Deck 3: Organizing in a Changing Global Environment

Question 1

As the level of environmental complexity increases, the level of environmental uncertainty decreases.

Answer 1

False

Question 2

Global supply chain management is the process of coordinating the flow of raw materials, components, semifinished goods, and finished products around the world.

Answer 2

True

Question 3

One way to reduce uncertainty is to increase the number of specific and general environmental forces that are interconnected. Because, when forces begin to interact, the environment becomes more predictable.

Answer 3

False

Question 4

The term organizational domain refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves.

Question 5

The environment of an organization is considered to be unstable and dynamic if the organization cannot predict the way in which the forces will change over time.

Question 6

An increase in the level of environmental richness leads to an increase in the environmental uncertainty.

Question 7

As a company begins to produce a wider variety of products for different groups of customers, its environmental complexity goes on decreasing.

Question 8

In a rich, stable, and simple environment, resources are easy to come by and uncertainty is low.

Question 9

Shareholders are a part of an organization's specific environment.

Question 10

Environmental dynamism is a function of the amount of resources available to support an organization's domain.

Question 11

Economic forces, such as interest rates, are considered to be specific environmental forces rather than a general environmental forces.

Question 12

Environmental richness is a function of how much and how quickly forces in the specific and general environments change over time and thus increase the uncertainty an organization faces.

Question 13

The forces that constitute the specific environment shape the general environment and affect the ability of all organizations in a particular environment to obtain resources.

Question 14

An organization can reduce environmental uncertainty by entering into global markets.

Question 15

An increase in the level of competition leads to a proportionate increase in the level of environmental richness.

Question 16

Suppliers are a part of the specific environment of an organization.

Question 17

The specific environment consists of forces from outside stakeholder groups that directly affect an organization's ability to secure resources.

Question 18

The richer the environment, the more difficult it is for organizations to obtain resources.

Question 19

Environmental complexity is a function of the strength, number, and interconnectedness of the specific and general forces that an organization has to manage.

Question 20

By decreasing the number of suppliers, an organization can reduce the complexity of its environment.

Question 21

The interdependencies that exist between an organization and its suppliers and distributors are known as competitive interdependencies.

Question 22

Cooptation is a strategy used for managing competitive resource interdependencies.

Question 23

Cooptation is a strategy that manages symbiotic interdependencies by neutralizing problematic forces in the specific environment.

Question 24

A joint venture is the least formal type of strategic alliance.

Question 25

The alliance resulting from a network is less formal than the alliance resulting from a contract.

Question 26

A collusion is an agreement that commits two or more companies to share their resources to develop joint new business opportunities.

Question 27

A defense company decided to sell the services of its scientists to commercial clients. This company is changing its ________.

A) organizational domain
B) symbiotic interdependencies
C) competitive interdependencies
D) core competences

Question 28

Strategic alliances are a linkage mechanism that can be used to manage both competitive and symbiotic interdependencies.

Question 29

Formal linkage mechanisms minimize the transaction costs associated with reducing uncertainty, opportunism, and risk.

Question 30

Symbiotic and competitive interdependencies exist in the specific environment.

Question 31

________ are a part of an organization's specific environment.

A) Shop floor workers
B) Shareholders
C) Suppliers
D) Managers

Question 32

Third-party linkage mechanisms tend to increase the complexity of the environment and thus reduce its richness.

Question 33

Interdependencies are symbiotic when the outputs of one organization are inputs for another.

Question 34

Symbiotic interdependencies are the interdependencies that exist among organizations that compete for scarce inputs and outputs.

Question 35

An interlocking directorate is a linkage that results when a director from one company sits on the board of another company.

Question 36

Both collusions and cartels are illegal in the United States.

Question 37

The term ________ refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves.

A) organizational design
B) organizational domain
C) organizational richness
D) organizational structure

Question 38

The specific environment consists of forces from ________.

A) outside stakeholder groups that directly affect an organization's ability to secure resources
B) inside stakeholder groups that directly affect an organization's structure
C) general environment that directly affect an organization's human resource practices
D) inside stakeholder groups that directly affect an organization's competitive strategies

Question 39

Cartels and collusion increase the stability and richness of an organization's environment and reduce the complexity of relations among competitors.

Question 40

The keiretsu system is a form of minority ownership.

