M Management Thomas Bateman 6th Edition- Test Bank

 

To Purchase this Complete Test Bank with Answers Click the link Below

 

https://tbzuiqe.com/product/m-management-thomas-bateman-6th-edition-test-bank/

 

If face any problem or Further information contact us At tbzuiqe@gmail.com

 

 

Sample Test

M: Management, 6e (Bateman)

Chapter 3   The Organizational Environment and Culture

 

1) Open systems are all relevant forces outside an organization’s boundaries.

 

Answer:  FALSE

Explanation:  Organizations are open systems—that is, they are affected by and in turn affect their external environments.

Difficulty: 1 Easy

Topic:  Open Systems

Learning Objective:  03-01 Describe the five elements of an organization’s macroenvironment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

2) When an industry matures, profits drop. Weaker companies are eliminated, and the strong companies survive.

 

Answer:  TRUE

Explanation:  When an industry matures and growth slows, profits drop. New, high-growth industries offer enormous opportunities for profits.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

3) If there are many barriers to entry, the threat of new entrants is greater.

 

Answer:  FALSE

Explanation:  If many factors prevent new companies from entering an industry, the threat to established firms is less serious. If there are few such barriers to entry, the threat of new entrants is greater.

Difficulty: 2 Medium

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

4) Environmental uncertainty means that managers do not have enough information about the environment to understand or predict the future.

 

Answer:  TRUE

Explanation:  Environmental uncertainty means that managers do not have enough information about the environment to understand or predict the future. Uncertainty arises from two related factors: complexity and dynamism.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

5) Benchmarking is the process comparing an organization’s practices and technologies with those of other companies.

 

Answer:  TRUE

Explanation:  Benchmarking is the process comparing an organization’s practices and technologies with those of other companies. Benchmarking means identifying the best-in-class performance by a company in a given area.

Difficulty: 1 Easy

Topic:  Benchmarking

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

6) Divestiture is entering a new market or industry with existing expertise.

 

Answer:  FALSE

Explanation:  Entering a new market or industry with existing expertise is known as domain selection. Divestiture occurs when a company sells one or more businesses.

Difficulty: 1 Easy

Topic:  Divestiture

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

7) ________ is/are composed of all relevant forces outside a firm’s boundaries, such as competitors, customers, the government, and the economy.

1.   A) The external environment

2.   B) Open systems

3.   C) Relative constraints

4.   D) The barriers to entry domain selection

5.   E) Conditions of certainty

 

Answer:  A

Explanation:  The external environment refers to all relevant forces outside a firm’s boundaries, such as competitors, customers, the government, and the economy.

Difficulty: 1 Easy

Topic:  External Environment

Learning Objective:  03-01 Describe the five elements of an organization’s macroenvironment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

8) Sonia, a manager of a new 50-person finance department in a U.S.-based firm, is working with Juan, the human resources manager in her organization, to develop strategies for staffing her department. Thinking of workforce demographics, Juan advises Sonia to consider all of the following actions, EXCEPT

1.   A) Conduct interviews on campus for entry-level accounting and finance majors, even with their lack of experience.

2.   B) Hire accountants and business professionals over the age of 55, even though they might have shorter projected remaining careers.

3.   C) Outsource selected accounting and financial analysis tasks to overseas workers who might be lower priced, but be aware of possible communication challenges.

4.   D) Institute a hiring freeze for women workers, due to their likelihood to leave the workforce.

5.   E) Hire foreign-born accountants and financial professionals with a legal right to work in the United States, being sensitive of the cultural differences both sides might experience.

 

Answer:  D

Explanation:  Due to projected trends in the U.S. workforce demographics, managers must develop a multi-pronged approach to meeting staffing needs, including hiring entry-level workers, hiring older workers (including part-time), sending technical tasks to lower-priced but highly trained workers overseas, hiring current and future immigrants with a legal right to work in the United States, and hiring women workers.

Difficulty: 3 Hard

Topic:  Demographics

Learning Objective:  03-01 Describe the five elements of an organization’s macroenvironment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

9) Advances in genetic engineering are expected to produce some food products that will become available all year round even in continental climates. These changes will provide grocers with an opportunity to reduce their shipping costs while offering fresher produce to their customers. These advances are examples of changes in the ________ environment.

1.   A) technological

2.   B) social

3.   C) legal

4.   D) demographic

5.   E) economic

 

Answer:  A

Explanation:  As technology evolves, new industries, markets, and competitive niches develop. Advances in technology also permit companies to enter markets that would otherwise be unavailable to them. In this case, advances in genetic engineering will provide grocers with an opportunity to reduce their shipping costs while offering fresher produce to their customers.

Difficulty: 3 Hard

Topic:  Technology

Learning Objective:  03-01 Describe the five elements of an organization’s macroenvironment.

Bloom’s:  Analyze

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

10) ________ is the immediate environment surrounding a firm, including suppliers, customers, rivals, and the like.

