Deck 2: The External and Internal Environments

Question 1

Organizations are open systems that affect and are affected by their external environments.

Answer 1

True

Question 2

A barrier to entry is a condition that prevents customers from using a firm's products or services.

Answer 2

False

Question 3

When investors bid up stock prices,companies have less capital to fuel their strategies.

Answer 3

False

Question 4

U.S.government policies both impose strategic constraints and provide opportunities for organizations.

Question 5

A more diverse workforce presents managers with challenges as well as opportunities.

Question 6

Regulatory agencies set rules but are typically weak institutions since they do not have the power to investigate company practices or to take legal action to ensure compliance with the law.

Question 7

According to Michael Porter's model,the competitive environment includes rivalry among current competitors and the impact of new entrants,substitute and complementary products,suppliers,and customers.

Question 8

As a first step in understanding their competitive environment,organizations must analyze how the competitors compete.

Question 9

An organization's macroenvironment includes its customers and suppliers.

Question 10

Social metrics are measures of various characteristics of the people who make up groups or other social units.

Question 11

Firms that develop strategies that do not include technological advances run the risk of becoming obsolescent.

Question 12

Population growth is unrelated to the size and composition of the labor force.

Question 13

While the stock market can impact a firm,it has no effect on the behavior of individual managers.

Question 14

Family leave,flexible working hours,and child care assistance have been introduced as a result of the evolving societal trends.

Question 15

Inputs are the goods and services organizations take in and use to create products or services.

Question 16

The external environment includes all relevant forces outside an organization's boundaries.

Question 17

Cost is often a major barrier to entry into the marketplace.

Question 18

Michael Porter's model for competitive analysis is one example of analyzing the competitive environment for adapting to and even influencing the nature of competition.

Question 19

Immigration is a factor that significantly influences the U.S.population and labor force.

Question 20

A firm's competitive environment includes new entrants,substitutes,and rivals.

Question 21

The immediate environment surrounding a firm is known as its:

A) macroenvironment.
B) demographic environment.
C) competitive environment.
D) internal environment.
E) economic environment.

Question 22

In a dynamic environment,bureaucratic organizations are more efficient than organic organizations.

Question 23

Benchmarking means identifying the best-in-class performance by a company in a given area and then comparing one's processes to theirs.

Question 24

Advances in genetic and bioengineering are expected to produce food products that will be available year-round even in unsuitable Northern climates.This provides grocers an opportunity to reduce shipping costs and provide fresher products to customers.These advances are an example of changes in the _____ environment.

A) technological
B) economic
C) political
D) demographic
E) biophysical

Question 25

Organizations are _____ systems,which means that they are affected by and in turn affect their external environments.

A) input
B) output
C) open
D) closed
E) social

Question 26

A strong organization culture is one in which everyone understands and believes in the firm's goals,priorities,and practices.

Question 27

_____ lead to new products,advanced production facilities,and better ways of managing and communicating.

A) Demographic shifts
B) Societal preferences
C) Political changes
D) Technological advances
E) Economic turbulences

Question 28

Liz,a new manager at a company,has been asked to focus on the competitive environment of the organization.Which of the following is a factor Liz should focus on?

A) Government legislation
B) Culture
C) Demographics
D) Buyers
E) Technology

Question 29

Environmental uncertainty refers to the lack of information needed to understand or predict the future.

Question 30

Organizations are at a disadvantage if they become overly dependent on any powerful supplier.

Question 31

Needing to learn a new software program as a result of changing suppliers is an example of a switching cost.

Question 32

April,a manager in a call center,encourages her employees to solve customers' problems without her approval of the particular situation.In this case,April is trying to empower her employees.

Question 33

The Internet has empowered customers by providing an easy source of information.

Question 34

Environmental scanning means searching for and sorting through information about the environment.

Question 35

Stories told by employees almost never have any connection to the true culture of the organization.

Question 36

The goal of supply chain management is having the right product in the right quantity at the right place at the right cost.

Question 37

In an organization,buffering refers to leveling normal fluctuations at the boundaries of the environment.

Question 38

Organizations that are defenders are more likely to engage in strategic maneuvering than are prospectors.

Question 39

Cognitive intelligence is the information that helps managers determine how to compete better.

Question 40

Strategic maneuvering is the managing of the network of facilities and people that obtain materials from outside the organization,transform them into products,and distribute them to customers.

Question 41

Conditions that may prevent new firms from entering an industry are referred to as _____.

A) barriers to entry
B) strategic maneuvers
C) unfair trade practices
D) industry regulators
E) entry inhibitors

Question 42

Which of the following is an example of a potential substitute product?

