Deck 3: The Organizational Environment and Culture

Question 1

Benchmarking is the process comparing an organization's practices and technologies with those of other companies.

Answer 1

True

Question 2

Entering a new market or industry with existing expertise is known as divestiture.

Answer 2

False

Question 3

Organizations are

A) oligopolies.
B) open systems.
C) pyramids.
D) ecologies.
E) exosystems.

Answer 3

B

Question 4

Advances in genetic engineering are expected to produce some food products that will become available all year round even in continental climates. These changes will provide grocers with an opportunity to reduce their shipping costs while offering fresher produce to their customers. These advances are examples of changes in the

A) technological environment.
B) social environment.
C) political environment.
D) demographic environment.
E) international environment.

Question 5

Which of the following is not one of the forces in Porter's model of an organization's competitive environment?

A) the power of suppliers
B) the impact of new competitors entering the market
C) the influence of the labor force
D) the impact of substitute or complement services or products
E) the competition among existing rivals in the industry

Question 6

Intense competition causes an industry shakeout.

Question 7

_____ is the immediate environment surrounding a firm, including suppliers, customers, rivals, and the like.

A) Macroenvironment
B) Competitive environment
C) Microenvironment
D) Exosystem
E) Open system

Question 8

______ are conditions that prevent new companies from setting foot in an industry.

A) Demographics
B) Industry shakeouts
C) Prospectors
D) Zero-profit conditions
E) Barriers to entry

Question 9

Coalition involves groups that act jointly with respect to a set of political initiatives for some period.

Question 10

Open systems are all relevant forces outside a firm's boundaries.

Question 11

Environmental uncertainty means that managers do not have enough information about the environment to understand or predict the future.

Question 12

All relevant forces outside a firm's boundaries, such as competitors, customers, the government, and the economy, are referred to as

A) the external environment.
B) open systems.
C) relative constraints.
D) the barriers to entry domain selection.
E) conditions of certainty.

Question 13

When an industry matures, profits drop.

Question 14

Margaret, a new manager at The Royal Deli, has been asked to focus on the competitive environment of the organization. Which of these factors is among those that Margaret should focus on?

A) government policies
B) demographics
C) suppliers
D) technology
E) social factors

Question 15

Which of the following is a common barrier to entry?

A) distribution channels
B) final consumers
C) bargaining power of buyers
D) demographics
E) switching costs

Question 16

A popular low-cost airline, Parson Corp., has gone out of business. Although the service and price provided by the airline was what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. Which component of the competitive environment does this illustrate?

A) customers
B) competitors
C) regulators
D) economic factors
E) threat of new entrants

Question 17

Some companies, called prospectors, are more likely than others to engage in strategic maneuvering.

Question 18

Managers always operate under conditions of certainty.

Question 19

_____ occurs when weaker companies are eliminated, and the strong companies survive.

A) Cannibalization
B) Downsizing
C) Scaffolding
D) Industry shakeout
E) Economic fluctuation

Question 20

If there are many barriers to entry, the threat of new entrants is greater.

Question 21

Identify the environmental factor that is formed by an attractive environment.

A) low customer bargaining power
B) few entry barriers
C) many competitors
D) many substitutes
E) complementary products

Question 22

In an attempt to improve customer service, Cobalt Toys Inc. decided to assign a team to investigate the kinds of services offered by competing companies. The team discovered that a smaller company, Nuance Games Corp., seemed to have outstanding customer service. The team then determined the major differences between the two companies and developed a plan to incorporate the best elements of Nuance Games into Cobalt Toys. Which of the following is being implemented by Cobalt Toys?

A) environmental dynamism
B) strategic maneuvering
C) cooperative action
D) benchmarking
E) forecasting

Question 23

Hospitals and universities are very expensive to run because of the capital and equipment required. The requirement of personnel such as specialized medical doctors and researchers are also high. Which of the following is this an example of?

A) protectionism
B) buffering
C) barriers to entry
D) smoothing
E) downsizing

Question 24

A _____ is powerful if a buyer has few other sources of supply or if the supplier has many other buyers.

