File: ch02, Chapter 2: The Modern Organization in the Digital Economy

True/False

! Toronto "nternational #irport is using in$ormation technology only to cut costs! #ns: False %esponse: &ee page 2'

2! "n$ormation technology is pro(iding Toronto "nternational #irport )ith a competiti(e ad(antage o(er the airlines! #ns: True %esponse: &ee page 2'

*! The common+use airport sa(es money $or the airport and $or the airlines that use the airport! #ns: True %esponse: &ee page 2,

-! The common+use airport sa(es money $or the airport .ut costs more $or the airlines that use the airport! #ns: False %esponse: &ee page 2,

/! "nternet+.ased applications can .e used to pro(ide super. customer ser(ice! #ns: True %esponse: &ee page 2,

0! "nternet+.ased applications are o$ little use )ith regard to pro(iding super. customer ser(ice! #ns: False %esponse: &ee page 2,

1! Corporations in mature industries do not de(elop "nternet+.ased systems, as they ha(e e2tensi(e in$ormation systems already operating! #ns: False

%esponse: &ee page 2,

'! Corporations in mature industries must de(elop "nternet+.ased systems to reduce costs, increase producti(ity, and impro(e customer ser(ice! #ns: True %esponse: &ee page 2,

,! "n$ormation technology typically re3uires a small in(estment, .ut a rather long period o$ time! #ns: False %esponse: &ee page 2,

0! The in$rastructure $or e+.usiness is net)or4ed computing! #ns: True %esponse: &ee page 2,

! The in$rastructure $or e+.usiness consists only o$ main$rame computers! #ns: False %esponse: &ee page 2,

2! Electronic commerce occurs )hen organizations per$orm their .asic $unctions electronically! #ns: True %esponse: &ee page *0

*! The glo.al net)or4ed en(ironment is 4no)n as the "nternet! #ns: True %esponse: &ee page *0

-! The glo.al net)or4ed en(ironment is 4no)n as the intranet! #ns: False %esponse: &ee page *0

/! The use o$ "nternet technologies inside the organization is 4no)n as an intranet!

#ns: True %esponse: &ee page *0

0! The use o$ "nternet technologies inside the organization is 4no)n as an e2tranet! #ns: False %esponse: &ee page *0

1! Companies that ha(e lin4ed their intranets to those o$ their .usiness partners o(er net)or4s ha(e $ormed e2tranets! #ns: True %esponse: &ee page *0

'! Companies that ha(e lin4ed their intranets to those o$ their .usiness partners o(er net)or4s ha(e $ormed conglomerates! #ns: False %esponse: &ee page *0

,! The "nternet is not ha(ing much o$ an impact on the real estate industry! #ns: False %esponse: &ee page *2 5"T6s #.out 7usiness 2! 8

20! The "nternet is ha(ing a dramatic impact on the real estate industry! #ns: True %esponse: &ee page *2 5"T6s #.out 7usiness 2! 8

2 ! Today6s mar4etplace is unpredicta.le, comple2, hypercompetiti(e, and customer+$ocused! #ns: True %esponse: &ee page **

22! The in$ormation technology en(ironment is the com.ination o$ social, legal, economic, physical, and political $actors that a$$ect .usiness acti(ities! #ns: False %esponse: &ee page **

2*! "n general, la.or costs are higher in de(eloped countries than in de(eloping countries! #ns: True %esponse: &ee page **+*-

2-! De(eloped countries usually pay higher $ringe .ene$its than de(eloping countries! #ns: True %esponse: &ee page *-

2/! De(eloping countries usually pay higher $ringe .ene$its than de(eloped countries! #ns: False %esponse: &ee page *-

20! The )or4$orce, particularly in de(eloped countries, is .ecoming more di(ersi$ied! #ns: True %esponse: &ee page *-

21! The )or4$orce, particularly in de(eloped countries, is .ecoming less di(ersi$ied! #ns: False %esponse: &ee page *-

2'! "n$ormation technology is $acilitating the entry o$ a )ide (ariety o$ employees into the )or4$orce! #ns: True %esponse: &ee page *-

2,! # pro.lem that managers ha(e is too much in$ormation! #ns: True %esponse: &ee page *-

*0! # pro.lem that managers ha(e is too little in$ormation! #ns: False %esponse: &ee page *-

* ! The digital di(ide means that .et)een di$$erent groups o$ people, there is a )ide di(ision .et)een those )ho ha(e access to in$ormation and communications technology and are using it e$$ecti(ely, and those )ho do not! #ns: True %esponse: &ee page *-