1.   A) Macroenvironment

2.   B) Competitive environment

3.   C) Microenvironment

4.   D) Exosystem

5.   E) Open system

 

Answer:  B

Explanation:  The immediate environment surrounding a firm, including suppliers, customers, rivals, and the like, is called the competitive environment.

Difficulty: 1 Easy

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

11) Netflix, Amazon, and YouTube have recently emerged as serious and successful content providers, attracting viewers away from traditional networks such as ABC, CBS, and NBC. The success of these nontraditional providers demonstrates the power in the competitive environment held by new competitors, or new entrants to the marketplace. To effectively compete with these new entrants, executives at traditional networks will take advantage of barriers to entry, such as

1.   A) buffering.

2.   B) distribution channels.

3.   C) complements.

4.   D) smoothing.

5.   E) substitutes.

 

Answer:  B

Explanation:  New competitors, or new entrants, are discouraged or prevented from entering a new industry or market by barriers to entry, e.g., government policy, capital requirements, brand identification, cost disadvantages, and distribution channels. Established companies may have tight distribution channels that cause new entrants struggle to get their goods or services to customers.

Difficulty: 2 Medium

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

12) Josiah, a new manager at Super Sandwiches, has been asked to focus on the competitive environment of the organization. Which of these factors is among those that Josiah should focus on?

1.   A) government policies

2.   B) demographics

3.   C) suppliers

4.   D) technology

5.   E) social factors

 

Answer:  C

Explanation:  The competitive environment is composed of a firm and its rivals, suppliers, customers (buyers), new entrants, and substitute or complementary products. Josiah should focus on the suppliers because he has been asked to focus on the competitive environment of the organization.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

13) A popular low-cost airline, Budget Airways, has gone out of business. Although the service and price provided by the airline was what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. Which component of the competitive environment does this illustrate?

1.   A) customers

2.   B) competitors

3.   C) regulators

4.   D) economic factors

5.   E) threat of new entrants

 

Answer:  B

Explanation:  The competitive environment consists of rivalry among existing competitors and the threat of new entrants, the threat of substitute and complementary products, and the bargaining power of suppliers and buyers.

Difficulty: 3 Hard

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

14) ________ occurs when weaker companies are eliminated, and the strong companies survive.

1.   A) Cannibalization

2.   B) Downsizing

3.   C) Scaffolding

4.   D) Industry shakeout

5.   E) Economic fluctuation

 

Answer:  D

Explanation:  When an industry matures and growth slows, profits drop. Then intense competition causes an industry shakeout: weaker companies are eliminated, and the strong companies survive.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

15) ________ are conditions that prevent new companies from setting foot in an industry.

1.   A) Demographics

2.   B) Industry shakeouts

3.   C) Prospectors

4.   D) Zero-profit conditions

5.   E) Barriers to entry

 

Answer:  E

Explanation:  Barriers to entry are conditions that prevent new companies from entering an industry.

Difficulty: 1 Easy

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

16) ________ is a common barrier to entry.

1.   A) Distribution channels

2.   B) Final consumers

3.   C) Bargaining power of buyers

4.   D) Demographics

5.   E) Switching costs

 

Answer:  A

Explanation:  Barriers to entry are conditions that prevent new companies from entering an industry. Existing competitors may have such tight distribution channels that new entrants struggle to get their goods or services to customers.

Difficulty: 1 Easy

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

17) Roberto owns a janitorial service company. Over the past five years, the bulk of his business, about 80 percent, has derived from a long-term service contract with the federal government. He learned today that his company will not be awarded an extension of the contract, and thus his company’s work for the government client must cease within 30 days. The very negative impact of this decision on Roberto’s company is a reminder that

1.   A) contracting with the federal government is not profitable over the long term.

2.   B) a firm that does not achieve affirmative action goals must implement a corrective action plan.

3.   C) government clients cannot be relied upon to be good business partners.

4.   D) long-term services contracts are not good for business.

5.   E) an organization is at a disadvantage if it depends too heavily upon powerful customers.

 

Answer:  E

Explanation:  An organization is at a disadvantage if it depends too heavily on powerful customers—those who make large purchases or can easily find alternative places to buy.

Difficulty: 3 Hard

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

18) Hospitals and universities are very expensive to start and keep running because of the capital and equipment required. The requirement of personnel, such as specialized medical doctors and researchers, is also high. What does this provide an example of?

1.   A) protectionism

2.   B) buffering

3.   C) barriers to entry

4.   D) smoothing

5.   E) downsizing

 

Answer:  C

Explanation:  Barriers to entry are conditions that prevent new companies from entering an industry. In this case, the expenses to run hospitals and universities and the requirement of personnel such as specialized medical doctors and researchers are the barriers to entry.

Difficulty: 3 Hard

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

19) Carroll Cereals Inc. is a major supplier to almost all grocery store chains. It has most of the valuable shelf space in the cereal aisle. Which of the following is true based on this information?

