Deck 3: Managing in a Changing Global Environment

Question 1

The richer the environment, the more difficult it is for organizations to manage resource transactions.

Answer 1

False

Question 2

Environmental complexity is a function of the strength, number, and interconnectedness of the specific and general forces that an organization has to manage.

Answer 2

True

Question 3

U.S. companies had not been involved in international trade until the industrial revolution began.

Answer 3

False

Question 4

Economic forces, such as the interest rate or unemployment rate, are categorized as forces in the specific environment, since they affect the ability of all organizations in a particular environment to secure resources.

Question 5

The airline industry is generally considered to be operating in a stable environment because of a relatively stable customer base.

Question 6

One way to reduce uncertainty is to have the environmental forces interconnected. That is, when forces begin to interact, the environment becomes more predictable.

Question 7

Competitors are a force in the general environment.

Question 8

Changes in customer tastes and preferences is a force in the specific environment that impacts an organization.

Question 9

The government attempting to control prescription drug prices would have reduced the uncertainty in that industry because competition would have decreased.

Question 10

Economic forces, such as the interest rate or unemployment rate, are categorized as forces in the general environment, since they affect the ability of all organizations in a particular environment to secure resources.

Question 11

Economic forces, such as interest rates, are considered to be a specific environmental force.

Question 12

Global supply chain management is the process of identifying and managing external environmental forces.

Question 13

The pharmaceutical industry generally is considered to be operating in a certain environment because patents reduce the level of competition.

Question 14

Customers would be considered an inside stakeholder group affecting an organization's specific environment.

Question 15

Expanding internationally is one way for an organization to enlarge and protect its domain.

Question 16

The more complex an organization's environment, the more problems associated with controlling the flow of resources there are.

Question 17

An organization in a dynamic, unstable environment seeks ways to make the environment more predictable.

Question 18

The range of goods and services that an organization produces and the customers that it serves are referred to as the organizational domain.

Question 19

By dramatically reducing their number of suppliers, Ford and General Motors were able to reduce the complexity of its environment by negotiating with the labor union.

Question 20

An organization entering the global market will have reduced environmental uncertainty due to the enlarged domain it offers.

Question 21

Strategic alliances are a linkage mechanism that can be used to manage both competitive and symbiotic interdependencies.

Question 22

A keiretsu significantly increases an organization's bureaucratic costs.

Question 23

Both collusions and cartels are illegal in the United States.

Question 24

________ are a part of an organization's specific environment.

A) Employees
B) Interest rates
C) Suppliers
D) Shareholders

Question 25

A keiretsu is a more formal interorganizational linkage than joint ventures.

Question 26

A capital keiretsu has a bank at the center of its network.

Question 27

Formal interorganizational linkage mechanisms reduce transaction costs.

Question 28

The co-optation linkage mechanism involves bringing the other party inside the organization, thus, making them a stakeholder.

Question 29

The more formal the linkage mechanism, the more control organizations have over each other's behavior.

Question 30

The keiretsu system is a form of minority ownership.

Question 31

The ________ is the set of forces surrounding an organization that has the potential to affect the way it operates and its access to scarce resources.

A) global environment
B) hierarchy
C) economy
D) organizational environment

Question 32

Developing a good reputation is a way to manage competitive interdependencies.

Question 33

The goods and services an organization produces and the customers it serves define its ________.

A) general environment
B) organizational domain
C) core competences
D) organizational resources

Question 34

Ekco company uses informal interorganizational strategies instead of formal ones.

Question 35

Developing a good reputation is considered to be a way to manage symbiotic interdependencies.

Question 36

A defense company decided to sell the services of its scientists to commercial clients. This company is:

A) managing symbiotic interdependencies.
B) managing bounded rationality.
C) changing its organizational domain.
D) managing competitive interdependencies.

Question 37

A franchiser has a symbiotic relationship with a franchisee.

Question 38

In general, organizations like competition because it enlarges the organizational domain.

Question 39

In general, organizations like competition because it increases product quality.

Question 40

The most informal linkage mechanism for managing symbiotic interdependencies is trust and reputation.

Question 41

Which term is defined as the strength, number, and interconnectedness of the specific and general forces that an organization has to manage?

A) Organizational domain
B) Environmental richness
C) Environmental complexity
D) Environmental dynamism

Question 42

The specific environment:

A) includes economic and technological forces.
B) consists of outside stakeholders.
C) includes international forces.
D) contains forces that shape the general environment.

Question 43

Which term is defined as how rapidly the forces in the environment change?

A) Environmental complexity
B) Organizational domain
C) Environmental richness
D) Environmental dynamism

Question 44

The general environment:

A) contains forces that shape the specific environment.
B) is a reflection of an organization's domain.
C) consists of inside stakeholders.
D) consists of outside stakeholders.

Question 45

How does Nokia insure that all factories are efficient?

A) They use cartels to share information.
B) They implemented the latest technology regarding Global Supply Chain Management
C) It has a compensation plan that rewards managers based upon the collective performance of all factories.
D) They form strategic alliances with other technology firms.

Question 46

________ is/are a function of the strength, number, and interconnectedness of the specific and general forces that an organization has to manage.

A) Individual ethics
B) Environmental complexity
C) Social responsibility
D) Organizational behavior

Question 47

The ________ is/are the set of forces from outside stakeholder groups that directly affect an organization's ability to secure resources.

A) economy
B) rites of passage
C) specific environment
D) government

Question 48

Which of the following is not a specific environmental force?

A) The government
B) Competitors
C) Employees
D) Customers

Question 49

A frozen food manufacturer offers low-fat dinners. This company is responding to which of the following forces?

A) Demographic and cultural
B) Environmental
C) International
D) Economic

Question 50

________ is/are a function of how much and how quickly forces in the specific and general environments change over time and contribute to uncertainty.