A) Hand sanitizer for soaps
B) Ink cartridges for printers
C) Mops for detergent
D) iTunes for iPods
E) Furniture for apartments

Question 43

_____ are specific government organizations in a firm's more immediate task environment.

A) Open systems
B) Regulators
C) Prospectors
D) Stakeholders
E) Defenders

Question 44

A(n)_____ is a potential threat;customers use it as an alternative,buying less of one kind of product but more of another.

A) new entrant
B) substitute
C) ensemble
D) divestiture
E) complement

Question 45

_____ are measures of various characteristics of the people who make up groups or other social units.

A) Psychographics
B) Demographics
C) Domain selections
D) Lifestyle analytics
E) Group dynamics

Question 46

_____ are fixed costs buyers face if they change suppliers.

A) Changing costs
B) Switching costs
C) Renewable costs
D) Exchange costs
E) Sunk costs

Question 47

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

A) the final consumer purchases finished products,whereas an intermediate consumer only buys raw materials.
B) intermediate consumers buy raw materials and sell finished products to final consumers,whereas final consumers use the finished products.
C) final consumers make more purchases than the intermediate consumers.
D) unlike final consumers,intermediate consumers provide monetary benefits to organizations by purchasing their products.
E) final consumers tend to have more bargaining power than intermediate consumers.

Question 48

Hospitals and universities are very expensive to run not only due to the capital equipment that is required for each but also due to the personnel such as specialized medical doctors and researchers.The cost of these types of institutions is an example of _____.

A) a barrier to entry
B) environmental uncertainty
C) unfair competition
D) high switching costs
E) strategic maneuvering

Question 49

Laredo Bank & Trust uses the janitorial services of ProKleen,which provides necessary cleaning supplies,personnel training,and maintenance services.The other available janitorial services do not provide maintenance services.In this case,if Laredo decides to terminate ProKleen's services and shift to some other agency,it is likely to create _____.

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

Question 50

_____ trends regarding how people think and behave have major implications for management of the labor force,corporate social actions,and strategic decisions about products and markets.

A) Psychological
B) Political
C) Economic
D) Technological
E) Societal

Question 51

Which of the following is an element of Michael Porter's model for analyzing the competitive environment of an organization?

A) Substitutes
B) Cost strategy
C) Societal trends
D) Regulatory forces
E) Demographics

Question 52

Organizations must acquire a variety of resources in order to produce a product or service of value.These resources may include materials,equipment,financing,or even employees.The sources that provide these various resources are referred to as _____.

A) warehouse clubs
B) regulators
C) retailers
D) suppliers
E) prospectors

Question 53

Giving consumers what they want or need,the way they want it,the first time is known as _____.

A) planned merchandise
B) planned obsolescence
C) customer service
D) cause marketing
E) operations management

Question 54

A firm's current competition,suppliers,customers,and the threat of new entrants or of substitutes are all elements in the _____.

A) task environment
B) Peter's model for organizational excellence
C) microenvironment
D) Porter's model for competitive environment
E) supply chain management

Question 55

If many factors prevent new companies from entering an industry,the:

A) threat of new entrants is more serious.
B) threat of competitive rivalry is high.
C) threat to established firms is less serious.
D) new companies can easily compete with the established ones.
E) industry is said to have just a few barriers to entry.

Question 56

Using bribery as a business tactic may result in fines for U.S.firms.Which of the following types of environmental forces at work does this reflect?

A) Competitive
B) Economic
C) Legal
D) Technological
E) Demographic

Question 57

Venus was a low-cost airline that was functional in the 1980s.Industry analysts state that although Venus was able to provide all the services the customers wanted,it was thrown out of business because of aggressive pricing from larger airline firms.Which of the following aspects of the competitive environment does this scenario illustrate?

A) Customers
B) Rivals
C) Regulators
D) The economy
E) Social trends

Question 58

_____ refers to management of the network of facilities and people that obtain materials from the outside,transform them into products,and distribute the products to customers.

A) Inventory management
B) Strategic maneuvering
C) Human resource management
D) Customer service
E) Supply chain management

Question 59

A customer who purchases raw materials or wholesale products before selling them to other parties is known as a(n)_____.

A) final purchaser
B) intermediate consumer
C) final customer
D) first-tier supplier
E) preliminary customer

Question 60

Environmental _____ refers to the degree of discontinuous change that occurs within the industry.

A) complexity
B) dysfunction
C) contracting
D) cooptation
E) dynamism

Question 61

Domain selection,diversification,mergers / acquisitions,and divestiture are all examples of _____.

