Deck 2: Organizational Environments and Culture

Question 1

Environmental complexity refers to the degree of change in the external factors that affect organizations.

Answer 1

False

Question 2

Managers often prefer economic statistics to business confidence indices as tools for managerial decision making because of their inherently greater accuracy.

Answer 2

False

Question 3

External environments are the forces and events outside a company that have the potential to influence or affect it.

Answer 3

True

Question 4

The three techniques used by advocacy groups to influence companies are public communications, media advocacy, and product boycotts.

Question 5

The general segment of a company's external environment consists of the economy and the technological, socio-cultural, and political/legal trends that indirectly affect all organizations.

Question 6

The specific segment of an organization's external environment is unique to its region of the country.

Question 7

The best way to manage legal responsibilities is to retain a large staff of legal specialists to defend the company against any charges.

Question 8

Proactive customer monitoring is defined as identifying and addressing customer trends and problems after they occur.

Question 9

Advocacy groups are typically composed of concerned citizens who have a strong feeling about a common issue even though the members' viewpoints differ significantly.

Question 10

Under conditions in which the rate of both environmental change and complexity go up while environmental resources become scarce, environmental uncertainty can be expected to increase.

Question 11

Buyer dependence is the degree to which a company relies on a supplier because of the importance of the supplier's product to the company and the difficulty of finding other sources of that product.

Question 12

Managers often do a poor job of identifying potential competitors.

Question 13

The two kinds of external organizational environments are the general environment and the specific environment.

Question 14

In contrast to the general segment of the external environment that DIRECTLY influences an organization, changes in the specific segment of an organization's external environment INDIRECTLY affect the way a company conducts its business.

Question 15

The general segment of a company's external environment is unique to each firm's industry and directly affects the way it conducts day-to-day business.

Question 16

According to its rate of environmental change, an organization's environment can be either stable or dynamic, but not both.

Question 17

Changes in any sector of the general environment eventually affect most organizations.

Question 18

Business confidence indices are a viable alternative to economic statistics for management decision making.

Question 19

A decrease in either buyer dependence or supplier dependence can lead to opportunistic behavior.

Question 20

Resource scarcity is the degree to which an organization's external environment has an abundance or lack of critical organizational resources.

Question 21

What are the two types of external organizational environments?

A)general and the specific
B)public and private
C)global and the national
D)organizational and the interpersonal
E)market-specific and the product-specific

Question 22

In terms of external organizational environments, the ____ environment affects all organizations while the ____ environment is unique to each company.

A)global; national
B)customer-driven; production-driven
C)general; specific
D)informal; formal
E)specific; general

Question 23

Because external environments can be dynamic, confusing, and complex, managers use a three-step process to make sense of the changes in their external environments. Those steps are (1)environmental scanning, (2)interpreting environmental factors, and (3)acting on threats and opportunities.

Question 24

Successful organizational cultures seem to be based solely upon consistency (i.e., "strength" of the organizational culture).

Question 25

A company facing a simple environment would ____.

A)most likely be in the first stage of the environmental cycle
B)exhibit proof of the punctuated equilibrium theory
C)be unable to succeed due to lack of innovation
D)be influenced by only factors in its specific environment
E)have few external factors in the environment that affect it

Question 26

Suppose that a Mexican car manufacturer wants to export cars to Guatemala. The fact that the distribution of income within Guatemala is highly unequal and that about 75 percent of the population is below the poverty line would be a(n)____ component in the manufacturer's general environment.

A)technological
B)socio-cultural
C)economic
D)political/legal
E)demographic

Question 27

Advocacy groups cannot directly regulate organization practices.

Question 28

According to the ____theory, companies go through long, simple periods of environmental stability, followed by short, complex periods of dynamic, fundamental environmental change, finishing with a return to environmental stability.

A)environmental change theory
B)theory of environmental dynamics
C)punctuated equilibrium theory
D)theory of resource scarcity
E)environmental cycle

Question 29

Over the past 20 years, which of the following is an industry that has experienced both the stable and dynamic environments predicted by punctuated equilibrium theory?

A)the airline industry
B)the baking industry
C)the video game industry
D)the breakfast cereal industry
E)the landscaping industry

Question 30

Organizational heroes can be used to make sense of organizational events and changes.

