Deck 11: Organizational Birth, Growth, Decline, and Death

Question 1

In a SWOT analysis, strengths and weaknesses are inside the organization, while opportunities and threats are environmental.

Answer 1

True

Question 2

In Greiner's model of growth, a crisis of autonomy is followed by the growth through delegation stage.

Answer 2

True

Question 3

Population ecologists propose that organizations should select an environmental niche.

Answer 3

True

Question 4

One reason for the liability of newness is that existing organizations compete for the same resources.

Question 5

In the life cycle approach, organizations pass through the stages at different rates.

Question 6

One reason for the liability of newness is that new organizations lack a formal structure.

Question 7

Andrew Carnegie was successful largely because his family was able to support his business interests.

Question 8

The organizational life cycle approach is based on the premise that all organizations pass through four basic stages at some point during their existence.

Question 9

In Greiner's model of growth, the growth through direction stage follows a crisis of control.

Question 10

In a SWOT analysis, threats are defined as things in the environment that could threaten the success of the business.

Question 11

Andrew Carnegie revolutionized the steel industry by the use of new production methods that dramatically dropped the cost of steel.

Question 12

The rate of birth in a new environment increases rapidly at first. This is in part because many new organizations are founded by entrepreneurs who leave existing companies to start up their own.

Question 13

The principle of natural selection states that the organizations that have the skills and abilities that best fit the environment will be the ones that survive in the marketplace.

Question 14

The Institutional theory posits that as organizations develop, they become so set in their ways that change becomes difficult.

Question 15

The rate of birth in a new environment increases rapidly at first. This is in part because surviving organization provide a role model that other organizations can copy.

Question 16

An organization will enter the decline stage if it fails to manage the liability of newness.

Question 17

Large department stores with demands for different kinds of clothes pursue a specialist strategy.

Question 18

In a SWOT analysis, a typical weakness would be that new competitors could prevent the organization from acquiring needed resources.

Question 19

Organizations that follow a K-strategy obtain first-mover advantages.

Question 20

One reason for the liability of newness is that entrepreneurs tend to adopt a very centralized mechanistic structure which is inappropriate for a young organization.

Question 21

Which of the following is not included in a SWOT analysis.

A) Threats
B) Weaknesses
C) Standards
D) Opportunities

Question 22

Weitzel and Jonsson's model suggests that top management can take action to reverse decline at any substage of decline.

Question 23

In a SWOT analysis, which of the following would fall under the category of "weakness"?

A) A saturated marketplace
B) Owners with little expertise
C) A tight labor force
D) A product that is priced too high for the market

Question 24

The danger associated with being first in a new environment is known as ________.

A) population ecology theory
B) the liability of newness
C) organizational inertia
D) decentralization

Question 25

An organization in the dissolution stage can only turn things around through very drastic measures.

Question 26

A multidivisional or product team structure can help an organization resolve a crisis of autonomy.

Question 27

Which of the following is not included in the typical business plan?

A) A mission statement
B) A time line
C) A functional analysis of the jobs to be done
D) A list of the resources required for implementation

Question 28

An organization should pursue as much growth as possible.

Question 29

Population ecology theorists state that the number of births in a new environment:

A) is slow at first but then increases rapidly in a linear fashion.
B) is restricted by organizational inertia.
C) is determined by the institutional environment.
D) depends on the availability of resources.

Question 30

________ recognize and take advantage of opportunities to use their skills and competences to create value.

A) Supervisors
B) External stakeholders
C) Top managers
D) Entrepreneurs

Question 31

The four principal stages of an organization's life cycle are:

A) birth, crisis, decline, and death.
B) birth, growth, decline, and death.
C) birth, growth, crisis, and death.
D) birth, growth, collaboration, and death.

Question 32

Which of the following theories attempts to explain the rate of organizational birth in a new environment?

A) Contingency theory
B) Institutional theory
C) Transaction cost theory
D) Population ecology theory

Question 33

It is just as important to be able to manage organizational decline as it is organizational growth.

Question 34

If an organization grows too much without solving problems at each growth stage, it may enter the decline stage of the organizational life cycle.

Question 35

BP experienced a "crisis of autonomy" that led to many safety issues and operating inefficiencies.

Question 36

________ is a sequence of stages of growth and development through which organizations may pass.

A) Organizational learning
B) Vertical integration
C) Organizational life cycle
D) Decentralization

Question 37

How was Andrew Carnegie able to dramatically change the U.S. steel industry?