*2! "nternet access in the 9nited &tates is directly correlated )ith household income! #ns: True %esponse: &ee page */

**! "nternet access in the 9nited &tates is not correlated )ith household income! #ns: False %esponse: &ee page */

*-! Cy.erca$es are pu.lic places in )hich "nternet terminals are a(aila.le! #ns: True %esponse: &ee page */

*/! "n general, go(ernment deregulation intensi$ies competition! #ns: True %esponse: &ee page *0

*0! "n general, go(ernment deregulation decreases competition! #ns: False %esponse: &ee page *0

*1! Ethical issues are important .ecause, i$ handled poorly, they can damage the image o$ an organization! #ns: True %esponse: &ee page *0

*'! &trategic in$ormation systems are designed to gi(e the organization a competiti(e ad(antage in the mar4etplace! #ns: True

%esponse: &ee page *1

*,! Ma4e+to+order is a strategy o$ producing customized products and ser(ices! #ns: True %esponse: &ee page *'

-0! 7uild+to+stoc4 is a strategy o$ producing customized products and ser(ices! #ns: False %esponse: &ee page *'

- ! "n mass production, a company produces a large 3uantity o$ identical items! #ns: True %esponse: &ee page *'

-2! "n mass customization, companies produce items in large 3uantity, )ith each item tailored to $it the desires o$ each customer! #ns: True %esponse: &ee page *'

-*! "n mass production, companies produce items in large 3uantity, )ith each item tailored to $it the desires o$ each customer! #ns: False %esponse: &ee page *'

--! Competiti(e ad(antage helps a company control a mar4et and generate larger+than+a(erage pro$its! #ns: True %esponse: &ee page *,

-/! #ny in$ormation system that helps an organization gain a competiti(e ad(antage or reduce a competiti(e disad(antage is a strategic in$ormation system! #ns: True %esponse: &ee page *,

-0! Michael :orter concludes that the o(erall impact o$ the "nternet is to increase competition, )hich positi(ely impacts pro$ita.ility! #ns: False %esponse: &ee page *,+-0

-1! Michael :orter concludes that the o(erall impact o$ the "nternet is to decrease competition, )hich negati(ely impacts pro$ita.ility! #ns: False %esponse: &ee page *,+-0

-'! Michael :orter concludes that the o(erall impact o$ the "nternet is to decrease competition, )hich positi(ely impacts pro$ita.ility! #ns: False %esponse: &ee page *,+-0

-,! For most $irms, the "nternet increases the threat o$ ne) competitors! #ns: True %esponse: &ee page -0

/0! The "nternet increases traditional .arriers to entry into a mar4et! #ns: False %esponse: &ee page -0

/ ! The "nternet increases customers6 .argaining po)er! #ns: True %esponse: &ee page -0

/2! The "nternet decreases customers6 .argaining po)er! #ns: False %esponse: &ee page -0

/*! "n$ormation+.ased industries are in the least danger $rom su.stitutes! #ns: False %esponse: &ee page -0

/-! Old Economy manu$acturing companies are in the greatest danger $rom su.stitutes! #ns: False %esponse: &ee page -0

//! The "nternet ma4es proprietary systems more di$$icult to 4eep secret, reducing di$$erences among competitors! #ns: True %esponse: &ee page -0

/0! The "nternet ma4es proprietary systems more di$$icult to 4eep secret, increasing di$$erences among competitors! #ns: False %esponse: &ee page -0

/1! Digital products ha(e e2tremely lo) (aria.le costs! #ns: True %esponse: &ee page -0

/'! The music industry is a good e2ample o$ the e2tremely lo) (aria.le costs o$ digital products! #ns: True %esponse: &ee page -0

/,! :roduce products and/or ser(ices at the lo)est cost in the industry is the cost leadership strategy! #ns: True %esponse: &ee page -

00! :roduce products and/or ser(ices at the lo)est cost in the industry is the di$$erentiation strategy! #ns: False %esponse: &ee page -

0 ! O$$er di$$erent products, ser(ices, or product $eatures is the di$$erentiation strategy!

