Deck 4: The External Environment

Question 1

What results from allowing customers in an auto dealership service department to talk directly to the mechanic rather than to a service manager?

A) It creates a buffering role.
B) It creates a boundary-spanning role.
C) It makes the company less fluid.
D) It makes the company less responsive to customers.

Answer 1

B

Question 2

What term is used for unique cognitive and emotional orientations among managers across functional departments, and the specialized formal structures among these departments?

A) integration
B) resource dependence
C) cooptation
D) differentiation

Answer 2

D

Question 3

Which of the following is a dimension of the framework for assessing environmental uncertainty?

A) stable-unstable
B) loose-tight
C) known-unknown
D) high competitiveness-low competitiveness

Answer 3

A

Question 4

What term is used for sectors of the environment that have direct impact on the organization?

A) task environment
B) general environment
C) environmental buffers
D) environmental boundary-spanners

Question 5

When Johnson & Johnson had to cope with the Tylenol poisoning issue, which dimension of its environment was most affected?

A) simple
B) complex
C) stable
D) unstable

Question 6

In which of the following types of industries would organizations face the greatest amount of environmental uncertainty? Evaluate

A) beer distributors because of simplicity
B) universities because of complexity
C) airlines because of instability
D) appliance manufacturers because of complexity

Question 7

Which aspect of the general environment affects an organization due to rapid changes and innovations?

A) financial resources
B) technology sector
C) economic conditions
D) the government sector

Question 8

Which of the following examples best illustrates how various sectors can have an impact on organizations?

A) In the industry sector, labour unions are a significant force.
B) In the market sector, an increasing number of foreign-owned manufacturing plants are built in North America.
C) In the raw materials sector, steelmakers owned the beverage can market until the mid-1980s.
D) In the human resources sector, brand names are fighting it out with lower-cost store brands.

Question 9

Which of the following includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it?

A) the general environment
B) the international context
C) the task environment
D) the buffering roles

Question 10

What is the function of boundary-spanning roles?

A) They primarily link data to information.
B) They buffer the manufacturing department from outside intrusion that would interfere with efficiency.
C) They bring information about environmental changes into the organization.
D) They move the firm to internationalism.

Question 11

Which sector in an organization's environment relates to understanding consumer preferences?

A) industry sector
B) international sector
C) sociocultural sector
D) market sector

Question 12

What is an organization's "domain"?

A) the set of positions and departments within the organization
B) the buildings and grounds that are owned or leased by the organization in which inputs are transformed into outputs
C) the organization's niche that has been staked out for its products, services, and markets served
D) the technical core that is buffered by other departments so that it can operate as a closed system

Question 13

What term is used to refer to high quality collaboration between departments?

A) differentiation
B) integration
C) uncertainty
D) cooptation

Question 14

What is the task environment?

A) all elements that exist outside the organizational boundary
B) sectors with which the organization interacts directly
C) the domain
D) all jobs and positions inherent within the organizational activity

Question 15

Which of the following is the best application of the framework for assessing environmental uncertainty?

A) Soft drink bottlers are examples of typical firms in the simple and unstable quadrant.
B) Universities are examples of organizations typically found in the complex and stable quadrant.
C) Electronic firms are typically found in the simple and stable quadrant.
D) Fashion clothing or toy manufacturers would exemplify the complex and unstable quadrant.

Question 16

Bobby Barista is a researcher in the R&D department at 3M. Part of her job is to read technical and scientific journals, and to attend conferences to find out what new developments are occurring. What sort of role is she carrying out in this part of her job?

A) buffering
B) maintenance
C) boundary spanning
D) managerial

Question 17

Assessment of environmental uncertainty of an organization is based primarily on analysis of which two of the following dimensions?

A) the need for information about the environment and the need for resources from the environment
B) the number of sectors and the organization's niche
C) the extent of turbulence and the amount of available resources
D) differentiation and integration

Question 18

What do trend-setting toy companies or high-fashion clothing manufacturers have in common?

A) an environment that is stable but complex, therefore requiring a mechanistic structure
B) an organic structure, from which we can reason that the environment is highly uncertain
C) a large number of dissimilar external elements, which remain about the same over time
D) an environment that is simple but unstable, creating relatively high uncertainty

Question 19

Often, decision makers do NOT have sufficient information about environmental factors so they have a difficult time predicting external change. What is this called?

A) cooptation
B) differentiation
C) uncertainty
D) integration

Question 20

Which of the following is a dimension of the framework for assessing environmental uncertainty?

A) dispersion-contiguity
B) simple-complex
C) certain-uncertain
D) internal-external

Question 21

Which term refers to the purchase of one organization by another so that the buyer assumes control?

A) acquisition
B) merger
C) joint venture
D) domain

Question 22

Which of the following is an example of the way high uncertainty influences organizational design responses?

A) requiring extensive planning and forecasting
B) having few departments
C) having no integrating roles
D) using a mechanistic structure

Question 23

How can an organization change its domain most directly?

