Test Bank for Information Systems for
Managers in the Digital Age 5th Edition by
Piccoli Actual Exam 2026/2027 Complete
Questions and Answers - Pass Guaranteed
- A+ Graded
Information Systems for Managers in the Digital Age, 5th Edition – Midterm Exam
The Strategic Role of Information Systems – 12 questions
Q1: A digital music streaming service enters a market where existing users have to
purchase individual songs and switching to a new service is as easy as creating a new
account. According to Porter’s Five Forces model, which force is creating a significant
threat for established record labels?
A. Bargaining Power of Suppliers
B. Threat of New Entrants
C. Rivalry among Existing Competitors
D. Threat of Substitute Products
Correct Answer: B
Rationale: The best answer is the threat of new entrants because streaming technology
lowered the barriers to entry and switching costs, allowing new firms like Spotify to
challenge established record labels easily.
Q2: From a Resource-Based View (RBV) perspective, a company develops a
proprietary algorithmic trading software that predicts market fluctuations faster than
competitors. This asset is best described as:
A. A valuable physical resource.
B. A strategic capability that is difficult to imitate.
C. A simple commodity resource.
D. A financial liability.
Correct Answer: B
Rationale: This choice is correct because a unique, hard-to-reproduce capability is
considered a strategic asset in the Resource-Based View, providing a sustained
competitive advantage over competitors.
,Q3: A bank is developing its Strategic Information Systems Plan (SISP). To ensure the
plan supports the business strategy, they must first:
A. Select specific technologies and vendors.
B. Align the goals of the IT department with the goals of the business.
C. Determine the budget for IT projects.
D. Hire an external IT consulting firm.
Correct Answer: B
Rationale: This aligns with strategic IS planning because alignment between business
and IT is the critical first step to ensure that technology investments actually support the
organization's strategic goals and objectives.
Q4: A software company offers a suite of office applications that users find highly
compatible and sticky because it integrates with other tools they already use. Which
network effect does this describe?
A. Same-side network effects
B. Network effects that increase the value of a product as more people use it.
C. Cross-side network effects where complementary products add value.
D. Negative network effects where value decreases with adoption.
Correct Answer: B
Rationale: The best answer is that network effects increase the value of a product as
more people use it; the increasing number of users makes the software more valuable
to everyone due to compatibility and data sharing.
Q5: Which business model focuses on creating a platform that facilitates two distinct
user groups to interact, with value increasing as more users join?
A. Product Leadership model
B. Customer Intimacy model
C. Two-sided Platform model
D. Supplier Power model
Correct Answer: C
Rationale: This aligns with platform economics because two-sided platforms (like Uber
or Airbnb) facilitate interactions between two groups (drivers and riders, hosts and
guests), and the network effects create value for both sides as the user base grows.
Q6: A hospital system implements a new CRM to provide personalized care plans and
track patient history across departments. This initiative is best described as an example
of:
A. Product Leadership
B. Customer Intimacy
C. Operational Excellence
D. Lock-in
, Correct Answer: B
Rationale: This choice is correct because customer intimacy involves using IT to gather
detailed data about customer (patient) preferences and needs to tailor services and
strengthen the relationship, exactly what the CRM system does.
Q7: A bicycle manufacturer adds a small electric motor and battery to an existing bike
design to create an e-bike. According to innovation terminology, this is an example of:
A. Disruptive innovation
B. Sustaining innovation
C. Architectural innovation
D. Radical innovation
Correct Answer: A
Rationale: The best answer is disruptive innovation because the e-bike creates a new
market by changing the value proposition (speed and ease of use) and displaces
traditional bicycles or cars, disrupting the existing transportation ecosystem.
Q8: A company uses its information systems to automate routine administrative tasks,
allowing HR staff to focus on employee relations and strategic planning. This is an
example of using IS to achieve:
A. Low-cost leadership
B. Product differentiation
C. Focus
D. Operational Excellence
Correct Answer: D
Rationale: This aligns with operational excellence because automating routine tasks
improves efficiency and reduces waste, allowing the organization to optimize its
processes and deliver reliable service.
Q9: The CIO is evaluating a proposed CRM system. She calculates that the system will
cost $2 million to implement and generate $500,000 in annual benefits. If the company’s
discount rate is 10%, what is the Return on Investment (ROI) and is it justified?
A. 25%; Justified
B. 25%; Not justified
C. 20%; Justified
D. 20%; Not justified
Correct Answer: A
Rationale: The best answer is 25%; Justified because ROI is calculated as (Total
Benefits - Total Cost) / Total Cost ($500,000 - $2,000,000 is wrong, usually annual
benefit/first year cost). If Benefit is 500k/yr and Cost is 2M, ROI is negative. Correction:
Wait, if the question implies "generate 500k annual benefit savings". ROI = 500k/2M =
25%. A 25% return is typically considered very high for IT projects. Wait, 500k/2M is
Managers in the Digital Age 5th Edition by
Piccoli Actual Exam 2026/2027 Complete
Questions and Answers - Pass Guaranteed
- A+ Graded
Information Systems for Managers in the Digital Age, 5th Edition – Midterm Exam
The Strategic Role of Information Systems – 12 questions
Q1: A digital music streaming service enters a market where existing users have to
purchase individual songs and switching to a new service is as easy as creating a new
account. According to Porter’s Five Forces model, which force is creating a significant
threat for established record labels?
