Test Bank For Management Information Systems: Managing the Digital Firm, 16th Edition

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1Management Information Systems: Managing the Digital Firm, 16e(Laudon)Chapter 1Information Systems in Global Business Today1) Which of the following isnotone of the six strategic business objectives of informationsystems?A) New products and servicesB) Improved decision makingC) Improved community relationsD) Competitive advantageE) SurvivalAnswer: CDifficulty: ChallengingAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?2) Verizon's use of a web-based digital dashboard to provide managers with precise real-timeinformation enabled it to improve which of the following?A) Compliance with regulationsB) Managerial decision makingC) Efficiency in creation of new productsD) Employee moraleE) Intimacy with its suppliersAnswer: BDifficulty: ChallengingAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?3) Which of the following may lead to competitive advantage?1. New products, services, and business models;2. Charging less for superior products;3. Responding to customers in real timeA) 1 onlyB) 1 and 2C) 2and 3D) 1 and 3E) 1, 2,and 3Answer: EDifficulty: ChallengingAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why arethey so essential forrunning and managing a business today?

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24) A firm that investsin an information system because it is a necessity of doing business does sobecause it is seeking to achieve which of the following business objectives?A) Operational excellenceB) Improved decision makingC) Competitive advantageD) Customer intimacyE)SurvivalAnswer: EDifficulty: ModerateAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they soessential forrunning and managing a business today?5) The Mandarin Oriental's use of computer systems to keep track of guests' preferences is anexample of which of the following?A) Improved flexibilityB) Improved decision makingC) Improved efficiencyD) Customer intimacyE) Operational excellenceAnswer: DDifficulty: ModerateAACSB: InformationtechnologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?6) TheToxic Substances Control Act requires firms to retain records of employee exposure totoxic chemicals:A) for 10 years.B) for 5years.C) for 30 years.D) for 1 year.E) forever.Answer: CDifficulty: ModerateAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?

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37) Which of the following is the key business objective behind the technologies implemented byPCL Construction, as discussed in the chapter-opening case?A) Higher customer satisfaction levelsB) SurvivalC) Improved employee moraleD) Reduced delays in document managementE) Reduced cost of suppliesAnswer: DDifficulty: ModerateAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a businesstoday?8) Which of the following is an example of a business using information systems to improvecustomer andsupplier intimacy?A) Walmart's RetailLink systemB) The Mandarin Oriental's use of computers to keep track of guest preferencesC) Verizon's use of a web-based digital dashboard to provide real-time company information formanagersD) Apple's creation ofthe iPadE) PCL Construction's use of cloud computingAnswer: BDifficulty: ChallengingAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?9) Walmart exemplifies the power of information systems coupled with state-of-the-art businesspractices and supportive management to achieve which of the following?A) New products and servicesB) Operational efficiencyC) SurvivalD) Customer intimacyE) Competitive advantageAnswer: BDifficulty: ChallengingAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they soessential forrunning and managing a business today?

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410) Howmuch did American businesses spend on information systems hardware, software, andtelecommunications equipment in 2017?A) About $100 millionB) About $1 billionC)About $100 billionD) About$1 trillionE) About $10 trillionAnswer: DDifficulty: ModerateAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?11) To make sure theystock clothes that their customers will purchase, a department storeimplements a new application that analyzes spending levels at their stores and cross-referencesthis data to popular clothing styles. Which of the following business objectives is thisinformation intended to support?A) Customer intimacyB) SurvivalC) Operational excellenceD) Improved decision makingE) New products and servicesAnswer: CDifficulty: ModerateAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?12) Approximately how much revenue was generated by e-commerce in 2017?A) About $1 trillionB) About $2 trillionC) About $229 billionD)About $700 billionE) About$180 billionAnswer: DDifficulty: ModerateAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?

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513) All of thefollowing are new technology-related trends in MISexcept:A) cloud computing.B) big data.C) IoT.D) the mobile digital platform.E) co-creation of business value.Answer: EDifficulty: ModerateAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?14) Which of the following statements about digital firms isnottrue?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 andmanagement.D) Digital firms sense and respond to their environments more rapidly than traditional firms.E) Digital firms havemore flexibility to survive in turbulent times.Answer: BDifficulty: ChallengingAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?15) A firm that must invest in new informationsystems capabilities in order to comply withfederal legislation is investing to achieve which business objective?A) Customer intimacyB) Operational excellenceC) SurvivalD) Creation of new productsE) Improved decision makingAnswer: CDifficulty: ModerateAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?

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616) Which of the following isnotone of the IT innovations changing the world ofbusinesstoday?A) IoTB) Big dataC) The mobile digital platformD) CloudcomputingE) Business intelligenceAnswer: DDifficulty: EasyAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business,and why are they so essential forrunning and managing a business today?17) Which of the following isnotone of the current changes taking place in information systemstechnology?A) Growing business use of big dataB) Growth in cloud computingC) Growth in the PC platformD) Emerging mobile digital platformE) Increased usage of data generated by the Internet of ThingsAnswer: CDifficulty: ModerateAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunningand managing a business today?18) Thomas Friedman's description of the world as "flat" refers 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 timesand the ubiquity of global exchange and travel.D) the growth of globalization.E) the increased use of global currencies.Answer: ADifficulty: EasyAACSB: Reflective thinkingLO: 1-1: How areinformation systems transforming business, and why are they so essential forrunning and managing a business today?