A) Organizational behavior
B) Organizational theory
C) Environmental dynamism
D) Societal ethics

Question 51

The ________ is the set of forces that shape the specific environment and affect the ability of all organizations in a particular environment to obtain resources.

A) hierarchy
B) general environment
C) product structure
D) team structure

Question 52

When a company decides to produce different products for different customers:

A) the organizational domain decreases.
B) the number of stakeholders decreases.
C) environmental complexity increases.
D) environmental stability increases.

Question 53

The Organizational Insight about the flower industry discussed the fact that the price of roses has been dropping. What is the primary cause of this?

A) Poorer countries can grow roses for less money
B) Better supply chain management
C) More competition

Question 54

Which of the following is not a general environment force?

A) Political
B) Cultural
C) Environmental
D) Competitors

Question 55

An organization used to obtain supplies from 3,000 suppliers, but now deals with less than 300. They have reduced ________.

A) environmental dynamism
B) innovation
C) rites of enhancement
D) environmental complexity

Question 56

Which of the following forces is a general environment factor?

A) The government
B) Suppliers
C) Interest rates
D) Customers

Question 57

Environments may be poor because:

A) resources are plentiful.
B) the country is wealthy.
C) competition is high.
D) uncertainty is low.

Question 58

An organization's environment will be more uncertain when:

A) forces in the environment do not change much.
B) competition is low.
C) many forces in the environment are interconnected.
D) many forces in the environment are not connected.

Question 59

Which term is defined by the amount of resources available to support an organization's domain?

A) Environmental richness
B) Environmental dynamism
C) Organizational domain
D) Environmental complexity

Question 60

McDonalds is trying to determine whether to purchase its own fleet of vehicles for delivering products to stores, or to contract with outside trucking companies to do this. This is an example of ________.

A) global supply chain management.
B) an environmental force
C) symbiotic interdependency
D) managing the domain

Question 61

A(n) ________ is a linkage that results when a director from one company sits on the board of another company.

A) network
B) strategic alliance
C) liaison
D) interlocking directorate

Question 62

Which of the following is not an interorganizational strategy for managing symbiotic interdependencies?

A) Price leadership
B) Merger
C) Minority ownership
D) Co-optation

Question 63

Which of the following theories states that an organization must respond to the needs and demands of other organizations in its environment?

A) Resource dependence theory
B) The enacted environment concept
C) Contingency theory
D) Transaction cost theory

Question 64

Which strategic alliance would be most appropriate for two organizations that operate in a relatively certain environment?

A) Minority ownership
B) Contract
C) Network
D) Joint venture

Question 65

An upscale department store agrees to sell a fashion designer's clothes. This is an example of ________.

A) a joint venture
B) co-optation
C) a competitive interdependency
D) a symbiotic interdependency

Question 66

A keiretsu is a form of which of the following types of strategic alliance?

A) Long-term contracts
B) Minority ownership
C) Developing a good reputation
D) Joint venture

Question 67

The union does not like the work rules of an automobile plant. The plant forms a joint union-labor committee and gets key union leaders to join the committee. This is an example of:

A) co-optation.
B) a joint venture.
C) a change in the specific environment.
D) a change in organizational domain.

Question 68

Which of the following is an example of co-optation?

A) Creating cross-functional teams
B) Appointing the CEO of a company's bank to its board of directors
C) Establishing an ethics committee
D) Forming a joint venture to develop a new technology

Question 69

The DeBeers diamond cartel uses trust to manage its linkages with suppliers and customers. This interorganizational linkage is called ________.

A) merger
B) co-optation
C) reputation
D) strategic alliance

Question 70

The government attempted to control prescription drug prices during the 1990s. What effect would this have had on this industry?

A) It would have enlarged the domain of this industry.
B) It would have made the environment more complex due to the reduction in profits.
C) It would have reduced competition, thereby reducing the complexity of this environment.
D) It would have increased the demand for drugs, thereby making the environment more dynamic.

Question 71

Two companies pool their resources to develop a new computer technology. This is an example of ________.

A) co-optation
B) bounded rationality
C) resource dependence
D) an interorganizational linkage

Question 72

All of the following are interorganizational strategies to manage competitive interdependencies except:

A) price leadership.
B) joining a trade association.
C) developing a good reputation.
D) interlocking directorate.

Question 73

Which of the following is the least formal interorganizational strategy for managing symbiotic interdependencies?

A) Network
B) Collusion
C) Co-optation
D) Strategic alliances

Question 74

Which of the following type(s) of strategic alliance is the most formal?

A) Long-term contracts
B) Network
C) Joint venture
D) Minority ownership

Question 75

Which linkage mechanism is the most informal?

A) Strategic alliance
B) Contracts
C) Reputation
D) Interlocking directorate

Question 76

Financial keiretsu is used to manage linkages among diverse companies. The benefits include all except:

A) minority ownership.
B) sharing of information.
C) decreased profits for suppliers.
D) sharing activities.

Question 77

________ exist between an organization and its suppliers.

A) Levels of hierarchy
B) Rites of passage
C) Competitive interdependencies
D) Symbiotic interdependencies

Question 78

According to the ________, an organization should minimize its dependence on other organizations for resources and find ways of influencing them to make resources available.

A) organizational theory
B) resource dependency theory
C) group theory
D) contingency theory

Question 79

Amazon.com changed the book-selling industry from a certain environment to a(n) ________ environment.

A) fixed
B) stable
C) simple
D) uncertain

Question 80

Which of the following is not one of the reasons that an environment would be considered poor?

A) There are many organizations fighting over a limited amount of resources.
B) There is a high level of competition.
C) There is a large customer base, and organizations can't fill the demand.
D) The organization may be located in a poor country or a poor region.