California State University, San Bernardino - IST 309

Package Title: Assessment Questions Course Title: Intro IS 5e

Chapter Number: 2

Question Type: True/False

1)A business process has inputs and outputs

2. The activities of a business process can be measured

3. Cross-functional processes are executed within a single functional area.

4. The procurement process includes the sales function.

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

6. A business process always includes information systems.

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

8. BPM is an implementation of BPR.

9. BPM can improve an organization’s flexibility.

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

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

12. Competitive advantage refers to making higher profits.

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

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

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

16. In general, labor costs are higher in developed countries than in developing countries.

17. Developed countries usually provide greater fringe benefits than developing countries.

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

19. Internet access in the United States is not particularly related to household income.

20. In general, government deregulation decreases competition.

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

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

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

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

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

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

27. The digital divide is the gap between data and knowledge.

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

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

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

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

32. Michael Porter concludes that the overall impact of the Internet is to increase

competition, which generally diminishes a firm’s profitability.

33. The Internet increases traditional barriers to entry into a market.

34. The Internet decreases customers’ bargaining power.

35. Information-based industries face the greatest threat from substitutes.

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

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

38. An entry barrier is a long-term competitive advantage.

39. The bargaining power of suppliers is low when their buyers have many choices.

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

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

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

Question Type: Multiple Choice

43. Which of the following statements concerning business processes is false?

1. A process has inputs.
2. A process has outputs.
3. A process has activities that can be measured.
4. A process creates value.
5. A process cannot cross functional area boundaries.

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

1. Accounting business process
2. Finance business process
3. Marketing business process
4. Production business process
5. Management information systems business process

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

1. Accounting Business Process
2. Finance Business Process
3. Marketing Business Process
4. Production Business Process
5. Management Information Systems Business Process

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

1. Accounting Business Process
2. Finance Business Process
3. Marketing Business Process
4. Production Business Process
5. Management Information Systems Business Process

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

1. Accounting Business Process
2. Finance Business Process
3. Marketing Business Process
4. Production Business Process
5. Management Information Systems Business Process

48. Managing purchasing is an example of a(n):

1. Accounting Business Process
2. Finance Business Process
3. Marketing Business Process
4. Production Business Process
5. Management Information Systems Business Process

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

1. Accounting Business Process
2. Finance Business Process
3. Marketing Business Process
4. Human Resources Business Process
5. Management Information Systems Business Process

50. Which of the following processes involves the warehouse, purchasing, and accounting functional areas?

1. Procurement
2. Fulfillment
3. Order entry
4. Accounts receivable
5. Payroll

51. Which of the following processes involves the warehouse, sales, and accounting functional areas?

1. Procurement
2. Fulfillment
3. Order entry
4. Accounts Receivable
5. Payroll

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

1. Establish standards
2. Execute the process
3. Capture and store process data
4. Monitor process performance
5. Detect problems with the process.

53. For many organizations, business process reengineering

1. Is easy to implement.

2. Is not disruptive to implement.
3. Has little impact on facilities.
4. Is inexpensive.
5. Has a major impact on the corporate culture.

54. Which of the following statements is false?

1. BPM is a task-oriented approach.
2. BPM can help companies reduce costs.
3. BPM can help companies increase revenue.
4. BPM can improve customer satisfaction.
5. BPM can improve organizational flexibility

55. Which of the following statements is false?

1. BPM begins with process modeling.
2. Process modeling is a graphical depiction of all the steps in a process.
3. BPM uses Web-enabled technologies for user interfaces.
4. Business activity monitoring is used to measure and manage business processes.
5. Business activity monitoring is a type of scheduled reporting.

56. Business pressures on organizations are created when there are changes in

1. Social factors
2. Economic factors
3. Legal factors
4. Political factors
5. Changes in all of the above will create business pressures.

57. Market pressures include which of the following?

1. the global economy
2. weak competition
3. a homogeneous workforce
4. weak customers
5. high-cost offshore labor

58. The workforce in developed countries is exhibiting all of the following trends except:

1. It is becoming more diversified.
2. It includes more women.
3. It includes more single parents.
4. It includes fewer persons with disabilities.
5. It includes more minority-group members.

59. Today’s customers have                   .

1. less knowledge about products
2. less sophistication
3. difficulty in finding information about products
4. higher expectations
5. difficulty in comparing prices

60. Which of the following statements concerning technology pressures on modern

businesses is true?

1. Technology changes so rapidly that organizations should wait before they release new technology-based products.
2. New technologies offer alternative service options.
3. New technologies will never replace existing technologies.
4. The amount of information on the Internet remains stable from year to year.
5. The important information on the Internet is fee-based.