Question 31

In terms of environmental complexity, ____ environments have few environmental factors, whereas ____ environments have many environmental factors.

A)non-competitive; competitive
B)simple; complex
C)stable; dynamic
D)scarce; abundant
E)market-oriented; product-oriented

Question 32

All events outside a company that have the potential to influence or affect it occur in the ____ environment.

A)specific
B)external
C)formal
D)potential
E)national

Question 33

Managers can make sense of their changing external environments by completing all three of the following steps: environmental scanning, interpreting environmental factors, and acting on threats and opportunities.

Question 34

Extensive research demonstrates clearly that organizational culture is strongly related to organizational success.

Question 35

A primary source of organizational culture is the company founder.

Question 36

Organizational culture refers to the set of key values, beliefs, and attitudes shared by organizational members.

Question 37

The term behavioral multiplication refers to the process of having managers and employees perform new behaviors that are central to and symbolic of the new organizational culture that a company wants to create.

Question 38

When used together, the combination of behavioral substitution, behavioral addition, and changing visible artifacts is extremely likely to achieve the desired changes in organizational culture.

Question 39

After the company founders are gone, stories and heroes can help to sustain the founder's values, attitudes, and beliefs in the organizational culture.

Question 40

Which of the following companies is most likely operating in a dynamic environment?

A)a video game manufacturer
B)a bakery
C)a brewery, winery, or distillery in the liquor industry
D)a manufacturer of pet food
E)a cereal manufacturer

Question 41

More premature babies than ever before are surviving due to improvements in medical knowledge and care. This improved survival rate can be attributed to the ____ component of hospitals.

A)technological
B)socio-cultural
C)economic
D)political/legal
E)demographic

Question 42

The manager of a company that produces a soy-based sausage wants to conduct a competitive analysis. During this competitive analysis, he should look at ____.

A)companies that produce other brands of pork-based sausage
B)Morningstar, a company that has a complete line of soy-based products
C)companies that produce other forms of breakfast meats like bacon
D)individuals who make their own sausage
E)The manager should consider all of the listed factors.

Question 43

Changes in any sector of the general environment ____.

A)will typically not impact most organizations
B)tend to slow down how quickly an organization moves through the environmental cycle
C)inhibit the innovation process
D)influence customers first and then suppliers
E)will eventually affect most organizations.

Question 44

Managers often prefer to use business confidence indices ____.

A)to identify socio-cultural trends
B)as predictors of future economic activity when making business decisions
C)which are based on intuition and experience
D)to encourage customers to make long-term buying decisions
E)to improve consumer confidence forecasts

Question 45

Technology is the ____ used to transform inputs (raw materials, information, etc.)into outputs (products or services).

A)knowledge, tools, and techniques
B)knowledge and machinery
C)plans and machinery
D)tools and techniques
E)strategy and tactics

Question 46

Consider a hamburger fast-food chain that began operations prior to World War II. In which of the following would have been part of its specific environment after the start of World War II?

A)other fast-food restaurants that sell hamburgers
B)its customers who eat burgers at least once a week
C)the meat packing company that supplied its beef
D)government-mandated beef rationing as a result of World War II
E)all of these

Question 47

Fear of a lawsuit prevents many employers from giving totally honest recommendations to former employees. This reflects a change in the ____ component of the general environment.

A)technological
B)social
C)economic
D)political/legal
E)demographic

Question 48

Which of the following is the LEAST aggressive approach likely to be used by an advocacy group?

A)public communications
B)media advocacy
C)product boycotts
D)class action lawsuits
E)picketing

Question 49

Which of the following is a component of a book publisher's general environment and will indirectly influence how it does business?

A)other book publishing companies
B)pornography laws
C)an advocacy group supporting free books for children
D)a trend toward less leisure time
E)paper and ink suppliers

Question 50

____ is the degree to which an organization's external environment has an abundance or scarcity of critical organizational resources.

A)Environmental complexity
B)Environmental capacity
C)Differentiation opportunity
D)Environmental dynamism
E)Resource scarcity

Question 51

The ____ consists of the economy and the technological, socio-cultural, and political/legal trends that indirectly affect all organizations.

A)economic environment
B)specific environment
C)general environment
D)indirect environment
E)direct environment

Question 52

Which of the following is a component of Coca-Cola's specific environment and will directly influence how it does business?

