MGT 3370 – Chapter 3 Quiz – Flashcards
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What are the two types of external organizational environments? a. general and the specific b. public and private c. global and the national d. organizational and the interpersonal e. market-specific and the product-specific
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a. general and the specific
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In terms of external organizational environments, the ____ environment affects all organizations while the ____ environment is unique to each company. a. global; national b. customer-driven; production-driven c. general; specific d. informal; formal e. specific; general
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c. general; specific
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All events outside a company that have the potential to influence or affect it occur in the ____ environment. a. specific b. external c. formal d. potential e. national
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b. external
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Which of the following companies is most likely operating in a dynamic environment? a. a video game manufacturer b. a bakery c. a brewery, winery, or distillery in the liquor industry d. a manufacturer of pet food e. a cereal manufacturer
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a. a video game manufacturer A dynamic environment is one in which the rate of change is fast. A video game maker faces short product life cycles and rapid changes in technology.
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According to the ____theory, companies go through long, simple periods of environmental stability, followed by short, complex periods of dynamic, fundamental environmental change, finishing with a return to environmental stability. a. environmental change theory b. theory of environmental dynamics c. punctuated equilibrium theory d. theory of resource scarcity e. environmental cycle
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c. punctuated equilibrium theory This is the definition of punctuated equilibrium theory.
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Over the past 20 years, which of the following is an industry that has experienced both the stable and dynamic environments predicted by punctuated equilibrium theory? a. the airline industry b. the baking industry c. the video game industry d. the breakfast cereal industry e. the landscaping industry
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c. the video game industry The U.S. airline industry is used in the text as an example of punctuated equilibrium, or a long, simple period of stability followed by short periods of dynamic, fundamental change.
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Suppose that a Mexican car manufacturer wants to export cars to Guatemala. The fact that the distribution of income within Guatemala is highly unequal and that about 75 percent of the population is below the poverty line would be a(n) ____ component in the manufacturer's general environment. a. technological b. socio-cultural c. economic d. political/legal e. demographic
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c. economic
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A company facing a simple environment would ____. a. most likely be in the first stage of the environmental cycle b. exhibit proof of the punctuated equilibrium theory c. be unable to succeed due to lack of innovation d. be influenced by only factors in its specific environment e. have few external factors in the environment that affect it
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e. have few external factors in the environment that affect it
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In terms of environmental complexity, ____ environments have few environmental factors, whereas ____ environments have many environmental factors. a. non-competitive; competitive b. simple; complex c. stable; dynamic d. scarce; abundant e. market-oriented; product-oriented
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b. simple; complex
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____ is the degree to which an organization's external environment has an abundance or scarcity of critical organizational resources. a. Environmental complexity b. Environmental capacity c. Differentiation opportunity d. Environmental dynamism e. Resource scarcity
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e. Resource scarcity
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In a very strong economy, where the demand for qualified job applicants exceeds the supply, the environmental characteristic of ____ is likely to be particularly salient for many companies. a. environmental complexity b. environmental change c. resource scarcity d. environmental uncertainty e. environmental risk
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c. resource scarcity Resource scarcity is a lack of critical organizational resources (in this case, human resources).
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Environmental ____ is affected by environmental complexity, change, and resources. a. uncertainty b. differentiation c. difficulty d. essence e. entrepreneurship
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a. uncertainty Environmental uncertainty is defined as the extent to which managers can understand or predict which environmental changes will affect their businesses. Complexity and change make it more difficult for managers to achieve such understanding or make sound forecasts.
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Legislation concerning the disposal of biological wastes, the development of more sophisticated imaging machines, and longer patient life spans would all be part of the ____ for a public hospital. a. internal environment b. specific environment c. socio-cultural environment d. general environment e. environmental differentiation
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d. general environment These are changes that indirectly affect all organizations.
