CHAPTER 1

1) Which of the following is not one of the six strategic business objectives of information systems?

1. A) New products and services

2. B) Improved decision making
3. C) Competitive advantage
4. D) Improved employee morale
5. E) Survival

Answer:  D
3) Which of the following may lead to competitive advantage?

1. New products, services, and business models;

2. Charging less for superior products;
3. Responding to customers in real time?
4. A) 1 only
5. B) 1 and 2
6. C) 2 and 3
7. D) 1 and 3
8. E) 1, 2, and 3

Answer:  E

4) A firm that invests in an information system because it is a necessity of doing business does so because it is
seeking to achieve which of the following business objectives?

1. A) Operational excellence
2. B) Improved decision making
3. C) Competitive advantage
4. D) Customer intimacy
5. E) Survival

Answer:  E

9) Walmart exemplifies the power of information systems coupled with state-of-the-art business practices and
supportive management to achieve which of the following?

1. A) New products and services

2. B) Operational efficiency
3. C) Survival
4. D) Customer intimacy
5. E) Competitive advantage

Answer:  B

11) ) To make sure they stock clothes that their customers will purchase, a department store implements a new
application that analyzes spending levels at their stores and cross-references this data to popular clothing styles.
Which of the following business objectives is this information intended to support?

1. A) Customer intimacy
2. B) Survival
3. C) Operational excellence
4. D) Improved decision making
5. E) New products and services
 Answer:  C

13) All of the following are new technology-related trends in MIS except:

1. A) cloud computing.
2. B) big data.
3. C) IoT.
4. D) the mobile digital platform.
5. E) co-creation of business value.

Answer:  E

14) Which of the following statements about digital firms is not true?

1. A) In digital firms, time shifting and space shifting are the norm.
2. B) Today, most firms are fully digital..
3. C) Digital firms offer extraordinary opportunities for flexible global organization and management.
4. D) Digital firms sense and respond to their environments more rapidly than traditional firms.
5. E) Digital firms have more flexibility to survive in turbulent times.

Answer:  B

15) A firm that must invest in new information systems capabilities in order to comply with federal legislation is
investing to achieve which business objective?

1. A) Customer intimacy
2. B) Operational excellence
3. C) Survival
4. D) Creation of new products
5. E) Improved decision making

Answer:  C

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

Answer:  TRUE

18) In order to be considered a digital firm, all of the firm’s significant business relationships and core business
processes must be digitally enabled.

Answer:  FALSE

19) A business model describes how a company produces, delivers, and sells a product or service to create wealth.

Answer:  TRUE

21) The enormous volume of data generated by Internet activity, such as web traffic, email, and social media is
referred to as:

1. A) IoT
2. B) big data.
3. C) the mobile digital platform.
4. D) cloud computing.
5. E) business intelligence.

Answer:  B

24) The three activities in an information system that produce the information organizations use to control
operations are:
1. A) information, research, and analysis.
2. B) input, output, and feedback.
3. C) data, information, and analysis.
4. D) data analysis, processing, and feedback.
5. E) input, processing, and output.

Answer:  E

26) The total number of food items with storage temperatures problems is an example of which of the following?

1. A) Input
2. B) Raw data
3. C) Meaningful information
4. D) Feedback
5. E) Processing

Answer:  C

27) Output:

1. A) is feedback that has been processed to create meaningful information.

2. B) is information that is returned to appropriate members of the organization to help them evaluate
the input stage.
3. C) transfers data to the people who will use it or to the activities for which it will be used.
4. D) transfers processed information to the people who will use it or to the activities for which it will be
used.
5. E) converts raw input into a meaningful form.

Answer:  D

28) Converting raw data into a more meaningful form is called:

1. A) capturing.
2. B) processing.
3. C) organizing.
4. D) feedback.
5. E) analysis.

Answer:  B

30) In a hierarchical organization, the upper level consists of:

1. A) scientists.
2. B) senior management.
3. C) professional employees.
4. D) data workers.
5. E) knowledge workers.

Answer:  B

31) Which of the following is not one of the current changes taking place in information systems technology?

1. A) Growing business use of big data

2. B) Growth in cloud computing
3. C) Growth in the PC platform
4. D) Emerging mobile digital platform
5. E) Increased usage of data generated by the Internet of Things
 Answer:  C

32) 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:

1. A) culture.
2. B) environment.
3. C) atmosphere.
4. D) business process.
5. E) mission.

Answer:  A

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

1. A) Physical hardware and media used by an organization for storing data

2. B) Detailed, preprogrammed instructions that control and coordinate the computer hardware
components in an information system
3. C) Two or more computers to share data or resources
4. D) Hardware and software used to transfer data
5. E) Software governing the organization of data on physical storage media

Answer:  E

35) Which of the following statements best describes organizational culture?

1. A) It encompasses the sum of beliefs and assumptions by all members.

2. B) It enables the organization to transcend the different levels and specialties of its employees.
3. C) It reflects the senior management's perspective on the organization and goals.
4. D) It allows a company to achieve greater operational efficiency.
5. E) It is a fundamental set of assumptions, values, and ways of doing things that has been accepted by
most members of the organization.

Answer:  E

36) 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:

1. A) data management environment.

2. B) networked environment.
3. C) information technology (IT) infrastructure.
4. D) information system.
5. E) culture.

Answer:  C

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

1. A) Manufacturing and accounting

2. B) Finance and accounting
3. C) Sales and manufacturing
4. D) Finance and sales
5. E) Human resources

Answer:  B

38) All of the following are examples of environmental actors in an information system except:
1. A) competitors.
2. B) regulatory agencies.
3. C) customers.
4. D) suppliers.
5. E) sales force.

Answer:  E

39) Which of the following best describes the primary reason for implementing a new information system, from a
business perspective?

1. A) The system enables the firm to create new products and services.
2. B) The system will create new value for the firm, beyond its costs.
3. C) The system will automate key business processes.
4. D) The system is in use by our primary competitors.
5. E) The system integrates well with the Web.

Answer:  B

41) In a business hierarchy, which of the following levels is responsible for monitoring the daily activities of the
business?

1. A) Middle management
2. B) Service workers
3. C) Production management
4. D) Operational management
5. E) Knowledge workers

Answer:  D

42) In _____________, raw data is systematically acquired and transformed during various stages that add value to
that information.

1. A) an information value chain

2. B) the firm value chain
3. C) information processing
4. D) the feedback process
5. E) the dissemination process.

Answer:  A

43) 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?

1. A) Managerial
2. B) Governmental
3. C) Social
4. D) Organizational
5. E) Auxiliary

Answer:  C

44) Which of the following is an example of an organizational complementary asset?

1. A) Using the appropriate business model

2. B) A collaborative work environment
3. C) Laws and regulations
4. D) The Internet and telecommunications infrastructure
5. E) Strong senior management

Answer:  A

45) Which of the following is an example of a social complementary asset?

1. A) Technology and service firms in adjacent markets

2. B) Training programs
3. C) Distributed decision-making rights
4. D) Incentives for management innovation
5. E) A strong IS development team

Answer:  A

46) Which of the following roles in a firm would be least affected by using mobile devices to access firm information
systems?

1. A) Senior executives
2. B) Sales executives
3. C) Production workers
4. D) Operational managers
5. E) Knowledge workers

Answer:  C

47) Which of the following would not be used as an input for an information system?

1. A) Digital dashboard
2. B) Tablet computer
3. C) Barcode scanner
4. D) Smartphone
5. E) RFID reader

Answer:  A

48) The three principal levels within a business organization hierarchy are:

1. A) senior management, operational management, and service workers.

2. B) senior management, middle management, and operational management.
3. C) senior management, operational management, and information systems.
4. D) senior management, middle management, and service workers.
5. E) senior management, data workers, and service workers.

Answer:  B

49) Personnel who design new products or services for a firm belong to which level of a business hierarchy?

1. A) Middle management
2. B) Production workers
3. C) Knowledge workers
4. D) Data workers
5. E) Service workers

Answer:  C
 50) Which main business function is responsible for maintaining employee records?

1. A) Sales and marketing

2. B) Human resources
3. C) Finance and accounting
4. D) Manufacturing and production
5. E) Middle management

Answer:  B

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

Answer:  TRUE

54) Computers and programs are the only things required to produce the information an organization needs.

Answer:  FALSE

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

Answer:  FALSE

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

Answer:  TRUE

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

Answer:  FALSE

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

Answer:  FALSE

59) You need to know something about the hierarchy and culture of the company in order to understand how a
specific business firm uses information systems

Answer:  TRUE

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

Answer:  FALSE

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

Answer:  TRUE

62) Intranets link different systems and networks within a firm.