A) Through mergers and takeovers, he was able to create a huge conglomerate that had monopoly-like power.
B) By new production processes that dramatically reduced the cost of steel.
C) By forming alliances with British steel companies.
D) By effectively overcoming organizational inertia.

Question 38

The lack of an effective monitoring system is the reason an organization reaches the faulty action stage of decline.

Question 39

The lack of an effective monitoring system is the reason an organization enters the blinded stage of decline.

Question 40

Organizations have the greatest risk of failure when they are in the stage of the organizational life cycle.

A) coordination
B) decline
C) birth
D) delegation

Question 41

The benefits an organization derives from being an early entrant into the environment are called ________.

A) birth
B) liability of newness
C) population growth
D) first-mover advantages

Question 42

McDonald's was one of the first fast-food restaurants and has a recognized name because of ________.

A) ate entry advantages
B) decreased competition
C) top management
D) first-mover advantages

Question 43

________ is the number of organizations that can compete for the same resources in a particular environment.

A) Population ecology
B) Globalization
C) Population growth
D) Population density

Question 44

A large computer company focuses on the higher education market. They are pursuing ________.

A) global expansion
B) an environmental niche
C) a population strategy
D) a K-strategy

Question 45

After Apple founded the personal computer market, IBM realized the potential and developed personal computers. IBM followed a(n) ________.

A) specialist strategy
B) K-strategy
C) generalist strategy
D) r-strategy

Question 46

All the fast-food restaurants in College Station, Texas, compete for business from students. This is an example of ________.

A) organizational growth
B) a population of organizations
C) entrepreneurship
D) marketing theory

Question 47

An entrepreneur designs a new product. He or she will most likely pursue which of the following strategies?

A) R-specialist
B) R-generalist
C) K-generalist
D) K-specialist

Question 48

According to population ecology theorists, births diminish over time because:

A) the new environment lacks legitimacy.
B) isomorphism arises.
C) existing organizations may engage in actions, such as extensive advertising, to deter new entrants.
D) companies are unwilling to adapt to the institutional environment.

Question 49

A large video company observes that smaller companies are having success with pay-per-view movies and decides to enter the pay-per-view market. This video company is pursuing which of the following strategies?

A) Specialist strategy
B) K-strategy
C) R-specialist strategy
D) R-strategy

Question 50

________ are organizations that spread their skills thinly to compete for a broad range of resources in many niches.

A) Specialists
B) Entrepreneurs
C) r-strategists
D) Generalists

Question 51

Amazon.com was the first to use the Internet to sell books, and others have difficulty competing because of:

A) consumers haven't grasped online shopping.
B) natural selection.
C) population ecology.
D) a first-mover advantage.

Question 52

________ are organizations that concentrate their skills to pursue a narrow range of resources in a single niche.

A) K-strategists
B) Globalists
C) Specialists
D) Generalists

Question 53

Population ecology notes that births in a new environment are rapid at first. This is because:

A) Many organizations are executing a strategy at the same time.
B) The population density is lowest at the early stages.
C) Many new organizations are founded by entrepreneurs that leave existing companies to set up their own companies.
D) Margins are almost always higher in the early stages of an industry.

Question 54

When an organization within a population focuses on particular sets of resources, it pursues ________.

A) organizational birth
B) a population strategy
C) an environmental niche strategy
D) a generalist strategy

Question 55

An organization will gain first-mover advantages when it pursues which of the following strategies?

A) Specialist strategy
B) K-strategy
C) Generalist strategy
D) R-strategy

Question 56

The population ecology model of organizational birth, which is driven by natural selection, implies all of the following except:

A) entrepreneurship keeps the cycle of birth going.
B) weak organizations will die.
C) new organizations survive if they can stake a claim to an environmental niche.
D) a new organization must adopt rules and values that govern the behavior of organizations in its population.

Question 57

________ is the process that ensures the survival of the organizations that have the skills and abilities that best fit the environment.

A) Birth
B) Natural selection
C) Growth
D) K-strategy

Question 58

The organizations that are competing for the same resources in the same environment are known as ________.

A) organizational theory
B) liability of newness
C) a population of organizations
D) ecology

Question 59

Which of the following statements about generalists and specialists is true?