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The ____ consists of the economy and the technological, socio-cultural, and political/legal trends that indirectly affect all organizations. a. economic environment b. specific environment c. general environment d. indirect environment e. direct environment
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c. general environment
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Which of the following is a component of the specific environment that would directly influence a restaurant's day-to-day operation? a. its regular customers b. GNP c. a trend toward eating less fat d. more rigid enforcement of OSHA laws e. all of these
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a. its regular customers Customers are a major component of a firm's specific environment. All of the other items would exert an indirect influence as part of the firm's general environment.
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Changes in any sector of the general environment ____. a. will typically not impact most organizations b. tend to slow down how quickly an organization moves through the environmental cycle c. inhibit the innovation process d. influence customers first and then suppliers e. will eventually affect most organizations.
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e. will eventually affect most organizations. It is a fundamental attribute of general environment factors that they affect all organizations over time.
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Which of the following is a component of Coca-Cola's specific environment and will directly influence how it does business? a. Pepsi-Cola b. laws concerning sanitation c. inflation d. the increased popularity of energy drinks e. the development of vending machines that accept debit cards
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a. Pepsi-Cola Pepsi is a direct competitor and thus a component of Coke's specific environment.
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Which of the following is a component of a book publisher's general environment and will indirectly influence how it does business? a. other book publishing companies b. pornography laws c. an advocacy group supporting free books for children d. a trend toward less leisure time e. paper and ink suppliers
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d. a trend toward less leisure time Leisure time trends will affect other companies such as boat manufacturers. The other elements are part of the publisher's specific environment.
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Which of the following is the LEAST aggressive approach likely to be used by an advocacy group? a. public communications b. media advocacy c. product boycotts d. class action lawsuits e. picketing
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a. public communications
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Consider a hamburger fast-food chain that began operations prior to World War II. In which of the following would have been part of its specific environment after the start of World War II? a. other fast-food restaurants that sell hamburgers b. its customers who eat burgers at least once a week c. the meat packing company that supplied its beef d. government-mandated beef rationing as a result of World War II e. all of these
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d. government-mandated beef Competitors, customers, and suppliers are part of a company's specific environment at any time. Rationing, an example of industry-specific regulation, is not a typically part of a company's specific environment but occurs only under certain circumstances, in this case the need to divert resources to the war effort
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Managers often prefer to use business confidence indices ____. a. to identify socio-cultural trends b. as predictors of future economic activity when making business decisions c. which are based on intuition and experience d. to encourage customers to make long-term buying decisions e. to improve consumer confidence forecasts
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b. as predictors of future economic activity when making business decision Economic statistics tend to be poor predictors of future business activity. Confidence indexes measure manager sentiment, which may yield a stronger prediction of near-term economic activity.
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Technology is the ____ used to transform inputs (raw materials, information, etc.) into outputs (products or services). a. knowledge, tools, and techniques b. knowledge and machinery c. plans and machinery d. tools and techniques e. strategy and tactics
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a. knowledge, tools, and techniques
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More premature babies than ever before are surviving due to improvements in medical knowledge and care. This improved survival rate can be attributed to the ____ component of hospitals. a. technological b. socio-cultural c. economic d. political/legal e. demographic
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a. technological
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Tourism was not the only travel-associated industry that was visibly hurt by what happened on 9/11. People decided to vacation at home and sales of luggage and similar travel gear decreased significantly. Sales of home swimming pools increased. This decision to stay at home reflects a change in attitudes toward the perceived safety of long-distance traveling. This is an example of a change in the ____ component of the general environment. a. technological b. socio-cultural c. economic d. competitive e. geographic
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b. socio-cultural
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Fear of a lawsuit prevents many employers from giving totally honest recommendations to former employees. This reflects a change in the ____ component of the general environment. a. technological b. social c. economic d. political/legal e. demographic
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d. political/legal
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The manager of a company that produces a soy-based sausage wants to conduct a competitive analysis. During this competitive analysis, he should look at ____. a. companies that produce other brands of pork-based sausage b. Morningstar, a company that has a complete line of soy-based products c. companies that produce other forms of breakfast meats like bacon d. individuals who make their own sausage e. The manager should consider all of the listed factors.