A. Bargaining Power of Suppliers
B. Threat of New Entrants
C. Rivalry among Existing Competitors
D. Threat of Substitute Products
Correct Answer: B
Rationale: The best answer is the threat of new entrants because streaming technology
lowered the barriers to entry and switching costs, allowing new firms like Spotify to
challenge established record labels easily.
Q2: From a Resource-Based View (RBV) perspective, a company develops a
proprietary algorithmic trading software that predicts market fluctuations faster than
competitors. This asset is best described as:
A. A valuable physical resource.
B. A strategic capability that is difficult to imitate.
C. A simple commodity resource.
D. A financial liability.
Correct Answer: B
Rationale: This choice is correct because a unique, hard-to-reproduce capability is
considered a strategic asset in the Resource-Based View, providing a sustained
competitive advantage over competitors.
,Q3: A bank is developing its Strategic Information Systems Plan (SISP). To ensure the
plan supports the business strategy, they must first:
A. Select specific technologies and vendors.
B. Align the goals of the IT department with the goals of the business.
C. Determine the budget for IT projects.
D. Hire an external IT consulting firm.
Correct Answer: B
Rationale: This aligns with strategic IS planning because alignment between business
and IT is the critical first step to ensure that technology investments actually support the
organization's strategic goals and objectives.
Q4: A software company offers a suite of office applications that users find highly
compatible and sticky because it integrates with other tools they already use. Which
network effect does this describe?
A. Same-side network effects
B. Network effects that increase the value of a product as more people use it.
C. Cross-side network effects where complementary products add value.
D. Negative network effects where value decreases with adoption.
Correct Answer: B
Rationale: The best answer is that network effects increase the value of a product as
more people use it; the increasing number of users makes the software more valuable
to everyone due to compatibility and data sharing.
Q5: Which business model focuses on creating a platform that facilitates two distinct
user groups to interact, with value increasing as more users join?
A. Product Leadership model
B. Customer Intimacy model
C. Two-sided Platform model
D. Supplier Power model
Correct Answer: C
Rationale: This aligns with platform economics because two-sided platforms (like Uber
or Airbnb) facilitate interactions between two groups (drivers and riders, hosts and
guests), and the network effects create value for both sides as the user base grows.
Q6: A hospital system implements a new CRM to provide personalized care plans and
track patient history across departments. This initiative is best described as an example
of:
A. Product Leadership
B. Customer Intimacy
C. Operational Excellence
D. Lock-in
, Correct Answer: B
Rationale: This choice is correct because customer intimacy involves using IT to gather
detailed data about customer (patient) preferences and needs to tailor services and
strengthen the relationship, exactly what the CRM system does.
Q7: A bicycle manufacturer adds a small electric motor and battery to an existing bike
design to create an e-bike. According to innovation terminology, this is an example of:
A. Disruptive innovation
B. Sustaining innovation
C. Architectural innovation
D. Radical innovation
Correct Answer: A
Rationale: The best answer is disruptive innovation because the e-bike creates a new
market by changing the value proposition (speed and ease of use) and displaces
traditional bicycles or cars, disrupting the existing transportation ecosystem.
Q8: A company uses its information systems to automate routine administrative tasks,
allowing HR staff to focus on employee relations and strategic planning. This is an
example of using IS to achieve:
A. Low-cost leadership
B. Product differentiation
C. Focus
D. Operational Excellence
Correct Answer: D
Rationale: This aligns with operational excellence because automating routine tasks
improves efficiency and reduces waste, allowing the organization to optimize its
processes and deliver reliable service.
Q9: The CIO is evaluating a proposed CRM system. She calculates that the system will
cost $2 million to implement and generate $500,000 in annual benefits. If the company’s
discount rate is 10%, what is the Return on Investment (ROI) and is it justified?
A. 25%; Justified
B. 25%; Not justified
C. 20%; Justified
D. 20%; Not justified
Correct Answer: A
Rationale: The best answer is 25%; Justified because ROI is calculated as (Total
Benefits - Total Cost) / Total Cost ($500,000 - $2,000,000 is wrong, usually annual
benefit/first year cost). If Benefit is 500k/yr and Cost is 2M, ROI is negative. Correction:
Wait, if the question implies "generate 500k annual benefit savings". ROI = 500k/2M =
25%. A 25% return is typically considered very high for IT projects. Wait, 500k/2M is
