Deck 2: The Environment of Organizations and Managers

Question 1

Which of the following is a part of the task environment of organizations?

A) Owners
B) Board of directors
C) Employees
D) Politicians
E) Competitors

Answer 1

E
The task environment consists of specific organizations or groups that affect the organization. It includes competitors, customers, suppliers, strategic partners, and regulators.

Question 2

A diner received many warnings from the local Board of Health regarding the quality of its food. The Board of Health objected to the trans-fats used for frying and the freshness of bread and meat used at the diner. The Board is playing the role of a(n) _____ in the restaurant's environment.

A) competitor
B) customer
C) supplier
D) regulator
E) investor

Answer 2

D
Regulatory agencies are created by the government to protect the public from certain business practices or to protect organizations from one another.

Question 3

Hike and Loiters are two shoe manufacturers. Their products are similar, they are in the same price range, and their consumers keep switching between their products. This makes them:

A) strategic allies.
B) competitors.
C) associates.
D) regulators.
E) suppliers.

Answer 3

B
An organization's competitors are other organizations that compete with it for resources. The most obvious resources that competitors vie for are customer dollars.

Question 4

For a private college, parents of students may be considered part of the _____ dimension of the task environment.

A) supplier
B) competitor
C) regulator
D) strategic partner
E) customer

Question 5

Jeffry's Foodbar, a locally owned restaurant is experiencing competition from an internationally known chain of fast food restaurants, which has recently started business in its neighborhood. Jeffrey's Foodbar is experiencing a change in its:

A) task environment.
B) internal environment.
C) physical work environment.
D) government regulations.
E) organizational culture.

Question 6

Which of the following is a part of an organization's external environment?

A) Board of directors
B) Physical work environment
C) Inflation
D) Organization's culture
E) Labor unions

Question 7

Which of the following is an accurate difference between the task environment and the general environment?

A) The general environment is quite complex, whereas the task environment is very simple.
B) The task environment provides useful information more readily than the general environment.
C) The task environment deals with more abstract dimensions than the general environment.
D) The general environment's impact is short term, whereas that of the task environment is long term.
E) The general environment includes competitors and regulators, whereas that of the task environment includes customers, suppliers, and strategic partners.

Question 8

In the external environment of an organization, the _____ environment's impact is often vague, imprecise, and long term.

A) general
B) regulatory
C) physical work
D) cultural
E) competitive

Question 9

A company would to begin business in another country only if the trade relationships with that country are relatively well defined and stable. In the context of general environment, which of the following does this point of view reflect?

A) Task
B) Economic
C) Technological
D) Political-legal
E) Competitive

Question 10

_____ are elements of the task environment that have the potential to control, legislate, or otherwise influence an organization's policies and practices.

A) Board members
B) Owners
C) Strategic partners
D) Employees
E) Regulators

Question 11

Nonstop is a free instant messaging and voice chat service that allows users to communicate with each other, using a microphone and/or a webcam, over the Internet. Its popularity is increasing and, as a result, the number of people using Chatterbox, another instant texting service, has decreased. Nonstop is a _____ to Chatterbox.

A) competitor
B) supplier
C) customer
D) strategic partner
E) regulator

Question 12

Alex, one of the proprietors of Atlas Corp. is worried.The stock market was not doing well, unemployment was 10 percent, inflation was on the rise again, and government debt was still increasing. These concerns of Alex are related to the _____ dimension of the general environment of Atlas Corp.

A) legal
B) sociocultural
C) technological
D) political
E) economic

Question 13

The set of broad dimensions and forces in an organization's surroundings that determines its overall context is called the:

A) task environment.
B) general environment.
C) physical work environment.
D) regulatory environment.
E) ethical environment.

Question 14

Ralph Corp. and Swan Inc. are strategic partners. In this context, which of the following statements is most accurate?

A) Ralph and Swan produce the same goods and share the same market.
B) Ralph procures and provides all the raw materials and labour used by Swan for production.
C) Ralph purchases raw materials from Swan in large volumes and uses it to manufacture its products for retail sale.
D) Ralph sells Swan's merchandise at its stores and Swan promotes Ralph stores in its advertisements.
E) Ralph has been using the media to call attention to the negative impact of using Swan's products.

