Deck 2: The External and Internal Environments

Question 1

A strong organization culture is one in which lower-level employees do not concern themselves with the firm's goals, priorities, and practices because management deals with those issues.

Answer 1

False
Explanation:
Cultures can be strong or weak; strong cultures can have great influence on how people think and behave. A strong culture is one in which everyone understands and believes in the firm's goals, priorities, and practices.

Question 2

Organizations are open systems that affect and are affected by their external environments.

Answer 2

True
Explanation:
Organizations are open systems-that is, they are affected by and in turn affect their external environments. For example, they take in inputs from their environment and use them to create products and services that are outputs to their environment.

Question 3

Environmental uncertainty refers to the lack of information needed to understand or predict the future.

Answer 3

True
Explanation:
Environmental uncertainty refers to the lack of information needed to understand or predict the future.

Question 4

How is immigration affecting U.S. demographics?

A)It is increasing the diversity of the workforce.
B)It is decreasing the number of workers.
C)It is decreasing the number of consumers.
D)It is making the educational levels of the workforce more similar.
E)It is decreasing the amount of paperwork needed to hire workers.

Question 5

Which of the following was introduced as the result of an evolving societal trend?

A)Shares of stock
B)Hourly wages
C)Levels of management
D)Offshoring
E)Family leave

Question 6

Although a top executive team may have unique _____ strengths and ideas about its goals, it must consider _____ factors before taking action.

A)external; internal
B)internal; external
C)traditional; unconventional
D)unconventional; traditional
E)past; future

Question 7

April, a manager in a call center, encourages her employees to solve customers' problems without her approval of the particular situation. In this case, April is trying to empower her employees.

Question 8

Which of the following statements about the impact of the stock market is true?

A)The stock market has little effect on the amount of capital a company has.
B)If a company exceeds its performance expectations, its stock price will often drop.
C)Publicly held companies are more insulated from the stock market than privately held companies.
D)The stock market may have a profound effect on the behavior of individual managers.
E)Stock market fluctuations have little effect on the compensation of managers.

Question 9

A failure to develop a strategy that incorporates _____ may doom a firm to obsolescence.

A)hierarchical bureaucracy
B)many layers of middle management
C)classic production methods
D)technological advances
E)closed communication systems

Question 10

What term is used to describe all the relevant forces outside an organization's boundaries?

A)Environmental scanning
B)Competitive intelligence
C)External environment
D)Competitive environment
E)Organizational climate

Question 11

When investors bid up stock prices, companies have less capital to fuel their strategies.

Question 12

Enrico has used environmental scanning to gather information that will help him make his company more competitive. This is an example of cognitive intelligence.

Question 13

A more diverse workforce presents managers with challenges as well as opportunities.

Question 14

Which of the following is a U.S. government policy or action that is most likely to provide an opportunity for businesses?

A)deductions in the tax code
B)fines on heavy polluters
C)laws against bribing officials
D)court rulings against monopolies
E)failure to rule a new product as safe

Question 15

Stylin' Footwear buys leather and lesser quantities of cork, elastic, metal buckles, and other materials to manufacture shoes. Which of the following is Stylin's Footwear's output?

A)Leather
B)Cork
C)Elastic
D)Buckles
E)Shoes

Question 16

Organizations are at an advantage if they depend on a single powerful supplier because such dependency ensures consistency.

Question 17

A firm's _____ includes its rivals, suppliers, customers, new entrants, substitutes, and complementary products.

A)environmental scanning
B)competitive intelligence
C)external environment
D)competitive environment
E)organizational climate

Question 18

What are demographics?

A)Trends regarding how the people within a society think and behave
B)Conditions that prevent new companies from entering an industry
C)Measures of various characteristics of the people who make up social units
D)The fixed costs that buyers face if they change suppliers
E)The lack of information needed to understand or predict the future

Question 19

Raw materials are an example of inputs.

Question 20

According to Michael Porter's model, the competitive environment includes rivalry among current competitors and the impact of new entrants, substitute and complementary products, suppliers, and customers.

Question 21

Which of the following is said to occur when two or more firms combine?

A)An acquisition
B)A takeover
C)A merger
D)Diversification
E)Downsizing

Question 22

Fujiko, a new manager at a company, has been asked to focus on the competitive environment of the organization. Which of the following is a factor Fujiko should focus on?

A)Government regulation
B)Economic performance
C)Demographics
D)Rivals
E)Technology

Question 23

Corporate mission statements, business practices, symbols and ceremonies, and the stories people tell can all give clues to

A)organizational climate.
B)organizational culture.
C)competitive environment.
D)external environment.
E)macroenvironment.

