This Document Contains Chapters 3 to 5 Chapter 03 Strategic Initiatives for Implementing Competitive Advantages Multiple Choice Questions 1. What does supply chain management involve? A. The management of production material flows between and among stages in a supply chain to maximize total supply chain efficiency. B. The management of information flows between and among stages in a supply chain to maximize total supply chain costs. C. The management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. D. None of these. Answer: C. The management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. Rationale: This is the definition of SCM. 2. All of the following are part of the four basic components of supply chain management except: A. Supply chain strategy B. Supply chain customers C. Supply chain partners D. Supply chain logistics Answer: B. Supply chain customers Rationale: It should state supply chain operation, not supply chain customers. 3. Which of the following defines supply chain partners? A. The schedule for production activities, including testing, packaging, and preparation for delivery. B. The product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. C. The strategy for managing all the resources required to meet customer demand for all products and services. D. The partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. Answer: D. The partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. Rationale: This is the definition of supply chain partners. 4. Which of the following defines supply chain operations? A. The schedule for production activities, including testing, packaging, and preparation for delivery. B. The product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. C. The strategy for managing all the resources required to meet customer demand for all products and services. D. The partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. Answer: A. The schedule for production activities, including testing, packaging, and preparation for delivery. Rationale: This is the definition of supply chain operations. 5. Which of the following defines supply chain logistics? A. The schedule for production activities, including testing, packaging, and preparation for delivery. B. The product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. C. The strategy for managing all the resources required to meet customer demand for all products and services. D. The partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. Answer: B. The product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. Rationale: This is the definition of supply chain logistics. 6. Which of the following defines supply chain strategy? A. The schedule for production activities, including testing, packaging, and preparation for delivery. B. The product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. C. The strategy for managing all the resources required to meet customer demand for all products and services. D. The partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. Answer: C. The strategy for managing all the resources required to meet customer demand for all products and services. Rationale: This is the definition of supply chain strategy. 7. Walmart and Procter and Gamble implemented a tremendously successful SCM system. The system linked Walmart's _____________ centers directly to Procter and Gamble's _____________ centers. A. Manufacturing, distribution B. Distribution, manufacturing C. Stores, distribution D. Distribution, retail Answer: B. Distribution, manufacturing Rationale: Walmart's distribution centers are linked directly to Procter and Gamble's manufacturing centers. 8. What can effective and efficient supply chain management systems enable an organization to accomplish? A. Increase the power of its buyers. B. Increase its supplier power. C. Increase switching costs to increase the threat of substitute products or services. D. All of these. Answer: B. Increase its supplier power. Rationale: Answer A should state "decrease" the power of its buyers, and answer C should state "reduce" the threat of substitute products or services. 9. Which of the following is an organizational result from an effective and efficient supply chain management system? A. Decrease the power of its buyers. B. Create entry barriers, thereby reducing the threat of new entrants. C. Increase efficiencies while seeking a competitive advantage through cost leadership. D. All of these. Answer: D. All of these. Rationale: All of these are results from an effective and efficient SCM system. 10. Charles Schwab recouped the cost of a multimillion-dollar system in less than two years. What type of system was it? A. Supply chain management. B. Customer relationship management. C. Enterprise resource planning. D. All of these. Answer: B. Customer relationship management. Rationale: Charles Schwab implemented a successful CRM system that paid for itself in less than two years. 11. What type of system did Kaiser Permanente implement in order to improve and prolong the lives of diabetics? A. Supply chain management. B. Customer relationship management. C. Enterprise resource planning. D. All of these. Answer: B. Customer relationship management. Rationale: Kaiser Permanente implemented a CRM system to help diabetics. 