Emmanuel Opoku Rowkish+ 1 - WordPress.com

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 1 Information Systems in Global Business Today 1) Internet advertising is growing at a rate of more than 25 percent a year. Answer: TRUE Diff: 3 Page Ref: 6 AACSB: Reflective thinking skills CASE: Content Objective: 1.1 2) Developing a new product, fulfilling an order, and hiring a new employee are examples of business processes. Answer: TRUE Diff: 1 Page Ref: 9 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 3) A fully digital firm produces only digital goods or services. Answer: FALSE Diff: 2 Page Ref: 9 AACSB: Reflective thinking skills CASE: Content Objective: 1.1 4) A business model describes how a company produces, delivers, and sells a product or service to create wealth. Answer: TRUE Diff: 1 Page Ref: 13 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 5) Information technology (IT) consists of all the hardware that a firm needs to use in order to achieve its business objectives, whereas information systems consist of all the software and business processes needed. Answer: FALSE Diff: 2 Page Ref: 15-16 AACSB: Use of information technology CASE: Content Objective: 1.3

Emmanuel Opoku

Rowkish+ 1

6) Computers are only part of an information system. Answer: TRUE Diff: 1 Page Ref: 18 AACSB: Use of information technology CASE: Content Objective: 1.3

7) Information systems literacy describes the behavioral approach to information systems, whereas computer literacy describes the technical approach. Answer: FALSE Diff: 1 Page Ref: 18 AACSB: Use of information technology CASE: Content Objective: 1.3 8) The dimensions of information systems are management, organizations, and information technology. Answer: TRUE Diff: 2 Page Ref: 18 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 9) Knowledge workers assist with paperwork at all levels of the firm. Answer: FALSE Diff: 1 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 10) In order to understand how a specific business firm uses information systems, you need to know something about the hierarchy and culture of the company. Answer: TRUE Diff: 2 Page Ref: 19-20 AACSB: Analytic skills CASE: Analysis Objective: 1.3 11) Business processes are logically related tasks for accomplishing tasks that have been formally encoded by an organization. Answer: FALSE Diff: 2 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.3

Emmanuel Opoku

Rowkish+ 2

12) There are four major business functions: Sales and marketing; manufacturing and production; finance and accounting; and information technology. Answer: FALSE Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

13) A network requires at least two computers and a shared resource, such as a printer. Answer: FALSE Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 14) A substantial part of management responsibility is creative work driven by new knowledge and information. Answer: TRUE Diff: 1 Page Ref: 21 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 15) Intranets allow firms to work easily with third-party suppliers and vendors. Answer: FALSE Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.2 16) An IT infrastructure provides the platform on which the firm can build its information systems. Answer: TRUE Diff: 1 Page Ref: 22 AACSB: Use of information technology CASE: Content Objective: 1.3 17) 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: 13, 23 AACSB: Analytic skills CASE: Analysis Objective: 1.2

Emmanuel Opoku

Rowkish+ 3

18) Government and private sector standards are examples of complementary social assets required to optimize returns from IT investments. Answer: TRUE Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4

19) A firm that invests in efficient business processes is making an investment in organizational complementary assets. Answer: TRUE Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4 20) In the behavioral approach to information systems, technology is ignored in favor of understanding the psychological, social, and economic impacts of systems. Answer: FALSE Diff: 2 Page Ref: 29 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 21) The six important business objectives of information technology are new products, services, and business models; customer and supplier intimacy; survival; competitive advantage; operational excellence; and A) improved flexibility. B) improved decision making. C) improved business practices. D) improved efficiency. Answer: B Diff: 1 Page Ref: 12 AACSB: Use of information technology CASE: Content Objective: 1.2

Emmanuel Opoku

Rowkish+ 4

22) Dell Computer's use of information systems to improve efficiency and implement "mass customization" techniques to maintain consistent profitability and an industry lead illustrates which business objective? A) improved flexibility B) improved business practices C) competitive advantage D) survival Answer: C Diff: 3 Page Ref: 15 AACSB: Use of information technology CASE: Synthesis Objective: 1.2

23) 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: 15 AACSB: Use of information technology CASE: Content Objective: 1.2 24) Which of the following choices may lead to competitive advantage: (1) new products, services, and business models; (2) charging less for superior products; (3) responding to customers in real time? A) 1 only B) 1 and 2 C) 2 and 3 D) 1, 2, and 3 Answer: D Diff: 3 Page Ref: 15 AACSB: Analytic skills CASE: Analysis Objective: 1.2

Emmanuel Opoku

Rowkish+ 5

25) 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: 14 AACSB: Use of information technology CASE: Analysis Objective: 1.2 26) The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates the use of information systems to achieve which business objective? A) improved efficiency B) customer and supplier intimacy C) survival D) competitive advantage Answer: C Diff: 2 Page Ref: 15 AACSB: Use of information technology CASE: Analysis Objective: 1.2

27) An information system can be defined technically as a set of interrelated components that collect, 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: 16 AACSB: Use of information technology CASE: Content Objective: 1.2 28) 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: 16 AACSB: Use of information technology CASE: Content Objective: 1.3

Emmanuel Opoku

Rowkish+ 6

29) Order data for baseball tickets and bar code data are examples of A) raw input. B) raw output. C) customer and product data. D) sales information. Answer: A Diff: 1 Page Ref: 16-17 AACSB: Use of information technology CASE: Content Objective: 1.3 30) The average number of tickets sold daily online is an example of A) input. B) raw data. C) meaningful information. D) feedback. Answer: C Diff: 1 Page Ref: 16-17 AACSB: Use of information technology CASE: Analysis Objective: 1.3

31) 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 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: 16-17 AACSB: Use of information technology CASE: Content Objective: 1.3 32) Converting raw data into a more meaningful form is called A) capturing. B) processing. C) organizing. D) feedback. Answer: B Diff: 1 Page Ref: 16 AACSB: Use of information technology CASE: Content Objective: 1.3

Emmanuel Opoku

Rowkish+ 7

33) An example of raw data from a national chain of automobile stores would be A) an average of 13 Toyotas are sold daily in Kentucky. B) 30 percent increase in Toyota RAV 4 sales during September in Kentucky. C) 1 Toyota RAV4 sold March 3, 2008 in Louisville, Kentucky. D) all of the above. Answer: C Diff: 3 Page Ref: 16-17 AACSB: Use of information technology CASE: Analysis Objective: 1.3 34) 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: 18-19 AACSB: Reflective thinking skills CASE: Content Objective: 1.5

35) In a hierarchical organization, the upper levels consist of A) managerial and professional employees. B) managerial, professional, and technical employees. C) professional and operational employees. D) managerial, professional, and operational employees. Answer: B Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 36) Which of the six strategic business objectives did the NBA's use of Synergy Sports Technology help to achieve? A) customer and supplier intimacy B) improved decision making C) new products and services D) operational excellence Answer: B Diff: 3 Page Ref: 3-4, 12-15 AACSB: Analytic skills CASE: Analysis Objective: 1.2

Emmanuel Opoku

Rowkish+ 8

37) 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: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 38) Thomas Friedman's declaration that the world was now "flat" meant that A) the Internet has reduced the economic advantages of developed countries. B) globalization is starting to offer less advantage to large corporations. C) the global economy is increasingly commanded by fewer and larger corporations. D) global capitalism is homogenizing culture and business practices throughout the world. Answer: A Diff: 1 Page Ref: 8 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

39) Data management technology consists of the A) physical hardware and media used by an organization for storing data. B) detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. C) software governing the organization of data on physical storage media. D) hardware and software used to transfer data. Answer: C Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 40) The hardware and software used to transfer data in an organization is called A) data management technology. B) networking and data management technology. C) data and telecommunications technology. D) networking and telecommunications technology. Answer: D Diff: 2 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3

Emmanuel Opoku

Rowkish+ 9

41) 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) IT infrastructure. D) information system. Answer: C Diff: 2 Page Ref: 22 AACSB: Use of information technology CASE: Content Objective: 1.3 42) An example of a business using information systems to create new products and services is A) Wal-Mart's RetailLink system. B) the Mandarin Oriental hotel's customer-preference tracking system. C) Verizon's Web-based digital dashboard. D) Apple Inc.'s iPod. Answer: D Diff: 3 Page Ref: 13 AACSB: Use of information technology CASE: Analysis Objective: 1.1

43) An example of a business using information systems to attain operational excellence is A) Wal-Mart's RetailLink system. B) the Mandarin Oriental hotel's customer-preference tracking system. C) Verizon's Web-based digital dashboard. D) Apple Inc.'s iPod. Answer: A Diff: 3 Page Ref: 13 AACSB: Use of information technology CASE: Analysis Objective: 1.1 44) An example of a business using information systems for customer and supplier intimacy is A) Wal-Mart's RetailLink system. B) the Mandarin Oriental hotel's customer-preference tracking system. C) Verizon's Web-based digital dashboard. D) Apple Inc.'s iPod. Answer: B Diff: 2 Page Ref: 13-14 AACSB: Use of information technology CASE: Analysis Objective: 1.1

Emmanuel Opoku

Rowkish+ 10

45) 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 Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 46) Based on the examples in the chapter, if you were asked to formulate a plan for a regional drive-in restaurant chain's efforts to use information technology to develop a loyal customer base, what would be the best use of information technology from the list below? A) Use IT to increase supplier loyalty. B) Use IT to increase operational efficiency. C) Use IT to create new products and business models. D) Use IT to help survive government reporting requirements. E) Use IT to achieve customer intimacy. Answer: E Diff: 3 Page Ref: 13-15 AACSB: Use of information technology CASE: Evaluation Objective: 1.2

47) The fact that online advertising revenues are growing at 25 percent a year, while offline traditional advertising revenues are growing at about 5 percent a year, suggests that A) Internet advertising is very inexpensive. B) offline traditional advertising is not very effective. C) the Internet is transforming the traditional advertising business model. D) new technologies are more efficient at selling to customers. Answer: C Diff: 3 Page Ref: 5-6 AACSB: Analytic skills CASE: Synthesis Objective: 1.1

Emmanuel Opoku

Rowkish+ 11

48) Toyota Motor Company's vehicle orders management system allows it to improve efficiency by basing vehicle production on A) superior forecasts of regional demand. B) actual customer orders. C) improved decision making. D) customer preferences. Answer: B Diff: 3 Page Ref: 15 AACSB: Use of information technology CASE: Content Objective: 1.1 49) In a business hierarchy, the level that is responsible for monitoring the daily activities of the business is A) middle management. B) service workers. C) production management. D) operational management. Answer: D Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.3 50) Which of the following are environmental actors that interact with an organization and its information systems? A) customers B) suppliers C) regulatory agencies D) all of the above Answer: D Diff: 2 Page Ref: 17 AACSB: Use of information technology CASE: Content Objective: 1.2

51) From a business perspective, raw data is transformed systematically during various stages, transforming it into valuable information, in a process called A) the information value chain. B) the IT value chain. C) information processing. D) feedback. Answer: A Diff: 2 Page Ref: 25 AACSB: Use of information technology CASE: Content Objective: 1.2

Emmanuel Opoku

Rowkish+ 12

52) A corporation that funds a political action committee, which in turn promotes and funds a political candidate who agrees with the values of that corporation, could be seen as investing in which main category of complementary assets? A) managerial B) governmental C) social D) organizational Answer: C Diff: 2 Page Ref: 27 AACSB: Analytic skills CASE: Analysis Objective: 1.4 53) Apple Computer dominates the online legal music sales industry primarily because of a failure of recording label companies to A) invest in technology. B) adopt a new business model. C) invest in complementary assets. D) modernize their information value chain. Answer: B Diff: 2 Page Ref: 27 AACSB: Use of information technology CASE: Content Objective: 1.1 54) An example of an organizational complementary asset is A) using the appropriate business model. B) a collaborative work environment. C) laws and regulations. D) all of the above. Answer: A Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4

55) An example of a social complementary asset is A) technology and service firms in adjacent markets. B) training programs. C) distributed decision-making rights. D) all of the above. Answer: A Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.4

Emmanuel Opoku

Rowkish+ 13

56) Disciplines that contribute to the technical approach to information systems are: A) computer science, engineering, and networking. B) operations research, management science, and computer science. C) engineering, utilization management, and computer science. D) management science, computer science, and engineering. Answer: B Diff: 3 Page Ref: 28-29 AACSB: Use of information technology CASE: Content Objective: 1.5 57) The discipline that focuses on mathematical techniques for optimizing parameters of organizations, such as transportation and inventory control, is A) management science. B) MIS. C) operations research. D) utilization management. Answer: C Diff: 3 Page Ref: 28-29 AACSB: Reflective thinking skills CASE: Content Objective: 1.5 58) Sociologists study information systems with an eye to understanding A) how systems affect individuals, groups, and organizations. B) how human decision makers perceive and use formal information. C) how new information systems change the control and cost structures within the firm. D) the production of digital goods. Answer: A Diff: 2 Page Ref: 29 AACSB: Use of information technology CASE: Content Objective: 1.5

59) Psychologists study information systems with an eye to understanding A) how systems affect individuals, groups, and organizations. B) how human decision makers perceive and use formal information. C) how new information systems change the control and cost structures within the firm. D) the production of digital goods. Answer: B Diff: 2 Page Ref: 29 AACSB: Use of information technology CASE: Content Objective: 1.5

Emmanuel Opoku

Rowkish+ 14

60) The costs for firms operating on a global scale have been drastically reduced by A) networking technology. B) investments in organizational complementary assets. C) the Internet. D) the rise of digital content. Answer: C Diff: 2 Page Ref: 9 AACSB: Use of information technology CASE: Content Objective: 1.1 61) Which of the following are key corporate assets? A) intellectual property, core competencies, and financial and human assets B) production technologies and business processes for sales, marketing, and finance C) knowledge and the firm's tangible assets, such as goods or services D) time and knowledge Answer: A Diff: 3 Page Ref: 11 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 62) Overproduction or underproduction of goods and services, misallocation of resources, and poor response times are the results of a firm's having A) poor relationships with suppliers. B) poor relationships with customers. C) inadequate information. D) a surplus of information. Answer: C Diff: 3 Page Ref: 14 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

63) A firm that must invest in new information systems capabilities in order to comply with federal legislation can be said to be investing to achieve which business objective? A) customer intimacy B) operational excellence C) survival D) improved reporting Answer: C Diff: 2 Page Ref: 13 AACSB: Use of information technology CASE: Analysis Objective: 1.2

Emmanuel Opoku

Rowkish+ 15

64) Which of the following would NOT be used as an input for an information system? A) digital dashboard B) handheld computer C) bar-code scanner D) cell phone Answer: A Diff: 2 Page Ref: 16 AACSB: Use of information technology CASE: Analysis Objective: 1.3 65) Which field of study focuses on both a behavioral and technical understanding of information systems? A) sociology B) operations research C) economics D) management information systems Answer: D Diff: 2 Page Ref: 18-19 AACSB: Use of information technology CASE: Content Objective: 1.5 66) The three principle 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 Diff: 3 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

67) Engineers, scientists, or architects, who design new products or services for a firm, belong to which level of a business hierarchy? A) middle management B) production workers C) knowledge workers D) data workers Answer: C Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

Emmanuel Opoku

Rowkish+ 16

68) Which main business function is responsible for maintaining employee records? A) sales and marketing B) human resources C) finance and accounting D) manufacturing and production Answer: B Diff: 1 Page Ref: 20 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 69) Which of the following constitutes an organizational element in the UPS tracking system described in the chapter? A) the specification of procedures for identifying packages with sender and recipient information 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 Diff: 3 Page Ref: 23 AACSB: Analytic skills CASE: Synthesis Objective: 1.2 70) A managerial element in the UPS tracking system described in the chapter is A) taking inventory. B) providing package status reports to customers. C) the decision to use automation. D) in-house package tracking software. Answer: C Diff: 2 Page Ref: 22 AACSB: Analytic skills CASE: Synthesis Objective: 1.2

71) ________ is data that has been shaped into a form that is meaningful to human beings. Answer: Information Diff: 1 Page Ref: 16 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

Emmanuel Opoku

Rowkish+ 17

72) ________ is output returned to appropriate members of the organization to help them evaluate or correct the input stage. Answer: Feedback Diff: 2 Page Ref: 17 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 73) ________ is a global network that uses universal standards to connect millions of different networks around the world. Answer: The Internet Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 74) Computer ________ consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. Answer: software Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3 75) The ________ is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format. Answer: World Wide Web/Web/WWW Diff: 1 Page Ref: 21-22 AACSB: Use of information technology CASE: Content Objective: 1.3 76) ________ are private corporate networks extended to authorized users outside the organization. Answer: Extranets Diff: 1 Page Ref: 21 AACSB: Use of information technology CASE: Content Objective: 1.3

77) The key elements of an organization are its people, structure, business processes, politics, and ________. Answer: culture Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2

Emmanuel Opoku

Rowkish+ 18

78) In a(n) ________ perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to one another until a satisfactory fit is obtained. Answer: sociotechnical Diff: 2 Page Ref: 30 AACSB: Use of information technology CASE: Content Objective: 1.3 79) ________ makes long-range strategic decisions about the firm's products and services. Answer: Senior management Diff: 2 Page Ref: 19 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 80) Investments in organization and management, such as investments in new business models and training, are also known as ________. Answer: organizational and management capital Diff: 2 Page Ref: 27 AACSB: Reflective thinking skills CASE: Content Objective: 1.2 81) Define operational excellence. How can information systems help achieve it? Answer: Operational excellence is the achievement of higher levels of productivity, efficiency, profitability. Information systems can help achieve operational excellence by improving communications to supplier and optimizing the supply chain. Information systems could help managers communicate with workers more efficiently, enable technological innovation in products, minimize warehouse overhead, streamline distribution. Diff: 2 Page Ref: 13 AACSB: Analytic skills CASE: Evaluation Objective: 1.2

82) You work for an auto manufacturer and distributor. How could you use information systems to achieve greater customer intimacy? Answer: You could create a Web site that allows customers to customize cars, communicate with support personnel and other car owners. You could create an automated e-mail service reminding car owners to take their car in for periodic checkups. You could have an information system that tracks customer preferences in local areas, so you can provide cars that reflect local customer needs and desires. Diff: 3 Page Ref: 13-14 AACSB: Analytic skills CASE: Analysis Objective: 1.2

Emmanuel Opoku

Rowkish+ 19

83) 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: • supports decision making, coordination, and control • helps employees analyze problems • helps employees visualize complex subjects • helps create new products Diff: 2 Page Ref: 15-16 AACSB: Analytic skills CASE: Evaluation Objective: 1.3 84) 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 would be: average number of tickets sold to seniors on certain days of the week. Diff: 3 Page Ref: 16-17 AACSB: Analytic skills CASE: Synthesis Objective: 1.3 85) 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 for accomplishing work. Hiring a new employee, customer intake, and filing medical records are examples of business processes at a hospital. Diff: 2 Page Ref: 9 AACSB: Analytic skills CASE: Synthesis Objective: 1.2

Emmanuel Opoku

Rowkish+ 20

86) You are starting a small bike messenger company. Given your 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: Being a digital firm doesn't purely rely on having digital goods and services. A digital firm would have most of its relationships with customers, suppliers, and employees be digitally enabled. Ordering deliveries, assigning deliveries, managing employees and assignments could certainly be digitally enabled; using cell phones, information systems, and handheld devices to connect customers, delivery management, and bike messengers. Diff: 3 Page Ref: 9 AACSB: Analytic skills CASE: Synthesis Objective: 1.1 87) 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. Diff: 2 Page Ref: 20 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 88) You work at the business headquarters for a chain of movie theaters. Describe this firm's information value chain. Answer: An information value chain adds value to data at various stages, transforming it into valuable data. At a chain of movie theaters, data would be gathered from ticket sales and concession sales. Information systems would help transform this into meaningful information, such as determining the types of movies popular in certain regions, times and days of the week that people most often saw movies, what snacks were the most popular. This information would be valuable in making decisions, such as offering ticket discounts during less popular time slots, and offering more popular snack items. Further feedback based on the results of these decisions could determine whether these decisions were effective. Diff: 3 Page Ref: 25 AACSB: Analytic skills CASE: Synthesis Objective: 1.2

Emmanuel Opoku

Rowkish+ 21

89) How does a company's use of information systems affect its corporate strategies? Provide an example. Answer: A firm's ability to effectively use information technology is interdependent with its ability to implement corporate strategies and achieve corporate goals. More and more, the ability to compete and succeed depends on a company's ability to implement technology. What a business would like to do in the future can depends on what its systems will be able to do. Examples of this might be a company who invests in information systems that enable it to create new products or to make its distribution system more efficient, allowing the company to become the low-cost producer. Diff: 3 Page Ref: 12 AACSB: Analytic skills CASE: Evaluation Objective: 1.2 90) The information systems of Accenture, a global consulting firm, allow for a highly decentralized organization without a traditional headquarters. Based on your reading of Chapter 1, which of the six strategic business objectives does Accenture's information systems contribute to? Answer: Student answers will vary. The following is an example of a possible answer: Accenture's information systems allow its mobile workforce to be within easy, constant reach of its customers, contributing to the business objective of customer and supplier intimacy. Additionally, the ability of employees to connect to and work with local branch information systems in standard ways, regardless of their location, contributes to more efficient processes and operational excellence. Diff: 2 Page Ref: 12-15 AACSB: Analytic skills CASE: Evaluation Objective: 1.1

Emmanuel Opoku

Rowkish+ 22

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 2 Global E-Business: How Businesses Use Information Systems 1) Operational management is responsible for directing the day-to-day operations of the business and therefore needs transaction-level information. Answer: TRUE 2) Deciding whether to introduce a new product line is the responsibility of an operational manager. Answer: FALSE 3) Tata Motors had to revise many of its manufacturing processes to support digital manufacturing. Answer: TRUE 4) Transaction processing systems are most commonly used by the senior management level of an organization. Answer: FALSE 5) A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business. Answer: TRUE 6) A hotel reservation system is a typical example of a management information system. Answer: FALSE 7) Management information systems typically support non-routine decision making. Answer: FALSE 8) Enrolling employees in benefits plans is a business process handled by the finance and accounting function. Answer: FALSE 9) Functional systems that support business processes within a single functional group, such as human resources, are being phased out in favor of cross-functional systems. Answer: TRUE 10) Managers need TPSs to monitor the status of internal operations and the firm's relations with the external environment. Answer: TRUE 11) Most MISs use sophisticated mathematical models or statistical techniques. Answer: FALSE

Emmanuel Opoku

Rowkish+ 23

12) Decision-support systems help managers make decisions that are unique, rapidly changing, and not easily specified in advance. Answer: TRUE 13) Decision-support systems use internal information as well as information from external sources. Answer: TRUE 14) ESSs are designed to serve the middle management of the organization. Answer: FALSE 15) ESSs are designed to incorporate data about external events, but they also draw summarized information from internal MIS and DSS. Answer: TRUE 16) ESSs are designed primarily to solve specific problems. Answer: FALSE 17) Information supplied by an enterprise system is structured around cross-functional business processes. Answer: TRUE 18) Enterprise systems often include transactions with customers and vendors. Answer: TRUE 19) Supply chain management systems are more externally oriented than enterprise systems. Answer: TRUE 20) Maintaining online directories of employees with special areas of expertise is one application of knowledge management systems. Answer: TRUE 21) Tata Motor's new information system, enabling it to automate processes in product design and production engineering planning, is best categorized as a(n) A) KMS B) TPS C) DSS D) ESS Answer: A 22) Identifying customers is a responsibility of the ________ function. A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing Answer: D

Emmanuel Opoku

Rowkish+ 24

23) Producing bills of materials is a business process within the ________ function. A) finance and accounting B) human resources C) manufacturing and production D) sales and marketing Answer: C 24) Which of the following is an example of a cross-functional business process? A) identifying customers B) creating a new product C) assembling a product D) paying creditors Answer: B 25) Which type of system would you use to change a production schedule if a key supplier was late in delivering goods? A) ESS B) TPS C) MIS D) DSS Answer: B 26) To monitor the status of internal operations and the firm's relations with the external environment, managers need ________ systems. A) decision-support B) knowledge C) transaction processing D) management information Answer: C 27) Which systems are typically a major source of data for other systems? A) transaction processing systems B) management information systems C) executive support systems D) decision-support systems Answer: A 28) Which type of system would you use to determine the five suppliers with the worst record in delivering goods on time? A) ESS B) TPS C) MIS D) DSS Answer: C

Emmanuel Opoku

Rowkish+ 25

29) A relocation control system that reports summaries on the total moving, house-hunting, and home financing costs for employees in all company divisions would fall into the category of A) knowledge management systems. B) transaction processing systems. C) executive-support systems. D) management information systems. Answer: D 30) The term "management information systems" designates 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 31) Decisions that are unique, rapidly changing, and not easily specified in advance are best suited to which type of system? A) MIS B) TPS C) ESS D) DSS Answer: D 32) ________ systems are especially suited to situations in which the procedure for arriving at a solution may not be fully defined in advance. A) Management information B) Transaction processing C) Decision-support D) Knowledge management Answer: C 33) Which type of system would you use to forecast the return on investment if you used new suppliers with better delivery track records? A) ESS B) TPS C) MIS D) DSS Answer: D 34) Decision-support systems are often referred to as business ________ systems. A) information B) intelligence C) analysis D) modeling Answer: B

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Rowkish+ 26

35) Which benefits of Air Canada's new Maintenix software best illustrate the DSS capabilities of their new information system? A) enhanced visibility of fleetwide data B) support of existing business model and enterprise resource planning and financial software C) increased operational efficiencies D) ability to match work requirements against changing locations and flight schedules Answer: D 36) ESS are specifically designed to serve which level of the organization? A) operational B) end-user C) middle management D) senior management Answer: D 37) Executive support systems are information systems that support the A) long-range planning activities of senior management. B) knowledge and data workers in an organization. C) decision-making and administrative activities of middle managers. D) day-to-day processes of production. Answer: A 38) Which systems often deliver information to senior executives through a portal, which uses a Web interface to present integrated personalized business content? A) transaction processing systems B) executive support systems C) management information systems D) decision-support systems Answer: B 39) Which type of system would you use to determine what trends in your supplier's industry will affect your firm the most in five years? A) ESS B) TPS C) MIS D) DSS Answer: A 40) What is the most important function of an enterprise application? A) increasing speed of communicating B) enabling business functions and departments to share information C) enabling a company to work collaboratively with customers and suppliers D) enabling cost-effective e-business processes Answer: B

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Rowkish+ 27

41) ________ are designed to support organization-wide process coordination and integration. A) Decision-support systems B) Management information systems C) CRM systems D) Enterprise applications Answer: D 42) 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 B) enterprise C) automatic reporting D) management information Answer: B 43) You manage the IT department at a small startup Internet advertiser. You need to set up an inexpensive system that allows customers to see real-time statistics such as views and click-throughs about their current banner ads. Which type of system will most efficiently provide a solution? A) CRM B) enterprise system C) extranet D) intranet Answer: C 44) The Smart Site Solution system used by Johnny's Lunch to help identify the best locations to open new franchises is best categorized as a A) POS system B) DSS C) CRM D) KMS Answer: B 45) The MICROS system used by Johnny's Lunch to captures sales transaction data and help monitor inventory, control waste, and adhere to government regulations is best categorized as a(n) A) TPS B) ESS C) CRM D) KMS Answer: A

Emmanuel Opoku

Rowkish+ 28

46) The four major enterprise applications are A) SCMs, CRMs, DSSs, and KMSs. B) SCMs, CRMs, ESSs, and KMSs. C) enterprise systems, SCMs, DSSs, and CRMs. D) enterprise systems, SCMs, CRMs, and KMSs. Answer: D 47) Enterprise systems are also known as ________ systems. A) resource planning B) enterprise resource planning C) enterprise support D) management information Answer: B 48) Enabling management to make better decisions regarding organizing and scheduling sourcing, production, and distribution is a central feature of A) SCMs B) TPSs C) KMSs D) ERPs Answer: A 49) ________ systems integrate supplier, manufacturer, distributor, and customer logistics processes. A) Collaborative distribution B) Supply-chain management C) Reverse logistics D) Enterprise planning Answer: B 50) ________ uses a set of integrated applications to address all aspects of the customer relationship. A) CRM B) MIS C) CLE D) CLU Answer: A 51) Which types of systems consolidate the relevant knowledge and experience in the firm to make it available to improve business processes and management decision making? A) TPS B) Extranets C) KMS D) CRM Answer: C

Emmanuel Opoku

Rowkish+ 29

52) An information system for ________ would NOT be categorized as a KMS. A) distributing documents B) documenting the expertise of company specialists C) enabling the discovery of new product applications D) discovering new sales channels for a product Answer: D 53) Which type of information system is an intranet most easily adapted to? A) CRM B) MIS C) TPS D) KMS Answer: D 54) Which of the following types of system helps expedite the flow of information between the firm and its suppliers and customers? A) intranet B) extranet C) KMS D) TPS Answer: B 55) Which of the following occupations would NOT be categorized as an "interaction" job? A) sales representative B) business manager C) engineer D) operations manager Answer: C 56) Which of the following decisions requires knowledge based on collaboration and interaction? A) How long will it take to manufacture this product? B) Should we collaborate with outside vendors on new products and services? C) In which geographical locations are our products garnering the most sales? D) Which product design is the most efficient for the user in terms of energy use? Answer: B 57) E-government refers to the application of ________ to digitally enable government and public sector agencies' relationships with citizens, businesses, and other arms of government. A) the Internet and networking technologies B) e-commerce C) e-business D) any computerized technology Answer: A

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Rowkish+ 30

58) Buying or selling goods over the Internet is called A) e-commerce. B) e-business. C) an intranet. D) an extranet. Answer: A 59) The use of digital technology and the Internet to execute the major business processes in the enterprise is called A) e-commerce. B) e-business. C) enterprise applications. D) MIS. Answer: B 60) 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 61) A ________ is a senior manager who oversees the use of IT in the firm. A) CEO B) CFO C) CIO D) CTO Answer: C 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 63) The CPO is 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

Emmanuel Opoku

Rowkish+ 31

64) The advantage of a having a centralized information services department that operates as a separate department similar to other departments is that A) this is more likely to produce more compatible systems and more coherent long-term systems development plans. B) this lowers costs of technology purchases. C) systems are built that directly address that function's business needs. D) systems are built that can function independently and more efficiently. Answer: A 65) Which of the following roles falls into the duties of an information systems manager? A) writing software instructions for computers B) acting as liaison between the information systems group and the rest of the organization C) translating business problems into information requirements D) managing data entry staff Answer: D 66) Which of the following types of organizing the information systems function would you be most likely to find in a small company with 20 employees? A) as departments within each functional area B) as a separate, centralized department C) represented within each major division of the company D) none of the above Answer: D 67) Which of the following types of organizing the information systems function would you be most likely to find in a very large, multinational corporation? A) as departments within each functional area B) as a separate, centralized department C) represented within each major division of the company D) none of the above Answer: C 68) You work for a highly successful advertiser that is just about to expand nationally. Of utmost importance will be finding a way to store and disseminate their clients' continually updated branding guides, which include multiple image files and text documents, to all of the firm's branches. What system will best serve these needs? A) an intranet with KMS capabilities B) an extranet with KMS capabilities C) a TPS with KMS capabilities D) a CRM Answer: B

Emmanuel Opoku

Rowkish+ 32

69) You have been hired by a non-profit agency to implement a system to handle their donations. Event fundraisers need to be able to quickly access a donor's information and history. The marketing department needs to be able to create customized mailing lists, in order to send different messages to different types of donors. What system will best meet these needs? A) TPS B) TPS with DSS capabilities C) TPS with MIS capabilities D) TPS with ESS capabilities Answer: C 70) You have been hired by Inspiration Inc, to help improve their profit margin. Inspiration Inc. is a business communications consultancy that services many clients in different industries throughout the United States. The end products of the company are customized recommendations for the best use of a client's existing resources for improving internal communications, typically delivered via documentation in different media. The company has approximately 100 consultants, all of whom are located in their central headquarters in Chicago. What system do you recommend to improve the company's business processes and increase their profit margin? A) Extranet, to enable quick collaboration over the Internet, minimize the time spent communicating with the client, and minimize the amount of paperwork needed B) CRM, to maintain easily accessible customer records to minimize the time spent looking for client data C) KMS, for minimizing redundant work on similar clients D) marketing system, for improving sales levels Answer: A 71) A(n) ________ is a set of logically related activities for accomplishing a specific business result. Answer: business process 72) A Web interface used to present integrated personalized business content to users is called a(n) ________. Answer: portal 73) ________ applications span the entire firm, integrating information from multiple functions and business processes to enhance the performance of the organization as a whole. Answer: Enterprise 74) ________ systems are used by middle management to combine data and sophisticated analytical models or data analysis tools to support non-routine decision making. Answer: Decision-support 75) IT ________ includes the strategy and policies for using information technology within an organization. Answer: governance

Emmanuel Opoku

Rowkish+ 33

76) The ________ function is responsible for attracting, developing, and maintaining the firm's workforce. Answer: human resources 77) A state Web site that allows citizens to pay parking fines online is a form of ________. Answer: e-government 78) Supply chain management systems are one type of ________ system because they automate the flow of information across organizational boundaries. Answer: inter-organizational 79) ________ are highly trained technical specialists who write the software instructions for computers. Answer: Programmers 80) ________ are representatives of departments outside of the information systems group for whom applications are developed. Answer: End users 81) Identify and discuss the major types of information systems that serve the main management groups 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. 2. Management-information systems (MIS) provide the management control level with reports and access to the organization's current performance and historical records. Most MIS reports condense information from TPS and are not highly analytical. 3. Decision-support systems (DSS) support management decisions when these decisions are unique, rapidly changing, and not specified easily in advance. They have more advanced analytical models and data analysis capabilities than MIS and often draw on information from external as well as internal sources. 4. Executive-support systems (ESS) support senior management by providing data of greatest importance to senior management decision makers, often in the form of graphs and charts delivered via portals. They have limited analytical capabilities but can draw on sophisticated graphics software and many sources of internal and external information. The various types of systems in the organization exchange data with one another. TPS are a major source of data for other systems, especially MIS and DSS. ESSs primarily receive data from lower-level systems. Diff: 2 Page Ref: 45-52 AACSB: Analytic skills CASE: Analysis Objective: 2.2

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Rowkish+ 34

82) You have been hired to work with 10 salespeople from different branches of a national business in creating an online training site for 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 (1) Internet-based collaboration environment; (2) E-mail and instant messaging; (3) Cell phones and smart phones; (4) Social networking; (5) Wikis; and (6) virtual worlds. The most helpful of these might be the Internet-based collaboration environment, because it would enable people to have discussions, calendars, conferences, and share documents. Diff: 2 Page Ref: 61-62 AACSB: Analytic skills CASE: Synthesis Objective: 2.2

83) Your aunt has asked you for your suggestions to make her business, a local sandwich shop, more efficient. Describe at least three types of business processes that a sandwich shop have. Can any be better coordinated through the use of information systems? Answer: The business processes of a sandwich shop would include: Taking orders, making sandwiches, selling to the customer, ordering supplies, opening the store, closing the store, cleaning the store, paying employees, hiring employees, paying creditors and vendors, creating financial statements, paying taxes, managing cash. Many of these processes could be helped by better information systems, specifically those that require recorded data, such as any financial processes (payments, cash management, taxes, salaries) and information gathered from and distributed to employees. Diff: 2 Page Ref: 43-44 AACSB: Analytic skills CASE: Synthesis Objective: 2.1 84) Describe the role of IT governance within the firm. Answer: IT governance is the management of how the information systems function is organized and handled within the firm. IT governance includes the strategy and policies for using information technology within an organization. It specifies the decision rights and framework for accountability to ensure that the use of information technology supports the organization's strategies and objectives. For example, IT governance decides how decisions implementing and evaluating new systems are made, whether the IT function should be decentralized or centralized, who has power to create and manage systems, and what kind of ROI is expected from systems. Diff: 2 Page Ref: 66 AACSB: Analytic skills CASE: Analysis Objective: 2.5

Emmanuel Opoku

Rowkish+ 35

85) Apex Vacuum, a family-owned manufacturer of budget vacuums, has grown exponentially over the last few years. However, the company is having difficulty preparing for future growth. The only information system used at Apex is an antiquated accounting system. The company has one manufacturing plant located in Arkansas; and three warehouses, in Arkansas, Delaware, and California. The Apex sales force is national, and Apex purchases about a third of its vacuum parts and materials from a single overseas supplier. You have been hired to recommend the information systems Apex should implement in order to maintain their competitive edge. However, there is not enough money for a full-blown, cross-functional enterprise application, and you will need to limit the first step to a single functional area or constituency. What will you choose, and why? Answer: Student answers will vary. E.g. A TPS focusing on production and manufacturing to keep production costs low while maintaining quality, and for communicating with other possible vendors. The TPS would later be used to feed MIS and other higher level systems. Diff: 2 Page Ref: 45-52 AACSB: Analytic skills CASE: Synthesis Objective: 2.2

86) 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. These systems help create a more uniform organization in which everyone uses similar processes and information, and measures their work in terms of organization-wide performance standards. The coordination of the firm's key business processes allows the firm to respond more rapidly to customer demands. Diff: 1 Page Ref: 52-56 AACSB: Analytic skills CASE: Evaluation Objective: 2.3 87) How can a good CRM system increase profits for a company? Answer: Customer relationship management uses information systems to coordinate all of the business processes surrounding the firm's interactions with its customers. The systems consolidate customer information from multiple sources (e.g. telephone, e-mail, wireless devices, traditional sales and marketing systems, and the Web) so that the firm can obtain a unified view of a customer. This allows the firm to identify its most profitable customers and make special efforts to please them. Diff: 2 Page Ref: 57-58 AACSB: Analytic skills CASE: Evaluation Objective: 2.3

Emmanuel Opoku

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88) What is the connection between organizations, information systems, and business processes? Answer: Business processes refer to the manner in which work activities are organized, coordinated, and focused to produce a specific business result. They also represent unique ways in which organizations coordinate work, information, and knowledge and the ways in which management chooses to coordinate work. Managers need to pay attention to business processes because they determine how well the organization can execute, and thus are a potential source for strategic success or failures. Although each of the major business functions has its own set of business processes, many other business processes are cross-functional. Information systems can help organizations achieve great efficiencies by automating parts of these processes or by helping organizations rethink and streamline them. Firms can become more flexible and efficient by coordinating and integrating their business processes to improve management of resources and customer service. Diff: 2 Page Ref: 43-45 AACSB: Analytic skills CASE: Synthesis Objective: 2.1

89) 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 salesman takes 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. Diff: 1 Page Ref: 44 AACSB: Analytic skills CASE: Analysis Objective: 2.1 90) The retail home improvement chain you work for, DIY Discount, has noticed that one of its brands of faucets is not selling nearly as well as anticipated. What information systems of the business will you use to determine the reason for the poor sales? Discuss what information you will retrieve from which system. Which of the information systems will be most important for your analysis? Which of the systems will be least important? Answer: You might query operational level TPS to make sure that the product is actually getting to the stores and being restocked. You could query MIS to see average sales levels according to geography, location, and other factors to see if there are any specific factors affecting the sales. You might query ESS to see if the same faucets are being sold by competitors and what these prices are. You might use DSS to see what factors could increase sales. Assuming that the faucets are being properly stocked at the stores, the most important systems to query are the managerial-level systems: MIS for summaries of sales records to help pinpoint any other factors; ESS to check competition, and DSS for higher-level analysis to forecast possible solutions. Diff: 3 Page Ref: 45-52 AACSB: Analytic skills CASE: Evaluation Objective: 2.2

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Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 3 Information Systems, Organizations, and Strategy 1) An adhocracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals. Answer: FALSE 2) From the point of view of economics, information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor. Answer: TRUE 3) One type of competitive advantage Amazon was able to implement in selling books over the Internet was that of being a new market entrant. Answer: TRUE 4) A firm can be said to have competitive advantage when they have higher stock market valuations than their competitors. Answer: TRUE 5) The competitive forces model was created for today's digital firm. Answer: FALSE 6) Customers are one of the competitive forces that affect an organization's ability to compete. Answer: TRUE 7) A transparent marketplace means that there is high product differentiation. Answer: FALSE 8) In an efficient customer response system, digital answering systems are used to monitor and respond to customer inquiries. Answer: FALSE 9) Mass customization is a form of mass production. Answer: TRUE 10) Strong linkages to customers and suppliers decrease switching costs. Answer: FALSE 11) In the strategy of product differentiation, information systems are used to enable new products and services. Answer: TRUE 12) The effect of the Internet has been to raise bargaining power over suppliers. Answer: TRUE

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Rowkish+ 38

13) In the age of the Internet, Porter's traditional competitive forces model is still at work, but competitive rivalry has become much more intense. Answer: TRUE 14) In the value chain model, primary activities are most directly related to the production and distribution of the firm's products and services that create value for the customer. Answer: TRUE 15) The value chain model classifies all company activities as either primary or support. Answer: TRUE 16) The idea driving synergies is that when the output of some units can be used as inputs to other units, the relationship can lower cost and generate profits. Answer: TRUE 17) The law of diminishing returns always applies to digital, as well as traditional companies. Answer: FALSE 18) In network economics, the more people that use Microsoft Office software and related products, the greater its value. Answer: TRUE 19) The term business ecosystem describes the interplay between the various organizational forces within a firm. Answer: FALSE 20) The use of Internet technologies allows companies to more easily sustain competitive advantage. Answer: FALSE 21) As discussed in the chapter opening case, which of the four generic strategies to combat competitive forces formed the basis of e-Bay's growth strategy? A) low-cost leadership B) focus on market niche C) customer and supplier intimacy D) product differentiation Answer: D 22) Which of the following would NOT be considered a disruptive technology? A) instant messaging B) e-mail C) Internet telephony D) PCs Answer: A

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Rowkish+ 39

23) The interaction between information systems and organizations is A) primarily guided by the decision making of middle- and senior-managers. B) a complex, two-way relationship mediated by factors such as the environment and organizational structure. C) driven by the microeconomic forces of capital and labor. D) successfully managed when the organization's existing culture and goals are seen as the driving force. Answer: B 24) An organization is a A) stable, formal social structure that takes resources from the environment and processes them to produce outputs. B) formal, legal entity with internal rules and procedures that must abide by laws. C) collection of social elements. D) b and c E) a, b, and c Answer: E 25) How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm? A) It sees information systems as a way to rearrange the inputs and outputs of the organization. B) It sees capital and labor as primary production factors. C) It sees the inputs and outputs, labor and capital, as being infinitely malleable. D) It sees the organization as a social structure similar to a machine. Answer: C 26) According to the ________ definition of organizations, an organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment. A) microeconomic B) macroeconomic C) sociotechnical D) behavioral Answer: A 27) All of the following are major features of organizations that impact the use of information systems EXCEPT for A) business processes. B) environments. C) goals. D) agency costs. Answer: D 28) Business processes are collections of A) informal practices and behaviors. B) formalized and documented practices. C) routines.