A) supplier
B) customer
C) marketer
D) manager
E) competitor

Question 25

The main difference between final consumers and intermediate consumers is that the final consumers

A) pay cash.
B) use products themselves.
C) purchase more than intermediate consumers.
D) are not as flexible as intermediate consumers.
E) do not have any bargaining power.

Question 26

_____ is the number of issues to which a manager must attend, and the degree to which they are interconnected.

A) Complexity
B) Dynamism
C) Environmental uncertainty
D) Continuous change
E) Minimization

Question 27

_____ refers to searching for information that is unavailable to most people and sorting through that information to interpret what is important.

A) Competitive skimming
B) Data classification
C) Environmental scanning
D) Knowledge browsing
E) Information foraging

Question 28

A complement is a potential _____ because customers use it as an alternative, buying less of one kind of product but more of another.

A) threat
B) opportunity
C) strength
D) weakness
E) minimization

Question 29

Which of the following is an intermediate consumer?

A) wholesaler
B) manufacturer's representative
C) distributor
D) retailer
E) broker

Question 30

Wright Bank Corp. utilizes the janitorial services of Rob's Scrub-All Corp. to keep their buildings clean. Rob's provides all the necessary cleaning supplies, training, background security checks since the crew works after hours), and all other associated expenses. The other available janitorial services do not typically provide security checks, and a client such as a bank would have to hire guards to watch the work of the janitors. This expense effectively limits the bank to utilizing only Rob's services. Which of the following is being incurred by Wright Bank?

A) high employment costs
B) unfavorable supplier status
C) high switching costs
D) favorable quality status
E) complementary products

Question 31

Kegg's Cereals Inc. is a major supplier to almost all grocery store chains. It has most of the valuable shelf space in the cereal aisle. Which of the following is true based on this information?

A) There are few entry barriers.
B) Government regulation of cereals is high.
C) The threat of new entrants is low.
D) Competitors have the larger market share.
E) Customers have high bargaining power.

Question 32

If a consumer changes suppliers, they are faced with

A) switching costs.
B) increased global competition.
C) supply chain management.
D) unforeseen logistics.
E) observational inadequacy.

Question 33

_____ means that managers do not have enough information about the surroundings needed to understand or predict the future.

A) Competitive intelligence
B) Environmental uncertainty
C) Minimization
D) Disinformation
E) Observational inadequacy

Question 34

______ is the degree of discontinuous change that occurs within the industry.

A) Complexity
B) Dynamism
C) Environmental uncertainty
D) Interconnectedness
E) Buffering

Question 35

Competition is most intense when there are ____ direct competitors, industry growth is slow, and the product or service cannot be differentiated.

A) few
B) many
C) some
D) no
E) limited

Question 36

Identify the environmental factor that contributes to an attractive environment for firms.

A) many barriers to entry
B) high threat of entry
C) many competitors
D) few suppliers
E) many substitutes

Question 37

Ted Inc. traditionally provides subcontracting services to construction firms. There are many firms like Ted Inc. in the marketplace, but it does about 85 percent of the work for Will's Construction Corp. Will typically negotiates quite heavily, reducing Ted's profits. This situation is indicative of the high bargaining power of

A) customers.
B) suppliers.
C) substitute companies.
D) competitors.
E) complementary firms.

Question 38

Which of the following is a final consumer?

A) wholesaler
B) retailer
C) broker
D) distributor
E) supplier

Question 39

_____ is a barrier to entry.

A) Price reductions
B) Brand identification
C) Advertising campaigns
D) Capital requirements
E) Environmental uncertainty

Question 40

A customer who purchases products in their finished form is an) _____ consumer.

A) immediate
B) final
C) alpha
D) complete
E) suave

Question 41

_____ are methods for adapting the technical core to changes in an environment.

A) Supply chain actions
B) Flexible processes
C) Independent strategies
D) Cooperative strategies
E) Technical acquisitions

Question 42

_____ is leveling normal fluctuations at the boundaries of an environment.

A) Smoothing
B) Buffering
C) Sifting
D) Flexing
E) Skirting

Question 43

A decentralized, bureaucratic approach with standardized skills for managing uncertainty is ideal for which of the following environments?