61. Which of the following is not an example of the growing initiative called green IT?

1. Designing an IT infrastructure to support sustainability.
2. Building systems that monitor carbon throughout the organization.
3. Asking vendors about compliance on environmental standards.
4. Building computer applications that use less energy
5. Designing energy-efficient data centers.

62. The digital divide is an example of which type of societal pressure?

1. social responsibility
2. government regulations
3. protection against terrorism
4. ethics
5. information overload

63. Which one of the following statements is false?

1. Businesses tend to view government regulations as expensive constraints on their activities.
2. Government deregulation reduces competition.
3. IT support is essential for compliance with many new regulations.
4. IT has been used to identify patterns of behavior associated with terrorist activities.
5. Information ethics can destroy the morale of a company’s employees.

64. Which of the following is not a Section Reference 1 by organizations to business pressures?

1. Delay releases of innovated products.
2. Build strategic systems that enable an organization to increase market share or profits.
3. Provide tools that satisfy customers so they don’t go to a competitor.
4. Manufacture customized goods at a lower cost.
5. Conduct business electronically with customers and business partners.

65. Producing identical items in large quantities is called:

1. strategic systems.
2. customer focus.
3. continuous improvement.
4. mass production.
5. mass customization.

66. Producing customized items in large quantities is called:

1. strategic systems.
2. customer focus.
3. continuous improvement.
4. mass production.
5. mass customization.

67. The Bodymetrics body scanner is best characterized as an example of:

1. mass production.
2. customer focus.
3. real-time customer input.
4. mass customization.
5. continuous improvement.

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

1. threat of entry of new competitors
2. bargaining power of suppliers
3. bargaining power of customers
4. threat of substitute products
5. rivalry among existing firms in an industry

69. Competitive advantage for an organization manifests itself as all of the following except:

1. Lower costs
2. Higher quality
3. Increased time to market
4. Increased profits
5. Increased speed

70. For most companies, the Web             the threat that new competitors will enter the

market by            traditional barriers to entry.

1. decreases, increasing
2. increases, decreasing
3. increases, increasing
4. decreases, decreasing

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

1. Competitive advantage
2. An entry barrier
3. Strategic advantage
4. Rapid time-to-market
5. One-to-one marketing

72. The threat of competitors’ entering the automobile manufacturing industry is        

because barriers to entry are so           .

1. low, low
2. high, high
3. high, low
4. low, high

73. 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                                    .

1. intermediation, physical
2. broker, physical
3. sales, financial

4. financial, digital
5. intermediation, digital

74. How does the Internet affect the way you purchase your textbooks?

1. The Internet gives you fewer choices.
2. The Internet increases your bargaining power.
3. The Internet provides you with less information.
4. The Internet decreases your bargaining power.
5. The Internet increases your switching costs.

75. Buyer power is            when buyers have many choices from whom to buy and

           when buyers have few choices.

1. high, the same
2. high, low
3. low, low
4. low, high
5. low, the same

76. The costs of delivering products in the            channel are much higher than delivering products in the                             channel.

1. e-commerce, digital
2. digital, e-commerce
3. digital, physical
4. physical, financial
5. physical, digital

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

1. competitive opportunities, activities
2. general strategies, activities
3. activities, competitive opportunities
4. activities, general strategies
5. primary activities, support activities

78.            activities create value for which customers are willing to pay, whereas         

activities do not add value directly to the firm’s products or services.

1. Support, primary
2. Human resource management, inbound logistics
3. Procurement, operations
4. Primary, support
5. Accounting, outbound logistics

79. If there are           substitutes for an organization’s products or services, then the threat of substitutes is                          .

1. many, high
2. few, low
3. few, high
4. many, low
5. few, negligible

80. New technologies can produce new products very            , which            the threat from substitute products.

1. slowly, decreases
2. slowly, increases
3. slowly, does not affect
4. quickly, increases
5. quickly, does not affect

81. 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?

1. threat of entry of new competitors
2. bargaining power of suppliers
3. bargaining power of customers
4. threat of substitute products
5. rivalry among existing firms in an industry

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

1. cost leadership
2. differentiation
3. innovation
4. operational effectiveness
5. customer-orientation

83. Which strategy for competitive advantage involves offering different products, services, or product features?

1. cost leadership
2. differentiation
3. innovation
4. operational effectiveness
5. customer-orientation

84. Which strategy for competitive advantage involves introducing new products and putting new features in existing products?

1. cost leadership
2. differentiation
3. innovation
4. operational effectiveness
5. customer-orientation

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

1. cost leadership
2. differentiation
3. innovation
4. operational effectiveness
5. customer-orientation

86. When Amazon welcomes you by name back to its Web site on your second visit, it is employing which strategy for competitive advantage?