Answer:  TRUE

64) There is little variation in returns on IT investment across firms.

Answer:  FALSE

65) Laws and regulations creating fair, stable market environments are examples of complementary social assets
required to optimize returns from IT investments.

Answer:  TRUE

66) A firm that invests in a strong IS development team is making an investment in organizational complementary
assets.
 Answer:  TRUE

67) The behavioral approach to information systems focuses on analyzing the psychological, social, and economic
impacts of systems rather than the technical aspects.

Answer:  TRUE

68) Data is information that has been shaped into a form that is meaningful to human beings.

Answer:  FALSE

69) Feedback is output returned to appropriate members of the organization to help them evaluate or correct the
input stage.

Answer:  TRUE

70) The key elements of an organization are its structure, business processes, politics, culture, and people.

Answer:  TRUE

71) Middle managers make long-range strategic decisions about the firm's products and services.

Answer:  FALSE

72) Detailed, programmed instructions that control computer hardware components in an information system are
known as computer software.

Answer:  TRUE

73) Which of the following is a global network that uses universal standards to connect millions of different
networks around the world?

1. A) An extranet
2. B) The World Wide Web
3. C) The Internet
4. D) An intranet
5. E) Verizon

Answer:  C

74) Which of the following is a service provided by the Internet that uses universally accepted standards for storing,
retrieving, formatting, and displaying information in a page format?

1. A) HTML
2. B) The World Wide Web
3. C) E-mail
4. D) An extranet
5. E) FTP

Answer:  B

75) Which of the following is a private corporate network extended to authorized users outside the organization?

1. A) An intranet
2. B) The World Wide Web
3. C) The Internet
4. D) An extranet
5. E) FTP

Answer:  A
 84) Which of the following deals with behavioral issues as well as technical issues surrounding the development,
use, and impact of information systems used by managers and employees in the firm?

1. A) Information systems literacy

2. B) Information systems architecture
3. C) Business processes
4. D) Information technology infrastructure
5. E) Management information systems

Answer:  E

85) Disciplines that contribute to the technical approach to information systems include:

1. A) computer science, engineering, and networking.

2. B) operations research, management science, and computer science.
3. C) engineering, utilization management, and computer science.
4. D) management science, computer science, and engineering.
5. E) economics, sociology, and psychology.

Answer:  B

86) Which of the following disciplines focuses on mathematical techniques for optimizing parameters of
organizations, such as transportation and inventory control?

1. A) Management science
2. B) MIS
3. C) Computer science
4. D) Utilization management
5. E) Operations research

Answer:  E

87) Sociologists study information systems with an eye to understanding:

1. A) how systems affect individuals, groups, and organizations.

2. B) how human decision makers perceive and use formal information.
3. C) how new information systems change the control and cost structures within the firm.
4. D) the production of digital goods.
5. E) mathematically based models and physical technology.

Answer:  A

88) Psychologists study information systems with an eye to understanding:

1. A) how systems affect individuals, groups, and organizations.

2. B) how human decision makers perceive and use formal information.
3. C) how new information systems change the control and cost structures within the firm.
4. D) the production of digital goods.
5. E) mathematically based models and physical technology.

Answer:  B

89) Which field of study focuses on both a behavioral and technical understanding of information systems?

1. A) Sociology
2. B) Operations research
3. C) Economics
4. D) Behavioral computing
5. E) Management information systems

Answer:  E

CHAPTER 2

1) Producing a bill of materials is a business process in which of the following functional areas?

1. A) Finance and accounting

2. B) Human resources
3. C) Manufacturing and production
4. D) Research and development
5. E) Sales and marketing

Answer:  C

3) Identifying customers is a business process handled by the human resources function.

Answer:  FALSE

4) One example of a business process is shipping a product to a customer.

Answer:  TRUE

5) Order fulfillment involves all of the following business processes except:

1. A) checking the customer’s credit.

2. B) assembling the product.
3. C) submitting the order.
4. D) making customers aware of the product.
5. E) shipping the product.

Answer:  D

9) The ________ function is responsible for identifying customers.

1. A) finance and accounting

2. B) human resources
3. C) manufacturing and production
4. D) sales and marketing
5. E) distribution and logistics

Answer:  D

10) If your main supplier was late in delivering goods, which type of system would you use to update your
production schedule?

1. A) ESS
2. B) TPS
3. C) MIS
4. D) DSS
5. E) BIS

Answer:  B

12) To monitor the status of internal operations and the firm's relations with the external environment, managers
need which of the following types of system?
1. A) DSS
2. B) KWS
3. C) TPS
4. D) MIS
5. E) BIS

Answer:  C

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

1. A) TPS
2. B) MIS
3. C) ESS
4. D) DSS
5. E) KMS

Answer:  A

14) The term management information systems refers to a specific category of information systems serving:

1. A) integrated data processing throughout the firm.

2. B) transaction process reporting.
3. C) employees with online access to historical records.
4. D) the information technology function.
5. E) middle management functions.

Answer:  E

15) Which of the following would you use in order to determine which of your suppliers has the best and worst
records for keeping to your production schedule?

1. A) MIS
2. B) TPS
3. C) UPS
4. D) DSS
5. E) CRM

Answer:  A

16) A relocation control system that reports summaries on the total moving, house hunting, and home financing
costs for employees in all company divisions falls into which of the following categories?

1. A) KMS
2. B) TPS
3. C) ESS
4. D) MIS
5. E) DSS

Answer:  D

17) Non-typical business problems with causes and effects that are rapidly changing are typically handled by which
of the following types of information system?

1. A) MIS
2. B) TPS
3. C) ESS
4. D) DSS
5. E) KMS

Answer:  D

18) Which of the following types of information system is especially suited to situations in which the procedure for
arriving at a solution may not be fully defined in advance?

1. A) MIS
2. B) TPS
3. C) DSS
4. D) KMS
5. E) RPS

Answer:  C

19) Which type of information system would you use to forecast the return on investment if your firm planned to
switch to a new supplier that offered products at a lower cost?

1. A) ESS
2. B) TPS
3. C) MIS
4. D) CRM
5. E) DSS

Answer:  E

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

1. A) Operational
2. B) End-user
3. C) Middle management
4. D) Senior management
5. E) Knowledge workers

Answer:  D

21) An ESS supports which of the following?

1. A) Long-range planning activities of senior management

2. B) Knowledge and data workers in an organization
3. C) Decision making and administrative activities of middle managers
4. D) Day-to-day processes of production
5. E) Transactional needs of the organization

Answer:  A

22) Which of the following systems would you expect to deliver integrated, personalized business content through a
web-based interface?

1. A) TPS
2. B) ESS
3. C) MIS
4. D) DSS
5. E) SCM

Answer:  B
 23) Which of the following would you use to forecast trends in your supplier's industry that could affect your firm
over the next five years?

1. A) ESS
2. B) TPS
3. C) MIS
4. D) DSS
5. E) KMS

Answer:  A

24) Which of the following is a highly structured decision?

1. A) Creating a new product

2. B) Estimating the effect of changing costs of supply materials
3. C) Calculating the best trucking routes for product delivery
4. D) Granting credit to a customer
5. E) Forecasting new industry trends

Answer:  D

25) Using the Internet to buy or sell goods is called:

1. A) e-commerce.
2. B) e-business.
3. C) an intranet.
4. D) an extranet.
5. E) e-government.

Answer:  A

26) Transaction-level information is essential for operational management to be able to direct the day-to-day
operations of the business.

Answer:  TRUE

28) A DSS is most commonly used by the operations management level of an organization.

Answer:  FALSE

29) You would use an MIS to help determine if your business should introduce a new product line.

Answer:  FALSE

30) For nonroutine decision making, senior managers rely on management information systems.

Answer:  FALSE

31) Most transaction processing systems use sophisticated mathematical models or statistical techniques.

Answer:  FALSE

32) Managers can use DSS to make decisions about problems that are unusual and not easily specified in advance.

Answer:  TRUE

33) A DSS uses internal information as well as information from external sources.

Answer:  TRUE

34) An organization's MIS and DSS supply an ESS with summarized information.
 Answer:  TRUE

35) Operational managers use ESS primarily to solve specific problems.

Answer:  FALSE

37) Which of the following types of system typically uses a digital dashboard to display an array of charts and graphs
of a business's key performance indicators?

1. A) MIS
2. B) TPS
3. C) ESS
4. D) CRM
5. E) SCM

Answer:  C

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

Answer:  TRUE

40) An SCM is considered to be an intraorganizational system because it manages information that flows between
different companies.

Answer:  FALSE

45) What is the most important function of an enterprise application?