12. What is CRM? A. A strategy. B. A technology. C. Both a technology and a strategy. D. Neither a technology nor a strategy. Answer: C. Both a technology and a strategy. Rationale: CRM is not just a technology, but a strategy that an organization must embrace on an enterprise level. 13. Which of the following can a customer use to contact an organization? A. Telephone. B. Email. C. Web access. D. All of these. Answer: D. All of these. Rationale: A customer can contact an organization through any of these methods. 14. Which of the following is not a valid way that a CRM system can collect information? A. Accounting system. B. Order fulfillment system. C. Inventory system. D. Customer's personal computer. Answer: D. Customer's personal computer. Rationale: A CRM system cannot collect information from a customer's personal computer. 15. What is a business process? A. The analysis and redesign of workflow within and between enterprises. B. A standardized set of activities that accomplish a specific task, such as processing a customer's order. C. Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise-wide information on all business operations. D. None of these. Answer: B. A standardized set of activities that accomplish a specific task, such as processing a customer's order. Rationale: This is the definition of business process. 16. What is business process reengineering? A. The analysis and redesign of workflow within and between enterprises. B. A standardized set of activities that accomplish as specific task, such as processing a customer's order. C. Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise-wide information on all business operations. D. None of these. Answer: A. The analysis and redesign of workflow within and between enterprises. Rationale: This is the definition of business process reengineering (BPR). 17. What is the purpose of business process reengineering? A. To make all business processes the best-in-class. B. To make all employees the best-in-class. C. To make all business partners the best-in-class. D. All of these. Answer: A. To make all business processes the best-in-class. Rationale: The purpose of BPR is to make all business processes best-in-class. 18. Which company used BPR to change its industry by implementing a mobile claims process? A. Saab. B. Progressive Insurance. C. Trek. D. Charles Schwab. Answer: B. Progressive Insurance. Rationale: Progressive Insurance used BPR to change its industry by implementing a mobile claims process. 19. What is the key word in ERP? A. Enterprise. B. Resource. C. Planning. D. All of these. Answer: A. Enterprise. Rationale: The key word in ERP is "enterprise" and not necessarily "resource" or "planning." 20. What is enterprise resource planning? A. The analysis and redesign of workflow within and between enterprises. B. A standardized set of activities that accomplish a specific task, such as processing a customer's order. C. Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise-wide information on all business operations. D. Involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability. Answer: C. Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise-wide information on all business operations. Rationale: This is the definition of enterprise resource planning (ERP). 21. Which of the following is a component ERP vendors offer to differentiate themselves in the marketplace? A. Accounting. B. CRM. C. Sales. D. Human resources. Answer: B. CRM. Rationale: ERP vendors differentiate themselves by offering distinct functionality, such as CRM and SCM. 22. Which type of system did Saab implement to gain a competitive advantage? A. SCM B. CRM C. BPR D. ERP Answer: B. CRM Rationale: The closing case discusses Saab's implementation of a CRM system to gain a competitive advantage. True/False Questions 23. Supply chain strategy, supply chain partners, supply chain operation, and supply chain logistics are the four basic components of supply chain management. Answer: True Rationale: These are the four basic components of supply chain management. 24. Effective and efficient supply chain management systems can enable an organization to decrease the power of its buyers. Answer: True Rationale: Organizations can decrease the power of their buyers through efficient and effective SCM. 25. Customer relationship management involves managing all aspects of a customer's relationship with an organization. Answer: True Rationale: This is the definition for CRM. 26. Eddie Bauer has successfully used CRM to collect information through customers' transactions and analyze the information to determine the best way to market to each individual customer. Answer: True Rationale: Eddie Bauer has achieved great success through its CRM systems. 27. A business process is the analysis and redesign of workflow within and between enterprises. Answer: False Rationale: This is the definition for business process reengineering, not business process. 