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719) In 2017, what percent of the U.S. economy resulted from foreign trade?A) 10 percentB) 25 percentC) 30 percentD) 50 percentE) 66 percentAnswer: CDifficulty: ChallengingAACSB: Information technologyLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?20) All of the following describe the effects of globalizationexcept: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.E) replication ofbusiness models in multiple countries.Answer:DDifficulty: ChallengingAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?21) How many service jobs move offshore to lower-wage countriesin a typical year?A) 3,000B) 30,000C) 300,000D) 3 millionE) 30 millionAnswer: CDifficulty: ChallengingAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and whyare they so essential forrunning and managinga business today?

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822) Which of the following statements isnottrue?A) In 2017, American businesses invested about $1 trillion in information systems hardware,software, and telecommunications equipment.B)In 2017, American businesses spent $500 billion on business and management consulting andinformation technology services.C) Private business investment in information technology has grown from 21 percent of totalinvested capital in 1999 to 33 percent ofall invested capital in 2017.D) Most of thebusiness value of IT investment derives from organizational, management, andcultural changes inside firms.E) Much of the money spent by American businesses on business and management consultinginvolves redesigning firms' business operations to take advantage of new technologies.Answer: BDifficulty: ChallengingAACSB: Application of knowledgeLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?23) Approximately how many Americans access the Internet using a smartphone or tablet?A) 118 millionB) 172 millionC) 194 millionD) 230 millionE) 258 millionAnswer: DDifficulty: ChallengingAACSB: Application of knowledgeLO: 1-1: How are information systems transformingbusiness, and why are theyso essential forrunning and managing a business today?24) Which of the following statements isnottrue?A) Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations.B) Most PCs manufactured inChina use microprocessor chips manufactured in Korea.C) Eighty percent of the toys sold in the United States are manufactured in China.D) In 2017, 60 percent of Apple's revenue was generated outside of the United States.E) Technology companies are particularly dependent on offshore revenue.Answer: BDifficulty: ChallengingAACSB: Application of knowledgeLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?

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925) Internet advertising is growing atapproximately 5 percent a year.Answer: FALSEDifficulty: ChallengingAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?26) Creating a marketing plan is not an example of a business process.Answer: FALSEDifficulty: EasyAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing abusiness today?27) In order to be considered a digital firm, all of thefirm's significant business relationships andcore business processes must be digitally enabled.Answer: FALSEDifficulty: EasyAACSB: Reflective thinkingLO: 1-1: How are information systems transformingbusiness, and why are they so essential forrunning and managing a business today?28) A business model describes how a company produces, delivers, and sells a product or serviceto create wealth.Answer: TRUEDifficulty: EasyAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?29) Private business investment in information technology constituted 55 percent of all investedcapital in 2017.Answer: FALSEDifficulty: ModerateAACSB: Reflective thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?

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1030) You are starting a small bike messenger company. Givenyour type of services (hand-delivering packages within a small geographical area), could your firm be a digital firm? If so,what would make this a digital firm?Answer: Yes, your firm could be a digital firm. Being a digital firm doesn't mean that you justoffer digital goods and services. A digital firm would have most of its relationships withcustomers, suppliers, and employees be digitally enabled. Ordering deliveries, assigningdeliveries, managing employees and assignmentscould certainly be digitally enabled; using cellphones, information systems, and handheld devices to connect customers, delivery management,and bike messengers.Difficulty: ChallengingAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?31) What are the main changes taking place in organizational use of information systems? Whichof these do you think is having the greatest impact on businesses?Answer: The main organizational changes taking place are:1.businesses using social networking platforms to deepen interactions with employees,customers, and suppliers,2.growing numbers of employees using mobile devices to connect with their firm, customers,and suppliers.3.co-creation of business value, with the sources of business value shifting from products tosolutions and experiences and from internal sources to networks of suppliers and collaborationwith customers.Student answers as to the greatest impact will vary. An example answer is: The increase incollaboration is having the greatest impact, as customers are essentially gaining greater control indetermining the end product; businesses who are flexible enough to listen to and respondtocustomer demand will bemore successful.Difficulty: ModerateAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?32) Definebusiness process. What might be a businessprocess used at a hospital?Answer: A business process is a set of logically related tasks and behaviors for accomplishingwork. Hiring a new employee, customerintake, and filing medical records are examples ofbusiness processes at a hospital.Difficulty: ModerateAACSB: Analytical thinkingLO: 1-1: How are information systems transforming business, and why are they so essential forrunning and managing a business today?