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e. The manager should consider all of the listed factors. Competitive analysis is a process for monitoring the competition that involves identifying competitors, anticipating their moves, and determining their strengths and weaknesses. To understand competitive behavior, it is important that this company identify all of its likely competitors.
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A fast-food restaurant chain is famous for its small, square hamburgers. Which of the following would be a component of its socio-cultural environment? a. a period of business prosperity b. the development of fully automated drive-through windows c. a price war with Burger King and McDonald's d. the fact most consumers prefer eating out rather than at home e. regulations passed by the Food & Drug Administration
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d. the fact most consumers prefer eating out rather than at home Consumer preferences are an example of a trend in general behavior, an aspect of the socio-cultural environment.
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Which of the following is NOT a dimension of the political/legal component of the general environment that governs and regulates business behavior? a. legislation b. competitive products c. court decisions d. regulation e. customer-initiated lawsuits
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b. competitive products The political/legal component includes legislation, regulation, and court decisions that govern and regulate business behavior.
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A fast-food restaurant chain is famous for its small, square hamburgers. Which of the following would be a component of its general environment? a. meat processing companies that provide its ground beef b. consumers who will drive miles out of their way to eat a burger c. boycotts by the Chicago organization of People for the Ethical Treatment of Animals (PETA) d. local zoning laws that designate the appropriate distance from the street for a restaurant to be located e. inflation
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e. inflation Inflation affects all organizations. The other factors exert industry-specific influence on the restaurant.
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Which of the following is NOT a potential legal risk associated with traditional managerial decisions like recruiting, hiring, and firing employees? a. negligent supervision b. invasion of privacy c. product liability d. defamation e. a charge of emotional distress
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c. product liability
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Two homebuilders are building homes in nearby subdivisions. One is offering 2,500-square-foot homes with two-acre yards. The other is offering a similarly sized house with quarter-acre yards. The builder offering the smaller lots cannot keep up with demand. The builder offering the larger lots has several unsold houses. The builder with the larger lots could use ____ to determine why his homes are not selling. a. proactive customer monitoring b. consumer confidence forecasts c. demographic information d. reactive customer monitoring e. a competitive location study
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d. reactive customer monitoring Reactive customer monitoring is defined as identifying and addressing customer trends and problems after they occur.
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____ is used to refer to a company's practice of identifying and addressing customer trends and problems after they occur. a. Consumer confidence forecasts b. Competitive analysis c. Reactive customer monitoring d. Proactive customer monitoring e. Continuous data mining
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c. Reactive customer monitoring
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Two homebuilders are building homes in nearby subdivisions. One is offering 2,500-square-foot homes with two-acre yards. The other is offering a similar size of house with quarter-acre yards. The builder offering the smaller lots cannot keep up with demand. The builder offering the larger lots has several unsold houses. The builder with the smaller lots most likely used ____ to determine what homebuyers desired. a. reactive customer monitoring b. proactive customer monitoring c. competitive analysis d. environmental munificence e. consumer confidence forecasts
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b. proactive customer monitoring
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____ involves deciding who your competitors are, anticipating competitors' moves, and determining competitors' strengths and weaknesses. a. Competitive mapping b. A market audit c. A SWOT analysis d. A proactive strategy e. A competitive analysis
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e. A competitive analysis
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Companies doing a competitive analysis typically err by ____. a. doing an incomplete job of identifying competitors b. overestimating their competition c. ignoring proactive monitoring d. relying on competitive intelligence e. doing all of these
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a. doing an incomplete job of identifying competitors Managers tend to focus on two or three well-known competitors and may overlook less visible/familiar competitors.
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Typically the most important factor in the relationship between companies and their suppliers is ____. a. how dependent they are on each other b. how much they know about each other c. how compatible their organizational cultures are d. the type of product being manufactured e. all of these
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a. how dependent they are on each other A high degree of buyer or seller dependence can lead to opportunistic behavior by one party at the expense of the other.
