Ch3 Test Bank + Answers The Organizational Environment And

M: Management, 6e (Bateman)

Chapter 3 The Organizational Environment and Culture

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

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

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

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

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

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

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

A) The external environment

B) Open systems

C) Relative constraints

D) The barriers to entry domain selection

E) Conditions of certainty

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

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

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

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

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

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.

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.

A) technological

B) social

C) legal

D) demographic

E) economic

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

A) Macroenvironment

B) Competitive environment

C) Microenvironment

D) Exosystem

E) Open system

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

A) buffering.

B) distribution channels.

C) complements.

D) smoothing.

E) substitutes.

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?

A) government policies

B) demographics

C) suppliers

D) technology

E) social factors

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?

A) customers

B) competitors

C) regulators

D) economic factors

E) threat of new entrants

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

A) Cannibalization

B) Downsizing

C) Scaffolding

D) Industry shakeout

E) Economic fluctuation

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

A) Demographics

B) Industry shakeouts

C) Prospectors

D) Zero-profit conditions

E) Barriers to entry

16) ________ is a common barrier to entry.

A) Distribution channels

B) Final consumers

C) Bargaining power of buyers

D) Demographics

E) Switching costs

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

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

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

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

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

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

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?

A) protectionism

B) buffering

C) barriers to entry

D) smoothing

E) downsizing

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?

A) There are few entry barriers.

B) Government regulation of cereals is high.

C) The threat of new entrants is low.

D) Carroll Cereals has no or weak distribution channels.

E) Carroll Cereals has limited brand identification.

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

A) pay cash.

B) use products themselves.

C) purchase more than intermediate consumers.

D) are not as flexible as intermediate consumers.

E) do not have any bargaining power.

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

A) customers.

B) suppliers.

C) substitute companies.

D) competitors.

E) complementary firms.

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?

A) high employment costs

B) unfavorable supplier status

C) high switching costs

D) favorable quality status

E) complementary products

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

A) few

B) many

C) some

D) no

E) limited

24) ________ is a barrier to entry.

A) Price reductions

B) Brand identification

C) Advertising campaigns

D) Capital requirements

E) Environmental uncertainty

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

A) threat

B) opportunity

C) strength

D) weakness

E) minimization

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

A) supplier

B) customer

C) marketer

D) manager

E) competitor

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

A) switching costs.

B) increased global competition.

C) supply chain management.

D) unforeseen logistics.

E) observational inadequacy.

28) A ________ is an intermediate consumer.

A) wholesaler

B) manufacturer's representative

C) distributor

D) retailer

E) broker

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

A) many barriers to entry

B) high threat of entry

C) many competitors

D) few suppliers

E) many substitutes

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

A) media.

B) distributor.

C) final consumer.

D) supplier.

E) broker.

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

A) low customer bargaining power

B) few entry barriers

C) many competitors

D) many substitutes

E) complementary products

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

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

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

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

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

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

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

A) Competitive skimming

B) Data classification

C) Environmental scanning

D) Knowledge browsing

E) Information foraging

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?

A) environmental dynamism

B) strategic maneuvering

C) cooperative action

D) benchmarking

E) forecasting

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

A) Complexity

B) Dynamism

C) Environmental uncertainty

D) Continuous change

E) Minimization

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

A) Complexity

B) Dynamism

C) Environmental uncertainty

D) Interconnectedness

E) Buffering

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

A) environmental scanning

B) sorting information

C) forecasting

D) searching

E) competitive intelligence

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

A) Environmental scanning

B) Forecasting

C) Predictions

D) Competitive intelligence

E) Minimization

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

A) past; future.

B) future; past.

C) present; future.

D) present; past.

E) future; present.

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

A) Business acumen

B) Lift coefficient

C) Competitive intelligence

D) Hidden agenda

E) Environmental scanning

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.

A) Empowerment

B) Licensing

C) Vetoing

D) Endorsement

E) Concurrence

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"?

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).