A)Pepsi-Cola
B)laws concerning sanitation
C)inflation
D)the increased popularity of energy drinks
E)the development of vending machines that accept debit cards

Question 53

Which of the following is a component of the specific environment that would directly influence a restaurant's day-to-day operation?

A)its regular customers
B)GNP
C)a trend toward eating less fat
D)more rigid enforcement of OSHA laws
E)all of these

Question 54

Tourism was not the only travel-associated industry that was visibly hurt by what happened on 9/11. People decided to vacation at home and sales of luggage and similar travel gear decreased significantly. Sales of home swimming pools increased. This decision to stay at home reflects a change in attitudes toward the perceived safety of long-distance traveling. This is an example of a change in the ____ component of the general environment.

A)technological
B)socio-cultural
C)economic
D)competitive
E)geographic

Question 55

A fast-food restaurant chain is famous for its small, square hamburgers. Which of the following would be a component of its general environment?

A)meat processing companies that provide its ground beef
B)consumers who will drive miles out of their way to eat a burger
C)boycotts by the Chicago organization of People for the Ethical Treatment of Animals (PETA)
D)local zoning laws that designate the appropriate distance from the street for a restaurant to be located
E)inflation

Question 56

Which of the following is NOT a dimension of the political/legal component of the general environment that governs and regulates business behavior?

A)legislation
B)competitive products
C)court decisions
D)regulation
E)customer-initiated lawsuits

Question 57

In a very strong economy, where the demand for qualified job applicants exceeds the supply, the environmental characteristic of ____ is likely to be particularly salient for many companies.

A)environmental complexity
B)environmental change
C)resource scarcity
D)environmental uncertainty
E)environmental risk

Question 58

Environmental ____ is affected by environmental complexity, change, and resources.

A)uncertainty
B)differentiation
C)difficulty
D)essence
E)entrepreneurship

Question 59

A fast-food restaurant chain is famous for its small, square hamburgers. Which of the following would be a component of its sociocultural environment?

A)a period of business prosperity
B)the development of fully automated drive-through windows
C)a price war with Burger King and McDonald's
D)the fact most consumers prefer eating out rather than at home
E)regulations passed by the Food & Drug Administration

Question 60

Legislation concerning the disposal of biological wastes, the development of more sophisticated imaging machines, and longer patient life spans would all be part of the ____ for a public hospital.

A)internal environment
B)specific environment
C)socio-cultural environment
D)general environment
E)environmental differentiation

Question 61

Typically the most important factor in the relationship between companies and their suppliers is ____.

A)how dependent they are on each other
B)how much they know about each other
C)how compatible their organizational cultures are
D)the type of product being manufactured
E)all of these

Question 62

An increase in ____ can lead to opportunistic behavior in which one party benefits at the expense of the other.

A)managerial commitment
B)buyer dependence
C)industry regulation
D)advocacy group activities
E)consumer confidence indicators

Question 63

The term ____ refers to the events and trends inside an organization that affect management, employees, and the organizational culture.

A)managerial environment
B)internal environment
C)industry environment
D)general environment
E)organizational structure

Question 64

Two homebuilders are building homes in nearby subdivisions. One is offering 2,500-square-foot homes with two-acre yards. The other is offering a similar size of house with quarter-acre yards. The builder offering the smaller lots cannot keep up with demand. The builder offering the larger lots has several unsold houses. The builder with the smaller lots most likely used ____ to determine what homebuyers desired.

A)reactive customer monitoring
B)proactive customer monitoring
C)competitive analysis
D)environmental munificence
E)consumer confidence forecasts

Question 65

The creation of Ingram Distribution allows booksellers to streamline the ordering and return procedures of their books. Ingram made all the books bookstore owners wanted available in one centralized warehouse. Many new bookstore owners would be unwilling and/or unable to return to the method of ordering books from the individual publishers. This is an example of the creation of ____.

A)high buyer dependence on a supplier
B)pure competition
C)transactional freedom
D)high supplier dependence on a buyer
E)none of these

Question 66

Which of the following is one of the steps in the process that managers use to make sense of their changing environments?