28. Progressive Insurance used CRM to revamp its insurance claims process. Answer: False Rationale: Progressive Insurance used business process reengineering (BPR) to revamp its insurance claims process. Fill in the Blank Questions 29. Supply chain management involves the management of ___________ flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. Answer: Information 30. Supply chain _________ is the schedule for production activities, including testing, packaging, and preparation for delivery. Answer: Operation 31. Supply chain _________ is the product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. Answer: Logistics 32. Supply chain _________ is the strategy for managing all the resources required to meet customer demand for all products and services. Answer: Strategy 33. Supply chain ________ are the partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. Answer: Partners 34. Customer relationship management involves ______________ all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability. Answer: Managing 35. Enterprise resource planning systems ______________ all departments and functions throughout an organization into a single IT system. Answer: Integrate 36. Business process reengineering is the analysis and _________ of workflow within and between enterprises. Answer: Redesign Essay Questions 37. List and describe the four components of supply chain management. Answer: (1) Supply chain strategy is the strategy for managing all the resources required to meet customer demand for all products and services. (2) Supply chain partners are the partners chosen to deliver finished products, raw materials, and services, including pricing, delivery, and payment processes, along with partner relationship monitoring metrics. (3) Supply chain operation is the schedule for production activities, including testing, packaging, and preparation for delivery. (4) Supply chain logistics is the product delivery processes and elements, including orders, warehouses, carriers, defective product returns, and invoicing. 38. In terms of Porter's Five-Forces Model, explain the benefits an organization can receive from implementing an efficient and effective SCM system. Answer: Decrease the power of its buyers, increase its own supplier power, increase switching costs to reduce the threat of substitute products or services, create entry barriers thereby reducing the threat of new entrants, and increase efficiencies while seeking a competitive advantage through cost leadership. 39. Summarize why CRM is more than just technology and must be embraced on an enterprise-wide level, along with the types of things an organization can determine when using a CRM system. Answer: CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprise-wide level. If an organization does not embrace CRM on an enterprise-wide level, they will have a difficult time gaining a complete view of their customers. CRM can enable an organization to identify the types of customers, design specific marketing campaigns tailored to each individual customer, and understand customer buying behaviors. 40. Explain the goal of enterprise resource planning. Answer: Enterprise resource planning systems provide organizations with consistency. Enterprise resource planning (ERP) integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make decisions by viewing enterprise-wide information on all business operations. An ERP system provides a method for effective planning and controlling of all the resources required to take, make, ship, and account for customer orders in a manufacturing, distribution, or service organization. The key word in enterprise resource planning is "enterprise." 41. Describe SCM, CRM, and ERP and the differences among them. Answer: Supply chain management (SCM) involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. Customer relationship management (CRM) involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability. Enterprise resource planning (ERP) integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise-wide decisions by viewing enterprise-wide information on all business operations. SCM systems focus specifically on suppliers. CRM systems focus specifically on customers. ERP systems focus on everything, all processes, departments, and operations for an enterprise. 42. Identify how an organization can use business process reengineering to improve its business. Answer: The purpose of BPR is to make all your processes the best-in-class. Companies frequently strive to improve their business processes by performing tasks faster, cheaper, and better. Companies often follow the same indirect path for doing business, not realizing there might be a different, faster, and more direct way of doing business. BPR provides companies with a way to find the different, more direct way of doing business. Progressive Insurance is an example of a company that effectively used BPR. Chapter 04 Measuring the Success of Strategic Initiatives Multiple Choice Questions 1. What type of metrics measure throughput, speed, and availability? A. Efficiency IT metrics B. Effectiveness IT metrics C. All of these D. None of these Answer: A. Efficiency IT metrics Rationale: Efficiency IT metrics measure throughput, speed, and availability. 