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).

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)

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)

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)

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

A) centralized and bureaucratic approach, with standardized work processes

B) decentralized and bureaucratic approach, with standardized skills

C) decentralized and organic approach, with mutual adjustment

D) centralized and organic approach, with direct supervision

E) centralized and organic approach, with mutual adjustment

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

A) centralized and organic approach, with direct supervision

B) decentralized and bureaucratic approach, with standardized skills

C) decentralized and organic approach, with mutual adjustment

D) centralized and bureaucratic approach, with standardized work processes

E) centralized and organic approach, with mutual adjustment

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

A) stable and complex

B) complex and dynamic

C) simple and stable

D) dynamic and simple

E) stable and dynamic

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

A) stable and complex

B) complex and dynamic

C) simple and stable

D) dynamic and simple

E) stable and dynamic

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

A) stable and complex

B) complex and dynamic

C) dynamic and simple

D) simple and stable

E) stable and dynamic

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

A) stable and complex

B) complex and dynamic

C) dynamic and simple

D) simple and stable

E) stable and dynamic

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

A) hoarding

B) smoothing

C) yielding

D) flocking

E) buffering

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.

A) substitutes

B) smoothing

C) complements

D) buffering

E) demographics

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

A) adapting at the core.

B) process flexibility.

C) buffering.

D) smoothing.

E) empowerment.

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

A) competitive aggression.

B) competitive pacification.

C) public relations.

D) voluntary cooptation.

E) cooperative action.

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

A) competitive aggression.

B) competitive pacification.

C) benchmarking.

D) smoothing.

E) cooptation.

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

A) Smoothing

B) Buffering

C) Sifting

D) Flexing

E) Skirting

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

A) Supply chain actions

B) Flexible processes

C) Independent strategies

D) Cooperative strategies

E) Technical acquisitions

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

A) Flexible processes

B) Forecasting methods

C) Independent strategies

D) Benchmarking procedures

E) Buffering techniques

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?

A) smoothing

B) cooptation

C) competitive intelligence

D) divestiture

E) scaffolding

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

A) merged.

B) created a coalition.

C) selected a domain.

D) were benchmarking.

E) acted with competitive aggression.

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

A) cooperative strategies.

B) voluntary action.

C) strategic maneuvering.

D) independent strategies.

E) competitive pacification.

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

A) diversification.

B) acquisition.

C) merger.

D) divestiture.

E) domain selection.

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.

A) independent action

B) domain selection

C) cooptation

D) buffering

E) smoothing

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

A) Independent action

B) Cooperative strategy

C) Strategic maneuvering

D) Public relations

E) Flexible processing

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

A) Diversification

B) Cooptation

C) Acquisition

D) Divestiture

E) Merger

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.

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

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)

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

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

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

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

A) Adopters

B) Accommodators

C) Protectors

D) Sponsors

E) Defenders

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

A) Competitive intelligence

B) Coalition

C) Cooptation

D) Competitive aggression

E) Competitive pacification

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

A) Coalition

B) Contracting

C) Cooptation

D) Buffering

E) Smoothing

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

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

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

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

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

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

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

A) Values

B) Organizational divestitures

C) Prospectors

D) Unconscious assumptions

E) Buffers

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

A) Buffering

B) Smoothing

C) Flexible processes

D) Independent strategies

E) Empowerment

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.

A) smoothing

B) buffering

C) independent strategies

D) flexible strategies

E) lift coefficient

72) A company uses ________ when it acts on its own to change some aspect of its current environment.

A) smoothing

B) buffering

C) independent strategies

D) flexible processes

E) competitive intelligence

73) For many years, Mars, Incorporated manufactured M&M's candies in assorted but fixed colors. M&M's were known and branded worldwide as individual candies featuring single solid colors. Then, in response to technological advancements and evolving customer tastes and expectations, Mars adapted its technical core by producing M&M's in an infinite variety of configurations and colors, even offering M&M's with personal photographs imprinted upon them. Thus, Mars offers personalized M&M's today as a product of "mass customization." Mars accomplished this by implementing

A) smoothing.

