Test Bank For Essentials Of Mis, 11th Edition

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1
Essentials of Management Information Systems, 11e (Laudon)
Chapter 1 Business Information Systems in Your Career
1) Purchase of information systems and telecommunications equipment constituted more than
half of all capital investment in the United States in 2013.
Answer: TRUE
Diff: 2 Page Ref: 5
AACSB: Information technology
CASE: Comprehension
2) A business model describes how a company produces, delivers, and sells a product or service
to create wealth.
Answer: TRUE
Diff: 1 Page Ref: 11
AACSB: Application of knowledge
CASE: Comprehension
3) Information systems consists of all the hardware and software that a firm needs to use in order
to achieve its business objectives.
Answer: FALSE
Diff: 2 Page Ref: 13
AACSB: Information technology
CASE: Comprehension
4) An extranet is a private intranet extended to authorized users outside the organization.
Answer: TRUE
Diff: 1 Page Ref: 17
AACSB: Information technology
CASE: Comprehension
5) Information systems literacy describes the behavioral approach to information systems, while
computer literacy describes the technical approach.
Answer: FALSE
Diff: 1 Page Ref: 15
AACSB: Information technology
CASE: Comprehension
6) The dimensions of information systems are people, organizations, and information
technology.
Answer: TRUE
Diff: 1 Page Ref: 15
AACSB: Information technology
CASE: Comprehension

2
7) In order to understand how a specific business firm uses information systems, you need to
know something about the history and culture of the company.
Answer: TRUE
Diff: 1 Page Ref: 16
AACSB: Information technology
CASE: Comprehension
8) Developing a new product, fulfilling an order, or hiring a new employee are all examples of
business processes.
Answer: TRUE
Diff: 1 Page Ref: 16
AACSB: Application of knowledge
CASE: Comprehension
9) Business processes are those logically related tasks for accomplishing tasks that have been
formally encoded by an organization.
Answer: FALSE
Diff: 2 Page Ref: 16
AACSB: Application of knowledge
CASE: Comprehension
10) Employee attitudes about their jobs, employers, or technology can have a powerful effect on
their abilities to use information systems productively.
Answer: TRUE
Diff: 1 Page Ref: 16
AACSB: Information technology
CASE: Comprehension
11) A network requires at least three computers and a shared resource.
Answer: FALSE
Diff: 2 Page Ref: 17
AACSB: Information technology
CASE: Comprehension
12) An IT infrastructure provides the platform on which the firm can build its information
systems.
Answer: TRUE
Diff: 1 Page Ref: 17
AACSB: Information technology
CASE: Comprehension

3
13) UPS's use of Web-based tools that allow customers to embed UPS functions, such as
tracking and cost calculations, into their own Web sites was an information systems solution
used to achieve customer intimacy.
Answer: TRUE
Diff: 3 Page Ref: 19
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize
14) Identifying a problem includes agreeing that a problem exists.
Answer: TRUE
Diff: 1 Page Ref: 21
AACSB: Application of knowledge
CASE: Comprehension
15) Political conflict is an example of the people dimension of business problems.
Answer: FALSE
Diff: 3 Page Ref: 21-22
AACSB: Application of knowledge
CASE: Comprehension
16) As a result of new public laws, accountants are beginning to perform more technical duties,
such as auditing systems and networks.
Answer: TRUE
Diff: 2 Page Ref: 25
AACSB: Information technology
CASE: Comprehension
17) IT managerial jobs are outsourced easily because of the universal standards used by the
Internet.
Answer: FALSE
Diff: 2 Page Ref: 27
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of examine
18) An understanding of enterprise-wide systems for customer relationship management is one
of the skills relevant to careers in marketing.
Answer: TRUE
Diff: 2 Page Ref: 26
AACSB: Information technology
CASE: Comprehension
19) Whereas marketing and financial careers have been transformed by the growth in
information systems, management has-so far-remained relatively unaffected.
Answer: FALSE
Diff: 2 Page Ref: 26
AACSB: Information technology
CASE: Comprehension