Question 15

Organizations that provide resources to other organizations are known as:

A) suppliers.
B) competitors.
C) regulators.
D) interest groups.
E) importers.

Question 16

Canyon LLC, a television manufacturing company, is about to launch its smart TV. The television will come with a built-in web browser by a company called Wayfarer Inc. to access Internet. Canyon is Wayfarer's _____.

A) strategic partner
B) business rival
C) franchisee
D) supplier
E) owner

Question 17

In Asia, consumers have historically had an aversion to debt. However, in recent years credit card use has grown significantly, supported by aggressive marketing and government policies in the region to promotegrowth in the region.This example comprises the _____ dimensionof an organization's general environment.

A) economic
B) technological
C) sociocultural
D) political-legal
E) task

Question 18

Which of the following is a concern of the economic dimension of an organization's general environment?

A) Organization's policies and practices
B) Inflation, interest rates, and unemployment
C) Tools, methods, and technology
D) Government regulations
E) Offices, production facilities, and cafeteria

Question 19

The _____ dimension of the general environment consists of government regulation of business and the relationship between business and government.

A) technological
B) task
C) political-legal
D) competitive
E) socio-economic

Question 20

A business manufactures top-of-the-line cabinets. The _____ dimension of its general environment includes computer-assisted design software that helps to convert wood and people's idea into lovely, functional cabinets.

A) legal
B) sociocultural
C) technological
D) political
E) economic

Question 21

Which of the following is an element of an organization's internal environment?

A) Government regulations
B) Competitors
C) Facilities
D) Strategic allies
E) Technology suppliers

Question 22

An interest group is a form of a _____.

A) supplier
B) board of directors
C) strategic partner
D) competitor
E) regulatory agency

Question 23

Which of the following is true of ethics or ethical behavior?

A) Ethical behavior is the same for all individuals.
B) Organizations define ethics in the context of the individual.
C) Organizations themselves have ethics.
D) Ethical behavior is controlled and directed according to rules made by federal agencies.
E) Ethical behavior is an individual's personal beliefs.

Question 24

In a business, which of the following people have legal property rights to that business?

A) Employees
B) Suppliers
C) Customers
D) Owners
E) Regulators

Question 25

A corporate _____ is a governing body that is elected by the stockholders and charged with overseeing a firm's general management to ensure that it is run to best serve the stockholders' interests.

A) council of strategic partners
B) board of directors
C) regulators directorate
D) whistle-blowing committee
E) economic community

Question 26

A(n) _____ occurs when an employee's decision potentially benefits the individual to the possible detriment of the organization.

A) loss of confidence
B) security breach
C) conflict of interest
D) violation of organizational culture
E) act of incitement

Question 27

Ethical issues in corporate governance are primarily the responsibility of:

A) interest groups.
B) employees.
C) strategic partners.
D) the board of directors.
E) federal regulatory agencies.

Question 28

Which of the following accurately describes the responsibility of a corporate board of directors?

A) Exerting considerable influence by using the media to call attention to their positions
B) Helping the company get the expertise they lack from other companies
C) Ensuring the firm is run to best serve the stockholders' interests
D) Gaining legal property rights to the business by buying stock
E) Protecting the public from certain business practices or to protect organizations from one another

Question 29

People who argue in favor of social responsibility claim that:

A) the purpose of business in U.S. society is to generate profit for owners.
B) involvement in social programs gives businesses too much power.
C) businesses do not create problems and should not therefore help solve them.
D) businesses often have surplus revenues necessary the resources necessary to solve problems.
E) there is potential for conflicts of interest among businesses.

Question 30

_____ is a law that requires CEOs and CFOs to vouch personally for the truthfulness and fairness of their firms' financial disclosures and imposes tough new measures to deter and punish corporate and accounting fraud and corruption.

A) Sarbanes-Oxley Act of 2002
B) Glass-Steagall Act of 1933
C) Gramm-Leach-Bliley Act of 1999
D) Commodity Futures Modernization Act of 2000
E) Investment Company Act of 1940

Question 31

_____ are hired for short periods of time and provide greater flexibility, earn lower wages, and often do not participate in benefits programs.

