Deck 2: The Environment and External Stakeholders

Question 1

Forces that are outside the traditional boundaries of the firm are called _____.

A) the external environment
B) the internal environment
C) the stakeholder environment
D) the broad environment
E) the sociocultural environment

Answer 1

the external environment

Question 2

The external environment can be divided into which two smaller categories. They are the _____.

A) broad environment and the sociocultural environment
B) sociocultural environment and the operating environment
C) broad environment and the operating environment
D) organizational environment and the sociocultural environment
E) broad environment and the organizational environment

Answer 2

broad environment and the operating environment

Question 3

The context in which the firm exists is called the _____.

A) stakeholder environment
B) sociocultural environment
C) operating environment
D) political environment
E) broad environment

Answer 3

broad environment

Question 4

Sociocultural environments have meaning because _____.

A) well-educated people find them meaningful
B) they influence trends in a particular region
C) they are made up of individuals
D) they are made up of stakeholders
E) they enhance businesses

Question 5

Influences and trends associated with domestic or global economies are called the _____.

A) broad environment
B) economic environment
C) sociocultural environment
D) operating environment
E) external environment

Question 6

Organizations should consider forecasts of economic growth in determining when to _____.

A) plan plant expansion
B) plan a reduction in force
C) make an acquisition
D) make critical resource allocation decisions
E) move into another market

Question 7

A major source of economic uncertainty for global organizations is _____.

A) foreign exchange rates
B) political environment
C) foreign trade balances
D) availability of credit
E) inflation rates

Question 8

The _____ is among the most significant determinant of organizational success, both at home and abroad.

A) broad environment
B) operating environment
C) sociocultural environment
D) economic environment
E) political environment

Question 9

When an innovation has an impact on more than one industry it is referred to as a _____.

A) new innovation
B) technological innovation
C) dominant design
D) radical innovation
E) basic innovation

Question 10

Major innovations that influence more than one business or industry are referred to as _____.

A) basic innovations
B) technological innovations
C) dominant designs
D) radical innovations
E) new innovations

Question 11

Which environment consists of stakeholders with whom organizations interact on a regular basis?

A) The sociocultural environment
B) The economic environment
C) The operating environment
D) The political environment
E) The technological environment

Question 12

Economic power that allows a firm or group of firms to influence the nature of business arrangements is commonly referred to as _____.

A) economic power
B) bargaining power
C) industry competition
D) vertical integration
E) horizontal integration

Question 13

All of the following characteristics make buyers in the Five Forces model strong except when _____.

A) they are few in number
B) they make high volume purchases
C) the products they are buying are differentiated
D) they can easily integrate backward
E) they are not concerned about the quality of what they are buying

Question 14

Suppliers in the Five Forces model are powerful when the following characteristics are present except when they _____.

A) are few in number
B) sell products and services that can be substituted with other products and services
C) have dependent customers
D) have a differentiated product
E) can easily integrate forward

Question 15

Costs associated with leaving a business or industries are commonly referred to as _____.

A) economic barriers
B) exit barriers
C) fixed costs
D) entry barriers
E) economies of scale

Question 16

Which of the following industry characteristics leads to greater rivalry?

A) A few competitors
B) A slow growth industry
C) Differentiated products
D) Low fixed costs
E) Low exit barriers

Question 17

An industry characterized by the existence of a few very large firms is called a(n) _____.

A) monopoly
B) capital requirement
C) hypercompetition
D) oligopoly
E) economy of scale

Question 18

Forces that keep new competitors out and provide a level of protection for existing competitors are called _____.

A) capital requirements
B) economies of scale
C) entry barriers
D) product/service differentiation
E) hypercompetition

Question 19

Cost savings that occur when it is more efficient to produce a product in a large facility at a higher volume are _____.

A) entry barriers
B) economies of scale
C) capital requirement
D) product/service differentiation
E) hypercompetition

Question 20

Costs associated with starting a business are _____.

A) entry barriers
B) economies of scale
C) capital requirements
D) product/service differentiation
E) hypercompetition

Question 21

Attributes associated with a product or service that cause customers to prefer it rather than competing products or services are _____.

A) entry barriers
B) economies of scale
C) capital requirements
D) product/service differentiation
E) hypercompetition

Question 22

Entry barriers are caused by all of the following, except _____.

A) economies of scale
B) capital requirements
C) product differentiation
D) low switching costs
E) inimitable resources

Question 23

Resources that are possessed by industry participants but are difficult or impossible to completely duplicate are _____.

A) product resources
B) service resources
C) fixed assets
D) substitute resources
E) inimitable resources

Question 24

Substitute products form a _____.

A) ceiling on prices
B) floor on prices
C) match group
D) strategic group
E) focus group

Question 25

The interest that a group takes in assuring that an organization behaves in a manner that is socially responsible is referred to as a(n) _______.

A) social stake
B) formal power
C) economic power
D) political power
E) stakeholders' interest

Question 26

Having a legal right to make decisions for some part of the company is referred to as a(n) _______.

A) social stake
B) formal power
C) economic power
D) political power
E) stakeholders' power

Question 27

Techniques that firms use to win market share and increase revenues and profits are _______.

A) interorganizational strategies
B) joint ventures
C) political strategies
D) benchmarking
E) competitive tactics

Question 28

Which term best describes various types of organizational cooperation?

A) interorganizational relationships
B) joint ventures
C) political strategies
D) benchmarking
E) competitive tactics

Question 29

The best example which illustrates the competitive force of substitute products is _______.

A) Four Seasons for Best Western
B) Kroger Grocery Store for Dairy Queen
C) Coca-Cola for Pepsi
D) Days Inn for Motel 6
E) McDonald's for Burger King

Question 30

A group of firms oriented towards problem solving and technology development is referred to as a(n) _____.

A) networks
B) consortia
C) alliances
D) trade associations
E) interlocking directorate

Question 31

Which relationship is most important for industries that are heavily regulated or subject to frequent government interferences?

A) Networks
B) Consortia
C) Alliances
D) Trade associations
E) Interlocking directorates

Question 32

What is the primary advantage of interlocking directorates?

A) The potential to form a network.
B) The potential to collect and disseminate information.
C) The potential to establish exchange arrangements.
D) The potential to form a specialized joint venture.
E) The potential to draw resources from other firms to achieve stability.

Question 33

The bargaining power of suppliers is great when _____.

A) barriers to entry into the suppliers industry are low
B) the costs of switching from one supplier to another are low
C) the buying firms are important customers of the suppliers
D) one or more suppliers pose a credible threat of moving into the business of the buyer
E) the supplier industry is composed of a large number of relatively small suppliers

Question 34

Discuss the four perspectives that make societal analysis important.

Question 35

Define technology and discuss the three characteristics of technological innovation.

Question 36

Discuss what factors make customers strong in Porter's Five Forces model.

Question 37

Discuss the characteristics that lead to greater rivalry in an industry.

Question 38

Discuss the factors that create barriers to entry in Porter's Five Forces model.