2. What types of metrics measure customer satisfaction? A. Efficiency IT metrics B. Effectiveness IT metrics C. Both efficiency and effectiveness IT metrics D. None of these Answer: B. Effectiveness IT metrics Rationale: Effectiveness IT metrics measure customer satisfaction. 3. According to Peter Drucker, what are managers who do things right addressing? A. Efficiency B. Effectiveness C. Both efficiency and effectiveness D. Customer metrics Answer: A. Efficiency Rationale: "Doing things right" addresses efficiency. 4. According to Peter Drucker, what are managers who do the right things addressing? A. Efficiency B. Effectiveness C. Both efficiency and effectiveness D. Customer metrics Answer: B. Effectiveness Rationale: "Doing the right things" addresses effectiveness. 5. What percentage of total capital expenditures are some organizations spending on IT? A. 5 percent B. 25 percent C. 50 percent D. 75 percent Answer: C. 50 percent Rationale: Some organizations spend up to 50 percent of their total capital expenditures on IT. 6. Which country is ranked first in terms of e-government effectiveness? A. United States B. Canada C. Denmark D. Australia Answer: B. Canada Rationale: Canada is the leader in e-government effectiveness (according to the e-government initiatives figure). 7. Which country is ranked first in terms of e-government efficiency? A. United States B. Canada C. Denmark D. Australia Answer: A. United States Rationale: The United States is the leader in e-government efficiency (according to the e-government initiatives figure). 8. Which of the following is not a type of efficiency IT metric? A. Speed B. Availability C. Usability D. Throughput Answer: C. Usability Rationale: Usability is an effectiveness IT metric. 9. Which of the following is not a type of effectiveness IT metric? A. Customer satisfaction B. Conversion rates C. Financial D. Web traffic Answer: D. Web traffic Rationale: Web traffic is an efficiency IT metric. 10. Which term is used to describe the ease with which people perform transactions and/or find information? A. Usability B. Customer satisfaction C. Financial D. Conversion rates Answer: A. Usability Rationale: This is the definition of usability. 11. What is measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer? A. Usability B. Customer satisfaction C. Financial D. Conversion rates Answer: B. Customer satisfaction Rationale: This is the definition of customer satisfaction. 12. What is eBay constantly benchmarking? A. IT efficiency B. IT effectiveness C. IT efficiency and IT effectiveness D. Usability Answer: C. IT efficiency and IT effectiveness Rationale: eBay depends on its IT systems for its business and constantly monitors and measures both efficiency and effectiveness IT metrics. 13. What types of security must an organization offer its customers when it provides them with the ability to purchase products over the Internet? A. Encryption and SSL B. SSL and HTTP C. Encryption and HTTP D. All of these Answer: A. Encryption and SSL Rationale: An organization must implement both encryption and SSL to ensure secure Internet activities. 14. What are the measures called that are tied to business drivers? A. IT efficiency B. IT effectiveness C. Key performance indicators D. None of these Answer: C. Key performance indicators Rationale: This is the definition of key performance indicators (KPIs). 15. On the graph depicting the interrelationships between efficiency and effectiveness, where does an organization ideally want to operate? A. Upper right-hand corner B. Lower right-hand corner C. Upper left-hand corner D. Lower left-hand corner Answer: A. Upper right-hand corner Rationale: The upper right-hand corner is the ideal place for an organization to operate. 16. Which of the following do customer effectiveness metrics typically focus on? A. Market share B. Customer acquisition C. Customer profitability D. All of these Answer: D. All of these Rationale: All of these are customer effectiveness metrics. 17. What do most companies measure to determine the success of their websites? A. Throughput B. Speed C. Traffic D. Availability Answer: C. Traffic Rationale: Most companies measure the traffic on a website as the primary determinant of the website's success. 18. Websites sometimes deposit on a customer's hard drive a small file containing information about the customer and the customer's web activities. What is that small file called? A. Click-through B. Cookie C. Banner ad D. Interactivity Answer: B. Cookie Rationale: This is the definition of a cookie. 19. What is a count of the number of people who visit one site and click on an advertisement that takes them to the site of the advertiser? A. Click-through B. Cookie C. Banner ad D. Interactivity Answer: A. Click-through Rationale: This is the definition of a click-through. 