A) Specialists and generalists can coexist in an environment.
B) Generalists typically have superior products.
C) A generalist is able to provide better customer service than a specialist.
D) A specialist is better able to survive in an uncertain environment than a generalist.

Question 60

A large, established organization pursues a broad range of resources in many niches. This company created a new niche in which a new firm could enter and survive. The new firm will likely use which of the following strategies?

A) R-specialist
B) K-generalist
C) K-specialist
D) R-generalist

Question 61

Which of the following controls an organization's behavior when it is in the growth through creativity stage of Greiner's model?

A) Formalization
B) Organizational structure
C) Informal organization
D) Rules and standard operating procedures

Question 62

Packard, a high-priced, handcrafted car could not survive when Ford's low-cost, mass-produced cars dominated the market. This is an example of ________.

A) population ecology
B) natural selection
C) r-strategy
D) organizational growth

Question 63

An auto manufacturer increased its effectiveness by using flexible manufacturing. Many other companies have intentionally imitated the technology of this manufacturer. This is an example of ________.

A) normative isomorphism
B) mimetic isomorphism
C) coercive isomorphism
D) natural isomorphism

Question 64

At a trade show, a manager discusses with his competitor several different ideas on how to serve customers better. The competitor then uses some of these ideas in her organization. This is an example of ________.

A) natural selection
B) normative isomorphism
C) a collusion agreement
D) coercive isomorphism

Question 65

In the creativity stage, an organization:

A) focuses primarily on costs.
B) has a high division of labor.
C) experiences a crisis of leadership.
D) develops a formal structure.

Question 66

In Greiner's model, a crisis of leadership is followed by which of the following stages?

A) Growth through creativity
B) Growth through direction
C) Growth through collaboration
D) Growth through delegation

Question 67

According to Greiner's model of growth, delegation is most likely to follow a crisis of ________.

A) leadership
B) red tape
C) control
D) autonomy

Question 68

In Greiner's model of growth, the phase of growth following a crisis of leadership is called:

A) growth through direction.
B) growth through coordination.
C) growth through collaboration.
D) growth through delegation.

Question 69

When organizations attend the meetings of trade associations, which of the following is a potential result?

A) Organizational inertia
B) Coercive isomorphism
C) Liability of newness
D) Normative isomorphism

Question 70

Which of the following is not a stage in Greiner's model of growth?

A) Crisis
B) Collaboration
C) Coordination
D) Creativity

Question 71

Learning outdated procedures is a potential disadvantage of ________.

A) an r-strategy
B) isomorphism
C) population ecology theory
D) natural selection

Question 72

A new organization designs its organization structure in which of the following stages of Greiner's model of growth?

A) Coordination
B) Collaboration
C) Direction
D) Delegation

Question 73

Organizations follow equal employment opportunity (EEO) laws. This is an example of ________.

A) normative isomorphism
B) coercive isomorphism
C) natural selection
D) mimetic isomorphism

Question 74

________ is the set of values and norms that governs the behavior of a population of organizations.

A) Institutional environment
B) Mimetic isomorphism
C) Growth theory
D) Natural selection

Question 75

An organization experiences a crisis of control in the ________ stage of Greiner's model.

A) coordination
B) dissolution
C) direction
D) delegation

Question 76

Which theory proposes that an organization must gain legitimacy in the eyes of stakeholders in order to grow and survive?

A) Greiner's theory
B) Contingency theory
C) Institutional theory
D) Population ecology theory

Question 77

________ is a theory that studies how organizations can increase their ability to grow and survive in a competitive environment by satisfying their stakeholders.

A) Institutional environment
B) Population ecology theory
C) Coercive isomorphism
D) Institutional theory

Question 78

In Greiner's growth through direction stage, an organization may experience a crisis of ________.

A) red tape
B) control
C) leadership
D) autonomy

Question 79

According to Greiner, an organization progresses through which of the following stages?

A) Delegation, coordination, growth, crisis, and decline
B) Creativity, direction, delegation, coordination, and collaboration
C) Birth, coordination, collaboration, growth, and decline
D) Creativity, delegation, crisis, decline, and death

Question 80

A restaurant is experiencing declining sales. It determines that the reason is that it has a formal dress code, such as a coat and tie policy for customers. Because they determine that the restaurant market in their domain prefers a more casual dress code, they eliminate the policy. This is an example of ________.

A) natural selection
B) isomorphism
C) growth through direction
D) faulty action