Ch2 Org Strategy Competitive Advantage Verified Test Bank

Chapter 2

Organizational Strategy, Competitive Advantage, and Information Systems

Question type: True/False

1) A business process has inputs and outputs.

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

2) A business process can be a liability.

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Comprehension

3) The activities of a business process can be measured.

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

4) Cross-functional processes are business processes require the cooperation of multiple functional areas.

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

5) Cross-functional processes are executed within a single functional area.

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

6) The procurement process includes the sales function.

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

7) The long-term goal of business process management is to create a competitive advantage through organizational flexibility.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

8) An organization’s business processes can create a competitive advantage.

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Comprehension

9) A business process always includes information systems.

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Comprehension

10) BPR is a strategy for improving the efficiency of an organization’s data collection.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

11) E-Commerce is the process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

12) BPM is an implementation of BPR.

Difficulty: Hard

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

13) BPM can improve an organization’s flexibility.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

14) The overall performance of an organization has little to do with how well it manages its business processes.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

15) Business process management includes methods and tools to support the design, analysis, implementation, management, and optimization of business processes.

Difficulty: Easy

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

16) Differentiation is the result of optimizing the marketing and innovation processes.

Difficulty: Hard

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

17) Productivity is the result of optimizing operations and supplier processes.

Difficulty: Hard

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

18) Customer satisfaction is the result of optimizing and aligning business processes to fulfill customers’ needs, wants, and desires.

Difficulty: Hard

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

19) The business environment refers to the industry that a company is in.

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

20) Globalization is the integration and interdependence of many facets of life made possible by rapid advances in information technology.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

21) The information technology environment is the combination of social, legal, economic, physical, and political factors that affect business activities.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

22) In general, labour costs are higher in developing countries than in developed countries.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

23) Developed countries usually provide greater fringe benefits than developing countries.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

24) Information technology is facilitating the entry of a wide variety of employees into the workforce.

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Comprehension

25) Internet access in Canada is not particularly related to household income.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Comprehension

26) In general, government deregulation decreases competition.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

27) Ethical issues are important because, if handled poorly, they can damage an organization’s image.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

28) Build-to-stock is a strategy of producing customized products and services.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

29) In mass production, a company produces a large quantity of identical items.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

30) In mass customization, companies produce items in large quantity, but they tailor the items to meet the desires and needs of individual customers.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

31) Customer intimacy is the process whereby a business learns as much as possible about its customers to better anticipate and address their needs.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

32) A growing IT initiative called green IT is enabling organizations to reduce their carbon footprint.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

33) The digital divide is the gap between data and knowledge.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

34) The One Laptop per Child project aims to use technology to revolutionize how the world can educate its children.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

35) Competitive advantage helps a company function effectively within a market and generate larger-than-average profits.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

36) An information system that helps an organization gain a competitive advantage is called a competitive information system.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

37) Every competitive organization is driven by the competitive forces identified by Michael Porter.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

38) Michael Porter concludes that the overall impact of the Internet is to increase competition, which generally diminishes a firm’s profitability.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

39) The Internet increases traditional barriers to entry into a market.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

40) The Internet decreases customers’ bargaining power.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

41) Information-based industries face the greatest threat from substitutes.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

42) The music industry is a good example of the extremely low variable costs of digital products.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

43) The Internet impact on the bargaining power of suppliers always favours buyers.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

44) The introduction of the ATM in the banking industry is an example of the innovation strategy.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

45) An entry barrier is a long-term competitive advantage.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

46) The bargaining power of suppliers is low when their buyers have few choices.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

47) The bargaining power of suppliers is high when buyers have few choices and low when buyers have many choices.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

48) When there are many substitute products, a company can create a competitive advantage by increasing fees.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

49) Porter’s value chain model is a variation of his competitive advantage framework.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode Knowledge

50) The primary activities in the value chain create the value for which customers are willing to pay.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

51) It’s a good idea for a company to select two competitive advantage strategies.