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Rowkish+ 40

D) rights and privileges. Answer: C 29) Mintzberg's classification of organizational structure categorizes the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals as a(n): A) entrepreneurial structure. B) divisionalized bureaucracy. C) professional bureaucracy. D) adhocracy. Answer: C 30) A large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management making is classified by Mintzberg as a ________ bureaucracy. A) machine B) professional C) divisionalized D) multidivisional Answer: A 31) An example of a professional bureaucracy is a A) small startup firm. B) school system. C) mid-size manufacturing firm. D) consulting firm. Answer: B 32) The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as: A) switching costs. B) transaction costs. C) procurement. D) agency costs. Answer: B 33) Which of the following statements is NOT true about information technology's impacts on business firms? A) It helps firms expand in size. B) It helps firms lower the cost of market participation. C) It helps reduce internal management costs. D) It helps reduce transaction costs. Answer: A

Emmanuel Opoku

Rowkish+ 41

34) 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 35) According to Leavitt's model of organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are A) environment, organization, structure, tasks. B) technology, people, culture, and structure. C) organization, culture, management. D) tasks, technology, people, and structure. Answer: D 36) The ________ model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete. A) network economics B) competitive forces C) competitive advantage D) demand control Answer: B 37) Which of the following is NOT one of the competitive forces? A) suppliers B) other competitors C) external environment D) customers Answer: C 38) A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force. A) product differentiation B) traditional competitors C) low number of suppliers D) new market entrants Answer: D 39) A substitute product of most concern for a cable TV distributor is A) satellite TV. B) broadcast TV. C) satellite radio. D) the Internet. Answer: A 40) Which of the following industries has a low barrier to entry? A) automotive

Emmanuel Opoku

Rowkish+ 42

B) computer chip C) restaurant D) airline Answer: C 41) Which of the following can force a business and its competitors to compete on price alone? A) transparent marketplace B) high product differentiation C) poor process efficiency D) demand control Answer: A 42) A firm can exercise greater control over its suppliers by having A) more suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. Answer: A 43) Amazon's use of the Internet as a platform to sell books illustrates a tactical use of information services for A) low-cost leadership. B) product differentiation. C) focusing on market niche. D) strengthening customer intimacy. Answer: A 44) The four major types of competitive strategy 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 45) Wal-Mart's continuous replenishment system allows it to: A) provide mass customization. B) provide an efficient customer response system. C) strengthen customer intimacy. D) achieve economy of scale. Answer: B

Emmanuel Opoku

Rowkish+ 43

46) When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a ________ strategy. A) product differentiation B) market niche C) mass customization D) process efficiency Answer: B 47) ________ is the ability to offer individually tailored products or services using the same production resources as bulk production. A) Mass customization B) Size customization C) Magnitude customization D) Dimension customization Answer: A 48) An information system can enable a company to focus on a market niche through A) complex trend forecasting. B) tailoring products to the client. C) intensive product trend analysis. D) intensive customer data analysis. Answer: D 49) Hilton Hotels' use of customer information software to identify the most profitable customers to direct services to is an example of using information systems to A) strengthen customer intimacy. B) differentiate their service. C) focus on market niche. D) increase efficiency. Answer: C 50) Which industries did the first wave of e-commerce transform? A) air travel, books, bill payments B) air travel, books, music C) real estate, air travel, books D) real estate, books, bill payments Answer: B 51) To what competitive force did the printed encyclopedia industry succumb? A) positioning and rivalry among competitors B) low cost of entry C) substitute products or services D) customer's bargaining power Answer: C

Emmanuel Opoku

Rowkish+ 44

52) Internet technology A) makes it easy for rivals to compete on price alone. B) imposes a significant cost of entry, due to infrastructure requirements. C) increases the difference between competitors because of the wide availability of information. D) makes it easy to sustain operational advantages. Answer: A 53) The Internet raises 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 54) 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) helps a firm identify points at which information technology can most effectively enhance its competitive position. Answer: D 55) The primary activities of a firm include 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 56) The secondary activities of a firm include A) inbound logistics, technology, outbound logistics, sales and marketing, and service. B) inbound logistics, organization infrastructure, outbound logistics, technology, and procurement. C) organization infrastructure, human resources, sales and marketing, and technology. D) organization infrastructure, human resources, technology, and procurement. Answer: D 57) Benchmarking A) compares the efficiency and effectiveness of your business processes against strict standards. B) allows industry participants to influence industry-wide standards. C) is used to measure the speed and responsiveness of information technology. D) synchronizes the business processes of customers, suppliers, and trading partners. Answer: A

Emmanuel Opoku

Rowkish+ 45

58) 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 59) A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n) A) industry value chain. B) business ecosystem. C) value web. D) consortia. Answer: C 60) How are information systems used at the industry level to achieve strategic advantage? A) by building industry-wide, IT-supported consortia and symposia B) by raising the bargaining power of suppliers C) by encouraging the entry of new competitors D) by enforcing standards that reduce the differences between competitors Answer: A 61) If two organizations pool markets and expertise that result in lower costs and generate profits it is often referred to as creating A) a value web. B) a value chain. C) synergies. D) core competencies. Answer: C 62) An example of synergy in business is A) Amazon's use of the Internet to sell books. B) JP Morgan Chase's merger with Bank One Corporation, which provided JP Morgan with a network of retail branches in new regions. C) Blockbuster combining traditional video rental with online video rental. D) Wal-Mart's order entry and inventory management system to coordinate with suppliers. Answer: B 63) An information system can 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

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Rowkish+ 46

64) 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 output. This 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 65) Network economics A) applies the law of diminishing returns to communities of users. B) applies traditional economics to networked users. C) sees the cost of adding new members as inconsequential. D) balances the high cost of adding new members to a community against the lower cost of using network infrastructure. Answer: C 66) 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 67) A virtual company A) uses the capabilities of other companies without being physically tied to those companies. 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 68) AutoNation's analytic software that mines customer data with a goal of enabling the building of automobiles that customers actually want can be categorized as using information systems for which competitive strategy? A) low-cost leadership B) product differentiation C) focus on market niche D) customer intimacy Answer: D 69) The emergence, for Amazon.com, of new competitors in the sphere of online shopping illustrates what disadvantage posed by the use of information systems to achieve competitive advantage? A) E-commerce is affected by the law of diminishing returns. B) Internet technologies are universal, and therefore usable by all companies. C) Internet shopping produces cost transparency.

Emmanuel Opoku

Rowkish+ 47

D) The Internet enables the production or sales of substitute products or services. Answer: B 70) You are consulting for a beverage 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 71) ________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors. Answer: Product differentiation 72) ________ is the ability to offer individually tailored products and services using the same production resources as mass production. Answer: Mass customization 73) ________ are the expenses incurred by a customer or company in lost time and resources when changing from one supplier or system to a competing supplier or system. Answer: Switching costs 74) The ________ highlights the primary or support activities that add a margin of value to a firm's products or services where information systems can best be applied to achieve a competitive advantage. Answer: value chain model Objective: 3.2 75) A(n) ________ activity is one that is directly related to the production and distribution of a firm's products or services. Answer: primary 76) A(n) ________ activity is a part of the organization's infrastructure, human resources, technology, and procurement that makes the delivery of the firm's products or services possible. Answer: Support activities 77) Socio technical changes affecting a firm adopting new information systems requiring organizational change can be considered ________. Answer: strategic transitions 78) The ________ is a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service for a market. Answer: value web

Emmanuel Opoku

Rowkish+ 48

79) A(n) ________ is an activity at which a firm excels as a world-class leader. Answer: core competency 80) A(n) ________ company uses networks to link people, assets, and ideas, enabling it to work with other companies to create products and services without being limited by traditional organizational boundaries or physical locations. Answer: virtual 81) Differentiate between the technical and behavioral definitions of an organization. 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 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. 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. Diff: 2 Page Ref: 79-81 AACSB: Analytic skills CASE: Analysis Objective: 3.1

82) List three organizational factors that can prevent a firm in fully realizing the benefits of a new information system, and provide examples for each. Answer: Features of organizations include the organization's culture, politics, and structure. 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. Diff: 3 Page Ref: 89-92 AACSB: Analytic skills CASE: Synthesis Objective: 3.1

Emmanuel Opoku

Rowkish+ 49

83) You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies could Smalltown Computer exert? Which ones will it have difficulty exercising? Answer: Low-cost leadership: Smalltown Computer may have difficulty competing against the warranty services or computer sales of major national computer manufacturers, such as Dell, but may be able to exercise low-cost leadership in comparison to any other local computer repair stores. Product differentiation: Although many national computer manufacturers sell customized computers to the individual, Smalltown computer may be able to differentiate their product by using superior components and adding more services to their product. Focus on market niche: Smalltown computer could determine a market niche geared to their advantage in being a local store with in-store technology support and assistance. Customer and supplier intimacy: Smalltown computer has an advantage in customer intimacy, in that it can develop relationships with local customers on a face-to-face basis. This advantage could be augmented to offset the low-cost leadership of national manufacturer's such as Dell. Because of much smaller production scales, Smalltown will probably not be able to exercise as much control over suppliers as Dell or other manufacturers. Diff: 3 Page Ref: 92-99 AACSB: Analytic skills CASE: Evaluation Objective: 3.2

84) You are consulting with the owner of Better Bodies, a national chain of gyms. What strategies might Better Bodies use in applying information services to achieve a competitive advantage? Answer: Better Bodies could use computers to monitor and evaluate health and fitness of members and customize workouts in product differentiation strategy. They could use information systems for sales and marketing data research in order to define a niche market that would bring greater profits. They could allow customers to review their health data and add additional information or view statistics to create customer intimacy. If the individual gyms are franchises, then a network could be used for franchisees to share data and research new sales tactics, etc. Diff: 2 Page Ref: 92-99 AACSB: Analytic skills CASE: Synthesis Objective: 3.2

Emmanuel Opoku

Rowkish+ 50

85) The text describes Michael Porter's view of the Internet as somewhat negative. What negative influences does Porter see? Describe several positive influences the Internet has on business. Do these outweigh the negative influences? Answer: Answers will vary. An example of a possible answer is: Porter sees the Internet as creating ever more intense rivalry, through allowing new competitors to enter the market, and forcing competition on price alone, raising the bargaining power of customers, and dampening profits. Positive influences of the Internet would be lowering telecommunications costs, creating new opportunities for building brands and loyal customer bases, lowering costs of globalization. You could also view Porter's negative take on lowering the barrier to entry as a positive for new companies. The Internet's influence being negative or positive depends in part on the point of view from which the influence is being seen. For example, a telephone utility is impacted negatively by the emergence of Internet telephony, whereas other industries may be impacted positively either through the use of this technology or through engaging in Internet telephony as a business. Diff: 2 Page Ref: 96-102 AACSB: Analytic skills CASE: Evaluation Objective: 3.2

86) Value chain analysis is useful at the business level to highlight specific activities in the business where information systems are most likely to have a strategic impact. Discuss this model, identify the activities, and describe how the model can be applied to the concept of information technology. Answer: The value chain model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive positions. Exactly where can it obtain the greatest benefit from strategic information systems? What specific activities can be used to create new products and services, enhance market penetration, lock in customers and suppliers, and lower operational costs? This model views the firm as a series or chain of basic activities that add a margin of value to a firm's products or services. These activities can be categorized as either primary activities or support activities. • Primary activities are most directly related to the production and distribution of the firm's products and services that create value for the customer. Primary activities include: inbound logistics, operations, outbound logistics, sales and marketing, and service. • Support activities make the delivery of the primary activities possible and consist of: organization infrastructure (administration and management), human resources (employee recruiting, hiring, and training, technology (improving products and the production process), and procurement (purchasing input). Diff: 2 Page Ref: 102-103 AACSB: Analytic skills CASE: Analysis Objective: 3.3

Emmanuel Opoku

Rowkish+ 51

87) How is the concept of core competency relevant to Smalltown computer, a local computer repair store that builds custom computers? Give examples. Answer: A core competency is an activity for which a company is a world leader, and from this perspective, Smalltown Computer does not have a core competency, as there are thousands of similar firms with longer track records. However, it might be good business practice for Smalltown Computer to define its core competencies in ways that differentiate its products from those of competitors and enable it to provide superior service or products. In defining a core competency, the business management can then determine ways to enable employees to understand and reach higher levels of quality production and service. For example, Smalltown Computer might define a core competency as being able to advise customers as to the types of system they really need, and Smalltown Computer could engage in knowledge gathering activities to help employees assess customer need. Diff: 2 Page Ref: 105-106 AACSB: Analytic skills CASE: Evaluation Objective: 3.4

88) How is Internet technology useful from a network economics perspective? Give examples. Answer: In network economics, the cost of adding a participant in the network is negligible, while the gain in value is relatively much larger. The Internet itself is an example of a successful implementation of network economicsthe more people participate, the more valuable and essential a commodity it is. If a company were to provide a service through the Internet such as a project management application, the costs to the company of adding another user are small (as the software infrastructure or application is already built), and the more users are signed up the more profit is made. Diff: 2 Page Ref: 106-107 AACSB: Analytic skills CASE: Analysis Objective: 3.4

Emmanuel Opoku

Rowkish+ 52

89) Define and describe a business ecosystem. Give an example of a business ecosystem. Answer: A business ecosystem is a collection of loosely coupled but interdependent industries (suppliers, distributors, technology manufacturers, etc.) that provides related services and products. It is similar to a value web, except that cooperation takes place across many industries rather than many firms. Business ecosystems can be characterized as having one or a few keystone firms that dominate the ecosystem and create the platforms used by other niche firms. Keystone firms in the Microsoft ecosystem include Microsoft and technology producers such as Intel and IBM. Niche firms include thousands of software application firms, software developers, service firms, networking firms, and consulting firms that both support and rely on the Microsoft products. Another example of an business ecosystem is the mobile Internet platform. In this ecosystem there are four industries: device makers (Apple iPhone, RIM BlackBerry, Motorola, LG, and others), wireless telecommunication firms (AT&T, Verizon, T-Mobile, Sprint, and others), independent software applications providers (generally small firms selling games, applications, and ring tones), and Internet service providers (who participate as providers of Internet service to the mobile platform). Diff: 2 Page Ref: 107-108 AACSB: Analytic skills CASE: Analysis Objective: 3.3

90) Describe in detail the major factors to determine when performing a strategic systems analysis. Answer: One major factor is the structure of the industry the firm is in. For example, what competitive forces are at work in the industry, and what is the basis for competition? What is the nature and direction of change in the industry, and how does the industry use IT. A second major factor is determining the firm and industry value chains. For example, how is the company creating value for the customer? Are best practices being used and core competencies leveraged? Is the industry supply chain or customer base changing, and what will the effect be? Can the firm benefit from strategic partnerships or value webs? And where in the value chain will information systems provide the greatest value to the firm. The third major factor to consider is has the firm aligned IT with its business strategy and goals. Have these goals been correctly stated or defined? Is IT improving the right business processes and activities in accordance with the firm's goals? Are we using the right metrics to measure progress? Diff: 3 Page Ref: 110 AACSB: Analytic skills CASE: Analysis Objective: 3.5

Emmanuel Opoku

Rowkish+ 53

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 4 Ethical and Social Issues in Information Systems 1) Advances in data storage have made routine violation of individual privacy more difficult. Answer: FALSE Diff: 1 Page Ref: 126 AACSB: Use of information technology CASE: Content Objective: 4.1 2) Professionals take on special rights and obligations because of their special claims to knowledge, wisdom, and respect. Answer: TRUE Diff: 1 Page Ref: 130-131 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.2 3) Privacy is the right to be left alone when you want to be, without surveillance or interference from other individuals or organizations. Answer: TRUE Diff: 1 Page Ref: 131 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 4) Web sites use "cookies" in order to obtain the names and addresses of their visitors. Answer: FALSE Diff: 2 Page Ref: 134 AACSB: Use of information technology CASE: Content Objective: 4.3 5) A cookie is a small file containing information about you and your Web activities that is deposited on your hard disk by a Web site. Answer: TRUE Diff: 2 Page Ref: 134 AACSB: Use of information technology CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 54

6) Spyware is software that comes hidden in downloaded applications and can track your online movements. Answer: TRUE Diff: 2 Page Ref: 135 AACSB: Use of information technology CASE: Content Objective: 4.3

7) Most Internet businesses do very little to protect the privacy of their customers. Answer: TRUE Diff: 2 Page Ref: 136 AACSB: Use of information technology CASE: Content Objective: 4.3 8) P3P encrypts or scrambles e-mail or data so that it cannot be read illicitly. Answer: FALSE Diff: 2 Page Ref: 137 AACSB: Use of information technology CASE: Content Objective: 4.3 9) Protection for trade secrets is enforced at the federal level. Answer: FALSE Diff: 3 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 10) Copyright is the legal protection afforded intellectual property, such as a song, book, or video game. Answer: TRUE Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 11) The Copyright Office began registering software programs in the 1990s. Answer: FALSE Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 55

12) The drawback to copyright protection is that the underlying ideas behind the work are not protected, only their manifestation in a product. Answer: TRUE Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 13) According to the courts, in the creation of software, unique concepts, general functional features, and even colors are protectable by copyright law. Answer: FALSE Diff: 2 Page Ref: 138-139 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

14) The key concepts in patent law's determination of nonobviousness are originality, novelty, and value. Answer: FALSE Diff: 3 Page Ref: 139 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 15) Despite the passage of several laws defining and addressing computer crime, accessing a computer system without authorization is not yet a federal crime. Answer: FALSE Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Content Objective: 4.4 16) Spam is unsolicited e-mail. Answer: TRUE Diff: 1 Page Ref: 146 AACSB: Use of information technology CASE: Content Objective: 4.4 17) The European Parliament has passed a ban on unsolicited commercial messaging. Answer: TRUE Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Content Objective: 4.4

Emmanuel Opoku

Rowkish+ 56

18) RSI is unavoidable for a computer keyboard worker. Answer: FALSE Diff: 1 Page Ref: 150 AACSB: Use of information technology CASE: Content Objective: 4.4 19) Technostress is a computer-related malady whose symptoms include fatigue. Answer: TRUE Diff: 2 Page Ref: 150 AACSB: Use of information technology CASE: Content Objective: 4.4 20) Radiation from computer display screens has been proved to be a factor in CVS. Answer: TRUE Diff: 2 Page Ref: 150 AACSB: Use of information technology CASE: Content Objective: 4.4

21) Information systems A) pose traditional ethical situations in new manners. B) raise new ethical questions. C) raise the same ethical questions created by the industrial revolution. D) raise ethical questions primarily related to information rights and obligations. Answer: B Diff: 2 Page Ref: 123 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.1 22) The introduction of new information technology has a A) dampening effect on the discourse of business ethics. B) ripple effect raising new ethical, social, and political issues. C) beneficial effect for society as a whole, while raising dilemmas for consumers. D) waterfall effect in raising ever more complex ethical issues. Answer: B Diff: 2 Page Ref: 124 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.1

Emmanuel Opoku

Rowkish+ 57

23) In the information age, the obligations that individuals and organizations have concerning rights to intellectual property fall within the moral dimension of A) property rights and obligations. B) system quality. C) accountability and control. D) information rights and obligations. Answer: A Diff: 1 Page Ref: 125 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.1 24) In the information age, the obligations that individuals and organizations have regarding the preservation of existing values and institutions fall within the moral dimension of A) family and home. B) property rights and obligations. C) system quality. D) quality of life. Answer: D Diff: 2 Page Ref: 125 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.1

25) The four key technical trends responsible for current ethical stresses related to information technology are (1) doubling of computer power every 18 months, (2) data analysis advances, (3) declining data storage costs, and (4) ________. A) advances in wireless networking B) international standards for data protection C) networking advances and the Internet D) increased ease in file sharing and copying Answer: C Diff: 1 Page Ref: 126 AACSB: Reflective thinking skills CASE: Content Objective: 4.1 26) Advances in data storage techniques and rapidly declining storage costs have A) been accompanied by relevant federal statutes protecting personal data. B) made universal access possible. C) doubled every 18 months. D) made routine violations of privacy cheap and effective. Answer: D Diff: 2 Page Ref: 126 AACSB: Reflective thinking skills CASE: Content Objective: 4.1

Emmanuel Opoku

Rowkish+ 58

27) The use of computers to combine data from multiple sources and create electronic dossiers of detailed information on individuals is called A) profiling. B) phishing. C) spamming. D) targeting. Answer: A Diff: 1 Page Ref: 126 AACSB: Reflective thinking skills CASE: Content Objective: 4.1 28) NORA is a A) profiling technology used by the EU. B) federal privacy law protecting networked data C) new data analysis technology that finds hidden connections between data in disparate sources. D) sentencing guideline adopted in 1987 mandating stiff sentences on business executives. Answer: C Diff: 2 Page Ref: 127 AACSB: Reflective thinking skills CASE: Content Objective: 4.1

29) Which of the five moral dimensions of the information age do the central business activities of ChoicePoint raise? A) property rights and obligations B) system quality C) accountability and control D) information rights and obligations Answer: D Diff: 3 Page Ref: 127 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.1 30) Accepting the potential costs, duties, and obligations for the decisions you make is referred to as A) responsibility. B) accountability. C) liability. D) due process. Answer: A Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Content Objective: 4.2

Emmanuel Opoku

Rowkish+ 59

31) The feature of political systems in which a body of laws is in place that permits individuals to recover the damages done to them by other actors, systems, or organizations is referred to as A) accountability. B) responsibility. C) due process. D) liability. Answer: D Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Content Objective: 4.2 32) The feature of social institutions that means mechanisms are in place to determine responsibility for an action is called A) due process. B) accountability. C) the courts of appeal. D) the judicial system. Answer: B Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Content Objective: 4.2

33) The process in law-governed societies in which laws are known and understood and there is an ability to appeal to higher authorities to ensure that the laws are applied correctly is called A) liability. B) due process. C) the courts of appeal. D) accountability. Answer: B Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Content Objective: 4.2 34) Which of the following is not one of the five steps discussed in the chapter as a process for analyzing an ethical issue? A) assign responsibility B) identify the stakeholders C) identify the options you can reasonably take D) identify and clearly describe the facts Answer: A Diff: 2 Page Ref: 129-130 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.2

Emmanuel Opoku

Rowkish+ 60

35) A colleague of yours frequently takes for his own personal use small amounts of office supplies, noting that the loss to the company is minimal. You counter that if everyone were to take the office supplies, the loss would no longer be minimal. Your rationale expresses which historical ethical principle? A) Kant's Categorical Imperative B) The Golden Rule C) The Risk Aversion Principle D) The "No free lunch" rule Answer: A Diff: 3 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.2 36) A classic ethical dilemma is the hypothetical case of a man stealing from a grocery store in order to feed his starving family. If you used the Utilitarian Principle to evaluate this situation, you might argue that stealing the food is A) acceptable, because the grocer suffers the least harm. B) acceptable, because the higher value is the survival of the family. C) wrong, because the man would not want the grocery to steal from him. D) wrong, because if everyone were to do this, the concept of personal property is defeated. Answer: B Diff: 2 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.2

37) Immanuel Kant's Categorical Imperative 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 an action is not right for everyone to take, it is not right for anyone to take. Answer: D Diff: 2 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.2

Emmanuel Opoku

Rowkish+ 61

38) 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) everything is owned by someone else, and that the creator wants compensation for this work. Answer: D Diff: 2 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.2 39) The ethical rules discussed in the textbook A) are based on political philosophies. B) cannot be guides to actions. C) cannot be applied to many e-commerce situations. D) do not allow for competing values. Answer: B Diff: 3 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Content Objective: 4.2 40) Which U.S. act restricts the information the federal government can collect and regulates what they can do with the information? A) Privacy Act of 1974 B) Gramm-Leach-Bliley Act of 1999 C) Freedom of Information Act D) HIPAA of 1996 Answer: A Diff: 2 Page Ref: 132 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

41) FIP principles are based on the notion of the 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 Diff: 2 Page Ref: 132 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 62

42) The Federal Trade Commission FIP principle of Notice/Awareness states that A) customers must be allowed to choose how their information will be used for secondary purposes other than the supporting transaction. B) data collectors must take responsible steps to assure that consumer information is accurate and secure from unauthorized use. C) there is a mechanism in place to enforce FIP principles. D) Web sites must disclose their information practices before collecting data. Answer: D Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 43) 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 Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 44) European privacy protection is ________ than in the United States. A) less far-reaching B) less liable to laws C) much less stringent D) much more stringent Answer: D Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

45) U.S. businesses are allowed to use personal data from EU countries if they A) have informed consent. B) create a safe harbor. C) develop equivalent privacy protection policies. D) make their privacy protection policies publicly available. Answer: C Diff: 2 Page Ref: 134 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 63

46) When a cookie is created during a Web site visit, it is stored A) on the Web site computer. B) on the visitor's computer. C) on the ISP's computer. D) in a Web directory. Answer: B Diff: 2 Page Ref: 134 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 47) The Online Privacy Alliance A) encourages self-regulation to develop a set of privacy guidelines for its members. B) protects user privacy during interactions with Web sites. C) has established technical guidelines for ensuring privacy. D) is a government agency regulating the use of customer information. Answer: A Diff: 2 Page Ref: 136 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 48) A(n) ________ model of informed consent permits the collection of personal information until the consumer specifically requests that the data not be collected. A) opt-in B) opt-out C) P3P D) PGP Answer: B Diff: 2 Page Ref: 136 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

49) P3P stands for A) Privacy for Personal Protection. B) Platform for Privacy Preferences. C) Personal Privacy Policy. D) Personal Privacy Protection. Answer: B Diff: 2 Page Ref: 137 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 64

50) The P3P standard is concerned with A) controlling pop-up ads based on user profiles and preventing ads from collecting or sending information. B) allowing users to surf the Web anonymously. C) scrambling data so that it can't be read. D) blocking or limiting cookies. Answer: D Diff: 2 Page Ref: 137 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 51) The limitation of trade secret protection for software is that it is difficult to prevent the ideas in the work from falling into the public domain when A) the courts become involved. B) hackers are able to break into the source code. C) the software is widely distributed. D) a new version of the software is released. Answer: C Diff: 2 Page Ref: 138 AACSB: Analytic skills CASE: Analysis Objective: 4.3 52) Intellectual property can best be described as A) intangible property created by individuals or corporations. B) unique creative work or ideas. C) tangible or intangible property created from a unique idea. D) the expression of an intangible idea. Answer: A Diff: 3 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

53) What legal mechanism protects the owners of intellectual property from having their work copied by others? A) patent protection B) intellectual property law C) copyright law D) Fair Use Doctrine Answer: C Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 65

54) "Look and feel" copyright infringement lawsuits are concerned with A) the distinction between tangible and intangible ideas. B) the distinction between an idea and its expression. C) using the graphical elements of another product. D) using the creative elements of another product. Answer: B Diff: 2 Page Ref: 138 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 55) The strength of patent protection is that it A) puts the strength of law behind copyright. B) allows protection from Internet theft of ideas put forth publicly. C) is easy to define. D) grants a monopoly on underlying concepts and ideas. Answer: D Diff: 3 Page Ref: 139 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 56) One of the difficulties of patent protection is A) that only the underlying ideas are protected. B) digital media cannot be patented. C) preventing the ideas from falling into public domain. D) the years of waiting to receive it. Answer: D Diff: 3 Page Ref: 139 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

57) Which of the following adjusts copyright laws to the Internet age by making it illegal to make, distribute, or use devices that 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 Diff: 3 Page Ref: 140 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 66

58) In general, it is very difficult to hold software producers liable for their software products when those products are considered to be A) part of a machine. B) similar to books. C) services. D) artistic expressions. Answer: B Diff: 2 Page Ref: 141 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 59) ________ are not held liable for the messages they transmit. A) Regulated common carriers B) Private individuals C) Organizations and businesses D) Elected officials Answer: A Diff: 2 Page Ref: 141 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 60) It is not feasible for companies to produce error-free software because A) any programming code is susceptible to error. B) it is too expensive create perfect software. C) errors can be introduced in the maintenance stage of development. D) any software of any complexity will have errors. Answer: B Diff: 2 Page Ref: 141-142 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

61) The most common source of business system failure is A) software bugs. B) software errors. C) hardware or facilities failures. D) data quality. Answer: D Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

Emmanuel Opoku

Rowkish+ 67

62) Which of the following is not one of the three principal sources of poor system performance? A) software bugs and errors B) hardware or facility failures caused by natural or other causes. C) insufficient integration with external systems. D) poor input data quality. Answer: C Diff: 2 Page Ref: 142 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 63) The "do anything anywhere" computing environment can A) make work environments much more pleasant. B) create economies of efficiency. C) centralize power at corporate headquarters. D) blur the traditional boundaries between work and family time. Answer: D Diff: 2 Page Ref: 143 AACSB: Reflective thinking skills CASE: Content Objective: 4.4 64) The practice of spamming has been growing because A) telephone solicitation is no longer legal. B) it is good advertising practice and brings in many new customers. C) it helps pay for the Internet. D) it is so inexpensive and can reach so many people. Answer: D Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Content Objective: 4.4

65) The U.S. CAN-SPAM Act of 2003 A) makes spamming illegal. B) requires spammers to identify themselves. C) has dramatically cut down spamming. D) does not override state anti-spamming laws. Answer: B Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Content Objective: 4.4

Emmanuel Opoku

Rowkish+ 68

66) Which of the five moral dimensions of the information age does spamming raise? A) quality of life B) system quality C) accountability and control D) information rights and obligations Answer: A Diff: 2 Page Ref: 146 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.4 67) Re-designing 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 Diff: 2 Page Ref: 146-147 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.4 68) The term "________ divide" refers to large disparities in access to computers and the Internet among different social groups and different locations. A) computer B) technology C) digital D) electronic Answer: C Diff: 1 Page Ref: 147 AACSB: Reflective thinking skills CASE: Content Objective: 4.4

69) CVS refers to A) eyestrain related to computer display screen use. B) carpal vision syndrome. C) wrist injuries brought about by incorrect hand position when using a keyboard. D) stress induced by technology. Answer: A Diff: 2 Page Ref: 150 AACSB: Reflective thinking skills CASE: Content Objective: 4.4

Emmanuel Opoku

Rowkish+ 69

70) ________ can be induced by tens of thousands of repetitions under low-impact loads. A) CTS B) CVS C) RSI D) technostress Answer: C Diff: 2 Page Ref: 150 AACSB: Reflective thinking skills CASE: Content Objective: 4.4 71) The principles of right and wrong that can be used by individuals acting as free moral agents to make choices to guide their behavior are called ________. Answer: ethics Diff: 1 Page Ref: 123 AACSB: Reflective thinking skills CASE: Content Objective: 4.1 72) The liberties that individuals and organizations have with respect to data pertaining to themselves describe the moral dimension of ________. Answer: information rights Diff: 2 Page Ref: 124 AACSB: Reflective thinking skills CASE: Content Objective: 4.1 73) Accepting the potential costs, duties, and obligations for the decisions one makes is called ________. Answer: responsibility Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Content Objective: 4.2

74) ________ refers to the existence of laws that permit individuals to recover damages done to them by other actors, systems, or organizations. Answer: Liability Diff: 2 Page Ref: 129 AACSB: Reflective thinking skills CASE: Content Objective: 4.2

Emmanuel Opoku

Rowkish+ 70

75) The ethical principle called ________ states that one should take the action that produces the least harm or incurs the least cost. Answer: the Risk Aversion Principle Diff: 3 Page Ref: 130 AACSB: Reflective thinking skills CASE: Content Objective: 4.2 76) ________ is permission given with knowledge of all the facts needed to make a rational decision. Answer: Informed consent Diff: 2 Page Ref: 133 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 77) A(n) ________ is a tiny graphic file embedded in e-mail messages and Web pages that is designed to monitor online Internet user behavior. Answer: Web bug Diff: 2 Page Ref: 135 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 78) The ________ model prohibits an organization from collecting any personal information unless the individual specifically takes action to approve information collection and use. Answer: opt-in Diff: 2 Page Ref: 136 AACSB: Reflective thinking skills CASE: Content Objective: 4.3 79) A(n) ________ grants the owner an exclusive monopoly on the ideas behind an invention for 20 years. Answer: patent Diff: 2 Page Ref: 139 AACSB: Reflective thinking skills CASE: Content Objective: 4.3

80) The commission of acts involving the computer that may not be illegal but are considered unethical is called ________. Answer: computer abuse Diff: 2 Page Ref: 146 AACSB: Reflective thinking skills CASE: Content Objective: 4.4

Emmanuel Opoku

Rowkish+ 71

81) List and describe the five moral dimensions that are involved in political, social, and ethical issues. Which do you think will be 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. 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. Diff: 2 Page Ref: 124-125 AACSB: Analytic skills CASE: Evaluation Objective: 4.1 82) Discuss at least three key technology trends that raise ethical issues. Give an example of an ethical or moral impact connected to each one. 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; and (5) 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? Diff: 2 Page Ref: 125-128 AACSB: Analytic skills CASE: Synthesis Objective: 4.1

Emmanuel Opoku

Rowkish+ 72

83) What are the steps in conducting an ethical analysis? Answer: The steps are: (1) Identify and describe clearly the facts; (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. Diff: 1 Page Ref: 129-130 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.2 84) List and define the six ethical principles discussed in your text. Answer: The six ethical principles are the Golden Rule, Kant's Categorical Imperative, Descartes' rule of change (slippery slope), the Utilitarian Principle, the Risk Aversion Principle, and the "no free lunch" rule. The Golden Rule proposes: do unto others as you would have them do unto you. Immanuel Kant's Categorical Imperative proposes, if an action is not right for everyone to take, it is not right for anyone. Descartes' rule of change 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 ethical 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. Diff: 2 Page Ref: 130 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.2 85) Do you believe that professional groups should be allowed to assign their own professional codes of conduct and police themselves from within? Why or why not? Answer: This is an opinion question, but anyone who aspires to management will consider himself or herself a professional and will need to have a clear understanding as to how he or she feels about this matter. With the recent scandals in large business firms, which have devastated our economy, there is likely to be a cry for legally sanctioned codes and outside regulatory agencies. Diff: 2 Page Ref: 130-131 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation Objective: 4.2

Emmanuel Opoku

Rowkish+ 73

86) What are the major issues concerning privacy in the information age? Do you believe the need for homeland security should overrule some of the personal privacy and information rights we have previously taken for granted? Why or why not? Answer: One answer might be that we should depend upon the Federal Trade Commission Fair Information Practice Principles and that as long as these principles are not ignored or overset, personal privacy does not conflict with homeland security. This is a weak argument. Other issues involve online privacy, employee monitoring, tradeoffs between security and privacy and good business results versus privacy. Diff: 2 Page Ref: 125-128, 131-136 AACSB: Ethical understanding and reasoning abilities CASE: Evaluation Objective: 4.3

87) How does a cookie work? Answer: A cookie works as follows: A user opens a Web browser and selects a site to visit. The user's computer sends a request for information to the computer running at the Web site. The Web site computer is called the server, since it allows the user's computer to display the Web site. At the same time it 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 Web site, the server running the site retrieves the cookie to help identify the user. Diff: 2 Page Ref: 134-135 AACSB: Analytic skills CASE: Analysis Objective: 4.3 88) Define the basic concepts of responsibility, accountability, and liability as applied to ethical decisions. How are these concepts related? Answer: Responsibility is the first key element of ethical action. Responsibility means that an individual, group, or organization accepts the potential costs, duties, and obligations for decisions made. Accountability is a feature of systems and social institutions. It means that mechanisms are in place to determine who took responsible action; i.e., who is responsible for the action. Liability is a feature of political systems in which a body of law is in place that permits individuals to recover the damages done to them by others. These concepts are related as follows: I will assume the blame or benefit for the actions I take (responsibility); this blame or benefit accrues to me through the requirement that I be able to explain why I have taken the actions I have (accountability) for actions traceable to me by defined mechanisms in the organization, and if those actions result in hard to another, I will be held by law to reparations for those actions (liability). Diff: 3 Page Ref: 129 AACSB: Ethical understanding and reasoning abilities CASE: Analysis Objective: 4.2

Emmanuel Opoku

Rowkish+ 74

89) What do you consider to be the primary ethical, social, and political issues regarding information system quality? Answer: The central quality-related ethical issue that information systems raise is at what point should I release software or services for consumption by others? At what point can I conclude that my software or service achieves an economically and technologically adequate level of quality? What am I obligated to know about the quality of my software, its procedures for testing, and its operational characteristics? The leading quality-related social issue deals with expectations: As a society, do we want to encourage people to believe that systems are infallible, that data errors are impossible? By heightening awareness of system failure, do we inhibit the development of all systems, which in the end contribute to social well-being? The leading quality-related political issue concerns the laws of responsibility and accountability, what they should be, and how they should be applied. Diff: 2 Page Ref: 141-142 AACSB: Ethical understanding and reasoning abilities CASE: Synthesis Objective: 4.4

90) How does the use of electronic voting machines act as a "double-edged sword?" What moral dimensions are raised by this use of information technology? Answer: Electronic voting machines can be seen as beneficial by making voting easy to accomplish and tabulate. However, it may be easier to tamper with electronic voting machines than with countable paper ballots. In terms of information rights, it seems possible that methods could be set up to determine how an individual has voted and to store and disseminate this knowledge. Manufacturers of voting machines claim property rights to the voting software, which means that if the software is protected from inspection, there is no regulation in how the software operates or how accurate it is. In terms of accountability and control, if an electronic voting system malfunctions, will it be the responsibility of the government, of the company manufacturing the machines or software, or the programmers who programmed the software? The dimension of system quality raises questions of how the level of accuracy of the machines is to be judged and what level is acceptable? In terms of quality of life, while it may make voting easier and quicker, does the vulnerability to abuse of these systems pose a threat to the democratic principle of one person, one vote? Diff: 3 Page Ref: 122, 124-125 AACSB: Ethical understanding and reasoning abilities CASE: Synthesis Objective: 4.1

Emmanuel Opoku

Rowkish+ 75

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 5 IT Infrastructure and Emerging Technologies 1) IT infrastructure technology is purely a set of physical devices and software applications that are required to operate the entire enterprise. Answer: FALSE Diff: 1 Page Ref: 163 AACSB: Use of information technology CASE: Content Objective: 5.1 2) Client/server computing is a widely used form of centralized processing. Answer: FALSE Diff: 2 Page Ref: 166 AACSB: Use of information technology CASE: Content Objective: 5.1 3) In two-tiered client/server architecture, the processing is split between two types of servers. Answer: FALSE Diff: 3 Page Ref: 166-167 AACSB: Use of information technology CASE: Content Objective: 5.1 4) N-tier computing is a multi-tier, load-balancing scheme for Web-based applications in which significant parts of Web site content, logic, and processing are performed by smaller, less expensive servers located nearby the user. Answer: TRUE Diff: 3 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.1 5) Application server software is responsible for locating and managing stored Web pages. Answer: FALSE Diff: 2 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.1

Emmanuel Opoku

Rowkish+ 76

6) An application server may reside on the same computer as a Web server or on its own dedicated computer. Answer: TRUE Diff: 2 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.1

7) Enterprise integration requires software that can link disparate applications and enable data to flow freely among different parts of the business. Answer: TRUE Diff: 2 Page Ref: 167-168 AACSB: Use of information technology CASE: Content Objective: 5.2 8) The mainframe market has grown steadily over the past decade. Answer: TRUE Diff: 2 Page Ref: 176 AACSB: Use of information technology CASE: Content Objective: 5.2 9) The operating system is used to manage the computer's activities. Answer: TRUE Diff: 1 Page Ref: 176-177 AACSB: Use of information technology CASE: Content Objective: 5.1 10) SANs create large central pools of storage that can be rapidly accessed and shared by multiple servers. Answer: TRUE Diff: 2 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.1 11) Like an ASP, a Web hosting service provides shared applications to subscribed users, but does this through a Web portal. Answer: FALSE Diff: 2 Page Ref: 178 AACSB: Use of information technology CASE: Content Objective: 5.1

Emmanuel Opoku

Rowkish+ 77

12) Autonomic computing is implemented primarily with enterprise or ISP servers. Answer: FALSE Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3

13) Java software is designed to run on any computer or computing device, regardless of the specific microprocessor or operating system it uses. Answer: TRUE Diff: 1 Page Ref: 185-186 AACSB: Use of information technology CASE: Content Objective: 5.4 14) Web services can exchange information between two different systems regardless of the operating system or programming languages on which the systems are based. Answer: TRUE Diff: 2 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.4 15) Whereas XML is limited to describing how data should be presented in the form of Web pages, HTML can perform presentation, communication, and data storage tasks. Answer: FALSE Diff: 1 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.4 16) Hypertext markup language specifies how text, graphics, video, and sound are placed on a Web page document. Answer: TRUE Diff: 1 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.4 17) The collection of Web services that are used to build a firm's software systems constitutes what is known as a service-oriented architecture. Answer: TRUE Diff: 2 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 78

18) Today most business firms have discontinued operating their legacy systems, replacing these with inexpensive Web services and hosted software. Answer: FALSE Diff: 2 Page Ref: 189 AACSB: Use of information technology CASE: Content Objective: 5.4

19) Scalability refers to the ability of a computer, product, or system to expand to serve a large number of users without breaking down. Answer: TRUE Diff: 1 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.5 20) TCO refers to the original cost of purchased technology: both hardware and software. Answer: FALSE Diff: 1 Page Ref: 196 AACSB: Use of information technology CASE: Content Objective: 5.5 21) Which type of infrastructure services provides voice and video connectivity to employees, customers, and suppliers? A) networking B) telephone C) VOIP D) telecommunications Answer: D Diff: 1 Page Ref: 164 AACSB: Use of information technology CASE: Content Objective: 5.1 22) Which of the following is NOT an IT infrastructure service component? A) operating system software B) computing platforms to provide a coherent digital environment C) physical facility management to manage the facilities housing physical components D) IT management services to plan and develop the infrastructure and provide project management Answer: A Diff: 1 Page Ref: 163-164 AACSB: Use of information technology CASE: Content Objective: 5.1

Emmanuel Opoku

Rowkish+ 79

23) 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) 4, 5, 3, 2, 1 B) 5, 4, 2, 3, 1 C) 4, 5, 2, 3, 1 D) 5, 4, 2, 1, 3 Answer: A Diff: 2 Page Ref: 164-168 AACSB: Analytic skills CASE: Synthesis Objective: 5.2

24) The introduction of the minicomputer: A) allowed computers to be customized to the specific needs of departments or business units. B) enabled decentralized computing. C) offered new, powerful machines at lower prices than mainframes. D) all of the above. Answer: D Diff: 2 Page Ref: 166 AACSB: Use of information technology CASE: Content Objective: 5.2 25) In a multi-tiered network: A) the work of the entire network is centralized. B) the work of the entire network is balanced over several levels of servers. C) processing is split between clients and servers. D) processing is handled by multiple, geographically remote clients. Answer: B Diff: 1 Page Ref: 167 AACSB: Use of information technology CASE: Content Objective: 5.2 26) 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) multi-tiered client/server architecture. D) two-tiered client/server architecture. Answer: D Diff: 1 Page Ref: 166-167 AACSB: Use of information technology CASE: Content Objective: 5.2

