Deck 3: Section 1: Organizational Environments and Cultures

Question 1

The three techniques used by advocacy groups to influence companies are public communications, media advocacy, and product boycotts.

Answer 1

True

Question 2

The best way to manage legal responsibilities is to retain a large staff of legal specialists to defend the company against any charges.

Answer 2

False

Question 3

Proactive customer monitoring is defined as identifying and addressing customer trends and problems after they occur.

Answer 3

False

Question 4

Managers often prefer economic statistics to business confidence indices as tools for managerial decision making because of their inherently greater accuracy.

Question 5

The general environment is unique to each firm's industry and directly affects the way it conducts day-to-day business.

Question 6

External environments are the forces and events outside a company that have the potential to influence or affect it.

Question 7

Environmental complexity refers to the degree of change in the external factors that affect organizations.

Question 8

Advocacy groups are typically composed of concerned citizens who have a strong feeling about a common issue even though the members' viewpoints differ significantly.

Question 9

The general environment consists of the economy and the technological, socio-cultural, and political/legal trends that indirectly affect all organizations.

Question 10

In contrast to the general segment of the external environment that DIRECTLY influences an organization, changes in the specific segment of an organization's external environment INDIRECTLY affect the way a company conducts its business.

Question 11

Managers often do a poor job of identifying potential competitors.

Question 12

Changes in any sector of the general environment eventually affect most organizations.

Question 13

The specific segment of an organization's external environment is unique to its region of the country.

Question 14

The two kinds of external organizational environments are the general environment and the specific environment.

Question 15

Under conditions in which the rate of both environmental change and complexity go up while environmental resources become scarce, environmental uncertainty can be expected to increase.

Question 16

A decrease in either buyer dependence or supplier dependence can lead to opportunistic behavior.

Question 17

Business confidence indices are a viable alternative to economic statistics for management decision making.

Question 18

Buyer dependence is the degree to which a company relies on a supplier because of the importance of the supplier's product to the company and the difficulty of finding other sources of that product.

Question 19

According to its rate of environmental change, an organization's environment can be either stable or dynamic, but not both.

Question 20

Resource scarcity is the degree to which an organization's external environment has an abundance or lack of critical organizational resources.

Question 21

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

Question 22

Because external environments can be dynamic, confusing, and complex, managers use a three-step process to make sense of the changes in their external environments. Those steps are (1) environmental scanning, (2) interpreting environmental factors, and (3) acting on threats and opportunities.

Question 23

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

Question 24

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

Question 25

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

Question 26

After the company founders are gone, stories and heroes can help to sustain the founder's values, attitudes, and beliefs in the organizational culture.

Question 27

Advocacy groups cannot directly regulate organization practices.

Question 28

Organizational culture refers to the set of key values, beliefs, and attitudes shared by organizational members.

Question 29

When used together, the combination of behavioral substitution, behavioral addition, and changing visible artifacts is extremely likely to achieve the desired changes in organizational culture.

Question 30

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

Question 31

The term behavioral multiplication refers to the process of having managers and employees perform new behaviors that are central to and symbolic of the new organizational culture that a company wants to create.

Question 32

Successful organizational cultures seem to be based solely upon consistency (i.e., "strength" of the organizational culture).

Question 33

Extensive research demonstrates clearly that organizational culture is strongly related to organizational success.

Question 34

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

Question 35

In terms of external organizational environments, the________ environment is unique to each company.

A) global; national
B) customer-driven; production-driven
C) general; specific
D) informal; formal
E) specific; general

Question 36

Organizational heroes can be used to make sense of organizational events and changes.

Question 37

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

Question 38

Managers can make sense of their changing external environments by completing all three of the following steps: environmental scanning, interpreting environmental factors, and acting on threats and opportunities.

Question 39

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

Question 40

A primary source of organizational culture is the company founder.

Question 41

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

Question 42

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

Question 43

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

Question 44

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) all of these

Question 45

Environmental_________ is affected by environmental complexity, change, and resources.

A) uncertainty
B) differentiation
C) difficulty
D) essence
E) entrepreneurship

Question 46

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

Question 47

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

Question 48

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

Question 49

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

Question 50

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

Question 51

_____________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

Question 52

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

Question 53

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

Question 54

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

Question 55

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

Question 56

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.

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

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

Question 62

___________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

Question 63

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

Question 64

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

Question 65

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

Question 66

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

Question 67

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

Question 68

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
In their

Question 69

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

Question 70

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

Question 71

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

Question 72

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

Question 73

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

Question 74

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
In which one party benefits at the expense of the

Question 75

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

Question 76

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

Question 77

____________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

Question 78

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

Question 79

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

Question 80

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