1.   A) There are few entry barriers.

2.   B) Government regulation of cereals is high.

3.   C) The threat of new entrants is low.

4.   D) Carroll Cereals has no or weak distribution channels.

5.   E) Carroll Cereals has limited brand identification.

 

Answer:  C

Explanation:  The threat of new entrants is likely to be low in this scenario primarily because existing competitors have tight distribution channels and new cereal manufacturers would struggle to get their goods to customers primarily because Carroll Cereals Inc. already dominates the shelf space in grocery store chains.

Difficulty: 3 Hard

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

20) The main difference between final consumers and intermediate consumers is that the final consumers

1.   A) pay cash.

2.   B) use products themselves.

3.   C) purchase more than intermediate consumers.

4.   D) are not as flexible as intermediate consumers.

5.   E) do not have any bargaining power.

 

Answer:  B

Explanation:  Intermediate consumers buy raw materials or wholesale products and then sell to final consumers. Final consumers use the products themselves.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

21) Jameson Products is the only provider of a patented leakproof valve for industrial applications. Acme Construction desires to include Jameson Products in a project for Acme’s customer, thereby increasing the chance that Acme will be selected by Acme’s customer to perform the project. However, Jameson Products charges a premium price for its valves, eroding Acme’s profitability. This situation is indicative of the high bargaining power of

1.   A) customers.

2.   B) suppliers.

3.   C) substitute companies.

4.   D) competitors.

5.   E) complementary firms.

 

Answer:  B

Explanation:  An organization is at a disadvantage if it becomes overly dependent on any powerful supplier—a supplier that might raise its prices or provide poor-quality goods and services. In this case, Acme is at a disadvantage because Jameson Products, as the only provider of the desired technology, has the ability to charge a premium price for the technology. Thus, Acme must reduce its price (profits) to remain competitive in its bid to be selected to perform a new project for its customer.

Difficulty: 3 Hard

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

22) Allied Bank Corp. utilizes the janitorial services of Marie’s Clean-It Corp. to keep their buildings clean. Marie’s provides all the necessary cleaning supplies, training, background security checks (because the crew works after hours), and all other associated expenses. The other available janitorial services do not typically provide security checks, and a client such as a bank would have to hire guards to watch the work of the janitors. If Allied Bank were to consider hiring another cleaning service to replace Marie’s, which of the following would the bank incur?

1.   A) high employment costs

2.   B) unfavorable supplier status

3.   C) high switching costs

4.   D) favorable quality status

5.   E) complementary products

 

Answer:  C

Explanation:  Switching costs are fixed costs buyers face if they change suppliers. In this case, the bank would have to have a permanent security guard, a fixed cost, should it decide to switch from Marie’s Clean-It to another cleaning service.

Difficulty: 3 Hard

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

23) Competition is most intense when there are ________ direct competitors, industry growth is slow, and the product or service cannot be differentiated.

1.   A) few

2.   B) many

3.   C) some

4.   D) no

5.   E) limited

 

Answer:  B

Explanation:  Competition is most intense when there are many direct competitors (including global contenders), industry growth is slow, and the product or service cannot be differentiated.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

24) ________ is a barrier to entry.

1.   A) Price reductions

2.   B) Brand identification

3.   C) Advertising campaigns

4.   D) Capital requirements

5.   E) Environmental uncertainty

 

Answer:  B

Explanation:  Brand identification is a barrier to entry. When customers are loyal to a familiar brand, new entrants have to spend heavily.

Difficulty: 2 Medium

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

25) A complement is a potential ________ because customers use it as an alternative, buying less of one kind of product but more of another.

1.   A) threat

2.   B) opportunity

3.   C) strength

4.   D) weakness

5.   E) minimization

 

Answer:  B

Explanation:  A complement is a potential opportunity because customers buy more of a given product if they also demand more of the complementary product.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

26) A ________ is powerful if a buyer has few other sources of supply or if the supplier has many other buyers.

1.   A) supplier

2.   B) customer

3.   C) marketer

4.   D) manager

5.   E) competitor

 

Answer:  A

Explanation:  Organizations are at a disadvantage if they become overly dependent on any powerful supplier. A suppler is powerful if a buyer has few other sources of supply or if the supplier has many other buyers.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

27) If a consumer changes suppliers, they are faced with

1.   A) switching costs.

2.   B) increased global competition.

3.   C) supply chain management.

4.   D) unforeseen logistics.

5.   E) observational inadequacy.

 

Answer:  A

Explanation:  If a consumer changes suppliers, they are faced with switching costs.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

28) A ________ is an intermediate consumer.

1.   A) wholesaler

2.   B) manufacturer’s representative

3.   C) distributor

4.   D) retailer

5.   E) broker

 

Answer:  D

Explanation:  A final consumer is a customer who purchases products in their finished form. An intermediate consumer is a customer who purchases raw materials or wholesale products before selling them to final customers. Types of intermediate customers include retailers, who buy from wholesalers and manufacturers’ representatives and then sell to consumers, and industrial buyers, who buy raw materials to be converted into final products.

Difficulty: 1 Easy

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

29) Identify the environmental factor that contributes to an attractive environment for firms.