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

52) With a competitive strategy, companies only need to plan their own moves.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

Question type: Multiple Choice

53) Which of the following statements is false?

a) Competitive advantage is based on some measurement such as cost, quality, or speed.

b) Competitive advantage enables a company to function effectively within a market.

c) Competitive advantage leads to higher-than-average profits.

d) Competitive advantage requires the use of technology.

e) Competitive advantage applies to companies of all sizes.

Difficulty: Easy

Learning Objective: Provide a real-world application of how information systems can contribute to organizational strategies and competitive advantage.

Section Reference: Case 2.1 BlackBerry Meets Android

AACSB: Use of Information Technology

Bloomcode: Knowledge

54) What does it mean that BlackBerry has diversified its software to traverse the roadway of Internet of Things?

a) That the software can support E-commerce

b) That the software can send e-mails

c) That the software can connect to RFID readers, laptops and larger computers

d) That the software has a firewall

e) That the software is fully compatible with TCP/IP

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: Case 2.1 BlackBerry Meets Android

AACSB: Use of Information Technology

Bloomcode: Knowledge

55) What major supplier can help BlackBerry to be a leader of self-driving cars?

a) Google

b) QNX

c) Microsoft

d) Macintosh

e) CISCO

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: Case 2.1 BlackBerry Meets Android

AACSB: Use of Information Technology

Bloomcode: Knowledge

56) What type of application did NASCAR develop in order to incorporate all the items on the paper-based form?

a) A dashboard view that displays each vehicle along with its progress through the inspection process

b) A mobile e-commerce application that allows customers to book inspections online

c) An accounting application that handles all the payroll and tax processes of the business

d) An e-commerce website for customers to pay online and book appointments

e) None of the above

Difficulty: Medium

Learning objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: IT’s About Business 2.1 NASCAR Uses IT in its Pre-Race Inspection

AACSB: Use of Information Technology

Bloomcode: Knowledge

57) One of the key benefits of the App developed by NASCAR is the cumulative value of the collected data that includes information on the pre-race inspections of all vehicles is collected and stored in real time. What can NASCAR executives identify with this data?

a) Trends and patterns to help maintain a level playing field for all racers

b) Information that can lead to a better tax strategy

c) Identification of customer profiles

d) Marketing information for better pricing strategy

e) Financial information for cost analysis

Difficulty: Medium

Learning objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: IT’s About Business 2.1 NASCAR Uses IT in its Pre-Race Inspection

AACSB: Use of Information Technology

Bloomcode: Knowledge

58) Which of the following is/are not a fundamental element of a business process?

a) feedback

b) input

c) output

d) resources

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

59) Which of the following statements concerning business processes is false?

a) A process has inputs.

b) A process has outputs.

c) A process has activities that can be measured.

d) A process creates value.

e) A process cannot cross functional area boundaries.

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

60) A business process can be a competitive advantage when _____________.

a) the company becomes less responsive and efficient

b) IT enables the company innovate or to execute better than its competitors

c) inputs are translated to outputs

d) a product or service is delivered to the organization

Difficulty: Hard

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Comprehension

61) Applying copyrights and trademarks is an example of a(n):

a) Accounting business process

b) Finance business process

c) Marketing business process

d) Production business process

e) Management information systems business process

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

62) Reconciling bank accounts is an example of a(n):

a) Accounting Business Process

b) Finance Business Process

c) Marketing Business Process

d) Production Business Process

e) Management Information Systems Business Process

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

63) Managing account collections is an example of a(n):

a) Accounting Business Process

b) Finance Business Process

c) Marketing Business Process

d) Production Business Process

e) Management Information Systems Business Process

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

64) Collecting sales tax is an example of a(n):

a) Accounting Business Process

b) Finance Business Process

c) Marketing Business Process

d) Production Business Process

e) Management Information Systems Business Process

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

65) Managing purchasing is an example of a(n):

a) Accounting Business Process

b) Finance Business Process

c) Marketing Business Process

d) Production Business Process

e) Management Information Systems Business Process

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

66) Cross-functional business processes:

a) fall within a single functional area.