Question 41

Which of the following terms refers to the strength, number, and interconnectedness of the specific and general forces that an organization has to manage?

A) environmental complexity
B) environmental dynamism
C) environmental richness
D) environmental naturalness

Question 42

Which of the following statements is definitely true regarding environmental complexity?

A) Environmental richness and environmental dynamism are inversely proportional to each other.
B) As a company begins to produce a wider variety of products for different groups of customers, its environmental complexity begins to decrease.
C) Environmental complexity is a function of the organizational structure selected by a company.
D) The more interconnected the forces in an organization's specific and general environments, the more uncertainty the organization faces.

Question 43

When a company decides to produce different products for different customers, ________.

A) the number of stakeholders decreases
B) environmental complexity increases
C) the organizational domain decreases
D) environmental stability increases

Question 44

An organization used to obtain supplies from 3,000 suppliers, but now deals with less than 300. By making this change, the organization has reduced its environmental ________.

A) dynamism
B) complexity
C) richness
D) depth

Question 45

Biotechnology companies in Boston have a large pool of high-quality scientists to choose from because of the presence of so many universities in the area. Based on the information given in this case we can say that the biotechnology companies in Boston have a ________ environment.

A) broad
B) complex
C) dynamic
D) rich

Question 46

Which of the following forces is a general environment factor?

A) suppliers
B) interest rates
C) distributors
D) customers

Question 47

McDonald's is trying to determine whether it should make its own fast-food containers or buy them from international suppliers. This decision is a part of the ________ management.

A) structural environment
B) competitive interdependency
C) global supply chain
D) symbiotic interdependency

Question 48

Which of the following statements is definitely true regarding environmental dynamism?

A) As a company decreases the number of suppliers, its environmental dynamism increases.
B) A company can reduce its environmental dynamism by selecting a decentralized organizational structure.
C) When a company enters into a foreign market, the dynamism of its environment increases.
D) Environmental dynamism and environmental richness are directly proportional to each other.

Question 49

An organization operating in the computer industry has to quickly respond to the changes in the technology. In this case, the environment of the organization is said to be ________.

A) complex
B) dynamic
C) rich
D) broad

Question 50

Which of the following is most likely to increase the environmental complexity for a company?

A) the company changes its organizational structure from divisional to functional
B) the company decreases its number of suppliers
C) the company diversifies its business in an entirely new industry
D) the company changes its organizational structure from centralized to decentralized

Question 51

As the ________ of the environment increases, the resources become hard to obtain.

A) complexity
B) dynamism
C) richness
D) depth

Question 52

Which of the following statements is true regarding environmental richness?

A) A rich environment is characterized by plentiful resources.
B) In rich environments, uncertainty is high.
C) Environmental richness and environmental complexity are directly proportional to each other.
D) Increase in the level of competition leads to a proportionate increase in the level of environmental richness.

Question 53

An organization's environment will be more uncertain when ________.

A) specific and general forces in the environment become interconnected
B) the number of stakeholders in the specific environment decreases
C) the company decreases the number of products it manufactures
D) the company begins to follow the cost leadership strategy

Question 54

As the ________, the environmental uncertainty decreases.

A) environmental complexity decreases
B) environmental dynamism increases
C) environmental richness decreases
D) environmental naturalness increases

Question 55

Which of the following is most likely to be a reason for poor environment?

A) resources are plentiful
B) environmental uncertainty is low
C) competition is high
D) the country is wealthy

Question 56

Which of the following terms refers to the degree to which forces in the specific and general environments change quickly over time and thus contribute to the uncertainty an organization faces?

A) environmental dynamism
B) environmental richness
C) environmental complexity
D) environmental naturalness

Question 57

Which of the following terms refers to the amount of resources available to support an organization's domain?

A) environmental dynamism
B) environmental complexity
C) environmental richness
D) environmental naturalness

Question 58

In the context of environmental dynamism, a company is said to be stable if ________.

A) the number of outside stakeholders remains constant
B) the number of specific and general forces that an organization has to manage remains stable
C) forces affect the supply of resources in a predictable way
D) the company is structured as per the matrix organizational structure

Question 59

Under which of the following situations, a company is most likely to experience high levels of environmental richness?

A) the company uses a matrix organizational structure
B) the company is not able to obtain sufficient quantity of required raw material due to new government restrictions
C) the company is highly centralized
D) the company has a monopoly in its industry

Question 60

Which of the following is most likely to increase the environmental dynamism for a company?