1.   A) many barriers to entry

2.   B) high threat of entry

3.   C) many competitors

4.   D) few suppliers

5.   E) many substitutes

 

Answer:  A

Explanation:  Many barriers to entry deter new entrants and make an environment attractive for firms.

Difficulty: 2 Medium

Topic:  Barriers to Entry

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

30) Smith Forge is a successful wholesale provider of hand tools to small retail hardware stores in Florida. Six months ago, John, national sales director for Smith Forge, succeeded in securing a large contract to provide hand tools to HomeFix, a major national retail hardware chain. Furthermore, Smith Forge’s contract with HomeFix allows Smith Forge to provide HomeFix with hand tools made of materials of lesser quality at a lesser price. Therefore, HomeFix can charge its retail customers a lower price, providing an attractive profit for both companies. Six months into the contract, both John and Smith Forge are disappointed that, although the hand tools meet the technical specifications of the contract between Smith Forge and HomeFix, the products are not selling. And, furthermore, HomeFix is receiving nonstop complaints from its customers about the quality of the hand tools, prompting HomeFix to consider canceling its contract with Smith Forge. In retrospect, in its eagerness to land a large contract with HomeFix, John and Smith Forge failed to adequately consider the needs of the

1.   A) media.

2.   B) distributor.

3.   C) final consumer.

4.   D) supplier.

5.   E) broker.

 

Answer:  C

Explanation:  A final consumer is a customer who purchases products in their finished form. As the final user of the finished product, the final consumer can demand lower prices, higher quality, unique product specifications, or better service.

Difficulty: 3 Hard

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

31) Identify the environmental factor that is a characteristic of an attractive environment.

1.   A) low customer bargaining power

2.   B) few entry barriers

3.   C) many competitors

4.   D) many substitutes

5.   E) complementary products

 

Answer:  A

Explanation:  An attractive environment for firms is formed by many customers with low bargaining power.

Difficulty: 1 Easy

Topic:  Competitive Environment

Learning Objective:  03-02 Explain the five components of an organization’s competitive environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

32) Dennis, a senior manager at VST Corporation, is considering the acquisition of a revolutionary water treatment technology from a small development firm. The asking price is $5 million. However, the environmental uncertainty of the water treatment marketplace is both complex and dynamic. Dennis wants to acquire the new technology but seeks to manage the risk associated with his decision, or “hedge his bets.” Key elements of his risk management strategy might be to

1.   A) gain competitive intelligence through environmental scanning, develop business scenarios, forecast sales, and benchmark the technology.

2.   B) diversify, merge, divest, prospect, or defend the technology.

3.   C) establish visible artifacts; develop symbols, rites, and ceremonies; and develop stories about the technology.

4.   D) decide upon a clan (collaborate), adhocracy (create), hierarchy (control), or market (compete) culture from which to market the technology.

5.   E) buffer, smooth, and empower in order to manage the technology supply chain.

 

Answer:  A

Explanation:  Environmental uncertainty means that managers do not have enough information about the environment to understand or predict the future. Uncertainty arises from complexity and dynamism. As environmental uncertainty increases, managers need methods for collecting, sorting through, and interpreting information about the environment, using environmental scanning, scenario development, forecasting, benchmarking, and other approaches.

Difficulty: 3 Hard

Topic:  Environmental Uncertainty

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

33) ________ refers to searching for information that is not immediately evident and sorting through that information to interpret what is important.

1.   A) Competitive skimming

2.   B) Data classification

3.   C) Environmental scanning

4.   D) Knowledge browsing

5.   E) Information foraging

 

Answer:  C

Explanation:  Environmental scanning includes searching for information that is unavailable to most people and sorting through that information to interpret what is important.

Difficulty: 1 Easy

Topic:  Environmental Scanning

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

34) In an attempt to improve customer service, Hi-Tech Toys Inc. decided to assign a team to investigate the kinds of services offered by competing companies. The team discovered that a smaller company, VG Games Corp., seemed to have outstanding customer service. The team then determined the major differences between the two companies and developed a plan to incorporate the best elements of VG Games into Hi-Tech Toys. Which of the following is being implemented by Hi-Tech Toys?

1.   A) environmental dynamism

2.   B) strategic maneuvering

3.   C) cooperative action

4.   D) benchmarking

5.   E) forecasting

 

Answer:  D

Explanation:  Benchmarking means identifying the best-in-class performance by a company in a given area—say, product development or customer service—and then comparing your processes with theirs. In this case, Hi-Tech Toys Inc. was benchmarking as it assigned a team to investigate the kinds of services offered by competing companies.

Difficulty: 3 Hard

Topic:  Benchmarking

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

35) ________ is the number of issues to which a manager must attend and the degree to which they are interconnected.

1.   A) Complexity

2.   B) Dynamism

3.   C) Environmental uncertainty

4.   D) Continuous change

5.   E) Minimization

 

Answer:  A

Explanation:  Complexity is the number of issues to which a manager must attend and the degree to which they are interconnected.

