creates an ethical dilemma between rewarding innovation and ensuring access to affordable
healthcare.From a legal perspective, patent laws grant exclusive rights to inventors, but these
rights are sometimes criticized for restricting access to essential medicines. Efforts to balance
the rights of pharmaceutical companies with public health concerns include the use of
compulsory licensing, which allows governments to override patents in certain circumstances
to provide access to generic versions of drugs.#### 14.2 **Cultural Appropriation and
Copyright**Cultural appropriation is the practice of borrowing or imitating elements of a
culture, often without understanding its significance or respecting its origins. This raises
ethical questions about exploitation, respect, and the potential harm caused to marginalized
Chapter 3
Information Systems,
Organizations, and Strategy
True-False Questions
1. Analysis
One type of competitive advantage Amazon was able to implement was that of being a new
market entrant.
Answer: True Difficulty: Hard Reference: pp. 97, 107–108
Analysis in terms of categorize
2. Analysis
Amazon’s success in online bookselling illustrates the use of increasing transaction costs to
increase profits.
Answer: False Difficulty: Hard Reference: pp. 90, 107–108
Analysis in terms of categorize
3. A firm can be said to have competitive advantage when they have higher stock market
valuations than their competitors.
Answer: True Difficulty: Medium Reference: p. 96
4. The competitive forces model was created for today’s digital firm.
Answer: False Difficulty: Hard Reference: pp. 96, 103
5. Customers are one of the competitive forces that affect an organization’s ability to compete.
Answer: True Difficulty: Easy Reference: p. 97
6. A transparent marketplace means that there is high product differentiation.
Answer: False Difficulty: Medium Reference: p. 97
,7. In an efficient customer response system, digital answering systems are used to monitor and
respond to customer inquiries.
Answer: False Difficulty: Medium Reference: p. 98
Mass customization is a form of mass production.
Answer: True Difficulty: Medium Reference: p. 99
8. Strong linkages to customers and suppliers decrease switching costs.
Answer: False Difficulty: Medium Reference: p. 103
9. In the strategy of product differentiation, information systems are used to enable new
products and services.
Answer: True Difficulty: Medium Reference: p. 99
10. The effect of the Internet has been to raise bargaining power over suppliers.
creates an ethical dilemma between rewarding innovation and ensuring access to affordable
healthcare.From a legal perspective, patent laws grant exclusive rights to inventors, but these
rights are sometimes criticized for restricting access to essential medicines. Efforts to balance the
rights of pharmaceutical companies with public health concerns include the use of compulsory
licensing, which allows governments to override patents in certain circumstances to provide
access to generic versions of drugs.#### 14.2 **Cultural Appropriation and Copyright**Cultural
appropriation is the practice of borrowing or imitating elements of a culture, often without
understanding its significance or respecting its origins. This raises ethical questions about
exploitation, respect, and the potential harm caused to marginalized
Answer: True Difficulty: Medium Reference: p. 104
11. In the age of the Internet, Porter’s traditional competitive forces model is still at work, but
competitive rivalry has become much more intense.
Answer: True Difficulty: Easy Reference: p. 103
12. In the value chain model, primary activities are most directly related to the production and
distribution of the firm’s products and services that create value for the customer.
Answer: True Difficulty: Medium Reference: p. 104
13. The idea driving synergies is that when the output of some units can be used as inputs to
other units, the relationship can lower cost and generate profits.
Answer: True Difficulty: Easy Reference: p. 109
14. The value chain model classifies all company activities as either primary or support.
Answer: True Difficulty: Medium Reference: p. 104
15. The law of diminishing returns always applies to digital, as well as traditional companies.
Answer: False Difficulty: Medium Reference: p. 111
, 16. In network economics, the more people that use Microsoft Office software and related
products, the greater its value.
Answer: True Difficulty: Medium Reference: p. 111
17. The merger of US Airways and America West, as discussed in the chapter case, illustrates
using the power of network economics to reduce operating costs.
Answer: False Difficulty: Hard Reference: pp. 81–82, 109–111
The term business ecosystem describes the interplay between the various organizational
forces within a firm.
Answer: False Difficulty: Medium Reference: p. 112
18. The use of Internet technologies allows companies to more easily sustain competitive
advantage.
Answer: False Difficulty: Hard Reference: p. 113
creates an ethical dilemma between rewarding innovation and ensuring access to affordable
healthcare.From a legal perspective, patent laws grant exclusive rights to inventors, but these
rights are sometimes criticized for restricting access to essential medicines. Efforts to balance the
rights of pharmaceutical companies with public health concerns include the use of compulsory
licensing, which allows governments to override patents in certain circumstances to provide
access to generic versions of drugs.#### 14.2 **Cultural Appropriation and Copyright**Cultural
appropriation is the practice of borrowing or imitating elements of a culture, often without
understanding its significance or respecting its origins. This raises ethical questions about
exploitation, respect, and the potential harm caused to marginalized
Multiple-Choice Questions
19. Analysis
What competitive force was the most dominant in preventing US Airways from success, as
discussed in the chapter case?
a. Traditional competitors
b. New market entrants
c. Substitute products and services
d. Suppliers
Answer: a Difficulty: Medium Reference: p. 81
Analysis in terms of categorize
20. Analysis
What strategy to counter competitive forces does US Airways emphasize in the case study
for this chapter?
a. Focus on market niche
b. Customer intimacy
c. Low-cost leadership
d. Product differentiation
healthcare.From a legal perspective, patent laws grant exclusive rights to inventors, but these
rights are sometimes criticized for restricting access to essential medicines. Efforts to balance
the rights of pharmaceutical companies with public health concerns include the use of
compulsory licensing, which allows governments to override patents in certain circumstances
to provide access to generic versions of drugs.#### 14.2 **Cultural Appropriation and
Copyright**Cultural appropriation is the practice of borrowing or imitating elements of a
culture, often without understanding its significance or respecting its origins. This raises
ethical questions about exploitation, respect, and the potential harm caused to marginalized
Chapter 3
Information Systems,
Organizations, and Strategy
True-False Questions
1. Analysis
One type of competitive advantage Amazon was able to implement was that of being a new
market entrant.