Emmanuel Opoku

Rowkish+ 80

27) Interpretations of Moore's law assert that: A) computing power doubles every 18 months. B) transistors decrease in size 50% every two years. C) data storage costs decrease by 50% every 18 months. D) none of the above. Answer: A Diff: 2 Page Ref: 168-170 AACSB: Use of information technology CASE: Content Objective: 5.2

28) Today's nanotechnology-produced computer transistors are roughly equivalent in size to: A) the width of a fingernail. B) a human hair. C) a virus. D) an atom. Answer: C Diff: 2 Page Ref: 171 AACSB: Reflective thinking skills CASE: Content Objective: 5.2 29) Which of the following factors provides an understanding of why computing resources today are ever more available than in previous decades? A) network economics B) law of mass digital storage and Moore's law C) declining communications costs, universal standards, and the Internet D) all of the above Answer: D Diff: 2 Page Ref: 168-174 AACSB: Use of information technology CASE: Content Objective: 5.5 30) Specifications that establish the compatibility of products and the ability to communicate in a network are called A) network standards. B) telecommunications standards. C) technology standards. D) Internet standards. Answer: C Diff: 2 Page Ref: 174 AACSB: Use of information technology CASE: Content Objective: 5.1

Emmanuel Opoku

Rowkish+ 81

31) ________ unleash powerful economies of scale and result in declines in manufactured computer products. A) Internet and web technologies B) Technology standards C) Linux and open-source software D) Client/server technologies Answer: B Diff: 2 Page Ref: 174 AACSB: Use of information technology CASE: Content Objective: 5.2

32) The multitasking, multi-user, operating system developed by Bell Laboratories that operates on a wide variety of computing platforms is A) Unix. B) Linux. C) OS X. D) COBOL. Answer: A Diff: 3 Page Ref: 174 AACSB: Use of information technology CASE: Content Objective: 5.2 33) The network standard for connecting desktop computers into local area networks that enabled the widespread adoption of client/server computing and local area networks and further stimulated the adoption of personal computers is A) TCP/IP B) COBOL C) Ethernet D) ASCII Answer: C Diff: 2 Page Ref: 174 AACSB: Use of information technology CASE: Content Objective: 5.2 34) Software that manages the resources of the computer is called A) operating system software. B) application software. C) data management software. D) network software. Answer: A Diff: 1 Page Ref: 176-177 AACSB: Use of information technology CASE: Content Objective: 5.1

Emmanuel Opoku

Rowkish+ 82

35) A SAN is a ________ network. A) server area B) storage area C) scalable architecture D) service-oriented architecture Answer: B Diff: 1 Page Ref: 177 AACSB: Use of information technology CASE: Content Objective: 5.1

36) The leading networking hardware providers include A) Dell, HP/Compaq, and IBM. B) Cisco, Lucent, and Nortel. C) Seagate, Maxtor, and Western Digital. D) IBM, Oracle, and Sun. Answer: B Diff: 1 Page Ref: 177 AACSB: Use of information technology CASE: Content Objective: 5.1 37) As referred to in the text, legacy systems are A) traditional mainframe-based business information systems. B) electronic spreadsheets used on a PC. C) any pre-1990 Wintel systems. D) systems found on older ASPs. Answer: A Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.1 38) Legacy systems are still used because they A) can only be run on the older mainframe computers. B) are too expensive to redesign. C) integrate well using new Web services technologies. D) contain valuable data that would be lost during redesign. Answer: B Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.1

Emmanuel Opoku

Rowkish+ 83

39) Connecting geographically remote computers in a single network to create a "virtual supercomputer" is called A) co-location. B) edge computing. C) grid computing. D) utility computing. Answer: C Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.3

40) Which of the following is NOT an example of the new mobile digital computing platforms? A) netbooks B) digital e-book readers C) cell phones D) laptops Answer: D Diff: 1 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.3 41) The business case for using grid computing involves all of the following EXCEPT A) cost savings. B) increased accuracy. C) speed of computation. D) agility. Answer: B Diff: 2 Page Ref: 179-180 AACSB: Analytic skills CASE: Analysis Objective: 5.3 42) Which type of computing refers to firms purchasing computing power from remote providers and paying only for the computing power they use? A) on-demand B) grid C) edge D) autonomic Answer: A Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3

Emmanuel Opoku

Rowkish+ 84

43) Which of the following does grid computing utilize to create enormous supercomputing power? A) massive unused data centers B) underutilized mainframe computers C) networked computers with idle resources D) networks with low usage Answer: C Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3

44) An example of autonomic computing is A) spyware protection software that runs and updates itself automatically. B) software programmed to run on any hardware platform. C) cell phones taking on the functions of handheld computers. D) programming languages that allow non-programmers to create custom applications. Answer: A Diff: 2 Page Ref: 181 AACSB: Analytic skills CASE: Analysis Objective: 5.3 45) An industry-wide effort to develop systems that can configure, optimize, tune, and heal themselves when broken, and protect themselves from outside intruders and self-destruction is called A) grid computing. B) utility computing. C) virtualization D) autonomic computing. Answer: D Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3

Emmanuel Opoku

Rowkish+ 85

46) 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 is called A) cloud computing. B) autonomic computing. C) virtualization. D) multicore processing. Answer: C Diff: 2 Page Ref: 184 AACSB: Use of information technology CASE: Content Objective: 5.3 47) 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 Diff: 1 Page Ref: 184 AACSB: Use of information technology CASE: Content Objective: 5.4

48) 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 Diff: 2 Page Ref: 185 AACSB: Use of information technology CASE: Content Objective: 5.4 49) Which of the following statements about Linux is NOT true? A) It plays a major role in the back office running local area networks. B) It is available in free versions downloadable from the Internet. C) It has garnered 80 percent of the server operating system market. D) Linux applications are embedded in cell phones, smartphones, netbooks, and other handheld devices. Answer: C Diff: 2 Page Ref: 185 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 86

50) Which of the following is a technique used to allow users to interact with a Web page without having to wait for the Web server to reload the Web page? A) UDDI B) widgets C) Ajax D) Java Answer: C Diff: 2 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.4 51) A software tool with a graphical user interface for displaying Web pages and for accessing the Web and other Internet resources is called a: A) JVM. B) Web browser. C) FTP client. D) All of the above. Answer: B Diff: 1 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.4

52) Sets of loosely coupled software components that exchange information with each other using standard Web communication standards and languages are referred to as A) Web services. B) EAI software. C) SOA. D) SOAP. Answer: A Diff: 2 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.4 53) Running a Java program on a computer requires A) a Java Virtual Machine to be installed on the computer. B) a Java Virtual Machine to be installed on the server hosting the Java applet. C) a miniature program to be downloaded to the user's computer. D) no specialized software, as Java is platform-independent. Answer: A Diff: 2 Page Ref: 186 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 87

54) What is the foundation technology for Web services? A) XML B) HTML C) SOAP D) UDDI Answer: A Diff: 2 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.4 55) A set of self-contained services that communicate with each other to create a working software application is called: A) Web services. B) EAI software. C) SOA. D) SOAP. Answer: C Diff: 2 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.4

56) Which of the following is an example of an SOA environment? A) Amazon.com's operation of hundreds of services, such as billing or customer interface, delivered by different application servers B) E*Trade's use of lower-cost Linux servers that delivered increased computer performance C) Thermos's use of hosted Oracle systems software running on Oracle's computers D) None of the above Answer: A Diff: 2 Page Ref: 187-188 AACSB: Analytic skills CASE: Analysis Objective: 5.4 57) The small software programs that can be added to Web pages or placed on the desktop to provide additional functionality are referred to as A) Web services. B) applets. C) widgets. D) mashups. Answer: C Diff: 2 Page Ref: 189 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 88

58) Software applications that are based on combining different online software applications are called A) integrated software. B) Ajax. C) mashups. D) virtual software. Answer: C Diff: 1 Page Ref: 189 AACSB: Use of information technology CASE: Content Objective: 5.4 59) Your firm needs to implement electronic timesheet software and needs to keep within a small budget. Which of the following would be the most costly method of implementing this new software? A) purchasing a software package B) programming the new software in-house C) leasing the software over the Internet D) outsourcing the software programming to an overseas vendor Answer: B Diff: 2 Page Ref: 189-191 AACSB: Analytic skills CASE: Analysis Objective: 5.4

60) 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 Diff: 1 Page Ref: 190 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 89

61) A formal contract between customers and their service providers that outlines the specific responsibilities of the service provider and to the customer is called a(n) A) SOA B) SLA C) TCO D) RFQ Answer: B Diff: 1 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 62) SaaS refers to A) supplying online access over networks to storage devices and storage area network technology. B) managing combinations of applications, networks, systems, storage, and security as well as providing Web site and systems performance monitoring to subscribers over the Internet. C) hosting and managing access to software applications delivered over the Internet to clients on a subscription basis. D) none of the above. Answer: C Diff: 3 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4 63) 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 Diff: 1 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 90

64) Which of the following is not a challenge being faced by Salesforce.com, as discussed in the chapter case? A) increased competition from traditional industry leaders such as Microsoft and SAP B) continuing to differentiate its product and develop complementary new products and services C) maintaining 24/7 availability for clients D) moving into a more scalable, on-demand environment Answer: D Diff: 2 Page Ref: 192 AACSB: Use of information technology CASE: Content Objective: 5.4 65) 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 Answer: B Diff: 1 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.5 66) How would you determine the market demand for your firm's IT services? A) Perform a TCO analysis. B) Benchmark your services. C) Hold focus groups to assess your services. D) Analyze sales returns on key investments. Answer: C Diff: 1 Page Ref: 194 AACSB: Use of information technology CASE: Content Objective: 5.5 67) Which of the following is not one of the main six factors to consider when evaluating how much your firm should spend on IT infrastructure? A) your firm's business strategy B) the IT investments made by competitor firms C) market demand for your firm's services D) your firm's organizational culture Answer: D Diff: 2 Page Ref: 195 AACSB: Use of information technology CASE: Content Objective: 5.5

Emmanuel Opoku

Rowkish+ 91

68) Your firm, an auto parts manufacturer, has just merged with an automobile engine manufacturer, and the two companies have different SCM systems. Which of the following strategies would be the most likely course to help to reduce the TCO of the merged firms' technology investments? A) Use Web services to join the two systems. B) Move one firm into using the other's system in order to centralize management and support services. C) Develop single ERP system that encompasses the information needs and business processes of both firms. D) Purchase a hosted, on-demand ERP system that encompasses the needs and processes of both firms. Answer: B Diff: 3 Page Ref: 196-197 AACSB: Analytic skills CASE: Evaluation Objective: 5.5 69) Which model can be used to analyze the direct and indirect costs to help firms determine the actual cost of specific technology implementations? A) total cost of ownership B) return on investment C) breakeven point D) cost benefit analysis Answer: A Diff: 1 Page Ref: 196 AACSB: Use of information technology CASE: Content Objective: 5.5 70) Hardware and software acquisition costs account for about ________ percent of TCO. A) 20 B) 40 C) 60 D) 80 Answer: A Diff: 2 Page Ref: 196 AACSB: Use of information technology CASE: Content Objective: 5.5

Emmanuel Opoku

Rowkish+ 92

71) The ________ PC is a computer using the Windows operating system software on a computer with an Intel microprocessor became the standard PC in the Personal Computer Era. Answer: Wintel Diff: 2 Page Ref: 166 AACSB: Use of information technology CASE: Content Objective: 5.2

72) ________ uses individual atoms and molecules to create computer chips and other devices thinner than a human hair. Answer: Nanotechnology Diff: 1 Page Ref: 171 AACSB: Use of information technology CASE: Content Objective: 5.2 73) ________ states that the value or power of a network grows exponentially as a function of the number of network members. Answer: Metcalfe's Law Diff: 3 Page Ref: 172 AACSB: Use of information technology CASE: Content Objective: 5.2 74) ________ are ultrathin computers consisting of a circuit board with processors, memory, and network connections that are stored in racks. Answer: Blade servers Diff: 2 Page Ref: 176 AACSB: Use of information technology CASE: Content Objective: 5.1 75) ________ systems are generally older transaction processing systems created for mainframe computers that continue to be used to avoid the high cost of replacing or redesigning them. Answer: Legacy Diff: 2 Page Ref: 179 AACSB: Use of information technology CASE: Content Objective: 5.1 76) ________ computing is an industry-wide effort to develop systems that can configure, optimize, tune, heal, and protect themselves from outside intruders and self-destruction. Answer: Autonomic Diff: 2 Page Ref: 181 AACSB: Use of information technology CASE: Content Objective: 5.3

Emmanuel Opoku

Rowkish+ 93

77) A(n) ________ is an integrated circuit to which two or more processors have been attached for enhanced performance and reduced power consumption. Answer: multicore processor Diff: 2 Page Ref: 184 AACSB: Use of information technology CASE: Content Objective: 5.3

78) ________ can boost server utilization rates to 70 percent or higher. Answer: Virtualization Diff: 2 Page Ref: 184 AACSB: Use of information technology CASE: Content Objective: 5.3 79) ________ provides a standard format for data exchange, enabling Web services to pass data from one process to another. Answer: XML Diff: 2 Page Ref: 187 AACSB: Use of information technology CASE: Content Objective: 5.4 80) ________ takes place when a firm contracts custom software development or maintenance of existing legacy programs to outside firms. Answer: Outsourcing Diff: 1 Page Ref: 191 AACSB: Use of information technology CASE: Content Objective: 5.4

Emmanuel Opoku

Rowkish+ 94

81) List and describe the major components of IT infrastructure. Answer: Computer hardware platforms: consists of technology for computer processing and includes client and server machines and mainframes. Computer software platforms: includes system software, application software, and enterprise applications. Data management and storage includes database management software and hardware for storage, such as disk arrays, tape libraries, and SANs. Networking and telecommunications platforms include telecommunication services for voice lines and Internet access, as well as cellular phone services. Internet platforms: includes hardware, software, and management services for maintaining Web sites, intranets, and extranets. Consulting and system integration services: includes consulting services and staff for maintaining legacy systems and integrating older systems with new infrastructure technologies. Diff: 2 Page Ref: 163-164 AACSB: Analytic skills CASE: Analysis Objective: 5.1

82) Briefly explain why corporations are increasingly interested in using Unix or Linux for their operating system. Answer: Linux is an inexpensive and robust open-source relative of Unix. 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. The major providers of Unix operating systems are IBM, HP, and Sun with slightly different and partially incompatible versions. Although Windows continues to dominate the client marketplace, many corporations have begun to explore Linux as a low-cost desktop operating system provided by commercial vendors such as RedHat Linux and Linux-based desktop productivity suites such as Sun's StarOffice. Linux is also available in free versions downloadable from the Internet as open-source software. The rise of open-source software, particularly Linux and the applications it supports at the client and server level, has profound implications for corporate software platforms: cost, reduction, reliability and resilience, and integration, because Linux works on all the major hardware platforms from mainframes to servers to clients. Linux has the potential to break Microsoft's monopoly on the desktop. Sun's StarOffice has an inexpensive Linux-based version that competes with Microsoft's Office productivity suite. Diff: 2 Page Ref: 184-185 AACSB: Analytic skills CASE: Evaluation Objective: 5.4

Emmanuel Opoku

Rowkish+ 95

83) Distinguish between grid computing, cloud computing, and on-demand computing. Answer: Grid computing involves connecting geographically remote computers into a single network to create a computational grid that combines the computing power of all the computers on the network with which to attack large computing problems. In cloud computing, hardware and software capabilities are provided as services over the Internet. With on-demand computing firms to purchase processing power from large computer service firms and either pay subscription fees or pay only for the power they use. Diff: 2 Page Ref: 179-181 AACSB: Analytic skills CASE: Analysis Objective: 5.3

84) Identify and describe five or more of the current trends in contemporary software platforms. Answer: 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. Java is an operating-system and hardware-independent programming language that is the leading interactive programming environment for the Web. 3. Web services and service-oriented architecture. Software for enterprise integration includes enterprise applications and middleware such as enterprise application integration (EAI) software and Web services. Unlike EAI software, 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. Ajax, a new software techniques for enabling Web applications. 5. Mashups, or combining Web applications to create new products. 6. Widgets, small software programs that can be added to Web pages or placed on the desktop to provide additional functionality. 7. Software outsourcingcompanies 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. Diff: 3 Page Ref: 184-191 AACSB: Analytic skills CASE: Analysis Objective: 5.4

Emmanuel Opoku

Rowkish+ 96

85) Distinguish between Simple Object Access Protocol (SOAP), Web Services Description Language (WSDL), and Universal Description, Discovery, and Integration (UDDI). Answer: Simple Object Access Protocol (SOAP) is a set of rules for structuring messages that enables applications to pass data and instructions to one another. Web Services Description Language (WSDL) is a common framework for describing the tasks performed by a Web service and the commands and data it will accept so that it can be used by other applications. Universal Description, Discovery, and Integration (UDDI) enable a Web service to be listed in a directory of Web services so that it can be easily located. Diff: 3 Page Ref: 187 AACSB: Analytic skills CASE: Analysis Objective: 5.4

86) What is scalability? Why is it essential to the success of the modern business firm? Answer: Scalability is the ability of the computer, product, or system to expand to survey larger numbers of users without breaking down. It is important because as firms grow, they can quickly outgrow their infrastructure. As firms shrink, they can get stuck with excessive infrastructure purchased in better times. Any modern company must be able to make plans for the future, even though that future may be different than what was expected. Computer equipment is expensive, though dropping in price, and budgets must be planned to allow for new purchases, upgrades, and training. It is generally assumed that a successful company will need more computer capacity for more people as it follows a path to continued success. Diff: 2 Page Ref: 194 AACSB: Analytic skills CASE: Evaluation Objective: 5.5

Emmanuel Opoku

Rowkish+ 97

87) You are starting a market research company with a single business partner and are planning the hardware and software need for the two of you. Which factors should play into your decision of how much to spend on these investments? Answer: Using the competitive forces model for IT infrastructure investment, the most relevant factors in this decision are: • The firm's business strategy. What capabilities we will want to have over the next five years? • Alignment of IT strategy. How does our IT strategy match up with the business plan? • IT assessment. What are the current technology levels for the services we are offering and our business type? We would probably not need to be at the bleeding edge, but not behind the times either. • Competitor firm services. What technology-enabled capabilities do our competitors have? We would want to match services with our competitors. • Competitor firm IT investments. How much are competitor firms investing in their technology? Because this is a startup, one other factor may not play such a large role: That of market demand for services. However, finding out what the market demand for competitor's services may uncover ways that this new company could have a competitive advantage. Diff: 3 Page Ref: 194-197 AACSB: Analytic skills CASE: Synthesis Objective: 5.5

88) Explain why standards are so important in information technology? What standards have been important for the growth of Internet technologies? Answer: Standards are important because they result in different manufacturer's creating 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. 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. Diff: 3 Page Ref: 174-175 AACSB: Analytic skills CASE: Synthesis Objective: 5.2

Emmanuel Opoku

Rowkish+ 98

89) An ad-hoc group of oceanographers needs to set up a system to analyze massive amounts of data on ocean temperatures. The technology and hardware for gathering the data and transmitting the data to a central computer is in place. What additional hardware might they need? What techniques might they use to make their research more efficient and lower costs? Answer: To store their data they may want to use a SAN. To process their data, they will need a supercomputer or grid computing. To lower costs, they could look at on-demand or utility computing as well as virtualization and implementing multicore processors. Diff: 3 Page Ref: 179-184 AACSB: Analytic skills CASE: Synthesis Objective: 5.3 90) A small design agency you are consulting for will be creating client Web sites and wants to purchase a Web server so they can host the sites themselves. How will you advise them on this purchase? Answer: They need to understand total cost of ownership: the costs will go beyond the cost of the server, but they will also need to purchase the server software and any application software they will be using. They will also need someone in their IT department to manage and maintain the computers. They will also incur facilities costs for running the computer. They need to have a backup plan should the server fail. The design agency will need to add up all the potential costs and risks. Additionally, they need to prepare for their plan if they need more servers? Will they eventually have to run and maintain their own server farm? What if one of their clients' sites is more popular than anticipated and the server has difficulty handling the load? How quickly can they add servers or processing power? The company should look at collocation, Web hosting services, and ASPs to see if their needs will be better met this way. Diff: 3 Page Ref: 193-197 AACSB: Analytic skills CASE: Synthesis Objective: 5.5

Emmanuel Opoku

Rowkish+ 99

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 6 Foundations of Business Intelligence: Databases and Information Management 1) A grouping of characters into a word, a group of words, or a complete number is called a record. Answer: FALSE 2) Each characteristic or quality describing a particular entity is called an attribute. Answer: TRUE 3) Program-data dependence refers to the coupling of data stored in files and software programs that use this data such that changes in programs require changes to the data. Answer: TRUE 4) A DBMS separates the logical and physical views of the data. Answer: TRUE 5) Every record in a file should contain at least one key field. Answer: TRUE 6) Many applications today require databases that can store and retrieve multimedia. Answer: TRUE 7) One of the drawbacks to OODBMS are that they cannot work with applets. Answer: FALSE 8) OODBMS are slower than relational DBMS. Answer: TRUE 9) A data dictionary is a language associated with a database management system that end users and programmers use to manipulate data in the database. Answer: FALSE 10) In a relational database, complex groupings of data must be streamlined to eliminate awkward many-to-many relationships. Answer: TRUE 11) A data warehouse may be updated by a legacy system. Answer: TRUE 12) A data warehouse is typically comprised of several smaller data marts. Answer: FALSE 13) OLAP is a key tool of BI. Answer: TRUE

Emmanuel Opoku

Rowkish+ 100

14) OLAP enables users to obtain online answers to ad-hoc questions in a fairly rapid amount of time, except when the data are stored in very large databases. Answer: FALSE 15) Predictive analysis is synonymous with data mining. Answer: FALSE 16) In a Web-based database, middleware is used to transfer information from the organization's internal database back to the Web server for delivery in the form of a Web page to the user. Answer: TRUE 17) A Web interface requires changes to the internal database. Answer: FALSE 18) Common Gateway Interface is a specification for processing data on a Web server. Answer: TRUE 19) Data administration is a special organizational function that manages the policies and procedures through which data can be managed as an organizational resource. Answer: TRUE 20) Data cleansing is the same process as data scrubbing. Answer: TRUE 21) Which of the following is NOT one of the main problems with a traditional file environment? A) data inconsistency B) program-data independence C) lack of flexibility in creating ad-hoc reports D) poor security Answer: B 22) A DBMS reduces data redundancy and inconsistency by A) enforcing referential integrity. B) uncoupling program and data. C) utilizing a data dictionary. D) minimizing isolated files with repeated data. Answer: D 23) Which of the following best illustrates the relationship between entities and attributes? A) the entity CUSTOMER with the attribute PRODUCT B) the entity CUSTOMER with the attribute PURCHASE C) the entity PRODUCT with the attribute PURCHASE D) the entity PRODUCT with the attribute CUSTOMER Answer: B

Emmanuel Opoku

Rowkish+ 101

24) A characteristic or quality describing an entity is called a(n) A) field. B) tuple. C) key field. D) attribute. Answer: D 25) Which of the following non-digital data storage items is most similar to a database? A) library card catalog. B) cash register receipt. C) doctor's office invoice. D) list of sales totals on a spreadsheet. Answer: A 26) The confusion created by ________ makes it difficult for companies to create customer relationship management, supply chain management, or enterprise systems that integrate data from different sources. A) batch processing B) data redundancy C) data independence D) online processing Answer: B 27) Duplicate data in multiple data files is called data ________. A) redundancy B) repetition C) independence D) partitions Answer: A 28) A DBMS makes the A) physical database available for different logical views. B) logical database available for different analytical views. C) physical database available for different analytical views. D) relational database available for different physical views. Answer: A 29) The logical view A) shows how data are organized and structured on the storage media. B) presents an entry screen to the user. C) allows the creation of supplementary reports. D) presents data as they would be perceived by end users. Answer: D

Emmanuel Opoku

Rowkish+ 102

30) DBMS for midrange computers include all of the following EXCEPT A) DB2. B) Oracle. C) Microsoft SQL Server. D) Microsoft Access. Answer: D 31) The type of logical database model that treats data as if they were stored in two-dimensional tables is the A) OODBMS. B) pre-digital DBMS. C) relational DBMS. D) hierarchical DBMS. Answer: C 32) Oracle Database Lite is a(n) A) DBMS for small handheld computing devices. B) Internet DBMS. C) mainframe relational DBMS. D) DBMS for midrange computers. Answer: A 33) Microsoft SQL Server is a(n) A) DBMS for small handheld computing devices. B) Internet DBMS. C) desktop relational DBMS. D) DBMS for midrange computers. Answer: D 34) In a table for customers, the information about a single customer would reside in a single A) field. B) row. C) column. D) table. Answer: B 35) In a relational database, a record is referred to in technical terms as a(n) A) tuple. B) row. C) entity. D) field. Answer: A

Emmanuel Opoku

Rowkish+ 103

36) A field identified in a table as holding the unique identifier of the table's records is called the A) primary key. B) key field. C) primary field. D) unique ID. Answer: A 37) A field identified in a record as holding the unique identifier for that record is called the A) primary key. B) key field. C) primary field. D) unique ID. Answer: B 38) 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) select, from, and join. Answer: C 39) The select operation A) combines relational tables to provide the user with more information than is otherwise available. B) creates a subset consisting of columns in a table. C) identifies the table from which the columns will be selected. D) creates a subset consisting of all records in the file that meet stated criteria. Answer: D 40) 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 41) 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

Emmanuel Opoku

Rowkish+ 104

42) Which of the following database types is useful for storing java applets as well as processing large numbers of transactions? A) relational DBMS B) hierarchical DBMS C) object-relational DBMS D) OODBMS Answer: C 43) The type of database management approach that can handle multimedia is the A) hierarchical DBMS. B) relational DBMS. C) network DBMS. D) object-oriented DBMS. Answer: D 44) The data dictionary serves as an important data management tool by A) assigning attributes to the data. B) creating an inventory of data contained in the database. C) presenting data as end users or business specialists would perceive them. D) maintaining data in updated form. Answer: B 45) An automated or manual file that stores information about data elements and data characteristics such as usage, physical representation, ownership, authorization, and security is the A) data dictionary. B) data definition diagram. C) entity-relationship diagram. D) relationship dictionary. Answer: A 46) The specialized language programmers use to add and change data in the database is called A) a data access language. B) a data manipulation language. C) structured Query language. D) a data definition language. Answer: B 47) The most prominent data manipulation language today is A) Access. B) DB2. C) SQL. D) Crystal Reports. Answer: C

Emmanuel Opoku

Rowkish+ 105

48) DBMSs typically include report-generating tools in order to A) retrieve and display data. B) display data in an easier-to-read format. C) display data in graphs. D) perform predictive analysis. Answer: B 49) 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 50) 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 51) A one-to-one relationship between two entities is symbolized in a diagram by a line that ends with A) two short marks. B) one short mark. C) a crow's foot. D) a crow's foot topped by a short mark. Answer: A 52) A one-to-many relationship between two entities is symbolized in a diagram by a line that ends with A) two short marks. B) one short mark. C) a crow's foot. D) a crow's foot topped by a short mark. Answer: D 53) In what type of a database system is the entire central database duplicated at all remote locations? A) partitioned B) normalized C) replicated D) networked Answer: C

Emmanuel Opoku

Rowkish+ 106

54) Which of the following is a main disadvantage to a distributed database system? A) lack of flexibility B) susceptibility to data inconsistency C) poor responsiveness to local users D) requires more expensive computers Answer: B 55) A data warehouse is composed of A) historical data from legacy systems. B) current data. C) internal and external data sources. D) historic and current internal data. Answer: D 56) A data mart usually can be constructed more rapidly and at lower cost than a data warehouse because A) a data mart typically focuses on a single subject area or line of business. B) all the information is historical. C) a data mart uses a Web interface. D) all of the information belongs to a single company. Answer: A 57) Tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better business decisions are known as A) DSS. B) business intelligence. C) OLAP. D) data mining. Answer: B 58) The tool that enables users to view the same data in different ways using multiple dimensions is A) predictive analysis. B) SQL. C) OLAP. D) data mining. Answer: C 59) OLAP is a tool for enabling A) users to obtain online answers to ad-hoc questions in a rapid amount of time. B) users to view both logical and physical views of data. C) programmers to quickly diagram data relationships. D) programmers to normalize data. Answer: A

Emmanuel Opoku

Rowkish+ 107

60) Data mining is a tool for allowing users to A) quickly compare transaction data gathered over many years. B) find hidden relationships in data. 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 61) In terms of data relationships, 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 62) ________ tools are used to analyze large unstructured data sets, such as e-mail, memos, survey responses, etc., to discover patterns and relationships. A) OLAP B) Text mining C) Web mining D) Web content mining Answer: B 63) An alternative to using application server software for interfacing between a Web server and back-end databases is A) CGI. B) HTML. C) Java. D) SQL. Answer: A 64) The organization's rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information is called a(n) A) information policy. B) data definition file. C) data quality audit. D) data governance policy. Answer: A 65) The special organizational function whose responsibilities include the technical and operational aspects of managing data, including physical database design and maintenance, is called A) data administration. B) database administration. C) information policy administration. D) data auditing. Answer: B

Emmanuel Opoku

Rowkish+ 108

66) Which common database challenge is illustrated by the text's discussion of receiving multiple pieces of the same direct mail advertising? A) data normalization B) data accuracy C) data redundancy D) data inconsistency Answer: D 67) 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 scrubbing. D) data optimization. Answer: C 68) As discussed in the Interactive Session: Technology, what problem was MySpace facing in its data management? A) program-data dependence B) data redundancy C) scalability D) data quality Answer: C 69) 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. Answer: D 70) Which of the following is NOT a method for performing a data quality audit? A) surveying entire data files B) surveying samples from data files C) surveying data definition and query files D) surveying end users about their perceptions of data quality Answer: C 71) Databases record information about general categories of information referred to as ________. Answer: entities 72) Data ________ describes a situation in which the same attribute of a data entity may have different values. Answer: inconsistency

Emmanuel Opoku

Rowkish+ 109

73) A(n) ________ view shows data as it is actually organized and structured on the data storage media. Answer: physical 74) DBMS have a(n) ________ capability to specify the structure of the content of the database. Answer: data definition 75) RDBMSs use ________ rules to ensure that relationships between coupled tables remain consistent. Answer: referential integrity 76) A(n) ________ database is one that is stored in more than one physical location. Answer: distributed 77) In ________, a data mining tool discovers different groupings within data, such as finding affinity groups for bank cards. Answer: clustering 78) The discovery and analysis of useful patterns and information from hypertext documents on the Internet is called ________. Answer: Web mining 79) A(n) ________ is software that handles all application operations between browser-based computers and a company's back-end business applications or databases. Answer: application server 80) ________ are the formal rules governing the maintenance, distribution, and use of information in an organization. Answer: Information policies 81) The small publishing company you work for wants to create a new database for storing information about all of their author contracts. What factors will influence how you design the database? Answer: Student answers will vary, but should include some assessment of data quality; business processes and user needs; and relationship to existing IT systems. Key points to include are: Data accuracy when the new data is input, establishing a good data model, determining which data is important and anticipating what the possible uses for the data will be, beyond looking up contract information, technical difficulties linking this system to existing systems, new business processes for data input and handling, and contracts management, determining how end users will use the data, making data definitions consistent with other databases, what methods to use to cleanse the data. Diff: 2 Page Ref: 231-234 AACSB: Analytic skills CASE: Synthesis

Emmanuel Opoku

Rowkish+ 110

Objective: 6.5 82) When you design the new contracts database for the publishing house mentioned above, what fields do you anticipate needing? Which of these fields might be in use in other databases used by the company? Answer: Author first name, author last name, author address, agent name and address, title of book, book ISBN, date of contract, amount of money, payment schedule, date contract ends. Other databases might be an author database (author names, address, and agent details), a book title database (title and ISBN of book), and financial database (payments made). Diff: 2 Page Ref: 209-210, 213-215 AACSB: Analytic skills CASE: Synthesis Objective: 6.1 83) List at least three conditions that contribute to data redundancy and inconsistency. Answer: Data redundancy occurs when different divisions, functional areas, and groups in an organization independently collect the same piece of information. 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. Diff: 2 Page Ref: 211 AACSB: Analytic skills CASE: Analysis Objective: 6.1

Emmanuel Opoku

Rowkish+ 111

84) List and describe three main capabilities or tools of a DBMS. Answer: A data definition capability to specify the structure of the content of the database. This capability would be used to create database tables and to define the characteristics of the fields in each table. A data dictionary to store definitions of data elements in the database and their characteristics. In large corporate databases, the data dictionary may capture additional information, such as usage; ownership; authorization; security; and the individuals, business functions, programs, and reports that use each data element. A data manipulation language, such as SQL, that is used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications. Diff: 2 Page Ref: 216-217 AACSB: Analytic skills CASE: Analysis Objective: 6.2 85) What types of relationships are possible in a relational database? Describe and give an example of each. Answer: A one-to-one relationship occurs when each record in one table has only one related record in a second table. An example might be a table of salespeople and a separate table of company cars. Each salesperson can only have one car, or be related to the one car in the database. A one-to-many relationship occurs when a record in one table has many related records in a second table. An example might be a table of salespeople and clients. Each salesperson may have several clients. A many-to-many relationship occurs when records in one table have many related records in a second table, and the records in the second table have many related records in the first table. An example might be a clients table and a products table. Clients may buy more than one product, and products are sold to more than one client. Diff: 3 Page Ref: 219-220 AACSB: Use of information technology CASE: Synthesis Objective: 6.2 86) Identify and 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. Diff: 2 Page Ref: 215 AACSB: Use of information technology CASE: Analysis Objective: 6.2

Emmanuel Opoku

Rowkish+ 112

87) Describe the ways in which database technologies could be used by an office stationery supply company to achieve low-cost leadership. Answer: Sales databases could be used to make the supply chain more efficient and minimize warehousing and transportation costs. You can also use sales databases to determine what supplies are in demand by which customers, and whether needs are different in different geographical areas. DSS databases using business intelligence could be used to predict future trends in office supply needs, to help anticipate demand, and to determine the most efficient methods of transportation and delivery. Diff: 3 Page Ref: 213, 222-231 AACSB: Use of information technology CASE: Evaluation Objective: 6.4 88) Describe the ways in which database technologies could be used by an office stationery supply company to achieve product differentiation. Answer: Product databases could be made available to customers for greater convenience when ordering online. Databases could be used to track customer preferences and to help anticipate customer desires. Sales databases could also help a client anticipate when they would need to re-supply, providing an additional service. Data mining could help anticipate trends in sales or other factors to help determine new services and products to sell to the clients. Diff: 3 Page Ref: 222-231 AACSB: Use of information technology CASE: Evaluation Objective: 6.4 89) What makes data mining an important business tool? What types of information does data mining produce? In what type of circumstance would you advise a company to use data mining? Answer: Data mining is one of the data analysis tools that helps users make better business decisions and is one of the key tools of business intelligence. Data mining allows users to analyze large amounts of data and find hidden relationships between data that otherwise would not be discovered. For example, data mining might find that a customer that buys product X is ten times more likely to buy product Y than other customers. Data mining finds information such as: • Associations or occurrences that are linked to a single event. • Sequences, events that are linked over time. • Classification, patterns that describe the group to which an item belongs, found by examining existing items that have been classified and by inferring a set of rules. • Clusters, unclassified but related groups. 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. Diff: 3 Page Ref: 228-229 AACSB: Use of information technology CASE: Evaluation Objective: 6.4

Emmanuel Opoku

Rowkish+ 113

90) What are the differences between data mining and OLAP? When would you advise a company to use OLAP? Answer: Data mining uncovers hidden relationships and is used when you are trying to discover data and new relationships. 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 productbroken down by month and geographical region, and how did those sales compare to sales forecasts? Diff: 2 Page Ref: 226-229 AACSB: Use of information technology CASE: Evaluation Objective: 6.4

Emmanuel Opoku

Rowkish+ 114

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 7 Telecommunications, the Internet, and Wireless Technology 1) Telephone networks are fundamentally different from computer networks. Answer: TRUE Diff: 2 Page Ref: 249 AACSB: Use of information technology CASE: Content Objective: 7.1 2) Increasingly, voice, video, and data communications are all based on Internet technology. Answer: TRUE Diff: 1 Page Ref: 249 AACSB: Use of information technology CASE: Content Objective: 7.1 3) To connect two computers together in the same office, you must have a computer network. Answer: TRUE Diff: 2 Page Ref: 249 AACSB: Use of information technology CASE: Content Objective: 7.1 4) An NOS must reside on a dedicated server computer in order to manage a network. Answer: FALSE Diff: 2 Page Ref: 250 AACSB: Use of information technology CASE: Content Objective: 7.1 5) A hub is a networking device that connects network components and are used to filter and forward data to specified destinations on the network. Answer: FALSE Diff: 2 Page Ref: 250 AACSB: Use of information technology CASE: Content Objective: 7.1 6) In a client/server network, a network server provides every connected client with an address so it can be found by others on the network. Answer: TRUE Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1

Emmanuel Opoku

Rowkish+ 115

7) Central large mainframe computing has largely replaced client/server computing. Answer: FALSE Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1 8) Circuit switching makes much more efficient use of the communications capacity of a network than does packet switching. Answer: FALSE Diff: 1 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1 9) A protocol is a standard set of rules and procedures for the control of communications in a network. Answer: TRUE Diff: 1 Page Ref: 253 AACSB: Use of information technology CASE: Content Objective: 7.1 10) Two computers using TCP/IP can communicate even if they are based on different hardware and software platforms. Answer: TRUE Diff: 1 Page Ref: 254 AACSB: Use of information technology CASE: Content Objective: 7.1 11) In a ring topology, one station transmits signals, which travel in both directions along a single transmission segment. Answer: FALSE Diff: 3 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2 12) Coaxial cable is similar to that used for cable television and consists of thickly insulated copper wire. Answer: TRUE Diff: 2 Page Ref: 257 AACSB: Use of information technology CASE: Content Objective: 7.2

Emmanuel Opoku

Rowkish+ 116

13) Fiber-optic cable is more expensive and harder to install than wire media. Answer: TRUE Diff: 2 Page Ref: 257-258 AACSB: Use of information technology CASE: Content Objective: 7.2 14) The number of cycles per second that can be sent through any telecommunications medium is measured in kilobytes. Answer: FALSE Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Content Objective: 7.2 15) The success of the Internet is in part due to its design as an infinitely scalable network capable of handling millions of users. Answer: FALSE Diff: 2 Page Ref: 265 AACSB: Analytic skills CASE: Evaluation Objective: 7.3 16) VoIP technology delivers video information in digital form using packet switching. Answer: FALSE Diff: 2 Page Ref: 267 AACSB: Use of information technology CASE: Content Objective: 7.3 17) Web 2.0 is the collaborative effort led by the World Wide Web Consortium to add a layer of meaning atop the existing Web to reduce the amount of human involvement in searching for and processing Web information. Answer: FALSE Diff: 2 Page Ref: 276 AACSB: Reflective thinking skills CASE: Content Objective: 7.3 18) Wi-Fi enables users to freely roam from hotspot to hotspot even if the hotspot is using different Wi-Fi network services. Answer: FALSE Diff: 2 Page Ref: 281 AACSB: Use of information technology CASE: Content Objective: 7.4

Emmanuel Opoku

Rowkish+ 117

19) WiMax has a wireless access range of up to 300 feet. Answer: FALSE Diff: 2 Page Ref: 281 AACSB: Use of information technology CASE: Content Objective: 7.4 20) RFID has been exceptionally popular because of its low implementation costs. Answer: FALSE Diff: 1 Page Ref: 283 AACSB: Use of information technology CASE: Content Objective: 7.5 21) A device that acts as a connection point between computers and can filter and forward data to a specified destination is called a A) hub. B) switch. C) router. D) NIC. Answer: B Diff: 1 Page Ref: 250 AACSB: Use of information technology CASE: Content Objective: 7.1 22) 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 Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1

Emmanuel Opoku

Rowkish+ 118

23) The method of slicing digital messages into parcels, transmitting them along different communication paths, and reassembling them at their destinations is called A) multiplexing. B) packet switching. C) packet routing. D) ATM. Answer: B Diff: 1 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1

24) The telephone system is an example of a ________ network. A) peer-to-peer B) wireless C) packet-switched D) circuit-switched Answer: D Diff: 1 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1 25) 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 Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1 26) In TCP/IP, IP is responsible for A) disassembling and reassembling of 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 Diff: 3 Page Ref: 253 AACSB: Use of information technology CASE: Content Objective: 7.1

Emmanuel Opoku

Rowkish+ 119

27) In a telecommunications network architecture, a protocol is A) a device that handles the switching of voice and data in a local area network. B) a standard set of rules and procedures for control of communications in a network. C) a communications service for microcomputer users. D) the main computer in a telecommunications network. Answer: B Diff: 2 Page Ref: 253 AACSB: Use of information technology CASE: Content Objective: 7.1

28) The four layers of the TCP/IP reference model are A) physical layer, application layer, transport layer, and the network interface layer. B) physical layer, application layer, Internet layer, and the network interface layer. C) application layer, transport layer, Internet layer, and the network interface layer. D) application layer, hardware layer, Internet layer, and the network interface layer. Answer: C Diff: 3 Page Ref: 253-254 AACSB: Use of information technology CASE: Content Objective: 7.1 29) Which signal types are represented by a continuous waveform? A) laser B) optical C) digital D) analog Answer: A Diff: 2 Page Ref: 254 AACSB: Use of information technology CASE: Content Objective: 7.2 30) To use an analog telephone system for sending digital data, you must us A) a modem. B) a router. C) DSL. D) twisted wire. Answer: A Diff: 1 Page Ref: 255 AACSB: Use of information technology CASE: Content Objective: 7.2

Emmanuel Opoku

Rowkish+ 120

31) Which type of network is used to connect digital devices within a half-mile or 500-meter radius? A) microwave B) LAN C) WAN D) MAN Answer: B Diff: 2 Page Ref: 255 AACSB: Use of information technology CASE: Content Objective: 7.2

32) Which type of network treats all processors equally, and allows peripheral devices to be shared without going to a separate server? A) peer-to-peer B) wireless C) LAN D) ring Answer: A Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2 33) Which type of network would be most appropriate for a business that comprised three employees and a manager located in the same office space, whose primary need is to share documents? A) wireless network in infrastructure mode B) domain-based LAN C) peer-to-peer network D) campus area network Answer: C Diff: 2 Page Ref: 256 AACSB: Analytic skills CASE: Evaluation Objective: 7.2 34) In a bus network A) signals are broadcast to the next station. B) signals are broadcast in both directions to the entire network. C) multiple hubs are organized in a hierarchy. D) messages pass from computer to computer in a loop. Answer: B Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2

Emmanuel Opoku

Rowkish+ 121

35) All network components connect to a single hub in a ________ network. A) star B) bus C) domain D) peer-to-peer Answer: A Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2

36) The most common Ethernet topology is A) bus. B) star. C) ring. D) mesh. Answer: A Diff: 3 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2 37) A network that spans a city, and sometimes its major suburbs as well, is called a A) CAN. B) MAN. C) WAN. D) LAN. Answer: B Diff: 1 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2 38) 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 Diff: 1 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2

