additional managerial and IT employees
Ans: B
Response: Chapter opening case
Difficulty: Hard
3. Which of the following statements about information systems is not correct?
A. Information systems are concentrated in the IS Department.
B. Information systems tend to follow the structure of the organization.
C. Information systems are based on the needs of employees.
D. Any information system can be strategic.
E. Managing information systems is difficult.
Ans: A
Response: Discussion immediately following Chapter opening case
Difficulty: Medium
4. A collection of related files, tables, and so on that stores data and the associations among them is _____.
A. hardware
B. software
C. a database
D. a network
E. procedures
Ans: C
Response: Types of Information Systems
Difficulty: Easy
5. A set of programs that enable the hardware to process data is _____.
A. hardware
B. software
C. a database
D. a network
E. procedures
Ans: B
Response: Types of Information Systems
Difficulty: Easy
6. Which of the following is not a major capability of information systems?
A. perform high-speed, high-volume numerical computations
B. provide fast, accurate communications among organizations
C. store large amounts of information in a very large space
D. increase the effectiveness and efficiency of people working in groups
E. automate semiautomatic business processes
Ans: C
Response: Types of Information Systems
Difficulty: Medium
7. Two information systems that support the entire organization are:
A. enterprise resource planning systems, dashboards
B. transaction processing systems, office automation systems
C. enterprise resource planning systems, transaction processing systems
D. expert systems, office automation systems
E. expert systems, transaction processing systems
Ans: C
Response: Types of Information Systems
Difficulty: Medium
8. _____ systems are designed to correct a lack of communications among _____.
A. Office automation systems, expert systems
B. Transaction processing systems, functional area information systems
C. Enterprise resource planning systems, functional area information systems
D. Dashboards, office automation systems
E. Functional area information systems, enterprise resource planning systems
Ans: C
Response: Types of Information Systems
Difficulty: Medium
9. Refer to IT’s About Business 2.1. The Gameday Management Group uses IT for which of the following?
A. to help the National Football League (NFL) increase profits
B. to help the NFL strengthen its brand
C. to enable the NFL to find optimal cities for expansion
D. to ensure that the Super Bowl operations function smoothly
E. to help the NFL decide on new product offerings for each NFL franchise
Ans: D
Response: IT’s About Business 2.1
Difficulty: Hard
10. When your purchases are swiped over the bar-code reader at the point-of-sale terminals at Wal-Mart, a _____ records the data.
A. transaction processing system
B. functional area information system
C. dashboard
D. enterprise resource planning system
E. office automation system
Ans: A
Response: Types of Information Systems
Difficulty: Medium
11. Supply chain systems are which type of information system?
A. departmental information systems
B. enterprisewide information systems
C. interorganizational information systems
D. end-user computing systems
E. individual information systems
Ans: C
Response: Types of Information System
Difficulty: Easy
12. Which information system is the most closely associated with the Internet?
A. transaction processing systems
B. functional area information systems
C. electronic commerce systems
D. office automation systems
E. individual information systems
Ans: C
Response: Types of Information Systems
Difficulty: Medium
13. _____ deal with the day-to-day functioning of the organization and make routine decisions.
A. Clerical workers
B. First-line supervisors
C. Middle managers
D. Senior managers
E. Staff personnel
Ans: B
Response: Types of Information Systems
Difficulty: Easy
14. _____ are professional people who act as advisors and assistants to both top and middle managers and are often subject-area experts in a particular area.
A. Clerical workers
B. Operational managers
C. Knowledge workers
D. Middle level managers
E. Executives
Ans: C
Response: Types of Information Systems
Difficulty: Easy
15. _____ make decisions that deal with situations that may significantly change the manner in which business is done.
A. Knowledge workers
B. Staff
C. Middle managers
D. Operational managers
E. Senior managers
Ans: E
Response: Types of Information Systems
Difficulty: Easy
16. _____ attempt to duplicate the work of human experts by applying reasoning capabilities.