20. What is the name for a small ad on one website that advertises the products and services of another business, usually another dot-com business? A. Click-through B. Cookie C. Banner ad D. Interactivity Answer: C. Banner ad Rationale: This is the definition of a banner ad. 21. Which of the following is a type of metric based on website data? A. Number of visits to a website B. Number of abandoned registrations C. Number of abandoned shopping carts D. All of these Answer: D. All of these Rationale: All of these are website data metrics. 22. All of the following are types of website visitors except: A. Usability visitor B. Session visitor C. Identified visitor D. Tracked visitor Answer: A. Usability visitor Rationale: Usability visitor is not valid according to the website metrics figure. 23. Which category of website metrics measures the number of times a particular web page has been viewed by visitors in a given time period? A. Visitor metric B. Exposure metric C. Service metric D. Hit metric Answer: B. Exposure metric Rationale: Exposure metric is defined in the website metrics figure. 24. What category of website metrics does stickiness, or visit duration time, belong to? A. Service metric B. Exposure metric C. Visit metric D. Hit metric Answer: C. Visit metric Rationale: Stickiness is a visit metric according to the website metrics figure. 25. Which type of metric measures when a visitor reaches a website and their computer sends a request to the site's computer server to begin displaying pages? A. Visitor metric B. Exposure metric C. Visit metric D. Hit metric Answer: D. Hit metric Rationale: A hit metric is defined in the website metrics figure. 26. Which of the following is not a typical CRM metric? A. Sales metrics B. Service metrics C. Marketing metrics D. Inventory metrics Answer: D. Inventory metrics Rationale: CRM metrics measure sales, services, and marketing metrics. 27. Which of the following is a type of SCM metric? A. Customer order promised cycle time B. Customer order actual cycle time C. Inventory replenishment cycle time D. All of these Answer: D. All of these Rationale: All of these are SCM metrics. 28. What type of metrics includes number of prospective customers, number of new customers, and number of retained customers? A. CRM metrics B. SCM metrics C. BPR metrics D. ERP metrics Answer: A. CRM metrics Rationale: CRM metrics or sales metrics include number of prospective customers, number of new customers, and number of retained customers. 29. What type of metrics includes number of marketing campaigns, new customer retention rates, and number of feedbacks by marketing campaign? A. CRM metrics B. SCM metrics C. BPR metrics D. ERP metrics Answer: A. CRM metrics Rationale: CRM metrics or marketing metrics include the number of marketing campaigns, new customer retention rates, and number of feedbacks by marketing campaign. 30. What type of metrics includes number back order, customer order promised cycle time, and customer order actual cycle time? A. CRM metrics B. SCM metrics C. BPR metrics D. ERP metrics Answer: B. SCM metrics Rationale: SCM metrics include number back order, customer order promised cycle time, and customer order actual cycle time. 31. What is a management system, in addition to a measurement system, that enables organizations to clarify their vision and strategy and translate them into action? A. The balanced cycle time B. Porter's five forces C. Porter's three generic strategies D. The balanced scorecard Answer: D. The balanced scorecard Rationale: This is the definition of the balanced scorecard. 32. The balanced scorecard views the organization from four perspectives, and users should develop metrics, collect data, and analyze their business relative to each of these perspectives. Which of the following is not one of the four perspectives in the balanced scorecard? A. The leading perspective B. The internal business process perspective C. The customer perspective D. The financial perspective Answer: A. The leading perspective Rationale: The learning and growth perspective is missing, and the leading perspective is not valid. 33. There is a rule for how many metrics, out of the hundreds of possible CRM metrics, should be tracked and analyzed at any given management level. What is the rule? A. Best practice is to track and analyze no more than two (plus or minus two) metrics. B. Best practice is to track and analyze no more than five (plus or minus two) metrics. C. Best practice is to track and analyze no more than seven (plus or minus two) metrics. D. None of these, as it depends on the type of industry. Answer: C. Best practice is to track and analyze no more than seven (plus or minus two) metrics. Rationale: Best practice is to track and analyze no more than seven (plus or minus two) metrics. 34. The balanced scorecard was developed by Drs. Robert Kaplan of the Harvard Business School and David Norton. Which systems does the balanced scorecard measure? A. CRM and ERP B. BPR and ERP C. SCM and ERP D. SCM and CRM Answer: B. BPR and ERP Rationale: The balanced scorecard measures BPR and ERP. True/False Questions 35. Benchmarks are baseline values the system seeks to attain. Answer: True Rationale: This is the definition for benchmarks. 