A)perceptual re-engagement
B)environmental laddering
C)acting on threats and opportunities
D)creating strategic windows
E)behavioristic relations

Question 67

The first step managers use to make sense of their changing environments is ____.

A)environmental scanning
B)perceptual re-engagement
C)modifying budgets
D)downsizing
E)benchmarking

Question 68

A high degree of buyer or seller dependence can lead to ____ in which one party benefits at the expense of the other.

A)relationship behavior
B)transactional behavior
C)behavioral monogamy
D)relational monopoly
E)opportunistic behavior

Question 69

In setting up his new office, an attorney wanted furnishings that were elegant and that would make him look successful. He wanted thick, plush carpeting in his office, but federal regulations state that his office must be wheelchair accessible because it is a public area. Wheelchairs do not maneuver well in thick carpeting. The building inspector had him remove the expensive carpeting and replace it with a carpet that did allow for wheelchair maneuverability. This is an example of how the ____ component of a company's specific environment influences it.

A)socio-cultural
B)economic
C)political/legal
D)supplier
E)industry regulation

Question 70

Which of the following is NOT a potential legal risk associated with traditional managerial decisions like recruiting, hiring, and firing employees?

A)negligent supervision
B)invasion of privacy
C)product liability
D)defamation
E)a charge of emotional distress

Question 71

Advocacy groups use a variety of tactics to convince businesses to comply with the group's stand on issues. Which of the following advocacy group tactics would be most likely to cause a business to fail?

A)media advocacy
B)product boycotts
C)public communications
D)requiring a business license
E)lobbying

Question 72

Small manufacturers are successful often because Wal-Mart agrees to carry their products. If Wal-Mart does not like a price increase, it often will refuse to do business with the manufacturer. At this point, many small manufacturers will offer price reductions because they fear failure if they lose the Wal-Mart account. The relationship between these small manufacturers and Wal-Mart can be described as ____.

A)buyer dependent
B)relationship-based
C)transformational
D)supplier dependent
E)none of these

Question 73

____ is a tactic in which an advocacy group actively tries to convince consumers not to purchase a company's product or service.

A)Lobbying
B)Public communications
C)Media advocacy
D)Product boycott
E)Market denigration

Question 74

A fast-food restaurant chain is famous for its small, square hamburgers. Which of the following would be an industry regulation component of its specific environment?

A)an increase in the prime lending rate
B)local health inspectors
C)class-action suits against all fast-food restaurants
D)inflation
E)all of these

Question 75

Two homebuilders are building homes in nearby subdivisions. One is offering 2,500-square-foot homes with two-acre yards. The other is offering a similarly sized house with quarter-acre yards. The builder offering the smaller lots cannot keep up with demand. The builder offering the larger lots has several unsold houses. The builder with the larger lots could use ____ to determine why his homes are not selling.

A)proactive customer monitoring
B)consumer confidence forecasts
C)demographic information
D)reactive customer monitoring
E)a competitive location study

Question 76

____ involves deciding who your competitors are, anticipating competitors' moves, and determining competitors' strengths and weaknesses.

A)Competitive mapping
B)A market audit
C)A SWOT analysis
D)A proactive strategy
E)A competitive analysis

Question 77

Companies doing a competitive analysis typically err by ____.

A)doing an incomplete job of identifying competitors
B)overestimating their competition
C)ignoring proactive monitoring
D)relying on competitive intelligence
E)doing all of these

Question 78

An emphasis on ____ is likely to decrease opportunistic behavior but will never completely eliminate it.

A)buyer dependence
B)supplier dependence
C)industry regulation
D)relationship behavior
E)competitive advocacy

Question 79

____ is used to refer to a company's practice of identifying and addressing customer trends and problems after they occur.

A)Consumer confidence forecasts
B)Competitive analysis
C)Reactive customer monitoring
D)Proactive customer monitoring
E)Continuous data mining

Question 80

Kodak makes digital cameras and paper for prints. Kodak would view the ubiquity of digital cameras as a(n)____ in its external environment if it considered how digital cameras affect sales of cameras that use film. On the other hand, Kodak would view the growing popularity of digital cameras as a(n)____ in its external environment if it considered the amount of Kodak processing paper used in printing pictures made by digital cameras.

A)strength; weakness
B)risk; certainty
C)opportunity; threat
D)certainty; risk
E)threat; opportunity