A) stable and complex
B) complex and dynamic
C) simple and stable
D) dynamic and simple
E) stable and dynamic

Question 44

Clara owns a small gift shop in South Carolina. She hopes the economy will rebound this fall as she has to order her Christmas merchandise and other holiday gifts in February. She wants to make sure she has enough goods for the surge in sales that the holiday season usually brings to her retail store. Here, Clara is using _____ to be sure she has enough gifts for those extra customers that she hopes will bear the economic woes and shop for holiday presents.

A) substitutes
B) smoothing
C) complements
D) buffering
E) demographics

Question 45

In ______ supplies are created of excess resources in case of unpredictable needs.

A) hoarding
B) smoothing
C) yielding
D) flocking
E) buffering

Question 46

Forecasts are most useful when the ____ will look radically different from the _____.

A) past; future
B) future; past
C) present; future
D) present; past
E) future; present

Question 47

_____ includes searching for and sorting through information about the environment.

A) Environmental scanning
B) Forecasting
C) Predictions
D) Competitive intelligence
E) Minimization

Question 48

When Carousel Corp. advertises its soap products as better than the soap products of Rhye Corp., Carousel is demonstrating

A) competitive aggression.
B) competitive pacification.
C) benchmarking.
D) smoothing.
E) cooptation.

Question 49

A decentralized, organic approach with mutual adjustment for managing uncertainty is ideal for which of the following environments?

A) stable and complex
B) complex and dynamic
C) simple and stable
D) dynamic and simple
E) stable and dynamic

Question 50

_____ are approaches that an organization that acts on its own uses to change some aspect of its current environment.

A) Flexible processes
B) Forecasting methods
C) Independent strategies
D) Benchmarking procedures
E) Buffering techniques

Question 51

When Nancy's Yogurt Inc. acts on its own to promote the yogurt industry as a whole, the company is practicing

A) competitive aggression.
B) competitive pacification.
C) public relations.
D) voluntary cooptation.
E) cooperative action.

Question 52

A centralized, organic approach with direct supervision for managing uncertainty is ideal for which of the following environments?

A) stable and complex
B) complex and dynamic
C) dynamic and simple
D) simple and stable
E) stable and dynamic

Question 53

Which of the following approaches should an organization adopt for managing uncertainty in a complex and dynamic environment?

A) centralized and bureaucratic approach, with standardized work processes
B) decentralized and bureaucratic approach, with standardized skills
C) decentralized and organic approach, with mutual adjustment
D) centralized and organic approach, with direct supervision
E) centralized and organic approach, with mutual adjustment

Question 54

_____ is the information necessary to decide how to best manage the competitive environment.

A) Business acumen
B) Lift coefficient
C) Competitive intelligence
D) Hidden agenda
E) Environmental scanning

Question 55

What method is used to predict exactly how some variable or variables will change in the future?

A) environmental scanning
B) sorting information
C) forecasting
D) searching
E) competitive intelligence

Question 56

Which of the following approaches should an organization adopt for managing uncertainty in a simple and stable environment?

A) centralized and organic approach, with direct supervision
B) decentralized and bureaucratic approach, with standardized skills
C) decentralized and organic approach, with mutual adjustment
D) centralized and bureaucratic approach, with standardized work processes
E) centralized and organic approach, with mutual adjustment

Question 57

A centralized, bureaucratic approach with standardized work processes for managing uncertainty is ideal for which of the following environments?

A) stable and complex
B) complex and dynamic
C) dynamic and simple
D) simple and stable
E) stable and dynamic

Question 58

Which of the following approaches should an organization adopt for managing uncertainty in a complex and stable environment?

A) decentralized and organic approach, with mutual adjustment
B) decentralized and bureaucratic approach, with standardized skills
C) centralized and bureaucratic approach, with standardized work processes
D) centralized and organic approach, with direct supervision
E) centralized and organic approach, with mutual adjustment

Question 59

The growth of contingent workers in the U.S. labor force due to unpredictable labor demand is an illustration of

A) adapting at the core.
B) process flexibility.
C) buffering.
D) smoothing.
E) empowerment.

Question 60

_____ is the process of sharing authority with employees to enhance their confidence in their ability to perform their jobs and contribute to an organization.