36. Canada is ranked first in terms of e-government efficiency IT metrics. Answer: False Rationale: The United States is ranked first in terms of egovernment efficiency IT metrics. 37. Effectiveness IT metrics include throughput, speed, and availability. Answer: False Rationale: Efficiency IT metrics include throughput, speed, and availability. 38. Customer metrics assess the management of customer relationships by the organization. Answer: True Rationale: This is the definition of customer metrics. 39. Measuring the amount of website traffic is the best way to determine a website's success. Answer: False Rationale: A large amount of website traffic does not indicate large revenues or website success. Fill in the Blank Questions 40. ___________ IT metrics measure the performance of the IT system itself including throughput, speed, and availability. Answer: Efficiency 41. _________ IT metrics measure the impact IT has on business processes and activities, including customer satisfaction, conversion rates, and sell-through increases. Answer: Effectiveness 42. __________ focuses on how well an organization is achieving its goals and objectives. Answer: Effectiveness 43. _________ focuses on the extent to which an organization is using its resources in an optimal way. Answer: Efficiency 44. ________ are baseline values the system seeks to attain. Answer: Benchmarks 45. ______________ is a process of continuously measuring system results, comparing those results to optimal system performance, and identifying steps and procedures to improve system performance. Answer: Benchmarking 46. ______________ is the amount of information that can travel through a system at any point in time. Answer: Throughput 47. Web _________ includes a host of benchmarks, such as the number of page-views, the number of unique visitors, and the average time spent viewing a web page. Answer: Traffic 48. System _____________ is the number of hours a system is available for use by customers and employees. Answer: Availability 49. __________ metrics assess the management of customer relationships by the organization. Answer: Customer 50. A large amount of website _______ does not necessarily indicate large sales. Answer: Traffic 51. _________ is the percentage of potential customers who visit a site and actually buy something. Answer: Conversion rate 52. A(n) ____________ is a count of the number of people who visit one site and click on an advertisement that takes them to the site of the advertiser. Answer: Click-through 53. A(n) ___________________ is an unfilled customer order. Answer: Back order 54. A ___________________ is a management system, in addition to a measurement system, that enables organizations to clarify their vision and strategy and translate them into action. Answer: Balanced scorecard Essay Questions 55. Explain the difference between efficiency and effectiveness. Answer: Efficiency implies doing things right and effectiveness implies doing the right things. 56. Define the relationship between benchmarks and benchmarking. Answer: Benchmarks are baseline values the system seeks to attain. Benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance. Benchmarking uses benchmarks. 57. Explain the interrelationships of efficiency and effectiveness IT metrics. Answer: Efficiency IT metrics focus on technology and include (1) throughput, which is the amount of information that can travel through a system at any point in time; (2) speed, which is the amount of time to perform a transaction; (3) availability, which is the number of hours a system is available; (4) accuracy, which is the extent to which a system generates correct results; (5) web traffic, which includes number of pageviews, number of unique visitors, and time spent on a web page; and (6) feedback, which is the time to respond to user interactions. Effectiveness IT metrics focus on an organization's goals, strategies, and objectives, including (1) usability, which is the ease with which people perform transactions and/or find information; (2) customer satisfaction, such as the percentage of existing customers retained; (3) conversion rates, which are the numbers of customers an organization "touches" for the first time and convinces to purchase products or services; and (4) financial metrics, such as return on investment, cost-benefit analysis, etc. Ideally, an organization wants to operate with significant increases in both efficiency and effectiveness. 