Deck 4: The External Environment

Question 1

Which of the following means that decision makers do not have sufficient information about environmental factors and they have a difficult time predicting external change?

A) Cooptation
B) Differentiation
C) Uncertainty
D) Integration

Answer 1

C

Question 2

Assessment of environmental uncertainty of an organization is based primarily on analysis of two dimensions, which are:

A) the need for information about the environment and the need for resources from the environment.
B) the number of sectors and the organization's niche.
C) the extent of turbulence and the amount of available resources.
D) differentiation and integration.

Answer 2

A

Question 3

Trend-setting toy companies or high-fashion clothing manufacturers have in common:

A) an environment that is stable but complex, therefore requiring a mechanistic structure.
B) an organic structure, from which we can reason that the environment is highly uncertain.
C) a large number of dissimilar external elements, which remain about the same over time.
D) an environment that is simple but unstable, creating relatively high uncertainty.

Answer 3

D

Question 4

In the ____ sector, regulations influence every phase of organizational life.

A) sociocultural
B) human resources
C) international
D) government

Question 5

The greatest uncertainty for an organization occurs in which environment?

A) Complex, stable
B) Complex, unstable
C) Simple, unstable
D) Simple, stable

Question 6

Which of the following is a proper dimension of the framework for assessing environmental uncertainty?

A) Dispersion-contiguity
B) Simple-complex
C) Certain-uncertain
D) Internal-external

Question 7

Which of the following is a proper dimension of the framework for assessing environmental uncertainty?

A) Stable-unstable
B) Loose-tight
C) Known-unknown
D) High competitiveness-low competitiveness

Question 8

The following examples illustrate how various sectors can impact organizations:

A) in the industry sector, labor unions are a significant force.
B) in the market sector, we see an increasing number of foreign-owned manufacturing plants built in the U.S.
C) in the raw materials sector, we note that steel makers owned the beverage can market until the mid-1960s.
D) in the human resources sector, brand names are fighting it out with lower-cost store brands.

Question 9

Bobby Barista is a researcher in the R&D department at 3M. Part of her job is to read technical and scientific journals, and to attend conferences to find out what new developments are occurring. When she is doing this part of her job she is carrying out a ____ role.

A) buffering
B) maintenance
C) boundary spanning
D) managerial

Question 10

Organizations in which of the following types of industries would face the greatest amount of environmental uncertainty?

A) Beer distributors because of simplicity
B) Universities because of complexity
C) Airlines because of instability
D) Appliance manufacturers because of complexity

Question 11

Sectors of the environment which have direct impact on the organization are called the:

A) task environment.
B) general environment.
C) organizational buffers.
D) environmental boundary-spanners.

Question 12

Allowing customers in an auto dealership service department to talk directly to the mechanic rather than to a service manager:

A) is an example of creating a buffering role.
B) is creating a boundary-spanning role.
C) will make the company less fluid.
D) will make the company less responsive to customers.

Question 13

The task environment is:

A) all elements that exist outside the organizational boundary.
B) sectors with which the organization interacts directly.
C) domain.
D) all jobs and positions inherent within the organizational activity.

Question 14

The ____ includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it.

A) general environment
B) international context
C) task environment
D) buffering roles

Question 15

An organization's domain is:

A) the set of positions and departments within the organization.
B) the buildings and grounds that are owned or leased by the organization in which inputs are transformed into outputs.
C) the organization's niche that has been staked out for itself with respect to products, services, and markets served.
D) the technical core that is buffered by other departments so that it can operate as a closed system.

Question 16

An organization's environment includes all except:

A) labor market.
B) city, state, and federal laws.
C) Competitors.
D) production processes.

Question 17

When Johnson & Johnson had to cope with the unpredictable Tylenol poisoning issue, their experience best exemplified the____ dimension of the environment.

A) simple
B) complex
C) stable
D) unstable

Question 18

Boundary-spanning roles:

A) primarily link data to information
B) buffer the manufacturing department from outside intrusion that would interfere with efficiency.
C) bring into the organization information about environmental changes.
D) move the firm to internationalism.

Question 19

In the framework for assessing environmental uncertainty:

A) soft drink bottlers are examples of typical firms in the simple and unstable quadrant.
B) universities are examples of organizations typically found in the complex and stable quadrant.
C) electronic firms are typically found in the simple and stable quadrant.
D) fashion clothing or toy manufacturers would exemplify the complex and unstable quadrant.