Difficulty: 1 Easy

Topic:  Strategic Management

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

36) ________ is the degree of discontinuous change that occurs within the industry.

1.   A) Complexity

2.   B) Dynamism

3.   C) Environmental uncertainty

4.   D) Interconnectedness

5.   E) Buffering

 

Answer:  B

Explanation:  The degree of discontinuous change that occurs within the industry is called dynamism.

Difficulty: 1 Easy

Topic:  Organizational Change

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

37) What method is used to predict exactly how some variable or variables will change in the future?

1.   A) environmental scanning

2.   B) sorting information

3.   C) forecasting

4.   D) searching

5.   E) competitive intelligence

 

Answer:  C

Explanation:  Forecasting predicts exactly how some variable or variables will change in the future.

Difficulty: 1 Easy

Topic:  Organizational Change

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

38) ________ includes searching for and sorting through information about the environment.

1.   A) Environmental scanning

2.   B) Forecasting

3.   C) Predictions

4.   D) Competitive intelligence

5.   E) Minimization

 

Answer:  A

Explanation:  Environmental scanning includes searching for and sorting through information about the environment.

Difficulty: 1 Easy

Topic:  Environmental Scanning

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

39) Forecasts are most useful when the ________ will look radically different from the

1.   A) past; future.

2.   B) future; past.

3.   C) present; future.

4.   D) present; past.

5.   E) future; present.

 

Answer:  B

Explanation:  Forecasts are most useful when the future will look radically different from the past. Unfortunately, that is when forecasts tend to be less accurate. The more things change, the less confidence we have in our forecasts.

Difficulty: 1 Easy

Topic:  Forecast

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

40) ________ is the information necessary to decide how to best manage the competitive environment.

1.   A) Business acumen

2.   B) Lift coefficient

3.   C) Competitive intelligence

4.   D) Hidden agenda

5.   E) Environmental scanning

 

Answer:  C

Explanation:  Competitive intelligence is the information necessary to decide how to best manage in the competitive environment that has been identified.

Difficulty: 1 Easy

Topic:  Competitive Intelligence

Learning Objective:  03-03 Understand how managers stay on top of changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

41) ________ is the process of sharing authority with employees to enhance their confidence in their ability to perform their jobs and contribute to an organization.

1.   A) Empowerment

2.   B) Licensing

3.   C) Vetoing

4.   D) Endorsement

5.   E) Concurrence

 

Answer:  A

Explanation:  Empowerment is the process of sharing power with employees to enhance their confidence in their ability to perform their jobs and contribute to the organization.

Difficulty: 1 Easy

Topic:  Empowerment

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

42) SurTran Inc. is an 80-year-old transportation company headquartered in St. Louis. SurTran ships goods via truck and train throughout the United States. Its general operations manager, Raul Sosa, has grown up in the business and knows that Surtran is a highly complex business with 100 facilities and 2,000 staff in dozens of U.S. cities. But Raul knows that, at its core, SurTran is also a stable (nondynamic) business. As Raul is fond of saying, “As long as there are people in one place and their desired goods in another, there will always be a need for shipping! And that makes for a stable business.” Nonetheless, Raul, like any other manager, deals with uncertainty on a daily basis, as do his four regional vice presidents located in Los Angeles, Houston, Chicago, and New York City. Due to SurTran’s high complexity and high stability, what management style should Raul adopt to be successful in allowing his vice presidents to operate “in the field”?

1.   A) “Address each problem or opportunity as a unique situation and make operational decisions in the field, through consultation with me or your managers as appropriate.” (decentralized and organic approach, with mutual adjustment).

2.   B) “Hire good people with the right skills and train them to use our formal business work processes, and then make operational decisions in the field yourselves.” (decentralized and bureaucratic approach, with standardized skills).

3.   C) “Our people will follow instructions as pre-defined by headquarters, and I will make operational decisions, including those in the field.” (centralized and bureaucratic approach, with standardized work processes)

4.   D) “I will handle each problem or opportunity as a unique situation, and I will make operational decisions, including those in the field, based upon my personal supervision of those involved.” (centralized and organic approach, with direct supervision)

5.   E) “I will address each problem or opportunity as a unique situation, and I will make operational decisions, including those in the field, after consulting with you and others as appropriate.” (centralized and organic approach, with mutual adjustment)

 

Answer:  B

Explanation:  An organization should adopt a decentralized, bureaucratic approach with standardized skills for managing uncertainty in a complex and stable environment.

Difficulty: 3 Hard

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

43) Which approaches should an organization adopt for managing uncertainty in a complex and dynamic environment?

1.   A) centralized and bureaucratic approach, with standardized work processes

2.   B) decentralized and bureaucratic approach, with standardized skills

3.   C) decentralized and organic approach, with mutual adjustment

4.   D) centralized and organic approach, with direct supervision

5.   E) centralized and organic approach, with mutual adjustment

 

Answer:  C

Explanation:  An organization should adopt a decentralized, organic approach with mutual adjustment for managing uncertainty in a complex and dynamic environment.