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An increase in ____ can lead to opportunistic behavior in which one party benefits at the expense of the other. a. managerial commitment b. buyer dependence c. industry regulation d. advocacy group activities e. consumer confidence indicators
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b. buyer dependence
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The creation of Ingram Distribution allows booksellers to streamline the ordering and return procedures of their books. Ingram made all the books bookstore owners wanted available in one centralized warehouse. Many new bookstore owners would be unwilling and/or unable to return to the method of ordering books from the individual publishers. This is an example of the creation of ____. a. high buyer dependence on a supplier b. pure competition c. transactional freedom d. high supplier dependence on a buyer e. none of these
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a. high buyer dependence on a supplier A high degree of buyer or seller dependence can lead to opportunistic behavior by one party at the expense of the other.
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Small manufacturers are successful often because Wal-Mart agrees to carry their products. If Wal-Mart does not like a price increase, it often will refuse to do business with the manufacturer. At this point, many small manufacturers will offer price reductions because they fear failure if they lose the Wal-Mart account. The relationship between these small manufacturers and Wal-Mart can be described as ____. a. buyer dependent b. relationship-based c. transformational d. supplier dependent e. none of these
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a. buyer dependent A high degree of buyer or seller dependence can lead to opportunistic behavior by one party at the expense of the other.
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A high degree of buyer or seller dependence can lead to ____ in which one party benefits at the expense of the other. a. relationship behavior b. transactional behavior c. behavioral monogamy d. relational monopoly e. opportunistic behavior
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e. opportunistic behavior
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In setting up his new office, an attorney wanted furnishings that were elegant and that would make him look successful. He wanted thick, plush carpeting in his office, but federal regulations state that his office must be wheelchair accessible because it is a public area. Wheelchairs do not maneuver well in thick carpeting. The building inspector had him remove the expensive carpeting and replace it with a carpet that did allow for wheelchair maneuverability. This is an example of how the ____ component of a company's specific environment influences it. a. socio-cultural b. economic c. political/legal d. supplier e. industry regulation
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e. industry regulation Industry regulation includes rules that govern business practices and procedures, including accessibility for disabled workers.
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An emphasis on ____ is likely to decrease opportunistic behavior but will never completely eliminate it. a. buyer dependence b. supplier dependence c. industry regulation d. relationship behavior e. competitive advocacy
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d. relationship behavior A high degree of buyer or seller dependence can lead to opportunistic behavior by one party at the expense of the other. Relationship behavior focuses on establishing long-term, mutually beneficial relationships.
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A fast-food restaurant chain is famous for its small, square hamburgers. Which of the following would be an industry regulation component of its specific environment? a. an increase in the prime lending rate b. local health inspectors c. class-action suits against all fast-food restaurants d. inflation e. all of these
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b. local health inspectors Industry regulations and rules govern the business practices and procedures of specific industries, businesses, and professions. The restaurant industry is regulated by local health inspectors.
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____ is a tactic in which an advocacy group actively tries to convince consumers not to purchase a company's product or service. a. Lobbying b. Public communications c. Media advocacy d. Product boycott e. Market denigration
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d. Product boycott Media advocacy is defined as a tactic that involves framing issues as public issues; exposing questionable, exploitative, or unethical practices; and forcing media coverage by buying media time or creating controversy that is likely to receive extensive news coverage. Lobbying, public communications, and market denigration are not listed in the book as advocacy tactics.
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Advocacy groups use a variety of tactics to convince businesses to comply with the group's stand on issues. Which of the following advocacy group tactics would be most likely to cause a business to fail? a. media advocacy b. product boycotts c. public communications d. requiring a business license e. lobbying
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b. product boycotts Product boycotts are the most aggressive public advocacy tactic, as they may directly impact a company's potential to profit and grow.
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The first step managers use to make sense of their changing environments is ____. a. environmental scanning b. perceptual re-engagement c. modifying budgets d. downsizing e. benchmarking
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a. environmental scanning Environmental scanning precedes action steps such as downsizing, modifying budgets, or benchmarking. Perceptual re-engagement is a red herring.