Question 20

All of the following, except ____, are examples of the general environment.

A) financial resources
B) human resources
C) economic conditions
D) government sector

Question 21

____ means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence.

A) Integration
B) Resource dependence
C) Organic process
D) Cooptation

Question 22

Which of the following is a cross-functional group of managers and employees, led by a competitive intelligence professional, who work together to gain a deep understanding of a specific business issue?

A) Intelligence team
B) Business team
C) Boundary team
D) Task force

Question 23

Organizations in rapidly changing environments tend to have ____ management processes.

A) differentiated
B) mechanistic
C) organic
D) dependent

Question 24

A(n) ____ involves the purchase of one organization by another so that the buyer assumes control.

A) acquisition
B) merger
C) joint venture
D) domain

Question 25

Which of the following characteristics most accurately describes mechanistic organizations?

A) Authoritarian, unfriendly leadership
B) Communication is horizontal
C) It is a service organization with individualized customer demands
D) Tasks are broken down into specialized parts

Question 26

____ is especially important in highly competitive consumer industries and in industries that experience variable demand.

A) Advertising
B) Cooptation
C) Executive recruitment
D) Contracts

Question 27

An organization can change its domain most directly by:

A) hiring a new CEO.
B) changing the nature of the labor - management agreements.
C) Divesting a division of the organization.
D) moving to a more favorable structure.

Question 28

All of the following are strategies for controlling the environmental domain except

A) illegitimate activities.
B) political activities and regulations.
C) change of domain.
D) cooptation and interlocking directorates.

Question 29

Which of the following occurs when leaders from important sectors in the environment are made part of an organization?

A) Integration
B) Joint venture
C) Resource dependence
D) Cooptation

Question 30

____ can be used to erect regulatory barriers against new competitors or to squash unfavorable legislation.

A) Cooptation
B) Contracts
C) Joint venture
D) Political strategy

Question 31

____ result in the creation of a new organization that is formally independent of the parents.

A) Strategic alliances
B) Supplier arrangements
C) Joint ventures
D) Cooptation

Question 32

Which of the following is not a characteristic of the mechanistic process?

A) Knowledge and control of tasks are centralized at the top of the organization
B) Tasks are rigidly defined
C) There is a strict hierarchy of authority and control
D) Communication is horizontal

Question 33

____ refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant.

A) Business intelligence
B) Competitive intelligence
C) Boundary spanning
D) Environment intelligence

Question 34

____ is a way that high uncertainty influences organizational characteristics.

A) Extensive planning and forecasting
B) Few departments
C) No integrating roles
D) Mechanistic structure

Question 35

The differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments is referred to as

A) integration.
B) resource dependence.
C) cooptation.
D) differentiation.

Question 36

Roger Ramon is a militant member of a faculty union at a medium-sized college. When the union's negotiating committee is reporting to a meeting of the faculty, he always finds fault with the work of that committee and strongly advocates striking. When a member of the negotiating committee resigns because of illness, the union's executive committee appoints Roger to take his place. This is an example of:

A) formal strategic alliance.
B) cooptation.
C) change of domain.
D) public relations.

Question 37

All of the following, except ____, are ways high-moderate uncertainty influences organizational characteristics.

A) mechanistic structure: formal, centralized
B) few integrating roles
C) planning orientation; fast response
D) few departments, much boundary spanning

Question 38

____ is the quality of collaboration among departments.

A) Differentiation
B) Integration
C) Uncertainty
D) Cooptation

Question 39

A(n) ____ is a formal linkage that occurs when a member of the board of directors of one company sits on the board of directs of another company.

A) joint venture
B) interlocking directorate
C) integration
D) indirect interlock

Question 40

In organizations characterized by very ____ and ____ environments, almost no managers are assigned to integration roles.

A) simple, stable
B) simple, unstable
C) complex, stable
D) complex, unstable

Question 41

The international environment includes sectors with which the organization interacts directly and that have a direct impact on the organization's ability to achieve its goals.

Question 42

Differentiation refers to differences in cognitive and emotional orientations among managers in different functional departments.

Question 43

The purpose of boundary-spanning roles is to absorb uncertainty from the environment.

Question 44

A company in a highly uncertain environment is more likely to need a formal integrator.