Difficulty: 2 Medium

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

44) Which approaches should an organization adopt for managing uncertainty in a simple and stable environment?

1.   A) centralized and organic approach, with direct supervision

2.   B) decentralized and bureaucratic approach, with standardized skills

3.   C) decentralized and organic approach, with mutual adjustment

4.   D) centralized and bureaucratic approach, with standardized work processes

5.   E) centralized and organic approach, with mutual adjustment

 

Answer:  D

Explanation:  An organization should adopt a centralized, bureaucratic approach with standardized work processes for managing uncertainty in a simple and stable environment.

Difficulty: 2 Medium

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

45) A decentralized, bureaucratic approach with standardized skills for managing uncertainty is ideal for which of the following environments?

1.   A) stable and complex

2.   B) complex and dynamic

3.   C) simple and stable

4.   D) dynamic and simple

5.   E) stable and dynamic

 

Answer:  A

Explanation:  An organization should adopt a decentralized, bureaucratic approach with standardized skills for managing uncertainty in a complex and stable environment.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

46) A decentralized, organic approach with mutual adjustment for managing uncertainty is ideal for which of the following environments?

1.   A) stable and complex

2.   B) complex and dynamic

3.   C) simple and stable

4.   D) dynamic and simple

5.   E) stable and dynamic

 

Answer:  B

Explanation:  An organization should adopt a decentralized, organic approach with mutual adjustment for managing uncertainty in a complex and dynamic environment.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

47) A centralized, organic approach with direct supervision for managing uncertainty is ideal for which of the following environments?

1.   A) stable and complex

2.   B) complex and dynamic

3.   C) dynamic and simple

4.   D) simple and stable

5.   E) stable and dynamic

 

Answer:  C

Explanation:  An organization should adopt a centralized, organic approach with direct supervision for managing uncertainty in a simple and dynamic environment.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

48) A centralized, bureaucratic approach with standardized work processes for managing uncertainty is ideal for which of the following environments?

1.   A) stable and complex

2.   B) complex and dynamic

3.   C) dynamic and simple

4.   D) simple and stable

5.   E) stable and dynamic

 

Answer:  D

Explanation:  An organization should adopt a centralized, bureaucratic approach with standardized work processes for managing uncertainty in a simple and stable environment.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

49) In ________, supplies are created of excess resources in case of unpredictable needs.

1.   A) hoarding

2.   B) smoothing

3.   C) yielding

4.   D) flocking

5.   E) buffering

 

Answer:  E

Explanation:  Creating supplies of excess resources in case of unpredictable needs is called buffering.

Difficulty: 1 Easy

Topic:  Buffering

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

50) Sandra owns a small gift shop in Tennessee. She hopes the economy will rebound this fall as she has to order her Christmas merchandise and other holiday gifts in February. She wants to make sure she has enough goods for the surge in sales that the holiday season usually brings to her retail store. Here, Sandra is using ________ to be sure she has enough gifts for those extra customers that she hopes will bear the economic woes and shop for holiday presents.

1.   A) substitutes

2.   B) smoothing

3.   C) complements

4.   D) buffering

5.   E) demographics

 

Answer:  D

Explanation:  Buffering is creating supplies of excess resources in case of unpredictable needs. In Sandra’s case, she has accumulated additional inventory to sell during the holiday season because demand is unpredictable.

Difficulty: 3 Hard

Topic:  Buffering

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

51) The growth of contingent workers in the U.S. labor force due to unpredictable labor demand is an illustration of

1.   A) adapting at the core.

2.   B) process flexibility.

3.   C) buffering.

4.   D) smoothing.

5.   E) empowerment.

 

Answer:  C

Explanation:  Buffering creates supplies of excess resources (in this case contingent workers) in case of unpredictable needs (such as unpredictable labor demand).

Difficulty: 2 Medium

Topic:  Buffering

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

52) When Kevin’s Healthy-and-Good-for-You Fruit Juice Company acts on its own to promote the fruit juice industry as a whole, the company is practicing

1.   A) competitive aggression.

2.   B) competitive pacification.

3.   C) public relations.

4.   D) voluntary cooptation.

5.   E) cooperative action.

 

Answer:  B

Explanation:  Competitive pacification is an independent action to improve relations with competitors such as Kevin’s Healthy-and-Good-for-You Fruit Juice Company promoting the yogurt industry as a whole.

Difficulty: 3 Hard

Topic:  External Environment

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

53) When Good As Mom’s Corp. advertises its syrup products as better than the syrup products of Grandma’s Best Corp., Good As Mom’s is demonstrating

1.   A) competitive aggression.

2.   B) competitive pacification.

3.   C) benchmarking.

4.   D) smoothing.

5.   E) cooptation.

 

Answer:  A

Explanation:  Competitive aggression is exploiting a distinctive competence (such as Good As Mom’s Corp. advertising its syrup products as better than the syrup products of Grandma’s Best Corp.) or improving internal efficiency for competitive advantage.

Difficulty: 3 Hard

Topic:  Competitive Advantage

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

54) ________ is leveling normal fluctuations at the boundaries of an environment.