b) cut across multiple functional areas.

c) require collaboration.

d) A and C

e) B and C

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Comprehension

67) Managing pay and payroll is an example of a(n):

a) Accounting Business Process

b) Finance Business Process

c) Marketing Business Process

d) Human Resources Business Process

e) Management Information Systems Business Process

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

68) Which of the following processes involves the warehouse, purchasing, and accounting functional areas?

a) Procurement

b) Fulfillment

c) Order entry

d) Accounts receivable

e) Payroll

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

69) Which of the following processes involves the warehouse, sales, and accounting functional areas?

a) Procurement

b) Fulfillment

c) Order entry

d) Accounts receivable

e) Payroll

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

70) Which of the following is not a role that information systems play in businesses processes?

a) Establish standards

b) Execute the process

c) Capture and store process data

d) Monitor process performance

e) Detect problems with the process

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Comprehension

71) An example of a cross-functional business process is ________.

a) warehousing

b) purchasing

c) procurement

d) accounting

Difficulty: Medium

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

72) For many organizations, business process reengineering:

a) is easy to implement.

b) is not disruptive to implement.

c) has little impact on facilities.

d) is inexpensive.

e) has a major impact on the corporate culture.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

73) Which of the following statements is false?

a) BPM is a task-oriented approach.

b) BPM can help companies reduce costs.

c) BPM can help companies increase revenue.

d) BPM can improve customer satisfaction.

e) BPM can improve organizational flexibility.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

74) Business process ______________ is a management technique that includes methods and tools to support the design, analysis, implementation, management, and optimization of business processes.

a) implementation

b) management

c) optimization

d) reengineering

Difficulty: Easy

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

75) The initial goal of business process management is ____________________.

a) to be less radical, disruptive, and more incremental

b) to improve profitability by decreasing costs and increasing revenue

c) to create a competitive advantage through organizational flexibility

d) to organize around the business process, not the individual task

Difficulty: Hard

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

76) Which of the following statements is false?

a) BPM begins with process modelling.

b) Process modeling is a graphical depiction of all the steps in a process.

c) BPM uses Web-enabled technologies for user interfaces.

d) Business activity monitoring is used to measure and manage business processes.

e) Business activity monitoring is a type of scheduled reporting.

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Comprehension

77) _____________ is the result of optimizing the manufacturing and logistics processes.

a) Customer satisfaction

b) Cost reduction

c) Cycle and fulfillment time

d) Differentiation

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

78) _____________ is the result of optimizing the marketing and innovation processes.

a) Customer satisfaction

b) Cost reduction

c) Cycle and fulfillment time

d) Differentiation

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

79) Business process _______________ is a strategy for improving the efficiency and effectiveness of an organization’s business processes.

a) implementation

b) management

c) optimization

d) reengineering

Difficulty: Medium

Learning Objective: Differentiate among business process reengineering, business process improvement, and business process management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

80) ____________ pressures are generated by the global economy, intense competition, the changing nature of the workforce, and powerful customers.

a) Economic

b) Market

c) Social

d) Technology

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

81) Procurement is not completed in this functional area:

a) Accounting

b) Purchasing

c) Sales

d) Warehouse

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

82) Fulfillment is triggered in the _________ department.

a) Accounting

b) Purchasing

c) Sales

d) Warehouse

Difficulty: Easy

Learning Objective: Discuss ways in which information systems enable cross-functional business processes and business processes for a single functional area.

Section Reference: 2.1 Business Processes

AACSB: Use of Information Technology

Bloomcode: Knowledge

83) __________ is the result of optimizing operations and supplier processes.

a) Cost reduction

b) Differentiation

c) Productivity

d) Quality

Difficulty: Easy

Learning Objective: Business Process Reengineering, Business Process Improvement, and Business Process Management.