Emmanuel Opoku

Rowkish+ 122

39) ________ work(s) by using radio waves to communicate with radio antennas placed within adjacent geographic areas. A) Cell phones B) Microwaves C) Satellites D) WANs Answer: A Diff: 1 Page Ref: 258 AACSB: Use of information technology CASE: Content Objective: 7.2

40) Bandwidth is the A) number of frequencies that can be broadcast through a medium. B) number of cycles per second that can be sent through a medium. C) difference between the highest and lowest frequencies that can be accommodated on a single channel. D) total number of bytes that can be sent through a medium per second. Answer: C Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Content Objective: 7.2 41) 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 Diff: 2 Page Ref: 259 AACSB: Use of information technology CASE: Content Objective: 7.2 42) Digital subscriber lines A) operate over existing telephone lines to carry voice, data, and video. B) operate over coaxial 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 Diff: 2 Page Ref: 260 AACSB: Use of information technology CASE: Content Objective: 7.3

Emmanuel Opoku

Rowkish+ 123

43) T lines A) operate over existing telephone lines to carry voice, data, and video. B) operate over coaxial 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: C Diff: 2 Page Ref: 260 AACSB: Use of information technology CASE: Content Objective: 7.3

44) Which protocol is the Internet based on? A) TCP/IP B) FTP C) packet-switching D) HTTP Answer: A Diff: 1 Page Ref: 260 AACSB: Use of information technology CASE: Content Objective: 7.3 45) What service converts IP addresses into more recognizable alphanumeric names? A) HTML B) DNS C) IP D) HTTP Answer: B Diff: 2 Page Ref: 260 AACSB: Use of information technology CASE: Content Objective: 7.3 46) The child domain of the root is the A) top-level domain. B) second-level domain. C) host name. D) domain extension. Answer: A Diff: 2 Page Ref: 260 AACSB: Use of information technology CASE: Content Objective: 7.3

Emmanuel Opoku

Rowkish+ 124

47) In the domain name "http://myspace.blogging.com", what are the root, top-level, second-level, and third-level domains, respectively? A) "http://", myspace, blogging, com B) "http://", com, blogging, myspace C) ".", com, blogging, myspace D) ".", myspace, blogging, com Answer: C Diff: 2 Page Ref: 261 AACSB: Use of information technology CASE: Content Objective: 7.3

48) Which organization helps define the overall structure of the Internet? A) None (no one "owns" the Internet) B) W3C C) ICANN D) IAB Answer: D Diff: 3 Page Ref: 262 AACSB: Use of information technology CASE: Content Objective: 7.3 49) IPv6 is being 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 Diff: 2 Page Ref: 265 AACSB: Use of information technology CASE: Content Objective: 7.3 50) Which of the following services enables logging on to one computer system and working on another? A) FTP B) LISTSERV C) Telnet D) World Wide Web Answer: C Diff: 3 Page Ref: 263 AACSB: Use of information technology CASE: Content Objective: 7.3

Emmanuel Opoku

Rowkish+ 125

51) Instant messaging is a type of ________ service. A) chat B) cellular C) Web D) wireless Answer: A Diff: 1 Page Ref: 267 AACSB: Use of information technology CASE: Content Objective: 7.3

52) The need in some cases for employees to have access to sexually explicit material on the Internet, such as medical researchers, suggests that companies A) cannot restrict Internet use. B) need specialized software to determine which types of material are acceptable. C) may need to maintain a database of acceptable Web sites. D) need to base their Internet use policies on the needs of the organization and culture. Answer: D Diff: 2 Page Ref: 268-269 AACSB: Analytic skills CASE: Analysis Objective: 7.3 53) ________ integrate(s) disparate channels for voice communications, data communications, instant messaging, e-mail, and electronic conferencing into a single experience. A) Wireless networks B) Intranets C) Virtual private networks D) Unified communications Answer: D Diff: 1 Page Ref: 270 AACSB: Use of information technology CASE: Content Objective: 7.3 54) 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 Diff: 2 Page Ref: 270 AACSB: Use of information technology CASE: Content Objective: 7.3

Emmanuel Opoku

Rowkish+ 126

55) Web browser software requests Web pages from the Internet using which protocol? A) URL B) HTTP C) DNS D) HTML Answer: B Diff: 2 Page Ref: 271 AACSB: Use of information technology CASE: Content Objective: 7.3

56) Together, a protocol prefix, a domain name, a directory path, and a document name, are called a(n) A) uniform resource locator. B) unified resource locator. C) third level domain. D) root domain. Answer: A Diff: 2 Page Ref: 271 AACSB: Use of information technology CASE: Content Objective: 7.3 57) The open-source Web server that controls 70 percent of the market is A) Microsoft IIS. B) ASP.net. C) Apache HTTP server. D) Netscape. Answer: C Diff: 2 Page Ref: 272 AACSB: Use of information technology CASE: Content Objective: 7.3 58) What technology allows people to have content pulled from Web sites and fed automatically to their computers? A) FTP B) RSS C) HTTP D) Bluetooth Answer: B Diff: 2 Page Ref: 275 AACSB: Use of information technology CASE: Content Objective: 7.3

Emmanuel Opoku

Rowkish+ 127

59) To keep internal data secure, a company employing an extranet must be sure to put a ________ in place A) router B) server C) firewall D) switch Answer: C Diff: 2 Page Ref: 277 AACSB: Use of information technology CASE: Content Objective: 7.3

60) A network that connects authorized customers, suppliers, and other business partners to portions of a firm's internal network is called a(n) A) intranet. B) extranet. C) enterprise network. D) virtual private network. Answer: B Diff: 2 Page Ref: 277 AACSB: Use of information technology CASE: Content Objective: 7.3 61) Which generation of network are wireless cellular phone systems entering? A) 2.5G B) 3G C) 3.5G D) 4G Answer: B Diff: 1 Page Ref: 278 AACSB: Use of information technology CASE: Content Objective: 7.4 62) CDMA A) is the major European digital cellular standard. B) is more expensive than GSM. C) transmits over several frequencies. D) uses the 1.9 GHz band. Answer: C Diff: 3 Page Ref: 278 AACSB: Use of information technology CASE: Content Objective: 7.4

Emmanuel Opoku

Rowkish+ 128

63) The most appropriate wireless networking standard for creating PANs is A) I-mode. B) IEEE 802.11b. C) WiFi. D) Bluetooth. Answer: D Diff: 2 Page Ref: 279 AACSB: Use of information technology CASE: Content Objective: 7.4

64) Bluetooth can be used to link up to ________ devices within a 10-meter area using low-power, radio-based communication. A) four B) six C) eight D) ten Answer: C Diff: 3 Page Ref: 279 AACSB: Use of information technology CASE: Content Objective: 7.4 65) The Wi-Fi 802.11a standard can transmit up to A) 54 Mbps in the 5-GHz frequency range. B) 11 Mbps in the 2.4-GHz frequency range. C) 54 Mbps in the 2.4-GHz frequency range. D) 722 Kbps in the 2.4-GHz frequency range. Answer: A Diff: 3 Page Ref: 280 AACSB: Use of information technology CASE: Content Objective: 7.4 66) One or more access points positioned on a ceiling, wall, or other strategic spot in a public place to provide maximum wireless coverage for a specific area are referred to as A) touch points. B) hotspots. C) hot points. D) wireless hubs. Answer: B Diff: 2 Page Ref: 281 AACSB: Use of information technology CASE: Content Objective: 7.4

Emmanuel Opoku

Rowkish+ 129

67) The IEEE standard for the WiMax is A) IEEE 802.15. B) IEEE 802.11. C) IEEE 802.16. D) IEEE 802.20. Answer: C Diff: 3 Page Ref: 281 AACSB: Use of information technology CASE: Content Objective: 7.4

68) The WiMax standard can transmit up to a distance of approximately A) 30 meters. B) 500 meters. C) 30 miles. D) 5 miles. Answer: C Diff: 3 Page Ref: 281 AACSB: Use of information technology CASE: Content Objective: 7.4 69) Passive RFID tags A) have their own power source. B) have a range of several feet. C) enable data to be rewritten and modified. D) are used in automated toll-collection systems. Answer: B Diff: 2 Page Ref: 283 AACSB: Use of information technology CASE: Content Objective: 7.5 70) Based on your reading of the examples in the chapter, what would be the best use of RFID for a business? A) transactions B) supply chain management C) lowering network costs D) enabling client communication Answer: B Diff: 2 Page Ref: 282-283 AACSB: Analytic skills CASE: Evaluation Objective: 7.5

Emmanuel Opoku

Rowkish+ 130

71) The ________ is special software that routes and manages communications on the network and coordinates networks resources. Answer: network operating system Diff: 2 Page Ref: 250 AACSB: Use of information technology CASE: Content Objective: 7.1 72) A(n) ________ is a device that forwards packets of data through different networks, ensuring that the data gets to the right address. Answer: router Diff: 2 Page Ref: 250-251 AACSB: Use of information technology CASE: Content Objective: 7.1

73) Prior to the development of ________, computer networks used leased, dedicated telephone circuits to communicate with other computers in remote locations. Answer: packet switching Diff: 2 Page Ref: 252 AACSB: Use of information technology CASE: Content Objective: 7.1 74) A(n) ________ signal is a discrete, binary waveform that transmits data coded into two discrete states such as 1-bits and 0-bits. Answer: digital Diff: 2 Page Ref: 254 AACSB: Use of information technology CASE: Content Objective: 7.2 75) ________ is the manner in which the components of a network are connected. Answer: Topology Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2 76) ________ is the dominant LAN standard at the physical network level. Answer: Ethernet Diff: 2 Page Ref: 256 AACSB: Use of information technology CASE: Content Objective: 7.2

Emmanuel Opoku

Rowkish+ 131

77) A(n) ________ is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers. Answer: Internet service provider Diff: 2 Page Ref: 260 AACSB: Use of information technology CASE: Content Objective: 7.3 78) The backbone networks of the Internet are typically owned by long-distance telephone companies called ________. Answer: network service providers Diff: 2 Page Ref: 261 AACSB: Use of information technology CASE: Content Objective: 7.3

79) A(n) ________ is software for locating and managing stored Web pages. Answer: Web server Diff: 2 Page Ref: 271 AACSB: Use of information technology CASE: Content Objective: 7.3 80) A(n) ________ is a box consisting of a radio receiver/transmitter and antennas that links to a wired network, router, or hub. Answer: access point Diff: 2 Page Ref: 280 AACSB: Use of information technology CASE: Content Objective: 7.4 81) How does packet switching work? Answer: Packet switching is a method of slicing digital messages into parcels called packets, sending the packets along different communication paths as they become available, and then reassembling the packets once they arrive at their destinations. Packet switching makes much more efficient use of the communications capacity of a network than did circuit-switching. In packet-switched networks, messages are first broken down into small fixed bundles of data called packets. The packets include information for directing the packet to the right address and for checking transmission errors along with the data. The packets are transmitted over various communications 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. Diff: 2 Page Ref: 252 AACSB: Analytic skills CASE: Analysis Objective: 7.1

Emmanuel Opoku

Rowkish+ 132

82) Identify the layers of the Department of Defense reference model for TCP/IP, and describe how this model works. Answer: The application layer enables client application programs to access the other layers and defines the protocols that applications use to exchange data. One of these application protocols is the Hypertext Transfer Protocol (HTTP), which is used to transfer Web page files. The transport layer is responsible for providing the application layer with communication and packet services. This layer includes TCP and other protocols. The Internet layer is responsible for addressing, routing, and packaging data packets called IP datagrams. The Internet Protocol is one of the protocols used in this layer. At the bottom of the reference model, the network interface layer is responsible for placing packets on and receiving them from the network medium, which could be any networking technology. Data sent from one computer to the other passes downward through all four layers, starting with the sending computer's application layer and passing through the network interface layer. After the data reach the recipient host computer, they travel up the layers and are reassembled into a format the receiving computer can use. If the receiving computer finds a damaged packet, it asks the sending computer to retransmit it. This process is reversed when the receiving computer responds. Diff: 3 Page Ref: 253-254 AACSB: Analytic skills CASE: Analysis Objective: 7.1 83) You have been hired by a tax preparation firm to set up a network connecting several new branches in a metropolitan area. What type of network hardware and transmission media will you choose and why? Answer: Because of security issues, I wouldn't choose wireless transmission. The offices themselves can each have an Ethernet-based LAN, and they can connect to each other and to an Intranet via a secure, encrypted VPN over the Internet. Network hardware anticipated is: coaxial cable, network server, a switch. Because the LANs will be connected through a VPN, a router may not be needed. In anticipation of the need for a lot of data transmission, the connection to the Internet will be through cable modems. A firewall, or several, for security purposes is anticipated. Diff: 3 Page Ref: 255-259 AACSB: Analytic skills CASE: Evaluation Objective: 7.2

Emmanuel Opoku

Rowkish+ 133

84) You have been hired by a small new Web design firm to set up a network for its single office location. The network is primarily needed for exchanging files, accessing and managing beta Web sites on their Web server, and connecting to the Internet. The firm hires many freelancers who come into the office on an ad-hoc basis and it does not have a lot of money to spend on infrastructure. What type of network will you recommend? Answer: I would recommend a mixed Ethernet and wireless network. The Ethernet LAN would connect the Web servers and primary workstations and connect via cable service to the Internet. Freelancers could connect wirelessly via access points. Diff: 3 Page Ref: 249-250 AACSB: Analytic skills CASE: Evaluation Objective: 7.2

85) What types of capabilities does the Internet provide businesses and what Internet protocols or technologies support these? Which have proven the most valuable to businesses thus far? Answer: The Internet provides ways to transfer files (FTP), work on remote computers (Telnet), distribute information in the form of pages (The Web), have real-time text-based conversations (instant messaging, chat), collaborate (wikis), communicate and share data with suppliers (extranets, Web-based applications), conduct group discussions (newsgroups), real-time voice conversations (chat, VOIP), send text messages (e-mail) and create lower cost networks (TCP/IP, extranets, intranets, VPN). Probably the two most important effects the Internet has had are the effects on network costs and ease of setting up a network using TCP/IP and Internet-based technologies, and e-mail, allowing near-instant documented messaging. E-mail has been a valuable alternative to post office mail. Diff: 2 Page Ref: 265-277 AACSB: Analytic skills CASE: Evaluation Objective: 7.3 86) What are the business advantages of using voice over IP (VoIP) technology? Answer: Business can lower costs by using the Internet to deliver voice information, avoiding the tolls charged by local and long-distance telephone networks. They can lower costs from not having to create a separate telephone network. VOIP enables communication by supporting Internet conference calls using video. VOIP also provides flexibility - phones can be added or moved to different offices without rewiring or reconfiguring the network. Diff: 2 Page Ref: 267-270 AACSB: Analytic skills CASE: Evaluation Objective: 7.3

Emmanuel Opoku

Rowkish+ 134

87) Describe and explain the idea of "network neutrality." Are you in favor of network neutrality? Why or why not? Answer: Network neutrality describes the current equal access by users to Internet bandwidth, regardless of the services they are using on the Internet. Network neutrality is the idea that Internet service providers must allow customers equal access to content and applications, regardless of the source or nature of the content. Presently, the Internet is indeed neutral: all Internet traffic is treated equally on a first-come, first-serve basis by Internet backbone owners. The Internet is neutral because it was built on phone lines, which are subject to ‘common carriage' laws. These laws require phone companies to treat all calls and customers equally. For example, someone using the Internet to download large movie files pays the same rate as someone accessing their e-mail. Now telecommunications and cable companies want to be able to charge differentiated prices based on the amount of bandwidth consumed by content being delivered over the Internet. Student opinions will vary; one might be: I support network neutrality because the risk of censorship increases when network operators can selectively block or slow access to certain content. Diff: 2 Page Ref: 263-264 AACSB: Analytic skills CASE: Evaluation Objective: 7.3

88) Describe the current trends and movements in Internet technology and content. Answer: One upcoming change is the move to IPv6, a new addressing scheme that will allow for billions more addresses. Other technological changes are being worked on by Internet2 and Next-Generation Internet (NGI); consortia representing 200 universities, private businesses, and government agencies in the United States that are working on a new, robust, high-bandwidth version of the Internet. A current trend in Internet content is Web 2.0 Web 2.0, second-generation interactive Internet-based services that enable people to collaborate, share information, and create new services online like mashups, blogs, RSS, and wikis. With Web 2.0, the Web is not just a collection of destination sites but a source of data and services that can be combined to create applications users need. Web 2.0 software applications run on the Web itself instead of the desktop and bring the vision of Web-based computing closer to realization. Another potential change or trend in Internet content is the Web 3.0 or Semantic Web, a collaborative effort led by the World Wide Web Consortium to make Web searching more efficient by reducing the amount of human involvement in searching for and processing Web information. The Semantic Web is still in its infancy. Further development requires extensive work to establish specific meanings for data on the Web, categories for classifying the data, and relationships between classification categories. Once some of this work takes place, computers will be able to make more sense of the Web, intelligent agents will be capable of performing sophisticated search tasks, and data in Web pages will be able to be processed automatically. Another technological change can be seen in the way the Internet is being accessed. Mobile wireless broadband Internet access is the fastest-growing form of Internet access in 2008. Diff: 2 Page Ref: 265-274 AACSB: Analytic skills CASE: Analysis Objective: 7.3

Emmanuel Opoku

Rowkish+ 135

89) 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. Diff: 1 Page Ref: 283 AACSB: Analytic skills CASE: Analysis Objective: 7.5

90) What are wireless sensor networks? How do they work and what are they used for? Answer: Wireless sensor networks (WSNs) are networks of interconnected wireless devices that are embedded into the physical environment to provide measurements of many points over large spaces. These devices have built-in processing, storage, and radio frequency sensors and antennas. They are linked into an interconnected network that routes the data they capture to a computer for analysis. These networks range from hundreds to thousands of nodes. Because wireless sensor devices are placed in the field for years at a time without any maintenance or human intervention, they must have very low power requirements and batteries capable of lasting for years. Wireless sensor networks are valuable in areas such as monitoring environmental changes; monitoring traffic or military activity; protecting property; efficiently operating and managing machinery and vehicles; establishing security perimeters; monitoring supply chain management; or detecting chemical, biological, or radiological material. Diff: 1 Page Ref: 283-284 AACSB: Analytic skills CASE: Analysis Objective: 7.5

Emmanuel Opoku

Rowkish+ 136

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 8 Securing Information Systems 1) The potential for unauthorized access is usually limited to the communications lines of a network. Answer: FALSE Diff: 2 Page Ref: 295 AACSB: Use of information technology CASE: Content Objective: 8.1 2) Computers using cable modems to connect to the Internet are more open to penetration than those connecting via dial-up. Answer: TRUE Diff: 2 Page Ref: 296 AACSB: Use of information technology CASE: Content Objective: 8.1 3) Wireless networks are vulnerable to penetration because radio frequency bands are easy to scan. Answer: TRUE Diff: 2 Page Ref: 297 AACSB: Use of information technology CASE: Content Objective: 8.1 4) The range of Wi-Fi networks can be extended up to two miles by using external antennae. Answer: FALSE Diff: 3 Page Ref: 297 AACSB: Use of information technology CASE: Content Objective: 8.1 5) The WEP specification calls for an access point and its users to share the same 40-bit encrypted password. Answer: TRUE Diff: 3 Page Ref: 300 AACSB: Use of information technology CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 137

6) Viruses can be spread through e-mail. Answer: TRUE Diff: 1 Page Ref: 300 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

7) Computer worms spread much more rapidly than computer viruses. Answer: TRUE Diff: 2 Page Ref: 300 AACSB: Use of information technology CASE: Content Objective: 8.1 8) One form of spoofing involves forging the return address on an e-mail so that the e-mail message appears to come from someone other than the sender. Answer: TRUE Diff: 2 Page Ref: 302 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 9) Sniffers enable hackers to steal proprietary information from anywhere on a network, including e-mail messages, company files, and confidential reports. Answer: TRUE Diff: 2 Page Ref: 302 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 10) DoS attacks are used to destroy information and access restricted areas of a company's information system. Answer: FALSE Diff: 2 Page Ref: 302-303 AACSB: Use of information technology CASE: Content Objective: 8.1 11) The most economically damaging kinds of computer crime are e-mail viruses. Answer: FALSE Diff: 3 Page Ref: 303 AACSB: Use of information technology CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 138

12) 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 Diff: 2 Page Ref: 307 AACSB: Use of information technology CASE: Content Objective: 8.1

13) An acceptable use policy defines the acceptable level of access to information assets for different users. Answer: FALSE Diff: 2 Page Ref: 312 AACSB: Use of information technology CASE: Content Objective: 8.3 14) Biometric authentication is the use of physical characteristics such as retinal images to provide identification. Answer: FALSE Diff: 1 Page Ref: 316 AACSB: Reflective thinking skills CASE: Content Objective: 8.4 15) Packet filtering catches most types of network attacks. Answer: FALSE Diff: 2 Page Ref: 318 AACSB: Use of information technology CASE: Content Objective: 8.4 16) NAT conceals the IP addresses of the organization's internal host computers to deter sniffer programs. Answer: TRUE Diff: 2 Page Ref: 318 AACSB: Use of information technology CASE: Content Objective: 8.4 17) SSL is a protocol used to establish a secure connection between two computers. Answer: TRUE Diff: 2 Page Ref: 319 AACSB: Use of information technology CASE: Content Objective: 8.4

Emmanuel Opoku

Rowkish+ 139

18) Public key encryption uses two keys. Answer: TRUE Diff: 2 Page Ref: 320 AACSB: Reflective thinking skills CASE: Content Objective: 8.4

19) Fault-tolerant computers contain redundant hardware, software, and power supply components. Answer: TRUE Diff: 2 Page Ref: 321 AACSB: Use of information technology CASE: Content Objective: 8.4 20) High-availability computing is also referred to as fault tolerance. Answer: FALSE Diff: 2 Page Ref: 321 AACSB: Use of information technology CASE: Content Objective: 8.4 21) ________ refers to policies, procedures, and technical measures used to prevent unauthorized access, alternation, theft, or physical damage to information systems. A) "Security" B) "Controls" C) "Benchmarking" D) "Algorithms" Answer: A Diff: 2 Page Ref: 295 AACSB: Use of information technology CASE: Content Objective: 8.1 22) ________ refers to all of the methods, policies, and organizational procedures that ensure the safety of the organization's assets, the accuracy and reliability of its accounting records, and operational adherence to management standards. A) "Legacy systems" B) "SSID standards" C) "Vulnerabilities" D) "Controls" Answer: D Diff: 2 Page Ref: 295 AACSB: Use of information technology CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 140

23) Large amounts of data stored in electronic form are ________ than the same data in manual form. A) less vulnerable to damage B) more secure C) vulnerable to many more kinds of threats D) more critical to most businesses Answer: C Diff: 1 Page Ref: 295 AACSB: Analytic skills CASE: Evaluation Objective: 8.1

24) Electronic data are more susceptible to destruction, fraud, error, and misuse because information systems concentrate data in computer files that A) are usually bound up in legacy systems that are difficult to access and difficult to correct in case of error. B) are not secure because the technology to secure them did not exist at the time the files were created. C) have the potential to be accessed by large numbers of people and by groups outside of the organization. D) are frequently available on the Internet. Answer: C Diff: 2 Page Ref: 295-296 AACSB: Analytic skills CASE: Analysis Objective: 8.1 25) Specific security challenges that threaten the communications lines in a client/server environment include A) tapping; sniffing; message alteration; radiation. B) hacking; vandalism; denial of service attacks. C) theft, copying, alteration of data; hardware or software failure. D) unauthorized access; errors; spyware. Answer: A Diff: 3 Page Ref: 295 AACSB: Analytic skills CASE: Analysis Objective: 8.1

Emmanuel Opoku

Rowkish+ 141

26) Specific security challenges that threaten clients in a client/server environment include A) tapping; sniffing; message alteration; radiation. B) hacking; vandalism; denial of service attacks. C) theft, copying, alteration of data; hardware or software failure. D) unauthorized access; errors; spyware. Answer: D Diff: 2 Page Ref: 295 AACSB: Analytic skills CASE: Analysis Objective: 8.1 27) Specific security challenges that threaten corporate servers in a client/server environment include A) tapping; sniffing; message alteration; radiation. B) hacking; vandalism; denial of service attacks. C) theft, copying, alteration of data; hardware or software failure. D) unauthorized access; errors; spyware. Answer: B Diff: 3 Page Ref: 295 AACSB: Analytic skills CASE: Analysis Objective: 8.1

28) The Internet poses specific security problems because A) it was designed to be easily accessible. B) everyone uses the Internet. C) Internet standards are universal. D) it changes so rapidly. Answer: A Diff: 2 Page Ref: 296 AACSB: Use of information technology CASE: Content Objective: 8.1 29) The main security problem on the Internet is A) radiation. B) bandwidth theft. C) hackers. D) natural disasters, such as floods and fires. Answer: C Diff: 1 Page Ref: 296-297 AACSB: Analytic skills CASE: Analysis Objective: 8.1

Emmanuel Opoku

Rowkish+ 142

30) An independent computer program that copies itself from one computer to another over a network is called a A) worm. B) Trojan horse. C) bug. D) pest. Answer: A Diff: 2 Page Ref: 300 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 31) Sobig.F and MyDoom.A are A) viruses that use Microsoft Outlook to spread to other systems. B) worms attached to e-mail that spread from computer to computer. C) multipartite viruses that can infect files as well as the boot sector of the hard drive. D) Trojan horses used to create bot nets. Answer: B Diff: 3 Page Ref: 301 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

32) In 2004, ICQ users were enticed by a sales message from a supposed anti-virus vendor. On the vendor's site, a small program called Mitglieder was downloaded to the user's machine. The program enabled outsiders to infiltrate the user's machine. What type of malware is this an example of? A) Trojan horse B) virus C) worm D) spyware Answer: A Diff: 2 Page Ref: 301 AACSB: Analytic skills CASE: Analysis Objective: 8.1 33) Redirecting a Web link to a different address is a form of A) snooping. B) spoofing. C) sniffing. D) war driving. Answer: B Diff: 2 Page Ref: 302 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 143

34) A key logger is a type of A) worm. B) Trojan horse. C) virus. D) spyware. Answer: D Diff: 1 Page Ref: 302 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 35) How do hackers create a botnet? A) by infecting Web search bots with malware B) by using Web search bots to infect other computers C) by causing other people's computers to become "zombie" PCs following a master computer D) by infecting corporate servers with "zombie" Trojan horses that allow undetected access through a back door Answer: C Diff: 2 Page Ref: 303 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

36) Using numerous computers to inundate and overwhelm the network from numerous launch points is called a ________ attack. A) DDoS B) DoS C) pharming D) phishing Answer: A Diff: 2 Page Ref: 303 AACSB: Use of information technology CASE: Content Objective: 8.1 37) Which of the following is NOT an example of a computer used as a target of crime? A) knowingly accessing a protected computer to commit fraud B) accessing a computer system without authority C) illegally accessing stored electronic communication D) threatening to cause damage to a protected computer Answer: C Diff: 2 Page Ref: 304 AACSB: Analytic skills CASE: Analysis Objective: 8.1

Emmanuel Opoku

Rowkish+ 144

38) Which of the following is NOT an example of a computer used as an instrument of crime? A) theft of trade secrets B) intentionally attempting to intercept electronic communication C) unauthorized copying of software D) breaching the confidentiality of protected computerized data Answer: D Diff: 2 Page Ref: 304 AACSB: Analytic skills CASE: Analysis Objective: 8.1 39) Phishing is a form of A) spoofing. B) spinning. C) snooping. D) sniffing. Answer: A Diff: 2 Page Ref: 304 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

40) Phishing involves A) setting up bogus Wi-Fi hot spots. B) setting up fake Web sites to ask users for confidential information. C) pretending to be a legitimate business's representative in order to garner information about a security system. D) using e-mails for threats or harassment. Answer: B Diff: 2 Page Ref: 304 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 41) Evil twins are A) Trojan horses that appears to the user to be a legitimate commercial software application. B) e-mail messages that mimic the e-mail messages of a legitimate business. C) fraudulent Web sites that mimic a legitimate business's Web site. D) bogus wireless networks that look legitimate to users. Answer: D Diff: 1 Page Ref: 304 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 145

42) Pharming involves A) redirecting users to a fraudulent Web site 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 Web sites to ask users for confidential information. D) using e-mails for threats or harassment. Answer: A Diff: 2 Page Ref: 305 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 43) You have been hired as a security consultant for a legal firm. Which of the following constitutes the greatest threat, in terms of security, to the firm? A) wireless network B) employees C) authentication procedures D) lack of data encryption Answer: B Diff: 2 Page Ref: 306 AACSB: Analytic skills CASE: Evaluation Objective: 8.1

44) Tricking employees to reveal their passwords by pretending to be a legitimate member of a company is called A) sniffing B) social engineering C) phishing D) pharming Answer: B Diff: 1 Page Ref: 306 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 45) How do software vendors correct flaws in their software after it has been distributed? A) issue bug fixes B) issue patches C) re-release software D) issue updated versions Answer: B Diff: 2 Page Ref: 307 AACSB: Use of information technology CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 146

46) The HIPAA Act of 1997 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 Diff: 2 Page Ref: 308 AACSB: Reflective thinking skills CASE: Content Objective: 8.2 47) 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 Diff: 3 Page Ref: 309 AACSB: Reflective thinking skills CASE: Content Objective: 8.2

48) 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 Diff: 2 Page Ref: 309 AACSB: Reflective thinking skills CASE: Content Objective: 8.2 49) The most common type of electronic evidence is A) voice-mail. B) spreadsheets. C) instant messages. D) e-mail. Answer: D Diff: 2 Page Ref: 309 AACSB: Use of information technology CASE: Content Objective: 8.2

Emmanuel Opoku

Rowkish+ 147

50) Electronic evidence on computer storage media that is not visible to the average user is called ________ data. A) defragmented B) ambient C) forensic D) recovery Answer: B Diff: 2 Page Ref: 310 AACSB: Use of information technology CASE: Content Objective: 8.2 51) Application controls A) can be classified as input controls, processing controls, and output controls. B) govern the design, security, and use of computer programs and the security of data files in general throughout the organization. C) apply to all computerized applications and consist of a combination of hardware, software, and manual procedures that create an overall control environment. D) include software controls, computer operations controls, and implementation controls. Answer: A Diff: 2 Page Ref: 310 AACSB: Use of information technology CASE: Content Objective: 8.3

52) ________ controls ensure that valuable business data files on either disk or tape are not subject to unauthorized access, change, or destruction while they are in use or in storage. A) Software B) Administrative C) Data security D) Implementation Answer: C Diff: 3 Page Ref: 311 AACSB: Use of information technology CASE: Content Objective: 8.3

Emmanuel Opoku

Rowkish+ 148

53) Analysis of an information system that rates the likelihood of a security incident occurring and its cost is included in a(n) A) security policy. B) AUP. C) risk assessment. D) business impact analysis. Answer: C Diff: 2 Page Ref: 311 AACSB: Use of information technology CASE: Content Objective: 8.3 54) Statements ranking information risks and identifying security goals are included in a(n) A) security policy. B) AUP. C) risk assessment. D) business impact analysis. Answer: A Diff: 2 Page Ref: 311 AACSB: Use of information technology CASE: Content Objective: 8.3 55) An analysis of the firm's most critical systems and the impact a system's outage would have on the business is included in a(n) A) security policy. B) AUP. C) risk assessment. D) business impact analysis. Answer: D Diff: 3 Page Ref: 314 AACSB: Use of information technology CASE: Content Objective: 8.3

56) Rigorous password systems A) are one of the most effective security tools. B) may hinder employee productivity. C) are costly to implement. D) are often disregarded by employees. Answer: B Diff: 2 Page Ref: 316 AACSB: Use of information technology CASE: Content Objective: 8.4

Emmanuel Opoku

Rowkish+ 149

57) An authentication token is a(n) A) device the size of a credit card that contains access permission data. B) type of smart card. C) gadget that displays passcodes. D) electronic marker attached to a digital authorization file. Answer: C Diff: 2 Page Ref: 316 AACSB: Use of information technology CASE: Content Objective: 8.4 58) Biometric authentication A) is inexpensive. B) is used widely in Europe for security applications. C) can use a person's face as a unique, measurable trait. D) only uses physical traits as a measurement. Answer: C Diff: 2 Page Ref: 316 AACSB: Reflective thinking skills CASE: Content Objective: 8.4 59) A firewall allows the organization to A) enforce a security policy on traffic between its network and the Internet. 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 e-mail messages. Answer: A Diff: 2 Page Ref: 317 AACSB: Use of information technology CASE: Content Objective: 8.4

60) In which technique are network communications are analyzed to see whether packets are part of an ongoing dialogue between a sender and a receiver? A) stateful inspection B) intrusion detection system C) application proxy filtering D) packet filtering Answer: A Diff: 3 Page Ref: 318 AACSB: Use of information technology CASE: Content Objective: 8.4

Emmanuel Opoku

Rowkish+ 150

61) ________ 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 Diff: 2 Page Ref: 318 AACSB: Use of information technology CASE: Content Objective: 8.4 62) Currently, the protocols used for secure information transfer over the Internet are A) TCP/IP and SSL. B) S-HTTP and CA. C) HTTP and TCP/IP. D) SSL, TLS, and S-HTTP. Answer: D Diff: 1 Page Ref: 319 AACSB: Use of information technology CASE: Content Objective: 8.4 63) Most antivirus software is effective against A) only those viruses active on the Internet and through e-mail. B) any virus. C) any virus except those in wireless communications applications. D) only those viruses already known when the software is written. Answer: D Diff: 2 Page Ref: 319 AACSB: Analytic skills CASE: Synthesis Objective: 8.4

64) 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 B) symmetric key encryption C) public key encryption D) private key encryption Answer: B Diff: 2 Page Ref: 320 AACSB: Use of information technology CASE: Content Objective: 8.4

Emmanuel Opoku

Rowkish+ 151

65) A digital certificate system A) uses third-party CAs to validate a user's identity. B) uses digital signatures to validate a user's identity. C) uses tokens to validate a user's identity. D) are used primarily by individuals for personal correspondence. Answer: A Diff: 2 Page Ref: 320 AACSB: Use of information technology CASE: Content Objective: 8.4 66) Downtime refers to periods of time in which a A) computer system is malfunctioning. B) computer system is not operational. C) corporation or organization is not operational. D) computer is not online. Answer: B Diff: 2 Page Ref: 321 AACSB: Use of information technology CASE: Content Objective: 8.4 67) Online transaction processing requires A) more processing time. B) a large server network. C) fault-tolerant computer systems. D) dedicated phone lines. Answer: C Diff: 1 Page Ref: 321 AACSB: Use of information technology CASE: Content Objective: 8.4

68) In controlling network traffic to minimize slow-downs, a technology called ________ is used to examine data files and sort low-priority data from high-priority data. A) high availability computing B) deep-packet inspection C) application proxy filtering D) stateful inspection Answer: B Diff: 3 Page Ref: 322 AACSB: Use of information technology CASE: Content Objective: 8.4

Emmanuel Opoku

Rowkish+ 152

69) The development and use of methods to make computer systems recover more quickly after mishaps is called A) high availability computing. B) recovery oriented computing. C) fault tolerant computing. D) disaster recovery planning. Answer: B Diff: 2 Page Ref: 322 AACSB: Use of information technology CASE: Content Objective: 8.4 70) Smaller firms can outsource security functions to A) MISs B) CSOs C) MSSPs D) CAs Answer: C Diff: 2 Page Ref: 322 AACSB: Use of information technology CASE: Content Objective: 8.4 71) A practice in which eavesdroppers drive by buildings or park outside and try to intercept wireless network traffic is referred to as ________. Answer: war driving Diff: 2 Page Ref: 297 AACSB: Reflective thinking skills CASE: Content Objective: 8.1 72) Malicious software programs referred to as ________ include a variety of threats such as computer viruses, worms, and Trojan horses. Answer: malware Diff: 1 Page Ref: 300 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

73) ________ is a crime in which an imposter obtains key pieces of personal information to impersonate someone else. Answer: Identity theft Diff: 1 Page Ref: 304 AACSB: Reflective thinking skills CASE: Content Objective: 8.1

Emmanuel Opoku

Rowkish+ 153

74) ________ is 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. Answer: Computer forensics Diff: 2 Page Ref: 309-310 AACSB: Reflective thinking skills CASE: Content Objective: 8.2 75) On the whole, ________ controls apply to all computerized applications and consist of a combination of hardware, software, and manual procedures that create an overall control environment. Answer: general Diff: 3 Page Ref: 310 AACSB: Use of information technology CASE: Content Objective: 8.3 76) A(n) ________ examines the firm's overall security environment as well as the controls governing individual information systems. Answer: MIS audit Diff: 2 Page Ref: 314 AACSB: Use of information technology CASE: Content Objective: 8.3 77) ________ consists of all the policies and procedures a company uses to prevent improper entry to systems by unauthorized insiders and outsiders. Answer: Access control Diff: 3 Page Ref: 315 AACSB: Use of information technology CASE: Content Objective: 8.4 78) ________ refers to the ability to know that a person is who he or she claims to be. Answer: Authentication Diff: 2 Page Ref: 316 AACSB: Reflective thinking skills CASE: Content Objective: 8.4

Emmanuel Opoku

Rowkish+ 154

79) Comprehensive security management products, with tools for firewalls, VPNs, intrusion detection systems, and more, are called ________ systems. Answer: unified threat management Diff: 3 Page Ref: 319 AACSB: Use of information technology CASE: Content Objective: 8.4 80) When errors are discovered in software programs, the sources of the errors are found and eliminated through a process called ________. Answer: debugging Diff: 1 Page Ref: 325 AACSB: Use of information technology CASE: Content Objective: 8.4 81) Discuss the issue of security challenges on the Internet as that issue applies to a global enterprise. List at least five Internet security challenges. Answer: Large public networks, including the Internet, are more vulnerable because they are virtually open to anyone and because they are so huge that when abuses do occur, they can have an enormously widespread impact. When the Internet becomes part of the corporate network, the organization's information systems can be vulnerable to actions from outsiders. Computers that are constantly connected to the Internet via cable modem or DSL line are more open to penetration by outsiders because they use a fixed Internet address where they can be more easily identified. The fixed Internet address creates the target for hackers. To benefit from electronic commerce, supply chain management, and other digital business processes, companies need to be open to outsiders such as customers, suppliers, and trading partners. Corporate systems must be extended outside the organization so that employees working with wireless and other mobile computing devices can access them. This requires a new security culture and infrastructure, allowing corporations to extend their security policies to include procedures for suppliers and other business partners. Diff: 2 Page Ref: 295-300 AACSB: Analytic skills CASE: Analysis Objective: 8.1

Emmanuel Opoku

Rowkish+ 155

82) How can a firm's security policies contribute and relate to the six main business objectives? Give examples. Answer: Operational excellence: Security policies are essential to operational excellence. A firm's daily transactions can be severely disrupted by cybercrime such as hackers. A firm's efficiency relies on accurate data. In addition, information assets have tremendous value, and the repercussions can be devastating if they are lost, destroyed, or placed in the wrong hands. New products, services, business models. Security policies protect a company's ideas for new products and services, which could be stolen by competitors. Additionally, enhanced security could be seen by a customer as a way to differentiate your product. Customer and supplier intimacy: Customers rely on your security if they enter personal data into your information system, for example, credit card information into your e-commerce site. The information you receive from customers and suppliers directly affects how able you are to customize your product, service, or communication with them. Improved decision making: Secure systems make data accuracy a priority, and good decision making relies on accurate and timely data. Lost and inaccurate data would lead to compromised decision making. Competitive advantage: The knowledge that your firm has superior security than another would, on an otherwise level playing field, make your firm more attractive to do business with. Also, improved decision-making, new products and services, which are also affected by security (see above), will contribute to a firm's competitive advantage. Strong security and control also increase employee productivity and lower operational costs. Survival: New laws and regulations make keeping your security system up-to-data a matter of survival. Inadequate security and control may result in serious legal liability. Firms have been destroyed by errors in security policies. Diff: 3 Page Ref: 295-325 AACSB: Analytic skills CASE: Synthesis Objective: 8.2 83) Three major concerns of system builders and users are disaster, security, and human error. Of the three, which do you think is most difficult to deal with? Why? Answer: Disaster might be the most difficult because it is unexpected, broad-based, and frequently life threatening. In addition, the company cannot know if the disaster plan will work until a disaster occurs, and then it's too late to make corrections. Security might be the most difficult because it is an ongoing problem, new viruses are devised constantly, and hackers get smarter every day. Furthermore, damage done by a trusted employee from inside cannot be obviated by system security measures. Human error might be most difficult because it isn't caught until too late, and the consequences may be disastrous. Also, administrative error can occur at any level and through any operation or procedure in the company. Diff: 2 Page Ref: 295-306 AACSB: Analytic skills CASE: Evaluation Objective: 8.1

Emmanuel Opoku

Rowkish+ 156

84) What are the security challenges faced by wireless networks? Answer: Wireless networks are vulnerable because radio frequency bands are easy to scan. 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. Diff: 3 Page Ref: 297-300 AACSB: Analytic skills CASE: Analysis Objective: 8.1

Emmanuel Opoku

Rowkish+ 157

85) Why is software quality important to security. What specific steps can an organization take to ensure software quality? Answer: Software errors pose a constant threat to information systems, causing untold losses in productivity. Growing complexity and size of software programs, coupled with demands for timely delivery to markets, have contributed to an increase in software flaws or vulnerabilities. A major problem with software is the presence of hidden bugs or program code defects. Studies have shown that it is virtually impossible to eliminate all bugs from large programs. Flaws in commercial software not only impede performance but also create security vulnerabilities that open networks to intruders. To correct software flaws once they are identified, the software vendor creates small pieces of software called patches to repair the flaws without disturbing the proper operation of the software. Organizations must maintain best efforts to both make sure purchased software is up to date and make sure their own software and programming is as bug-free as possible by employing software metrics and rigorous software testing. Ongoing use of metrics allows the information systems department and end users to jointly measure the performance of the system and identify problems as they occur. Examples of software metrics include the number of transactions that can be processed in a specified unit of time, online response time, the number of payroll checks printed per hour, and the number of known bugs per hundred lines of program code. For metrics to be successful, they must be carefully designed, formal, objective, and used consistently. Early, regular, and thorough testing will contribute significantly to system quality. Good testing begins before a software program is even written by using a walkthrough– a review of a specification or design document by a small group of people carefully selected based on the skills needed for the particular objectives being tested. Once developers start writing software programs, coding walkthroughs also can be used to review program code. However, code must be tested by computer runs. When errors are discovered, the source is found and eliminated through a process called debugging. Diff: 2 Page Ref: 307, 325 AACSB: Analytic skills CASE: Evaluation Objective: 8.3 86) Hackers and their companion viruses are an increasing problem, especially on the Internet. What are the most important measurers for a firm to take to protect itself from this? Is full protection feasible? Why or why not? Answer: For protection, a company must institute good security measures, which will include firewalls, investigation of personnel to be hired, physical and software security and controls, antivirus software, and internal education measures. These measures are best put in place at the time the system is designed, and careful attention paid to them. A prudent company will engage in disaster protection measures, frequent updating of security software, and frequent auditing of all security measures and of all data upon which the company depends. Full protection may not be feasible in light of the time and expenses involved, but a risk analysis can provide insights into which areas are most important and vulnerable. These are the areas to protect first. Diff: 2 Page Ref: 310-322 AACSB: Analytic skills CASE: Synthesis Objective: 8.4