58. Describe how an organization should determine the efficiency and effectiveness of its website. Answer: Organizations typically measure the amount of web traffic as the primary determinant of the success of the website. This view is limited. The organization must analyze its web traffic to determine such things as revenue generated by web traffic, number of new customers acquired by web traffic, reduction in customer service calls, etc. 59. Describe and identify visitor, exposure, visit, and hit website metrics. Answer: Visitor metrics track the actual visitors to the website and include unidentified visitors, unique visitors, session visitors, tracked visitors, and identified visitors. Exposure metrics track the number of times a particular web page has been viewed by visitors in a given time period and include page exposure and site exposures. Visit metrics track each website visit, including stickiness, raw visit depth, and visit depth. Hit metrics track when a visitor reaches a website. Chapter 05 Organizational Structures That Support Strategic Initiatives Multiple Choice Questions 1. Which of the following activities does a CIO perform? A. Oversees all uses of information technology. B. Ensures the strategic alignment of IT with business goals. C. Ensures the strategic alignment of IT with business objectives. D. All of these. Answer: D. All of these. Rationale: The CIO performs all of these. 2. Broad functions of a CIO include all of the following except: A. Ensuring the delivery of all IT projects, on time and within budget. B. Ensuring that the strategic vision of IT is in line with the strategic vision of the organization. C. Building and maintaining strong executive relationships. D. Building and maintaining strong customer processes. Answer: D. Building and maintaining strong customer processes. Rationale: The CIO performs the function of manager, leader, and communicator. The CIO typically does not communicate directly with customers. 3. Which issue concerns CIOs the most? A. Security. B. Budgeting. C. Enhancing customer satisfaction. D. Marketing. Answer: C. Enhancing customer satisfaction. Rationale: The CIO is most concerned with enhancing customer satisfaction, according to the What Concerns CIOs the Most figure. 4. Who is responsible for ensuring the throughput, speed, accuracy, availability, and reliability of an organization's information technology? A. CIO B. CPO C. CTO D. CSO Answer: C. CTO Rationale: This is the definition of Chief Technology Officer (CTO). 5. Who is responsible for ensuring the security of IT systems and developing strategies and IT safeguards against attacks from hackers and viruses? A. CIO B. CPO C. CTO D. CSO Answer: D. CSO Rationale: This is the definition of Chief Security Officer (CSO). 6. What is intangible creative work that is embodied in physical form? A. Intellectual property B. Copyright C. Pirated software D. Fair use doctrine Answer: A. Intellectual property Rationale: This is the definition of intellectual property. 7. What gives a person the legal right to use copyrighted material in certain situations? A. Intellectual property B. Copyright C. Pirated software D. Fair use doctrine Answer: D. Fair use doctrine Rationale: This is the definition of the fair use doctrine. 8. What is the legal protection afforded an expression of an idea? A. Intellectual property B. Copyright C. Pirated software D. Fair use doctrine Answer: B. Copyright Rationale: This is the definition of copyright. 9. What are the principles and standards that guide our behavior toward other people? A. Intellectual property B. Copyright C. Pirated software D. Ethics Answer: D. Ethics Rationale: This is the definition of ethics. 10. What is a broad term encompassing the protection of information from accidental or intentional misuse by persons inside or outside an organization? A. Ethics B. Privacy C. Copyright D. Information security Answer: D. Information security Rationale: This is the definition of information security. 11. What first-ever national appointment was made by President Barack Obama? A. National Chief Security Officer B. National Chief Privacy Officer C. National Chief Technology Officer D. All of these Answer: C. National Chief Technology Officer Rationale: President Barack Obama appointed the first-ever National Chief Technology Officer. 12. The old business axiom "time is money" needs to be updated to more accurately reflect the crucial interdependence between IT and business processes. What is the recommended new phrase? A. Uptime is a good business process. B. Downtime is a bad business process. C. Uptime is money. D. Downtime is impossible. Answer: C. Uptime is money. Rationale: To reflect the times, the phrase should state "uptime is money." 13. According to Infonetics research, what is the leading cause of downtime? A. Software failure followed by human error. B. Tornadoes. C. Power outage. D. Sink overflow. Answer: A. Software failure followed by human error. Rationale: Software failure followed by human error is the leading cause of downtime. 14. Which of the following is one of the four categories of costs associated with downtime? A. Financial performance B. Revenue C. Damaged reputation D. All of these Answer: D. All of these Rationale: Financial performance, revenue, and damaged reputation are all costs associated with downtime. 15. Trina Hauger works for Johnson Electric as a corporate lawyer, and part of her duties are to ensure the ethical and legal use of information within the company. Which of the following represents Trina's role at Johnson Electric? A. Chief Knowledge Officer (CKO). B. Chief Privacy Officer (CPO). C. Chief Technology Officer (CTO). D. Chief Information Officer (CIO). Answer: B. Chief Privacy Officer (CPO). Rationale: The CPO is responsible for ensuring the ethical and legal use of information within a company. 