Answer: True Difficulty: Hard Reference: pp. 97, 107–108
Analysis in terms of categorize
2. Analysis
Amazon’s success in online bookselling illustrates the use of increasing transaction costs to
increase profits.
Answer: False Difficulty: Hard Reference: pp. 90, 107–108
Analysis in terms of categorize
3. A firm can be said to have competitive advantage when they have higher stock market
valuations than their competitors.
Answer: True Difficulty: Medium Reference: p. 96
4. The competitive forces model was created for today’s digital firm.
Answer: False Difficulty: Hard Reference: pp. 96, 103
5. Customers are one of the competitive forces that affect an organization’s ability to compete.
Answer: True Difficulty: Easy Reference: p. 97
6. A transparent marketplace means that there is high product differentiation.
Answer: False Difficulty: Medium Reference: p. 97
,7. In an efficient customer response system, digital answering systems are used to monitor and
respond to customer inquiries.
Answer: False Difficulty: Medium Reference: p. 98
Mass customization is a form of mass production.
Answer: True Difficulty: Medium Reference: p. 99
8. Strong linkages to customers and suppliers decrease switching costs.
Answer: False Difficulty: Medium Reference: p. 103
9. In the strategy of product differentiation, information systems are used to enable new
products and services.
Answer: True Difficulty: Medium Reference: p. 99
10. The effect of the Internet has been to raise bargaining power over suppliers.
creates an ethical dilemma between rewarding innovation and ensuring access to affordable
healthcare.From a legal perspective, patent laws grant exclusive rights to inventors, but these
rights are sometimes criticized for restricting access to essential medicines. Efforts to balance the
rights of pharmaceutical companies with public health concerns include the use of compulsory
licensing, which allows governments to override patents in certain circumstances to provide
access to generic versions of drugs.#### 14.2 **Cultural Appropriation and Copyright**Cultural
appropriation is the practice of borrowing or imitating elements of a culture, often without
understanding its significance or respecting its origins. This raises ethical questions about
exploitation, respect, and the potential harm caused to marginalized
Answer: True Difficulty: Medium Reference: p. 104
11. In the age of the Internet, Porter’s traditional competitive forces model is still at work, but
competitive rivalry has become much more intense.
Answer: True Difficulty: Easy Reference: p. 103
12. In the value chain model, primary activities are most directly related to the production and
distribution of the firm’s products and services that create value for the customer.
Answer: True Difficulty: Medium Reference: p. 104
13. The idea driving synergies is that when the output of some units can be used as inputs to
other units, the relationship can lower cost and generate profits.
Answer: True Difficulty: Easy Reference: p. 109
14. The value chain model classifies all company activities as either primary or support.
Answer: True Difficulty: Medium Reference: p. 104
15. The law of diminishing returns always applies to digital, as well as traditional companies.
Answer: False Difficulty: Medium Reference: p. 111
, 16. In network economics, the more people that use Microsoft Office software and related
products, the greater its value.
Answer: True Difficulty: Medium Reference: p. 111
17. The merger of US Airways and America West, as discussed in the chapter case, illustrates
using the power of network economics to reduce operating costs.
Answer: False Difficulty: Hard Reference: pp. 81–82, 109–111
The term business ecosystem describes the interplay between the various organizational
forces within a firm.
Answer: False Difficulty: Medium Reference: p. 112
18. The use of Internet technologies allows companies to more easily sustain competitive
advantage.
Answer: False Difficulty: Hard Reference: p. 113
creates an ethical dilemma between rewarding innovation and ensuring access to affordable
healthcare.From a legal perspective, patent laws grant exclusive rights to inventors, but these
rights are sometimes criticized for restricting access to essential medicines. Efforts to balance the
rights of pharmaceutical companies with public health concerns include the use of compulsory
licensing, which allows governments to override patents in certain circumstances to provide
access to generic versions of drugs.#### 14.2 **Cultural Appropriation and Copyright**Cultural
appropriation is the practice of borrowing or imitating elements of a culture, often without
understanding its significance or respecting its origins. This raises ethical questions about
exploitation, respect, and the potential harm caused to marginalized
Multiple-Choice Questions
19. Analysis
What competitive force was the most dominant in preventing US Airways from success, as
discussed in the chapter case?
a. Traditional competitors
b. New market entrants
c. Substitute products and services
d. Suppliers
Answer: a Difficulty: Medium Reference: p. 81
Analysis in terms of categorize
20. Analysis
What strategy to counter competitive forces does US Airways emphasize in the case study
for this chapter?
a. Focus on market niche
b. Customer intimacy
c. Low-cost leadership
d. Product differentiation