Question 24

Diversified Industries decides to use the expertise it has from its canned-pet-food division and its health-food division to enter the fast-growing market for fresh, natural pet foods. This is an example of

A)diversification.
B)benchmarking.
C)a merger.
D)domain selection.
E)an acquisition.

Question 25

Which of the following is the best description of organizational culture?

A)Conditions that prevent new companies from entering an industry
B)The network that obtains raw materials, transforms them into products, and distributes them to customers
C)The process of searching out information that is unavailable to most people and sorting through it to interpret what is important and what is not
D)The process of comparing an organization's practices and technologies with those of other companies
E)A system of shared values about what is important and beliefs about how the world works

Question 26

In comparison to organizational culture, organizational climate

A)is more deeply held.
B)is based on values rather than attitudes.
C)does not have a discernible pattern.
D)can be measured more readily.
E)is less easy to manage.

Question 27

The goal of _____ is having the right product in the right quantity at the right place at the right cost.

A)barriers to entry
B)benchmarking
C)supply chain management
D)empowerment
E)open systems

Question 28

Klaus's office has always used Tangerine computers. His technical people have suggested that he switch all his employees over to Vale computers. Klaus is reluctant because it will mean not only replacing all the computers but also buying all new software and taking the time to train everyone. Klaus is worried about

A)barriers to entry.
B)benchmarking.
C)environmental uncertainty.
D)switching costs.
E)strategic maneuvering.

Question 29

Supply chain management refers to the

A)search for information that is unavailable to most people and the process of interpreting what is important and what is not.
B)identification of the best-in-class performance by a company in a given area and the comparison of your processes to the company's processes.
C)procedure of sharing power with employees, thereby enhancing their confidence and their belief that they are influential contributors to the organization.
D)creation of new products, advanced production techniques, and better ways of managing and communicating.
E)managing of the network of facilities and people that obtain raw materials, transform them into products, and distribute them to customers.

Question 30

Which of the following was designed to help managers analyze the competitive environment and adapt to or even influence the nature of competition?

A)Dell's IdeaStorm
B)Michael Porter's model
C)B2B selling
D)Peter Drucker's theory
E)Organizational smoothing

Question 31

_____ lead to new products, advanced production facilities, and better ways of managing and communicating.

A)Demographic shifts
B)Societal preferences
C)Political changes
D)Technological advances
E)Economic turbulences

Question 32

The immediate environment surrounding a firm is known as its

A)macroenvironment.
B)demographic environment.
C)competitive environment.
D)internal environment.
E)economic environment.

Question 33

_____ means searching for and sorting through information about the environment.

A)Environmental uncertainty
B)Competitive intelligence
C)Domain selection
D)Environmental scanning
E)Strategic maneuvering

Question 34

Which of the following is a barrier to entry?

A)Consumer demand for a product
B)Lack of brand recognition
C)The existence of a popular complement
D)A low-cost distribution method
E)An inexpensive production process

Question 35

Advances in 3-D printing have made it easier and faster for architects to create models of proposed building designs to help clients make more informed decisions. These advances are an example of changes in the _____ environment.

A)technological
B)economic
C)political
D)demographic
E)biophysical

Question 36

What is the purpose of benchmarking?

A)To save money
B)To reduce the workforce
C)To adopt best practices
D)To expand internationally
E)To diversify products

Question 37

Organizations are _____ systems, which means that they are affected by and in turn affect their external environments.

A)input
B)output
C)open
D)closed
E)social

Question 38

A human resources manager is considering changing her company's vacation policy. Before she makes a proposal to the senior executive team, she researches the vacation policies of other leading companies in her industry. This is an example of _____.

A)benchmarking
B)demographics
C)inputs
D)buffering
E)smoothing

Question 39

Organizational climate consists of the patterns of _____ that shape people's experience of an organization.

A)attitudes and behavior
B)demographic characteristics
C)deeply held beliefs and values
D)inputs and outputs
E)buffering and smoothing

Question 40

Which of the following would be a sign of a weak organizational culture?

A)Everyone knows the organization's goals.
B)Everyone understands how things are done.
C)Everyone believes in the company's mission.
D)Everyone uses a rulebook to decide what to do.
E)Everyone helps new employees fit in.

Question 41

Venus was a low-cost airline that operated in the 1980s. Industry analysts state that although Venus was able to provide all the services the customers wanted, it was thrown out of business because of aggressive pricing from larger airline firms. Which of the following aspects of the competitive environment does this scenario illustrate?

A)Customers
B)Rivals
C)Regulators
D)The economy
E)Social trends

Question 42

A firm's current competition, suppliers, customers, and the threat of new entrants or of substitutes are all elements in the _____.

A)task environment
B)Peter's model for organizational excellence
C)microenvironment
D)Porter's model for competitive environment
E)supply chain management

Question 43

Which of the following is an element of Michael Porter's model for analyzing the competitive environment of an organization?