1.   A) Smoothing

2.   B) Buffering

3.   C) Sifting

4.   D) Flexing

5.   E) Skirting

 

Answer:  A

Explanation:  In addition to buffering, organizations try smoothing, or leveling, normal fluctuations at the boundaries of the environment.

Difficulty: 1 Easy

Topic:  External Environment

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

55) ________ are methods for adapting the technical core to changes in an environment.

1.   A) Supply chain actions

2.   B) Flexible processes

3.   C) Independent strategies

4.   D) Cooperative strategies

5.   E) Technical acquisitions

 

Answer:  B

Explanation:  While buffering and smoothing manage uncertainties at the boundaries of the organization, firms also can establish flexible processes that allow for adaptation in their technical core.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

56) ________ are approaches used by an organization that acts on its own to change some aspect of its current environment.

1.   A) Flexible processes

2.   B) Forecasting methods

3.   C) Independent strategies

4.   D) Benchmarking procedures

5.   E) Buffering techniques

 

Answer:  C

Explanation:  A company uses independent strategies when it acts on its own to change some aspect of its current environment.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

57) A university has just formed a board of trustees and invited 25 of its wealthiest alumni to join the board. Which of the following is being adopted by the university?

1.   A) smoothing

2.   B) cooptation

3.   C) competitive intelligence

4.   D) divestiture

5.   E) scaffolding

 

Answer:  B

Explanation:  Cooptation is absorbing new elements into the organization’s leadership structure to avert threats to its stability or existence. In this case, the university is demonstrating cooptation by inviting wealthy alumni to join its board of trustees.

Difficulty: 2 Medium

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

58) Todd Pharmaceuticals and Gregg Medicines Corp. have joined forces to fight for health care reform. The two companies

1.   A) merged.

2.   B) created a coalition.

3.   C) selected a domain.

4.   D) were benchmarking.

5.   E) acted with competitive aggression.

 

Answer:  B

Explanation:  Coalition is two or more groups (Todd Pharmaceuticals and Gregg Medicines Corp.) that act jointly with respect to some set of issues (health care reform) for some period of time.

Difficulty: 2 Medium

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

59) Domain selection, diversification, mergers or acquisitions, and divestitures are all examples of

1.   A) cooperative strategies.

2.   B) voluntary action.

3.   C) strategic maneuvering.

4.   D) independent strategies.

5.   E) competitive pacification.

 

Answer:  C

Explanation:  Strategic maneuvering is an organization’s conscious efforts to change the boundaries of its competitive environment. Managers can use several strategic maneuvers, including domain selection, diversification, merger and acquisition, and divestiture.

Difficulty: 2 Medium

Topic:  Competitive Environment

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

60) Great American Farms Corp. announced that it was selling off its cereals division in order to realign itself more competitively in the marketing of its other products. This is an example of managing the task environment through

1.   A) diversification.

2.   B) acquisition.

3.   C) merger.

4.   D) divestiture.

5.   E) domain selection.

 

Answer:  D

Explanation:  Divestiture occurs when a company sells one or more businesses. In this case, Great American Farms Corp. engaged in divestiture as it sold off its pork division in order to realign itself more competitively in the marketing of its other products.

Difficulty: 3 Hard

Topic:  Divestiture

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

61) For the past two years, Swen Johannsen, owner/general manager of Swen’s Fine Duds, a local men’s clothing store, has fought to stay in business. In the face of increasing competition, Swen has tried several tactics: aggressively promoting price-slashing sales to drive his competitors’ customers to his doors; attempting to cut costs by leveling out sales and inventory through seasonal sales; as well as lining up contracts with wholesalers in advance of seasonal rushes (e.g., summer swimwear) to prevent inventory depletion. He has even recruited the president of the chamber of commerce to sit on his board. None of these tactics have been successful. Now, Swen is considering a deviation from his current business to one that might be more suitable, perhaps a formal wear/tuxedo rental and retail shop or a boutique Western wear store. Swen is using ________ as his final tactic.

1.   A) independent action

2.   B) domain selection

3.   C) cooptation

4.   D) buffering

5.   E) smoothing

 

Answer:  B

Explanation:  Domain selection is the entrance by a company into another suitable market or industry. It is a way of changing the boundaries of a firm’s environment.

Difficulty: 2 Medium

Topic:  Domain Selection

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Apply

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

62) ________ is an organization’s conscious efforts to change the boundaries of its task environment.

1.   A) Independent action

2.   B) Cooperative strategy

3.   C) Strategic maneuvering

4.   D) Public relations

5.   E) Flexible processing

 

Answer:  C

Explanation:  Strategic maneuvering is an organization’s conscious efforts to change the boundaries of its task environment.

Difficulty: 1 Easy

Topic:  Strategic Management

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

63) ________ occurs when a company sells one or more businesses.

1.   A) Diversification

2.   B) Cooptation

3.   C) Acquisition

4.   D) Divestiture

5.   E) Merger

 

Answer:  D

Explanation:  Divestiture occurs when a company sells one or more businesses.