Section Reference: 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management

AACSB: Use of Information Technology

Bloomcode: Knowledge

84) New and improved technologies rapidly create and support substitutes for products, alternative service options, and superb quality. This is an example of ________ pressures.

a) economic

b) market

c) social

d) technology

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

85) Spending to protect against terrorism is an example of __________ pressure.

a) economic

b) market

c) social

d) technology

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

86) ____________ is a strategy of producing a large quantity of items, but customizing them to fit the desire of each customer.

a) Customer focus

b) Make-to-order

c) Mass customization

d) Personalization

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

87) ____________ is a strategy of producing customized (made to individual specifications) products and services.

a) Customer focus

b) Make-to-order

c) Mass customization

d) Personalization

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

88) Business pressures on organizations are created when there are changes in:

a) Social factors

b) Economic factors

c) Legal factors

d) Political factors

e) Changes in all of these will create business pressures.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

89) Market pressures include which of the following?

a) The global economy

b) Weak competition

c) A homogeneous workforce

d) Weak customers

e) High-cost offshore labour

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

90) The workforce in developed countries is exhibiting all of the following trends except:

a) It is becoming more diversified.

b) It includes more women.

c) It includes more single parents.

d) It includes fewer persons with disabilities.

e) It includes more minority group members.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

91) Today’s customers have ________.

a) less knowledge about products

b) less sophistication

c) difficulty in finding information about products

d) higher expectations

e) difficulty in comparing prices

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

92) Which of the following statements concerning technology pressures on modern businesses is true?

a) Technology changes so rapidly that organizations should wait before they release new technology-based products.

b) New technologies offer alternative service options.

c) New technologies will never replace existing technologies.

d) The amount of information on the Internet remains stable from year to year.

e) The important information on the Internet is fee-based.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

93) Which of the following is not an example of the growing initiative called green IT?

a) Designing an IT infrastructure to support sustainability

b) Building systems that monitor carbon throughout the organization

c) Asking vendors about compliance on environmental standards

d) Building computer applications that use less energy

e) Designing energy-efficient data centres

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

94) The digital divide is an example of which type of societal pressure?

a) Social responsibility

b) Government regulations

c) Protection against terrorism

d) Ethics

e) Information overload

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

95) Which one of the following statements is false?

a) Businesses tend to view government regulations as expensive constraints on their activities.

b) Government deregulation reduces competition.

c) IT support is essential for compliance with many new regulations.

d) IT has been used to identify patterns of behaviour associated with terrorist activities.

e) Information ethics can destroy the morale of a company’s employees.

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

96) Producing identical items in large quantities is called:

a) Strategic systems

b) Customer focus

c) Continuous improvement

d) Mass production

e) Mass customization

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

97) Producing customized items in large quantities is called:

a) Strategic systems

b) Customer focus

c) Continuous improvement

d) Mass production

e) Mass customization

Difficulty: Easy

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

98) The Bodymetrics body scanner is best characterized as an example of:

a) Mass production

b) Customer focus

c) Real-time customer input

d) Mass customization

e) Continuous improvement

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

99) Information-based industries are most susceptible to which one of Porter’s five forces?

a) Threat of entry of new competitors

b) Bargaining power of suppliers

c) Bargaining power of customers

d) Threat of substitute products

e) Rivalry among existing firms in an industry

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

100) Competitive advantage for an organization manifests itself as all of the following except:

a) Lower costs

b) Higher quality

c) Increased time to market

d) Increased profits

e) Increased speed

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

101) For most companies, the Web _____ the threat that new competitors will enter the market by _____ traditional barriers to entry.

a) decreases, increasing

b) increases, decreasing

c) increases, increasing

d) decreases, decreasing

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

102) ____________ is a feature that must be offered by a competing organization in order to survive in the marketplace.

a) Competitive advantage

b) An entry barrier

c) Strategic advantage

d) Rapid time-to-market

e) One-to-one marketing

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

103) The threat of competitors’ entering the automobile manufacturing industry is _____ because barriers to entry are so _____.

a) low, low

b) high, high

c) high, low

d) low, high

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

104) The threat of competitors’ entering a market is very high in industries that perform a(n) _____ role and in industries where the primary product or service is _____.