Emmanuel Opoku

Rowkish+ 158

87) You have just been hired as a security consultant by MegaMalls Inc., a national chain of retail malls, to make sure that the security of their information systems is up to par. Outline the steps you will take to achieve this. Answer: 1. Establish what data and processes are important and essential to the company. Determine what external and internal information is essential to the different employee roles in the company. 2. Conduct an MIS audit, a security audit, and create a risk assessment analysis 3. Establish what legal/governmental/industry standards need to be adhered to and which international standards are relevant. 4. Conduct a business impact analysis and determine a disaster recovery and business continuity plan. 5. Create a security policy that defines an acceptable use policy, authorization policies and processes. 6. Plan for any change management needed. 7. Determine how the success of your policy will be measured and set up means for measuring this. 8. Implement such policies 9. Measure and evaluate the effectiveness of the policy and make any additional adjustments. Diff: 3 Page Ref: 310-325 AACSB: Analytic skills CASE: Synthesis Objective: 8.3 88) What is a digital certificate? How does it work? Answer: Digital certificates are data files used to establish the identity of users and electronic assets for protection of online transactions. A digital certificate system uses a trusted third party, known as a certification authority, to validate a user's identity. The CA verifies a digital certificate user's identity offline. This information is put into a CA server, which generates an encrypted digital certificate containing owner identification information and a copy of the owner's public key. The certificate authenticates that the public key belongs to the designated owner. The CA makes its own public key available publicly either in print or perhaps on the Internet. The recipient of an encrypted message uses the CA's public key to decode the digital certificate attached to the message, verifies it was issued by the CA, and then obtains the sender's public key and identification information contained in the certificate. Using this information, the recipient can send an encrypted reply. The digital certificate system would enable, for example, a credit card user and a merchant to validate that their digital certificates were issued by an authorized and trusted third party before they exchange data. Public key infrastructure (PKI), the use of public key cryptography working with a certificate authority, is now widely used in e-commerce. Diff: 2 Page Ref: 320-321 AACSB: Analytic skills CASE: Analysis Objective: 8.4

Emmanuel Opoku

Rowkish+ 159

89) Define a fault-tolerant computer system and a high-availability computer system. How do they differ? When would each be used? Answer: Both systems use backup hardware resources. Fault-tolerant computer systems contain extra memory chips, processors, and disk storage devices that can back the system up and keep it running to prevent a system failure. High-availability computing places the emphasis on quick recovery from a system crash. A high-availability system includes redundant servers, mirroring, load balancing, clustering, storage area networks, and a good disaster recovery plan. The main difference between them is that fault-tolerant computer systems don't go down; high-availability computer systems go down, but can recover quickly. Companies needing a technology platform with 100 percent, 24-hr system availability, use fault-tolerant computer systems. High-availability computing environments are a minimum requirement for firms with heavy electronic commerce processing or that depend on digital networks for their internal operations. Diff: 2 Page Ref: 321-322 AACSB: Analytic skills CASE: Analysis Objective: 8.4 90) How is the security of a firm's information system and data affected by its people, organization, and technology? Is the contribution of one of these dimensions any more important than the other? Why? Answer: There are various technological essentials to protecting an information system: firewalls, authentication, encryption, anti-virus protection etc. Without technology implemented correctly, there is no security. A firm's employees are its greatest threat, in terms of embezzlement and insider fraud, errors, and lax enforcement of security policies. Probably the most important dimension is organization, because this is what determines a firm's business processes and policies. The firm's information policies can most enhance security by stressing intelligent design of security systems, appropriate use of security technology, the usability of its security processes. Diff: 3 Page Ref: 295-325 AACSB: Analytic skills CASE: Evaluation Objective: 8.2

Emmanuel Opoku

Rowkish+ 160

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 1) Companies can use configuration tables provided by the enterprise software to tailor a particular aspect of the system to the way it does business Answer: TRUE Diff: 2 Page Ref: 341 AACSB: Use of information technology CASE: Content Objective: 9.1 2) Enterprise systems use a client/server architecture and have not yet been redesigned to take advantage of the Web. Answer: FALSE Diff: 2 Page Ref: 341 AACSB: Use of information technology CASE: Content Objective: 9.1 3) Enterprise systems can improve management reporting and decision making. Answer: TRUE Diff: 1 Page Ref: 342 AACSB: Use of information technology CASE: Content Objective: 9.1 4) The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products to the final customers. Answer: FALSE Diff: 2 Page Ref: 343 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 5) Supply chain inefficiencies can waste as much as 25 percent of a company's operating costs. Answer: TRUE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 161

6) Safety stock acts as an inexpensive buffer for the lack of flexibility in the supply chain. Answer: FALSE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Content Objective: 9.2

7) The bullwhip effect is the distortion of information about the demand for a product as it passes from one entity to the next across the supply chain. Answer: TRUE Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 8) Supply chain execution systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. Answer: FALSE Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2 9) In the pre-Internet environment, supply chain coordination was hampered by the difficulties of making information flow smoothly among different internal supply chain processes. Answer: TRUE Diff: 2 Page Ref: 348 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 10) Intranets can be used to integrate information from isolated business processes within the firm to help them manage their internal supply chains. Answer: TRUE Diff: 1 Page Ref: 349 AACSB: Use of information technology CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 162

11) In a push-based model, actual customer orders or purchases trigger events in the supply chain. Answer: FALSE Diff: 2 Page Ref: 350 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 12) In a pull-based model, production master schedules are based on forecasts of demand for products. Answer: FALSE Diff: 2 Page Ref: 350 AACSB: Reflective thinking skills CASE: Content Objective: 9.2

13) Dell Inc. is an example of a push-based model. Answer: FALSE Diff: 2 Page Ref: 351 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 14) Total supply chain costs represent the majority of operating expenses for many businesses and in some industries approach 75 percent of the total operating budget. Answer: TRUE Diff: 2 Page Ref: 351 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 15) All CRM packages contain modules for PRM and ERM. Answer: FALSE Diff: 1 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3 16) Major CRM application software vendors include Siebel Systems, PeopleSoft, SAP, and Salesforce.com. Answer: TRUE Diff: 3 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3

Emmanuel Opoku

Rowkish+ 163

17) Cross-selling markets complementary products to customers. Answer: TRUE Diff: 2 Page Ref: 355 AACSB: Reflective thinking skills CASE: Content Objective: 9.3 18) CRM software can help organizations identify high-value customers for preferential treatments. Answer: TRUE Diff: 2 Page Ref: 357 AACSB: Use of information technology CASE: Content Objective: 9.3

19) Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm's customer touch points and from other sources. Answer: TRUE Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Content Objective: 9.3 20) Enterprise systems require fundamental changes in the way the business operates. Answer: FALSE Diff: 2 Page Ref: 360 AACSB: Use of information technology CASE: Content Objective: 9.4 21) From your reading of the Tasty Baking Company case study, the firm implemented new information systems in order to achieve which of the main six business objectives? A) customer and supplier intimacy B) new products, services, and business models C) improved decision making D) survival Answer: D Diff: 3 Page Ref: 337-338 AACSB: Analytic skills CASE: Analysis Objective: 9.1

Emmanuel Opoku

Rowkish+ 164

22) From your reading of the Tasty Baking Company case study, what enabled the firm to take maximum advantage of the new enterprise software's capabilities? A) willingness to normalize data B) adopting many changes in their business processes C) limiting changes to the software D) enforcing strict project management standards Answer: B Diff: 3 Page Ref: 337 AACSB: Analytic skills CASE: Analysis Objective: 9.4 23) A suite of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processes best describes A) process management software. B) ERP systems. C) groupware. D) application software. Answer: B Diff: 2 Page Ref: 339 AACSB: Use of information technology CASE: Content Objective: 9.1

24) ________ software is built around thousands of predefined business processes from all functional areas. A) Process management B) PRM C) Enterprise D) CRM Answer: C Diff: 1 Page Ref: 340 AACSB: Use of information technology CASE: Content Objective: 9.1

Emmanuel Opoku

Rowkish+ 165

25) 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 mimic their unique business practices. D) Enterprise software includes analytical tools to evaluate overall organizational performance. Answer: C Diff: 2 Page Ref: 341 AACSB: Analytic skills CASE: Synthesis Objective: 9.1 26) Why is overstocking warehouses not an effective solution for a problem of low availability? A) It does not speed product time to market. B) It is an inefficient use of raw materials. C) It increases sales costs. D) It increases inventory costs. Answer: D Diff: 2 Page Ref: 344 AACSB: Analytic skills CASE: Analysis Objective: 9.2 27) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first step you should take? A) Select the functions of the system you wish to use. B) Select the business processes you wish to automate. C) Map the company's business processes to the software's business processes. D) Map the software's business processes to the company's business processes. Answer: A Diff: 2 Page Ref: 341 AACSB: Analytic skills CASE: Evaluation Objective: 9.1

Emmanuel Opoku

Rowkish+ 166

28) When tailoring a particular aspect of a system to the way a company does business, enterprise software can provide the company with A) configuration tables. B) project workbooks. C) data dictionaries. D) middleware. Answer: A Diff: 2 Page Ref: 341 AACSB: Use of information technology CASE: Content Objective: 9.1 29) In order to achieve maximum benefit from an enterprise software package, a business A) customizes the software to match all of its business processes. B) uses only the processes in the software that match its own processes. C) changes the way it works to match the software's business processes. D) selects only the software that best matches its existing business processes. Answer: C Diff: 2 Page Ref: 341 AACSB: Use of information technology CASE: Evaluation Objective: 9.1 30) Supply chain complexity and scale A) affect both very small companies and large, global corporations. B) were difficult to address before the Internet. C) result when firms produce complex products and services. D) result when firms implement full-scale supply-chain management systems. Answer: C Diff: 3 Page Ref: 342 AACSB: Analytic skills CASE: Analysis Objective: 9.2 31) 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 Diff: 2 Page Ref: 342 AACSB: Reflective thinking skills CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 167

32) Components or parts of finished products are referred to as A) upstream materials. B) raw materials. C) secondary products. D) intermediate products. Answer: D Diff: 2 Page Ref: 343 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 33) A company's suppliers, supplier's suppliers, and the processes for managing relationships with them is the A) supplier's internal supply chain. B) external supply chain. C) upstream portion of the supply chain. D) downstream portion of the supply chain. Answer: C Diff: 2 Page Ref: 343 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 34) A company's organizations and processes for distributing and delivering products to the final customers is the A) supplier's internal supply chain. B) external supply chain. C) upstream portion of the supply chain. D) downstream portion of the supply chain. Answer: D Diff: 2 Page Ref: 343 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 35) Uncertainties arise in any supply chain because of A) inaccurate or untimely information. B) poor integration between systems of suppliers, manufacturers, and distributors. C) inefficient or inaccurate MIS. D) unforeseeable events. Answer: D Diff: 2 Page Ref: 344 AACSB: Analytic skills CASE: Analysis Objective: 9.2

Emmanuel Opoku

Rowkish+ 168

36) Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply chain? A) safety stock B) continuous replenishment C) just-in-time strategies D) demand planning Answer: A Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 37) A scheduling system for minimizing inventory by having components arrive exactly at the moment they are needed and finished goods shipped as soon as they leave the assembly line best describes a ________ strategy. A) just-in-time B) stockless C) bullwhip D) safety stock Answer: A Diff: 2 Page Ref: 344 AACSB: Use of information technology CASE: Content Objective: 9.2 38) 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) replenishment B) bullwhip C) ripple D) exponential Answer: B Diff: 1 Page Ref: 344 AACSB: Reflective thinking skills CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 169

39) 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 Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2

40) Systems that enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product best describes supply chain ________ systems. A) demand B) delivery C) planning D) execution Answer: C Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2 41) Supply chain planning systems A) track the physical status of goods. B) identify the transportation mode to use for product delivery. C) track the financial information involving all parties. D) track the status of orders. Answer: B Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2 42) 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 Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 170

43) Supply chain ________ systems manage 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) demand B) delivery C) planning D) execution Answer: D Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2

44) Capabilities of supply chain planning systems would NOT include A) transport operations. B) advanced scheduling and manufacturing planning. C) demand planning. D) order planning. Answer: A Diff: 2 Page Ref: 346 AACSB: Use of information technology CASE: Content Objective: 9.2 45) From your reading of the Procter & Gamble case study, the company implemented a multi-echelon inventory optimization system to achieve which of the main six business objectives? A) customer and supplier intimacy B) operational excellence C) improved decision making D) survival Answer: B Diff: 2 Page Ref: 347 AACSB: Analytic skills CASE: Evaluation Objective: 9.2 46) A supply chain driven by actual customer orders or purchases follows a ________ model. A) pull-based model B) build-to-stock C) push-based D) replenishment-driven Answer: A Diff: 2 Page Ref: 350 AACSB: Use of information technology CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 171

47) A build-to-order supply-chain model is also called a ________ model. A) supply-driven B) demand-driven C) replenishment-driven D) push-based Answer: B Diff: 2 Page Ref: 350 AACSB: Use of information technology CASE: Content Objective: 9.2

48) Concurrent supply chains are made possible by which technology? A) pull-based technology B) Internet technology C) supply chain management systems D) just-in-time supply-chain technologies Answer: B Diff: 1 Page Ref: 351 AACSB: Use of information technology CASE: Content Objective: 9.2 49) Companies with effective supply chain management systems can expect A) improved customer service and responsiveness. B) cost reduction. C) reduced inventory levels. D) all of the above. Answer: D Diff: 1 Page Ref: 351 AACSB: Analytic skills CASE: Evaluation Objective: 9.2 50) A ________ is a method of interaction with a customer, such as telephone or customer service desk. A) point of presence B) touch point C) sales point D) client channel Answer: B Diff: 2 Page Ref: 353 AACSB: Reflective thinking skills CASE: Content Objective: 9.3

Emmanuel Opoku

Rowkish+ 172

51) Which of the following would NOT be considered a contact point? A) e-mail B) Web site C) intranet D) retail store Answer: C Diff: 2 Page Ref: 353 AACSB: Use of information technology CASE: Content Objective: 9.3

52) ________ modules use many of the same data, tools, and systems as CRM to enhance collaboration between a company and its selling partners. A) SCM B) SFA C) ERM D) PRM Answer: D Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3 53) ________ modules deal with issues such as setting objectives, employee performance management, and performance-based compensation. A) SCM B) SFA C) ERM D) PRM Answer: C Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3 54) Customer relationship management systems typically provide software and online tools for sales, customer service, and A) marketing. B) account management. C) advertising. D) public relations. Answer: A Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3

Emmanuel Opoku

Rowkish+ 173

55) SFA modules in CRM systems would 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: D Diff: 1 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3

56) Customer service modules in CRM systems provide tools for A) assigning and managing customer service requests. B) sales quote generation. C) identifying profitable and unprofitable customers. D) managing sales prospect and contact information. Answer: A Diff: 1 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3 57) Marketing modules in CRM systems would provide tools for A) managing an advice telephone line. B) sales quote generation. C) identifying profitable and unprofitable customers. D) managing sales prospect and contact information. Answer: C Diff: 1 Page Ref: 355 AACSB: Use of information technology CASE: Content Objective: 9.3 58) ________ software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training? A) Enterprise B) ERM C) PRM D) ERP Answer: B Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3

Emmanuel Opoku

Rowkish+ 174

59) 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 Diff: 2 Page Ref: 355 AACSB: Use of information technology CASE: Content Objective: 9.3

60) Which of the following is an important capability for service processes that is found in most major CRM software products? A) returns management B) lead management C) account management D) events management Answer: A Diff: 2 Page Ref: 358 AACSB: Use of information technology CASE: Content Objective: 9.3 61) Which of the following is an important capability for sales processes that is found in most major CRM software products? A) returns management B) lead management C) channel promotions management D) events management Answer: B Diff: 3 Page Ref: 358 AACSB: Use of information technology CASE: Content Objective: 9.3 62) Customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance best describes ________ applications. A) operational CRM B) analytical CRM C) SCM D) SFA Answer: B Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Synthesis Objective: 9.3

Emmanuel Opoku

Rowkish+ 175

63) Analytical CRM applications A) include tools for marketing automation. B) provide consolidated data for operational CRM applications. C) are based on data warehouses consolidated from operational CRM applications. D) provide customer-facing applications. Answer: C Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Content Objective: 9.3

64) Operational CRM applications include tools for A) identifying buying patterns. B) calculating CLTV. C) sales force automation. D) pinpointing unprofitable customers. Answer: C Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Content Objective: 9.3 65) Analyzing sales representative and customer service representative productivity is an example of A) CLTV. B) analytical CRM. C) operational CRM. D) demand planning. Answer: B Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Content Objective: 9.3 66) 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 Diff: 2 Page Ref: 359 AACSB: Reflective thinking skills CASE: Content Objective: 9.3

Emmanuel Opoku

Rowkish+ 176

67) 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 Diff: 2 Page Ref: 360 AACSB: Reflective thinking skills CASE: Content Objective: 9.3

68) Which of the following statements about enterprise applications is NOT true? A) The total implementation cost of a large system might amount to four to five times the initial purchase price for the software. B) Enterprise applications introduce "switching costs." C) Enterprise applications are based on organization-wide definitions of data. D) Enterprise applications are best implemented when few changes in business processes are required. Answer: D Diff: 2 Page Ref: 360-361 AACSB: Analytic skills CASE: Analysis Objective: 9.4 69) ________ integrate(s) multiple applications from multiple business functions, business units, or business partners to deliver a seamless experience for the customer, employee, manager, or business partner and provide a greater degree of cross-functional integration than the traditional enterprise applications. A) PRM software B) SFA software C) ERP suites D) Service platforms Answer: D Diff: 2 Page Ref: 362 AACSB: Use of information technology CASE: Content Objective: 9.4

Emmanuel Opoku

Rowkish+ 177

70) Enterprise application vendors have created ________ to make their own customer relationship management, supply chain management, and enterprise systems work closely together with each other. A) e-business suites B) ERP systems C) middleware D) legacy systems Answer: A Diff: 1 Page Ref: 361 AACSB: Use of information technology CASE: Content Objective: 9.5 71) ________ consists of a set of interdependent software modules that support basic internal business processes for finance and accounting, human resources, manufacturing and production, and sales and marketing. Answer: Enterprise software Diff: 2 Page Ref: 340-341 AACSB: Use of information technology CASE: Content Objective: 9.1

72) The ________ is 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. Answer: supply chain Diff: 1 Page Ref: 342 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 73) In a(n) ________ strategy, components arrive exactly at the moment they are needed, and finished goods are shipped as they leave the assembly line. Answer: just-in-time Diff: 2 Page Ref: 344 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 74) ________ is used to determine how much product a business needs to make to satisfy all of its customers' demands. Answer: Demand planning Diff: 2 Page Ref: 346 AACSB: Reflective thinking skills CASE: Content Objective: 9.2

Emmanuel Opoku

Rowkish+ 178

75) With new flows of information made possible by Web-based tools, supply chain management can more easily follow a(n) ________ model. Answer: pull-based Diff: 2 Page Ref: 350 AACSB: Reflective thinking skills CASE: Content Objective: 9.2 76) ________ 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. Answer: Sales force automation, SFA Diff: 2 Page Ref: 354 AACSB: Use of information technology CASE: Content Objective: 9.3 77) ________ CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation. Answer: Operational Diff: 2 Page Ref: 359 AACSB: Use of information technology CASE: Content Objective: 9.3

78) ________ is the marketing of complementary products to customers. Answer: Cross-selling Diff: 2 Page Ref: 355 AACSB: Reflective thinking skills CASE: Content Objective: 9.3 79) Enterprise-wide ________ provide a greater degree of cross-functional integration than the traditional enterprise applications. Answer: service platforms Diff: 2 Page Ref: 362 AACSB: Use of information technology CASE: Content Objective: 9.5

Emmanuel Opoku

Rowkish+ 179

80) ________ can integrate information from enterprise applications and disparate in-house legacy systems, presenting it to users through a Web interface so that the information appears to be coming from a single source. Answer: Portal software Diff: 2 Page Ref: 363 AACSB: Use of information technology CASE: Content Objective: 9.5

81) Identify and describe three major enterprise applications. Answer: Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and marketing processes. Enterprise systems provide many benefits including an enterprise-enabled organization, improved management reporting and decision making, a unified information systems technology platform, and more efficient operations and customer-driven business processes. Supply chain management systems help an organization better manage its supply chain, including planning, sourcing, making, delivering, and returning items. Supply chain management software can be categorized as a supply chain planning system or as a supply chain execution system. A supply chain planning system enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. A supply chain execution system 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. Supply chain management benefits include improved customer service and responsiveness, cost reduction, and cash utilization. Customer relationship management systems help firms maximize the benefits of their customer assets. These systems capture and consolidate data from all over the organization and then distribute the results to various systems and customer touch points across the enterprise. Customer relationship management systems can be classified as operational or as analytical. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Benefits include increased customer satisfaction, reduced direct marketing costs, more effective marketing, and lower costs for customer acquisition and retention. Diff: 2 Page Ref: 340-360 AACSB: Analytic skills CASE: Analysis Objective: 9.1

Emmanuel Opoku

Rowkish+ 180

82) What are the benefits of enterprise systems? What are the challenges of enterprise systems? Answer: Benefits include creating an enterprise-enabled organization, providing firmwide knowledge-based management processes, providing a unified information system technology platform and environment, and enabling more efficient operations and customer-driven business processes. Challenges include a daunting implementation process, surviving a cost-benefit analysis, inflexibility, and realizing strategic value. Diff: 2 Page Ref: 339-342, 360-361 AACSB: Analytic skills CASE: Evaluation Objective: 9.1

83) Identify two classifications for supply chain software. For each classification, identify five capabilities. 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 generate demand forecasts for a product and develop sourcing and manufacturing plans for that product. Capabilities include order planning, advanced scheduling and manufacturing planning, demand planning, distribution planning, and transportation planning. 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 order commitments, final production, replenishment, distribution management, and reverse distribution. Diff: 2 Page Ref: 346 AACSB: Analytic skills CASE: Analysis Objective: 9.2

Emmanuel Opoku

Rowkish+ 181

84) What additional complexities are faced in global supply chains? How does the Internet help in managing global supply chains? Answer: Global supply chains typically span greater geographic distances and time differences than domestic supply chains and have participants from a number of different countries. Although the purchase price of many goods might be lower abroad, there are often additional costs for transportation, inventory, and local taxes or fees. Performance standards may vary from region to region or from nation to nation. Supply chain management may need to reflect foreign government regulations and cultural differences. All of these factors impact how a company takes orders, plans distribution, organizes warehousing, and manages inbound and outbound logistics throughout the global markets it services. The Internet helps companies manage many aspects of their global supply chains, including sourcing, transportation, communications, and international finance. As goods are being sourced, produced, and shipped, communication is required among retailers, manufacturers, contractors, agents, and logistics providers. Many, especially smaller companies, still share product information over the phone, via e-mail, or through faxes. These methods slow down the supply chain and also increase errors and uncertainty. With Internet technology, supply chain members communicate through a Web-based system. Firms use intranets to improve coordination among their internal supply chain processes, and they use extranets to coordinate supply chain processes shared with their business partners. Using intranets and extranets, all members of the supply chain are instantly able to communicate with each other, using up-to-date information to adjust purchasing, logistics, manufacturing, packaging, and schedules. Diff: 2 Page Ref: 348-350 AACSB: Analytic skills CASE: Analysis Objective: 9.2

85) Identify two supply chain models. Which is better? Answer: Push-based and pull-based models were discussed in the textbook. Push-based refers to a supply chain driven by production master schedules based on forecasts or best guesses of demand for products. Pull-based 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. Pull-based models are better. Diff: 1 Page Ref: 350-351 AACSB: Analytic skills CASE: Analysis Objective: 9.2 86) Identify two types of customer relationships management applications. Answer: Operational CRM and analytical CRM are two aspects. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Diff: 1 Page Ref: 359 AACSB: Analytic skills CASE: Analysis Objective: 9.3

Emmanuel Opoku

Rowkish+ 182

87) Identify five benefits of customer relationship management systems. Answer: Benefits include: better customer service, make call centers more efficient, cross-sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, acquire new profitable customers, sell additional products and services, provide customer information for developing new products, increase product utilization, reduce sales and marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high-lifetime value customers, improve customer loyalty, improve response rates to direct mail, increase product profitability, respond quickly to market opportunities. Diff: 2 Page Ref: 360 AACSB: Analytic skills CASE: Analysis Objective: 9.3

88) 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 enterprise software packages that are available to smaller companies. A hosted enterprise application might be the most economical way to implement an enterprise system. 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 existing hosted applications 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. Diff: 3 Page Ref: 340-342, 360-361 AACSB: Analytic skills CASE: Synthesis Objective: 9.4 89) Plant Away is an Oregon-based retailer and distributor of trees and shrubs. They have hundreds of smaller nurseries based around the country that grow the plant stock. The majority of their business is conducted online: Consumers purchase typically small quantities of products online and Plant Away coordinates the shipping from the most appropriate nursery. What unique problems might you anticipate they have in their supply chain? What might remedy these problems? Answer: Typical problems in supply chains arise from unforeseeable events. In a plant nursery, variations in the weather, growing season, plant diseases, crop output would be uncertainties. Other problems might be interstate regulations governing plants allowed in different states, and making sure plants survive and are healthy during transportation. It would be very important to have up-to-date forecasting of the weather or growing seasons that could anticipate possible problems, and analyze and determine the best transportation routes. Diff: 3 Page Ref: 342-352 AACSB: Analytic skills CASE: Synthesis Objective: 9.2

Emmanuel Opoku

Rowkish+ 183

90) You have been hired by Croydon Visiting Nurse Services, whose business processes are all manual, paper-based processes. How might a CRM system benefit them? Answer: A CRM system that includes patient's health records would allow any nurse to take over if another needed replacement. Assuming that the nurses had access via laptops or other PDAs to the system, a new nurse would have instant access to the patients needs. The CRM might also be able to record which types of treatments or products customers were most interested in or gave the greatest benefit to customers, and help anticipate needs. Additionally, with PRM capabilities, products needed by the nursing service would be more easily anticipated, ordered, and delivered. Since the employees work in the field, or away from a central office, Internet-based communications might provide tools for reviewing employee performance. Diff: 3 Page Ref: 352-359 AACSB: Analytic skills CASE: Evaluation Objective: 9.3

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Rowkish+ 184

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 10 E-Commerce: Digital Markets, Digital Goods 1) E-commerce refers to the use of any networking technologies to transact business. Answer: FALSE Diff: 2 Page Ref: 375 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 2) Retail consumer e-commerce is still growing at single-digit rates. Answer: FALSE Diff: 3 Page Ref: 375 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 3) The Internet shrinks information asymmetry. Answer: TRUE Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 4) Information asymmetry exists when one party in a transaction has more information for the transaction than the other party. Answer: TRUE Diff: 1 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 5) All previous mass media in modern history, including the printing press, use a broadcast model where content is created in a central location by experts. Answer: TRUE Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 6) Disintermediation provides major benefits to the distributor. Answer: FALSE Diff: 2 Page Ref: 383 AACSB: Analytic skills CASE: Evaluation Objective: 10.1

Emmanuel Opoku

Rowkish+ 185

7) In general, for digital goods, the marginal cost of producing another unit is about zero. Answer: TRUE Diff: 2 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 8) An information broker provides product, pricing, and availability information to individuals and businesses and generates revenue from advertising or from directing buyers to sellers. Answer: TRUE Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 9) A banner ad opens a new window automatically and does not disappear until the user clicks on it. Answer: FALSE Diff: 1 Page Ref: 386 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 10) Podcasting allows subscribers to listen to live, streaming radio and other audio content. Answer: FALSE Diff: 1 Page Ref: 387 AACSB: Analytic skills CASE: Analysis Objective: 10.2 11) An online syndicator aggregates content or applications from multiple sources, packaging them for distribution, and reselling them to third-party Web sites. Answer: TRUE Diff: 2 Page Ref: 387 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 12) Web sites can gather bountiful detailed information about customer behavior and demographics. Answer: TRUE Diff: 1 Page Ref: 391 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 186

13) Companies rarely use Web pages to analyze customer information. Answer: FALSE Diff: 1 Page Ref: 391 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 14) Amazon.com uses Web personalization as a major marketing tool. Answer: TRUE Diff: 3 Page Ref: 392 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 15) EDI standards that take advantage of network communications have yet to be fully implemented at the industry level. Answer: FALSE Diff: 2 Page Ref: 394 AACSB: Use of information technology CASE: Content Objective: 10.4 16) Web sites cannot currently provide customers with call center interaction. Answer: FALSE Diff: 2 Page Ref: 394 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 17) Some Net marketplaces support contractual purchasing based on long-term relationships with designated suppliers. Answer: TRUE Diff: 3 Page Ref: 396 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 18) Exchanges proliferated during the early years of e-commerce, but many have failed, in part because they encouraged competitive bidding that drove prices down. Answer: FALSE Diff: 3 Page Ref: 397 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

Emmanuel Opoku

Rowkish+ 187

19) Automobile manufacturing is an example of a vertical market. Answer: TRUE Diff: 2 Page Ref: 397 AACSB: Analytic skills CASE: Analysis Objective: 10.3

20) Accumulated balance digital payment systems allow consumers to make instant online payments to merchants and other individuals based on stored value in a digital account. Answer: FALSE Diff: 1 Page Ref: 399 AACSB: Reflective thinking skills CASE: Content Objective: 10.5 21) Through what channel did e-commerce first evolve? A) online advertising sales B) internet portals C) online book sales D) Internet service providers Answer: A Diff: 3 Page Ref: 375 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 22) Since the dot-com bubble burst of 2001, e-commerce revenues: A) have essentially stagnated. B) show signs of stabilizing. C) have returned to solid growth. D) have returned to exponential growth. Answer: C Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 188

23) Based on your reading of the chapter, e-commerce is A) still in a revolutionary phase. B) widely accepted by consumers, although technology is still quickly changing. C) not yet fully accepted by consumers, although much of its driving technology is firmly in place. D) well entrenched as a form of modern commerce. Answer: A Diff: 2 Page Ref: 376 AACSB: Analytic skills CASE: Evaluation Objective: 10.1

24) The quality of ubiquity, as it relates to e-commerce, is illustrated by A) the same set of standards being used across the globe. B) plentiful, cheap information. C) the enabling of commerce worldwide. D) the availability of Internet technology everywhere and anytime. Answer: D Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 25) 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 Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 26) Which development is helping expand B2B e-commerce opportunities? A) intranets B) HTTP C) .NET and Web services D) dropping of computing hardware prices Answer: C Diff: 3 Page Ref: 377 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 189

27) Which of the following is NOT a recent development in e-commerce? A) growth of wireless Internet connections B) online, interactive models for newspapers and other traditional media C) use of blogs as a commercial medium D) transformation of the music recording industry Answer: D Diff: 3 Page Ref: 377 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

28) How is the Internet and e-commerce causing severe disruption to the existing advertising business model? A) Ties between customer and businesses are being rethought. B) Technology players such as Yahoo! seek to dominate online advertising. C) New methods of advertising, such as blog advertising, are emerging. D) The market entry costs for online advertising services are extremely low. Answer: B Diff: 3 Page Ref: 377 AACSB: Analytic skills CASE: Evaluation Objective: 10.2 29) Which of the following is NOT one of the unique features of e-commerce technology? A) information density B) transparency C) richness D) social technology Answer: B Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 30) The act of engaging consumers in a dialog that dynamically adjusts the experience to the individual describes which dimension of e-commerce technology? A) ubiquity B) personalization/customization C) richness D) interactivity Answer: D Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 190

31) The integration of video, audio, and text marketing messages into a single marketing message and consumer experience describes which dimension of e-commerce technology? A) ubiquity B) personalization/customization C) richness D) interactivity Answer: C Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

32) The effort required to locate a suitable product is called A) price discrimination. B) search costs. C) menu costs. D) transparency costs. Answer: B Diff: 2 Page Ref: 378 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 33) The lowered costs of information storage, processing, and communication, along with the improvement of data quality has resulted in which unique quality of e-commerce? A) information density B) richness C) customization D) interactivity Answer: A Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 34) Information density refers to the A) richnesscomplexity and contentof a message. B) total amount and quantity of information delivered to consumers by merchants. C) total amount and quantity of information available to all market participants. D) amount of information available to reduce price transparency. Answer: C Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 191

35) Selling the same goods to different targeted groups at different prices is called price ________. A) customization B) opacity C) gouging D) discrimination Answer: D Diff: 1 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

36) 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) imbalance Answer: B Diff: 1 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 37) The cost to a merchant of changing the price of a product is called a ________ cost. A) pricing B) dynamic pricing C) menu D) switching Answer: C Diff: 2 Page Ref: 380-382 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 38) Varying a product's price according to the supply situation of the seller is called ________ pricing. A) menu B) flexible C) dynamic D) asymmetric Answer: C Diff: 2 Page Ref: 382 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 192

39) Compared to digital markets, traditional markets have A) lower search costs. B) stronger network effects. C) higher delayed gratification effects. D) higher transaction costs. Answer: D Diff: 3 Page Ref: 382 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

40) Reducing the business process layers in a distribution channel is called A) disintermediation. B) BPR. C) market segmentation. D) network effects. Answer: A Diff: 2 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 41) Digital goods are goods that are A) produced digitally. B) sold over digital networks. C) delivered digitally. D) used with digital equipment. Answer: C Diff: 2 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 42) Compared to traditional goods, digital goods have A) greater pricing flexibility. B) lower marketing costs. C) higher production costs. D) higher inventory costs. Answer: A Diff: 3 Page Ref: 383 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

Emmanuel Opoku

Rowkish+ 193

43) Compared to traditional markets, digital markets have A) lower distributed delivery costs. B) higher marginal costs per unit. C) equivalent copying costs. D) similar inventory costs. Answer: A Diff: 3 Page Ref: 384 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

44) Which of the following Internet business models does Amazon.com use? A) information broker B) transaction broker C) online service provider D) virtual storefront Answer: D Diff: 2 Page Ref: 385 AACSB: Analytic skills CASE: Analysis Objective: 10.2 45) Which of the following businesses utilizes the content provider Internet business model? A) Amazon.com B) eBay.com C) CNN.com D) Motocross.com Answer: C Diff: 2 Page Ref: 385 AACSB: Analytic skills CASE: Analysis Objective: 10.2 46) Transaction brokers A) generate revenue from advertising or from directing buyers to sellers. B) save users money and time by processing online sales dealings. C) provide a digital environment where buyers and sellers can establish prices for products. D) sell physical products directly to consumers or individual businesses. Answer: B Diff: 1 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.2

Emmanuel Opoku

Rowkish+ 194

47) Online marketplaces A) save users money and time by processing online sales dealings. 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 Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.2

48) Which of the following is an ad that opens automatically and does not disappear until the user clicks on it? A) pop-up ad B) controlled ad C) portal ad D) banner ad Answer: A Diff: 1 Page Ref: 386 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 49) Why are companies interested in setting up MySpace profiles for their products? A) to bypass broadcast regulations for advertising to children B) to gather data on MySpace users linking to them C) to take advantage of free advertising D) to create personal relationships with consumers Answer: A Diff: 2 Page Ref: 386 AACSB: Analytic skills CASE: Evaluation Objective: 10.2 50) Which Internet business model is Photobucket most closely aligned with? A) service provider B) content provider C) portal D) social network Answer: A Diff: 3 Page Ref: 387 AACSB: Analytic skills CASE: Analysis Objective: 10.2

Emmanuel Opoku

Rowkish+ 195

51) A "supersite" that provides a comprehensive entry point for a huge array of Internet resources and services is called a(n): A) portal. B) online syndicator. C) content provider. D) information broker. Answer: A Diff: 2 Page Ref: 387 AACSB: Reflective thinking skills CASE: Content Objective: 10.2

52) Pure-play businesses A) are an example of business-to-business electronic commerce. B) do not sell a physical product. C) are extensions of traditional bricks-and-mortar businesses. D) did not have an earlier existing bricks-and-mortar business before they went to the Internet. Answer: D Diff: 2 Page Ref: 387-388 AACSB: Reflective thinking skills CASE: Evaluation Objective: 10.2 53) eBay is an example of A) a click-and-mortar business. B) C2C electronic commerce. C) B2C electronic commerce. D) an online exchange. Answer: B Diff: 2 Page Ref: 388 AACSB: Analytic skills CASE: Analysis Objective: 10.3 54) Businesses retailing products and services directly via the Internet to individual consumers best describes A) B2B electronic commerce. B) C2C electronic commerce. C) M-commerce. D) B2C electronic commerce. Answer: D Diff: 1 Page Ref: 388 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

Emmanuel Opoku

Rowkish+ 196

55) Consumers selling goods and services electronically to other consumers best describes: A) disintermediation. B) C2C electronic commerce. C) M-commerce. D) B2C electronic commerce. Answer: B Diff: 1 Page Ref: 388 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

56) Which Internet business model is JR.com most closely aligned with? A) virtual storefront B) exchange C) transaction broker D) online marketplace Answer: A Diff: 1 Page Ref: 389 AACSB: Analytic skills CASE: Analysis Objective: 10.2 57) Tools that record customer activities at Web sites and store them in a log for further analysis are called ________ tools. A) clickstream tracking B) customer tracking C) collaborative filtering D) filtering Answer: A Diff: 2 Page Ref: 391 AACSB: Use of information technology CASE: Content Objective: 10.3 58) A blog is typically composed of a series of A) blogrolls. B) dated entries. C) trackbacks. D) twitters. Answer: B Diff: 2 Page Ref: 392 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

Emmanuel Opoku

Rowkish+ 197

59) Tools that compare user behavior and interests to make purchasing recommendations to users are called ________ tools. A) clickstream tracking B) customer tracking C) collaborative filtering D) filtering Answer: C Diff: 2 Page Ref: 392 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

60) What strategy was implemented by Stonyfield Farm in its use of blogs? A) low-cost leadership B) product differentiation C) focus on market niche D) strengthen customer and supplier intimacy Answer: D Diff: 3 Page Ref: 393 AACSB: Analytic skills CASE: Analysis Objective: 10.3 61) The organizational department responsible for handling customer service issues is the A) service center. B) customer support department. C) call center. D) sales department. Answer: C Diff: 2 Page Ref: 394 AACSB: Use of information technology CASE: Content Objective: 10.3 62) EDI is A) the use of Internet technologies for electronic data transactions. B) the exchange between two organizations of standard transactions through a network. C) electronic data invoicing. D) electronic delivery infrastructure. Answer: B Diff: 2 Page Ref: 394 AACSB: Use of information technology CASE: Content Objective: 10.3

Emmanuel Opoku

Rowkish+ 198

63) The process of sourcing goods and materials, negotiating with suppliers, paying for goods, and making delivery arrangements is called A) procurement. B) e-procurement. C) supply chain management. D) electronic commerce. Answer: A Diff: 2 Page Ref: 394-395 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

64) An extranet that links a large firm to its suppliers and other key business partners is called a(n) A) private industrial network. B) e-hub. C) marketspace. D) exchange. Answer: A Diff: 2 Page Ref: 395 AACSB: Use of information technology CASE: Content Objective: 10.3 65) E-hubs are more ________ than private industrial networks. A) transaction-oriented B) collaborative C) independent D) supply-chain oriented Answer: A Diff: 3 Page Ref: 396 AACSB: Analytic skills CASE: Evaluation Objective: 10.3 66) Net marketplaces A) focus on continuous business process coordination between companies for supply chain management. B) are industry owned or operate as independent intermediaries between buyers and sellers. C) are geared towards short-term spot purchasing. D) are more relationship oriented than private industrial networks. Answer: B Diff: 3 Page Ref: 396 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

Emmanuel Opoku

Rowkish+ 199

67) A third-party Net marketplace that connects many buyers and suppliers for spot purchasing is called a(n) A) exchange. B) vertical market. C) private exchange. D) e-hub. Answer: A Diff: 2 Page Ref: 397 AACSB: Reflective thinking skills CASE: Content Objective: 10.3

68) Which of the following is NOT one of the categories of services that are popular for m-commerce? A) location-based services B) financial services C) games and entertainment D) e-books Answer: D Diff: 1 Page Ref: 397-399 AACSB: Analytic skills CASE: Evaluation Objective: 10.4 69) In the United States, m-commerce A) has become widely adopted. B) is still in its infancy. C) represents a major fraction of total e-commerce transactions. D) is growing, due to the emergence of 2G networks Answer: B Diff: 2 Page Ref: 397 AACSB: Reflective thinking skills CASE: Content Objective: 10.4

Emmanuel Opoku

Rowkish+ 200

70) Which of the following statements about m-commerce payments is NOT true? A) Use of mobile handsets as payment devices is already well established in Europe, Japan, and South Korea. B) The cell phone in the United States is not connected to a wide network of financial institutions. C) Japanese cell phones act like mobile wallets, containing a variety of payment mechanisms. D) The three kinds of mobile payments systems used in Japan are mobile credit cards, mobile debit cards, and digital wallets. Answer: D Diff: 2 Page Ref: 400-401 AACSB: Reflective thinking skills CASE: Content Objective: 10.5 71) The ubiquity of the Internet reduces the costs of participating in a market. These costs are called ________ costs. Answer: transaction Diff: 2 Page Ref: 376 AACSB: Reflective thinking skills CASE: Content Objective: 10.1

72) ________ refers to the ability of consumers to discover what merchants actually pay for products. Answer: Cost transparency Diff: 2 Page Ref: 379 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 73) ________ are the merchants' costs of changing prices. Answer: Menu costs Diff: 2 Page Ref: 380 AACSB: Reflective thinking skills CASE: Content Objective: 10.1 74) A(n) ________ provides an online meeting place where people with similar interests can communicate and find useful information. Answer: social network Diff: 2 Page Ref: 385 AACSB: Reflective thinking skills CASE: Content Objective: 10.2

Emmanuel Opoku

Rowkish+ 201

75) A(n) ________ business model has the Web site as an extension of a traditional bricks-and-mortar business. Answer: clicks-and-mortar Diff: 1 Page Ref: 388 AACSB: Reflective thinking skills CASE: Content Objective: 10.2 76) A(n) ________ is another term for a private industrial network. Answer: private exchange Diff: 2 Page Ref: 396 AACSB: Reflective thinking skills CASE: Content Objective: 10.3 77) A(n) ________ stores credit card and owner identification information and provides these data automatically during electronic commerce purchase transactions. Answer: digital wallet Diff: 2 Page Ref: 399 AACSB: Reflective thinking skills CASE: Content Objective: 10.5