4
20) There are two types of outsourcing: offshore outsourcing and foreign outsourcing.
Answer: FALSE
Diff: 2 Page Ref: 27
AACSB: Application of knowledge
CASE: Comprehension
21) As discussed in the chapter opening case, the Giants' new ticketing information systems is an
effort to achieve which of the primary business objectives?
A) Customer and supplier intimacy
B) Improved decision making
C) Operational excellence
D) New products and services
Answer: B
Diff: 3 Page Ref: 4
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of compare
22) Journalist Thomas Friedman's description of the world as "flat" referred to:
A) the flattening of economic and cultural advantages of developed countries.
B) the use of the Internet and technology for instantaneous communication.
C) the reduction in travel times and the ubiquity of global exchange and travel.
D) the growth of globalization.
Answer: A
Diff: 2 Page Ref: 10
AACSB: Application of knowledge
CASE: Comprehension
23) The six important business objectives of information system investment include all of the
following except:
A) competitive advantage.
B) employee morale.
C) improved decision making.
D) survival.
Answer: B
Diff: 2 Page Ref: 11
AACSB: Application of knowledge
CASE: Comprehension

5
24) The use of information systems because of necessity describes the business objective of:
A) survival.
B) improved business practices.
C) competitive advantage.
D) improved flexibility.
Answer: A
Diff: 2 Page Ref: 12
AACSB: Information technology
CASE: Comprehension
25) All of the following choices describe ways for a company to achieve a competitive
advantage, except:
A) producing a superior product and charging less than competitors.
B) implementing information systems to support better management decision making.
C) garnering more sales and profits than your competitors.
D) using information systems to create new and popular products that your competitors cannot
duplicate.
Answer: B
Diff: 3 Page Ref: 12
AACSB: Analytical thinking
CASE: Analysis in terms of compare
26) Verizon's implementation of a Web-based digital dashboard to provide managers with real-
time information, such as customer complaints, is an example of:
A) improved flexibility.
B) improved decision making.
C) improved efficiency.
D) customer and supplier intimacy.
Answer: B
Diff: 2 Page Ref: 12
AACSB: Information technology; Analytical thinking
CASE: Analysis in terms of categorize
27) The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates the
information system business objective of:
A) improved efficiency.
B) customer and supplier intimacy.
C) survival.
D) competitive advantage.
Answer: C
Diff: 2 Page Ref: 12
AACSB: Information technology; Analytical thinking
CASE: Analysis in terms of categorize

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6
28) An information system can be defined technically as a set of interrelated components that
collect (or retrieve), process, store, and distribute information to support:
A) decision making and control in an organization.
B) communications and data flow.
C) managers analyzing the organization's raw data.
D) the creation of new products and services.
Answer: A
Diff: 2 Page Ref: 13
AACSB: Information technology
CASE: Comprehension
29) The three activities in an information system that produce the information organizations use
to control operations are:
A) information retrieval, research, and analysis.
B) input, output, and feedback.
C) input, processing, and output.
D) data analysis, processing, and feedback.
Answer: C
Diff: 1 Page Ref: 13
AACSB: Information technology
CASE: Comprehension
30) All of the following describe the effects of globalization except:
A) significant decreases in operating costs.
B) reduction of labor costs through outsourcing.
C) ability to find low-cost suppliers.
D) increases in transaction costs.
Answer: D
Diff: 3 Page Ref: 10-11
AACSB: Analytical thinking
CASE: Analysis in terms of appraise; differentiate
31) The average number of tickets sold daily online is an example of:
A) input.
B) raw data.
C) meaningful information.
D) output.
Answer: C
Diff: 1 Page Ref: 13
AACSB: Analytical thinking
CASE: Analysis in terms of categorize

