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Chapter 1 Managing the Digital Firm

1. Internet culture is: a. b. c. d. global. regional. domestic. local. Difficulty: Easy Reference: p. 4

Answer: a 2.

What term is used to refer to all of the computer-based information systems used by organizations and their underlying technologies? a. b. c. d. network technology digital technology information technology productivity technology Difficulty: Easy Reference: p. 4

Answer: c 3.

The ultimate end product of the new ways of conducting business electronically is: a. b. c. d. the extinction of the traditional bureaucracy. more government oversight. a more complicated tax structure. the digital firm. Difficulty: Easy Reference: p. 4

Answer: d 4.

The largest component of capital investment for firms in the United States and many industrialized societies is: a. b. c. d. inventory. information technology. machinery. buildings. Difficulty: Easy Reference: p. 4

Answer: b

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In 2005, U.S. firms alone will spend nearly $1.8 __________________ on IT and telecommunications equipment and software. a. b. c. d. thousand million billion trillion Difficulty: Easy Reference: p. 4

Answer: d 6.

The use of the Internet and digital technology to execute all of the activities in the enterprise is referred to as: a. b. c. d. digital business. electronic business. electronic commerce. digital processes. Difficulty: Medium Reference: p. 9

Answer: b 7.

Buying and selling of goods and services electronically with computerized business transactions using the Internet, networks, and other digital technologies is called: a. b. c. d. electronic commerce. electronic communications. electronic business. electronic exchanges. Difficulty: Medium Reference: p. 9

Answer: a 8.

The application of the Internet and related technologies to digitally enable government and public sector agencies relationships with citizens, businesses, and other arms of government is called: a. b. c. d. e-commerce. e-business. e-government. e-technology. Difficulty: Easy Reference: p. 9

Answer: c 9.

Experts believe that ____________________ percent of travel sales will be online within a decade. a. b. c. d. 10 to 30 30 to 40 40 to 50. 50 to 70. Difficulty: Easy Reference: p. 9

Answer: d

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10.

Developing a new product, generating and fulfilling an order, creating a marketing plan, and hiring an employee are examples of: a. b. c. d. creating feedback. business processes. maintaining a competitive edge. industrial processes. Difficulty: Easy Reference: p. 12

Answer: b 11.

These two companies are close to becoming fully digital firms: a. b. c. d. DaimlerChrysler and General Motors. Cisco Systems and Dell Computers. Wal-Mart and Sears. GKN Aerospace North America and Flextronics. Difficulty: Easy Reference: p. 13

Answer: b 12. Information is: a. b. c. d.

the accumulation of raw data. the way we analyze problems. the best form of knowledge. data shaped into meaningful form. Difficulty: Easy Reference: p. 13

Answer: d 13.

Streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use are called: a. b. c. d. wisdom. knowledge. data. expertise. Difficulty: Easy Reference: p. 15

Answer: c 14. Input:

a. captures or collects raw data from within the organization or from the external environment. b. allows the analysis of problems faced by the organization. c. is data shaped into meaningful form. d. converts raw data into meaningful form. Answer: a Difficulty: Easy Reference: p. 15

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Converting raw data into a more meaningful form is called: a. b. c. d. capturing. processing. controlling. feedback. Difficulty: Easy Reference: p. 15

Answer: b 16.

__________________ systems depend on fixed definitions of data and procedures for collecting, storing, processing, disseminating, and using the data. a. b. c. d. Informal Modern Traditional Formal Difficulty: Easy Reference: pp. 15-16

Answer: d 17.

__________________ use paper-and pencil-technology. a. b. c. d. Manual systems Bureaucracies Most established companies Reactionaries Difficulty: Easy Reference: p. 16

Answer: a 18.

Electronic computers and related software programs are the technical foundation, the tools and materials, of: a. b. c. d. all business procedures. information accumulation. modern information systems. all industrialized countries. Difficulty: Medium Reference: p. 16

Answer: c 19.

Sets of operating instructions that direct and control computer processing are called: a. b. c. d. protocols. policies. computer programs. procedures. Difficulty: Easy Reference: p. 16

Answer: c

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20.