A) Temporary workers
B) Regulatory agencies
C) Interest groups
D) Strategic allies
E) Suppliers

Question 32

Which of the following would supply capital to a business?

A) Employment agencies
B) Regulators
C) Banks
D) Board of directors
E) Employees

Question 33

Myrtle Wines, a chain of wine retailers, has prepared guidelines that clearly specify how employees should interact with suppliers, customers, competitors, and other people associated with their business. These guidelines are documented and distributed at all Myrtle outlets. The guidelines prepared by Myrtle forms its _____.

A) business plan
B) code of ethics
C) strategic plan
D) fair trade standards
E) licensing agreement

Question 34

The set of obligations that an organization has to protect and enhance the societal context in which it functions is called its:

A) legal responsibility.
B) ethical responsibility.
C) social responsibility.
D) cultural responsibility.
E) financial responsibility.

Question 35

A person who purchases stock in a company becomes a(n) _____ of the company.

A) member of the board of directors
B) customer
C) strategic partner
D) owner
E) regulator

Question 36

The management of a company prevents its employees from meeting in groups of three or more. Which of the following would best describe these restrictions imposed by the management?

A) Legal
B) Unethical
C) Illegal
D) Ethical
E) Racist

Question 37

Which of the following is an accurate argument against social responsibility for organizations?

A) Business is not a partner in our society, unlike the government and the general population.
B) Corporations are citizens in our society.
C) Profit generation, for the owners, is the purpose of business in U.S. society.
D) Business does not create problems and should therefore not try to solve them.
E) Business lacks the resources needed to solve social programs.

Question 38

The term _____ refers to an individual's personal beliefs about whether a behavior, action, or decision is right or wrong.

A) justice
B) culture
C) ethics
D) aesthetics
E) regulations

Question 39

Which of the following terms represents a formal, written statement of the values and ethical standards that guide a firm's action?

A) Codes of ethics
B) Business plan
C) Standard operating procedures
D) Strategic plan
E) Licensing agreement

Question 40

A group organized by its members to attempt to influence organizations is known as a(n):

A) interest group.
B) board of directors.
C) strategic ally.
D) competitor.
E) ethics committee.

Question 41

Which of the following is an advantage of direct investment?

A) New infrastructure
B) Simplicity
C) Enhanced control
D) Greater political support
E) Greater certainty

Question 42

Making a product in the firm's domestic marketplace and selling it in another country is known as _____.

A) direct investment
B) exporting
C) joint venture
D) competing
E) franchising

Question 43

As an internationalization strategy, the typical use of maquiladoras by U.S. firms is a form of _____.

A) strategic alliance
B) licensing agreement
C) direct investment
D) joint venture
E) franchising

Question 44

Which of the following actions represents an attempt to manage social responsibility through ethical compliance?

A) Requiring top financial managers to ensure compliance with securities and banking regulations
B) Donating money to fund the performing arts
C) Creating a committee to review proposals concerning selection and promotion
D) Consulting the legal department regarding the requirements of a particular law
E) Making human resource managers responsible for complying with the Equal Employment Opportunity Commission (EEOC) standards

Question 45

Once a licensing agreement is agreed to, the licensee pays a(n) _____ in return.

A) interest
B) royalty
C) remuneration
D) tariff
E) reward

Question 46

Which of the following is true of quotas in trade?

A) It is used most commonly to restrict trade.
B) It is used to encourage strategic alliance.
C) It is used to increase domestic competition.
D) It is the tax breaks given by the host government.
E) It is a form of tax collected on imported goods.

Question 47

Which of the following about the ethical compliance of an organization is true?

A) It is a formal dimension of managing social responsibility.
B) It cannot be enhanced by providing training.
C) It includes awarding of funds or gifts to charities or other worthy causes.
D) It is used to circumvent their legal obligations.
E) It cannot be imposed by developing guidelines and codes of conduct.

Question 48

Which of the following approaches to internationalization of business has the disadvantage of shared ownership?

