Management 12th Edition John Schermerhorn – Test Bank

 

 

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Sample Questions 

 

 

Chapter 4: Environment, Innovation, and Sustainability

 

 

True/False Questions

 

 

1.    Risk taking is a way to step forward and try new things.

Answer: True

Page: 85

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

2.    The general environment comprises the actual organizations, groups, and persons with whom an organization interacts and conducts business.

Answer: False

Page: 86

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

3.    Offshoring is the return of jobs from foreign locations as companies establish new domestic operations.

Answer: False

Page: 87

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

4.    Rising labor costs, higher shipping costs, and public criticisms about destroying local jobs can cause global firms to return to their home countries.

Answer: True

Page: 87

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

5.    The legal-political conditions in the global business environment are uniform across all countries.

Answer: False

Page: 88

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

6.    Internet censorship is the deliberate blockage and denial of public access to information posted on the Internet.

Answer: True

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

7.    Inflation, income levels, and job outlook are part of the sociocultural conditions in the general environment.

Answer: False

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

8.    Generational cohorts consist of people born within a few years of one another and who experience somewhat similar life events during their formative years.

Answer: True

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

9.    The Baby Boomers are “digital natives” who grew up in technology-enriched homes, schools, and friendship environments.

Answer: False

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

10.  The Millennials are characterized with the ease of multitasking, desire for immediate gratification, continuous contact with others, and less concern with knowing things than with knowing where to find out about things.

Answer: True

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

11.  A sustainable business both meets the needs of customers and protects the natural environment for future generations.

Answer: True

Page: 91

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

12.  Sustainable business practices generate substantial amounts of waste and toxic materials.

Answer: False

Page: 91

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

13.  A sustainable business can be initiated by recycling and reusing materials in order to minimize waste and pollution of the environment.

Answer: True

Page: 91

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Comprehension

 

14.  Stakeholders are the persons, groups, and institutions directly affected by an organization.

Answer: True

Page: 92

Learning Objective: 4.2

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

15.  Competitive advantage is something that an organization does extremely well, that can be copied by its competitors, and help them gain an advantage.

Answer: False

Page: 93

Learning Objective: 4.2

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

16.  Competitive advantage can be achieved through quality by finding ways and using technology to create products and services that are of consistently higher quality for customers than what is offered by one’s competitors.

Answer: True

Page: 93

Learning Objective: 4.2

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

17.  Competitive advantage achieved through costs will help an organization earn profits with prices that one’s competitors have difficulty matching.

Answer: True

Page: 93

Learning Objective: 4.2

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

18.  The more uncertain the environment, the easier it is to analyze environmental conditions and predict future states of affairs.

Answer: False

Page: 93

Learning Objective: 4.2

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

19.  The number of different factors in the environment is referred to as the rate of change.

Answer: False

Page: 93

Learning Objective: 4.2

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

20.  The least challenging and certain situation is an environment of organizations that is both complex and dynamic.

Answer: False

Page: 94

Learning Objective: 4.2

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

21.  High-uncertainty environments require an ability of decision makers to respond quickly as new circumstances arise and new information becomes available.

Answer: True

Page: 94

Learning Objective: 4.2

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

22.  Innovation is a low priority when executives and leaders try to steer organizations through complex and uncertain environments.

Answer: False

Page: 94

Learning Objective: 4.3

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

23.  Product innovations result in better ways of doing things.

Answer: False

Page: 94

Learning Objective: 4.3

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

24.  Business model innovations result in new ways of making money for the firm.

Answer: True

Page: 94

Learning Objective: 4.3

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

25.  The final step of assessing in the innovation process involves commercializing innovation by turning it into actual products, services, or processes that increase profits by improving sales or lowering costs.

Answer: False

Page: 95

Learning Objective: 4.3

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

26.  The concept of reverse innovation got its start as global firms moved away from viewing innovation as a “home market” activity that creates new products and services for distribution to “foreign markets.”

Answer: True

Page: 95

Learning Objective: 4.3

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

27.  Environmental capital is the storehouse of natural resources that we use to sustain life and produce goods and services for society.

Answer: True

Page: 98

Learning Objective: 4.4

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

28.  The executives of Acme Ltd. pay equal attention toward maximizing profits of the firm, maintaining the well-being of its employees, satisfying its customers, and preserving the environment. This indicates that Acme Ltd. uses the triple bottom line approach.

Answer: True

Page: 98

Learning Objective: 4.4

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

29.  An organization that does not provide health insurance to employees can be categorized as one with poor human sustainability.

