Deck 3: The Organizational Environment and Culture

Question 1

Environmental scanning predicts exactly how some variable or variables will change in the future.

Answer 1

False

Question 2

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

Answer 2

False

Question 3

When an industry matures, profits drop.

Answer 3

True

Question 4

Buffering is a method for adapting the technical core to changes in the environment.

Question 5

Forecasts are most useful when the future will look radically different from the past.

Question 6

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

Question 7

Brand identification is a barrier to entry.

Question 8

The immediate environment surrounding a firm including suppliers, customers, rivals, and the like is called the macroenvironment.

Question 9

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

Question 10

Smoothing is creating supplies of excess resources in case of unpredictable needs.

Question 11

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

Question 12

All organizations operate in a macroenvironment.

Question 13

Switching costs are variable costs consumers face if they change brands.

Question 14

Competition is most intense when there are few direct competitors, industry growth is fast, and the product or service varies

Question 15

Exploiting a distinctive competence or improving internal efficiency for competitive advantage is known as competitive aggression.

Question 16

Many companies improve their competitiveness and profitability through switching costs.

Question 17

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

Question 18

Intense competition causes an industry shakeout.

Question 19

Benchmarking means identifying the best-in-class performance by a company in a given area and then comparing your processes with theirs.

Question 20

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

Question 21

Hospitals and universities are very expensive to run because of the capital and equipments 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) Absolute threshold

Question 22

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

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

Question 23

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

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

Question 24

A popular low-cost airline, Sky Cruiser, 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 aspect of the competitive environment does this illustrate?

A) Customers
B) Competitors
C) Regulators
D) The economy
E) Threat of new entrants

Question 25

Wealth and Wealth Bank utilizes the janitorial services of Rob's Scrub-All 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 does this illustrate?

A) High employment costs
B) Unfavorable supplier status
C) High switching costs
D) Favorable quality status
E) Complementary products

Question 26

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

A) Cannibalization
B) Downsizing
C) Scaffolding
D) Industry shakeout
E) Segmentation

Question 27

Organizations that are affected by, and that affect, their environment are called:

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

Question 28

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

Question 29

The immediate environment surrounding a firm including suppliers, customers, and rivals is known as _____.

A) macroenvironment
B) external environment
C) competitive environment
D) demographics
E) proximal climate

Question 30

The dominant attributes of an adhocracy are order, rules and regulations, uniformity, and efficiency.

Question 31

Defenders pertain to conditions that prevent new companies from entering an industry.

Question 32

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

Question 33

Which of the following is a common barrier to entry?

A) Brand identification
B) Final consumer
C) Bargaining power of buyers
D) Demographics
E) Switching costs

Question 34

Ted Inc. traditionally provides sub-contracting services to construction firms. There are many firms like Ted Inc. in the marketplace but it does about 85% of the work for Will's Construction. 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 35

Conditions that prevent new companies from setting foot in an industry are known as _____.

A) demographics
B) industry shakeouts
C) scaffolding
D) zero-profit conditions
E) barriers to entry

Question 36

The main difference between a final consumer and an intermediate consumer is that the final consumer:

A) pays cash.
B) uses products himself.
C) purchases more than intermediate consumers.
D) is not as flexible as an intermediate consumer.
E) does not have any bargaining power.

Question 37

Kegg's Cereals 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 cereal is high.
C) The threat of new entrants is low.
D) Competitors have the larger market share.
E) Customers have high bargaining power.

Question 38

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

A) external environment
B) open systems
C) relative constraints
D) physical noise
E) competitive bodies

Question 39

Cooptation means absorbing new elements into the organization's leadership structure to avert threats to its stability or existence.

Question 40

Margaret Pane, 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 Pane should focus on?

A) Government policies
B) Demographics
C) Suppliers
D) Technology
E) Social factors

Question 41

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 42

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

A) Centralized, organic with mutual adjustment
B) Decentralized, bureaucratic with standardized skills
C) Decentralized, organic with mutual adjustment
D) Centralized, bureaucratic with standardized work processes
E) Centralized, organic with direct supervision

Question 43

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

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

Question 44

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

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

Question 45

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

A) Centralized, organic with direct supervision
B) Decentralized, bureaucratic with standardized skills
C) Decentralized, organic with mutual adjustment
D) Centralized, bureaucratic with standardized work processes
E) Centralized, organic with mutual adjustment

Question 46

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

A) Decentralized, organic with mutual adjustment
B) Decentralized, bureaucratic with standardized skills
C) Centralized, bureaucratic with standardized work processes
D) Centralized, organic with direct supervision
E) Centralized, organic with mutual adjustment

Question 47

When Musk advertises its soap products as better than Pearl soap products, Musk is demonstrating:

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

Question 48

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 49

Clara owns a small gift shop in 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 brave the economic woes and shop for holiday presents.