78) Wireless ________ feature content and services optimized for mobile devices to steer users to the information they are most likely to need. Answer: portals Diff: 1 Page Ref: 399 AACSB: Reflective thinking skills CASE: Content Objective: 10.4 79) A(n) ________ payment system enables a consumer to make instant online payments based on the amount of money they have in a digital account. Answer: stored value Diff: 2 Page Ref: 400 AACSB: Reflective thinking skills CASE: Content Objective: 10.5 80) A(n) ________ system extends the functionality of existing checking accounts so they can be used for online shopping payments. Answer: digital checking Diff: 2 Page Ref: 400 AACSB: Reflective thinking skills CASE: Content Objective: 10.5

Emmanuel Opoku

Rowkish+ 202

81) What is the most profound way in which e-commerce and the Internet has changed the relationship between companies and their customers? Support your answer. Answer: Answers will vary, one answer is: The most profound way in which e-commerce and the Internet has changed this relationship 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 Web sites 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. Diff: 2 Page Ref: 375-388 AACSB: Analytic skills CASE: Evaluation Objective: 10.1

82) List and describe at least five different Internet business models. Which of these models do you think is the most risky for a dot-com business? Support your answer. Answer: The eight models are: virtual storefront, information broker, transaction broker, online marketplace, content provider, online service provider, virtual community, and portal. The choice of riskiest model will depend on the individual student. Diff: 1 Page Ref: 384-388 AACSB: Analytic skills CASE: Evaluation Objective: 10.2

Emmanuel Opoku

Rowkish+ 203

83) "Knowledge increases exponentially" is a phrase with which we are all familiar. How does this concept apply to electronic business and the emergence of the digital firm? Support your contentions. Answer: Student answers will vary. One answer might be: The exponential increases of knowledge refer to shared information. For example, once the concept of a wheel is established, inheritors of that knowledge do not have to "reinvent the wheel." The Internet is a tool similar to the wheel: it is based on shared standards and universal tools. The Internet and shared networking technologies are allowing new techniques for attracting customers and selling customers to be developed and adapted very quickly. For example, although early Internet retailers had difficulty setting up secure credit card transactions and payment systems, today there are many systems in place as vendors step in to create shared tools for doing this. The Internet is fostering shared knowledge and as such propagating ever greater increases in that knowledge. Diff: 3 Page Ref: 375-388 AACSB: Analytic skills CASE: Analysis Objective: 10.3

84) Describe the use of personalization in e-commerce. What business value does personalization have? Answer: E-commerce technologies permit personalization: Merchants can target their marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. The technology also permits customization–changing the delivered product or service based on a user's preferences or prior behavior. Given the interactive nature of e-commerce technology, a great deal of information about the consumer's past purchases and behavior can be stored and used by online merchants. The result is a level of personalization and customization unthinkable with traditional commerce technologies. For instance, you may be able to shape what you see on television by selecting a channel, but you cannot change the content of the channel you have chosen. In contrast, the Wall Street Journal Online allows you to select the type of news stories you want to see first and gives you the opportunity to be alerted when certain events happen. Customer information also enables firms to create unique personalized Web pages that display content or ads for products or services of special interest to each user, improving the customer's experience and creating additional value. By using personalization technology to modify the Web pages presented to each customer, marketers achieve the benefits of using individual salespeople at dramatically lower costs. One technique for Web personalization is collaborative filtering, which compares information gathered about a specific user's behavior at a Web site to data about other customers with similar interests to predict what the user would like to see next. The software then makes recommendations to users based on their assumed interests. The business value of personalization is reduced marketing costs, as you spend only the money to target customers that are more likely to be receptive and are more profitable, and improved sales results, from increased customer response to personalized sites that better server their own purposes and shopping needs. Diff: 2 Page Ref: 379-380, 391-392 AACSB: Analytic skills CASE: Synthesis Objective: 10.1

Emmanuel Opoku

Rowkish+ 204

85) List and describe five ways in which the individual consumer may pay for purchases on the Internet. Answer: The principal electronic payment systems for electronic commerce for the individual are credit card, digital wallet, accumulated balance digital payment systems, stored value systems, digital cash, peer-to-peer payment systems, and electronic checks. Most consumers use their credit card. Diff: 2 Page Ref: 399-400 AACSB: Analytic skills CASE: Analysis Objective: 10.5

86) List and describe the three major types of electronic commerce. Which do you think is ultimately the most valuable to the individual consumer? Support your answer. Answer: Business-to-consumer, business-to-business, and consumer-to-consumer. All three are valuable to the consumer, but in the long run, business-to-business may be the most valuable to the individual consumer because it will reduce prices and increase both goods and services. (Other opinions, of course, are supportable.) Diff: 2 Page Ref: 388 AACSB: Analytic skills CASE: Evaluation Objective: 10.3 87) 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. 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. Diff: 2 Page Ref: 385, 387 AACSB: Analytic skills CASE: Evaluation Objective: 10.2

Emmanuel Opoku

Rowkish+ 205

88) You are consulting for Lucky's, a chain of gas stations. What types of e-commerce opportunities, if any, are relevant to Lucky's? Could Lucky's make use of any Internet business models for this opportunity? Answer: In terms of B2B e-commerce, Lucky's might be able to procure goods over the Internet, use a private industrial network to coordinate their supply chain with suppliers and manage inventory. Depending on the structure of the gasoline retail business, industry net marketplaces and exchanges might be of use. In terms of B2C e-commerce, there are not many opportunities, as it is inefficient to sell gasoline over the Internet. However, a mobile payment system, similar to Mobil's SpeedPass payment system, is a way of offering more convenient services to customers. Additionally, Lucky's could make sure that it's stations are listed in popular location-based mobile services that help drivers find nearby gas stations. Diff: 3 Page Ref: 384-397 AACSB: Analytic skills CASE: Synthesis Objective: 10.2

89) You have been hired as a marketing consultant by a law firm in Los Angeles that specializes in juvenile justice. What ways can you use the Internet as a marketing tool and to advertise the firm's services? Answer: For market research, you could advertise on search engines. You could pay for marketing research at relevant portals. You could also collect customer information from the company's Web site. You could monitor relevant blogs to see what issues are of concern in juvenile justice, so as to address these concerns in your advertising campaigns. To advertise, you could advertise on search engine results and at relevant portals or legal information content providers, using banner ad or popup ads. If it were feasible, you could create a juvenile justice portal and blog for the company in order to attract users whom you could gather market research as well as promote your services. Diff: 3 Page Ref: 384-387, 391-394 AACSB: Analytic skills CASE: Synthesis Objective: 10.3

Emmanuel Opoku

Rowkish+ 206

90) Describe four types of applications that are especially well-suited for m-commerce. Answer: Types of applications include location-based services, banking and financial services, wireless advertising, and games and entertainment. Location-based services such as Mobio and Where enable users to locate nearby restaurants and gasoline stations, find local entertainment and movie times, and call a cab, providing maps showing how to reach their locations. New York-based MeetMoi provides a dating service that helps users identify people who are nearby and looking for dates. Banks are rolling out services that let customers manage their bank accounts from their cell phones or other mobile devices. Citibank and Bank of America customers can use their cell phones to check account balances, transfer funds, and pay bills. Cell phone service providers who have information valuable to advertisers about where subscribers live, their location the moment they view ads, their age, and the games, music, and other services they use on their phones. When done right, mobile campaigns yield high response rates and increased consumer engagement. Games and entertainment are another popular area, with music, digital games, ringtones, and even films designed for cell phone screens. Diff: 2 Page Ref: 397-399 AACSB: Analytic skills CASE: Analysis Objective: 10.4

Emmanuel Opoku

Rowkish+ 207

Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 11 Managing Knowledge and Collaboration 1) Knowledge residing in the minds of employees that has not been documented is called explicit knowledge. Answer: FALSE Diff: 2 Page Ref: 414 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 2) Knowledge can reside in e-mail, voice mail, graphics, and unstructured documents as well as structured documents. Answer: TRUE Diff: 1 Page Ref: 414 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 3) Knowledge is universally applicable and easily moved. Answer: FALSE Diff: 1 Page Ref: 414 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 4) The chief knowledge officer is the organizational role responsible for the firm's knowledge management program. Answer: TRUE Diff: 1 Page Ref: 417 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 5) COPs are formalized groups of professionals and employees within and outside the firm who have similar work-related activities and interests. Answer: FALSE Diff: 3 Page Ref: 417 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

Emmanuel Opoku

Rowkish+ 208

6) Structured knowledge is explicit knowledge that exists in informal documents. Answer: FALSE Diff: 1 Page Ref: 419 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

7) Semistructured information is all the knowledge in a firm that resides in the heads of experienced employees. Answer: FALSE Diff: 2 Page Ref: 419 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 8) Knowledge workers are primarily clerical and data workers who usually do not possess high levels of education. Answer: FALSE Diff: 1 Page Ref: 424 AACSB: Reflective thinking skills CASE: Content Objective: 11.3 9) VRML requires the use of a powerful server as well as large amounts of bandwidth. Answer: FALSE Diff: 2 Page Ref: 427 AACSB: Use of information technology CASE: Content Objective: 11.3 10) Expert systems are the primary tools used for knowledge discovery. Answer: FALSE Diff: 1 Page Ref: 428 AACSB: Use of information technology CASE: Content Objective: 11.4 11) Intelligent agents can discover underlying patterns, categories, and behaviors in large data sets. Answer: FALSE Diff: 2 Page Ref: 438 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

Emmanuel Opoku

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12) 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 Diff: 1 Page Ref: 428 AACSB: Use of information technology CASE: Content Objective: 11.4

13) Given their limitations, expert systems are seldom used for making discrete, highly structured decision-making situations. Answer: FALSE Diff: 2 Page Ref: 452 AACSB: Use of information technology CASE: Content Objective: 11.4 14) Expert systems work by applying a set of AND/OR rules against a knowledge base, both of which are extracted from human experts. Answer: FALSE Diff: 2 Page Ref: 431 AACSB: Use of information technology CASE: Content Objective: 11.4 15) Case-based reasoning is not well-suited for diagnostic systems in medicine. Answer: FALSE Diff: 1 Page Ref: 431 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 16) Fuzzy logic can describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules. Answer: TRUE Diff: 2 Page Ref: 431 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 17) Fuzzy logic systems "learn" patterns from large quantities of data by sifting through data, searching for relationships, building models, and correcting over and over again the model's own mistakes. Answer: FALSE Diff: 2 Page Ref: 431-433 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

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18) Because neural network applications cannot always explain why they arrive at a particular solution, they are not well suited for use in the medical profession. Answer: FALSE Diff: 2 Page Ref: 434 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

19) Intelligent agents are used primarily for specific, repetitive and predictable tasks. Answer: TRUE Diff: 2 Page Ref: 437 AACSB: Use of information technology CASE: Content Objective: 11.4 20) Shopping bots are a form of intelligent agent. Answer: TRUE Diff: 2 Page Ref: 438 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 21) What type of knowledge management system did Procter & Gamble implement in order to increase the efficiency of their research and development organization? A) content management system B) digital asset management system C) learning management system D) knowledge network system Answer: A Diff: 2 Page Ref: 411-412 AACSB: Analytic skills CASE: Analysis Objective: 11.2 22) The percentage of gross domestic product of the United States that is produced by the knowledge and information sectors is estimated to be about ________ percent. A) 20 B) 40 C) 60 D) 80 Answer: C Diff: 3 Page Ref: 413 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

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23) Which of the following statements best describes the relationship between collaboration and knowledge management? A) Without knowledge, collaboration is difficult. B) Knowledge doesn't exist without collaboration. C) Knowledge is useful only when shared with others. D) As knowledge increases, so does collaboration. Answer: C Diff: 2 Page Ref: 413 AACSB: Analytic skills CASE: Analysis Objective: 11.1

24) The flow of events or transactions captured by an organization's system describes A) information. B) data. C) wisdom. D) knowledge. Answer: B Diff: 1 Page Ref: 414 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 25) Expertise and experience of organizational members that has not been formally documented best describes A) wisdom. B) information. C) data. D) tacit knowledge. Answer: D Diff: 2 Page Ref: 414 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 26) Changing organizational behavior by sensing and responding to new experience and knowledge is called A) change management. B) knowledge networking. C) the knowledge value chain. D) organizational learning. Answer: D Diff: 1 Page Ref: 414-415 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

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27) The set of business processes, culture, and behavior required to obtain value from investments in information systems is one type of A) knowledge culture. B) knowledge discovery. C) organizational and management capital. D) organizational routine. Answer: C Diff: 3 Page Ref: 415 AACSB: Use of information technology CASE: Content Objective: 11.1

28) Which of the following systems digitizes, indexes, and tags documents according to a coherent framework? A) wikis B) CAD C) document management D) LMS Answer: C Diff: 1 Page Ref: 416 AACSB: Use of information technology CASE: Content Objective: 11.2 29) Which of the following statements is NOT an accurate description of the importance of knowledge to a firm? A) Knowledge-based core competencies are key organizational assets. B) Knowledge should be seen as similar to any other key asset, such as a financial asset or a production facility. C) Knowledge enables firms to become more efficient in their use of scarce resources. D) Knowledge is not subject to the law of diminishing returns as are physical assets. Answer: B Diff: 3 Page Ref: 414-415 AACSB: Analytic skills CASE: Analysis Objective: 11.1 30) What is meant by the statement "knowledge is sticky"? A) Knowledge is hard to move. B) Knowledge is universally applicable. C) Knowledge works only in certain situations. D) Knowledge is intangible. Answer: A Diff: 3 Page Ref: 414-415 AACSB: Analytic skills CASE: Analysis Objective: 11.1

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31) Which of the following is NOT one of the main four dimensions of knowledge described in the chapter? A) Knowledge is a firm asset. B) Knowledge has different forms. C) Knowledge has no locations. D) Knowledge is situational. Answer: C Diff: 3 Page Ref: 414-415 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

32) In order, which are the value-adding steps in the knowledge business value chain? A) acquire, store, disseminate, apply, feedback B) data and information acquisition, acquire, store, disseminate, apply C) acquire, disseminate, apply, feedback, management and organizational activities D) data and information acquisition, store, disseminate, feedback, apply Answer: B Diff: 2 Page Ref: 416 AACSB: Analytic skills CASE: Analysis Objective: 11.1 33) Informal social networks of professionals and employees within and outside the firm who have similar work-related activities and interests are called communities of A) practice. B) professionals. C) interest. D) knowledge. Answer: A Diff: 2 Page Ref: 417 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 34) Which of the following are the three major types of knowledge management systems? A) management information systems, decision support systems, and transaction processing systems B) enterprise systems, customer support systems, and supply chain management systems C) database management systems, expert systems, and knowledge work systems D) enterprise-wide knowledge management systems, knowledge work systems, and intelligent techniques Answer: D Diff: 3 Page Ref: 418 AACSB: Use of information technology CASE: Content Objective: 11.2

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35) Specialized systems built for engineers, scientists, and other knowledge workers charged with discovering and creating new knowledge for a company are called A) KWS. B) LMS. C) wikis. D) CAD systems. Answer: A Diff: 1 Page Ref: 418 AACSB: Use of information technology CASE: Content Objective: 11.2

36) Fuzzy logic is a type of A) data mining. B) neural network. C) intelligent technique. D) business intelligence. Answer: C Diff: 2 Page Ref: 418 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 37) Which of the following is NOT a typical component or capability of an enterprise-wide knowledge management system? A) collaboration tools B) KWS C) document management D) LMS Answer: B Diff: 2 Page Ref: 418 AACSB: Analytic skills CASE: Analysis Objective: 11.2 38) Which of the following would NOT considered semistructured knowledge? A) request for proposals B) voice-mail C) videos D) e-mail Answer: A Diff: 2 Page Ref: 419 AACSB: Analytic skills CASE: Analysis Objective: 11.2

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39) You are advising a multimedia company on the best type of knowledge management system to help them archive digital video and sound clips. Which of the following will suit their needs? A) enterprise content management system B) digital asset management system C) knowledge network system D) VRML system Answer: B Diff: 2 Page Ref: 420 AACSB: Analytic skills CASE: Analysis Objective: 11.2

40) Once a knowledge taxonomy is developed, documents are all ________ with the proper classification. A) tagged B) linked C) tupled D) referenced Answer: A Diff: 2 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 41) Which of the following is NOT a Web 2.0 tool firms are using to foster collaboration? A) blogs B) intranets C) wikis D) social bookmarking Answer: B Diff: 2 Page Ref: 421-422 AACSB: Use of information technology CASE: Content Objective: 11.2 42) Which of the following statements about the use of wikis by firms is NOT true? A) They are inexpensive and easy to implement. B) Users are able to modify wiki content contributed by others. C) They are most appropriate for information that must be revised but does not need to be available 24/7. D) They can be used as a central repository for all types of corporate data such as spreadsheets and e-mail. Answer: C Diff: 2 Page Ref: 422 AACSB: Analytic skills CASE: Evaluation Objective: 11.2

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43) Which of the following is a collaboration tool used to support knowledge management systems? A) blogs B) wikis C) social bookmarking D) all of the above Answer: D Diff: 2 Page Ref: 422 AACSB: Use of information technology CASE: Content Objective: 11.2

44) Tools for the management, delivery, tracking, and assessment of various types of employee learning best describes a(n) A) investment workstation. B) organizational learning system. C) employee enrichment system. D) learning management system. Answer: D Diff: 2 Page Ref: 422 AACSB: Use of information technology CASE: Content Objective: 11.2 45) Most knowledge workers require specialized knowledge work systems, but they also rely on A) office systems. B) schools and universities. C) imaging systems. D) data transferring systems. Answer: A Diff: 2 Page Ref: 425 AACSB: Use of information technology CASE: Content Objective: 11.3 46) A ________ is very important to a knowledge worker's system. A) careful filing system B) financial analysis system C) CAD capability D) user-friendly interface Answer: D Diff: 1 Page Ref: 425 AACSB: Use of information technology CASE: Content Objective: 11.3

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47) ________ often are designed and optimized for the specific tasks to be performed. A) Graphics programs B) Knowledge workstations C) Virtual simulators D) CAD stations Answer: B Diff: 2 Page Ref: 425 AACSB: Use of information technology CASE: Content Objective: 11.3

48) CAD workstations A) provide engineers, designers, and factory managers with precise control over industrial design and manufacturing. B) provide an important source of expertise for organizations. C) allow groups to work together on documents. D) are high-end PCs used in the financial sector to analyze trading situations instantaneously and facilitate portfolio management. Answer: A Diff: 2 Page Ref: 426 AACSB: Use of information technology CASE: Content Objective: 11.3 49) Which of the following would NOT be classified as a knowledge work system? A) computer-aided design system B) 3D visualization system C) investment workstations D) expert system Answer: D Diff: 2 Page Ref: 426-427 AACSB: Analytic skills CASE: Analysis Objective: 11.3 50) Virtual reality systems A) provide engineers, designers, and factory managers with precise control over industrial design and manufacturing. B) provide an important source of expertise for organizations. C) allow groups to work together on documents. D) provide architects, engineers, and medical workers with precise, photorealistic simulations of objects. Answer: D Diff: 2 Page Ref: 427 AACSB: Use of information technology CASE: Content Objective: 11.3

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51) Investment workstations A) provide engineers, designers, and factory managers with precise control over industrial design and manufacturing. B) provide an important source of expertise for organizations. C) allow groups to work together on documents. D) are used in the financial sector to analyze trading situations instantaneously and facilitate portfolio management. Answer: D Diff: 1 Page Ref: 427 AACSB: Use of information technology CASE: Content Objective: 11.3

52) Which of the following systems is NOT used to capture tacit knowledge? A) expert system B) case-based reasoning C) fuzzy logic D) neural network Answer: D Diff: 3 Page Ref: 427 AACSB: Reflective thinking skills CASE: Content Objective: 11.3 53) Which of the following is a type of intelligent technique? A) knowledge networks B) case based reasoning C) computer-aided design D) VRML Answer: B Diff: 3 Page Ref: 427-428 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 54) Which of the following techniques is used for knowledge discovery? A) expert system B) transaction processing systems C) case-based reasoning D) data mining Answer: D Diff: 2 Page Ref: 428 AACSB: Use of information technology CASE: Content Objective: 11.4

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55) Technology that consists of computer-based systems that attempt to emulate human behavior is called A) fuzzy logic. B) neural networks. C) AI technology. D) genetic algorithms. Answer: C Diff: 2 Page Ref: 428 AACSB: Use of information technology CASE: Content Objective: 11.4

56) An inference engine is A) a strategy for searching the rule base in case-based reasoning. 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 the rule base in an expert system by forward chaining or backward chaining. Answer: D Diff: 2 Page Ref: 428 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 57) Forward chaining is A) a strategy for searching the rule base in an expert system that begins with information entered by the user. B) the programming environment of an expert system. C) a method of organizing expert system knowledge into chunks. D) a strategy for searching the rule base in an expert system that begins with a hypothesis. Answer: A Diff: 2 Page Ref: 428 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 58) Backward chaining is A) a strategy for searching the rule base in an expert system that begins with information entered by the user. B) the programming environment of an expert system. C) a method of organizing expert system knowledge into chunks. D) a strategy for searching the rule base in an expert system that begins with a hypothesis. Answer: D Diff: 2 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

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59) Expert systems A) solve problems too difficult for human experts. B) are based on DO WHILE rules. C) work in very limited domains. D) share characteristics with mainframe computing. Answer: C Diff: 2 Page Ref: 431 AACSB: Use of information technology CASE: Content Objective: 2.1

60) It is unlikely you could represent the knowledge in the Encyclopedia Britannica with an expert system because: A) there is no one expert who understands all the material contained within the encyclopedia. B) the knowledge changes radically over a short time. C) not all the knowledge in the encyclopedia can be represented in the form of IF-THEN rules. D) the knowledge is too general. Answer: C Diff: 2 Page Ref: 431 AACSB: Analytic skills CASE: Analysis Objective: 11.4 61) Virtually all expert systems deal with problems of A) policy development. B) classification. C) logic and control. D) high complexity. Answer: B Diff: 3 Page Ref: 431 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 62) Expert systems are expensive and time-consuming to maintain because A) their rule base is so complex. B) they rely on equipment that becomes outdated. C) their rules must be reprogrammed every time there is a change in the environment, which in turn may change the applicable rules. D) only the person who created the system knows exactly how it works, and may not be available when changes are needed. Answer: C Diff: 3 Page Ref: 431 AACSB: Analytic skills CASE: Analysis Objective: 11.4

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63) In this technique, descriptions of past experiences of human specialists are stored in a database for later retrieval when the user encounters a situation with similar characteristics. A) CBR B) fuzzy logic C) data mining D) LMS Answer: A Diff: 1 Page Ref: 431 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

64) You are an automotive engineer working on an application that will automatically parallel park a car. The intelligent technique you may find most useful is: A) case-based reasoning. B) artificial intelligence. C) fuzzy logic. D) expert system. Answer: C Diff: 2 Page Ref: 432-433 AACSB: Analytic skills CASE: Evaluation Objective: 11.4 65) Hardware and software that attempts to emulate the processing patterns of the biological brain best describes A) a neural network. B) an expert system. C) case-based reasoning. D) fuzzy logic. Answer: A Diff: 2 Page Ref: 433 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 66) Genetic algorithms A) develop solutions to particular problems using fitness, crossover, and mutation. B) represent knowledge as groups of characteristics. C) do not work for most problems. D) are based on logic. Answer: A Diff: 2 Page Ref: 436 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

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67) Which of the following describes a difference between neural networks and genetic algorithms? A) Genetic algorithms are designed to process large amounts of information. B) Genetic algorithms are a type of knowledge discovery, while neural networks are an intelligent technique. C) Neural networks are programmed to "learn." D) All of the above Answer: C Diff: 3 Page Ref: 433-437 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

68) Software programs that work in the background without direct human intervention to carry out specific, repetitive, and predictable tasks for individual users, business processes, or software applications, are called A) intelligent agents. B) intelligent techniques. C) business intelligence. D) AI hybrid systems. Answer: A Diff: 2 Page Ref: 437 AACSB: Use of information technology CASE: Content Objective: 11.4 69) What type of intelligent technique helped Procter & Gamble determine the most efficient methods for their trucks to deliver goods? A) fuzzy logic B) intelligent agents C) genetic algorithms D) none of the above Answer: B Diff: 2 Page Ref: 438 AACSB: Reflective thinking skills CASE: Content Objective: 11.4

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70) To automate routine tasks to help firms search for and filter information for use in electronic commerce and supply chain management a firm would most likely use A) CAD systems. B) virtual reality systems. C) fuzzy logic systems. D) intelligent agents. Answer: D Diff: 2 Page Ref: 437-439 AACSB: Analytic skills CASE: Analysis Objective: 11.4 71) ________ is thought to be the collective and individual experience of applying knowledge to the solution of problems. Answer: Wisdom Diff: 1 Page Ref: 414 AACSB: Reflective thinking skills CASE: Content Objective: 11.1

72) ________ is explicit knowledge that exists in formal documents, as well as in formal rules that organizations derive by observing experts and their decision-making behaviors. Answer: Structured knowledge Diff: 1 Page Ref: 419 AACSB: Reflective thinking skills CASE: Content Objective: 11.1 73) ________ are also known as expertise location and management systems. Answer: Knowledge network systems Diff: 2 Page Ref: 420 AACSB: Use of information technology CASE: Content Objective: 11.2 74) A(n) ________ is a scheme for classifying information and knowledge in such a way that it can be easily accessed. Answer: taxonomy Diff: 2 Page Ref: 420 AACSB: Reflective thinking skills CASE: Content Objective: 11.2

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75) The user-created taxonomies created for shared bookmarks are called ________. Answer: folksonomies Diff: 2 Page Ref: 422 AACSB: Reflective thinking skills CASE: Content Objective: 11.2 76) A(n) ________ provides tools for the management, delivery, tracking, and assessment of various types of employee learning and training. Answer: learning management system, LMS Diff: 2 Page Ref: 422 AACSB: Use of information technology CASE: Content Objective: 11.2 77) ________ automates the creation and revision of designs, using computers and sophisticated graphics software. Answer: Computer aided design, CAD Diff: 1 Page Ref: 426 AACSB: Use of information technology CASE: Content Objective: 11.3

78) The model of human knowledge used by expert systems is called the ________. Answer: knowledge base Diff: 2 Page Ref: 428 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 79) The strategy used to search through the rule base is called the ________. Answer: inference engine Diff: 2 Page Ref: 428 AACSB: Reflective thinking skills CASE: Content Objective: 11.4 80) Systems that integrate genetic algorithms, fuzzy logic, neural networks, and expert systems are called ________ systems. Answer: hybrid AI Diff: 2 Page Ref: 437 AACSB: Use of information technology CASE: Content Objective: 11.4

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81) What is knowledge management? What types of knowledge might a company such as a taxi service have, and could a taxi service benefit from knowledge management? Answer: Knowledge management is the set of processes developed in an organization to create, gather, store, disseminate, and apply the firm's knowledge. A taxi company's knowledge might include explicit knowledge, such as maps and routes between destinations. Tacit knowledge would include the experience of drivers, such as the best alternate routes between destinations or passenger needs. A taxi service might benefit from a system that gave drivers guides on routes that included alternate routes drivers had found. It might benefit from a learning management system that trained drivers for locations, destinations, and alternate routes. Diff: 1 Page Ref: 413-414 AACSB: Analytic skills CASE: Evaluation Objective: 11.1

82) Briefly outline the knowledge management chain as it might apply to the online catalog system of a public library. Answer: Steps in the knowledge management chain include: Acquisition: for an online catalog of a library this would be getting the book data into digital format. Storage: This would involve the systems for storing this data, perhaps a central server. Dissemination: The library would need to determine how the card catalog information is accessed by the public or by staff. Application: This would involve the card catalog becoming part of the library's business processes: for example, the card catalog would be linked to a system of borrowing, so that users would know from the card catalog whether a book was out on loan. Management and organizational activities: This would entail using the system with a card catalog base for other services, perhaps linking up to a wider library system to share resources, information, or book loaning between systems. Diff: 2 Page Ref: 415-418 AACSB: Analytic skills CASE: Synthesis Objective: 11.1 83) Identify the three major types of knowledge management systems. Provide two examples of each. Answer: The major types of knowledge management systems are enterprise knowledge management systems, knowledge work systems, and intelligent techniques. Enterprise knowledge management systems include: enterprise content management systems, digital asset management systems, learning management systems, and knowledge networks. Knowledge work systems include: Computer-aided design systems, virtual reality systems, and financial investment workstations. Intelligent techniques include: Data mining, expert systems, case-based reasoning, fuzzy logic, neural networks, genetic algorithms, hybrid AI systems, and intelligent agents. Diff: 1 Page Ref: 418-439 AACSB: Analytic skills CASE: Analysis Objective: 11.2

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84) How can knowledge be gathered from the personal and undocumented expertise of professionals within a firm? List at least four ways to gather and disseminate such knowledge. Answer: The expertise and experience of firm employees can be gathered by documenting their experience through documenting best practices and frequently asked questions. You can also develop a referral system by providing a way for employees to find a company expert for the solution they are looking for. There is commercially available software for enterprise-wide knowledge network system, but other tools you can use include best-practices documents, FAQs, social bookmarking, collaboration tools, wikis, and blogs for helping gather and disseminate tacit knowledge. Diff: 2 Page Ref: 420-422 AACSB: Analytic skills CASE: Analysis Objective: 11.2

85) Why are knowledge workers so important to the digital firm? What are their functions and which of these do you feel is most critical to the success of the firm? Why? Answer: Student answers will vary, but should include an understanding of the three main functions of knowledge workers. An example answer is: Knowledge workers create new products or find ways to improve existing ones. Without them, the firm would stagnate and become less competitive in an environment that is always changing and is increasingly more competitive. In the modern economy, knowledge is truly power. The three major functions of knowledge workers are: keeping the organization up-to-date in knowledge as it develops in the external world; serving as internal consultants regarding their areas of knowledge and its opportunities; and acting as change agents as they evaluate, initiate, and promote new projects. The most important of these is to develop new knowledge as it applies to the making of products or services, as offering products and services is the mainstay of the corporation. Diff: 2 Page Ref: 424-425 AACSB: Analytic skills CASE: Evaluation Objective: 11.2 86) Identify three important qualities or capabilities of knowledge work systems. Answer: Knowledge work systems must give knowledge workers the specialized tools they need, such as powerful graphics, analytical tools, and communications and document-management tools. Knowledge work systems must provide a user-friendly interface to the KWS. These user-friendly interfaces save time by allowing the user to perform needed tasks and get to required information without having to spend a lot of time learning to use the computer. Knowledge work systems must be carefully designed to optimize the performance of the specific tasks of the pertinent knowledge worker. Diff: 2 Page Ref: 425 AACSB: Analytic skills CASE: Analysis Objective: 11.3

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87) Discuss the concept of virtual reality, especially with regard to VRML and its applications in the business arena. Answer: Virtual reality systems use interactive graphics software and hardware to create the illusion of reality in cyberspace. The original applications were in gaming, but new uses in education, science, and business are being developed and have great promise. Virtual reality applications are being developed for the Web using a standard called Virtual Reality Modeling Language (VRML), which can organize multiple media types to put users in a simulated real-world environment. VRML is platform independent, operates over a desktop computer, and requires little bandwidth. DuPont's HyperPlant is an example of a business application. HyperPlant allows users to go through three-dimensional models as if they were physically walking through a plant, which reduces errors during the construction of manufacturing structures. Diff: 2 Page Ref: 426-427 AACSB: Analytic skills CASE: Analysis Objective: 11.3

88) What is the difference between a neural network, fuzzy logic, and genetic algorithms? 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. Fuzzy logic creates rules that use approximate or subjective values. It describes a particular phenomenon or process linguistically and then represents that logic in a small number of flexible rules. Genetic algorithms are problem-solving methods that use the model of living organisms adapting to their environment. Possible solutions are evaluated, the "best" choices are made, then more possible solutions are created by combining the factors involved in those first "best" choices, and choosing again. The process continues until an optimum solution is reached. These genetic algorithms are useful for finding the optimal solution for a specific problem by examining a very large number of alternative solutions for that problem. Student evaluations 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. Diff: 3 Page Ref: 431-437 AACSB: Analytic skills CASE: Synthesis Objective: 11.4

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89) What do you see as the challenges in setting up a knowledge management system? Answer: Determining what knowledge will be the most effective or offer the most benefits to the company; defining taxonomies, gathering accurate knowledge, quantifying the system's success, change management and implementing business processes that incorporate the system. Diff: 3 Page Ref: 413-428 AACSB: Analytic skills CASE: Evaluation Objective: 11.1 90) You have been hired by a small architectural firm interested in implementing a knowledge management system. What features do you think would be of most benefit to them? Answer: Student answers will vary. The ability to store structured documents, such as plans, blueprints; collaboration tools, the ability to reference up-to-date local or national building codes, a system for storing case studies, best practices, and corporate standards. Also of importance is a knowledge work system or CAD to aid in engineering and design. Diff: 3 Page Ref: 417-439 AACSB: Analytic skills CASE: Evaluation Objective: 11.2

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Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 12 Enhancing Decision Making 1) Unstructured decisions are novel and nonroutine, and there is no well-understood or agreed-on procedure for making them. Answer: TRUE Diff: 1 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 2) A structured decision can be made by following a well-defined set of procedures. No "feel" or intuition is necessary. Answer: TRUE Diff: 1 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 3) Middle management tends to face more unstructured decision scenarios, but may include some structured components. Answer: FALSE Diff: 2 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 4) Unstructured decision making is most prevalent at lower organizational levels. Answer: FALSE Diff: 1 Page Ref: 453 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 5) Rank-and-file employees tend to make more structured decisions. Answer: TRUE Diff: 1 Page Ref: 453 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

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6) The intelligence phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization. Answer: TRUE Diff: 1 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

7) The implementation phase of Simon's decision making model includes choosing among solution alternatives. Answer: FALSE Diff: 2 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 8) The first stage in Simon's decision-making process model is the design stage. Answer: FALSE Diff: 2 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 9) The classical model of management does not address what exactly managers do when they plan, decide things, and control the work of others. Answer: TRUE Diff: 2 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 10) MIS typically produce fixed, regularly scheduled reports based on data extracted and summarized from the firm's underlying transaction processing systems. Answer: TRUE Diff: 1 Page Ref: 457 AACSB: Use of information technology CASE: Content Objective: 12.2 11) DSS primarily address structured problems. Answer: FALSE Diff: 1 Page Ref: 457 AACSB: Use of information technology CASE: Content Objective: 12.3

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12) The earliest DSS were data-driven. Answer: FALSE Diff: 2 Page Ref: 457 AACSB: Use of information technology CASE: Content Objective: 12.3 13) What-if analysis works forward from known or assumed conditions. Answer: TRUE Diff: 1 Page Ref: 462 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

14) Backward sensitivity analysis software is used for goal seeking. Answer: TRUE Diff: 1 Page Ref: 463 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 15) Data visualization technologies help distill large amounts of information into easily read textual lists. Answer: FALSE Diff: 1 Page Ref: 465 AACSB: Use of information technology CASE: Content Objective: 12.2 16) DSS are a special category of GIS. Answer: FALSE Diff: 1 Page Ref: 465 AACSB: Use of information technology CASE: Content Objective: 12.3 17) A geographic information system is a decision support system designed specifically to work with spatial information. Answer: TRUE Diff: 1 Page Ref: 465-466 AACSB: Use of information technology CASE: Content Objective: 12.2

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18) GDSS facilitate the solution of unstructured problems by a set of decision makers working together as a group in either the same location or different locations. Answer: TRUE Diff: 1 Page Ref: 467 AACSB: Use of information technology CASE: Content Objective: 12.5 19) Web-based tools for videoconferencing and electronic meetings are the primary tools for GDSS. Answer: FALSE Diff: 3 Page Ref: 467-468 AACSB: Use of information technology CASE: Content Objective: 12.5

20) During a GDSS meeting, the attendees control the use of GDSS tools. Answer: FALSE Diff: 1 Page Ref: 468 AACSB: Use of information technology CASE: Content Objective: 12.5 21) Which of the following was NOT a challenge Eastern Mountain Sports was facing in its management information systems and decision making? A) Employees had to craft most management reports by hand. B) Data was stored in unconnected sources. C) Data was not being acquired by the proper channels. D) Managers were unable to make good decisions about stocking stores. Answer: C Diff: 2 Page Ref: 449-450 AACSB: Analytic skills CASE: Evaluation Objective: 12.2

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22) Which of the following statements best describes the business value of improved decision making? A) Improved decision making creates better products. B) Improved decision making results in a large monetary value for the firm as numerous small daily decisions affecting efficiency, production, costs, and more add up to large annual values. C) Improved decision making enables senior executives to more accurately foresee future financial trends. D) Improved decision making strengthens customer and supplier intimacy, which reduces costs. Answer: B Diff: 1 Page Ref: 451 AACSB: Analytic skills CASE: Analysis Objective: 12.1 23) 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 Diff: 1 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

24) The type of decision that can made by following a definite procedure is called a(n) ________ decision. A) structured B) unstructured C) semistructured D) procedural Answer: A Diff: 1 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

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25) Which type of decision is deciding whether to introduce a new product line? A) structured B) unstructured C) recurring D) nonrecurring Answer: B Diff: 1 Page Ref: 452 AACSB: Analytic skills CASE: Analysis Objective: 12.1 26) Which type of decision is calculating gross pay for hourly workers? A) structured B) unstructured C) semistructured D) none of the above Answer: A Diff: 1 Page Ref: 452 AACSB: Analytic skills CASE: Analysis Objective: 12.1 27) The decision to approve a capital budget is an example of a(n) ________ decision. A) semistructured B) unstructured C) structured D) undocumented Answer: B Diff: 2 Page Ref: 452 AACSB: Analytic skills CASE: Analysis Objective: 12.1

28) The decisions involved in creating and producing a corporate intranet can be classified as ________ decisions. A) procedural B) unstructured C) structured D) semistructured Answer: D Diff: 2 Page Ref: 452 AACSB: Analytic skills CASE: Analysis Objective: 12.1

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29) Checking store inventory is an example of a(n) ________ decision. A) semistructured B) unstructured C) structured D) none of the above Answer: C Diff: 2 Page Ref: 452 AACSB: Analytic skills CASE: Analysis Objective: 12.1 30) Simon's description of decision making consists of which four stages? A) planning, financing, implementation, and maintenance. B) planning, design, implementation, and maintenance. C) intelligence, design, choice, and implementation. D) intelligence, design, financing, and implementation. Answer: C Diff: 2 Page Ref: 453 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 31) Which phase of decision making finds or recognizes a problem, need, or opportunity? A) design B) intelligence C) choice D) implementation Answer: B Diff: 1 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

32) The five classical functions of managers are planning, organizing, deciding, controlling, and A) coordinating. B) leading. C) managing. D) negotiating. Answer: A Diff: 3 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

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33) In contrast to the classical model of management, behavioral models see the actual behavior of managers as being more A) systematic. B) informal. C) reflective. D) well organized. Answer: B Diff: 2 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 34) Behavioral models of managers find that, from observation, managers A) perform often fewer than 100 activities a day. B) operate best with standardized, predictable, printed information. C) create a formalized, hierarchic structure of contacts to provide filtered information. D) typically work in a fragmented manner, with only 10% of activities exceeding an hour in duration. Answer: D Diff: 2 Page Ref: 454 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 35) Mintzberg's classification of managerial roles outlines which three main categories? A) interpersonal, informational, and decisional B) symbolic, decisional, and interpersonal C) symbolic, interpersonal, and technical D) technical, interpersonal, and informational Answer: A Diff: 2 Page Ref: 455 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

36) The role of liaison falls into which of Mintzberg's managerial classifications? A) decisional B) informational C) interpersonal D) symbolic Answer: C Diff: 3 Page Ref: 455 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

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37) The role of entrepreneur falls into which of Mintzberg's managerial classifications? A) decisional B) informational C) interpersonal D) symbolic Answer: A Diff: 3 Page Ref: 455 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 38) 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 Diff: 2 Page Ref: 455 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 39) Which of the following managerial roles is NOT supported by information systems? A) spokesperson B) resource allocator C) leader D) nerve center Answer: C Diff: 3 Page Ref: 455 AACSB: Reflective thinking skills CASE: Content Objective: 12.2

40) As discussed in the chapter text, the three main reasons that investments in information technology do NOT always produce positive results are A) management support, technical logistics, and user compliance. B) organization, environment, culture. C) information quality, information integrity, and information accuracy. D) information quality, organizational culture, and management filters. Answer: D Diff: 2 Page Ref: 456 AACSB: Use of information technology CASE: Content Objective: 12.2

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41) The concern that data values of an information source fall within a defined range reflects which quality dimension of information? A) accuracy B) integrity C) validity D) consistency Answer: C Diff: 3 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 42) The concern that the structure of data is consistent within an information source reflects which quality dimension of information? A) accuracy B) integrity C) validity D) consistency Answer: B Diff: 3 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 43) MIS typically produce A) new ways of looking at data that emphasize change, flexibility, and rapid response. B) fixed, regularly scheduled reports based on data extracted from the organization's TPS. C) solutions to semistructured problems appropriate for middle management decision making. D) assumptions, responses to ad hoc queries, and graphic representations of existing data. Answer: B Diff: 1 Page Ref: 457 AACSB: Use of information technology CASE: Content Objective: 12.2

44) An information system for a building company that tracks construction costs for various projects across the United States would be categorized as a type of A) DSS. B) MIS. C) GIS. D) CDSS. Answer: B Diff: 1 Page Ref: 457 AACSB: Analytic skills CASE: Analysis Objective: 12.2

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45) Which type of information system supports decision-making by enabling users to extract useful information that was previously buried in large quantities of data? A) GSS. B) ESS. C) TPS. D) DSS. Answer: D Diff: 1 Page Ref: 481 AACSB: Use of information technology CASE: Content Objective: 12.3 46) The components of a DSS are the A) internal corporate database, external data sources, and analysis tools. B) data visualization tools, software, and graphics capabilities. C) database, graphics capabilities, and analysis tools. D) database, software system, and user interface. Answer: D Diff: 2 Page Ref: 458 AACSB: Use of information technology CASE: Content Objective: 12.3 47) A system that uses data mining to guide senior marketing executive's decisions about customer retention can be categorized as a(n): A) CDSS. B) MIS. C) DSS. D) ESS. Answer: C Diff: 3 Page Ref: 458 AACSB: Analytic skills CASE: Analysis Objective: 12.3

48) A DSS database is a collection of A) historical data extracted from transaction processing systems. B) current or historical data from several applications or groups. C) external data typically mined from the Internet and other third-party sources. D) the corporation's current transaction data. Answer: B Diff: 2 Page Ref: 458 AACSB: Use of information technology CASE: Content Objective: 12.3