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7
32) Output:
A) is feedback that has been processed to create meaningful information.
B) is information that is returned to appropriate members of the organization to help them
evaluate the input stage.
C) transfers raw data to the people who will use it or to the activities for which it will be used.
D) transfers processed information to the people who will use it or to the activities for which it
will be used.
Answer: D
Diff: 1 Page Ref: 13
AACSB: Information technology
CASE: Comprehension
33) Converting raw data into a more meaningful form is called:
A) capturing.
B) processing.
C) organizing.
D) feedback.
Answer: B
Diff: 1 Page Ref: 13
AACSB: Information technology
CASE: Comprehension
34) An example of raw data from a national chain of automobile stores would be:
A) average of 13 Toyotas sold daily in Kentucky in 2007.
B) 300 Toyota RAV4s sold during fourth quarter 2007 in Kentucky.
C) 1 Toyota RAV4 sold January 7, 2008 in Louisville, Kentucky - $28000.
D) annual sales of Toyota RAV4s increased 2.4 percent.
Answer: C
Diff: 3 Page Ref: 13
AACSB: Analytical thinking
CASE: Analysis in terms of categorize
35) Electronic computers and related software programs are the technical foundation, the tools
and materials, of:
A) all business procedures.
B) information accumulation.
C) modern information systems.
D) all industrialized countries.
Answer: C
Diff: 2 Page Ref: 14-15
AACSB: Information technology
CASE: Comprehension

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8
36) The field that deals with behavioral issues, as well as technical issues surrounding the
development, use, and impact of information systems used by managers and employees in the
firm, is called:
A) information systems literacy.
B) information systems architecture.
C) management information systems.
D) information technology infrastructure.
Answer: C
Diff: 2 Page Ref: 15
AACSB: Application of knowledge
CASE: Comprehension
37) A hierarchy:
A) results in a clear-cut division of labor.
B) is composed primarily of experts trained for different functions.
C) is a pyramid structure of rising authority and responsibility.
D) is used primarily in large organizations to define job roles.
Answer: C
Diff: 1 Page Ref: 16
AACSB: Application of knowledge
CASE: Comprehension
38) In a hierarchical organization, the upper levels consist of:
A) managerial and professional workers.
B) managerial, professional, and technical workers.
C) professional and operational workers.
D) managerial, professional, and operational workers.
Answer: B
Diff: 2 Page Ref: 16
AACSB: Application of knowledge
CASE: Comprehension
39) The fundamental set of assumptions, values, and ways of doing things that has been accepted
by most of a company's members is called its:
A) culture.
B) environment.
C) atmosphere.
D) values.
Answer: A
Diff: 1 Page Ref: 16
AACSB: Application of knowledge
CASE: Comprehension

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9
40) All of the following can be considered managerial responsibilities except:
A) making action plans to solve organizational problems.
B) creating new products and services.
C) designing new information systems.
D) allocating human resources to coordinate the work to be done.
Answer: C
Diff: 2 Page Ref: 17
AACSB: Analytical thinking
CASE: Analysis in terms of compare
41) Data management technology consists of:
A) the physical hardware and media used by an organization for storing data.
B) the detailed, preprogrammed instructions that control and coordinate the computer hardware
components in an information system.
C) the software governing the organization of data on physical storage media.
D) the hardware and software used to transfer data.
Answer: C
Diff: 2 Page Ref: 17
AACSB: Information technology
CASE: Comprehension
42) A database that receives employee manual input of customer names and addresses is riddled
with errors and you have been charged with rectifying the situation. In taking an organizational
perspective of this problem, you would be considering:
A) the skill levels of the employees inputting the data.
B) the training given to the employees inputting the data.
C) the types of reviews in place for selecting data input personnel.
D) the types of automatic error checking provided by the input software.
Answer: C
Diff: 2 Page Ref: 18-23
AACSB: Application of knowledge; Information technology
CASE: Analysis in terms of categorize
43) Intranets:
A) are based on mainframe technology.
B) are multiple networks joined together.
C) are typically used to communicate with the business's trusted vendors.
D) use Internet technology for a private company network.
Answer: D
Diff: 2 Page Ref: 17
AACSB: Information technology
CASE: Comprehension