Question 45

The environmental conditions of complexity and change create a greater need to gather information and to respond based on that information.

Question 46

The greatest uncertainty for an organization occurs in the simple, unstable environment.

Question 47

Complex + Unstable environments = high uncertainty

Question 48

The general environment includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it.

Question 49

As the complexity in the external environment increases, so does the number of positions and departments within the organization, which in turn increases internal complexity.

Question 50

The boundary-spanning role is designed to bring information to the organization about changes in the environment, but not to work in reverse to take information into the environment about the organization.

Question 51

The organizational environment is defined as all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization.

Question 52

The socio-cultural sector refers to city, state, federal laws and regulations, taxes, courts systems, and political processes that may be in an organization's environment.

Question 53

The general environment includes sectors with which the organization interacts directly and which have a direct and regular impact on the organization's ability to achieve its goals.

Question 54

Boundary spanners can prevent the organization from stagnating by keeping top managers informed about environmental changes.

Question 55

Incompetence means that decision makers do not have sufficient information about environmental factors.

Question 56

The complex-stable dimension concerns environmental complexity, which refers to heterogeneity, or the number and dissimilarity of external elements relevant to an organization's operations.

Question 57

Rather than establish buffer departments, a newer approach in many organizations is to drop the buffers and expose the technical core to its uncertain environment.

Question 58

A hardware store would be in a complex environment.

Question 59

Competitive intelligence refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant.

Question 60

The technology sector refers to techniques of production, science, computers, information technology, and e-commerce.

Question 61

One outcome of high differentiation is that coordination between departments becomes more difficult until integrative devices are put in place.

Question 62

Explain how an organization could change its domain, and why it might want to do so.

Question 63

When differentiation is high, integration should be high if the level of environmental uncertainty is high.

Question 64

An acquisition is the unification of two or more organizations into a single unit.

Question 65

Planning guarantees successful coping with an unstable environment.

Question 66

Case 4.0
AligatorAde, a regional soft drink bottling plant in Clovis, California, produces according to the forecast given to them by corporate planning in Michigan. The company uses the focus strategy, designating a market of persons involved in athletic sports. AligatorAde sponsors Clovis Little League, and has a reputation for positive support of sports activities.
On the few occasions when production exceeds demand, corporate warehousing juggles the distribution so that the regional producers such as AligatorAde experience no significant loss. Although competitors have switched formulas several times, AligatorAde has not changed their formula because market demand for their product is stable. (Top management at corporate headquarters is considering adding a more fruity-flavored drink to their product line, but a decision is not yet made.)
On the line, the Manufacturing Department produces large batches of their drink. The product is prepared for distribution in both cans and bottles. Occasionally at the end of a run, some bottles will have special team labels affixed by machine; profitability on those few special runs is particularly high.
The plant's organization chart shows that there is a plant manager with four department heads reporting to her: Manufacturing Manager, Administrative Manager, Marketing Manager, and Warehousing and Distribution Manager. The purchasing function is carried out in Manufacturing, and what little R&D takes place at the regional plant is done in Marketing.
Reference Case 4.0 to answer the following question. Using the framework for environmental uncertainty, analyze AligatorAde's environment, and then make recommendations to the regional management of the plant based on your application of the framework. [Hint: Application of the textbook is what gets points!]

Question 67

List and give examples of each of the general environment sectors.

Question 68

In the organic organization, tasks are broken down into specialized, separate parts.

Question 69

Transferring or exchanging executives offers a method of establishing favorable linkages with external organizations.

Question 70

In rapidly changing environments, an organic structure is usually better.

Question 71

Why does environmental complexity lead to organizational complexity? Explain.

Question 72

When organizations depend on the environment but strive to acquire control over resources to minimize their dependence, it is referred to as cooptation.

Question 73

An interlocking directorate is a formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company.

Question 74

Resource dependence means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence.

Question 75

List and describe each of the task environment sectors.

Question 76

If the external environment is stable, a mechanistic and formal organization can be successful.

Question 77

In the mechanistic organization, communication is vertical.

Question 78

Once an organization relies on their others for valued resources, those other organizations can influence managerial decision making.

Question 79

Explain how the international context of organizations is bringing the international sector more and more into the task environment of organizations today.

Question 80

In addition to establishing favorable linkages to obtain resources, organizations also may try to change the environment.