1. A) Increasing speed of communicating

2. B) Enabling business functions and departments to share information
3. C) Enabling a company to work collaboratively with customers and suppliers
4. D) Enabling cost-effective e-business processes
5. E) Enabling inventory and supply chain management

Answer:  B

46) Which of the following systems is designed to support organization-wide process coordination and integration?

1. A) DSS
2. B) MIS
3. C) CRM
4. D) Enterprise applications
5. E) SCM

Answer:  D

47) 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.

1. A) transaction processing
2. B) enterprise
3. C) automatic reporting
4. D) management information
5. E) knowledge management

Answer:  B

48) The four major types of enterprise applications are:

1. A) SCM, CRM, DSS, and KMS.
2. B) SCM, CRM, ESS, and KMSs.
3. C) ERP, SCM, DSS, and CRM.
4. D) ERP, SCM, CRM, and KMS.
5. E) TPS, MIS, DSS, and ESS.

Answer:  D

49) ________ systems are also known as enterprise systems.

1. A) Resource planning
2. B) Enterprise resource planning
3. C) Enterprise support
4. D) Management information
5. E) Decision-support

Answer:  B

51) Which of the following types of system enables management to make better decisions regarding organizing and
scheduling sourcing, production, and distribution?

1. A) SCM
2. B) TPS
3. C) KMS
4. D) ERP
5. E) MIS

Answer:  A

52) Which type of system integrates supplier, manufacturer, distributor, and customer logistics processes?

1. A) Collaborative distribution system

2. B) Supply-chain management system
3. C) Reverse logistics system
4. D) Enterprise planning system
5. E) Transaction processing system

Answer:  B

53) Which of the following types of system would you use to manage relationships with your customers?

1. A) CRM
2. B) MIS
3. C) CLE
4. D) CLU
5. E) KMS

Answer:  A

54) Which of the following is the greatest obstacle in enabling collaboration between employees at different, distant
corporate locations?

1. A) Privacy
2. B) Permissions
3. C) Time zones
4. D) Language
5. E) Corporate culture
 Answer:  C

55) Which of the following would you use to consolidate the relevant knowledge and experience in the firm and
make it available to improve business processes and management decision making?

1. A) TPS
2. B) An extranet
3. C) KMS
4. D) CRM
5. E) MIS

Answer:  C

56) A(n) ________ social networking tool creates business value by connecting the members of an organization
through profiles, updates, and notifications that are tailored to internal

corporate uses.

1. A) cloud-based
2. B) social-commerce
3. C) collaborative
4. D) remote, asynchronous
5. E) enterprise

Answer:  E

58) 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?

1. A) CRM
2. B) Enterprise system
3. C) Extranet
4. D) Intranet
5. E) MIS

Answer:  C

59) Which of the following types of system helps coordinate the flow of information between the firm and its
suppliers and customers?

1. A) Intranet
2. B) Extranet
3. C) KMS
4. D) TPS
5. E) DSS

Answer:  B

60) Using ________ to enable government relationships with citizens, businesses, and other arms of government is
called e-government.

1. A) the Internet and networking technologies

2. B) e-commerce
3. C) e-business
4. D) any computerized technology
5. E) telecommunications
 Answer:  A

61) In ________, digital technology and the Internet are used to execute the major business processes in the
enterprise.

1. A) e-commerce
2. B) e-business
3. C) enterprise applications
4. D) MIS
5. E) SCM

Answer:  B

62) Which of the following statements about collaboration is not true?

1. A) In business, a collaboration can last as little as a few minutes.

2. B) Business collaboration relies on the formation of teams that are assigned a specific task or goal.
3. C) Successful collaboration can be achieved through technology regardless of the organization's
culture or structure.
4. D) One business benefit of collaboration is improved innovation.
5. E) Businesses need special systems for collaboration.

Answer:  C

63) Which of the following tools would you use to evaluate and choose a collaboration tool for your organization?

1. A) Virtual meeting system

2. B) Cloud collaboration
3. C) IBM Notes
4. D) The collaboration matrix
5. E) The time/space collaboration and social tool matrix

Answer:  E

64) Which of the following decisions requires knowledge based on collaboration and interaction?

1. A) How long will it take to manufacture this product?

2. B) Should we work with outside vendors on new products and services?
3. C) In which geographical locations are our products garnering the most sales?
4. D) Which product design is the most efficient for the user in terms of energy use?
5. E) How can we produce this product more cheaply?

Answer:  B

65) Which of the following is not a business benefit of collaboration?

1. A) Improved quality
2. B) Improved financial performance
3. C) Improved customer service
4. D) Improved innovation
5. E) Improved compliance with government regulations

Answer:  E

66) ________ allows you to communicate with avatars using text messaging.

1. A) A virtual world
2. B) Screen sharing
3. C) Collaborative writing
4. D) A large audience Webinar
5. E) Telepresence

Answer:  A

67) All of the following are reasons for the increased business focus on collaboration and teamwork, except for:

1. A) the need for creating innovative products and services.

2. B) growth of "interaction" jobs.
3. C) greater global presence.
4. D) the need for more efficient work hierarchies.
5. E) the need to reduce communication costs.

Answer:  D

69) Which of the following is not one of the four main classifications for collaboration tools identified by the
space/time matrix?

1. A) Synchronous/colocated
2. B) Same time/remote
3. C) Different time/remote
4. D) Remote/colocated
5. E) Same time/same place

Answer:  D

70) ________ is a collaboration tool that supports remote (different place), synchronous (same time) collaboration.

1. A) Video conferencing
2. B) E-mail
3. C) A MUD
4. D) A wall display
5. E) A virtual world

Answer:  A

71) Production tasks are coordinated through the use of social networks in social business.

Answer:  FALSE

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

Answer:  TRUE

73) Supply chain management systems are more externally oriented than enterprise systems.

Answer:  TRUE

74) An example of a remote, synchronous collaboration tool is a Skype conference call using VOIP and webcams.

Answer:  TRUE

75) Global firms can collaborate from different locations at the same time using synchronous collaboration tools.

Answer:  TRUE

76) A website that allows citizens to file taxes online is a form of ________.
 Answer:  e-government

79) The principal liaison between the information systems groups and the rest of the organization is a(n):

1. A) programmer.
2. B) information systems manager.
3. C) systems analyst.
4. D) CTO.
5. E) CIO.

Answer:  C

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

1. A) CEO
2. B) CFO
3. C) CIO
4. D) CTO
5. E) CKO

Answer:  C

81) An information systems manager:

1. A) writes software instructions for computers.

2. B) acts as liaison between the information systems group and the rest of the organization.
3. C) translates business problems into information requirements.
4. D) manages data entry staff.
5. E) oversees the company's security policy.

Answer:  D

82) 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.

1. A) CTO
2. B) CSO
3. C) CKO
4. D) CPO
5. E) CEO

Answer:  C

83) Which of the following is a firm's CPO responsible for?

1. A) Ensuring that the company complies with existing data privacy laws
2. B) Making better use of existing knowledge in organizational and management processes
3. C) Enforcing the firm's information security policy
4. D) Overseeing the use of information technology in the firm
5. E) Acting as liaison between the information systems group and the rest of the company

Answer:  A

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

Answer:  TRUE

85) An inventory control system is an example of an MIS.

 Answer:  FALSE

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

Answer:  TRUE

96) All of the following job categories are expected to grow over the next eight years except:

1. A) computer support specialists.

2. B) software engineers.
3. C) systems analysts.
4. D) computer programmers.
5. E) database administrators.

Answer: D

97) Which of the following job categories is expected to experience the most growth over the next eight years?

1. A) Computer support specialists

2. B) Software engineers
3. C) Systems analysts
4. D) Computer programmers
5. E) Database administrators

Answer: C

CHAPTER 3

1) The interaction between information technology and organizations is influenced:

1. A) solely by the decision making of middle and senior managers.

2. B) by the development of new information technologies.
3. C) by many factors, including structure, politics, culture, and environment.
4. D) by two main macroeconomic forces: capital and labor.
5. E) by the rate of growth of the organization.

Answer:  B

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

1. A) An organization is a stable, formal social structure that takes resources from the environment and
processes them to produce outputs.
2. B) An organization is a formal, legal entity with internal rules and procedures that must abide by laws.
3. C) An organization is a collection of people and other social elements.
4. D) An informal group can be considered to be an organization.
5. E) An organization is a collection of rights, privileges, obligations, and responsibilities delicately
balanced over a period of time through conflict and conflict resolution.

Answer:  D

3) According to the __________ definition of organizations, an organization is seen as a means by which capital and
labor are transformed by the organization into outputs consumed by the environment.

1. A) microeconomic
2. B) macroeconomic
3. C) sociotechnical
4. D) behavioral
5. E) psychological
 Answer:  A

5) Which of the following is not  a major feature of organizations that impacts the use of information systems?