16. Jeremy Bridges is an executive for Green Web Designs, where his primary role is to ensure the security of business systems and develop strategies to protect the company from online viruses and hackers. What is Jeremy's role within the company? A. Chief Executive Officer (CEO). B. Chief Security Officer (CSO). C. Chief Procurement Officer (CPO). D. Chief Technology Officer (CTO). Answer: B. Chief Security Officer (CSO). Rationale: The Chief Security Officer is responsible for ensuring the security of business systems and developing strategies and safeguards against attacks by hackers and viruses. 17. Which role within a company is responsible for overseeing all uses of MIS and ensuring that MIS strategy aligns with business goals and objectives? A. Chief knowledge officer (CKO). B. Chief privacy officer (CPO). C. Chief information officer (CIO). D. Chief security officer (CSO). Answer: C. Chief information officer (CIO). Rationale: The Chief information officer (CIO) is responsible for (1) overseeing all uses of MIS and (2) ensuring that MIS strategy aligns with business goals and objectives. True/False Questions 18. Job titles, roles, and responsibilities do not differ from organization to organization. Answer: False Rationale: IT is a relatively new functional area and job titles, roles, and responsibilities often differ dramatically from organization to organization. 19. It is the responsibility of the CIO to ensure effective communications between business and IT personnel. Answer: True Rationale: Bridging the gap between IT and business personnel is the CIO's responsibility. 20. Ethics are the laws that guide our behavior toward other people. Answer: False Rationale: Ethics are the principles and standards, not necessarily laws, that guide our behavior toward other people. 21. Privacy is the right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent. Answer: True Rationale: This is the definition for privacy. 22. One of the main ingredients in trust is privacy. Answer: True Rationale: Privacy is one of the main ingredients in trust. Fill in the Blank Questions 23. The chief ___________ officer is responsible for collecting, maintaining, and distributing the organization's knowledge. Answer: Knowledge 24. _________ are the principles and standards that guide our behavior toward other people. Answer: Ethics 25. __________ is the right to be left alone when you want to be, to have control over your own personal possessions, and to not be observed without your consent. Answer: Privacy 26. Software _________ is the unauthorized use, duplication, distribution, or sale of copyrighted software. Answer: Piracy 27. ________ software is manufactured to look like the real thing and sold as such. Answer: Counterfeit Essay Questions 28. List and describe the four common IT-related strategic positions. Answer: The Chief Information Officer (CIO) oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives. The Chief Technology Officer (CTO) is responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT. The Chief Security Officer (CSO) is responsible for ensuring the security of IT systems. The Chief Privacy Officer (CPO) is responsible for ensuring the ethical and legal use of information. 29. Describe the gap between business personnel and IT personnel and what an organization can do to close this gap. Answer: Business personnel possess expertise in functional areas such as marketing, accounting, and sales. IT personnel have the technological expertise. This causes a communications gap between the two. IT personnel have their own vocabularies consisting of acronyms and technical terms. Business personnel have their own vocabularies based on their experience and expertise. For both sides to have effective communications, the business personnel must increase their understanding of IT, and the IT personnel must increase their understanding of the business. 30. Describe the relationship between ethics and privacy. Answer: Ethics are the principles and standards that guide our behavior toward other people. Privacy is the right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent. Privacy is an ethical issue. 31. Discuss the reasons why privacy issues lose trust for ebusinesses. Answer: Loss of personal privacy is a top concern for America in the 21st century. Among Internet users, 37 percent would be a lot more inclined to purchase a product on a website that had a privacy policy. Privacy/security is the number 1 factor that would convert Internet researchers into Internet buyers. 32. Explain how HIPAA protects individuals' health records. Answer: HIPAA is the Health Insurance Portability and Accountability Act. HIPAA helps protect the privacy and security of personal health records by requiring all health care organizations to develop, implement, and maintain appropriate security measures when sending electronic health information. Test Bank for Business Driven Technology Paige Baltzan 9780073376844, 9781259924927, 9781260727814, 9780073376905
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