Answer: True

Page: 99

Learning Objective: 4.4

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Comprehension

 

30.  Human sustainability emphasizes the importance of employees as they are organizational stakeholders.

Answer: True

Page: 100

Learning Objective: 4.4

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Comprehension

 

 

  Multiple Choice Questions

 

 

31.  Which of the following falls on the positive side of risk-taking behavior of organizations?

32.  Risk taking from position of performance difficulty

33.  Risk taking motivated by desperation to get out of bad situation

34.  Risk taking from hard time dealing with problems without losing focus

35.  Risk taking with the ability to deal with problems as they arise

36.  Risk taking from little staying power

Answer: D

Page: 85

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

32.  ________ environment consists of economic, legal-political, sociocultural, technological, and natural environment conditions.

33.  Specific

34.  Task

35.  General

36.  Stakeholder

37.  Customer

Answer: C

Page: 86

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

33.  Which of the following represents the economic conditions in the general environment?

34.  Patents

35.  Infrastructure

36.  Internet access

37.  Unemployment rate

38.  Norms

Answer: D

Page: 87

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

34.  A country faced a severe recession that resulted in loss of jobs and low income levels, which in turn affected the lifestyles of the consumers. Which of the following conditions are influencing the environment of the country?

35.  Political conditions

36.  Legal conditions

37.  Technological conditions

38.  Sociocultural conditions

39.  Economic conditions

Answer: E

Page: 87

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

35.  Lubnia experienced a high rate of inflation. This led to a significant rise in prices, fluctuating market conditions, and a sharp decline in investments and savings. This implies that the inflation had created a negative impact on the ________ conditions in the environment of Lubnia.

36.  economic

37.  legal

38.  technological

39.  sociocultural

40.  political

Answer: A

Page: 87

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

36.  Which of the following involves outsourcing of jobs to foreign locations?

37.  Reshoring

38.  Offshoring

39.  Repatriation

40.  Nationalization

41.  Backshoring

Answer: B

Page: 87

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

37.  Which of the following examples illustrates the economic conditions in the general environment?

38.  An organization conducting virtual meetings

39.  An organization holding a session on business ethics

40.  An organization providing Broadband facilities at its workplace

41.  An organization raising the pay of its employees

42.  An organization discussing the philosophy and objectives of political parties

Answer: D

Page: 87

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Analytic skills

Bloom’s Taxonomy: Comprehension

 

38.  Mayer Inc., an automobile corporation based in London, shifts its manufacturing activities to China in order to minimize its cost of production. Which of the following is Mayer Inc. engaging itself in?

39.  Repatriation

40.  Nationalization

41.  Backshoring

42.  Offshoring

43.  Reshoring

Answer: D

Page: 87

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

39.  Which of the following would qualify as a reason for reshoring?

40.  Low costs in the target country

41.  Complicated logistics in the target country

42.  Excellent customer service in the target country

43.  Low shipping costs in the target country

44.  Low labor costs in the target country

Answer: B

Page: 87

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

40.  AZB Inc., a software corporation based in the United States, used to operate from several countries with lower labor costs. When the firm started to incur high costs in the foreign countries and received complaints and criticisms about the loss of local jobs, the firm decided to return to its home country. The change made to the firm’s global strategy is an example of ________.

41.  offshoring

42.  outsourcing

43.  nationalization

44.  privatization

45.  reshoring

Answer: E

Page: 87

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

41.  The patent attorney of EII Inc. was accused of stealing the organization’s invention. This scenario is an example of the ________ conditions of the general environment.

42.  natural

43.  legal-political

44.  technological

45.  sociocultural

46.  educational

Answer: B

Page: 88

Learning Objective: 4.1

Difficulty: Easy

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

42.  The government of Lubnia imposes certain rules and regulations regarding interest rates and other transactions. This is an example of the ________ conditions of the general environment.

43.  natural

44.  technological

45.  sociocultural

46.  legal-political

47.  educational

Answer: D

Page: 88

Learning Objective: 4.1

Difficulty: Easy

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

43.  Which of the following examples illustrates the legal-political conditions in the general environment?

44.  Bureaucratic decisions made in a nation

45.  Financial market situation existing in a nation

46.  Job outlooks of different individuals of a nation

47.  Information technology systems or infrastructure of a nation

48.  Population demographics of a nation

Answer: A

Page: 88

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

44.  BNQ Pvt. Ltd., a media corporation headquartered in California, has its operations across different nations. The activities of the firm are affected by the government policies and the ideologies of the legislative institutions existing in the host countries. Which of the following factors are affecting the firm’s operations?