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Which of the following is one of the steps in the process that managers use to make sense of their changing environments? a. perceptual re-engagement b. environmental laddering c. acting on threats and opportunities d. creating strategic windows e. behavioristic relations
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c. acting on threats and opportunities
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Kodak makes digital cameras and paper for prints. Kodak would view the ubiquity of digital cameras as a(n) ____ in its external environment if it considered how digital cameras affect sales of cameras that use film. On the other hand, Kodak would view the growing popularity of digital cameras as a(n) ____ in its external environment if it considered the amount of Kodak processing paper used in printing pictures made by digital cameras. a. strength; weakness b. risk; certainty c. opportunity; threat d. certainty; risk e. threat; opportunity
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e. threat; opportunity
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The term ____ refers to the events and trends inside an organization that affect management, employees, and the organizational culture. a. managerial environment b. internal environment c. industry environment d. general environment e. organizational structure
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b. internal environment
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The ____ is the set of key values, beliefs, and attitudes shared by members of an organization. a. industry code of ethics b. internal environment c. organizational culture d. organizational strategy e. organizational vision
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c. organizational culture
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When Susan started work at Henderson Textile Co., she was amazed at its employees who would take 30-minute restroom breaks, leave for the day at 2 p.m., and generally belittle the company's management. Such employees' actions most likely developed over time as a result of a faulty ____. a. general environment b. benchmark c. response to an opportunity d. organizational culture e. formalization strategy
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d. organizational culture The organizational culture is the set of key values, beliefs, and attitudes shared by members of an organization.
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____ is a primary source of organizational culture. a. The company's founder b. The organization's competitive strategy c. The industry in which the organization operates d. Suppliers e. Customers
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a. The company's founder Company founders (such as Sam Walton of Wal-Mart) exert a primary influence on the development of an organization's culture.
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After an organization's founders are gone, the organization can use ____ to sustain its organizational culture. a. industry associations b. organizational heroes c. organizational structure d. organizational maps e. reciprocal formalization
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b. organizational heroes Organizational stories and heroes are two means of perpetuating an organizational culture after a founder retires, dies, or chooses to leave the organization
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According to a book by a Harvard Business School professor, some organizational cultures simply cannot meet the challenges posed by innovation and must respond to threats from new technologies by building outside ventures. Digital Equipment is described as having one of those organizational cultures. The company squandered the opportunities presented by the PC revolution even though it was well equipped to build cheap PCs. The company did not have ____. a. adaptability b. synergy c. a formula for success laddering d. knowledge management e. comprehension
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a. adaptability Adaptability is the ability to notice and respond to changes in organizational environment. Digital Equipment failed to recognize the shift from mainframes to PCs.
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Which of the following is a characteristic of successful organizational cultures? a. adaptability b. consistency c. involvement d. a clear mission e. all of these
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e. all of these
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The Edmonton Oilers ice hockey team develops a sense of history for its current players by raising banners showing its success - five championships - and the retired numbers of great players from the past in its stadium and locker room. What tactics for maintaining organizational culture are the Edmonton Oilers using? a. organizational complexity and consistency b. organizational benchmarking c. cultural laddering d. organizational stories and organizational heroes e. behavioral addition and behavioral substitution
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d. organizational stories and organizational heroes
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One of the difficulties encountered in recent mergers has been the inability of employees in the two existing organizational cultures to operate harmoniously. In other words, merging organizational cultures often lack the ____ that would increase the likelihood of a merger's success. a. responsiveness b. adaptability c. involvement d. consistency e. validity
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b. adaptability Adaptability is the ability to notice and respond to changes in the environment. Merging changes the internal environment of the merged organizations.
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One of the problems with many of the dot-com companies that failed in the mid-1990s was a lower and middle management adherence to innovation and an expectation that work would be fun while top management envisioned the company being profitable and the elimination of unnecessary expenses. These companies lacked ____ in their organizational cultures. a. empathy b. formalization c. consistency d. broad spans of management e. responsiveness
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c. consistency Consistency is defined as actively defining and teaching the organizational values, beliefs and attitudes. In this description, dot-com companies allowed two different (and often conflicting) sub-cultures to emerge naturally.