A) Importing
B) Licensing
C) Exporting
D) Joint ventures
E) Direct investment

Question 49

A potential disadvantage of licensing agreements is:

A) decreased profits.
B) limited profitability.
C) inflexibility.
D) home production costs.
E) excessive transportation costs.

Question 50

Development of guidelines and codes of conduct is one of the most common ways through which an organization ensures _____.

A) risk management
B) technological specification
C) philanthropic giving
D) ethical compliance
E) export restraint agreements

Question 51

An advantage of importing and exporting is:

A) shared ownership.
B) the lack of government restrictions.
C) low transportation costs.
D) the lack of tariffs and taxes.
E) small cash outlay.

Question 52

A(n) _____ strategy requires little small cash outlay, is heavily regulated by government, and does not require modification to products for local conditions and is the easiest approach to internationalization.

A) importing
B) licensing
C) joint venture
D) direct investment
E) offshoring

Question 53

Soft Bites, a factory that makes breads, has asked all its retailers to return the loaves that have not been sold till the last date of expiry. It then donates all these loaves to shelters for the poor and the homeless. This act of Soft Bites can be termed as _____.

A) corporate gifting
B) legal compliance
C) ethical compliance
D) philanthropic giving
E) apprentice sponsoring

Question 54

Atlantia is a company that manufactures dishwashers in Germany. Its products are sold in the United States. Which of the following statements is most accurate?

A) Atlantia is exporting its products to the United States.
B) Atlantia has a license agreement with the United States.
C) Atlantia is importing its products from the United States.
D) Atlantia wholly owns subsidiaries of the firm in the United States.
E) Atlantia is outsourcing to the United States.

Question 55

Sam's Big Bites, an American chain of burger stands, operates on all military bases in the United States. The agreement between Sam's Big Bites and the Department of Defense is a(n) _____.

A) maquiladora.
B) licensing agreement
C) exporting agreement
D) importing agreement
E) strategic alliance

Question 56

Basco Electric Inc., an American company, has two factories in Mexico near the U.S. border. Basco gets special concessions from the Mexican government as it provides employment to the local population. The factories are an example of:

A) licensing agreements.
B) franchisees.
C) leases.
D) imports
E) maquiladoras.

Question 57

Which of the following is an advantage of licensing as an approach to internationalization?

A) Lack of competition
B) Extended profitability
C) Lesser uncertainty
D) Flexibility
E) Shared ownership

Question 58

_____ is an employee's disclosure of illegal or unethical conduct by others within the organization.

A) Lobbying
B) Influence peddling
C) Whistle-blowing
D) Source criticizing
E) Reconnaissance

Question 59

Which of the following is an informal organizational dimension of managing social responsibility?

A) Licensing
B) Philanthropic giving
C) Legal compliance
D) Ethical compliance
E) Organizational culture

Question 60

_____ is the extent to which the organization conforms to local, state, federal, and international laws.

A) Technological compliance
B) Philanthropic giving
C) Ethical compliance
D) Legal compliance
E) Risk management

Question 61

A(n) _____ is a limit on the number or value of goods that can be traded.

A) royalty
B) tariff
C) quota
D) threshold
E) allowance

Question 62

Which of the following is an agreement among the United States, Canada, and Mexico to promote trade with one another?

A) North American Free Trade Agreement
B) North Atlantic Treaty Organization
C) General Agreement on Tariffs and Trade
D) Transatlantic Free Trade Agreement
E) World Trade Organization

Question 63

Accords reached by governments in which countries voluntarily limit the volume or value of goods they export to or import from one another are known as _____.

A) service-level agreements
B) licensing agreements
C) export restraint agreements
D) strategic alliance agreements
E) operational-level agreements

Question 64

_____ gives preference to domestic producers through content or price restrictions.

A) "Buy national" legislation
B) "Go local" strategy
C) Federal acquisition regulation
D) Trade agreements legislation
E) "Ban maquiladoras" policy

Question 65

Unicorn designs Inc., a software company, requires its employees to wear a specific color every day of the week. The colors for the weekdays are presently orange, red, green, yellow, and blue, respectively. The colors are changed from time to time and the employees are informed about it. The colors should be visible and could be on anything, like scarves, bags, ties, or socks. According to the management, the color coding system makes the company a vibrant and fun place to work. This decision of the management affects the _____.