A) illegal boundary management
B) maneuvering the competition
C) strategic maneuvering
D) independent strategies
E) portfolio maneuvering

Question 62

Dan's FroYo is a company that sells different varieties of frozen yogurt.When Dan's FroYo spends its own money to promote the frozen yogurt industry as a whole,the company is practicing _____.

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

Question 63

Ranier Outdoor Clothing managers engage in an annual organizational assessment,trying to predict industry changes as well as possible opportunities and threats.They look at issues such as who their competitors are,current entry barriers,and what substitutes exist for their products.This assessment is called _____.

A) scenario development
B) forecasting
C) benchmarking
D) environmental scanning
E) strategic maneuvering

Question 64

Purple Lotus and GreenBolt are two leading e-commerce companies.Recently,Purple Lotus engaged in an online price war with GreenBolt in order to gain greater market share.This is an example of _____ on the part of Purple Lotus.

A) cooptation
B) voluntary action
C) competitive pacification
D) competitive aggression
E) environmental scanning

Question 65

_____ create alternative combinations of different factors into a total picture of the environment and a firm.

A) Scenarios
B) Forecasts
C) Benchmarks
D) Competitive intelligences
E) Strategic maneuvers

Question 66

_____ occurs when a firm invests in different types of businesses or products or when it expands geographically to reduce its dependence on a single market or technology.

A) Domain selection
B) Diversification
C) Acquisition
D) Divestiture
E) Empowerment

Question 67

One firm buying another is called a(n)_____.

A) merger
B) acquisition
C) divestiture
D) prospective
E) defender

Question 68

An outcome of environmental scanning is _____,the information necessary to decide how best to manage in the competitive environment managers have identified.

A) corporate governance
B) strategic vision
C) competitive intelligence
D) corporate espionage
E) competitive dissertation

Question 69

_____ strategies are used by an organization acting on its own to change some aspect of its current environment.

A) Flexible
B) Buffering
C) Independent
D) Smoothing
E) Cooperative

Question 70

When two or more companies work together to manage their external environment,they are using _____.

A) monopolistic strategies
B) strategic maneuvering
C) cooperative strategies
D) dependent strategies
E) competitive strategies

Question 71

When a brand advertises its products as being superior to that of its competitors,it is demonstrating _____.

A) competitive aggression
B) competitive pacification
C) benchmarking
D) political action
E) cooptation

Question 72

To improve customer service in its overseas call center,Jansen Electronics decided to investigate the call center practices of competing companies.The team discovered that a smaller company,Gorilla Devices Inc. ,seemed to have outstanding customer service.The team then determined differences between the organizations and developed a plan to incorporate the best elements of Gorilla into Jansen.This illustrates _____.

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

Question 73

Which of the following is true about using forecasts?

A) Multiple forecasts are best,and their predictions can be averaged.
B) Forecasts become more accurate while predicting further into the future.
C) Forecasts are useless when the future will look radically different from the past.
D) The more complex the forecast,the more accurate are the predictions.
E) The accuracy of forecasts does not vary from one application to another.

Question 74

The entrance by a company into another market or industry for which it has an existing expertise is called _____.

A) benchmarking
B) strategic positioning
C) outsourcing
D) domain selection
E) cooptation

Question 75

_____ refers to a narrative that describes a particular set of future conditions for a business.

A) Benchmarking
B) A scenario
C) Strategic maneuvering
D) A divestiture
E) Strategic vision

Question 76

Which of the following combinations can result in a best-case scenario?

A) Many competitors,high threat with few entry barriers,and few customers
B) Many competitors,high threat with few entry barriers,and many customers
C) Few entry barriers,many substitutes,many customers
D) High industry growth,low threat with many entry barriers,and customers with low bargaining power
E) Low industry growth,high threat with few entry barriers,and suppliers with low bargaining power

Question 77

Two general types of proactive strategies for influencing an organization's environment are _____

A) dependent strategies and independent strategies.
B) independent action and cooperative action.
C) cooperative strategies and strategic maneuvering.
D) strategic maneuvering and dependent strategies.
E) independent action and strategic maneuvering.

Question 78

_____ refers to the process of comparing an organization's practices and technologies with those of other companies.

A) Scenario planning
B) Forecasting
C) Benchmarking
D) Environmental scanning
E) Strategic maneuvering

Question 79

Valley Organic Meats recently announced that it was selling off its pork division in order to realign itself more competitively in the marketing of its other products.Which of the following strategic maneuvers is illustrated in this scenario?

A) Diversification
B) An acquisition
C) A merger
D) Divestiture
E) Domain selection

Question 80

The method for predicting how variables will change in the future is known as _____.

A) budgeting
B) buffering
C) forecasting
D) benchmarking
E) scanning