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1133) The three activities in an information system that produce the informationorganizations useto control operations are:A) information, research, and analysis.B) input, output, and feedback.C) data, information, and analysis.D) data analysis, processing, and feedback.E) input, processing, and output.Answer: EDifficulty:EasyAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat informationsystems provide genuine value for organizations?34) Data collected atcheckout counters in a grocery store is an example of:A) output.B) processing.C) feedback.D) input.E) information systems.Answer: DDifficulty: EasyAACSB: Information technologyLO: 1-2: Whatis an information system? How does it work? What are its management,organization, and technologycomponents? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?35)The total number of food items with storage temperature problems is an example of which ofthe following?A) InputB) Raw dataC) Meaningful informationD) FeedbackE) ProcessingAnswer: CDifficulty: EasyAACSB: Information technologyLO: 1-2: What isan information system?Howdoes it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?

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1236) Output:A) is feedback that has been processedto create meaningful information that can be used byothers.B) is information that is returned toappropriate members of the organization to help themevaluate the input stage.C) transfers data to the people who will use it or to the activities for whichitwill be used.D) is the result of processing raw input data into meaningful information.E) converts raw input into a meaningful form.Answer: DDifficulty: EasyAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?37) Converting raw data into a more meaningfulform is called:A) capturing.B) processing.C) organizing.D) feedback.E) analysis.Answer: BDifficulty: EasyAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why arecomplementary assets essential for ensuringthat information systems provide genuine value for organizations?38) Which of the following is an example of raw data from an automobile manufacturer?A) An average of 120 Subarus sold daily in New York in 2017B)1,200 SubaruOutbacks sold during the first quarter 2017 in New YorkC) One Subaru Outback sold July 27, 20176 in Mohegan Lake, New York for $24,000D) Annual sales of Subaru Outbacks increased 5.3 percentE) An average sale price of $25,500 for all Subaru Outbacks sold during July 2017 in MoheganLake, New YorkAnswer: CDifficulty: ChallengingAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?

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1339) In a hierarchical organization, the upper level consists of:A) scientists.B) senior management.C) professional employees.D) dataworkers.E) knowledge workers.Answer: BDifficulty: ModerateAACSB: Reflective thinkingLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essentialforensuringthat information systems provide genuine value for organizations?40) The fundamental set of assumptions, values, and ways of doing things that has been acceptedby most of a company's members is called its:A) culture.B) environment.C) atmosphere.D) business process.E) mission.Answer: ADifficulty: EasyAACSB: Reflective thinkingLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?41) Data management technology consists of which of the following?A) Physical hardware and media used by an organization for storing dataB) Detailed, preprogrammed instructions that control and coordinate the computer hardwarecomponents in an information systemC) Two or more computers to share data or resourcesD) Hardware and software used to transfer dataE) Software governing the organizationof data on physical storage mediaAnswer: EDifficulty: EasyAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?

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1442) Which of the following statements best describes organizational culture?A) It encompasses the sum of beliefs and assumptions by all members.B) It enables the organization to transcend the different levels and specialties of its employees.C) It reflects the senior management's perspective on the organization and goals.D) It allows a company to achieve greater operational efficiency.E) It is a fundamental set of assumptions, values, and ways ofdoing things that has beenaccepted by most members of the organization.Answer: EDifficulty: ModerateAACSB: Analytical thinkingLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?43) Networking and telecommunications technologies, along with computer hardware, software,data management technology, and the people required to run and manage them, constitute anorganization's:A) data management environment.B) networked environment.C) information technology (IT) infrastructure.D) information system.E) culture.Answer: CDifficulty:EasyAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?44)Maintaining the organization's financial records is a central purpose of which main businessfunction?A) Manufacturing and accountingB) Finance and accountingC) Sales and manufacturingD) Finance and salesE) Human resourcesAnswer: BDifficulty:EasyAACSB: Reflective thinkingLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?

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1545) All of the following are examples of environmental actors in an information systemexcept:A) competitors.B) regulatory agencies.C) customers.D) suppliers.E) sales force.Answer: EDifficulty: ModerateAACSB: Information technologyLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine valuefor organizations?46) Which of the following best describes the primary reason for implementing a newinformation system, from a business perspective?A) The system enables the firm to create new products and services.B) The system will create new value for the firm, beyonditscosts.C) The system will automate key business processes.D) The system is in use by our primary competitors.E) The system integrates well with the Web.Answer: BDifficulty: ModerateAACSB: Information technologyLO: 1-2:What is an informationsystem? How does it work? What are its management,organization, and technology components? Why are complementary assets essential for ensuringthat information systems provide genuine value for organizations?47) Which ofthe following wouldnotbe a complementary asset for a solar panel manufacturer?A) International solar equipment certification standardsB) Government funding for green technologyC) Centralized hierarchical decision makingD) Innovation-driven management teamE)Subsidies for adoptionof solar energyAnswer: CDifficulty: ModerateAACSB: Analytical thinkingLO: 1-2: What is an information system? How does it work? What are its management,organization, and technology components? Why are complementaryassets essential for ensuringthat information systems provide genuine value for organizations?

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