A)Substitutes
B)Cost strategy
C)Societal trends
D)Regulatory forces
E)Demographics

Question 44

Which of the following is an example of a potential substitute product?

A)Margarine for butter
B)Ink cartridges for printers
C)Mops for detergent
D)iTunes for iPods
E)Furniture for apartments

Question 45

A customer who purchases raw materials or wholesale products before selling them to other parties is known as a(n) _____.

A)final purchaser
B)intermediate consumer
C)final customer
D)first-tier supplier
E)preliminary customer

Question 46

_____ refers to management of the network of facilities and people that obtain materials from the outside, transform them into products, and distribute the products to customers.

A)Inventory management
B)Strategic maneuvering
C)Human resource management
D)Customer service
E)Supply chain management

Question 47

If many factors prevent new companies from entering an industry, the

A)threat of new entrants is more serious.
B)threat of competitive rivalry is high.
C)threat to established firms is less serious.
D)new companies can easily compete with the established ones.
E)industry is said to have just a few barriers to entry.

Question 48

The main difference between a final consumer and an intermediate consumer is that

A)the intermediate consumer purchases finished products, whereas the final consumer buys only raw materials.
B)intermediate consumers buy raw materials and sell finished products to final consumers, who use them.
C)final consumers make more purchases than the intermediate consumers.
D)unlike final consumers, intermediate consumers provide monetary benefits to organizations by purchasing their products.
E)final consumers tend to have more bargaining power than intermediate consumers.

Question 49

_____ are specific government organizations in a firm's more immediate task environment.

A)Open systems
B)Regulators
C)Prospectors
D)Stakeholders
E)Defenders

Question 50

_____ are measures of various characteristics of the people who make up groups or other social units.

A)Psychographics
B)Demographics
C)Domain selections
D)Lifestyle analytics
E)Group dynamics

Question 51

Giving consumers what they want or need, the way they want it, the first time is known as _____.

A)planned merchandise
B)planned obsolescence
C)customer service
D)cause marketing
E)operations management

Question 52

Conditions that may prevent new firms from entering an industry are referred to as _____.

A)barriers to entry
B)strategic maneuvers
C)unfair trade practices
D)industry regulators
E)entry inhibitors

Question 53

Mount Albion Financial Planning uses the services of Food-to-Go, which runs the employee cafeteria in the building and also caters business meetings at a discounted rate because of the volume of business it does with Mount Albion. The other available cafeteria services do not provide catering. In this case, if Mount Albion decides to terminate Food-to-Go's contract and shift to some other service, it is likely to create _____.

A)high employment costs
B)redemption costs
C)favorable quality status
D)complementary products
E)high switching costs

Question 54

Environmental _____ refers to the degree of discontinuous change that occurs within the industry.

A)complexity
B)dysfunction
C)contracting
D)cooptation
E)dynamism

Question 55

The recent legalization of same-sex marriage has major implications for how companies manage their labor force. For example, companies must now make sure their benefit packages include all types of family structures. This is an example of how _____ trends affect businesses.

A)psychological
B)political
C)economic
D)technological
E)societal

Question 56

A(n) _____ is a potential threat; customers use it as an alternative, buying less of one kind of product but more of another.

A)new entrant
B)substitute
C)ensemble
D)divestiture
E)complement

Question 57

_____ are fixed costs buyers face if they change suppliers.

A)Changing costs
B)Switching costs
C)Renewable costs
D)Exchange costs
E)Sunk costs

Question 58

Using bribery as a business tactic may result in fines for U.S. firms. Which of the following types of environmental forces at work does this reflect?

A)Competitive
B)Economic
C)Legal
D)Technological
E)Demographic

Question 59

Hospitals and universities are very expensive to run not only due to the capital equipment that is required for each but also due to the personnel such as specialized medical doctors and researchers. The cost of these types of institutions is an example of _____.

A)a barrier to entry
B)environmental uncertainty
C)unfair competition
D)high switching costs
E)strategic maneuvering

Question 60

Organizations must acquire a variety of resources in order to produce a product or service of value. These resources may include materials, equipment, financing, or even employees. The sources that provide these various resources are referred to as _____.

A)warehouse clubs
B)regulators
C)retailers
D)suppliers
E)prospectors

Question 61

An outcome of environmental scanning is _____, which is the information necessary to decide how best to manage in a given competitive environment.

A)corporate governance
B)strategic vision
C)competitive intelligence
D)corporate espionage
E)competitive dissertation

Question 62

Grandma Myrtle's Tasty Treats is a company that sells different varieties of snack cakes. When Grandma Myrtle's Tasty Treats spends its own money to promote the snack cake industry as a whole, the company is practicing _____.