A) by hiring a new CEO
B) by changing the nature of the labour-management agreements
C) by divesting a division of the organization
D) by moving to a more favourable structure

Question 24

Which of the following is especially important in highly competitive consumer industries and in industries that experience variable demand?

A) advertising
B) cooptation
C) executive recruitment
D) contracts

Question 25

Which of the following occurs when leaders from important sectors in an organization's environment are asked to join that organization?

A) integration
B) joint venture
C) resource dependence
D) cooptation

Question 26

Which characteristic most accurately describes mechanistic organizations?

A) They have authoritarian, unfriendly leadership.
B) Communication is horizontal.
C) They are service organizations with individualized customer demands.
D) Tasks are broken down into specialized parts.

Question 27

The sociocultural sector refers to municipal, provincial, and federal laws and regulations; taxes; court systems; and political processes that may be in an organization's environment.

Question 28

The general environment includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it.

Question 29

Organizations must cope with and manage uncertainty to be effective.

Question 30

The growing importance of the international sector means that the environment of all organizations is becoming extremely simple and extremely stable.

Question 31

Dave Dunn is a militant member of a faculty union. When the union's negotiating committee is reporting to a meeting of the faculty, he always finds fault with the work of that committee and strongly advocates striking. When a member of the negotiating committee resigns because of illness, the union's executive committee appoints Dave to take his place. What is this is an example of?

A) formal strategic alliance
B) cooptation
C) change of domain
D) public relations

Question 32

Which term refers to the idea that organizations need the environment but strive to minimize their vulnerabilities?

A) integration
B) resource dependence
C) organic process
D) cooptation

Question 33

Which of the following characterizes the mechanistic process?

A) knowledge and control of tasks that are decentralized within the organization
B) loosely defined tasks
C) a strict hierarchy of authority and control
D) horizontal communication

Question 34

If an organization were engaging in illegitimate behaviours, which of the following might it be trying to do?

A) control its environmental domain
B) attempt to influence political activities
C) change its domain
D) cooptation of interlocking directorates

Question 35

Which of the following types of management processes do organizations in rapidly changing environments tend to have?

A) differentiated
B) mechanistic
C) organic
D) dependent

Question 36

What is the term for a formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company?

A) joint venture
B) interlocking directorate
C) integration
D) indirect interlock

Question 37

Which of the following is likely in organizations characterized by very simple and stable environments?

A) almost no managers are assigned to integration roles
B) many departments are added
C) there is formal, centralized authority
D) there is extensive planning, forecasting and high-speed responses

Question 38

Which of the following can be used to erect regulatory barriers against new competitors or squash unfavourable legislation?

A) cooptation
B) contracts
C) joint venture
D) political strategy

Question 39

High-moderate uncertainty environments are unstable but simple. Which of the following organizational responses are elicited by this environment?

A) mechanistic structure; formal, centralized
B) few buffering roles
C) planning orientation; fast response
D) many departments; few boundary spanning

Question 40

The general environment includes sectors with which the organization interacts directly and that have a direct and regular impact on the organization's ability to achieve its goals.

Question 41

Joe Fresh Style is known for its ability to stay in close contact with its environment and its customers.

Question 42

Once an organization relies on other organizations for valued resources, those other organizations can influence managerial decision making in the original organization.

Question 43

Most e-commerce companies focus on a specific competitive niche and operate in simple but unstable environments.

Question 44

The environmental conditions of complexity and change create a greater need to gather information and to respond based on that information.

Question 45

As the complexity in the external environment increases, so does the number of positions and departments within the organization, which in turn increases internal complexity.

Question 46

Boundary spanners can prevent the organization from stagnating by keeping top managers informed about environmental changes.

Question 47

Differentiation refers to differences in cognitive and emotional orientations among managers in different functional departments.

Question 48

If the external environment is stable, a mechanistic and formal organization can be successful.

Question 49

Planning guarantees successfully coping with an unstable environment.

Question 50

When differentiation is high, integration should be high if the level of environmental uncertainty is high.

Question 51

A company in a highly uncertain environment is more likely to need a formal integrator.

Question 52

The boundary-spanning role is designed to bring information to the organization about changes in the environment, but not to work in reverse to take information into the environment about the organization.

Question 53

When organizations depend on the environment but strive to acquire control over resources to minimize their dependence, it is referred to as cooptation.

Question 54

In rapidly changing environments, an organic structure is usually better.

Question 55

One outcome of high differentiation is that coordination between departments becomes more difficult until integrative devices are put in place.

Question 56

The greatest uncertainty for an organization occurs in the simple, unstable environment.

Question 57

The learning organization is an organic structure.

Question 58

Rather than establish buffer departments, a newer approach in many organizations is to drop the buffers and expose the technical core to its uncertain environment.

Question 59

In the organic organization, tasks are broken down into specialized, separate parts.

Question 60

A hardware store would be in a complex environment.

Question 61

Distinguish between complexity and instability in an organization's environment.

Question 62

Explain how the international context of organizations is bringing the international sector more and more into the task environment of organizations today.

Question 63

Explain the five ways of establishing interorganizational linkages.