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49) The chapter case discussing overbooking on airlines illustrates that A) inaccuracies that can be magnified throughout a DSS because of incorrect data. B) organizational and people challenges may defeat a relatively successful technological solution. C) despite the best efforts of industry experts and sophisticated DSS, overbooking remains a problem. D) through the use of DSS, genetic algorithms, and neural networks, the problems of overbooking and bumped passengers have largely been solved. Answer: B Diff: 2 Page Ref: 459 AACSB: Analytic skills CASE: Evaluation Objective: 12.3 50) The chapter case discussing Dick's Sporting Goods stores illustrates the use of A) DSS to enable greater supplier intimacy. B) MIS to achieve greater operational excellence. C) ESS to enable better decision-making. D) CDSS to enable greater customer intimacy. Answer: A Diff: 3 Page Ref: 461-462 AACSB: Analytic skills CASE: Synthesis Objective: 12.2 51) Which type of model asks what-if questions repeatedly to determine the impact on outcomes of changes in one or more factors? A) optimization B) sensitivity analysis C) statistical D) forecasting Answer: B Diff: 2 Page Ref: 462 AACSB: Reflective thinking skills CASE: Content Objective: 12.3

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52) Which type of model is used to help managers use historical data to estimate future conditions and sales figures resulting from these conditions? A) optimization B) sensitivity analysis C) statistical D) forecasting Answer: D Diff: 2 Page Ref: 462 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 53) You would use an optimization model to A) project future conditions and predict the effect of these conditions on sales. B) determine the proper mix of products within a given market to maximize profits. C) determine the price of a product given fluctuating sales and advertising budget. D) establish the best relationship between price and sales and marketing budgets. Answer: B Diff: 2 Page Ref: 462 AACSB: Analytic skills CASE: Analysis Objective: 12.3 54) Backward sensitivity analysis software is used for A) supply chain optimization. B) historical what-if analysis. C) goal seeking. D) reverse forecasting. Answer: C Diff: 3 Page Ref: 463 AACSB: Use of information technology CASE: Content Objective: 12.3 55) 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 Diff: 1 Page Ref: 464 AACSB: Use of information technology CASE: Content Objective: 12.2

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56) 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) MIS D) TPS Answer: A Diff: 1 Page Ref: 465 AACSB: Use of information technology CASE: Content Objective: 12.3 57) Dell Computer's online tools that allow users of their Web site to customize and order a new PC are a type of A) DSS. B) CDSS. C) Web-based GIS. D) Intelligent agent. Answer: B Diff: 2 Page Ref: 466-467 AACSB: Analytic skills CASE: Analysis Objective: 12.4 58) As discussed in the chapter case, the system used in South Carolina to estimate and map the regional damage and losses resulting from an earthquake was a type of A) CDSS B) GSS C) GIS D) GDSS Answer: C Diff: 1 Page Ref: 467 AACSB: Analytic skills CASE: Analysis Objective: 12.3

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59) Saturn.com's "Build Your Own" feature, allowing customers to select the trim, transmission, engine, and other features of a car model is an example of a A) CDSS B) GSS C) GIS D) GDSS Answer: A Diff: 2 Page Ref: 466-467 AACSB: Analytic skills CASE: Analysis Objective: 12.3

60) GDSS A) are designed to allow meeting attendees to share their thoughts in real-time with their peers. B) support decisions that require knowledge about the geographic distribution of resources. C) are typically used with geographically dispersed attendees. D) implement structured methods for organizing and evaluating ideas. Answer: D Diff: 2 Page Ref: 467-468 AACSB: Use of information technology CASE: Content Objective: 12.5 61) An essential component in the ability of GDSS to contribute to a collaborative environment is A) allowing users to contribute simultaneously. B) using structured methods for evaluating ideas. C) identifying users informally. D) the guarantee of user anonymity. Answer: D Diff: 1 Page Ref: 468 AACSB: Reflective thinking skills CASE: Content Objective: 12.5 62) GDSS A) require a small number of attendees in order to maintain high levels of productivity. B) enable increasing a meeting size without reducing productivity. C) include specific procedures for priority ranking the order in which participants can respond. D) utilize shared desktop computers to foster collaboration. Answer: B Diff: 2 Page Ref: 468 AACSB: Reflective thinking skills CASE: Content Objective: 12.5

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63) The information system used by Caesar's Entertainment, which combines data from internal TPS with information from financial systems and external sources to deliver reports such as profit-loss statements, impact analyses, is an example of A) DSS. B) ESS. C) CDSS. D) MIS. Answer: B Diff: 1 Page Ref: 468 AACSB: Analytic skills CASE: Analysis Objective: 12.4

64) 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 Diff: 2 Page Ref: 468 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 65) Which of the following features of an ESS displays traditional financial metrics with measurements from additional perspectives, such as customers, or learning and growth, on a single screen? A) balanced scorecards B) digital dashboard C) graphic visualization tools D) drill-down capabilities Answer: B Diff: 1 Page Ref: 471 AACSB: Reflective thinking skills CASE: Content Objective: 12.4

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66) A system that displays performance overviews of the firm in an easy-to-read graphical interface, along with the ability to drill down into fine-grained sales data can be categorized as a(n) A) CDSS B) MIS C) DSS D) ESS Answer: A Diff: 2 Page Ref: 468-469 AACSB: Analytic skills CASE: Analysis Objective: 12.4 67) ESS A) support the structured decision making of senior executives. B) have the ability to drill down into lower levels of detail. C) easily integrate data from different systems. D) are primarily driven by information derived from a company's transaction processing systems. Answer: B Diff: 2 Page Ref: 494469 AACSB: Use of information technology CASE: Content Objective: 12.4

68) The easy use of graphics in an ESS allows the user to A) look at more data in less time with greater clarity. B) use creative analysis. C) quickly manipulate TPS and historical data. D) decentralize decision making. Answer: A Diff: 1 Page Ref: 470 AACSB: Reflective thinking skills CASE: Content Objective: 12.4 69) Executives need a wide range of ________ as well as internal data. A) structured B) informal C) system D) external Answer: D Diff: 1 Page Ref: 470 AACSB: Reflective thinking skills CASE: Content Objective: 12.4

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70) A well-designed ESS will allow management to A) have greater span of control. B) assign lower levels of management greater control. C) reduce their need to review lower levels of operation. D) all of the above. Answer: D Diff: 2 Page Ref: 470 AACSB: Use of information technology CASE: Content Objective: 12.4 71) A(n) ________ decision is repetitive and routine, for which known algorithms provide solutions. Answer: structured Diff: 1 Page Ref: 452 AACSB: Reflective thinking skills CASE: Content Objective: 12.1 72) The third stage in Simon's description of decision making is ________. Answer: choice Diff: 2 Page Ref: 453 AACSB: Reflective thinking skills CASE: Content Objective: 12.1

73) The concept of management ________ describes situations in which managers act on biases that reject information that does not conform to their expectations. Answer: filters Diff: 2 Page Ref: 456 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 74) ________-driven DSS have analysis capabilities based on strong theories and used to perform "what-if" and similar kinds of analyses. Answer: Model Diff: 1 Page Ref: 457 AACSB: Use of information technology CASE: Content Objective: 12.3

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75) Of the three main DSS components, the ________ system comprises the tools used for data analysis. Answer: software Diff: 2 Page Ref: 458 AACSB: Use of information technology CASE: Content Objective: 12.3 76) A(n) ________ is an abstract representation illustrating the components or relationships of a phenomenon. Answer: model Diff: 1 Page Ref: 458 AACSB: Reflective thinking skills CASE: Content Objective: 12.2 77) A(n) ________ model determines the best resource allocation to maximize or minimize specified variables. Answer: optimization Diff: 2 Page Ref: 462 AACSB: Reflective thinking skills CASE: Content Objective: 12.3 78) A(n) ________ supports the decision-making processes of an existing or potential customer. Answer: customer decision-support system, CDSS Diff: 1 Page Ref: 466 AACSB: Use of information technology CASE: Content Objective: 12.3

79) A(n) ________ facilitates the solution to unstructured problems by a set of decision-makers working together as a group. Answer: group decision-support systems, GDSS Diff: 2 Page Ref: 467 AACSB: Use of information technology CASE: Content Objective: 12.5 80) A(n) ________ uses easy-to-understand displays of information to provide management with a comprehensive view of firm performance on a single screen. Answer: digital dashboard, executive dashboard Diff: 2 Page Ref: 471 AACSB: Reflective thinking skills CASE: Content Objective: 12.4

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81) Describe MIS and DSS and differentiate between them. Answer: MIS provide information on the firm's performance to help managers monitor and control the business. They typically produce hard copy, fixed, regularly scheduled reports based on data extracted and summarized from the organization's underlying transaction processing systems. DSS provide new sets of capabilities for non-routine decisions and user control. MIS accents reports based on routine flows of data and assists in the general control of the organization. DSS emphasizes change, flexibility, and rapid response to unstructured problems. Diff: 2 Page Ref: 457-458 AACSB: Analytic skills CASE: Analysis Objective: 12.3 82) What is the difference between a model-driven and a data-driven DSS? Answer: Model-driven DSS use some type of model to perform "what-if" and other types of analyses. Their analysis capabilities were based on a strong theory or model combined with a good user interface to make the model easy to use. Data-driven DSS analyze large pools of data found in major organizational systems. They support decision making by allowing users to extract useful information that was previously buried in large quantities of data. Diff: 2 Page Ref: 458-463 AACSB: Analytic skills CASE: Analysis Objective: 12.3

83) Discuss four types of models commonly used by DSS. Answer: Statistical modeling software can be used to help establish relationships, such as relating product sales to differences in age, income, or other factors between communities. Optimization models determined optimal resource allocation to maximize or minimize specified variables such as cost or time. A classic use of optimization models is to determine the proper mix of products within a given market to maximize profits. Forecasting models are often used to forecast sales. The user of this type of model might supply a range of historical data to project future conditions and the sales that might result from those conditions. Companies often use this software to predict the actions of competitors. Sensitivity analysis models ask "what-if" questions repeatedly to determine the impact of changes in one or more factors on outcomes. Diff: 3 Page Ref: 462-463 AACSB: Analytic skills CASE: Analysis Objective: 12.3

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84) What is the business value of a DSS? Answer: DSS can help companies improve supply chain management and customer relationship management. Some take advantage of the company-wide data provided by enterprise systems. DSS today can also harness the interactive capabilities of the Web to provide decision-support tools to both employees and customers. Diff: 2 Page Ref: 457-465 AACSB: Analytic skills CASE: Analysis Objective: 12.3 85) If both contemporary ESS and DSS incorporate tools for modeling and analysis, what qualities distinguish the two types of system? Answer: DSS are concerned with solving more specific business problems, such as determining the best pricing for a product, establishing optimized delivery routes, whereas ESS are designed specifically for executives to use as a way of managing the company and seeing an overview of both external and internal information in order to monitor more general business situations. The ESS modeling tools would be used to provide different views of status, rather than to analyze large amounts of data to arrive at a solution for a specific problem. Diff: 2 Page Ref: 458-459, 468-470 AACSB: Analytic skills CASE: Analysis Objective: 12.3

86) What is a GIS? Describe at least three ways in which a GIS could be used by modern business. Answer: Geographic information systems are a special category of DSS that use data visualization technology to analyze and display data for planning and decision making in the form of digitized maps. 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. GIS have modeling capabilities, allowing managers to change data and automatically revise business scenarios to find better solutions. 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 branch restaurants. 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. Diff: 3 Page Ref: 466-467 AACSB: Analytic skills CASE: Synthesis Objective: 12.3

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87) What do you see as the business value of a GDSS? Answer: GDSS helps groups make decisions about unstructured problems. Firstly, because GDSS provides value by allowing collaboration over important decisionsthe decision doesn't rest in the hands of one person alone. By having more people working on the problem, the decision is more likely to realistically reflect the needs and goals of the group, rather than just one person. Secondly, because anonymity is a feature, people are encouraged to be more honest. This will also enhance the accuracy of the solution. The ability of the GDSS to record the meeting and decisions means that the decision-making process, its ideas and solutions, can be made part of the company's knowledge base. Additionally, by providing structure, the GDSS may enhance the efficiency of the particular type of unstructured decision making. Diff: 2 Page Ref: 467-468 AACSB: Analytic skills CASE: Evaluation Objective: 12.5

88) Describe what technologies, facilities, and capabilities would be required to run a GDSS-enabled meeting. Answer: GDSS-guided meetings take place in conference rooms with special hardware and software tools to facilitate group decision making. The hardware includes computer and networking equipment, overhead projectors, and display screens. Special electronic meeting software collects, documents, ranks, edits, and stores the ideas offered in a decision-making meeting. The more elaborate GDSS use a professional facilitator and support staff. The facilitator selects the software tools and helps organize and run the meeting. A sophisticated GDSS provides each attendee with a dedicated desktop computer under that person's individual control. No one will be able to see what individuals do on their computers until those participants are ready to share information. Their input is transmitted over a network to a central server that stores information generated by the meeting and makes it available to all on the meeting network. Data can also be projected on a large screen in the meeting room. Diff: 3 Page Ref: 467-468 AACSB: Analytic skills CASE: Analysis Objective: 12.5

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89) You have been hired as a consultant for an established bicycle parts manufacturer to assist senior management in planning a new ESS. What factors will you advise management to take into consideration? Answer: Student answers will vary, but should take into account technical difficulties (integrating data from different systems), the types of information and overview of the organization needed, and change management. An example answer is: A major challenge of building executive support systems has been to integrate data from systems designed for very different purposes so that senior executives can review organizational performance from a firm-wide perspective. ESS must be designed so that high-level managers and others can use them without much training. One area that merits special attention is the determination of executive information requirements. ESS need to have some facility for environmental scanning. A key information requirement of managers at the strategic level is the capability to detect signals of problems in the organizational environment that indicate strategic threats and opportunities. The ESS need to be designed so that both external and internal sources of information can be used for environmental scanning purposes. Implementation of the ESS must be carefully managed to neutralize the opposition of managers at the lower levels of the organization, because ESS potentially could give top executives the ability to examine their work without their knowledge. Diff: 2 Page Ref: 468-470 AACSB: Analytic skills CASE: Evaluation Objective: 12.4

90) Describe the balanced scorecard model and its role in ESS. Answer: The balanced score card is a framework for operationalizing a firm's strategic plan by focusing on measurable outcomes on four dimensions of firm performance: financial, business process, customer, and learning and growth. Performance on each dimension is measured using key performance indicators (KPIs), which are the measures proposed by senior management for understanding how well the firm is performing along any given dimension. The balanced scorecard framework is thought to be "balanced" because it causes managers to focus on more than just financial performance. In this view, financial performance is past history–the result of past actions–and managers should focus on the things they are able to influence today, such as business process efficiency, customer satisfaction, and employee training. Diff: 2 Page Ref: 468-469 AACSB: Analytic skills CASE: Analysis Objective: 12.4

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Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 13 Building Information Systems 1) The most common form of IT-enabled organizational change is automation. Answer: TRUE Diff: 2 Page Ref: 483 AACSB: Use of information technology CASE: Content Objective: 13.1 2) Rationalization of procedures describes a radical rethinking of the business models. Answer: FALSE Diff: 2 Page Ref: 484 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 3) Failure to address properly the organizational changes surrounding the introduction of a new system can cause the demise of an otherwise good system. Answer: TRUE Diff: 2 Page Ref: 487 AACSB: Analytic skills CASE: Evaluation Objective: 13.1 4) TQM describes the measurement of quality as 3.4 defects per million. Answer: FALSE Diff: 2 Page Ref: 488 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 5) Thorough testing is not required if, during the programming stage, the design documents are sufficiently detailed. Answer: FALSE Diff: 2 Page Ref: 492-494 AACSB: Analytic skills CASE: Analysis Objective: 13.2 6) The system is not in production until conversion is complete. Answer: TRUE Diff: 2 Page Ref: 496 AACSB: Use of information technology CASE: Content Objective: 13.2

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7) Documentation reveals how well the system has met its original objectives. Answer: FALSE Diff: 3 Page Ref: 495 AACSB: Use of information technology CASE: Content Objective: 13.2 8) A data flow diagram offers a logical and graphical model of information flow, partitioning a system into modules that show manageable levels of detail. Answer: TRUE Diff: 2 Page Ref: 497 AACSB: Use of information technology CASE: Content Objective: 13.3 9) A structure chart is a bottom-up chart, showing each level of design, its relationship to other levels, and its place in the overall design structure. Answer: FALSE Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.3 10) Object-oriented development is more incremental than traditional structured development. Answer: TRUE Diff: 2 Page Ref: 499 AACSB: Use of information technology CASE: Content Objective: 13.3 11) Objects are grouped into hierarchies, and hierarchies into classes. Answer: FALSE Diff: 2 Page Ref: 499 AACSB: Use of information technology CASE: Content Objective: 13.3 12) CASE tools facilitate the creation of clear documentation and the coordination of team development efforts. Answer: TRUE Diff: 1 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.3

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13) The oldest method for building information systems is prototyping. Answer: FALSE Diff: 2 Page Ref: 502 AACSB: Use of information technology CASE: Content Objective: 13.4

14) Prototyping is more iterative than the conventional lifecycle. Answer: TRUE Diff: 2 Page Ref: 502 AACSB: Use of information technology CASE: Content Objective: 13.4 15) A problem with prototyping is that the systems constructed using this method may not be able to handle large quantities of data in a production environment. Answer: TRUE Diff: 2 Page Ref: 502 AACSB: Use of information technology CASE: Content Objective: 13.4 16) End-user-developed systems can be completed more rapidly than those developed through the conventional systems lifecycle. Answer: TRUE Diff: 1 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.4 17) One advantage of fourth-generation tools is that they can easily handle processing large numbers of transactions or applications with extensive procedural logic and updating requirements. Answer: FALSE Diff: 1 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.4 18) In some forms of outsourcing, a company hires an external vendor to create the software for its system, but operates the software on its own computers. Answer: TRUE Diff: 1 Page Ref: 505-506 AACSB: Use of information technology CASE: Content Objective: 13.4

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19) Hidden costs typically increase the total cost of an offshore outsourcing project by an extra 50 to 75 percent. Answer: FALSE Diff: 2 Page Ref: 506 AACSB: Use of information technology CASE: Content Objective: 13.5

20) Systems development activities always take place in sequential order. Answer: FALSE Diff: 2 Page Ref: 509 AACSB: Use of information technology CASE: Content Objective: 13.5 21) Based on your reading of the chapter case discussing PC Connection, their implementation of a new order fulfillment system is an example of A) BPR. B) rationalization of procedures. C) automation. D) a paradigm shift. Answer: B Diff: 3 Page Ref: 481-482, 484 AACSB: Analytic skills CASE: Analysis Objective: 13.1 22) The four kinds of structural organizational change enabled by IT, in order from least to most risky, are A) rationalization, automation, reengineering, and redesigning. B) rationalization, automation, reengineering, and paradigm shift. C) automation, rationalization, reengineering, and paradigm shift. D) automation, redesigning, restructuring, and paradigm shift. Answer: C Diff: 2 Page Ref: 483 AACSB: Analytic skills CASE: Analysis Objective: 13.1

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23) Business processes are analyzed, simplified, and redesigned in A) BPR. B) rationalization of procedures. C) automation. D) a paradigm shift. Answer: A Diff: 2 Page Ref: 484 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

24) In automation A) business processes are simplified. B) business processes are reorganized to cut waste and eliminate repetitive, paper-intensive tasks. C) standard operating procedures are streamlined to remove bottlenecks. D) employees are enabled to perform their tasks more efficiently. Answer: D Diff: 2 Page Ref: 483 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 25) Based on your reading of the chapter, the redesign of mortgage application process by major mortgage banks was an example of which type of organizational change? A) automation B) paradigm shift C) business process reengineering D) restructuring Answer: B Diff: 2 Page Ref: 485 AACSB: Analytic skills CASE: Analysis Objective: 13.1 26) The process of streamlining business procedures so that documents can be moved easily and efficiently is called A) business process reengineering B) automation C) work flow management D) rationalization Answer: C Diff: 2 Page Ref: 485 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

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27) Which of the following statements about business process reengineering is NOT true? A) It is primarily an ongoing effort by a firm that continually readjusts and measures the effectiveness of new procedures. B) It typically focuses on one or two strategic business processes that need radical change. C) BPR projects tend to be expensive and organizationally disruptive. D) To judge effectiveness, the performance of a business process should be measured both before and after reengineering. Answer: A Diff: 3 Page Ref: 485-487 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

28) ________ provide(s) a methodology and tools for dealing with the organization's ongoing need to revise–and ideally optimize–its numerous internal business processes and processes shared with other organizations. A) BPR B) BPM C) CASE tools D) TQM Answer: B Diff: 3 Page Ref: 487 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 29) Enabling organizations to make continual improvements to many business processes and to use processes as the fundamental building blocks of corporate information systems is the goal of A) BPM. B) BPR. C) reengineering. D) work flow management. Answer: A Diff: 3 Page Ref: 487 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

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30) The idea that the achievement of quality control is an end in itself describes a main concept of A) BPM. B) BPR. C) six sigma. D) TQM. Answer: D Diff: 3 Page Ref: 488 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 31) 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 Diff: 2 Page Ref: 490 AACSB: Use of information technology CASE: Content Objective: 13.2

32) The entire system-building effort is driven by A) organizational change. B) feasibility studies. C) the information value chain. D) user information requirements. Answer: D Diff: 2 Page Ref: 491 AACSB: Analytic skills CASE: Analysis Objective: 13.3 33) Systems design: A) describes what a system should do to meet information requirements. B) shows how the new system will fulfill the information requirements. C) identifies which users need what information, where, when and how. D) is concerned with the logical view of the system solution. Answer: B Diff: 2 Page Ref: 491 AACSB: Use of information technology CASE: Content Objective: 13.2

Emmanuel Opoku

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34) System design specifications that address the category of database design issues will include specifications for A) transaction volume and speed requirements. B) data entry. C) job design. D) program logic and computations. Answer: A Diff: 3 Page Ref: 491 AACSB: Use of information technology CASE: Content Objective: 13.2 35) Transferring data from a legacy system to the new system would be defined by which category of system design specifications? A) input B) database C) manual procedures D) conversion Answer: D Diff: 3 Page Ref: 491 AACSB: Use of information technology CASE: Content Objective: 13.2

36) Determining methods for feedback and error handling would be defined by which category of system design specifications? A) training and documentation B) user interface C) manual procedures D) security and controls Answer: B Diff: 3 Page Ref: 491 AACSB: Use of information technology CASE: Content Objective: 13.2 37) Unit testing A) includes all the preparations for the series of tests to be performed on the system. B) tests the functioning of the system as a whole in order to determine if discrete modules will function together as planned. C) tests each program separately. D) provides the final certification that the system is ready to be used in a production setting. Answer: C Diff: 1 Page Ref: 492 AACSB: Use of information technology CASE: Content Objective: 13.2

Emmanuel Opoku

Rowkish+ 260

38) 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 Diff: 2 Page Ref: 492 AACSB: Use of information technology CASE: Content Objective: 13.2 39) 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 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: D Diff: 1 Page Ref: 492 AACSB: Use of information technology CASE: Content Objective: 13.2

40) In a parallel conversion strategy, the new system A) is tested by an outsourced company. B) replaces the old one at an appointed time. C) and the old are run together. D) is introduced in stages. Answer: C Diff: 2 Page Ref: 495 AACSB: Use of information technology CASE: Content Objective: 13.2 41) In the direct cutover conversion strategy, the new system A) is tested by an outsourced company. B) replaces the old one at an appointed time. C) and the old are run together. D) is introduced in stages. Answer: B Diff: 1 Page Ref: 495 AACSB: Use of information technology CASE: Content Objective: 13.2

Emmanuel Opoku

Rowkish+ 261

42) Changes in hardware, software, documentation, or production to a production system to correct errors, meet new requirements, or improve processing efficiencies are termed A) compliance. B) production. C) maintenance. D) acceptance. Answer: C Diff: 2 Page Ref: 496 AACSB: Use of information technology CASE: Content Objective: 13.2 43) In what stage of systems development are design specifications created? A) systems analysis B) systems design C) testing D) conversion Answer: B Diff: 2 Page Ref: 496 AACSB: Use of information technology CASE: Content Objective: 13.2

44) The primary tool for representing a system's component processes and the flow of data between them is the A) data dictionary. B) process specifications diagram. C) user documentation. D) data flow diagram. Answer: D Diff: 2 Page Ref: 497 AACSB: Use of information technology CASE: Content Objective: 13.3 45) To understand and define the contents of data flows and data store, system builders use A) a data dictionary. B) process specifications diagrams. C) user documentation. D) data flow diagrams. Answer: A Diff: 3 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.3

Emmanuel Opoku

Rowkish+ 262

46) To show each level of a system's design, its relationship to other levels, and its place in the overall design structure, structured methodologies use A) structure charts. B) Gantt and PERT charts. C) process specifications. D) data flow diagrams. Answer: A Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.3 47) An entire information system is broken down into its subsystems by using A) high-level data flow diagrams. B) low-level data flow diagrams. C) process specifications. D) structured diagrams. Answer: A Diff: 2 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.3

48) 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 Diff: 2 Page Ref: 498-499 AACSB: Analytic skills CASE: Evaluation Objective: 13.3 49) In an object-oriented development framework for a university, how would the classes Degree, Mathematics, and Physics be related? A) Degree would be a sister class to Mathematics and Physics. B) Degree is a superclass to Mathematics and Physics. C) Mathematics and Physics would be ancestors to Degree. D) Degree would be a subclass to Mathematics and Physics. Answer: B Diff: 2 Page Ref: 499 AACSB: Analytic skills CASE: Analysis Objective: 13.3

Emmanuel Opoku

Rowkish+ 263

50) Object-oriented modeling is based on the concepts of A) objects and relationships. B) classes and objects. C) class and inheritance. D) objects and inheritance. Answer: C Diff: 2 Page Ref: 499 AACSB: Use of information technology CASE: Content Objective: 13.3 51) 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 Diff: 2 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.3

52) CASE tools automate A) the tedious and error-prone portions of analysis and design. B) code generation. C) testing. D) all of the above. Answer: D Diff: 2 Page Ref: 500 AACSB: Use of information technology CASE: Content Objective: 13.3 53) The oldest method for building information systems is A) component-based development. B) prototyping. C) object-oriented development. D) the systems development lifecycle. Answer: D Diff: 2 Page Ref: 501 AACSB: Use of information technology CASE: Content Objective: 13.4

Emmanuel Opoku

Rowkish+ 264

54) In the traditional systems development lifecycle, 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 Diff: 2 Page Ref: 501 AACSB: Use of information technology CASE: Content Objective: 13.4 55) 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 begun? A) traditional B) prototyping C) RAD D) All of the above Answer: A Diff: 1 Page Ref: 501 AACSB: Use of information technology CASE: Content Objective: 13.4

56) As a technical project manager you have decided to propose implementing a prototyping methodology for a small Web-based design project. What is the order of steps you will follow in this project? A) Develop the prototype; use the prototype; revise and enhance the prototype. B) Identify user requirements, develop the prototype, use the prototype, revise and enhance the prototype. C) Define the requirements, develop solutions, select the best prototype, and implement the prototype. D) Define the requirements, develop the prototype, revise and enhance the prototype. Answer: B Diff: 2 Page Ref: 502 AACSB: Analytic skills CASE: Synthesis Objective: 13.5

Emmanuel Opoku

Rowkish+ 265

57) A systems building approach in which the system is developed as successive versions, each version reflecting requirements more accurately, is described to be A) end-user oriented. B) iterative. C) object-oriented. D) agile. Answer: B Diff: 2 Page Ref: 502 AACSB: Use of information technology CASE: Content Objective: 13.4 58) Which type of fourth-generation language tools are end-users most likely to work with? A) report generators and query languages B) report generators and application generators C) PC software tools and query languages D) PC software tools and report generators Answer: C Diff: 3 Page Ref: 503 AACSB: Use of information technology CASE: Content Objective: 13.4 59) Which type of fourth-generation language tool contains preprogrammed modules that can be used to create entire applications? A) PC software tools B) report generators C) application generators D) application software packages Answer: C Diff: 2 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.4

60) When systems are created rapidly, without a formal development methodology A) end users can take over the work of IT specialists. B) the organization quickly outgrows the new system. C) hardware, software, and quality standards are less important. D) testing and documentation may be inadequate. Answer: D Diff: 2 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.4

Emmanuel Opoku

Rowkish+ 266

61) Management should control the development of end-user applications by A) developing a formal development methodology. B) requiring cost justification for end-user IS projects. C) establishing standards for user-developed applications. D) both B and C. E) both A and B. Answer: D Diff: 3 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.4 62) Fourth-generation tools cannot replace conventional development tools because they A) cannot handle large numbers of transactions or extensive procedural logic. B) are not designed to integrate with legacy systems. C) do not incorporate methods for documentation. D) do not incorporate methods for testing. Answer: A Diff: 3 Page Ref: 504 AACSB: Use of information technology CASE: Content Objective: 13.4 63) If an organization's requirements conflict with the software package chosen and the package cannot be customized, the organization will have to A) change its procedures. B) outsource the development of the system. C) redesign the RFP. D) change the evaluation process. Answer: A Diff: 2 Page Ref: 505 AACSB: Use of information technology CASE: Content Objective: 13.4

64) Hidden costs such as ________ can easily undercut anticipated benefits from outsourcing. A) monitoring vendors to make sure they often are fulfilling their contractual obligations B) transitioning to a new vendor C) identifying and evaluating vendors of information technology services D) all of the above Answer: D Diff: 1 Page Ref: 506 AACSB: Use of information technology CASE: Evaluation Objective: 13.4

Emmanuel Opoku

Rowkish+ 267

65) The process of creating workable information systems in a very short period of time is called A) RAD. B) JAD. C) prototyping. D) B and C. Answer: A Diff: 2 Page Ref: 507 AACSB: Use of information technology CASE: Content Objective: 13.5 66) Which type of systems development is characterized by significantly speeding up the design phase and the generation of information requirements and involving users at an intense level? A) RAD B) JAD C) prototyping D) end-user development Answer: B Diff: 2 Page Ref: 509 AACSB: Use of information technology CASE: Content Objective: 13.5 67) You are an IT project manager for an advertising firm. The firm wishes to create an online tool that will be used to survey focus group reactions to products in development. The most important consideration for the firm is being able to offer the tool as soon as possible as a new corporate service. However, you know that many of the senior managers that are business owners of this project have difficulty in understanding technical or software development issues, and are likely to change their requirements during the course of development. What development method would be most successful for this project? A) RAD B) JAD C) end-user development D) prototyping Answer: D Diff: 2 Page Ref: 501-510 AACSB: Analytic skills CASE: Synthesis Objective: 13.4

Emmanuel Opoku

Rowkish+ 268

68) Groups of objects are assembled into software components for common functions, which can be combined into large-scale business applications, in which type of software development? A) object-oriented development B) component-based development C) structured methodologies D) RAD Answer: B Diff: 2 Page Ref: 509-510 AACSB: Use of information technology CASE: Content Objective: 13.5 69) Compared to the use of proprietary components, Web services promise to be less expensive and less difficult to implement because of A) their ability to integrate seamlessly with legacy systems. B) the use of universal standards. C) the ubiquity of the Internet. D) the ability to reuse Web services components. Answer: B Diff: 2 Page Ref: 510 AACSB: Use of information technology CASE: Content Objective: 13.5 70) ________ development focuses on rapid delivery of working software by breaking a large project into a series of small sub-projects that are completed in short periods of time using iteration and continuous feedback. A) Agile B) Rapid application C) Joint application D) Object-oriented Answer: A Diff: 2 Page Ref: 510 AACSB: Use of information technology CASE: Content Objective: 13.5 71) A(n) ________ is an organizational change that involves rethinking the nature of the business and the nature of the organization itself. Answer: paradigm shift Diff: 2 Page Ref: 484 AACSB: Reflective thinking skills CASE: Content Objective: 13.1

Emmanuel Opoku

Rowkish+ 269

72) ________ consists of setting strict standards for products, services, and other activities, and then measuring performance against those standards. Answer: Benchmarking Diff: 2 Page Ref: 489 AACSB: Reflective thinking skills CASE: Content Objective: 13.1 73) During the ________ stage of system development, system specifications that were prepared during the design stage are translated into software code. Answer: programming Diff: 1 Page Ref: 492 AACSB: Use of information technology CASE: Content Objective: 13.1 74) A systems analysis includes a(n) ________ that is used to determine whether the solution is achievable, from a financial, technical, and organizational standpoint. Answer: feasibility study Diff: 2 Page Ref: 490 AACSB: Use of information technology CASE: Content Objective: 13.2 75) ________ contain 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. Answer: Information requirements Diff: 2 Page Ref: 490 AACSB: Use of information technology CASE: Content Objective: 13.2 76) 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. Answer: systems design Diff: 2 Page Ref: 491 AACSB: Use of information technology CASE: Content Objective: 13.2

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77) ________ is the process of changing from the old system to the new system. Answer: Conversion Diff: 2 Page Ref: 495 AACSB: Use of information technology CASE: Content Objective: 13.2

78) ________ describe the transformation occurring within the lowest level of the data flow diagrams. Answer: Process specifications Diff: 3 Page Ref: 498 AACSB: Use of information technology CASE: Content Objective: 13.3 79) ________ are software tools that enable end users to create reports or develop software applications with minimal or no technical assistance. Answer: Fourth-generation languages Diff: 3 Page Ref: 503 AACSB: Use of information technology CASE: Content Objective: 13.4 80) ________ design is a process used to accelerate the generation of information requirements by having end-users and information system specialists work together in intensive interactive design sessions. Answer: Joint application Diff: 2 Page Ref: 509 AACSB: Use of information technology CASE: Content Objective: 13.5

Emmanuel Opoku

Rowkish+ 271

81) Describe each type of organizational change enabled by information technology. Give an example of each type of change, as it might be illustrated through the operations of a hotel. Answer: 1. In automation, employees are assisted with performing tasks automatically. In a hotel, this might mean that a system is set up for the reservations desk to record and process customer reservations. 2. In rationalization of procedures, standard operating procedures are streamlined. In a hotel, this might mean that a reservation system that required three or four steps for checking a customer in would be reduced to one or two steps. 3. In business process reengineering, business processes are analyzed, simplified and redesigned. In a hotel, the reservation and check-in system might be designed to allow the customers to reserve rooms and check in themselves, without the need of a hotel employee to confirm the process. 4. In paradigm shift, the very nature of the business is rethought and new business models are defined. In a hotel, this might mean that the idea of renting rooms on a night-by-night basis to clients might be rethought of as an extended stay place, or perhaps even as a condominium or other business type. Diff: 2 Page Ref: 483-484 AACSB: Analytic skills CASE: Synthesis Objective: 13.1

82) What is the importance of quality management as it pertains to business processes. Describe two methods of quality management and distinguish these from BPR. Answer: Quality management is one area of continuous process improvement. In addition to increasing organizational efficiency, companies must fine-tune their business processes to improve the quality in their products, services, and operations. Studies have repeatedly shown that the earlier in the business cycle a problem is eliminated, the less it costs the company. Thus, quality improvements not only raise the level of product and service quality, but they can also lower costs. 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. TQM and six sigma are considered to be more incremental than business process reengineering. TQM typically focuses on making a series of continuous improvements rather than dramatic bursts of change. Six sigma uses statistical analysis tools to detect flaws in the execution of an existing process and make minor adjustments. Diff: 2 Page Ref: 488-489 AACSB: Analytic skills CASE: Analysis Objective: 13.1

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83) You are consulting for the information technology division of a state university to guide and facilitate the design of a new system for handling college applications, which has previously been handled entirely with a paper-based process. They would like to set up a system by which prospective students can apply online. Describe in detail their first steps and any studies they should perform before designing the new information system. Answer: Student answers will vary, but should include an understanding of the first step of systems development — systems analysis, along with feasibility studies and determining information requirements. An example answer is: The college will need to perform systems analysis. This consists of defining the problem, identifying its causes, specifying the solution, identifying the information requirements. It also includes identifying the primary owners and users of data along with existing hardware and software, the problems of existing systems, examining documents, work papers, and procedures; observing system operations; and interviewing key users of the systems. The systems analysis would include a feasibility study to determine whether that solution was feasible, or achievable, from a financial, technical, and organizational standpoint. The feasibility study would determine whether the proposed system was a good investment, whether the technology needed for the system was available and could be handled by the firm's information systems specialists, and whether the organization could handle the changes introduced by the system. They should identify several alternative solutions that the organization can pursue. The process then assesses the feasibility of each. A written systems proposal report describes the costs and benefits, advantages and disadvantages of each alternative. It is up to management to determine which mix of costs, benefits, technical features, and organizational impacts represents the most desirable alternative. They will also need to define the specific information requirements that must be met by the system solution selected. This involves identifying who needs what information, where, when, and how. Requirements analysis carefully defines the objectives of the new or modified system and develops a detailed description of the functions that the new system must perform. Diff: 3 Page Ref: 489-490 AACSB: Analytic skills CASE: Synthesis Objective: 13.2

Emmanuel Opoku

Rowkish+ 273

84) List and describe 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 Diff: 2 Page Ref: 491 AACSB: Analytic skills CASE: Analysis Objective: 13.2 85) Discuss the role and influence the user plays in software development. Answer: The user is the primary focus of software development. Whether a new information system succeeds or fails largely depends on the roles of users. 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. The role of the user in the development of software depends on the method of development used. In SLDC, work; end users are limited to providing information requirements and reviewing the technical staff's work. In prototyping, users are involved throughout development, through the use and review of iterative steps of the prototype. In end-user development, the users themselves create the system. Users are typically more involved also in RAD, through the use of prototyping and JAD. In joint application design, end users and information systems specialists work together in an interactive session to discuss design. Diff: 2 Page Ref: 491-509 AACSB: Analytic skills CASE: Synthesis Objective: 13.2

Emmanuel Opoku

Rowkish+ 274

86) You work for the IT department of a startup ASP, and it is your job to set up the testing processes for a new enterprise system the company will be hosting. Describe the processes you will recommend. What unique considerations will you have? Answer: The first step is to prepare the test plan. Any individual components will need to be tested separately, first (in unit testing), and then the system as a whole will need to be tested (in system testing). Finally acceptance testing will be conducted to make sure the system is ready to be used in a production setting. Because this is a hosted application, the system will need to be tested as accessed from the variety of platforms that are supported by the application. If the hosted application supports both Mac and Windows users, the system and its parts will need to be tested using client computers running these systems. Diff: 3 Page Ref: 492-494 AACSB: Analytic skills CASE: Synthesis Objective: 13.2 87) What qualities of object-oriented development make this method especially suitable for Internet applications? Answer: Object-oriented development uses the object as the basic unit of systems analysis and design. The system is modeled as a collection of objects and the relationships between them. E-commerce companies need to be able to add, change, and retire their technology capabilities very rapidly. Object-oriented development allows objects to be reused and repackaged with other objects to create new software, saving money and development time. Diff: 2 Page Ref: 498-500 AACSB: Analytic skills CASE: Evaluation Objective: 13.3 88) Identify and describe each of the five systems development approaches. Answer: 1) Systems lifecycle is a sequential step-by-step formal process, written specification and approvals, limited role of users. (2) In prototyping, requirements are specified dynamically with experimental systems in a rapid, informal, and iterative process; users continually interact with the prototype. (3) An applications software package is commercial software that eliminates the need for internally developed software programs (4) In end-user development, systems are created by end users using fourth-generation software tools, rapid and informal, minimal role of information systems specialists. (5) In outsourcing —systems are built and sometimes operated by an external vendor. Diff: 2 Page Ref: 501-506 AACSB: Analytic skills CASE: Analysis Objective: 13.4

Emmanuel Opoku

Rowkish+ 275

89) What are the advantages and disadvantages of prototyping? Describe the steps in prototyping. Give at least two circumstances under which prototyping might be useful. Answer: Prototyping is most useful when there is some uncertainty about requirements or design solutions. Because prototyping encourages intense end-user involvement throughout the process, it is more likely to produce systems that fulfill user requirements. Working prototype systems can be developed very rapidly and inexpensively. Rapid prototyping can gloss over essential steps in systems development. If the completed prototype works reasonably well, management may not see the need for reprogramming, redesigned, full documentation in testing to build a polished production system. This can backfire later with large quantities of data or large numbers of users in a production environment. The steps in prototyping are: (1) Identify the user's basic requirements, (2) develop an initial prototype, (3) use the prototype, (4) revise and enhance the prototype. Prototyping might be especially useful in designing end-user interfaces, or situations in which the users have no clear ideas of what their information requirements are. Diff: 2 Page Ref: 502 AACSB: Analytic skills CASE: Evaluation Objective: 13.4 90) What is outsourcing? Describe the advantages and disadvantages to outsourcing software development. Answer: In outsourcing, a firm hires an external organization to build or maintain part or all of its information systems needs. This can include software development and hosting applications, but the firm may also host any developed applications on its own hardware while having the vendor create and maintain software or systems. The vendor may be domestic or in another country (in offshore outsourcing). The benefit to outsourcing is, in the case of domestic outsourcing, being able to develop systems that in-house staff may not have the time or skills to do. In the case of offshore outsourcing, a primary benefit is cost savings, as costs and salaries in foreign countries can be significantly less. Disadvantages would include relinquishing some control over development, having third party firms access to privileged company data and information. It is also possible to underestimate costs in outsourcing, which include costs for transferring knowledge, cultural differences, productivity losses, and other human resource issues. Diff: 2 Page Ref: 505-506 AACSB: Analytic skills CASE: Evaluation Objective: 13.5

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Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 14 Managing Projects 1) Between 30 and 40 percent of all software projects are "runaway" projects that far exceed original schedule and budget projections. Answer: TRUE Diff: 2 Page Ref: 523 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 2) An information system project's scope is directly related to its business requirements. Answer: TRUE Diff: 2 Page Ref: 524 AACSB: Analytic skills CASE: Analysis Objective: 14.1 3) The information systems steering committee is composed of information systems managers and end-user managers responsible for overseeing several specific information systems projects. Answer: FALSE Diff: 3 Page Ref: 527 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 4) An information systems plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals. Answer: TRUE Diff: 2 Page Ref: 528 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 5) 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 Diff: 2 Page Ref: 528 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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6) Scoring models are used most commonly to support decisions rather than as the final arbiters of system selection. Answer: TRUE Diff: 2 Page Ref: 532 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

7) Transaction and clerical systems that displace labor and save space typically produce more measurable, tangible benefits than management information systems. Answer: TRUE Diff: 3 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 8) More timely information is a tangible benefit of information systems. Answer: FALSE Diff: 2 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 9) Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in the long run. Answer: TRUE Diff: 1 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 10) 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 Diff: 2 Page Ref: 533-534 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 11) Real options pricing models use the concept of options valuation borrowed from the financial industry. Answer: TRUE Diff: 1 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.3

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12) 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 Diff: 1 Page Ref: 536-537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

13) The larger the systems project, the more risk the project runs in terms of being completed on time, within budget, and according to project requirements. Answer: TRUE Diff: 1 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 14) The relationship between users and information systems specialists has traditionally been a problem area for information systems implementation efforts. Answer: TRUE Diff: 1 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 15) 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 Diff: 2 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 16) A Gantt chart graphically depicts project tasks and their interrelationships. Answer: FALSE Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 17) Counterimplementation refers to a deliberate strategy to thwart the implementation of an information system or an innovation in an organization. Answer: TRUE Diff: 2 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.5