#ns: True %esponse: &ee page -

02! "ntroduce ne) products and ser(ices, add ne) $eatures to e2isting products and ser(ices, or de(elop ne) )ays to produce products is the inno(ation strategy! #ns: True %esponse: &ee page -

0*! ;or4 )ith .usiness partners is the customer+orientation strategy! #ns: False %esponse: &ee page -

0-! "mpro(e the manner in )hich internal .usiness processes are e2ecuted is the inno(ation strategy! #ns: False %esponse: &ee page -

0/! The introduction o$ the #TM in the .an4ing industry is an e2ample o$ the inno(ation strategy! #ns: True %esponse: &ee page -

00! "n$ormation technology ma4es managers more producti(e! #ns: True %esponse: &ee page --

01! "n$ormation technology increases the num.er o$ employees )ho can report to a single manager! #ns: True %esponse: &ee page --

0'! #s computers gain in intelligence and capa.ilities, the competiti(e ad(antage o$ replacing people )ith machines is decreasing rapidly! #ns: False %esponse: &ee page -/

0,! Tele(ision, computers, and no) the "nternet ha(e had, and are ha(ing, an isolating in$luence on people! #ns: True %esponse: &ee page -/

10! Ergonomics is the science o$ adapting machines and )or4 en(ironments to people! #ns: True %esponse: &ee page -0

Multiple Choice

! "n$ormation technology pro(ides Toronto "nternational #irport )ith )hich o$ the $ollo)ing< a8 reduced costs .8 competiti(e ad(antage o(er its ri(als c8 enhanced operations d8 enhanced customer e2perience e8 all o$ the a.o(e #ns: e %esponse: &ee page 2'

2! =arge corporations in mature industries use "nternet+.ased systems to do )hich o$ the $ollo)ing< a8 reduce costs .8 impro(e customer ser(ice c8 increase producti(ity d8 enhance operations e8 all o$ the a.o(e #ns: e %esponse: &ee page 2,

*! The in$rastructure $or e+.usiness is: a8 paper+.ased systems .8 net)or4ed computing c8 main$rame computing d8 local+area net)or4s e8 des4top computing #ns: . %esponse: &ee page *0

-! The glo.al net)or4ed en(ironment is called: a8 international net)or4ing

.8 intranet c8 internet d8 e2tranet e8 supernet #ns: c %esponse: &ee page *0

/! The "nternet6s counterpart )ithin organizations is called: a8 hypernet .8 intranet c8 internet d8 e2tranet e8 supernet #ns: . %esponse: &ee page *0

0! ;hen companies lin4 portions o$ their intranets together )ith those o$ their .usiness partners, they are creating: a8 e2tended intranet .8 e2tranet c8 internet d8 )ide+area net)or4 e8 local+area net)or4 #ns: . %esponse: &ee page *0

1! "n general, la.or costs are >>>>> in de(eloped countries than in de(eloping countries! a8 lo)er .8 higher c8 a.out the same d8 decreasing $aster e8 decreasing slo)er #ns: . %esponse: &ee page **

'! The )or4$orce in de(eloped countries has )hich o$ the $ollo)ing characteristics< a8 more di(ersi$ied .8 increased num.ers o$ )omen c8 increased num.er o$ single parents d8 increased num.er o$ minorities e8 all o$ the a.o(e #ns: e %esponse: &ee page *-

,! The )or4$orce in de(eloped countries has all o$ the $ollo)ing characteristics e2cept : a8 more di(ersi$ied .8 more )omen c8 more single parents d8 $e)er persons )ith disa.ilities e8 more minorities #ns: d %esponse: &ee page *-

0! Today6s customers ha(e )hich o$ the $ollo)ing characteristics< a8 less 4no)ledge a.out products .8 less sophistication c8 di$$iculty in $inding in$ormation a.out products d8 higher e2pectations e8 di$$iculty in comparing prices #ns: d %esponse: &ee page *-

! Mar4et pressures include )hich o$ the $ollo)ing< a8 glo.al economy .8 moderately strong competition c8 homogeneous )or4$orce d8 )ea4 customers e8 high+cost la.or o$$shore #ns: a %esponse: &ee page **+*-

2! Mar4et pressures include )hich o$ the $ollo)ing< a8 local economy .8 strong competition c8 homogeneous )or4$orce d8 )ea4 customers e8 high+cost la.or o$$shore #ns: . %esponse: &ee page **+*-

*! Mar4et pressures include )hich o$ the $ollo)ing< a8 local economy .8 )ea4 competition c8 di(ersi$ied )or4$orce d8 )ea4 customers

e8 high+cost la.or o$$shore #ns: c %esponse: &ee page **+*-

-! Mar4et pressures include )hich o$ the $ollo)ing< a8 local economy .8 )ea4 competition c8 homogeneous )or4$orce d8 po)er$ul customers e8 high+cost la.or o$$shore #ns: d %esponse: &ee page **+*-