1. A) Business processes
2. B) Environments
3. C) Goals
4. D) Agency costs
5. E) Leadership styles

Answer:  D

6) Which of the following statements about business processes is not true?

1. A) Business processes influence the relationship between an organization and information technology.
2. B) Business processes are a collection of standard operating procedures.
3. C) A business firm is a collection of business processes.
4. D) Business processes are usually ensconced in an organization’s culture.
5. E) Business processes are typically unaffected by changes in information systems.

Answer:  E

7) Which of the following technologies disrupted the traditional publishing industry?

1. A) instant messaging
2. B) e-mail
3. C) Internet telephony.
4. D) PCs.
5. E) World Wide Web

Answer:  E

10) Which of the following is an example of a divisionalized bureaucracy?

1. A) Startup firm
2. B) University
3. C) Fortune 500 firm
4. D) Midsize manufacturer
5. E) Consulting firm

Answer:  C

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

1. A) structure
2. B) culture
3. C) politics
4. D) feedback
5. E) labor

Answer:  E

12) The divergent viewpoints about how resources, rewards, and punishments should be distributed, and the
struggles resulting from these differences are known as organizational:

1. A) culture.
2. B) politics.
3. C) structure.
4. D) environments.
5. E) routines.

Answer:  B

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

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

2. B) Disruptive technologies may be substitute products that perform better than other products
currently being produced.
3. C) Disruptive technologies may sometimes simply extend the marketplace.
4. D) Disruptive technologies may put entire industries out of business.
5. E) Firms that invent disruptive technologies as first movers always become market leaders.

Answer:  E

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

Answer:  TRUE

15) A professional bureaucracy is a knowledge-based organization where goods and services depend on the
expertise and knowledge of professionals.

Answer:  TRUE

16) Routines are also called standard operating procedures.

Answer:  TRUE

18) When a firm buys on the marketplace what it cannot make itself, the costs incurred are referred to as:

1. A) switching costs.
2. B) network costs.
3. C) procurement.
4. D) agency costs.
5. E) transaction costs.

Answer:  E

19) All of the following statements are true about information technology's impact on business firms except:

1. A) it helps firms expand in size.

2. B) it helps firms lower the cost of market participation.
3. C) it helps reduce internal management costs.
4. D) it helps reduce transaction costs.
5. E) it helps reduce agency costs.

Answer:  A

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

1. A) unified, profit-maximizing entity.

2. B) task force organization that must respond to rapidly changing environments.
3. C) entrepreneurial endeavor.
4. D) "nexus of contracts" among self-interested individuals.
5. E) entrepreneurial structure.
 Answer:  D

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

1. A) environment, organization, structure, and tasks.

2. B) technology, people, culture, and structure.
3. C) organization, culture, management, and environment.
4. D) tasks, technology, people, and structure.
5. E) costs, tasks, structure, and management.

Answer:  D

22) Smart products are an example of the Internet of Things.

Answer:  TRUE

25) Which model is used to describe the interaction of external forces that affect an organization's strategy and
ability to compete?

1. A) Network economics model

2. B) Competitive forces model
3. C) Competitive advantage model
4. D) Demand control model
5. E) Agency costs model

Answer:  B

26) Which of the following industries has the lowest barrier to entry?

1. A) Automotive
2. B) Computer chip
3. C) Solar energy
4. D) Airline
5. E) Small retailer

Answer:  E

27) All of the following are competitive forces in Porter’s model except:

1. A) suppliers.
2. B) new market entrants.
3. C) external environment.
4. D) customers.
5. E) substitute products.

Answer:  C

29) Which of the following substitute products would be of most concern for a cable TV distributor?

1. A) Satellite TV
2. B) Broadcast TV
3. C) Satellite radio
4. D) The Internet
5. E) Terrestrial radio

Answer:  A
 30) Walmart's attempt to increase its online presence is an example of a firm using information systems to:

1. A) strengthen ties to its customers.

2. B) simplify the industry value chain.
3. C) develop synergies.
4. D) focus on market niche.
5. E) achieve low-cost leadership.

Answer:  E

31) A firm can exercise greater control over its suppliers by having:

1. A) more suppliers.
2. B) fewer suppliers.
3. C) global suppliers.
4. D) local suppliers.
5. E) only a single supplier.

Answer:  A

32) Amazon's use of the Internet as a platform to sell books more efficiently than traditional bookstores illustrates
which of the following strategies?

1. A) Low-cost leadership
2. B) Marketing effectiveness
3. C) Focusing on market niche
4. D) Strengthening supplier intimacy
5. E) Developing synergies

Answer:  A

33) The four major competitive strategies are:

1. A) low-cost leadership, substitute products and services, customers; and suppliers.

2. B) low-cost leadership, product differentiation, focus on market niche, and customer and supplier
intimacy.
3. C) new market entrants, substitute products and services, customers, and suppliers.
4. D) low-cost leadership, new market entrants, product differentiation, and focus on market niche.
5. E) customers, suppliers, new market entrants, and substitute products.

Answer:  B

34) Walmart's continuous replenishment system allows it to do all of the following except:

1. A) provide mass customization.

2. B) transmit orders to restock directly to its suppliers.
3. C) keep costs low.
4. D) better meet customer demands.
5. E) fine-tune merchandise availability

 Answer:  A

35) Firms use a ________ strategy to provide a specialized product or service for a narrow target market better than
competitors.

1. A) product differentiation
2. B) market niche
3. C) mass customization
4. D) process efficiency
5. E) low-cost leadership

Answer:  B

36) The ability to offer individually tailored products or services using the same production resources as bulk
production is known as:

1. A) mass marketing.
2. B) micromarketing.
3. C) micro customization.
4. D) niche customization.
5. E) mass customization.

Answer:  E

37) In environmental scanning, a firm may use information systems to:

1. A) transform inputs into products and services.

2. B) analyze the performance of its intranet.
3. C) identify external events that may affect it.
4. D) keep track of the temperature within its data centers.
5. E) develop a unified organizational culture.

Answer:  C

38) Which of the following is not a true statement about value webs?

1. A) Value webs involve a collection of independent firms that use information technology to coordinate
their value chains.
2. B) Value webs are more customer-driven than traditional value chains.
3. C) Value webs operate in a less linear fashion than traditional value chains.
4. D) Value webs are inflexible and cannot adapt quickly to changes in supply and demand.
5. E) Value webs involve highly synchronized industry value chains.
Answer: D

39) Which of the following best illustrates the use of information systems to focus on market niche?

1. A) A car manufacturer's Web site that lets you customize the features on the car you are purchasing.
2. B) A restaurant chain analyzing local sales figures to determine which menu items to serve.
3. C) A bookseller selling an e-book reader that reads only the bookseller's books.
4. D) A department store creating specialized products for preferred customers.
5. E) A clothes manufacturer expanding its offerings to new styles.

Answer:  D

40) All of the following are IT-enabled products and services providing competitive advantage except:

1. A) Amazon's one-click shopping.

2. B) Apple's iPod and iTunes.
3. C) Ping's golf club customization.
4. D) PayPal's online person-to-person payment system.
5. E) Nike’s use of celebrities to market their products.

Answer:  E
 41) The Internet increases the bargaining power of customers by:

1. A) creating new opportunities for building loyal customer bases.

2. B) making more products available.
3. C) making information available to everyone.
4. D) lowering transaction costs.
5. E) enabling the development of new services.

Answer:  C

43) Which of the following is a competitive force challenging the publishing industry?

1. A) Positioning and rivalry among competitors

2. B) Low cost of entry
3. C) Substitute products or services
4. D) Customers' bargaining power
5. E) Suppliers' bargaining power

Answer:  C

44) The value chain model:

1. A) categorizes five related advantages for adding value to a firm's products or services.
2. B) sees the supply chain as the primary activity for adding value.
3. C) categorizes four basic strategies a firm can use to enhance its value chain.
4. D) highlights specific activities in the business where competitive strategies can best be applied.
5. E) enables more effective product differentiation.

Answer:  D

45) Which of the following represent the primary activities of a firm?

1. A) Inbound logistics, operations, outbound logistics, sales and marketing, and service
2. B) Inbound logistics, operations, outbound logistics, technology, and service
3. C) Procurement, inbound logistics, operations, technology, and outbound logistics
4. D) Procurement, operations, technology, sales and marketing, and services
5. E) Organization infrastructure, human resources, technology, and procurement

Answer:  A

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

1. A) Inbound logistics
2. B) Operations
3. C) Sales and marketing
4. D) Service
5. E) Technology

Answer:  E

47) Which of the following would a company employ to measure and compare its business processes to similar
processes of other companies within their industry?