a) intermediation, physical

b) broker, physical

c) sales, financial

d) financial, digital

e) intermediation, digital

Difficulty: Hard

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

105) How does the Internet affect the way you purchase your textbooks?

a) The Internet gives you fewer choices.

b) The Internet increases your bargaining power.

c) The Internet provides you with less information.

d) The Internet decreases your bargaining power.

e) The Internet increases your switching costs.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

106) Buyer power is _____ when buyers have many choices from whom to buy, and _____ when buyers have few choices.

a) high, the same

b) high, low

c) low, low

d) low, high

e) low, the same

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

107) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.

a) e-commerce, digital

b) digital, e-commerce

c) digital, physical

d) physical, financial

e) physical, digital

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

108) Porter’s competitive forces model helps organizations identify _____, whereas his value chain model helps organizations identify specific _____.

a) competitive opportunities, activities

b) general strategies, activities

c) activities, competitive opportunities

d) activities, general strategies

e) primary activities, support activities

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

109) _____ activities create value for which customers are willing to pay, whereas _____ activities do not add value directly to the firm’s products or services.

a) Support, primary

b) Human resource management, inbound logistics

c) Procurement, operations

d) Primary, support

e) Accounting, outbound logistics

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

110) If there are ______ substitutes for an organization’s products or services, then the threat of substitutes is _______.

a) many, high

b) few, low

c) few, high

d) many, low

e) few, negligible

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

111) New technologies can produce new products very _____, which _____ the threat from substitute products.

a) slowly, decreases

b) slowly, increases

c) slowly, does not affect

d) quickly, increases

e) quickly, does not affect

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

112) The visibility of Internet applications on the Web makes proprietary systems more difficult to keep secret. This is an example of which of Porter’s five forces?

a) Threat of entry of new competitors

b) Bargaining power of suppliers

c) Bargaining power of customers

d) Threat of substitute products

e) Rivalry among existing firms in an industry

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

113) Walmart’s automatic inventory replenishment system, which enables the company to reduce inventory storage requirements, is an example of which strategy for competitive advantage?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

114) Which strategy for competitive advantage involves offering different products, services, or product features?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

115) Which strategy for competitive advantage involves introducing new products and putting new features in existing products?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

116) The threat of entry of new competitors is __________ when it is easy to enter a market and __________ when significant barriers to entry exist.

a) high, high

b) high, low

c) low, low

d) low, high

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

117) The bargaining power of suppliers is _______ when buyers have few choices and _________ when buyers have many choices.

a) high, high

b) high, low

c) low, low

d) low, high

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

118) The introduction of ATM machines by Citibank was a classic example of which strategy for competitive advantage?

a) Cost leadership

b) Innovation

c) Differentiation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

119) WestJet’s low-cost, short-haul strategy is an example of which strategy for competitive advantage?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

120) Which strategy for competitive advantage involves improving the manner in which an organization executes its internal business processes?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Easy

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

121) When Amazon welcomes you by name back to its website on your second visit, it is employing which strategy for competitive advantage?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

e) Customer-orientation

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

122) IT will impact managers’ jobs in all of the following ways except: 

a) Managers will have time to get into the field

b) Managers can spend more time planning

c) Managers can spend more time “putting out fires”

d) Managers can gather information more quickly

e) None of these

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

123) The bargaining power of buyers is ___________ when buyers have many choices and ________ when buyers have few choices.

a) high, high

b) high, low

c) low, low

d) low, high

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

124) The threat of substitute products or services is _______ when there are many substitutes for an organization’s products or services and ________ when there are few substitutes.

a) high, high

b) high, low

c) low, low

d) low, high

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

125) The rivalry among firms in an industry is __________ when there is fierce competition and ___________ when competition is among fewer firms.

a) high, high

b) high, low

c) low, low

d) low, high

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

126) In the airline industry, ________ is an example of differentiation strategy as it offers regional service at low cost.

a) Air Canada

b) Air Quebec

c) WestJet

d) easyJet

Difficulty: Hard

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

127) Porter’s _______ help(s) companies identify general strategies, whereas his _______ help(s) to identify specific activities where companies can use the strategies for greatest impact.