Question 64

Explain how an organization could change its domain, and why it might want to do so.

Question 65

Case 4.0
AligatorAde, a regional soft drink bottling plant, produces according to the forecast it receives from corporate headquarters. The company uses the focus strategy, designating a market of persons involved in athletic sports. AligatorAde sponsors a local lacrosse team and has a reputation for positive support of sports activities.
On the few occasions when production exceeds demand, corporate warehousing juggles the distribution so that the regional producers such as AligatorAde experience no significant loss. Although competitors have switched formulas several times, AligatorAde has not changed its formula because market demand for its product is stable. (Top management at corporate headquarters is considering adding a more fruity-flavoured drink to its product line, but a final decision has not yet been made.)
On the line, the manufacturing department produces large batches of its drink. The product is prepared for distribution in both cans and bottles. Occasionally at the end of a run, some bottles will have special team labels affixed by machine; profitability on those few special runs is particularly high.
The plant's organizational chart shows that there is a plant manager with four department heads reporting to her: manufacturing manager, administrative manager, marketing manager, and warehousing and distribution manager. The purchasing function is carried out in manufacturing, and what little R&D takes place at the regional plant is done in marketing.
Refer to Case 4.0. What is AligatorAde's current structure? Does it fit with the demands of its environment?

Question 66

What methods are suggested for dealing effectively with resource dependence?

Question 67

How might an economic recession affect the design of organizations?

Question 68

In addition to establishing favourable linkages to obtain resources, organizations also may try to change the environment.

Question 69

Why does environmental complexity lead to organizational complexity? Explain.

Question 70

Case 4.0
AligatorAde, a regional soft drink bottling plant, produces according to the forecast it receives from corporate headquarters. The company uses the focus strategy, designating a market of persons involved in athletic sports. AligatorAde sponsors a local lacrosse team and has a reputation for positive support of sports activities.
On the few occasions when production exceeds demand, corporate warehousing juggles the distribution so that the regional producers such as AligatorAde experience no significant loss. Although competitors have switched formulas several times, AligatorAde has not changed its formula because market demand for its product is stable. (Top management at corporate headquarters is considering adding a more fruity-flavoured drink to its product line, but a final decision has not yet been made.)
On the line, the manufacturing department produces large batches of its drink. The product is prepared for distribution in both cans and bottles. Occasionally at the end of a run, some bottles will have special team labels affixed by machine; profitability on those few special runs is particularly high.
The plant's organizational chart shows that there is a plant manager with four department heads reporting to her: manufacturing manager, administrative manager, marketing manager, and warehousing and distribution manager. The purchasing function is carried out in manufacturing, and what little R&D takes place at the regional plant is done in marketing.
Refer to Case 4.0. Using the framework for environmental uncertainty, analyze AligatorAde's environment, and then make recommendations to the regional management of the plant based on your application of the framework.

Question 71

Sometimes nonprofit organizations have tried to reduce their resource dependence through illegal activities.

Question 72

How do organizations use planning, forecasting, and responsiveness in stable and unstable environments?

Question 73

List and describe three organizational adaptations to environmental uncertainty.

Question 74

What is the environment of most e-commerce companies? What does your analysis of their environment lead you to conclude about appropriate organizational design adaptation of e-commerce companies to their environment?

Question 75

Transferring or exchanging executives offers a method of establishing favourable linkages with external organizations.

Question 76

What type of environment would the clothing chain Tommy Hilfiger have on the stable-unstable dimension? Explain and defend your opinion. Then use Tommy Hilfiger as an example for illustrating proper adaptation to that dimension of the environment.

Question 77

Explain the arguments for and against creating buffering roles.

Question 78

List and give examples of each of the general environment sectors.

Question 79

Discuss organizational differentiation. How is integration connected to differentiation?

Question 80

Case 4.0
AligatorAde, a regional soft drink bottling plant, produces according to the forecast it receives from corporate headquarters. The company uses the focus strategy, designating a market of persons involved in athletic sports. AligatorAde sponsors a local lacrosse team and has a reputation for positive support of sports activities.
On the few occasions when production exceeds demand, corporate warehousing juggles the distribution so that the regional producers such as AligatorAde experience no significant loss. Although competitors have switched formulas several times, AligatorAde has not changed its formula because market demand for its product is stable. (Top management at corporate headquarters is considering adding a more fruity-flavoured drink to its product line, but a final decision has not yet been made.)
On the line, the manufacturing department produces large batches of its drink. The product is prepared for distribution in both cans and bottles. Occasionally at the end of a run, some bottles will have special team labels affixed by machine; profitability on those few special runs is particularly high.
The plant's organizational chart shows that there is a plant manager with four department heads reporting to her: manufacturing manager, administrative manager, marketing manager, and warehousing and distribution manager. The purchasing function is carried out in manufacturing, and what little R&D takes place at the regional plant is done in marketing.
Refer to Case 4.0. Would you recommend that AligatorAde switch from its current strategy to a differentiation strategy that it markets to the public in general? Why or why not?