1. A) Benchmarking
2. B) Best practices
3. C) Value chain analysis
4. D) Strategic systems analysis
5. E) Secondary activities

Answer:  A

48) The most successful solutions or methods for achieving a business objective are called:

1. A) value activities.
2. B) best processes.
3. C) core competencies.
4. D) best practices.
5. E) benchmarks.

Answer:  D

49) Information systems can be used at the industry level to achieve strategic advantage by:

1. A) building industry-wide, IT-supported consortia and symposia.

2. B) raising the bargaining power of suppliers.
3. C) encouraging the entry of new competitors.
4. D) enforcing standards that reduce the differences between competitors.
5. E) decreasing switching costs.

Answer:  A

50) In network economics, the value of a commercial software vendor's software products:

1. A) increases as more people use them.

2. B) decreases as more people use them.
3. C) increases due to higher marginal gain in output.
4. D) decreases according to the law of diminishing returns.
5. E) is unrelated to the number of people that use them.

Answer:  A

51) When two organizations pool markets and expertise that result in lower costs and generate profits, they are
creating:

1. A) a value web.
2. B) a value chain.
3. C) net marketplaces.
4. D) core competencies.
5. E) synergies.

Answer:  E

52) Which of the following is an example of synergy in business?

1. A) Amazon's use of the Internet to sell books

2. B) Bank of America acquiring Countrywide Financial to reach a large pool of new customers
3. C) Blockbuster combining traditional video rental with online video rental
4. D) Walmart's order entry and inventory management system to coordinate with suppliers
5. E) Nike's use of technology to improve its product offerings

Answer:  B

53) Information systems enhance core competencies by:

1. A) providing better reporting facilities.
2. B) creating educational opportunities for management.
3. C) allowing operational employees to interact with management.
4. D) encouraging the sharing of knowledge across business units.
5. E) fostering synergies among departments.

Answer:  D

54) The idea that the more any given resource is applied to production, the lower the marginal gain in output, until a
point is reached where the additional inputs produce no additional output, is referred to as:

1. A) the point of no return.

2. B) the law of diminishing returns.
3. C) supply and demand.
4. D) network inelasticity.
5. E) virtual economics.

Answer:  B

55) Which of the following statements about network economics is not true?

1. A) Uber is an example of a business model that is based on the principle of network economics.
2. B) The law of diminishing returns does not always apply to every situation.
3. C) From a network economics perspective, the value of a community of people grows as the number
of participants in the community increases.
4. D) Information technology can be strategically useful from a network economics perspective.
5. E) In network economics, the marginal cost of adding new members to the network is higher than the
marginal gain.

Answer:  E

56) A virtual company:

1. A) uses networks to link people, assets, and ideas.

2. B) uses Internet technology to maintain a virtual storefront.
3. C) uses Internet technology to maintain a networked community of users.
4. D) provides entirely Internet-driven services or virtual products.
5. E) is limited by traditional organizational boundaries.

Answer:  A

57) Which of the following is an example of a keystone firm within a business ecosystem?

1. A) Apple in the mobile platform ecosystem

2. B) GUESS and the fashion ecosystem
3. C) Citibank and the ATM ecosystem
4. D) American Airlines and the computerized reservation ecosystem
5. E) Nike and the athletic apparel ecosystem

Answer:  A

58) ________ is a competitive strategy for creating brand loyalty by developing new and unique products and
services that are not easily duplicated by competitors.

1. A) Product differentiation
2. B) Low-cost leadership
3. C) Focusing on market niche
4. D) Strengthening customer intimacy
5. E) Strengthening supplier intimacy

Answer:  A

59) 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 are known as:

1. A) retention costs.
2. B) preservation costs.
3. C) differentiation costs.
4. D) switching costs.
5. E) variation costs.

Answer:  D

60) The ________ model 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.

1. A) competitive forces
2. B) value chain
3. C) bargaining power
4. D) new entrant
5. E) rivalry

Answer:  B

61) The parts of an organization's infrastructure, human resources, technology, and procurement that make the
delivery of the firm's products or services possible are known as ________ activities.

1. A) primary
2. B) auxiliary
3. C) secondary
4. D) service
5. E) support

Answer:  E

62) A(n) ________ 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.

1. A) value chain
2. B) support web
3. C) value web
4. D) consortium
5. E) net marketplace

Answer:  C

63) A(n) ________ is an activity at which a firm excels as a world-class leader.

1. A) expertise area
2. B) competitive advantage
3. C) growth driver
4. D) efficiency
5. E) core competency
Answer:  E

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

Answer:  TRUE

65) The competitive forces model cannot be used to analyze modern digital firms which face new competitive forces
that are not true of traditional firms.

Answer:  FALSE

66) Customers are one of the competitive forces that affect an organization's ability to compete.

Answer:  TRUE

67) High product differentiation is a sign of a transparent marketplace.

Answer:  FALSE

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

Answer:  FALSE

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

Answer:  TRUE

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

Answer:  TRUE

71) Mass customization offers individually tailored products or services using the same resources as mass
production.

Answer:  TRUE

72) Switching costs decrease when customers are strongly linked to products and platforms.

Answer:  FALSE

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

Answer:  TRUE

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

Answer:  FALSE

75) When the output of some units in a firm can be used as inputs to other units, synergies develop, which can lower
costs and generate profits.

Answer:  TRUE

76) According to the network economics perspective, the more people offering products on eBay's site, the greater
the value of the site to all who use it.

Answer:  TRUE

77) The term business ecosystem describes the loosely coupled but interdependent networks of suppliers,
distributors, outsourcing firms, transportation service firms, and technology manufacturers.

Answer:  TRUE
 85) Why does Amazon need to worry about competitors in online shopping?

1. A) E-commerce is affected by the law of diminishing returns.

2. B) Internet technologies are universal, and therefore usable by all companies.
3. C) Internet shopping produces cost transparency.
4. D) The Internet enables the production or sales of substitute products or services.
5. E) The Internet increases switching costs.

Answer:  B

86) You are consulting for a natural food products distributor who is interested in determining the benefits it could
achieve from implementing new information systems. What will you advise as the first step?

1. A) Identify the business ecosystem the distributor is in.

2. B) Implement a strategic transition to the new system.
3. C) Perform a strategic systems analysis.
4. D) Benchmark existing systems.
5. E) Set up a strategic transition.

Answer:  C

87) Sociotechnical changes affecting a firm adopting new information systems requiring organizational change can
be considered:

1. A) organizational adjustments.
2. B) strategic transitions.
3. C) systems alterations.
4. D) business goal transitions.
5. E) sociotechnical transitions.

Answer:  B

88) Research has shown that a majority of firms are able to align their information technology with their business
goals.

Answer:  FALSE

89) The use of Internet technologies allows companies to more easily sustain competitive advantage.

Answer:  FALSE

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

Answer:  TRUE

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

Answer:  FALSE

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

Answer:  FALSE

99) Smart products generally raise switching costs.

Answer: TRUE

CHAPTER 4
 1) Which of the following best describes how new information systems can result in legal gray areas?

1. A) They work with networked, digital data, which are more difficult to control than information stored
manually.
2. B) They result in new situations that are not covered by old laws.
3. C) They are implemented by technicians rather than managers.
4. D) They are created from sets of logical and technological rules rather than social or organizational
mores.
5. E) They are little understood by politicians or lawyers.

Answer:  B

2) Which of the following best describes the effect that new information technology has on society?

1. A) It has a dampening effect on the discourse of business ethics.

2. B) It has a ripple effect, raising new ethical, social, and political issues.
3. C) It is beneficial for society as a whole, while raising dilemmas for consumers.
4. D) It has a waterfall effect in raising ever more complex ethical issues.
5. E) It has a magnifying effect, creating increasing numbers of ethical issues.

Answer:  B

3) The obligations that individuals and organizations have concerning rights to intellectual property involve which of
the following moral dimensions of the information age?

A) Property rights and obligations

B) System quality
C) Accountability and control
D) Information rights and obligations
E) Quality of life

Answer:  A

4) The obligations that individuals and organizations have regarding the preservation of existing values and
institutions fall within which of the following moral dimensions of the information age?

1. A) Family and home.

2. B) Property rights and obligations
3. C) System quality
4. D) Accountability and control
5. E) Quality of life

Answer:  E

5) Which of the following is not one of the current key technology trends that raises ethical issues?

1. A) Data storage improvements

2. B) Data analysis advancements
3. C) Increase in data quality
4. D) Increase in use of mobile devices
5. E) Advances in networking technology

Answer:  C

7) Routine violations of individual privacy are made more difficult by advances in data storage.