A) the company increases the level of employee empowerment
B) the company changes its organizational structure from functional structure to matrix structure
C) the company enters into a long-term contract with one of its suppliers
D) the company enters into a foreign market with new products

Question 61

Which of the following types of strategic alliances is the least formal?

A) long-term contract
B) network
C) minority ownership
D) joint venture

Question 62

A joint venture is a type of ________.

A) takeover
B) collusion
C) strategic alliance
D) cartel

Question 63

Two computer manufacturing companies, operating in the same industry, pool their resources to develop a new computer technology. This is an example of ________.

A) licensing
B) an interorganizational linkage
C) franchising
D) a symbiotic interdependency

Question 64

Which of the following theories states that an organization must respond to the needs and demands of other organizations in its environment?

A) contingency theory
B) the enacted environment concept
C) resource dependence theory
D) transaction cost theory

Question 65

A poor environment is most likely to lead to ________.

A) a decrease in the level of environmental complexity
B) an increase in the level of environmental stability
C) an increase in the level of profit
D) an increase in the level of environmental uncertainty

Question 66

Which of the following terms refers to a strategy that manages symbiotic interdependencies by neutralizing problematic forces in the specific environment?

A) joint venture
B) strategic alliance
C) cooptation
D) franchising

Question 67

A ________ is an agreement that commits two or more companies to share their resources to develop joint new business opportunities.

A) cartel
B) strategic alliance
C) licensing agreement
D) collusion

Question 68

A ________ is a group of organizations, each of which owns shares in the other organizations in the group, and all of which work together to further the group's interests. It is a Japanese system.

A) hoteru
B) byouin
C) hikouki
D) keiretsu

Question 69

________ interdependencies exist between an organization and its suppliers.

A) Competitive
B) Symbiotic
C) Distributive
D) Convolutional

Question 70

The Japanese system of keiretsu is a type of ________.

A) long-term contract
B) collusion
C) minority ownership
D) joint venture

Question 71

As per the resource dependence theory, in which of the following situations is an organization said to be weak?

A) the organization is highly centralized
B) there are only a few suppliers of a resource needed by the organization
C) the organization uses a divisional organizational structure
D) the organization manufactures a wide variety of products

Question 72

Which of the following is most likely to increase environmental uncertainty?

A) increase in the richness of the environment
B) decrease in the dynamism of the environment
C) decrease in the depth of the environment
D) increase in the complexity of the environment

Question 73

The union does not like the work rules of an automobile plant. The plant forms a joint union-labor committee and gets key union leaders to join the committee. This is an example of ________.

A) a strategic alliance
B) a joint venture
C) a merger
D) cooptation

Question 74

Nova Electronics is a company that manufactures computers. It depends on H&L, Inc. for the supply of microprocessor chips. H&L, Inc. is the only company that manufactures the particular type and quality of microprocessor chips that are required by Nova electronics. The relationship between Nova Electronics and H&L, Inc. is an example of a ________ interdependency.

A) competitive
B) sequential
C) symbiotic
D) distributive

Question 75

Which of the following is the least formal and the least direct way to manage symbiotic interdependencies with suppliers and customers?

A) merger
B) developing reputation
C) cooptation
D) minority ownership

Question 76

According to the ________, an organization should minimize its dependence on other organizations for resources and find ways of influencing them to make resources available.

A) organizational theory
B) resource dependence theory
C) contingency theory
D) group theory

Question 77

A(n) ________ is a linkage that results when a director from one company sits on the board of another company.

A) interlocking directorate
B) strategic alliance
C) network
D) keiretsu

Question 78

________ interdependencies exist among organizations that need the same scarce inputs and market their products to the same group of potential customers.

A) Competitive
B) Distributive
C) Symbiotic
D) Convolutional

Question 79

Which of the following types of strategic alliances is the most formal?

A) long-term contract
B) network
C) minority ownership
D) joint venture

Question 80

The government attempted to control prescription drug prices during the 1990s. What would have been the effect of this change on this industry?

A) It would have increased competition, thereby reducing the complexity of this environment.
B) It would have made the environment more complex due to the reduction in profits.
C) It would have increased the demand for drugs, thereby making the environment less dynamic.
D) It would have enlarged the domain of this industry.