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CHAPTER 2—THE ENVIRONMENT AND CORPORATE CULTURE
TRUE/FALSE
1. The general environment and the task environment are the two layers of an organization's external environment.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
2. The outer layer of the external environment is the task environment.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
3. Current employees, management, and especially corporate culture are part of an organization's internal environment.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
4. According to Spotlight on Skills in Chapter 2, the Chinese concept of guanxi is a supportive, mutually beneficial connection between two people.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
5. According to Spotlight on Skills in Chapter 2, one of the rules of doing business in China is remembering that relationships are short-term.
ANS: F PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: COMP
6. Wine merchants have seen extraordinary growth in the sale of red wine and an associated decline in other types of alcoholic beverages because a large percentage of the Chinese market has adopted red wine consumption as the fad of the moment. This is an example of how the sociocultural dimension can influence an industry.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
7. One significant trend in the economic environment is entrepreneurial start-ups that are taking advantage of new competitive rules.
ANS: T PTS: 1 DIF: 3
NAT: AACSB Analytic | Environmental Influence TYP: COMP
8. The legislatures in many undeveloped nations are reducing perceived operational risks for foreign investors who are looking for new manufacturing locations. This would be part of the legal-political dimension of the general environment.
ANS: T PTS: 1 DIF: 3
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
9. Customers and competitors are two important sectors of the economic dimension of a firm's general environment.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
10. The task environment includes sectors that have a direct working relationship with the organization, such as customers, suppliers, and the labor market.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
11. Suppliers are the people in the environment who acquire goods and services from the organization.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
12. If British Petroleum (BP) provides jet fuel for American Airlines (AA), then BP is considered a supplier for AA.
ANS: T PTS: 1 DIF: 2
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
13. Cooperation with suppliers is becoming an exception rather than the rule.
ANS: F PTS: 1 DIF: 3
NAT: AACSB Analytic | Environmental Influence TYP: COMP
14. People in the environment who can be hired to work for an organization make up the labor market.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
15. The reason that organizations care so much about the external environment is that this environment creates uncertainty for organization managers.
ANS: T PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: COMP
16. A merger occurs when there is a strategic alliance between two or more organizations.
ANS: F PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
17. The set of key values, beliefs, and norms that are shared by members of an organization are combined to create the symbols of an organization.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
18. According to Spotlight on Skills in Chapter 2, it is important to demand documentation or proof for someone's ideas to be sure they are not plagiarizing.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Ethical Responsibilities TYP: DEF
19. Corporate culture includes stories that keep an organization's values alive.
ANS: T PTS: 1 DIF: 2
NAT: AACSB Analytic | Group Dynamics TYP: DEF
20. A symbol is a figure who exemplifies the deeds, character, and attributes of a corporate culture.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Group Dynamics TYP: DEF
21. A slogan is a phrase or sentence that succinctly expresses a key corporate value.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Group Dynamics TYP: DEF
22. The security supervisor who once challenged IBM's chairman because he wasn't carrying the appropriate clearance identification to enter a security area is an example of a hero.
ANS: T PTS: 1 DIF: 3
NAT: AACSB Reflective Thinking | Group Dynamics TYP: APP
23. An achievement culture is found in an environment that requires fast response and requires high-risk decision making.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Group Dynamics TYP: DEF
24. The involvement culture is suited to organizations that are concerned with serving specific customers in the external environment but without the intense need for flexibility and rapid change.
ANS: F PTS: 1 DIF: 2
NAT: AACSB Analytic | Group Dynamics TYP: DEF
25. The consistency culture has an internal focus and a consistency orientation for a dynamic environment.
ANS: T PTS: 1 DIF: 2
NAT: AACSB Analytic | Group Dynamics TYP: DEF
26. When an organization pays little attention to either cultural values or business results, it is unlikely to survive for long.
ANS: T PTS: 1 DIF: 1
NAT: AACSB Analytic | Group Dynamics TYP: COMP
27. A primary way in which managers shape cultural norms and values to build a high-performance culture is through cultural leadership.
ANS: T PTS: 1 DIF: 2
NAT: AACSB Analytic | Group Dynamics TYP: COMP
MULTIPLE CHOICE
1. The ____ includes all elements existing outside the boundary of the organization that have the potential to affect the organization.
a. / organizational environmentb. / internal environment
c. / task environment
d. / general environment
e. / technological environment
ANS: A PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
2. The ____ environment represents the outer layer of the environment and affects organizations ____.
a. / task; indirectlyb. / general; directly
c. / internal; directly
d. / internal; indirectly
e. / general; indirectly
ANS: E PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
3. The organization's external environment has two layers: ____ and ____.
a. / general; taskb. / general; internal
c. / internal; task
d. / task; cultural
e. / cultural; general
ANS: A PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
4. Which of these is a part of an organization's internal environment?
a. / its customersb. / employees
c. / the consumer price index
d. / its suppliers
e. / its competitors
ANS: B PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
5. The internal environment includes:
a. / current employees, management, and the corporate cultureb. / current employees, management, but not the corporate culture
c. / government, technology, and the economy
d. / government, technology, corporate culture, and the economy
e. / corporate culture alone
ANS: A PTS: 1 DIF: 3
NAT: AACSB Analytic | Environmental Influence TYP: DEF
6. Mike Wood and Jim Marggraff discovered that as parents become more educated, they have higher demands for educational toys. Therefore, the LeapPad, an educational toy, was born. The creators of this new product had to keep all of the following in mind EXCEPT:
a. / internal environmentb. / external environment
c. / task environment
d. / employee environment
e. / organizational environment
ANS: D PTS: 1 DIF: 3
NAT: AACSB Analytic | Environmental Influence TYP: COMP
7. Which dimension of the general environment represents events originating in foreign countries as well as opportunities for American companies in other countries?