/! The digital di(ide is an e2ample o$ )hich type o$ societal pressure< a8 social responsi.ility .8 go(ernment regulations c8 protection against terrorism d8 ethics e8 in$ormation o(erload #ns: a %esponse: &ee page *0! The ?motomen@ o$ Cam.odia are an e2ample o$ )hich type o$ societal pressure< a8 social responsi.ility .8 go(ernment regulations c8 protection against terrorism d8 ethics e8 in$ormation o(erload #ns: a %esponse: &ee page *-

1! Cy.erca$es are an e2ample o$ )hich type o$ societal pressure< a8 social responsi.ility .8 go(ernment regulations c8 protection against terrorism d8 ethics e8 in$ormation o(erload #ns: a %esponse: &ee page */

'! "n general, go(ernment deregulation >>>>> competition! a8 does not a$$ect

.8 decreases c8 intensi$ies d8 o.soletes e8 ends #ns: c %esponse: &ee page *0

,! &ocietal pressures on .usinesses include )hich o$ the $ollo)ing< a8 social responsi.ility .8 go(ernment regulations c8 protection against terrorism d8 ethics e8 all o$ the a.o(e #ns: e %esponse: &ee page *-+*0

20! >>>>> pro(ide organizations )ith ad(antages that ena.le them to increase their mar4et share and/or pro$its, to .etter negotiate )ith suppliers, or to pre(ent competitors $rom entering their mar4ets! a8 strategic systems .8 management in$ormation systems c8 computer+.ased in$ormation systems d8 decision support systems e8 e2ecuti(e in$ormation systems #ns: a %esponse: &ee page *1

2 ! ;hen items are produced in a large 3uantity .ut are tailored to $it the desires o$ each customer, this is called< a8 strategic systems .8 customer $ocus c8 continuous impro(ement d8 mass production e8 mass customization #ns: e %esponse: &ee page *'

22! ;hen identical items are produced in large 3uantities, this is called: a8 strategic systems .8 customer $ocus c8 continuous impro(ement d8 mass production e8 mass customization #ns: d

%esponse: &ee page *'

2*! "n$ormation+.ased industries are .est included in )hich one o$ :orter6s $i(e $orces< a8 threat o$ entry o$ ne) competitors .8 .argaining po)er o$ suppliers c8 .argaining po)er o$ customers d8 threat o$ su.stitute products e8 ri(alry among e2isting $irms in an industry #ns: d %esponse: &ee page -0

2-! The "nternet increasing customers6 access to in$ormation is .est included in )hich one o$ :orter6s $i(e $orces< a8 threat o$ entry o$ ne) competitors .8 .argaining po)er o$ suppliers c8 .argaining po)er o$ customers d8 threat o$ su.stitute products e8 ri(alry among e2isting $irms in an industry #ns: c %esponse: &ee page -0

2/! The geographical reach o$ the "nternet is an e2ample o$ )hich o$ :orter6s $i(e $orces< a8 threat o$ entry o$ ne) competitors .8 .argaining po)er o$ suppliers c8 .argaining po)er o$ customers d8 threat o$ su.stitute products e8 ri(alry among e2isting $irms in an industry #ns: a %esponse: &ee page -0

20! The (isi.ility o$ "nternet applications on the ;e. ma4es proprietary systems more di$$icult to 4eep secret! This is an e2ample o$ )hich o$ :orter6s $i(e $orces< a8 threat o$ entry o$ ne) competitors .8 .argaining po)er o$ suppliers c8 .argaining po)er o$ customers d8 threat o$ su.stitute products e8 ri(alry among e2isting $irms in an industry #ns: e %esponse: &ee page -0

21! The (aria.le cost o$ digital products is >>>>>! a8 increasing

.8 decreasing c8 staying a.out the same d8 almost zero e8 high #ns: d %esponse: &ee page -0

2'! ;al+Mart6s automatic replenishment system, )hich ena.les the company to reduce in(entory storage re3uirements, is an e2ample o$ )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 di$$erentiation c8 inno(ation d8 operational e$$ecti(eness e8 customer+orientation #ns: a %esponse: &ee page -

2,! &outh)est #irlines6 lo)+cost, short+haul strategy is an e2ample o$ )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 di$$erentiation c8 inno(ation d8 operational e$$ecti(eness e8 customer+orientation #ns: . %esponse: &ee page -