Answer:  FALSE
 8) In today's legal environment, managers who are convicted for the misuse of information systems are still unlikely
to be given a prison sentence.

Answer:  FALSE

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

1. A) Responsibility
2. B) Accountability
3. C) Liability
4. D) Due process
5. E) Duty

Answer:  A

12) ________ is a feature of social institutions that means mechanisms are in place to determine responsibility for
an action.

1. A) Due process
2. B) Accountability
3. C) The courts of appeal
4. D) The judicial system
5. E) Liability

Answer:  B

13) ________ is a feature of law-governed society and involves having laws that are known and understood, along
with the ability to appeal to higher authorities to ensure that the laws are applied correctly.

1. A) Liability
2. B) Due process
3. C) Responsibility
4. D) Accountability
5. E) The judicial system

Answer:  B

14) All of the following are steps in the process for analyzing an ethical issue except:

1. A) assigning responsibility.
2. B) identifying the stakeholders.
3. C) identifying the options you can reasonably take.
4. D) identifying and clearly describing the facts.
5. E) identifying the potential consequences of your options.

Answer:  A

15) A colleague at work takes small amounts of office supplies for her own personal use, saying that this is a tiny loss
to the company. You tell her that if everyone were to take office supplies, then the loss would no longer be minimal.
Your rationale expresses which of the following ethical principles?

1. A) Kant's Categorical Imperative

2. B) The Golden Rule
3. C) The Risk Aversion Principle
4. D) The "No free lunch" rule
5. E) The slippery-slope rule
 Answer:  A

16) A man steals from a grocery store in order to feed his starving family. Which of the following best expresses the
utilitarian principle in evaluating this situation?

1. A) His action is acceptable, because the grocer suffers the least harm.
2. B) His action is acceptable, because the higher social value is the survival of the family.
3. C) His action is wrong, because the man would not want the grocer to steal from him.
4. D) His action is wrong, because if everyone were to do this, the concept of personal property is
defeated.
5. E) His action is wrong, because the grocery store owner is harmed.

Answer:  B

17) Which of the following best describes Immanuel Kant's categorical imperative?

1. A) If an action cannot be taken repeatedly, then it is not right to be taken at any time.
2. B) One should take the action that produces the least harm or incurs the least cost.
3. C) One can put values in rank order and understand the consequences of various courses of action.
4. D) If an action is not right for everyone to take, it is not right for anyone to take.
5. E) You should act towards others as you would like them to act towards you.

Answer:  D

18) The ethical "no free lunch" rule states that:

1. A) if an action cannot be taken repeatedly, then it is not right to be taken at any time.
2. B) one should take the action that produces the least harm or incurs the least cost.
3. C) one can put values in rank order and understand the consequences of various courses of action.
4. D) if something someone else has created is useful to you, it has value, and you should assume the
creator wants compensation for this work.
5. E) if an action is not right for everyone to take, it is not right for anyone to take.

Answer:  D

19) According to _______, you should take the action that produces the least harm.

1. A) Kant’s categorical omperative

2. B) the risk aversion principle
3. C) the utilitarian principle
4. D) the Golden Rule
5. E) the "no free lunch" rule

Answer:  B

20) Which ethical rule states that if an action cannot be taken repeatedly, it is not right to take at all?

1. A) Slippery-slope rule
2. B) Lemming rule
3. C) High-failure cost rule
4. D) Utilitarian principle
5. E) Golden Rule

Answer:  A

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

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

Answer:  TRUE

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

Answer:  TRUE

25) Liability is a feature of political systems and allows individuals to recover damages done to them by others.

Answer:  TRUE

26) Which of the following ethical guidelines suggests that you put yourself in the place of others, and think of
yourself as the object of the decision?

1. A) Kant’s categorical imperative

2. B) the risk aversion principle
3. C) the utilitarian principle
4. D) the Golden Rule
5. E) the "no free lunch" rule

Answer:  D

30) The use of computers to assemble data from different sources to create digital dossiers of detailed information
about individuals is known as which of the following?

1. A) Profiling
2. B) Phishing
3. C) Spamming
4. D) Targeting
5. E) Spyware

Answer:  A

31)Which of the following is a data analysis technology that finds hidden connections between data in disparate
sources?

1. A) HIPAA
2. B) FIP
3. C) NORA
4. D) COPPA
5. E) Spyware

Answer:  C

34) FIP principles are based on a belief in which of the following?

1. A) Accountability of the record holder

2. B) Responsibility of the record holder
3. C) Mutuality of interest between the record holder and the individual
4. D) Privacy of the individual
5. E) Difference between the interests of the individual and commercial organizations

Answer:  C
 35) The FIP principle of Notice/Awareness states that:

1. A) customers must be allowed to choose how their information will be used for secondary purposes
other than the supporting transaction.
2. B) data collectors must take responsible steps to assure that consumer information is accurate and
secure from unauthorized use.
3. C) there must be a mechanism in place to enforce FIP principles.
4. D) consumers should be able to review the data collected about them.
5. E) websites must disclose their information practices before collecting data.

Answer:  E

39) When a cookie is created during a website visit, it is stored:

1. A) on the website's server.

2. B) on the hard drive of the visitor’s computer.
3. C) on the ISP’s servers.
4. D) in the browser's application settings.
5. E) nowhere, because they are only used during a visit and are discarded once a visitor leaves the Web
site.

Answer:  B

40) The U.S. Department of Commerce developed a ________ framework in order to enable U.S. businesses to
legally use personal data from EU countries.

1. A) COPPA
2. B) P3P
3. C) PGP
4. D) FIP
5. E) safe-harbor

Answer:  E

42) In the ________ model of informed consent, personal information can be collected until the consumer
specifically requests that his or her data not be collected.

1. A) opt-in
2. B) opt-out
3. C) P3P
4. D) PGP
5. E) safe harbor

Answer:  B

44) Which of the following forms of protection of intellectual property requires that the property be the subject of a
nondisclosure agreement?

1. A) Copyright
2. B) Patent
3. C) All forms of intellectual property protection
4. D) Trademark
5. E) Trade secret

Answer:  E

45) All of the following are technical solutions to protecting user privacy except:
1. A) email encryption.
2. B) anonymous surfing.
3. C) anonymous email.
4. D) preventing client computers from accepting cookies.
5. E) data use policies.

Answer:  E

46) Which of the following protects the authors of a book from having their work copied by others?

1. A) Patent protection
2. B) Due process
3. C) Copyright law
4. D) Fair Use Doctrine
5. E) Trade Secret law

Answer:  C

49) Which of the following is not protected by copyright law?

1. A) Musical compositions
2. B) Motion pictures
3. C) Maps
4. D) Artwork
5. E) Machines

Answer:  E

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

1. A) Digital Millennium Copyright Act

2. B) Privacy Act
3. C) Freedom of Information Act
4. D) Electronic Communications Privacy Act
5. E) Computer Software Copyright Act

Answer:  A

51) Which of the following statements about Flash cookies is not true?

1. A) Flash cookies are installed only at the user's request.

2. B) Flash cookies are stored on the user's computer.
3. C) Flash cookies cannot be easily detected or deleted.
4. D) Flash cookies are sometimes called super cookies.
5. E) Flash cookies can be installed whenever a person clicks a Flash video.

Answer:  A

52) Advertisers use ________ in order to display more relevant ads based on a user's search and browsing history.

1. A) behavioral targeting
2. B) Web bugs
3. C) NORA
4. D) intelligent agents
5. E) FIP principles
 Answer:  A

53) ________ prohibits an organization from collecting any personal information unless the individual specifically
takes action to approve information collection and use.

1. A) A safe harbor
2. B) The opt-in model
3. C) FIP principles
4. D) P3P
5. E) The opt-out model

Answer:  B

54) ______ grants the owner exclusive ownership of the ideas behind an invention for 20 years?

1. A) Copyright law
2. B) Trademark law
3. C) Patent law
4. D) Trade secret protection
5. E) Privacy law

Answer:  C

55) A Facebook user’s visit to a website can be tracked even if they do not click a Like button.

Answer:  TRUE

56) Malicious software that is installed secretly on your computer by other applications and that tracks your online
movements is called spyware.

Answer:  TRUE

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

Answer:  TRUE

59) Any intellectual work product that isn't based on public knowledge can be classed as a trade secret.

Answer:  TRUE

60) Copyright is a legal protection given to creators of certain types of intellectual property.

Answer:  TRUE

62) The problem with web browsers' Do Not Track options is that websites aren't obligated to honor these settings.

Answer:  TRUE

63) European countries do not allow businesses to use personally identifiable information without consumers’ prior
consent..

Answer:  TRUE

65) Some forms of illegal sharing of music files have declined as legitimate online music stores have expanded.