45.  Economic conditions

46.  Sociocultural conditions

47.  Legal-political conditions

48.  Technological conditions

49.  Natural environment conditions

Answer: C

Page: 88

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

45.  Which of the following is a part of the sociocultural conditions in the general environment?

46.  Inflation

47.  Financial markets

48.  Government policies

49.  Intellectual properties

50.  Demographics

Answer: E

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

46.  Diversity issues relating to educational opportunity, access to technology, housing options, and so on are parts of the ________ conditions in the general environment.

47.  economic

48.  legal

49.  technological

50.  sociocultural

51.  political

Answer: D

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

47.  The managers of Axis Inc. emphasize the importance of team norms, business ethics, and respect for human rights in the organization. This implies that the organization is working on the ________ conditions in the organizational environment.

48.  economic

49.  legal

50.  sociocultural

51.  technological

52.  political

Answer: C

Page: 89

Learning Objective: 4.1

Difficulty: Hard

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

48.  The marketing executives of Brown Inc. observe the demographics of the population at its different areas of operation. They work toward satisfying the needs and preferences of individuals belonging to various demographic groups. The factors that they analyze include age, ethnicity, income levels, and gender. This implies that Brown Inc. focuses on the ________ conditions in the general environment to make sales.

49.  technological

50.  legal

51.  philosophical

52.  sociocultural

53.  political

Answer: D

Page: 89

Learning Objective: 4.1

Difficulty: Hard

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

49.  Which of the following aspects of demographics comprises of generational cohorts?

50.  Income levels

51.  Race

52.  Age

53.  Ethnicity

54.  Gender

Answer: C

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

50.  ________ are “digital immigrants” that have had to learn about technology as it became available.

51.  Baby Boomers

52.  Gen Ys

53.  Gen Xs

54.  Millennials

55.  Gen Zs

Answer: A

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge

 

51.  Which of the following are characterized by ease of multitasking, desire for immediate gratification, continuous contact with others, and less concern with knowing things than with knowing where to find out about things?

52.  Millennials

53.  Gen Xs

54.  Baby Busters

55.  Golden Boomers

56.  Baby Boomers

Answer: A

Page: 89

Learning Objective: 4.1

Difficulty: Easy

AACSB: Analytic

Bloom’s Taxonomy: Knowledge

 

52.  Meg has the ability to multitask and maintain continuous contact with others. She believes in receiving immediate gratification. This implies that Meg is most likely a ________.

53.  Baby Boomer

54.  Millennial

55.  Gen X

56.  Baby Buster

57.  Golden Boomer

Answer: B

Page: 89

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

53.  F5, a financial services organization, advertises its financial products and instruments on social networking sites and other Websites. This implies that the firm is utilizing the ________ conditions in the general environment.

54.  natural

55.  legal

56.  technological

57.  sociocultural

58.  political

Answer: C

Page: 90

Learning Objective: 4.1

Difficulty: Hard

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

54.  Bart has a diverse collection of the latest video games. He owns a mobile phone with a number of applications. His school is well equipped with Internet facilities. Which of the following generational cohorts does Bart most likely belong to?

55.  Baby Boomer Generation

56.  Gen X Generation

57.  Baby Buster Generation

58.  Millennial Generation

59.  Golden Boomer Generation

Answer: D

Page: 89

Learning Objective: 4.1

Difficulty: Hard

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

55.  Synergy Inc. implements the use of social media, digital sharing of presentations, data, files, and holds regular virtual meetings. This indicates that the firm has reasonably well-equipped ________ conditions in the organizational environment.

56.  natural

57.  technological

58.  legal

59.  sociocultural

60.  political

Answer: B

Page: 90-91

Learning Objective: 4.1

Difficulty: Hard

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

56.  Which of the following examples illustrates the technological conditions in the general environment?

57.  Features and applications available on an individual’s phone

58.  Income levels of an individual

59.  Housing options for an individual

60.  Job options for an individual

61.  Educational opportunities for an individual

Answer: A

Page: 90-91

Learning Objective: 4.1

Difficulty: Moderate

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application

 

57.  Which of the following examples would qualify as a potential problem of the existing ever-present technological condition?

58.  An organization advertising its products on social networking websites

59.  An organization’s employees regularly engaging in online pastimes during work hours

60.  An organization conducting regular virtual meetings

61.  A musician promoting his debut musical project on the Internet through media Websites

62.  An organization implementing digital sharing of files, presentations, and projects

Answer: B

Page: 91

Learning Objective: 4.1

Difficulty: Hard

AACSB: Reflective thinking skills

Bloom’s Taxonomy: Apply