A)competitive aggression
B)competitive pacification
C)public relations
D)voluntary cooptation
E)comparative action

Question 63

One firm buying another is called a(n) _____.

A)merger
B)acquisition
C)divestiture
D)prospective
E)defender

Question 64

Two general types of proactive strategies for influencing an organization's environment are _____.

A)dependent strategies and independent strategies
B)independent action and cooperative action
C)cooperative strategies and strategic maneuvering
D)strategic maneuvering and dependent strategies
E)independent action and strategic maneuvering

Question 65

_____ strategies are used by an organization acting on its own to change some aspect of its current environment.

A)Flexible
B)Buffering
C)Independent
D)Smoothing
E)Cooperative

Question 66

Titan and Spencer-Fields are the two leading online booksellers. Recently, Titan engaged in an online price war with Spencer-Fields in order to gain greater market share. This is an example of _____ on the part of Titan.

A)cooptation
B)voluntary action
C)competitive pacification
D)competitive aggression
E)environmental scanning

Question 67

Harry, who works as a manager for a manufacturing company, investigates what computer programs his company's five biggest rivals use for placing and tracking customer orders. He then compares the features of those programs with the program his company uses. What process has Harry used?

A)Scenario planning
B)Forecasting
C)Benchmarking
D)Environmental scanning
E)Strategic maneuvering

Question 68

Hi-Performer Sporting Equipment managers engage in an annual organizational assessment, trying to predict industry changes as well as possible opportunities and threats. They look at issues, such as who their competitors are, current entry barriers, and what substitutes exist for their products. This assessment is called _____.

A)scenario development
B)forecasting
C)benchmarking
D)environmental scanning
E)strategic maneuvering

Question 69

The method for predicting how variables will change in the future is known as _____.

A)budgeting
B)buffering
C)forecasting
D)benchmarking
E)scanning

Question 70

Domain selection, diversification, mergers/acquisitions, and divestiture are all examples of _____.

A)illegal boundary management
B)maneuvering the competition
C)strategic maneuvering
D)independent strategies
E)portfolio maneuvering

Question 71

_____ occurs when a firm invests in different types of businesses or products or when it expands geographically to reduce its dependence on a single market or technology.

A)Domain selection
B)Diversification
C)Acquisition
D)Divestiture
E)Empowerment

Question 72

Which of the following is true about using forecasts?

A)Multiple forecasts are best, and their predictions can be averaged.
B)Forecasts become more accurate while predicting further into the future.
C)Forecasts are useless when the future will look radically different from the past.
D)The more complex the forecast, the more accurate are the predictions.
E)The accuracy of forecasts does not vary from one application to another.

Question 73

_____ create alternative combinations of different factors into a total picture of the environment and a firm.

A)Scenarios
B)Forecasts
C)Benchmarks
D)Competitive intelligences
E)Strategic maneuvers

Question 74

When a brand advertises its products as being superior to that of its competitors, it is demonstrating _____.

A)competitive aggression
B)competitive pacification
C)benchmarking
D)political action
E)cooptation

Question 75

Alicia writes a narrative that describes what she thinks will happen to her catering business if consumer interest in healthy cuisine continues to grow. This narrative is an example of _____.

A)benchmarking
B)a scenario
C)strategic maneuvering
D)a divestiture
E)strategic vision

Question 76

The entrance by a company into another market or industry for which it has an existing expertise is called _____.

A)benchmarking
B)strategic positioning
C)outsourcing
D)domain selection
E)cooptation

Question 77

When two or more companies work together to manage their external environment, they are using _____.

A)monopolistic strategies
B)strategic maneuvering
C)cooperative strategies
D)dependent strategies
E)competitive strategies

Question 78

Fashion Forward Accessories recently announced that it was selling off its scarf division in order to realign itself more competitively in the marketing of its other products, particularly its purse and belt divisions. Which of the following strategic maneuvers is illustrated in this scenario?

A)Diversification
B)An acquisition
C)A merger
D)Divestiture
E)Domain selection

Question 79

To improve customer service in its overseas call center, Bolt Smartphones decided to investigate the call center practices of competing companies. The team discovered that a smaller company, Grasshopper Phones Inc., seemed to have outstanding customer service. The team then determined differences between the organizations and developed a plan to incorporate the best elements of Grasshopper into Bolt. This illustrates _____.

A)environmental dynamism
B)benchmarking
C)strategic maneuvering
D)cooperative action
E)forecasting

Question 80

Which of the following combinations can result in a best-case scenario?

A)Many competitors, high threat with and few entry barriers, and few customers
B)Many competitors, high threat with and few entry barriers, and many customers
C)Few entry barriers, many substitutes, and many customers
D)High industry growth, low threat with and many entry barriers, and customers with low bargaining power
E)Low industry growth, high threat with and few entry barriers, and suppliers with low bargaining power