Answer:  TRUE

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

Answer:  FALSE
 67) Although online tracking gathers an enormous amount of information on individual users, it is anonymous and
can't be tied to a specific person.

Answer:  FALSE

68) Web beacons are tiny, invisible software programs hidden in e-mail messages and web pages that are used to
track and report a user's online behavior.

Answer:  TRUE

72) Which of the following is not a difficulty in establishing patent protection?

1. A) Length of time required to receive protection

2. B) The requirement that the work reflect some special understanding and contibution
3. C) The requirement that the work must be original
4. D) The requirement that the work must be novel
5. E) The requirement that the work must be a secret

Answer:  E

75) Which of the following is the most common reason that business systems fail?

1. A) Software bugs
2. B) Software errors
3. C) Hardware failures
4. D) Facilities failures
5. E) Data quality

Answer:  E

76) Which of the following is a primary drawback to the "do anything anywhere" computing environment?

1. A) It makes work environments less pleasant.

2. B) It creates a digital divide.
3. C) It centralizes power at corporate headquarters.
4. D) It blurs the traditional boundaries between work and family time.
5. E) It leads to employees being paid less for the total amount of work performed.

Answer:  D

79) Which of the five moral dimensions of the information age does spamming involve?

1. A) Quality of life
2. B) System quality
3. C) Accountability and control
4. D) Information rights and obligations
5. E) Property rights and obligations

Answer:  A

80) Redesigning and automating business processes can be seen as a double-edged sword because:

1. A) increases in efficiency may be accompanied by job losses.

2. B) increases in efficiency may be accompanied by poor data quality.
3. C) support for middle-management decision making may be offset by poor data quality.
4. D) reliance on technology results in the loss of hands-on knowledge.
5. E) it can concentrate power in the hands of senior executives.
 Answer:  A

84) Gaining unapproved access to a computer is not a federal crime.

Answer:  FALSE

85) Spam is legally defined as any e-mail that is unsolicited.

Answer:  FALSE

86) Some experts believe that exposure to computers reduces intelligence and makes people dumb.

Answer:  TRUE

87) Computer abuse refers to acts involving a computer that may not be illegal but are considered unethical.

Answer:  TRUE

97) Digital media differs from a physical book in all of the following ways except:

1. A) ease of replication.
2. B) ease of alteration.
3. C) ease of transmission.
4. D) ease of global distribution.
5. E) ease of establishing uniqueness.

Answer:  E

98) Which of the following were involved in what has been called the patent trial of the century?

1. A) Apple and Microsoft

2. B) Apple and Hewlett-Packard
3. C) Microsoft and Symantec
4. D) Microsoft and Facebook
5. E) Apple and Samsung

Answer:  E

99) Which of the following is not a file-sharing service?

1. A) The Pirate Bay

2. B) Megaupload
3. C) Morpheus
4. D) Pandora
5. E) Grokster

Answer:  D

CHAPTER 5

2) Which of the following provides 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?

1. A) Process management software

2. B) ERP systems
3. C) Groupware
4. D) CRM software
5. E) Supply chain management systems
 Answer:  B

3) Enterprise software is built around thousands of predefined business processes that reflect:

1. A) government regulations.
2. B) industry benchmarks.
3. C) best practices.
4. D) cutting edge workflow analyses.
5. E) the firm's culture.

Answer:  C

4) Which of the following is not true about enterprise systems?

1. A) Enterprise systems help firms respond rapidly to customer requests for information or products.
2. B) Enterprise system data have standardized definitions and formats that are accepted by the entire
organization.
3. C) Enterprise software is expressly built to allow companies to mimic their unique business practices.
4. D) Enterprise software includes analytical tools to evaluate overall organizational performance.
5. E) Enterprise systems provide firm-wide information to help managers make better decisions.

Answer:  C

5) You have been asked to implement enterprise software for a manufacturer of kitchen appliances. What is the first
step you should take?

1. A) Rewrite the software to support the way the company's business processes work.
2. B) Select the business processes you wish to automate.
3. C) Map the company's business processes to the software's business processes.
4. D) Map the software's business processes to the company's business processes.
5. E) Select the functions of the system you wish to use.

Answer:  E

6) Which of the following enables a company to tailor a particular aspect of enterprise software to the way a
company does business?

1. A) Configuration tables
2. B) Web services.
3. C) Data dictionaries
4. D) Middleware
5. E) Groupware

Answer:  A

7) In order to achieve maximum benefit from an enterprise software package, a business should:

1. A) customize the software to match all of its business processes.

2. B) use only the processes in the software that match its own processes.
3. C) change the way it works to match the software's business processes.
4. D) select only the software that best matches its existing business processes.
5. E) retain legacy systems that best work with the software.

Answer:  C

9) Enterprise systems include analytical tools.

 Answer:  TRUE

10) An enterprise system can help reduce redundant business processes.

Answer:  TRUE

14) Manufacturing and production processes include all of the following except:

1. A) procurement.
2. B) materials requirement planning.
3. C) quality control.
4. D) transportation execution.
5. E) product configuration.

Answer:  E

15) 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/an:

1. A) distribution channel.
2. B) supply chain.
3. C) value chain.
4. D) marketing channel.
5. E) information system.

Answer:  B

16) Components or parts of finished products are referred to as:

1. A) upstream materials.
2. B) raw materials.
3. C) secondary products.
4. D) intermediate products.
5. E) mid-chain products.

Answer:  D

17) Which of the following refers to a company's suppliers, supplier's suppliers, and the processes for managing
relationships with them? A) Supplier's internal supply chain

1. B) External supply chain

2. C) Upstream portion of the supply chain
3. D) Downstream portion of the supply chain
4. E) Onstream portion of the supply chain

Answer:  C

18) Which of the following refers to a company's organizations and processes for distributing and delivering
products to the final customers?

1. A) Supplier's internal supply chain

2. B) External supply chain
3. C) Upstream portion of the supply chain
4. D) Downstream portion of the supply chain
5. E) Onstream portion of the supply chain

Answer:  D
 19) If manufacturers had perfect information, they could implement a:

1. A) hyper-efficient strategy.
2. B) frictionless strategy.
3. C) streamlined strategy.
4. D) bullwhip strategy.
5. E) just-in-time strategy.

Answer:  E

20) Why isn’t overstocking warehouses an effective solution for a problem of low availability?

1. A) It does not speed product time to market.

2. B) It is an inefficient use of raw materials.
3. C) It increases sales costs.
4. D) It increases inventory costs.
5. E) It lowers fill rate.

Answer:  D

21) Which of the following traditional solutions enables manufacturers to deal with uncertainties in the supply
chain?

1. A) Safety stock
2. B) Continuous replenishment
3. C) Just-in-time strategies
4. D) Demand planning
5. E) Perfect information

Answer:  A

22) 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.

1. A) just-in-time
2. B) frictionless
3. C) bullwhip
4. D) safety-stock
5. E) streamlined

Answer:  A

23) 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.

1. A) network
2. B) bullwhip
3. C) ripple
4. D) whirlpool
5. E) diffraction

Answer:  B

24) Supply chain software can be classified as either supply chain ________ systems or supply chain ________
systems.

1. A) push; pull
2. B) demand; continual
3. C) upstream; downstream
4. D) planning; execution
5. E) maintenance; development

Answer:  D

25) Which of the following enables a firm to generate demand forecasts for a product and to develop sourcing and
manufacturing plans for that product? A) Supply chain demand system

1. B) Supply chain delivery system

2. C) Supply chain optimization system
3. D) Supply chain execution system
4. E) Supply chain planning system

Answer:  E

26) Supply chain planning systems perform all of the following functions except:

1. A) establish inventory levels for raw materials and finished goods.

2. B) identify the transportation mode to use for product delivery.
3. C) determine where to store finished goods.
4. D) determine how much product to manufacture in a given time period.
5. E) track the physical status of goods.

Answer:  E

27) Which supply chain planning function determines how much product is needed to satisfy all customer demands?

1. A) Distribution management
2. B) Replenishment planning
3. C) Demand planning
4. D) Order planning
5. E) Customer planning

Answer:  C

28) Which of the following manages the flow of products through distribution centers and warehouses to ensure
that products are delivered to the right locations in the most efficient manner?

1. A) Supply chain demand system

2. B) Supply chain delivery system
3. C) Supply chain planning system
4. D) Supply chain execution system
5. E) Supply chain optimization system

Answer:  D

29)Supply chain execution systems provide all of the following functions except:

1. A) generating demand forecasts for products.

2. B) tracking the flow of finished goods.
3. C) managing materials.
4. D) managing warehouse operations.
5. E) managing the financial information involving all parties.
 Answer:  A

31) A supply chain driven by actual customer orders or purchases follows a ________ model.