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10
44) The first step in the four-step model of business problem solving is:
A) agreeing that a problem exists.
B) identifying the problem.
C) outlining the problem's causes.
D) assigning the problem to a problem solver.
Answer: B
Diff: 1 Page Ref: 21
AACSB: Application of knowledge
CASE: Comprehension
45) Inadequate database capacity is an example of the ________ dimension of business
problems.
A) technology
B) organizational
C) people
D) management
Answer: A
Diff: 2 Page Ref: 22
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize
46) Legal and regulatory compliance is an example of the ________ dimension of business
problems.
A) management
B) organizational
C) people
D) technology
Answer: C
Diff: 3 Page Ref: 22
AACSB: Analytical thinking
CASE: Analysis in terms of categorize
47) You are a new manager at a plumbing supply manufacturer where there is an unusually high
number of returns for a new aerator for a high-end faucet in production. In viewing the problem
you determine that the primary cause is the improperly designed die cast for the aerator. Which
dimension of a business problem does this reflect?
A) People
B) Technology
C) Management
D) Organizational
Answer: A
Diff: 3 Page Ref: 22
AACSB: Application of knowledge; Analytical thinking
CASE: Analysis in terms of assess; compare

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11
48) Poor business processes is an example of the ________ dimension of business problems.
A) management
B) organizational
C) people
D) infrastructure
Answer: B
Diff: 2 Page Ref: 22
AACSB: Analytical thinking
CASE: Analysis in terms of categorize
49) The owners of Speed-EZ, a new bike messenger service, are concerned about how they will
manage their messengers once they have left the office. This is a business problem that falls into
the:
A) management dimension.
B) people dimension.
C) organizational dimension.
D) technology dimension.
Answer: B
Diff: 3 Page Ref: 22
AACSB: Analytical thinking
CASE: Analysis in terms of categorize
50) Flapjack Flats, a new pancake chain, is having difficulty finding pancake chefs. This is a
business problem that falls into the:
A) management dimension.
B) people dimension.
C) organizational dimension.
D) technical dimension.
Answer: C
Diff: 3 Page Ref: 22
AACSB: Analytical thinking
CASE: Analysis in terms of categorize
51) In choosing the best solution for a business problem, one of the most important
considerations is:
A) change management.
B) existing resources and skills.
C) employee training.
D) outcome measurement.
Answer: B
Diff: 3 Page Ref: 22
AACSB: Reflective thinking
CASE: Analysis in terms of assess

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12
52) The final step in the four-step model of business problem solving is:
A) outcome.
B) implementation.
C) change management.
D) feedback.
Answer: B
Diff: 1 Page Ref: 23
AACSB: Application of knowledge
CASE: Comprehension
53) Which of the following would not be considered part of the implementation phase of
problem solving?
A) Change management
B) Purchasing hardware for an information systems solution
C) Training an employee on new systems software
D) Evaluating a selection of software packages for implementing a new business process
Answer: D
Diff: 2 Page Ref: 23
AACSB: Analytical thinking
CASE: Analysis in terms of categorize
54) The failure of NASA's initial solution to preventing the space shuttle shedding foam
illustrates:
A) the importance of training employees on new business processes.
B) the need to prepare for measuring outcomes of a business solution.
C) the continuous nature of problem solving.
D) the need to quickly adapt to new technological innovations.
Answer: C
Diff: 2 Page Ref: 23
AACSB: Analytical thinking
CASE: Analysis in terms of compare
55) One of the most frequent errors in problem solving is:
A) rushing to judgment.
B) not being aware of personal limitations.
C) being too doubtful.
D) following a rote pattern of decision making.
Answer: A
Diff: 2 Page Ref: 24
AACSB: Application of knowledge
CASE: Comprehension