a. / national dimensionb. / global dimension
c. / international dimension
d. / task dimension
e. / ethnocentric dimension
ANS: C PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
8. China has been referred to as "the workshop of the world" because so many manufacturers have relocated their operations to China to take advantage of its cheap, productive labor. The influence of the "workshop of the world" on global manufacturing illustrates which dimension of the general environment?
a. / national dimensionb. / global dimension
c. / international dimension
d. / task dimension
e. / ethnocentric dimension
ANS: C PTS: 1 DIF: 1
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
9. Which of these is NOT a part of an organization's general environment?
a. / technologicalb. / economic
c. / competitors
d. / legal-political
e. / sociocultural
ANS: C PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
10. Scientific and technological advancements in a specific industry as well as in society at large are included in which general environment?
a. / sociocultural dimensionb. / legal-political dimension
c. / economic dimension
d. / technological dimension
e. / corporate culture dimension
ANS: D PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
11. In the business world, computer networking and the use of microprocessors have allowed managers to monitor and control numerous automated production lines from off-site locations. This ability to increase productivity reflects how the ____ influences the general environment.
a. / sociocultural dimensionb. / legal-political dimension
c. / economic dimension
d. / technological dimension
e. / corporate culture dimension
ANS: D PTS: 1 DIF: 1
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
12. The dimension of the general environment representing the demographic characteristics, norms, customs, and values of the population within which the organization operates is referred to as a(n):
a. / legal-political dimensionb. / economic dimension
c. / technological dimension
d. / corporate culture dimension
e. / sociocultural dimension
ANS: E PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
13. In past years, women in India have wanted a lighter complexion. Annual sales for skin lightening ointments in India were approximately $150 million. In the current decade, people in India have come to view skin lightening as a demeaning process and one that no woman should engage in. This is an example of a change in the:
a. / legal-political dimensionb. / economic dimension
c. / technological dimension
d. / corporate culture dimension
e. / sociocultural dimension
ANS: E PTS: 1 DIF: 1
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
14. When The Dallas Times launched a Spanish-language newspaper, El Nuevo Herald, with articles emphasizing Hispanic, Cuban, and Latin American news and sports, it was responding to changes in the ____ dimension.
a. / socioculturalb. / technological
c. / economic
d. / competitors
e. / suppliers
ANS: A PTS: 1 DIF: 2
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
15. McDonald's, the fast-food chain, opened its first drive-thru hamburger outlet in China in the autumn of 2005 to capitalize on growing car ownership and demand for western-style fast food in the nation. McDonald's added drive-thrus in response to changes in the ____ dimension of China's general environment.
a. / socioculturalb. / technological
c. / economic
d. / competitors
e. / suppliers
ANS: A PTS: 1 DIF: 2
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
16. Anyone considering doing business in China, according to Spotlight on Skills in Chapter 2, should keep in mind all of the following rules except:
a. / Business is always personalb. / Don't skip the small talk
c. / Remember that relationships are not short-term
d. / Be efficient with use of time
e. / Make contact frequently
ANS: D PTS: 1 DIF: 1
NAT: AACSB Reflective Thinking | Environmental Influence TYP: APP
17. Lying at the heart of Chinese culture, ____ is a supportive, mutually beneficial connection between two people.
a. / kaizenb. / ganqing
c. / renqing
d. / kansei
e. / guanxi
ANS: E PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
18. The general economic health of the country or region is typically determined by:
a. / geographical distribution, population density, age, and educational levelsb. / fair trade statutes, safety laws, protective legislation, and export restrictions
c. / consumer purchasing power, unemployment rate, interest rates
d. / legislative branches of the government and number of laws passed each year
e. / geographical distribution, fair trade status and consumer purchasing power
ANS: C PTS: 1 DIF: 3
NAT: AACSB Analytic | Environmental Influence TYP: DEF
19. Which of the following is a part of the legal-political dimension?
a. / geographical distribution, population density, age, educational levelsb. / fair trade statutes, safety laws, protective legislation, export restrictions
c. / consumer purchasing power, unemployment rate, interest rates
d. / legislative branches of the government and number of laws passed each year
e. / geographical distribution, fair trade status, consumer purchasing power
ANS: B PTS: 1 DIF: 3
NAT: AACSB Analytic | Environmental Influence TYP: DEF
20. The ____ dimension of the general environment includes federal, state, and local government regulations.
a. / technologicalb. / legal-political
c. / economic
d. / sociocultural
e. / international
ANS: B PTS: 1 DIF: 1
NAT: AACSB Analytic | Environmental Influence TYP: DEF
21. Which of the following is a dimension of the general environment?
a. / competitorsb. / labor market
c. / current employees
d. / economic
e. / customers
ANS: D PTS: 1 DIF: 2
NAT: AACSB Analytic | Environmental Influence TYP: DEF
22. Consumers think of salmon as pink, but the pink coloration is a result of a food additive. Salmon is naturally a grayish color. Salmon farmers in the European Union (EU) will have to stop adding the pink additive due to a new food safety initiative enacted by the EU. This is an example of a change in the: