Question 1

Which of the following identifies one reason why managers should NOT put time into managing stakeholder relationships?

Accepted Answer

This choice identifies a potential negative consequence of managing stakeholder relationships, namely that it can result in less predictability of environmental changes. However, all of the other choices identify benefits of stakeholder relationship management that can ultimately be advantageous for the organization. Therefore, A is the only choice that gives a reason why managers should not put time into managing these relationships.

Question 2

What do most high performing companies have in common when it comes to stakeholder relationships?

Accepted Answer

High performing companies tend to consider the interests of all stakeholder groups when they make important decisions. This is because they recognize that the success of the company is dependent not just on its shareholders, but on all of its stakeholders including customers, employees, suppliers, and the community. By considering the perspectives and needs of all stakeholders, high performing companies can make decisions that are not only financially successful but also socially responsible and sustainable in the long-term.

Question 3

Environmental complexity refers to the number of components that an organization must deal with.

Accepted Answer

Environmental complexity does refer to the number of components that an organization must deal with, such as stakeholders, regulations, competitors, and resources.

Question 4

New York mayor Michael Bloomberg's proposed ban on supersized sugary drinks is reflective of which external organizational issue?

Accepted Answer

The proposed ban on supersized sugary drinks is a response to concerns raised by stakeholders, such as health advocates, who are concerned about the health impacts of excessive sugar consumption. The ban reflects the importance of considering and responding to stakeholder interests and concerns.

Question 5

The CEO of a major corporation experiences emotional problems and is prescribed antidepressants by his psychiatrist.Which of the following do the CEO's stakeholders have the most legitimate right to be informed about?

Accepted Answer

Stakeholders have a legitimate right to be informed about whether the medication can impair judgment because it directly affects the CEO's ability to make decisions that impact the company's performance and their interests.

Question 6

The Total Freedom political party is trying to determine its position on climate change.Whom should the party consider as its stakeholders?

Accepted Answer

The answer of The Total Freedom political party is trying...

Question 7

A good manager considers the interests of all stakeholders equally when making an important decision.

Accepted Answer

A good manager must balance the interests of various stakeholders, but not all interests can be considered equally due to conflicting needs and the strategic direction of the organization.

Question 8

In a short essay, describe a real or fictional company that exists in cell 4 of the environmental uncertainty matrix.

Accepted Answer

The answer of In a short essay, describe a real...

Question 9

An industry with a dynamic business environment that is also highly complex faces the maximum amount of environmental uncertainty.

Accepted Answer

A dynamic business environment is characterized by frequent changes in technology, consumer preferences, government regulations, and other factors that affect the industry. At the same time, a complex industry involves multiple stakeholders, diverse product offerings, and intricate supply chain networks. These factors contribute to a high level of environmental uncertainty, where it becomes difficult to predict the future trends and outcomes of the industry. Therefore, option A is correct.

Question 10

The CEO of a major corporation experiences emotional problems and begins to see a psychiatrist.Which of the following has the most legitimate right to be informed about the situation?

Accepted Answer

The CEO's colleagues have a legitimate right to be informed about the situation because his emotional problems could potentially affect his ability to make sound decisions and lead the corporation effectively. However, the CEO's medical condition and treatment are confidential information and should not be disclosed to the media or stockholders unless it directly impacts the corporation's operations or financial status.

Question 11

The CEO of a major corporation experiences emotional problems and is treated for his condition by a psychiatrist.After being arrested and repeatedly behaving in bizarre and erratic ways, the company's board tries to oust the CEO but fails, so he remains in office.Following the failure to oust him from office, the CEO makes a series of brilliant decisions that vault the company into unprecedented success.Which of the following do the CEO's stakeholders have the most legitimate right to ask for?

Accepted Answer

While the CEO's brilliant decisions have led to the company's success, his past behavior and emotional problems cannot be ignored. The stakeholders have a legitimate right to ensure that the CEO's behavior and decision-making is being monitored for their own benefit. Appointing a colleague as a co-CEO or in a leadership position to keep an eye on the CEO would be the best course of action. The other options either do not address the issue or are potentially detrimental to the company's success.

Question 12

The CEO of a major corporation experiences emotional problems and makes an appointment to see a psychiatrist.Which of the following has the LEAST legitimate right to be informed about the situation?

Accepted Answer

The CEO's mental health issues are personal and confidential information, and therefore, the media has the least legitimate right to be informed about the situation. The stockholders, colleagues, and employees may have legitimate concerns about the CEO's ability to lead the company effectively and may have a right to be informed, to some extent, about the situation.

Question 13

Theodore and Janice have formed TJ Soft, an entrepreneurial venture to develop games and other kinds of software for consumers.Theodore has just read an article that describes the explosion of computer games among young people in India using cell phones and simple computers.This generation in India has well over 300 million people in it, and if TJ Soft can capture just a tiny portion of that market it will be highly successful.Which component of the external environment will affect TJ Soft the most in this situation?

Accepted Answer

The demographic component, specifically the size and characteristics of the young population in India, will have the most significant impact on TJ Soft's potential success in capturing a portion of the market for computer games. The technological component is also important, but it is the demographic component that creates the market opportunity for TJ Soft. The political and legal components are not directly relevant to this situation.

Question 14

In a short essay, describe the parameters in an environmental uncertainty matrix.

Accepted Answer

The answer of In a short essay, describe the parameters...

Question 15

In a short essay, describe a real or fictional company that exists in cell 1 of the environmental uncertainty matrix.

Accepted Answer

The answer of In a short essay, describe a real...

Question 16

Theodore and Janice have formed TJ Soft, an entrepreneurial venture to develop games and other kinds of software for consumers.Theodore has just gotten wind that engineers have developed a new computer system that works like the devices shown in the Steven Spielberg movie Minority Report in which users can control a sophisticated computer using their hands in midair.Janice sees this development as highly important to new games for TJ Soft.Which component of the external environment will affect TJ Soft the most in this situation?

Accepted Answer

The technological component will affect TJ Soft the most in this situation as the development of a new computer system that works like the devices shown in the movie Minority Report can create opportunities for new games and software for the company.

Question 17

Theodore and Janice have formed TJ Soft, an entrepreneurial venture to develop games and other kinds of software for consumers.Theodore has just read an article that says that the low interest rates that currently prevail are likely to end in the coming months.Theodore thinks that TJ Soft may need to apply for a loan now to avoid high costs later.Which component of the external environment will affect TJ Soft the most in this situation?

Accepted Answer

The economic component, specifically interest rates, is the factor that will affect TJ Soft the most in this situation. The potential increase in interest rates in the near future means that borrowing costs may rise, so Theodore's concern about applying for a loan now to avoid higher costs later is a response to the economic component of the external environment.

Question 18

Given a choice, managers would prefer to operate in an environment that has a minimum of uncertainty.

Accepted Answer

Managers generally prefer a stable and certain environment as it allows them to plan, forecast, and make decisions with more confidence. Uncertainty can create doubt and make it more difficult to evaluate options and outcomes.

Question 19

The CEO of a major corporation experiences emotional problems and is treated for his condition by a psychiatrist.Shortly after he begins taking medication, the CEO is arrested for reckless driving and appears in the media making bizarre statements that sound misguided and bigoted.When questioned about his competence to lead, the CEO blames his troubles on his medication, then continues to behave erratically and make statements in "bad taste." Which of the following do the CEO's stakeholders have the most legitimate right to demand?

Accepted Answer

The stakeholders have the most legitimate right to demand that the CEO resign from his position. The CEO's behavior is erratic and in "bad taste," which can harm the company's reputation and financial success. Although the CEO blames his behavior on medication, it is ultimately his responsibility to manage his condition and maintain the level of professionalism required for his leadership role. Therefore, resigning from his position would be the best course of action in this situation.

Question 20

The CEO of a major corporation experiences emotional problems and is prescribed antidepressants by his psychiatrist.The medication has been shown in studies to "cloud judgment." Which of the following do the CEO's stakeholders have the most legitimate right to demand?

Accepted Answer

Stakeholders have a legitimate right to ensure that the leadership of the corporation is sound and capable of making good decisions. Testing the CEO to see if his judgment is impaired directly addresses the concern raised by the medication's side effects without infringing unnecessarily on the CEO's privacy or autonomy.

Quiz 2: The Management Environment