*0! O$$ering di$$erent products, ser(ices, or product $eatures is )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 di$$erentiation c8 inno(ation d8 operational e$$ecti(eness e8 customer+orientation #ns: . %esponse: &ee page -

* ! "ntroducing ne) products and putting ne) $eatures in e2isting products is )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 di$$erentiation c8 inno(ation d8 operational e$$ecti(eness e8 customer+orientation

#ns: c %esponse: &ee page -

*2! The introduction o$ #TM machines .y Citi.an4 )as a classic e2ample o$ )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 inno(ation c8 di$$erentiation d8 operational e$$ecti(eness e8 customer+orientation #ns: . %esponse: &ee page -

**! "mpro(ing the manner in )hich internal .usiness processes are e2ecuted is )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 di$$erentiation c8 inno(ation d8 operational e$$ecti(eness e8 customer orientation #ns: d %esponse: &ee page -

*-! ;hen #mazon )elcomes you .y name .ac4 to its ;e. site on your second (isit, this is an e2ample o$ )hich strategy $or competiti(e ad(antage< a8 cost leadership .8 di$$erentiation c8 inno(ation d8 operational e$$ecti(eness e8 customer orientation #ns: e %esponse: &ee page -

*/! The impact o$ "T on the num.er o$ middle managers is: a8 increase .8 decrease c8 stay the same d8 increase greatly e8 none o$ the a.o(e #ns: . %esponse: &ee page --

*0! The impact o$ "T on managers6 Ao.s is )hich o$ the $ollo)ing: a8 gi(es managers time to get into the $ield .8 managers can spend more time planning c8 managers can spend less time ?putting out $ires@ d8 managers can gather in$ormation more 3uic4ly e8 all o$ the a.o(e #ns: e %esponse: &ee page --

*1! The impact o$ "T on managers6 Ao.s is all o$ the $ollo)ing e2cept: a8 gi(es managers time to get into the $ield .8 managers can spend more time planning c8 managers can spend more time ?putting out $ires@ d8 managers can gather in$ormation more 3uic4ly e8 none o$ the a.o(e #ns: c %esponse: &ee page --

*'! The impact o$ "T on managers6 Ao.s is all o$ the $ollo)ing e2cept: a8 gi(es managers less time to get into the $ield .8 managers can spend more time planning c8 managers can spend less time ?putting out $ires@ d8 managers can gather in$ormation more 3uic4ly e8 none o$ the a.o(e #ns: a %esponse: &ee page --

*,! The impact o$ "T on managers6 Ao.s is all o$ the $ollo)ing e2cept: a8 gi(es managers time to get into the $ield .8 managers can spend less time planning c8 managers can spend less time ?putting out $ires@ d8 managers can gather in$ormation more 3uic4ly e8 none o$ the a.o(e #ns: . %esponse: &ee page -/

-0! "n the $ace o$ di$$icult economic times, increased glo.al competition, and increased consumer sophistication, many companies ha(e >>>>> their in(estments in "T! a8 increased .8 decreased c8 le(eled d8 stopped e8 completed

#ns: a %esponse: &ee page -/

- ! "T impacts employees at )or4 in )hich o$ the $ollo)ing )ays< a8 causes loss o$ identity .8 has isolating in$luence c8 can cause depression d8 can cause physical di$$iculties e8 all o$ the a.o(e #ns: e %esponse: &ee pages -/+-0

&hort #ns)er ! Bo) does in$ormation technology create a strategic ad(antage $or the Toronto "nternational #irport< %esponse: &ee pages 2'+2,

2! Descri.e the digital in$rastructure $or e+.usiness! %esponse: &ee page *0

*! Discuss the .usiness pressures that $ace organizations today! %esponse: &ee pages **+*0

-! Discuss organizational responses to today6s .usiness pressures! %esponse: &ee pages *0+*'

/! Di$$erentiate .et)een mass customization and mass production! %esponse: &ee page *'

0! ;hat is competiti(e ad(antage< %esponse: &ee page *'

1! ;hat $i(e $orces in :orter6s competiti(e $orces model impact organizations and ho) does the "nternet a$$ect each $orce< %esponse: &ee pages *'+-0

'! Discuss the $i(e strategies $or competiti(e ad(antage and gi(e an e2ample o$ each! %esponse: &ee pages -0+--

,! Descri.e )hy it is important to 4no) a.out in$ormation technology! %esponse: &ee pages --+/*

0! Descri.e the impacts o$ "T on society 5e!g!, healthcare, crime $ighting, etc!8 %esponse: &ee pages -,+/0