One of the information processing activities in the business information value chain is: a. b. c. d. modeling planning multinational organizations. dissemination satellite communications systems. knowledge management c Difficulty: Medium Reference: p. 19

Answer: 21.

The primary purpose why information systems are built is to: a. b. c. d. contribute to corporate value. comply with government regulations. link up with business partners. gather competitive knowledge. Difficulty: Easy Reference: p. 19

Answer: a 22.

A broad-based understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems as well as technical knowledge about computers is called: a. b. c. d. computer literacy. technology literacy. management literacy. information systems literacy. Difficulty: Medium Reference: p. 19

Answer: d 23.

Which of the following would not be classified as a management activity in the business information value chain? a. Disseminating b. Planning. c. Coordinating. d. Controlling. Answer: a Difficulty: Medium Reference: p. 19

24.

Promoting the organizations products and services is a business function of: a. b. c. d. manufacturing and production. finance and accounting. human resources. sales and marketing. Difficulty: Easy Reference: p. 21

Answer: d

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Creating products and services is a business function of: a. b. c. d. manufacturing and production. finance and accounting. human resources. sales and marketing. Difficulty: Easy Reference: p. 21

Answer: a 26.

Managing the organizations financial assets is a business function of: a. b. c. d. manufacturing and production. finance and accounting. human resources. sales and marketing. Difficulty: Easy Reference: p. 21

Answer: b 27.

Maintaining the organizations financial records is a business function of: a. b. c. d. accounting and finance. manufacturing and production. human resources. sales and marketing. Difficulty: Easy Reference: p. 21

Answer: a 28.

Maintaining the organizations labor force is a business function of: a. b. c. d. manufacturing and production. finance and accounting. human resources. sales and marketing. Difficulty: Easy Reference: p. 21

Answer: c 29.

Engineers or architects who design products or services are called: a. b. c. d. data workers. service workers. information specialists. knowledge workers. Difficulty: Medium Reference: p. 21

Answer: d

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30.

Secretaries, bookkeepers, or clerks are called: a. b. c. d. data workers. service workers. information specialists. knowledge workers. Difficulty: Medium Reference: p. 21

Answer: a 31.

Long-range strategic decisions about what products and services to produce are done by: a. b. c. d. middle managers. senior managers. operational managers. supervisory personnel. Difficulty: Easy Reference: p. 21

Answer: b 32. An intranet uses: a. b. c. d.

mainframe technology. infrared telecommunications systems. the telecommunications capacities of fiber optic networks. Internet technology within the boundaries of the firm. Difficulty: Medium Reference: p. 22

Answer: d 33.

The shared information technology resources for the organization are called its: a. b. c. d. MIS plan. operational network. IT infrastructure. business infrastructure. Difficulty: Medium Reference: p. 23

Answer: c 34.

_____________________ assets are required to derive value from a primary investment. a. b. c. d. Complementary Supplemental Core Capital Difficulty: Medium Reference: p. 24

Answer: a

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Investments in new business processes, management behavior, or training to enhance returns on information technology investments are called _____________________ . a. b. c. d. organizational investments organizational and management capital social capital business investments Difficulty: Medium Reference: p. 24

Answer: b 36.

An example of a managerial asset required to optimize returns from information technology investments would be: a. decentralized authority b. teamwork and collaborative work environment c. laws and regulations d. distributed decision-making rights Answer: b Difficulty: Hard Reference: p. 25

37.

An example of a social asset required to optimize returns from information technology investments would be: a. teamwork. b. culture valuing efficiency and flexibility. c. telecommunications infrastructure. d. training programs. Answer: c Difficulty: Hard Reference: p. 25

38.

_____________________ focuses on mathematical techniques for optimizing selected parameters of organizations, such as transportation costs. a. b. c. d. Behavioral science Computer science Management science Operations research Difficulty: Medium Reference: p. 26

Answer: d 39.

Because information systems are so essential to business, government, and daily life, organizations must take special steps to ensure: a. b. c. d. that all managers know and understand the basics of copyright law. that the systems are accurate, reliable, and secure. that references are checked before employees are hired. that software is updated frequently. Difficulty: Easy Reference: p. 27

Answer: b