Difficulty: 1 Easy

Topic:  Divestiture

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

64) Sam, general manager of a licensed supplier of advanced 3-D printing equipment, routinely and independently influences his business environment to the benefit of his company. Determine which action below is NOT among the ways that Sam independently influences his business environment.

1.   A) by supporting and promoting elected officials to pass city ordinances that favor his customers or business (political action)

2.   B) by suing or threatening to sue firms who are not licensed to sell his printing equipment when they attempt to do so (legal action)

3.   C) by visibly supporting his brand through sponsorship of local sporting events (public relations)

4.   D) by joining a task force with his local business neighbors to brainstorm ideas to reduce the cost of downtown parking (coalition)

5.   E) by boldly stressing benefits of his technology against those of his competitors through comparative advertising (competitive aggression)

 

Answer:  D

Explanation:  According to Exhibit 3.5, the ways that managers can influence their environment are: competitive aggression, competitive pacification, public relations, voluntary action, legal action, and political action.

Difficulty: 3 Hard

Topic:  External Environment

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

 

 

65) ________ are companies that stay within a stable product domain as a strategic maneuver.

1.   A) Adopters

2.   B) Accommodators

3.   C) Protectors

4.   D) Sponsors

5.   E) Defenders

 

Answer:  E

Explanation:  Defenders are companies that stay within a stable product domain as a strategic maneuver.

Difficulty: 1 Easy

Topic:  Strategic Management

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

66) ________ is independent action to improve relations with competitors.

1.   A) Competitive intelligence

2.   B) Coalition

3.   C) Cooptation

4.   D) Competitive aggression

5.   E) Competitive pacification

 

Answer:  E

Explanation:  Competitive pacification is independent action to improve relations with competitors (e.g., helping competitors find raw materials).

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

67) ________ refers to absorbing new elements into an organization’s leadership structure to avert threats to its stability or existence.

1.   A) Coalition

2.   B) Contracting

3.   C) Cooptation

4.   D) Buffering

5.   E) Smoothing

 

Answer:  C

Explanation:  Cooptation is absorbing new elements into the organization’s leadership structure to avert threats to its stability or existence. Many universities invite wealthy alumni to join their boards of directors.

Difficulty: 1 Easy

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

68) Beatrice owns and operates a food truck in a large city. Competitors are many, and competition is fierce. Due to her small business’s size, she cannot realistically influence her business environment. However, Beatrice can and does take steps to adapt to the environment, including

1.   A) slashing her food prices to force her competitors to do likewise city-wide (competitive aggression).

2.   B) sponsoring local events to establish and maintain a positive brand image (public relations).

3.   C) recruiting the mayor to participate on her business advisory board (cooptation).

4.   D) hiring a lobbyist to promote state legislation that is favorable to operation of food trucks (political action).

5.   E) hiring part-time help and maintaining extra inventory for peak periods (buffering).

 

Answer:  E

Explanation:  Because they are open systems, organizations are exposed to uncertainties from both their inputs and outputs. In response, they can create buffers on both the input and output boundaries with the environment. Buffering creates supplies of excess resources to meet unpredictable needs.

Difficulty: 3 Hard

Topic:  Environmental Uncertainty

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Analyze

AACSB:  Analytical Thinking

Accessibility:  Keyboard Navigation

 

69) ________ are the strongly held and taken-for-granted beliefs that guide behavior in a firm.

1.   A) Values

2.   B) Organizational divestitures

3.   C) Prospectors

4.   D) Unconscious assumptions

5.   E) Buffers

 

Answer:  D

Explanation:  The third and deepest level of an organization’s culture refers to unconscious assumptions, which are strongly held and taken-for-granted beliefs that guide behavior in the firm.

Difficulty: 1 Easy

Topic:  Organizational Culture

Learning Objective:  03-05 Discuss how to use organizational cultures to overcome challenges in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

70) ________ is leveling normal fluctuations at the boundaries of the environment.

1.   A) Buffering

2.   B) Smoothing

3.   C) Flexible processes

4.   D) Independent strategies

5.   E) Empowerment

 

Answer:  B

Explanation:  Smoothing is leveling normal fluctuations at the boundaries of the environment.

Difficulty: 1 Easy

Topic:  Adaptive Change

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Remember

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation

 

 

 

71) During the holiday season, Budget Department Store works with a contracted employment agency to bring extra workers on board to handle overflow business, and extra duties such as wrapping presents. Budget is using ________ during these rush times.

1.   A) smoothing

2.   B) buffering

3.   C) independent strategies

4.   D) flexible strategies

5.   E) lift coefficient

 

Answer:  B

Explanation:  When the creation of supplies is in excess in case of unpredictable needs, it is called buffering.

Difficulty: 2 Medium

Topic:  Buffering

Learning Objective:  03-04 Summarize how managers respond to changes in the external environment.

Bloom’s:  Understand

AACSB:  Knowledge Application

Accessibility:  Keyboard Navigation