A) Empowerment
B) Licensing
C) Vetoing
D) Endorsement
E) Concurrence

Question 61

What is meant by adapting at the core?

A) smoothing
B) buffering
C) flexible processes
D) independent strategies
E) concurrence

Question 62

______ is exploiting a distinctive competence or improving efficiency for competitive advantage.

A) Competitive intelligence
B) Cooptation
C) Competitive aggression
D) Coalition
E) Smoothing

Question 63

_____ are companies that stay within a stable product domain as a strategic maneuver.

A) Adopters
B) Accommodators
C) Protectors
D) Sponsors
E) Defenders

Question 64

During the holiday season, Maria's Department Store works with a contracted employment agency to bring extra workers on board to handle overflow business, and extra duties such as wrapping presents. Maria's is using ________ during these rush times.

A) smoothing
B) buffering
C) independent strategies
D) flexible strategies
E) lift coefficient

Question 65

The Company is experiencing an increase in competition, and at the same time they are building more production facilities in Southeast Asia. In this scenario, the top management team is most likely to

A) give lower-level managers the authority to make decisions to benefit the firm.
B) pull decision-making responsibility from low-level management, taking it on themselves.
C) restructure to reflect a more bureaucratic, stable organization.
D) rid themselves of all buffering product.
E) increase the cost of their products.

Question 66

Bayne Corp. announced that it was selling off its pork division in order to realign itself more competitively in the marketing of its other products. This is an example of managing the task environment through

A) diversification.
B) acquisition.
C) merger.
D) divestiture.
E) domain selection.

Question 67

A university has just formed a board of trustees and invited 25 of its wealthiest alumni to join the board. Which of the following is being adopted by the university?

A) smoothing
B) cooptation
C) competitive intelligence
D) divestiture
E) scaffolding

Question 68

_____ is independent action to improve relations with competitors.

A) Competitive intelligence
B) Coalition
C) Cooptation
D) Competitive aggression
E) Competitive pacification

Question 69

_____ is an organization's conscious efforts to change the boundaries of its task environment.

A) Independent action
B) Cooperative strategy
C) Strategic maneuvering
D) Public relations
E) Flexible processing

Question 70

_____ is leveling normal fluctuations at the boundaries of the environment.

A) Buffering
B) Smoothing
C) Flexible processes
D) Independent strategies
E) Empowerment

Question 71

A company uses _____ when it acts on its own to change some aspect of its current environment.

A) strategic maneuvering
B) domain selection
C) buffering
D) independent action
E) endorsement

Question 72

Lindsay Pharmacy Corp. and Allman Medicines Corp. have joined forces with one another to fight for health care reform. This action of the two companies is referred to as

A) merger.
B) coalition.
C) domain selection.
D) benchmarking.
E) competitive aggression.

Question 73

Which of the following is a way of redefining the boundaries of an organization's environment?

A) independent action
B) domain selection
C) cooptation
D) buffering
E) smoothing

Question 74

Which of the following is a way of adapting to the external environment?

A) competitive aggression
B) public relations
C) cooptation
D) domain selection
E) buffering

Question 75

Which one of the following is not a way that a manager can influence their environment, according to Exhibit 3.5?

A) with political action
B) with legal action
C) through public relations
D) with automatic, involuntary actions
E) with competitive aggression

Question 76

_____ refers to absorbing new elements into an organization's leadership structure to avert threats to its stability or existence.

A) Coalition
B) Contracting
C) Cooptation
D) Buffering
E) Smoothing

Question 77

_____ are the strongly held and taken-for-granted beliefs that guide behavior in a firm.

A) Values
B) Organizational divestitures
C) Prospectors
D) Unconscious assumptions
E) Buffers

Question 78

_____ occurs when a company sells one or more businesses.

A) Diversification
B) Cooptation
C) Acquisition
D) Divestiture
E) Merger

Question 79

A company uses _____ when it acts on its own to change some aspect of its current environment.

A) smoothing
B) buffering
C) independent strategies
D) flexible processes
E) competitive intelligence

Question 80

Domain selection, diversification, mergers or acquisitions, and divestitures are all examples of

A) cooperative strategies.
B) voluntary action.
C) strategic maneuvering.
D) independent strategies.
E) competitive pacification.