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

Question 50

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

A) Centralized, bureaucratic with standardized work processes
B) Decentralized, bureaucratic with standardized skills
C) Decentralized, organic with mutual adjustment
D) Centralized, organic with direct supervision
E) Centralized, organic with mutual adjustment

Question 51

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 52

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

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

Question 53

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

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

Question 54

Creating supplies of excess resources in case of unpredictable needs is called

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

Question 55

_____ is the information that helps managers determine how to do better than others.

A) Business acumen
B) Lift coefficient
C) Hidden agenda
D) Competitive intelligence
E) Gini index

Question 56

When Nancy's Yogurt Company 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 57

_____ 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 58

In an attempt to improve customer service, Tailpin Toys decided to assign a team to investigate the kinds of services offered by competing companies. The team discovered that a smaller company, Nuance Games, 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 Tailpin Toys. Which of the following does this illustrate?

A) Environmental dynamism
B) Benchmarking
C) Strategic maneuvering
D) Cooperative action
E) Forecasting

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) flexible processes.
C) buffering.
D) smoothing.
E) empowerment.

Question 60

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 61

Higher Wisdom University has just formed a board of trustees and invited 25 of its wealthiest alumni to join. Which of the following is the university adopting?

A) Smoothing
B) Cooptation
C) Competitive intelligence
D) Divestiture
E) Scaffolding

Question 62

The five-by-eight inch card with one rule on it-Use good judgment in all situations-that employees at Envytech receive along with the employee handbook tells the employees a great deal about their company's:

A) visible artifacts.
B) voluntary actions.
C) organization culture.
D) competitive aggression.
E) macroenvironment.

Question 63

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

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

Question 64

Which of the following leadership styles is associated with a hierarchical culture?

A) Coordinator, organizer
B) Production and achievement-oriented
C) Risk taker
D) Innovator, entrepreneur
E) Mentor, facilitator, parent figure

Question 65

Lindsay Pharmacy and Allwell Medicines have joined forces with one another to lobby 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 66

_____ are the underlying qualities and desirable behaviors that are important to the organization.

A) Traits
B) Ethics
C) Norms
D) Benchmarks
E) Values

Question 67

_____ are companies that continuously change the boundaries for their task environments by seeking new products and markets, diversifying and merging, or acquiring new enterprises.

A) Defenders
B) Wanderers
C) Transformers
D) Prospectors
E) Divergers

Question 68

Which of the following is a way of redefining the boundaries of an environment a firm is in?

A) Independent action
B) Domain selection
C) Cooptation
D) Buffering
E) Smoothing

Question 69

_____ are approaches that an organization acting 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 70

Meatorganics 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 71

Which of the following is the deepest level of organizational culture?

A) Unconscious assumptions
B) Values
C) Desirable behaviors
D) Individual talents
E) Ancillary activities

Question 72

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

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

Question 73

If an organization's culture is externally oriented and focused on control with its primary objectives as productivity, planning and efficiency, it could best be described as a _____ culture.

A) group
B) hierarchical
C) rational
D) adhocracy
E) values-oriented

Question 74

_____ is the set of assumptions about the organization and its goals and practices that members of the company share.

A) Competitive intelligence
B) Systemic perception
C) Organization culture
D) Inductive bias
E) Scientific management

Question 75

_____ are the components of an organization that can be seen and heard, such as office layout, dress, orientation, stories, and written material.

A) Incendiaries
B) Visible artifacts
C) Perceived assimilations
D) Organizational divestitures
E) Apparitions

Question 76

An organization's _____ refers to all relevant forces inside a firm's boundaries, such as its managers, employees, resources, and organizational culture.

A) internal environment
B) competitive environment
C) macroenvironment
D) demographics
E) open systems

Question 77

Which of the following can be a useful clue about an organization's culture?

A) Who is hired and fired
B) Information printed in the media
C) The macroenvironment
D) Environmental scanning
E) The industrial environment

Question 78

Which of the following is the first level of organizational culture?

A) Unconscious assumptions
B) Values
C) Desirable behaviors
D) Visible artifacts
E) Intangible beliefs

Question 79

_____ 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 process

Question 80

_____ occurs when a company sells one or more businesses.

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