1. A) pull-based
2. B) build-to-stock
3. C) push-based
4. D) replenishment-driven
5. E) optimized

Answer:  A

32) A build-to-order supply-chain model is also called a ________ model.

1. A) supply-based
2. B) demand-driven
3. C) replenishment-driven
4. D) push-based
5. E) market-driven

Answer:  B

Difficulty:  2: Moder

33) Concurrent supply chains are made possible by which technology?

1. A) ERP systems
2. B) the Internet
3. C) supply-chain management systems
4. D) just-in-time supply-chain technologies
5. E) extranets

Answer:  B

34) The business value of an effective supply chain management system includes all of the following except:

1. A) faster time to market.

2. B) cost reduction.
3. C) supply matched to demand.
4. D) improved delivery service.
5. E) increased inventory levels.

Answer:  D

36) As they move through the supply chain, ________ are transformed into finished products and shipped to
retailers and customers.

1. A) raw materials
2. B) intermediate products
3. C) basic products
4. D) natural resources
5. E) nascent products

Answer:  A

37) The total time it takes to complete a business process, from start to finish, is called its ________ time.
1. A) development
2. B) cycle
3. C) fulfillment
4. D) service
5. E) actualization

Answer:  B

38) A company having difficulty with timely delivery of parts to its manufacturing plants should implement a supply
chain ________ system.

1. A) execution
2. B) planning
3. C) optimization
4. D) management
5. E) touch point

Answer:  A

39) Supply chain management systems are a type of enterprise system.

Answer:  TRUE

40) The upstream portion of the supply chain consists of the organizations and processes for distributing and
delivering products to the final customers.

Answer:  FALSE

41) Supply chain inefficiencies can waste as much as 25 percent of a company's operating costs.

Answer:  TRUE

42) Safety stock acts as a buffer for the lack of flexibility in the supply chain.

Answer:  TRUE

43) The bullwhip effect describes consistency and continuity in demand for a product as it passes from one entity to
the next across the supply chain.

Answer:  FALSE

44) 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

45) Before 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

46) Inefficiencies in a supply chain are primarily caused by inaccurate or untimely information.

Answer:  TRUE

47) In a push-based model of SCM systems, actual customer orders or purchases trigger events in the supply chain.

Answer:  FALSE

48) In a pull-based model of SCM systems, production master schedules are based on forecasts of demand for
products.
 Answer:  FALSE

49) Walmart is an example of a push-based model.

Answer:  FALSE

55) A ________ is a method of interaction with a customer, such as telephone or customer service desk.

1. A) point of presence
2. B) touch point
3. C) sales point
4. D) client channel
5. E) point of service

Answer:  B

57) ________ modules use many of the same data, tools, and systems as CRM to enhance collaboration between a
company and its selling partners.

1. A) SCM
2. B) SFA
3. C) ERM
4. D) DRM
5. E) PRM

Answer:  E

58) ________ modules deal with issues such as setting objectives, employee performance management, and
performance-based compensation.

1. A) SCM
2. B) SFA
3. C) ERM
4. D) DRM
5. E) PRM

Answer:  C

59) Customer relationship management systems typically provide software and online tools for sales, customer
service, and:

1. A) marketing.
2. B) account management.
3. C) advertising.
4. D) public relations.
5. E) human resources.

Answer:  A

60) SFA modules in CRM systems provide tools for all of the following except:

1. A) team selling.
2. B) territory management.
3. C) sales forecasting.
4. D) managing sales prospect and contact information.
5. E) managing customer service requests.
 Answer:  E

61) CRM systems help businesses achieve which of the following business objectives?

1. A) Automated accounting processes

2. B) Automated production forecasts
3. C) Faster time to market with new products and services
4. D) Enhanced supplier intimacy
5. E) Enhanced customer intimacy

Answer:  E

62) Customer service modules in CRM systems provide tools for:

1. A) assigning and managing customer service requests.

2. B) capturing prospect and customer data.
3. C) identifying profitable and unprofitable customers.
4. D) managing sales prospect and contact information.
5. E) organizing effective marketing campaigns.

Answer:  A

63) Marketing modules in CRM systems provide tools for all of the following except:

1. A) assigning and managing customer service requests.

2. B) capturing prospect and customer data.
3. C) identifying profitable and unprofitable customers.
4. D) qualifying leads.
5. E) identifying opportunities for cross-selling.

Answer:  A

65) Major CRM products typically have all of the following service capabilities except:

1. A) customer satisfaction management.

2. B) returns management.
3. C) call center & help desk.
4. D) service analytics.
5. E) order management.

Answer:  E

66) Which of the following is an important capability for sales processes that is found in most SFA modules in major
CRM software products?

1. A) Returns management
2. B) Lead management
3. C) Channel promotions management
4. D) Events management
5. E) Customer satisfaction management

Answer:  B

67) Which of the following customer relationship management applications provides analysis of customer data?

1. A) Operational CRM
2. B) Analytical CRM
3. C) Operational SCM
4. D) Analytical SFA
5. E) Operational SFA

Answer:  B

68) Operational CRM applications include tools for all of the following except:

1. A) sales force automation.

2. B) call center support.
3. C) marketing automation.
4. D) customer service support..
5. E) calculating CLTV

Answer:  E

70) Which of the following tools is used to analyzing customer buying patterns?

1. A) CLTV
2. B) Analytical CRM
3. C) Operational CRM
4. D) Demand planning
5. E) SFA

Answer:  B

71) 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?

1. A) Churn rate
2. B) Customer lifetime value
3. C) Cost per lead
4. D) Cost per sale
5. E) Customer average value

Answer:  B

72) The measurement of the number of customers who stop using or purchasing products or services from a
company is called:

1. A) switching costs.
2. B) churn rate.
3. C) CLTV.
4. D) switch rate.
5. E) turnover percentage.

Answer:  B

73) Walmart's continuous replenishment system is an example of a ________ model.

1. A) push-based
2. B) pull-based
3. C) enterprise-based
4. D) supply chain optimization
5. E) forecast-based
 Answer:  B

74) ________ 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.

1. A) Customer
2. B) SOA
3. C) Marketing
4. D) Complex
5. E) SFA

Answer:  E

75) ________ CRM includes customer-facing applications such as tools for sales force automation, call center and
customer service support, and marketing automation.

1. A) Analytical
2. B) Employee
3. C) Operational
4. D) Partner
5. E) Next-generation

Answer:  C

76) All CRM packages contain modules for PRM and ERM.

Answer:  FALSE

78) Cross-selling is the marketing of complementary products to customers.

Answer:  TRUE

79) CRM software can help organizations identify high-value customers for preferential treatments.

Answer:  TRUE

80) Analytical CRM uses tools to analyze customer data collected from the firm's customer touch points and from
other sources.

Answer:  TRUE

84) Which of the following statements about enterprise applications is not true?

1. A) Enterprise applications require organizational learning.

2. B) Enterprise applications introduce "switching costs."
3. C) Enterprise applications are based on organization-wide definitions of data.
4. D) Enterprise applications require fundamental changes in the way a business operates.
5. E) Enterprise applications are best implemented when few changes in business processes are
required.

Answer:  E

85) Which of the following is not an example of next-generation enterprise applications?

A)Openbravo

1. B) Social CRM
2. C) Apache Open for Business (OFBiz)
3. D) Salesforce.com
4. E) JDA Software

Answer:  E

87) Next-generation enterprise suites use ________ and SOA to link to systems of customers and suppliers.a

1. A) employee relationship management

2. B) cross-selling
3. C) just-in-time strategy
4. D) Web services
5. E) operational CRM

Answer:  D

88) Using social networking tools to converse with customers is called:

1. A) analytical CRM.
2. B) social CRM.
3. C) operational CRM.
4. D) PRM.
5. E) ERM.

Answer:  B

89) Enterprise application vendors are now including ________ features, such as tools for data visualization, flexible
reporting, and ad-hoc analysis, as part of the application.

1. A) social media
2. B) PRM
3. C) ERM
4. D) SOA
5. E) business intelligence

Answer:  E

90) Enterprise systems require fundamental changes in the way the business operates.

Answer:  TRUE

96) Enterprise applications introduce switching costs.

Answer:  TRUE

97) Enterprise applications are based on organization-wide definitions of data.

Answer:  TRUE

98) Churn rate is an important indicator of the growth or decline of a company’s customer base. Answer:  TRUE

100) SCM systems require multiple organizations to share information and business processes.

Answer:  TRUE

99) Extensive customization of enterprise software may degrade system performance. Answer:  Answer: TRUE

CHAPTER 6