Emmanuel Opoku

Rowkish+ 279

18) Mandatory use of a system is one effective way of overcoming user resistance to an information system. Answer: FALSE Diff: 2 Page Ref: 541-542 AACSB: Analytic skills CASE: Analysis Objective: 14.5

19) The design of jobs, health issues, and the end-user interface of information systems are all considerations in the field of ergonomics. Answer: TRUE Diff: 2 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 20) The goal of sociotechnical design is to create systems with better user interfaces and contribute to fewer health issues. Answer: FALSE Diff: 3 Page Ref: 544 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 21) On average, private sector IT projects underestimated budget and delivery time of systems by ________ percent. A) 30 B) 40 C) 50 D) 60 Answer: C Diff: 2 Page Ref: 523 AACSB: Reflective thinking skills CASE: Content Objective: 14.1 22) The major variables in project management are A) scope, time, cost, and performance. B) scope, time, cost, quality, and risk. C) time, cost, quality, performance, and risk. D) time, cost, scope, and performance. Answer: B Diff: 2 Page Ref: 524 AACSB: Reflective thinking skills CASE: Content Objective: 14.1

Emmanuel Opoku

Rowkish+ 280

23) At the top of the management structure for information systems projects in a large company is A) project management. B) the CIO. C) the corporate strategic planning group. D) the IS steering committee. Answer: C Diff: 2 Page Ref: 527 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

24) The ________ is directly responsible for the individual systems project. A) project management group B) project team C) IS steering committee D) corporate strategic planning committee Answer: B Diff: 2 Page Ref: 527 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 25) The ________ reviews and approves plans for systems in all divisions. A) project management group B) project team C) IS steering committee D) corporate strategic planning committee Answer: C Diff: 2 Page Ref: 527 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 26) The ________ consists of systems analysts, specialists from the relevant end-user business areas, application programmers, and perhaps database specialists. A) project management group B) project team C) IS steering committee D) corporate strategic planning committee Answer: B Diff: 2 Page Ref: 527 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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27) A CSF approach to establishing an enterprise's information requirements is especially suitable for A) distinguishing between individual and organizational objectives. B) identifying the key entities and attributes of the organization's data. C) understanding how organizational units define critical data. D) the development of DSSs and ESSs. Answer: D Diff: 3 Page Ref: 528-530 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

28) 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 is called a(n) A) project plan. B) portfolio analysis. C) information systems plan. D) enterprise analysis. Answer: C Diff: 2 Page Ref: 528 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 29) The principle method used in CFS analysis is to A) inventory all of the organization's information systems projects and assets and assign risk levels. B) perform a weighted comparison of the criteria used to evaluate a system. C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information. D) interview a small number of top managers to identify their goals and criteria for achieving success. Answer: D Diff: 2 Page Ref: 528 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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30) In CFS analysis, it is important to A) interview as many employees from different levels of the company as possible. B) create a broad inquiry into the various types of information used in the company. C) distinguish between organizational and individual CSFs. D) identify operational managers that can accurately portray the day-to-day information needs of the firm. Answer: C Diff: 1 Page Ref: 528-529 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 31) The central method used in a portfolio analysis is to A) inventory all of the organization's information systems projects and assets. B) perform a weighted comparison of the criteria used to evaluate a system. C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information. D) interview a small number of top managers to identify their goals and criteria for achieving success. Answer: A Diff: 2 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

32) In using a portfolio analysis to determine which IT projects to pursue, you would A) select the most low-risk projects from the inventory. B) limit work to those projects with great rewards. C) select only low-risk, high-reward projects. D) balance high-risk, high reward projects with lower-risk projects. Answer: D Diff: 2 Page Ref: 531 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 33) Which method would you use is used to develop risk profiles for a firm's information system projects and assets? A) information systems plan B) scoring model C) portfolio analysis D) CSF Answer: C Diff: 2 Page Ref: 530 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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34) The central method used in a scoring model is to A) inventory all of the organization's information systems projects and assets. B) perform a weighted comparison of the criteria used to evaluate a system. C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information. D) interview a small number of top managers to identify their goals and criteria for achieving success. Answer: B Diff: 2 Page Ref: 531 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 35) You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects. Which types of projects would be best avoided? A) any high risk projects B) any low-benefit projects C) all high-risk, low benefit projects D) none, any project might be beneficial. Answer: C Diff: 2 Page Ref: 531 AACSB: Analytic skills CASE: Analysis Objective: 14.2

36) Which method is used to assign weights to various features of a system? A) information systems plan B) scoring model C) portfolio analysis D) CSF Answer: B Diff: 1 Page Ref: 531 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 37) The criteria used for evaluation in a scoring model are usually determined by A) lengthy discussions among the decision-making group. B) a CSF analysis. C) the IS steering committee. D) systems analysts. Answer: A Diff: 3 Page Ref: 531 AACSB: Reflective thinking skills CASE: Content Objective: 14.2

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38) ________ are all intangible benefits of information systems. A) Improved asset utilization, increased organizational learning, and improved operations B) Reduced workforce, lower outside vendor costs, and increased productivity C) Increased productivity, reduced workforce, and increased job satisfaction D) Lower operational costs, improved resource control, and more information Answer: A Diff: 2 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 39) ________ are all tangible benefits of information systems. A) Improved asset utilization, increased organizational learning, and improved operations B) Reduced workforce, lower outside vendor costs, and increased productivity C) Increased productivity, reduced workforce, and increased job satisfaction D) Lower operational costs, improved resource control, and more information Answer: B Diff: 2 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.3

40) The worth of systems from a financial perspective essentially revolves around the issue of A) CSFs. B) adherence to information requirements. C) asset utilization. D) return on invested capital. Answer: D Diff: 1 Page Ref: 534 AACSB: Analytic skills CASE: Evaluation Objective: 14.3 41) When using a capital budgeting method in measuring the worth of an information system, which of the following related costs would you use to assess the cash inflow? A) increased sales of products B) hardware and software expenditures C) labor expenditures D) reduced costs in production and operation E) both A and D F) both B and C G) A, B, C and D Answer: E Diff: 2 Page Ref: 534 AACSB: Analytic skills CASE: Evaluation Objective: 14.3

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42) In working with ROPMs and options valuation, a financial option is a(n) A) obligation to purchase an asset at a later date at a fixed price. B) obligation to either purchase or sell an asset at a later date at a strike price. C) right to purchase an asset a later date at a strike price. D) right to purchase or sell an asset a later date at a fixed price. Answer: D Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 43) The principal capital budgeting models for evaluating information technology projects are the payback method, the accounting rate of return on investment (ROI), the net present value, and the A) future present value. B) internal rate of return. C) external rate of return. D) ROPM. Answer: B Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.3

44) ROPMs value information systems similar to stock options, in that A) ROPMs can be bought and sold like stocks. B) a company's worth can be evaluated by the worth of their ROPMs. C) initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date. D) expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options. Answer: C Diff: 2 Page Ref: 535 AACSB: Analytic skills CASE: Analysis Objective: 14.3

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45) To best evaluate, from a financial standpoint, an IT investment whose benefits cannot be firmly established in advance, you would use: A) capital budgeting. B) the real option pricing model. C) a scoring model. D) the net present value. Answer: B Diff: 2 Page Ref: 534 AACSB: Analytic skills CASE: Analysis Objective: 14.3 46) The level of a project's risk is influenced primarily by A) project size, project structure, and the level of technical expertise. B) project cost, project scope, and the implementation plan. C) project scope, project schedule, and project budget. D) project size, project scope, and the level of technical expertise. Answer: A Diff: 2 Page Ref: 535-536 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 47) The project risk will rise if the project team and the IS staff lack A) legacy applications as a starting point. B) good equipment. C) the required technical expertise. D) financial studies and plans. Answer: C Diff: 3 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

48) The organizational activities working toward the adoption, management, and routinization of a new information system are called A) production. B) maintenance. C) implementation. D) acceptance. Answer: C Diff: 1 Page Ref: 536 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

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49) Which of the following is NOT one of the activities of the systems analyst? A) acting as a change agent B) communication with users C) mediating between competing interest groups D) formulation of capital budgeting models Answer: D Diff: 1 Page Ref: 536-537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 50) One example of an implementation problem is A) poor user interface. B) inadequate user training. C) project running over budget. D) changes in job activities and responsibilities. Answer: B Diff: 2 Page Ref: 536-538 AACSB: Analytic skills CASE: Analysis Objective: 14.4 51) According to your reading of the chapter, change management is a process that A) should be addressed before a project is developed. B) begins when a project is implemented. C) is used primarily to mandate user acceptance. D) must be addressed in all systems development. Answer: A Diff: 1 Page Ref: 536-538 AACSB: Analytic skills CASE: Evaluation Objective: 14.4

52) Users prefer systems that A) are oriented to facilitating organizational tasks and solving business problems. B) work with existing DBMS. C) are able to provide optimum hardware and software efficiency. D) are capable of storing much more data than they need. Answer: A Diff: 2 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

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53) The communications gap between users and systems designers is created by their differences in A) backgrounds. B) interests. C) priorities. D) all of the above. Answer: D Diff: 1 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 54) Which of the following types of projects is most likely to fail? A) integration of an third-party automated payment system B) replacement of middleware with Web services for legacy application integration C) a business process redesign project that restructures workflow and responsibilities D) redesigning a user interface to an online investment site Answer: C Diff: 2 Page Ref: 538 AACSB: Analytic skills CASE: Evaluation Objective: 14.4 55) Which of the following is NOT a responsibility of effective change management? A) integrating legacy systems B) dealing with fear and anxiety about new systems C) training users of the new system D) enforcing user participation at all stages of system development Answer: A Diff: 2 Page Ref: 538 AACSB: Analytic skills CASE: Analysis Objective: 14.4

56) Which of the following tools would you 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) All of the above Answer: D Diff: 1 Page Ref: 538-542 AACSB: Reflective thinking skills CASE: Content Objective: 14.5

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57) Internal integration tools: A) enable a project to have sufficient technical support for project management and development. B) enable a project manager to properly document and monitor project plans. C) portray a project as a network diagram with numbered nodes representing project tasks. D) consist of ways to link the work of the implementation team with users at all organization levels. Answer: A Diff: 3 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 58) An example of using an internal integration tool would be to A) define task dependencies. B) include user representatives as active members of the project team. C) create a PERT chart. D) hold frequent project team meetings. Answer: D Diff: 2 Page Ref: 539 AACSB: Analytic skills CASE: Synthesis Objective: 14.5 59) Formal planning and control tools A) enable a project to have sufficient technical support for project management and development. B) enable a project manager to properly document and monitor project plans. C) portray a project as a network diagram with numbered nodes representing project tasks. D) consist of ways to link the work of the implementation team with users at all organization levels. Answer: B Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5

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60) External integration tools A) enable a project to have sufficient technical support for project management and development. B) enable a project manager to properly document and monitor project plans. C) portray a project as a network diagram with numbered nodes representing project tasks. D) consist of ways to link the work of the implementation team with users at all organization levels. Answer: D Diff: 2 Page Ref: 541 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 61) An example of using an external integration tool would be to: A) define task dependencies. B) include user representatives as active members of the project team. C) create a PERT chart. D) hold frequent project team meetings. Answer: B Diff: 3 Page Ref: 541 AACSB: Analytic skills CASE: Synthesis Objective: 14.5 62) 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 and B D) Neither A nor B Answer: B Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 63) To review a project's tasks and their interrelationships, you would use a A) PERT chart. B) Gantt chart. C) Either A or B. D) Neither A nor B. Answer: A Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5

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64) Which type of tool helps project managers identify bottlenecks in project development? A) internal integration tools B) external integration tools C) formal planning and control tools D) both B and C Answer: C Diff: 1 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 65) As discussed in the chapter case, which of the following difficulties proved the most challenging to the CDC in the implementation of its BioSense system? A) user-designer communications gap B) lack of management support C) poor technical performance D) user resistance Answer: D Diff: 2 Page Ref: 543 AACSB: Analytic skills CASE: Evaluation Objective: 14.4 66) Which of the following tools may help identify risk areas associated with employee acceptance of a new information system? A) formal planning and control tools B) organizational impact analysis C) system prototype D) feasibility study Answer: B Diff: 2 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 67) Which of the following is NOT an organizational factor in systems planning and implementation? A) standards and performance monitoring B) government regulatory compliance C) health and safety D) user interface Answer: D Diff: 1 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.5

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68) In sociotechnical design A) separate sets of technical and social design solutions are developed and compared. B) ergonomic features of a system and the system's technical design are given equal importance. C) systems analysts with proven backgrounds in sociological concerns rate and compare a system's social and technical aspects. D) all of the above. Answer: A Diff: 2 Page Ref: 544 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 69) The most widely used project management software today is A) Vertabase. B) IBM Project Guide. C) Microsoft Project. D) Microsoft Excel. Answer: C Diff: 1 Page Ref: 545 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 70) As described in the chapter case study on the U.S. Census Bureau, which of the following would have done the most to prevent the challenges, costs, and delays in implementing the 2010 Census project? A) PERT and Gantt charts B) risk management C) external integration tools D) organizational impact analysis Answer: B Diff: 3 Page Ref: 550-551 AACSB: Analytic skills CASE: Analysis Objective: 14.5 71) ________ refers to the application of knowledge, skills, tools and techniques to achieve specific targets within specified budget and time constraints. Answer: Project management Diff: 1 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.1

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72) A(n) ________ contains a statement of corporate goals and specifies how information technology will support the attainment of those goals. Answer: information systems plan Diff: 1 Page Ref: 528 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 73) In portfolio analysis, low benefit, ________ risk systems should be avoided. Answer: high Diff: 2 Page Ref: 531 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 74) A(n) ________ is a method for deciding among alternative systems based on a system of ratings for selected objectives. Answer: scoring model Diff: 2 Page Ref: 531 AACSB: Reflective thinking skills CASE: Content Objective: 14.2 75) ________ benefits are those than can be quantified and assigned a monetary value. Answer: Tangible Diff: 1 Page Ref: 533 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 76) ________ methods rely on measures of cash flows into and out of the firm. Answer: Capital budgeting Diff: 2 Page Ref: 534 AACSB: Reflective thinking skills CASE: Content Objective: 14.3 77) A(n) ________ is the individual who acts as the catalyst to ensure successful adaptation to a new system or innovation. Answer: change agent Diff: 2 Page Ref: 536-537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4

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78) A(n) ________ occurs when there is a difference in background, interests and priorities that impede communication and problem solving among users and IS specialists. Answer: user-designer communications gap Diff: 2 Page Ref: 537 AACSB: Reflective thinking skills CASE: Content Objective: 14.4 79) The ________ chart portrays a project as a network diagram consisting of numbered nodes representing project tasks. Answer: PERT Diff: 2 Page Ref: 539 AACSB: Reflective thinking skills CASE: Content Objective: 14.5 80) ________ is the interaction of people and machines in the work environment, including the design of jobs, health issues, and the end-user interface of information systems. Answer: Ergonomics Diff: 2 Page Ref: 542 AACSB: Reflective thinking skills CASE: Content Objective: 14.5

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81) 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? Diff: 2 Page Ref: 524 AACSB: Analytic skills CASE: Synthesis Objective: 14.2

82) Describe the elements of a management structure for information systems projects in a large corporation. Answer: In a large corporation, the management structure typically consists of (from top to bottom levels in the hierarchy): • Corporate strategic planning group: The higher level group of managers responsible for developing the firm's strategic plan. • Information systems steering committee: A senior management group with responsibility for systems development and operation. • Project management: A group of information systems managers and end-user managers responsible for overseeing several specific information systems projects. • Project team: The group directly responsible for the individual systems project, consisting of systems analysts, specialists from the relevant end-user business areas, application programmers, and perhaps database specialists. Diff: 2 Page Ref: 527 AACSB: Analytic skills CASE: Analysis Objective: 14.2

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83) List five types of information that should be included in an information systems plan. Answer: General categories of information included in an information plan are: • Purpose of the plan • Business rationale • Current systems or situation • New developments to consider • Management strategy • Implementation plan • Budget Diff: 3 Page Ref: 528 AACSB: Analytic skills CASE: Analysis Objective: 14.2 84) You have been hired as a consultant for a nationwide real estate firm, Cross & Deptford, who are interested in achieving better organization between branches by updating their information systems, but are not sure what will suit their needs. What will you recommend they do in order to determine the most effective IT projects? Answer: Cross & Deptford first should have an information systems plan created to determine what their information requirements are and what systems will support their business goals. They will need to inventory their existing systems and develop metrics to quantify any future improvements are made. They can use critical success factors and/or portfolio analysis and/or scoring models to help determine the most important information systems projects to pursue. Diff: 2 Page Ref: 528-532 AACSB: Analytic skills CASE: Evaluation Objective: 14.2

85) 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 companies 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. Diff: 1 Page Ref: 530-531 AACSB: Analytic skills CASE: Evaluation Objective: 14.2

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86) You have been hired as a consultant to make recommendations for Smarty's, a healthy fast-food chain that is undergoing major expansion and is in need of a supply chain planning system. They are evaluating two commercially available software packages. What systems evaluation model will help them assess and compare the two packages? How does this model work? Answer: A scoring model can be used for selecting projects where many criteria must be considered. It assigns weights to various features of a system and then calculates the weighted totals. What Smarty's would do is have decision makers such as top managers list the various features they feel are important to have in the system, such as the processes that need support or reports they may need from the system. Each feature, or criteria, the managers list is given a weight, or rating, in terms of how important it is overall to have in the system. Each package then is evaluated in terms of the percentage of requirements it contributes or supports for each criteria. In the scoring model, you multiply the weight with the software's percentage of contribution to arrive at a score for each criteria. The scores of both software packages are totaled and compared to see overall their contribution to fulfilling the company's requirements. Diff: 2 Page Ref: 528-532 AACSB: Analytic skills CASE: Analysis Objective: 14.2

87) Differentiate between intangible and tangible benefits and list three examples of each. In what types of systems are intangible 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. 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. Systems that produce more intangible benefits are MIS, DSS, and collaborative work systems. Diff: 2 Page Ref: 533 AACSB: Analytic skills CASE: Evaluation Objective: 14.3

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88) What is the purpose of using a real options pricing model to estimate the potential value of an information systems project? Answer: Some information systems projects are highly uncertain, especially investments in IT infrastructure. Their future revenue streams are unclear and their up-front costs are high. For example, consider a $20 million investment to upgrade your firm's IT infrastructure. If this upgraded infrastructure were available, the organization would have the technology capabilities to respond more easily to future problems and opportunities. Although the costs of this investment can be calculated, not all of the benefits of making this investment can be established in advance. But if the firm waits a few years until the revenue potential becomes more obvious, it might be too late to make the infrastructure investment. It is in these cases that managers might benefit from using real options pricing models to evaluate information technology investments. Real options pricing models (ROPMs) value information systems projects similar to stock options, where an initial expenditure on technology creates the right, but not the obligation, to obtain the benefits associated with further development and deployment of the technology as long as management has the freedom to cancel, restart, or change the project. ROPMs give managers the flexibility to stage their IT investment or test the waters with small pilot projects or prototypes to gain more knowledge about the risks of a project before investing in the entire implementation. valuation borrowed from the financial industry. Diff: 2 Page Ref: 534-535 AACSB: Analytic skills CASE: Analysis Objective: 14.3

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89) You are the senior project manager for a Web development company with upwards of 100 current client projects. You have been assigned to evaluate two upcoming projects. One project is to develop a time tracking solution that would allow your 20 freelancers to submit daily time sheets and would report on the time spent on each project. The other project is to redesign the client interface to the company extranet to make it easier to use. The extranet allows clients to log in and view their current Web sites under development, as well as view project statistics, documents, and progress reports. Compare the two projects in terms of risk factors. Answer: Student answers will vary but should include an understanding of the main risks factors: size, structure, and technical expertise. An example answer is: The main risk factors are size, structure, and technical expertise. • Size. The time-tracking project is a larger project: It involves creating new programming that may interface with back-end systems and will immediately influence payment and cost. It also affects business processes. Redesigning an interface for the client extranet may simply be designing one or two pages that will be replicated for each client once the initial design is done. • Structure. It may be easier to define the requirements of the time-tracking software, as this process is relatively straightforward. Understanding what makes the user interface problematic and defining ways to make it easier to use is somewhat of a less tangible quality than reporting on time, so this may be a concern in the second project. • Technical expertise. Since the time-tracking project is a new application, there may be some issues of making sure any in-house staff has the appropriate level of expertise. The user interface involves working with existing programming that will not change. However, there may be a need to make sure that an expert who understands usability is present. Diff: 2 Page Ref: 535-536 AACSB: Analytic skills CASE: Evaluation Objective: 14.4

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90) Americlinic, a national chain of budget health-care clinics, is creating an information system that will allow patients and doctors at participating franchises to communicate online. The goal of the system is to allow doctors to respond to minor health questions quickly and more efficiently, saving patients unnecessary visits to the clinic. This will be a major procedural change. What steps would you recommend to this company to ensure the user acceptance of the system? Answer: The first step should be to conduct an organizational impact analysis, to determine the changes in procedures, job function, organizational structure, power relationships, and behavior that this system requires or will engender. Any organizational changes should occur prior to implementing the system. In order to gain compliance and support of the doctors, I would establish a review committee of influential participating doctors and change agents to discuss the system prior to development and during development in order to meet physician needs and requirements. I would also involve focus groups of intended users to review prototypes of the system to make sure it is easy to use, and hopefully easier to use in the relevant health situations than going to the doctor. The company will need to make sure that there is also an option for users that do not have Internet access. User training for doctors and nurses will be essential. The company should also consider incentives for doctors and patients that use the system. Diff: 2 Page Ref: 536-538, 542 AACSB: Analytic skills CASE: Synthesis Objective: 14.5

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Management Information Systems: Managing the Digital Firm, 11e (Laudon/Laudon) Chapter 15 Managing Global Systems 1) The growth of international trade has radically altered domestic economies around the globe. Answer: TRUE Diff: 1 Page Ref: 555 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 2) Before developing a corporate strategy and structure for globalization, a firm should determine the appropriate technology infrastructure. Answer: FALSE Diff: 1 Page Ref: 556 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 3) Global business drivers can be divided into two groups: general cultural factors and specific business factors. Answer: TRUE Diff: 2 Page Ref: 557 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 4) The collapse of the Eastern block has speeded the growth of a world culture. Answer: TRUE Diff: 1 Page Ref: 557 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 5) The growth of powerful communications technologies and the emergence of world cultures create the condition for global markets. Answer: TRUE Diff: 2 Page Ref: 557 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

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6) Micromarketing describes the direct marketing of products to individuals rather than groups. Answer: FALSE Diff: 2 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

7) A powerful strategic advantage for a globalized firm is lowered cost factors in production. Answer: TRUE Diff: 2 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 8) Particularism is a concept based on accepting a shared global culture and the penetration of domestic markets by foreign goods and services. Answer: FALSE Diff: 3 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 9) At the cultural level, differences among cultures produce differences in social expectations, politics, and legal rules. Answer: TRUE Diff: 1 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 10) Globalization means that companies can be less concerned with the laws governing the movement of information. Answer: FALSE Diff: 1 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 11) European countries have very strict laws concerning transborder data flows and privacy. Answer: TRUE Diff: 1 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

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12) The European Union Data Protection Directive restricts the flow of any information to countries that do not meet strict European laws on personal information. Answer: TRUE Diff: 2 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

13) To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms have developed information systems within each European country. Answer: TRUE Diff: 2 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 14) With the growth of the Internet and reliable phone networks, skilled consultants are readily available to companies operating in global markets. Answer: FALSE Diff: 1 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 15) Accounting practices can vary significantly from country to country. Answer: TRUE Diff: 1 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 16) In international companies, English has become a kind of standard business language. Answer: TRUE Diff: 2 Page Ref: 560 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 17) In a multinational strategy, financial management is centralized while production and sales are decentralized. Answer: TRUE Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

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18) Global systems allow fixed costs to be amortized over a much smaller customer base. Answer: FALSE Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

19) One major telecommunications challenge in an international setting is making data flow seamlessly across networks shaped by disparate national standards. Answer: TRUE Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 20) Private networks may not provide the same level of quick and predictable response as VPNs. Answer: FALSE Diff: 3 Page Ref: 571-572 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 21) A force in the environment to which businesses must respond and that influences the direction of the business is called a business A) driver. B) threat. C) process. D) matrix. Answer: A Diff: 1 Page Ref: 556 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 22) The major dimensions of international systems architecture include each of the following EXCEPT A) the global environment. B) corporate global strategy. C) technology platform. D) transborder data flows. Answer: D Diff: 2 Page Ref: 556 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

Emmanuel Opoku

Rowkish+ 305

23) General cultural factors driving global business are A) global communication and transportation technologies, a global knowledge base, and global social norms. B) the development of global markets, political stability, and a global workforce. C) the rise of the global workforce, political stability, and a global knowledge base. D) the rise of a global workforce, global economies of scale, and global production and operations. Answer: A Diff: 3 Page Ref: 557 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

24) Global coordination of all of the major business functions permits the location of business activity according to A) social norms and values. B) comparative advantage. C) competitive threat. D) knowledge base. Answer: B Diff: 3 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 25) Marketing to very small geographic and social units is called: A) targeted marketing. B) macromarketing. C) personalization. D) micromarketing. Answer: D Diff: 1 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 26) Making judgments and taking action on the basis of narrow or personal characteristics is referred to as: A) localization. B) cooptation. C) particularism. D) prejudicial. Answer: C Diff: 2 Page Ref: 558 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

Emmanuel Opoku

Rowkish+ 306

27) Which of the following restricts the flow of personal information to countries that do not meet strict European information laws on personal information? A) Free Trade Agreement B) European Union Data Protection Directive C) United Nations Privacy Act D) European Transborder Data Flow Act Answer: B Diff: 2 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

28) General challenges and obstacles to global business systems are typified by A) different technology standards, shortages of skilled consultants, and social expectations. B) brand-name expectations, language differences, and commercial regulations. C) different work hours, transborder data and privacy laws, and different technology standards. D) different communications standards, language differences, and network reliability. Answer: B Diff: 3 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 29) Which of the following is NOT a specific challenge to global business system? A) shortages of skilled consultants B) language differences C) different telecommunication standards D) different data transfer speeds Answer: B Diff: 3 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 30) To avoid the cost and uncertainty of moving information across national boundaries, most multinational firms A) maintain a master database at their head offices. B) develop a master system that meets the standards of all the countries concerned. C) use microwave satellite transmission to move data. D) develop separate systems within each country. Answer: D Diff: 2 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

Emmanuel Opoku

Rowkish+ 307

31) German companies A) do not recognize the profit until the project is completely finished and they have been paid. B) recognize profits before the project is finished. C) recognize profits when the project is initialized. D) do not recognize the profits until they have been formally audited. Answer: A Diff: 3 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

32) Most large companies with overseas operations have inherited: A) recently built technology platforms for international systems. B) batch-oriented reporting from independent foreign divisions to corporate headquarters. C) transaction-oriented reporting based at the home office for overseas business. D) global marketing systems developed domestically. Answer: B Diff: 3 Page Ref: 560 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 33) In terms of global business strategy and structure, a domestic exporter will use a policy of A) some dispersed sales, with centralized production, accounting, human resources, and strategic management. B) centralized production and accounting with decentralized marketing and human resources. C) centralized production, accounting, marketing, and human resources. D) dispersed production and marketing, with centralized accounting, human resources and strategic management. Answer: A Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 34) In terms of global business strategy, Caterpillar Corporation and other heavy capital equipment manufacturers fall into which category of firm? A) domestic exporter B) multinational C) franchiser D) transnational Answer: A Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

Emmanuel Opoku

Rowkish+ 308

35) A company that controls finances in the home country and decentralizes production, sales, and marketing operations to other countries is using a ________ strategy. A) domestic exporter B) franchising C) transnational D) multinational Answer: D Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

36) In terms of global business strategy and structure, a multinational company will use a policy of A) mixed sales and marketing, with centralized production, accounting, human resources, and strategic management. B) centralized production, accounting, marketing, human resources, with strategic management. C) dispersed production, accounting, human resources, with centralized strategic management, and marketing. D) dispersed production and marketing, with centralized accounting and strategic management. Answer: D Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 37) In terms of global business strategy, Chrysler and Intel fall into which category of firm? A) domestic exporter B) multinational C) franchiser D) transnational Answer: B Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

Emmanuel Opoku

Rowkish+ 309

38) In terms of global business strategy and structure, a franchise company will use a policy of A) centralized production, accounting, marketing, human resources, with strategic management. B) dispersed production, accounting, human resources, with centralized strategic management, and marketing. C) dispersed production and marketing, with centralized accounting, human resources and strategic management. D) dispersed production, marketing, and human resources, with centralized strategic management and finance/accounting. Answer: D Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 39) In terms of global business strategy, KFC falls into which category of firm? A) domestic exporter B) multinational C) franchiser D) transnational Answer: C Diff: 1 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

40) In terms of global business strategy, the governance of ________ firms has been likened to a federal structurestrong central management core of decision making, but considerable dispersal of power and financial resources. A) domestic exporter B) multinational C) franchiser D) transnational Answer: D Diff: 2 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.2

Emmanuel Opoku

Rowkish+ 310

41) Citicorp, Sony, and Ford are attempting to make a transition to which type of business organizational structure? A) domestic exporter B) multinational C) transnational D) franchiser Answer: C Diff: 3 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 42) 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 Diff: 2 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 43) 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 Diff: 2 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

Emmanuel Opoku

Rowkish+ 311

44) 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 Diff: 2 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 45) 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 Diff: 2 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 46) Domestic exporters typically have highly ________ systems. A) duplicated B) centralized C) networked D) decentralized Answer: B Diff: 2 Page Ref: 563 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

Emmanuel Opoku

Rowkish+ 312

47) Multinational companies tend to have ________ systems. A) duplicated B) centralized C) networked D) decentralized Answer: D Diff: 2 Page Ref: 563 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

48) Franchise companies have typically had ________ systems. A) duplicated B) centralized C) networked D) decentralized Answer: A Diff: 2 Page Ref: 563 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 49) Transnational companies have tended to use a ________ systems configuration. A) duplicated B) centralized C) networked D) decentralized Answer: C Diff: 2 Page Ref: 563 AACSB: Reflective thinking skills CASE: Content Objective: 15.3 50) The network systems structure is the most visible in ________ services. A) production B) financial C) marketing D) software design Answer: B Diff: 2 Page Ref: 563 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

Emmanuel Opoku

Rowkish+ 313

51) Effective networked systems must have a A) powerful telecommunications backbone. B) culture of shared applications development. C) shared management culture that crosses cultural barriers. D) both b and c E) a, b, and c F) none of the above Answer: E Diff: 2 Page Ref: 563 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

52) Two of the management challenges in developing global systems are listed in your text as A) (1) managing the privacy concerns of different countries and (2) coordinating applications development. B) (1) creating a financial structure that will operate internationally and (2) managing the privacy concerns of different countries. C) (1) agreeing on common user requirements and (2) managing the privacy concerns of different countries. D) (1) coordinating software releases and (2) introducing changes in business processes. Answer: D Diff: 3 Page Ref: 564 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 53) Which of the following is NOT one of the principle 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 Diff: 2 Page Ref: 564 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

Emmanuel Opoku

Rowkish+ 314

54) Logically related tasks to produce specific business results best defines A) information systems. B) business processes. C) SOPs. D) core competencies. Answer: B Diff: 1 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 55) 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 Diff: 2 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.5

56) As a firm moves from local option systems to regional and global systems A) agency costs increase. B) coordination costs decrease. C) transaction costs increase. D) both transaction and agency costs increase. Answer: A Diff: 3 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 57) Which systems are worth sharing on a transnational basis, from a cost and feasibility point of view? A) only systems that support functions that are absolutely critical to the organization B) core systems and worthwhile provincial systems C) core systems and any financial systems that can be easily integrated with each other D) financial and accounting systems Answer: A Diff: 2 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

Emmanuel Opoku

Rowkish+ 315

58) Based on your reading of the chapter, why should companies avoid creating an all-encompassing, new global system when moving towards global operations? A) These may fail due to lack of visibility. B) It is difficult to quantify and explain the benefits of information systems that are that large. C) "Grand design" approaches typically fail to identify centers of excellence. D) Opposition is strengthened because of requirements for huge resources. Answer: D Diff: 3 Page Ref: 566 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 59) The ability of global systems to optimize the use of corporate funds over a much larger capital base means that A) capital in a surplus region can be moved efficiently to expand production of capital-starved regions. B) capital costs can be accounted or spread over a larger base of constituents. C) costs can be amortized over a larger customer base. D) value chains can be synchronized more effectively. Answer: C Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

60) Which of the following is NOT one of the main benefits to implementing global systems? A) superior management and coordination B) vast improvements in operation C) new economies of scale at production facilities D) reduced hardware costs Answer: D Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

Emmanuel Opoku

Rowkish+ 316

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) cooptation. B) change management. C) implementation. D) advocacy. Answer: A Diff: 1 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 62) In relation to global systems building, the Internet A) allows the seamless flow of information through the enterprise. B) affords local groups stable broadband access. C) has reduced some networking problems. D) all of the above. Answer: C Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 63) A critical necessity for ensuring the integration of local systems into a global system is A) adherence to data and technical standards. B) use of standard hardware at the local level. C) use of standard user software at the local level. D) all of the above. Answer: A Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.5

64) VPNs A) use the public Internet for communications. B) may not be able to support large numbers of remote users, due to the variable traffic on the Internet. C) provide many of the same services as private networks. D) all of the above. Answer: D Diff: 2 Page Ref: 571-572 AACSB: Reflective thinking skills CASE: Content Objective: 15.5

Emmanuel Opoku

Rowkish+ 317

65) Which of the following is NOT one of the principle problems of international networks? A) network capacity B) poor quality of international service C) network standards D) regulatory constraints Answer: C Diff: 2 Page Ref: 571 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 66) Which types of systems are widely used by manufacturing and distribution firms to connect to suppliers on a global basis? A) TPS systems B) EDI systems C) CRM systems D) None of the above Answer: B Diff: 1 Page Ref: 575 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 67) A global firm can develop transnational centers of excellence as an effective technique to A) ensure connectivity between regional systems. B) encourage user support of global systems. C) effectively identify global business processes. D) develop a merit-based hierarchy among regional groups. Answer: C Diff: 2 Page Ref: 570 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

68) Sixty-eight percent of the world's mobile phone subscriptions are in A) developing countries. B) Europe. C) the United States. D) the United States and Canada. Answer: A Diff: 2 Page Ref: 573 AACSB: Reflective thinking skills CASE: Content Objective: 15.5

Emmanuel Opoku

Rowkish+ 318

69) Software localization is the process of A) translating a user interface into a second language. B) converting software programming to run on a different platform. C) converting software to operate in a second language and with local conventions. D) modifying software so that it can be adopted in other countries without engineering changes. Answer: C Diff: 3 Page Ref: 574 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 70) According to the chapter case, what was the chief challenge facing General Motors regarding its information systems? A) incompatible legacy systems B) resistance from managers C) resistance from rank-and-file employees D) lack of globalization Answer: A Diff: 2 Page Ref: 580 AACSB: Reflective thinking skills CASE: Content Objective: 15.5 71) A(n) ________ is a force in the environment to which businesses must respond and that influences the direction of business. Answer: business driver Diff: 1 Page Ref: 556 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 72) The ________ created by television, the Internet, and other globally shared media such as movies now permits different peoples around the world to develop common expectations and values. Answer: global culture Diff: 2 Page Ref: 557 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

73) A(n) ________ is formed by consumers around the world who are interested in consuming similar products that are culturally approved. Answer: global market Diff: 2 Page Ref: 557 AACSB: Reflective thinking skills CASE: Content Objective: 15.1

Emmanuel Opoku

Rowkish+ 319

74) Japanese consumers who only want to purchase products made in Japan are an example of cultural ________. Answer: particularism Diff: 2 Page Ref: 558 AACSB: Analytic skills CASE: Analysis Objective: 15.1 75) The movement of information across international boundaries is called ________. Answer: transborder data flow Diff: 3 Page Ref: 559 AACSB: Reflective thinking skills CASE: Content Objective: 15.1 76) ________ firms have no single national headquarters but have many regional headquarters and perhaps a world headquarters. Answer: Transnational Diff: 2 Page Ref: 561 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 77) In a global system configuration, a(n) ________ system is one in which systems development and operations occur in an integrated and coordinated fashion across all units. Answer: networked Diff: 2 Page Ref: 562 AACSB: Reflective thinking skills CASE: Content Objective: 15.2 78) ________ systems support functions that are absolutely critical to the organization. Answer: Core Diff: 2 Page Ref: 565 AACSB: Reflective thinking skills CASE: Content Objective: 15.3

79) ________ is defined as the extent to which your authority is accepted on grounds of competence, vision, or other qualities. Answer: Legitimacy Diff: 2 Page Ref: 567 AACSB: Reflective thinking skills CASE: Content Objective: 15.4

Emmanuel Opoku

Rowkish+ 320

80) ________ is defined as bringing the opposing local organization groups into the process of designing and implementing an information systems solution without giving up control over the direction and nature of the change. Answer: Cooptation Diff: 3 Page Ref: 569 AACSB: Reflective thinking skills CASE: Content Objective: 15.4 81) What steps do the authors recommend be taken 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 instructor before you can choose the right technology. Diff: 2 Page Ref: 556 AACSB: Analytic skills CASE: Analysis Objective: 15.1

82) List at least four general cultural factors and four specific business factors driving global business. Which two factors (one of each) do you feel are most problematic at the current moment? Why? Answer: General cultural factors include global communication and transportation technologies, development of the global culture, emergency 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. One answer might be that two general cultural factors most in danger at the current moment are political stability and development of a global culture (either would be a good answer). Two business factors most problematic at the moment are global coordination and global workforce. Coordinating work on a truly global scale requires a fairly high level of corporation sophistication that only a small number of large firms are truly capable of on a real-time 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. Diff: 2 Page Ref: 557-558 AACSB: Analytic skills CASE: Analysis Objective: 15.1

Emmanuel Opoku

Rowkish+ 321

83) What are the four specific types of business challenges to global business systems? Which one do you think will be easiest to solve? Why? Answer: • Standards: Different EDI, e-mail, telecommunications standards. • Reliability: Phone networks are not uniformly reliable. • Speed: Different data transfer speeds; many are slower than United States speeds. • Personnel: Shortages of skilled consultants. Answers will vary, but an example answer is: The easiest challenge to solve is that of standards, because of the growth of universal, Internet-based standards, Web services, and component-based programming. Diff: 2 Page Ref: 558-559 AACSB: Analytic skills CASE: Analysis Objective: 15.4

84) How do cultural, legal, political, and social expectations affect global business? Answer: At a cultural level, particularism in all its forms rejects the very concept of a shared global culture and rejects the penetration of domestic markets by foreign goods and services. Differences among cultures produce differences in social expectations, politics, and ultimately in legal rules. Different cultures produce different political regimes, with different laws governing the movement of information, information privacy of their citizens, origins of software and hardware in systems, and radio and satellite telecommunications. Even the hours of business and terms of business trade vary greatly across political cultures. Cultural and political differences profoundly affect organizations' standard operating procedures. Everything from the different reliability of telephone systems to the shortage of skilled consultants creates barriers. National laws and traditions have created different accounting practices in various countries, which impact the way profits and losses are analyzed. These accounting practices are tightly intertwined with each country's legal system, business philosophy, and tax code. Cultural differences can also affect the way organizations use information technology. Japanese firms, for example, use fax technologies intensively but are not comfortable with e-mail. Language is a significant barrier. Software may have to be built with local language interfaces before a new information system can be successfully implemented. Currency fluctuations can play havoc with planning models and projections. Some of these problems will diminish in parts of the world when the Euro becomes more widely used. Diff: 3 Page Ref: 557-560 AACSB: Analytic skills CASE: Analysis Objective: 15.1

Emmanuel Opoku

Rowkish+ 322

85) 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. Diff: 1 Page Ref: 561 AACSB: Analytic skills CASE: Analysis Objective: 15.2

86) 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, an international. (3) Establish at world headquarters a single office responsible for development of international systems, a global chief information officer position. Diff: 1 Page Ref: 563 AACSB: Analytic skills CASE: Analysis Objective: 15.2 87) 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: Student answers will vary, but should include four of the five following problems. (1) Agreeing on user requirements. (2) Introducing changes in business processes. (3) Coordinating applications development. (4) Coordinating software releases. (5) Encouraging local users to support global systems. Diff: 2 Page Ref: 567-570 AACSB: Analytic skills CASE: Evaluation Objective: 15.5

Emmanuel Opoku

Rowkish+ 323

88) You are working for a global electronic parts manufacturing company with divisions in Taiwan, Malaysia, Australia, and Germany, that has embarked on developing a global enterprise system. To ensure that overseas divisions comply with the new system, they are considering a cooptation strategy in which they will permit each country unit the opportunity to develop one transnational application first in its home territory, and then throughout the world. What are the benefits and drawbacks to this approach? Are there any other solutions for the company's cooptation strategy? Answer: With this strategy, local units will feel a sense of ownership in the transnational effort. On the downside, this assumes the ability to develop high-quality systems is widely distributed, and that, a German team can successfully implement systems in Taiwan or Malaysia. This will not always be the case. Another cooptation strategy would be to develop new transnational centers of excellence, or a single center of excellence. In this, you would identify a regional location with excellent implementation of specific business processes. These centers draw heavily from local national units, are based on multinational teams, and must report to worldwide management. The centers of excellence would perform the initial identification and specification of business processes, define the information requirements, perform the business and systems analysis, and accomplish all design and testing. Implementation, however, and pilot testing are rolled out to other parts of the globe. Recruiting a wide range of local groups to transnational centers of excellence helps send the message that all significant groups are involved in the design and will have an influence. Diff: 3 Page Ref: 567-570 AACSB: Analytic skills CASE: Evaluation Objective: 15.4

89) What options does a company have for providing international connectivity? Answer: They can build their own international private network, rely on a network service based on the public switched networks throughout the world, or use the Internet and intranets. Diff: 1 Page Ref: 571-572 AACSB: Analytic skills CASE: Analysis Objective: 15.5

Emmanuel Opoku

Rowkish+ 324

90) How does the Internet benefit the development of a global information system? Should all global systems be based on the Internet? Answer: The Internet allows anyone connected to it to communicate and compute at any time, or anywhere. Satellite systems, digital cell phones, and personal communications services will make it even easier to coordinate work and information in many parts of the globe that cannot be reached by existing ground-based systems. Companies can use Internet technology to construct virtual private networks to reduce wide area networking costs and staffing requirements. If it wishes, the company can outsource the virtual private network to an Internet service provider. All global systems can't be based primarily on the Internet, because currently not all countries have the same access to the Internet. Additionally, high-traffic volumes at certain times of the day in various regions may impede responsiveness. Diff: 2 Page Ref: 571 AACSB: Analytic skills CASE: Synthesis Objective: 15.5

Emmanuel Opoku

Rowkish+ 325