A. Expert systems
B. Dashboards
C. Functional area information systems
D. Decision support systems
E. Business intelligence systems
Ans: A
Response: Types of Information Systems
Difficulty: Easy
17. An information system that analyzes credit card applications and suggests approval or denial is a(n):
A. expert system
B. dashboard
C. functional area information system
D. decision support system
E. business intelligence system
Ans: A
Response: Types of Information Systems
Difficulty: Medium
18. _____ provide rapid access to timely information and direct access to structured information in the form of reports.
A. Expert systems
B. Dashboards
C. Functional area information systems
D. Decision support systems
E. Business intelligence systems
Ans: B
Response: Types of Information Systems
Difficulty: Easy
19. Information-based industries are most susceptible to which one of Porter’s five forces?
A. threat of entry of new competitors
B. bargaining power of suppliers
C. bargaining power of customers
D. threat of substitute products
E. rivalry among existing firms in an industry
Ans: D
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
20. Competitive advantage for an organization manifests as all of the following except:
A. Lower costs
B. Higher quality
C. Increased time to market
D. Increased profits
E. Increased speed
Ans: C
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
21. For most companies, the Web _____ the threat that new competitors will enter the market by _____ traditional barriers to entry.
A. decreases, increasing
B. increases, decreasing
C. increases, increasing
D. decreases, decreasing
Ans: B
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
22. _____ is a feature that must be offered by a competing organization for it to survive in the marketplace.
A. Competitive advantage
B. Entry barrier
C. Strategic advantage
D. Rapid time-to-market
E. One-to-one marketing
Ans: B
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
23. The threat of competitors’ entering the automobile manufacturing industry is _____ because barriers to entry are so _____.
A. low, low
B. high, high
C. high, low
D. low, high
E. cheap, expensive
Ans: D
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
24. The threat of competitors’ entering a market is very high in industries that perform a(n) _____ role, and in industries where the primary product or service is _____.
A. intermediation, physical
B. broker, physical
C. sales, financial
D. financial, digital
E. intermediation, digital
Ans: E
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Hard
25. The Internet has had which of the following impacts on the way you purchase your textbooks?
A. The Internet gives you fewer choices.
B. The Internet increases your bargaining power.
C. The Internet provides you with less information.
D. The Internet decreases your bargaining power.
E. The Internet increases your switching costs.
Ans: B
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
26. Buyer power is _____ when buyers have many choices from whom to buy and _____ when buyers have few choices.
A. high, the same
B. high, low
C. low, low
D. low, high
E. low, the same
Ans: B
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
27. The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A. e-commerce, digital
B. digital, e-commerce
C. digital, physical
D. physical, financial
E. physical, digital
Ans: E
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
28. Porter’s competitive forces model helps organizations identify _____, where his value chain model helps organizations identify specific _____.
A. competitive opportunities, activities
B. general strategies, activities
C. activities, competitive opportunities
D. activities, general strategies
E. primary activities, support activities
Ans: B
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
29. _____ activities create value for which customers are willing to pay, where _____ activities do not add value directly to the firm’s products or services.
A. Support, primary
B. Human resource management, inbound logistics
C. Procurement, operations
D. Primary, support
E. Accounting, outbound logistics
Ans: D
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
30. If there are _____ substitutes for an organization’s products or services, then the threat of substitutes is _____.
A. many, high
B. few, few
C. few, high
D. many, few
E. few, negligible
Ans: A
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
31. New technologies can produce new products very _____, which _____ the threat from substitute products.
A. slowly, decreases
B. slowly, increases
C. slowly, does not affect
D. quickly, increases
E. quickly, does not affect
Ans: D
Response: Competitive Advantage and Strategic Information Systems
Difficulty: Medium
32. The visibility of Internet applications on the Web makes proprietary systems more difficult to keep secret. This is an example of which of Porter’s five forces?