1. cost leadership
2. differentiation
3. innovation
4. operational effectiveness
5. customer-orientation

87. IT will impact managers’ jobs in all of the following ways except:

1. managers will have time to get into the field
2. managers can spend more time planning
3. managers can spend more time “putting out fires”
4. managers can gather information more quickly
5. none of the above

88. 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.

1. value chain model, competitive forces model
2. primary activities, support activities
3. competitive forces model, primary activities
4. competitive forces model, value chain model
5. value chain model, support activities

89. Which of the following is not an example of business – IT alignment?
    1. The company goals are clear to every IT and business employee.

1. 2. The company ensures that IT employees understand how the company makes money.
   3. The company views IT as a way to support the business but not as a way to create new revenue streams.
   4. IT professionals rotate into business departments.
   5. The company views customer service as extremely important.

90. Which of the following is not a cause of inadequate alignment between IT and business?

1. A lack of communication
2. Different objectives
3. Not understanding each group’s expertise
4. Lack of IT knowledge on the part of the business executives
5. Lack of funds

91. Refer IT’s About Business 2.1 – Sharing Bicycles. Alta’s competitive advantage stems from the fact that

1. they have a unique product or service
2. they have un-replicable business model
3. they have a first mover advantage
4. they are the cost leader in their industry
5. none of the above

92. Refer to IT’s About Business 2.2 – Chevron: The changes over the past few years at Chevron were brought about by                                              and                       at the company level and

                         at the local level.

1. BPI, BPM, BPR
2. BPR, BPI, BPM
3. BPM, Six Sigma, BPR
4. BPR, BPM and BPI

93. Refer to IT’s About Business 2.3 – “Bring Your Own Device” Can Cause Problems: Hamilton Fraser’s human resource department created an acceptable use policy for their employees’ personal communication devices for the following reason:

1. 1. They didn’t want their employees wasting time playing games on their iPhones
   2. They didn’t want the corporate data to be accessible on mobile devices that were lost/misplaced
   3. They wanted to monitor how their employees were spending their time
   4. They didn’t want their employees to use social media while working
   5. They only wanted employees to use Android devices

94. Refer to IT’s About Business 2.4 – The Surui Tribe of the Amazon: The Surui Tribe’s use of technology demonstrates how IT can be used to

1. to conserve natural resources
2. to prevent deforestation
3. to catch criminals
4. to create carbon off-sets
5. to create awareness about environmental problems

95. Refer to IT’s About Business 2.5 – Massachusetts Mutual Transforms Its Information Systems: What kind of transformation did Massachusetts Mutual Transforms undergo?

1. BPI
2. BPR
3. BPM

96. Refer to Closing Case – IBM’s Watson: IBM Watson differs from other information systems’ capabilities in the following manner:

1. it can store vast amounts of information
2. it can search through a large amount of information
3. it can process natural language commands
4. it can process large amounts of information in response to a query and assign confidence measures to a set of possible solutions
5. it can selectively update information based on current trends on the Internet

Question Type: Multiple Choice

97. Ted works in his family’s bakery business. They supply bread and rolls to neighboring restaurants, and have their own store-front where they sell breads, rolls, pastries, cookies, and cupcakes. Ted thinks he should put free Wi-Fi in the store front (which seats about 15 people). This idea reflects which one of Porter’s five competitive forces?

1. threat of entry of new competitors
2. bargaining power of suppliers
3. bargaining power of customers
4. threat of substitute products
5. rivalry among existing firms in an industry

98. Ted works in his family’s bakery business. They supply bread and rolls to neighboring restaurants, and they have their own store front where they sell breads, rolls, pastries, cookies and cupcakes. Ted wants to start a Cookie Club that gives each member (joining is free) a free cookie after they have purchased a dozen. This idea Reflects which one of Porter’s five competitive forces?

1. threat of entry of new competitors
2. bargaining power of suppliers
3. bargaining power of customers
4. threat of substitute products

5. rivalry among existing firms in an industry

99. Ted works in his family’s bakery business. They supply bread and rolls to neighboring restaurants, and they have their own-store front where they sell breads, rolls, pastries, cookies and cupcakes. Ted wants to build a web site for the business that will allow customers to order cookies and cupcakes for later pickup. Is this idea

1. A strategic information system
2. In alignment with the business.
3. in support of a cost leadership strategy
4. likely to provide long term competitive advantage
5. a support activity within the value chain

100. Hyo runs an ice cream store with her family. Which of the following activities is a part of their procurement process?

1. Recording their daily sales revenue
2. Sending an order to their sugar supplier
3. Making the ice cream
4. Setting up an employee schedule
5. Taking an order for an ice cream cake

101. Hyo runs an ice cream store with her family. Which of the following activities is a part of their procurement?

1. Send an order to a supplier.
2. Decide what to order.
3. Record daily sales revenue
4. Record goods received
5. Send a check to a supplier