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Organizations use behavioral addition, behavioral substitution, and ____ to change their organizational culture. a. media advocacy b. visible artifacts c. psychological counseling d. affective stores e. incremental valences
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b. visible artifacts Visible artifacts are signs of an organization's culture (e.g., company dress code). Changes in artifacts may be made in order to support the change process.
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____ is the process of having managers and employees perform new behaviors that are central to and symbolic of the new organizational culture a company wants to create. a. Relationship transformation b. Behavioral substitution c. Partnering d. Attitudinal modification e. Behavioral addition
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e. Behavioral addition
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When using ____techniques to change organizational culture, the key to success is to choose behaviors that are central to and symbolic of the old culture that is changing and the new culture you want to create. a. attitudinal motivation and conditioned learning b. behavioral substitution and behavioral addition c. conditioned and classical learning d. negative and positive reinforcements e. organizational stories and heroes
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b. behavioral substitution and behavioral addition Behavioral substitution is replacing old behaviors with new behaviors in support of the change effort. Behavioral addition is adding new behaviors that support the change.
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Which of the following approaches will guarantee the successful change of an organizational culture? a. employee munificence b. perceptual substitution c. the recognition of new organizational heroes d. new organizational stories e. None of the choices can guarantee successful organizational change.
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e. None of the choices can guarantee successful organizational change. Organizational cultures are very difficult to change, and no intervention guarantees success.
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Managers can use behavioral addition and behavioral substitution to ____. a. create benchmarks b. assess the threats and opportunities in the internal environment c. develop new products d. locate new markets for existing products e. modify corporate culture
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e. modify corporate culture Behavioral addition and behavioral substitution are types of behavioral interventions commonly used in organizational change efforts.
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In order to change an organizational culture, top management can persuade other managers and employees to perform a new behavior in place of an older one. This technique is called ____. a. behavioral iteration b. behavioral substitution c. behavioral subtraction d. organizational acculturation e. replacement behavior
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e. replacement behavior Behavioral substitution is the process of having managers and employees perform new behaviors central to the new organizational culture in place of those behaviors that were central to the old organizational culture.
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When Samsonite purchased American Tourister, one of the first things the new management did was to eliminate the American Tourister Gorilla mascot (which had appeared in all American Tourister ads for years and which represented the quality construction of American Tourister luggage). The gorilla had been a symbol of quality and commitment for American Tourister employees. The executive order to remove the gorilla posters from the walls of offices and factories was one of the means Samsonite used to change the organizational culture at American Tourister. The gorilla posters were an example of ____. a. visible artifacts b. iconic representations c. organizational metaphors d. organizational allegories e. imbued technology
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a. visible artifacts Visible artifacts are signs of an organization's culture.
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Which of the following would be an example of a visible artifact for an organization that is merging with a large international firm? a. personal parking spaces for all salespeople b. a private company dining room c. traditional offices d. end-of-year bonuses e. all of these
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e. all of these Visible artifacts are signs of an organization's culture.
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Which of the following statements about corporate cultures is true? a. Corporate cultures are dynamic creations that respond positively to change. b. Corporate culture are unaffected by changes in perks, office layouts, or work relationships. c. Corporate cultures are very difficult to change. d. Any manager who wants to modify a corporate culture must follow the cultural change plan, which begins with employee input and ends with behavioral addition and/or substitution. e. Corporate culture change is significantly easier with behavioral addition than with behavioral subtraction.
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c. Corporate cultures are very difficult to change Corporate cultures are dynamic, composed of both visible artifacts and behavioral routines, and complex. Therefore, they resist simple rule-of-thumb interventions and are notoriously difficult to change.
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Milsand Corp. used office cubicles for its employees. Employees were not allowed to personalize their cubicles. If Milsand wanted to change its organizational culture, it could begin by ____. a. creating a new human resources department b. hiring a cultural ombudsman c. adhering to affirmative action regulations d. allowing employees to personalize their cubicles e. giving everyone raises
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d. allowing employees to personalize their cubicles This would represent a change in visible artifacts, one aspect of organizational culture.