B) buffering.

C) flexible processes.

D) independent strategies.

E) concurrence.

74) The Company is experiencing an increase in competition, and at the same time they are building more production facilities in Southeast Asia. In this scenario, the top management team is most likely to

A) give lower-level managers the authority to make decisions to benefit the firm.

B) pull decision-making responsibility from low-level management, taking it on themselves.

C) restructure to reflect a more bureaucratic, stable organization.

D) rid themselves of all buffering product.

E) increase the cost of their products.

75) ________ is exploiting a distinctive competence or improving efficiency for competitive advantage.

A) Competitive intelligence

B) Cooptation

C) Competitive aggression

D) Coalition

E) Smoothing

76) A company uses ________ when it acts on its own to change some aspect of its current environment.

A) strategic maneuvering

B) domain selection

C) buffering

D) independent action

E) endorsement

77) An organization's ________ refers to all relevant forces inside a firm's boundaries, such as its managers, employees, resources, and organizational culture.

A) internal environment

B) competitive environment

C) macroenvironment

D) demographics

E) open systems

78) The five-by-eight inch card with one rule on it—Use good judgment in all situations—that employees at J. R. Williams Corporation receive along with the employee handbook tells the employees a great deal about their company's

A) mission statement.

B) voluntary actions.

C) organization culture.

D) competitive aggression.

E) macroenvironment.

79) ________ are the components of an organization that can be seen and heard, such as office layout, dress, orientation, stories, and written material.

A) Incendiaries

B) Visible artifacts

C) Unconscious assumptions

D) Organizational divestitures

E) Apparitions

80) ________ is the first level of organization culture.

A) Unconscious assumptions

B) Values

C) Desirable behaviors

D) Visible artifacts

E) Intangible beliefs

81) ________ are the underlying qualities and desirable behaviors that are important to an organization.

A) Traits

B) Ethics

C) Norms

D) Benchmarks

E) Values

82) At the deepest level of organizational culture are

A) unconscious assumptions.

B) values.

C) desirable behaviors.

D) individual talents.

E) ancillary activities.

83) A useful clue about an organization's culture is

A) found by seeing who is hired and who is fired.

B) information printed in the media.

C) the macroenvironment.

D) environmental scanning.

E) the industrial environment.

84) The leadership style(s) of ________ is/are associated with a hierarchical culture.

A) coordinator and organizer

B) production and achievement-oriented

C) risk taker

D) innovator and entrepreneur

E) mentor, facilitator, and parent figure

85) Johnny and Tom successfully partnered as a small independent oil exploration firm ("wildcatter") for 30 years. They worked informally together like family, and they were intensely loyal toward each other, their customers, and their suppliers. However, later in their careers, Johnny and Tom sold their firm and hired on as employees of MegaOil, Inc., a top 5 global energy conglomerate. Their employment did not last, quitting in exasperation within six months. They could not adapt to MegaOil's culture, which is characterized by production/achievement, results orientation, competitive advantage, and market superiority (market/compete culture). In hindsight, Johnny and Tom realized that they missed the

A) stability, predictability, and smoothness of a hierarchy/control culture.

B) tradition, trust, teamwork, cohesiveness, and sense of family of a clan culture.

C) flexibility, risk-taking, innovation, and entrepreneurship of an adhocracy/create culture.

D) emphasis on the employees' individual needs of an empowerment culture.

E) laid-back work environment of a weak culture.

86) Which of the following organizational cultures is strongly characterized by cohesiveness, participation, and sense of family?

A) adhocracy

B) clan

C) hierarchy

D) market

E) rational

87) Which of the following organizational cultures are strongly characterized by goal achievement, environment exchange, and competitiveness?

A) adhocracy

B) clan

C) hierarchy

D) market

E) collaboration

88) A hierarchical organizational structure values ________ and assumes that individuals will comply with the organizational mandates when roles are stated formally and enforced through rules and procedures.