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13
56) A major criterion in deciding the most important perspectives of a business problem is:
A) implementation.
B) change management.
C) usefulness.
D) organizational needs.
Answer: C
Diff: 3 Page Ref: 24
AACSB: Application of knowledge
CASE: Comprehension
57) Which of the following is an example of a business using information systems to create new
products and services?
A) Apple's creation of the iPod
B) JC Penney's information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced
C) Toyota's legendary TPS that has created superlative efficiencies and enabled Toyota to
become the world's largest auto maker
D) Verizon's Web-based digital dashboard providing real-time company information for
managers
Answer: A
Diff: 2 Page Ref: 11
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize
58) An example of a business using information systems to attain competitive advantage is:
A) Apple's creation of the iPod.
B) JC Penney's information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced.
C) Toyota's legendary TPS that has created superlative efficiencies and enabled Toyota to
become the world's largest auto maker.
D) Verizon's Web-based digital dashboard providing real-time company information for
managers.
Answer: C
Diff: 3 Page Ref: 12
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize

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14
59) An example of a business using information systems for customer and supplier intimacy is:
A) Apple's creation of the iPod.
B) JC Penney's information system that allows its contract manufacturers to see what garments
have been sold and need to be replaced.
C) Toyota's legendary TPS that has created superlative efficiencies and enabled Toyota to
become the world's largest auto maker.
D) Verizon's Web-based digital dashboard providing real-time company information for
managers.
Answer: B
Diff: 2 Page Ref: 12
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize
60) An information skill important for an accounting major would be:
A) an understanding of online transaction and reporting systems.
B) an understanding of product management enterprise systems.
C) an understanding of supplier management enterprise systems.
D) an understanding of enterprise systems that enhance leadership.
Answer: A
Diff: 3 Page Ref: 25
AACSB: Information technology
CASE: Comprehension
61) An information skill important for a marketing major would be:
A) an understanding of online transaction and reporting systems.
B) an understanding of product management enterprise systems.
C) an understanding of supplier management enterprise systems.
D) an understanding of enterprise systems that enhance leadership.
Answer: B
Diff: 2 Page Ref: 26
AACSB: Information technology
CASE: Comprehension
62) Consider an information system in a moving company that analyzes travel patterns and
decides which routes are the most efficient for every van. The need for employees to follow
procedures to update this system with arrival and departure times would be considered a(n)
________ element of the system.
A) organizational
B) managerial
C) people
D) technology
Answer: A
Diff: 2 Page Ref: 16
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize

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15
63) What is the estimated growth rate for information systems managers' jobs through 2020?
A) 15%
B) -1%
C) 45%
D) 5%
Answer: D
Diff: 2 Page Ref: 26
AACSB: Information technology
CASE: Comprehension
64) To make sure they stock clothes that their customers will purchase, a department store
implements a new application that analyzes spending levels at their stores and cross references
this data to popular clothing styles. This is an example of using information systems to support a
business strategy of:
A) new products, services, and business models.
B) survival.
C) customer and supplier intimacy.
D) improved decision making.
Answer: C
Diff: 2 Page Ref: 11-12
AACSB: Analytical thinking; Information technology
CASE: Analysis in terms of categorize
65) Financial managers work directly with ________ to ensure investments in information
systems help achieve corporate goals.
A) operations managers
B) senior managers
C) marketing managers
D) accounting managers
Answer: B
Diff: 2 Page Ref: 25
AACSB: Information technology
CASE: Comprehension
66) Operations management, as a discipline, is directly relevant to all of the following
occupational categories except:
A) industrial production managers.
B) operations analysts.
C) administrative service managers.
D) financial managers.
Answer: D
Diff: 2 Page Ref: 26
AACSB: Application of knowledge
CASE: Comprehension

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