a) value chain model, competitive forces model

b) primary activities, support activities

c) competitive forces model, primary activities

d) competitive forces model, value chain model

e) value chain model, support activities

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

128) The Internet ________ buyers’ access to information, __________ buyer power.

a) decreases, decreasing

b) decreases, increasing

c) increases, decreasing

d) increases, increasing

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

129) Which strategy for competitive advantage improves the manner in which internal business processes are executed so that a firm performs similar activities better than its rivals?

a) Cost leadership

b) Differentiation

c) Innovation

d) Operational effectiveness

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

130) Which of the following is not an example of business–IT alignment?

a) The company goals are clear to every IT and business employee.

b) The company ensures that IT employees understand how the company makes money.

c) The company views IT as a way to support the business but not as a way to create new revenue streams.

d) IT professionals rotate into business departments.

e) The company views customer service as extremely important.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

131) Which of the following is not a cause of inadequate alignment between IT and business?

a) Lack of communication

b) Different objectives

c) Not understanding each group’s expertise

d) Lack of IT knowledge on the part of the business executives

e) Lack of funds

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

132) Which of the following is not a characteristic of excellent alignment between IT and business?

a) Organizations create a vibrant and inclusive company culture.

b) Organizations ensure business and IT professionals communicate solely from their area of expertise.

c) Organizations ensure that IT employees understand how the company makes (or loses) money.

d) Organizations view their internal and external customers and their customer service function as supremely important.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

133) Alignment between IT and business is difficult because ________.

a) the objectives of business managers and IT managers are so comprehensive.

b) the business and IT departments know little of the other group’s expertise.

c) managers communicate well but find it hard to implement projects that are discussed.

d) All of the above are reasons alignment is difficult.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

134) Alignment between IT and business is characterized by a(n) __________ of the IT function with strategy, mission, and goals of the organization.

a) tight integration

b) loose integration

c) replacement

d) upgrade

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

135) IT governance aims to add value while ______:

a) balancing risk versus return over IT and its processes.

b) maximizing profit.

c) minimizing cost.

d) creating a friendly environment

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Knowledge

136) ___________ is a website where potential donors can decide where their money can be directed, stating whether it goes to a particular disaster relief fund.

a) GiftFlow.org

b) RedCross.ca

c) Microsoft.ca

d) Kiva.org

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Knowledge

Question type: Short Answer

137) Identify the three types of business pressures, and explain how organizations can use IT to respond to each one.

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Comprehension

138) Using Porter’s competitive forces model, contrast the bargaining power of suppliers and the bargaining power of customers (buyers).

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

139) What are switching costs, and why would a company care about them?

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

140) Differentiate between Porter’s competitive forces model and his value chain model.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

141) Differentiate between primary activities and support activities in Porter’s value chain model.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

142) Evaluate the assertion that an information system by itself can rarely provide a sustainable competitive advantage.

Difficulty: Medium

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

Question type: Essay

143) Explain what a business environment is and what factors within the environment put pressure on the business.

Difficulty: Medium

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Comprehension

144) Explain how changes in social responsibility, government regulation/deregulation, social programs, protection against terrorism, and ethics put pressure on modern businesses.

Difficulty: Hard

Learning Objective: Identify effective IT responses to different kinds of business pressures.

Section Reference: 2.3 Business Pressures, Organizational Responses, and Information Technology Support

AACSB: Use of Information Technology

Bloomcode: Comprehension

145) Identify the five forces of Porter’s competitive forces model, and explain how the Internet impacts each one.

Difficulty: Hard

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Comprehension

146) Discuss why the variable cost of digital products is extremely low.

Difficulty: Hard

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Analysis

147) Provide an example of each of the five strategies for competitive advantage. (Do not use the examples provided in the book.)

Difficulty: Hard

Learning Objective: Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces.

Section Reference: 2.4 Competitive Advantage and Strategic Information Systems

AACSB: Use of Information Technology

Bloomcode: Application

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