A) change

B) stability

C) flexibility

D) external control

E) business acumen

89) The bonding attributes of a(n) ________ are flexibility, risk, and entrepreneur.

A) adhocracy

B) clan culture

C) hierarchical culture

D) market culture

E) concurrence

90) Jonas is the marketing manager in a firm that sells air pollution control systems to the coal-fired power industry. His business is highly competitive, with existing rivalries and new players. Coal-fired power plants are being shut down in favor of substitute forms of energy, e.g., wind and natural gas. Thus, new project opportunities in coal-fired power plants are rare. His clients (electric utility companies) have many choices of providers and technologies. Jonas's firm has long-term pricing agreements with its equipment suppliers, so Jonas knows what external costs his firm will incur on potential new projects. The competitive force that appears to represent the lowest risk to Jonas's firm is

A) competition between existing rivals.

B) impact of new competitors.

C) power of suppliers.

D) power of customers.

E) impact of substitute or complement services or products.

91) Claire presented to her boss the possibility of building a new manufacturing plant to serve a new, hot market. Her boss replied, "Claire, I can't support that. Three multinational firms, who are world-class in terms of global reach, influence, stability, and financial depth, will be competing for that market. Not only would we be a new entrant to the playing field, the barriers to entry are just too high for us. We are small and financial resource-limited, so we would be challenged to meet the market's ________ requirements."

A) capital

B) demographic

C) buffering

D) domain selection

E) public relations

92) Julius Holt, manager of operations at SigmaScan Industries, has decided to change careers. For years, SigmaScan has been a market leader in manufacturing DVD players, but sales—and Julius's advancement opportunities—have been declining for years. He told his wife, "Recent ________ have allowed smartphones and streaming to emerge as substitutes for DVD players. That's reality, and I need to face it."

A) barriers to entry

B) smoothing strategies

C) benchmarking trends

D) buffering strategies

E) technological advances

93) Ralph, a regional sales manager, was asked to analyze whether his company should launch a marketing effort to become RightFoods' produce supplier this year. He found that Fresh Green Veggies currently has a supply contract with RightFoods that has three more years in its term; RightFoods would have to pay Fresh Green $0.5 million to break the contract. Also, Fresh Green has installed automated ordering/billing software in RightFoods' home office; RightFoods would have to spend $100,000 to replace it and retrain its staff. He concluded that RightFoods' ________ costs would be too high to seriously consider a change in supplier, thereby recommending that a marketing effort not be launched this year.

A) capital

B) operating

C) switching

D) labor

E) cooptation

94) Your company has asked you to launch a new product campaign at a trade show. You have found that there are established competitors with many advantages, making it difficult to break into the market. However, you recommend displacing these competitors' business by

A) establishing an inefficient supply chain.

B) offering promotions and price breaks, intensive selling, and other tactics.

C) using competitors' brand identification.

D) increasing costs of production.

E) introducing the product at a higher price.

95) You have been asked to report on the competitive environment in the restaurant industry; therefore, you develop the ________ necessary to decide how to manage in the given environment.

A) historical trends

B) competitive intelligence

C) switching costs

D) benchmarking

E) barriers to entry

96) Elena Sanchez is the CEO of a nationwide computer purchasing and repair chain. Observing that the number of computer technology stores in the Northeast is so great that prices and margins have been driven downward, she has decided not to open any more outlets in that region. In the context of the competitive environment, this fact is an indication of the

A) high bargaining power of suppliers.

B) high pricing power of suppliers.

C) high bargaining power of customers.

D) low bargaining power of customers.

E) low threat of new entries.

97) "Last month, I opened a résumé-writing business out of my dorm room. And, now, on this floor alone, I find that I have three start-up competitors!" complained Ashley. Her roommate replied, "Well, at least you haven't had to buy any new equipment for your business. But apparently neither have your competitors." This scenario indicates the

A) high bargaining power of suppliers when the market is weak.