A) company's economic dimension
B) task environment
C) technological dimension
D) organizational culture
E) political-legal atmosphere

Question 66

_____ are light assembly plants built in Northern Mexico close to the U.S. border.

A) Industrial estates
B) Company towns
C) Hawthorne mills
D) Maquiladoras
E) Armories

Question 67

In a(n) _____, two or more firms share equal ownership of a new enterprise.

A) direct investment
B) technology transfer
C) joint venture
D) interest group
E) economic community

Question 68

The French government charges a 25 percent tax on all American fruits and vegetables that are sold in France. This tax collected by French authorities is a(n) _____.

A) direct investment
B) license
C) export tariff
D) import tariff
E) strategic alliance

Question 69

Almonds United Inc., a company that produces almonds, is based in California, United States. Almonds United ensures that most of its produce is sold in the local market and not more than 20 percent is sold in the Indian markets each year. This is in accordance with the U.S. government's voluntary limit on trade with India. Almonds United is following the _____ exercised by the U.S. government.

A) franchising agreement
B) direct investment
C) strategic alliance
D) licensing agreement
E) export restraint agreement

Question 70

A(n) _____ is a tax collected on goods shipped across national boundaries.

A) quota
B) tariff
C) allowance
D) remuneration
E) commission

Question 71

An American company is in a joint venture with an overseas Asian company. The U.S. managers are particular about time management and appointments for conference calls and meetings. However, their overseas Asian counterparts are not conditioned the same way and don't necessarily adhere to schedules. This variation in time management is an aspect of their _____ environment.

A) legal
B) cultural
C) technological
D) political
E) economic

Question 72

Which of the following determines an organization's culture?

A) The extended benefits provided by an organization
B) The level of formality or informality in communication within an organization
C) The regulations for work performance set by an organization
D) The strategic partners of an organization
E) The products and services available for the functioning of an organization

Question 73

The _____ of an organization includes all the values, symbols, beliefs, and language that guide behavior.

A) task environment
B) general environment
C) physical work environment
D) regulatory environment
E) cultural environment

Question 74

Which of the following statements about cultural environment is true?

A) An employee's cultural environment is personal, therefore, does not affect his profession.
B) In international business, cultural factors always cause problems for managers.
C) Cultural differences between countries can have a direct impact on business practice.
D) Difficulties can arise when there is complete overlap between a manager's home culture and the culture of the country in which business is to be conducted.
E) Subtle cultural differences between countries do not have a major impact on business activities.

Question 75

In international trade, the _____ amount is typically designed to ensure that domestic competitors will be able to maintain a certain market share.

A) benefaction
B) royalty
C) tariff
D) quota
E) minimum hourly wage

Question 76

An international _____ is a set of countries that agree to markedly reduce or eliminate trade barriers among member nations.

A) commonwealth
B) trade bloc
C) economic community
D) customs union
E) free trade area

Question 77

Which of the following statements about the European Union is true?

A) It dictates the internal organizational culture.
B) It is a union of observer countries that monitor the open markets to ensure that WTO rules are followed.
C) It is the strategic alliance between a European company and an American company.
D) It a form of labor union across Europe.
E) It is an economic community.

Question 78

_____ are, in effect, export quotas.

A) Export restraint agreements
B) Export licensing agreements
C) Service-level agreements
D) Export tariffs
E) Strategic alliance agreements

Question 79

The government of Westeria has made it mandatory that all local publishers must use paper made in Westeria itself. This restriction imposed by Westeria on its publishers is a form of:

A) "ban maquiladoras" policy.
B) import tariff.
C) export restraint agreement.
D) "go global" strategy.
E) "buy national" legislation.

Question 80

Which of the following statements about organizational culture is true?

A) Organizational culture shapes the behavior of employees, and thus impacts organizational effectiveness.
B) Organizational culture of an overseas franchisee is always the same as the culture of the nation in which the organization's headquarters are located.
C) Organizational culture will necessarily be the same throughout an organization's subunits.
D) Organizational culture refers to the cultural and artistic charities that an organization supports.
E) Organizational culture is frequently and easily changed by most organizations.