B) high threat of new entrants when capital requirements are low.

C) high threat of new entrants when substitute products are few.

D) high bargaining power of customers when suppliers are few.

E) low bargaining power of customers when suppliers are numerous.

98) The founders of Richardson Corporate pride themselves on their commitment to a stewardship of the environment, displaying a photo montage in the lobby that displays before-and-after pictures of the site where the headquarters complex is built—from an ugly landfill into a parkland. As a reflection of the company's culture, the photo montage represents a

A) mission statement.

B) myth.

C) legend.

D) visible artifact.

E) scenario.

99) Johnny Minelli, Chief Operating Office at Hank Corporation, effectively sustains and manages the company culture by

A) avoiding moves to stay competitive that require deep-rooted cultural changes.

B) relying heavily upon written directives.

C) deviating from the culture when financial challenges present themselves.

D) empowering employees through elimination of work distractions such as visible artifacts.

E) crafting a vision, "walking the talk," and celebrating employees who exemplify the culture.

100) Romano's Italian Foods founded in 1963 has grown steadily to 250 employees. Despite its size, Romano's operates as a family business with a strong clan culture. Romano's CEO, Tony Ferrari, has just learned that his long-standing and best customer, Sal's Bistro, with 15 locations in the region, is filing bankruptcy. As a result, Romano's will immediately experience a 15 percent reduction in sales. Based upon this description, what do you advise Tony to do?

A) Without consulting his team, lay off 15 percent of the workforce.

B) Ask members of the entire company to agree to cut their hours by 15 percent until business improves, avoiding any layoffs.

C) Without consulting his employees, quickly sell the company.

D) Avoid an employee strike by offering bonuses to employees.

E) Secretly implement a permanent policy to short-pay invoices from their suppliers by 15 percent and hope no suppliers leave.

101) Jane, a financial analyst at a small food-processing company, was asked by the Chief Financial Officer to forecast the costs of the company's required raw materials over the next five years. You would advise her to

A) collect data carefully, use simple forecast models, and make multiple forecasts to get an average.

B) collect data carefully, use complex forecast models, and make multiple forecasts to get an average.

C) collect data carefully, use a simple forecast model, rely on increased accuracy farther into the future.

D) collect data carefully, use a simple forecast models, do not allow for any unexpected events.

E) collect data carefully, use a complex forecast model, do not rely upon it and it alone.

102) Steve, long-term and successful sales professional for Durham Inc., has gained a vast degree of competitive intelligence in his 25 years with Durham. He walked into his manager's office and said, "David, for family reasons, I need to move out of state. Therefore, I've accepted a position with a competitor. I'm submitting my two weeks' notice. This isn't personal; you've been a great friend." David replied, "Steve, I'm sorry to hear this. I will truly miss you and your contributions. However, your two weeks' notice will not be required. I will walk with you to human resources right now to process your resignation, and then we will escort you to the door." David's rather terse response was intended to quickly remove Steve from Durham's premises. Why?

A) David wanted to help Steve move quickly and wanted him to become successful in his new position, even though he would be a competitor soon.

B) Steve was an average performer and David wanted to process the resignation quickly to hire a more qualified person.

C) It is evident that David does not like Steve.

D) Steve has lost his competitive intelligence and needs to be removed quickly.

E) David wants to ensure that a soon-to-be competitor will not have ongoing access to Durham's competitive intelligence and staff through Steve.

103) Mike Jones-Smith, a division manager for Rubon Corporation, told his subordinate, "Sheila, because this is your first year of budget planning for your department, I need you to ________, defining a best-case, a worst-case, and a plausible-case business, or middle-ground business, outlook. The plausible-case business outlook will be what you will use for budget planning."

A) do some buffering

B) develop competitive intelligence

C) create an environmental scan

D) give me some benchmarks

E) produce different scenarios

104) Because his firm's product market share has declined in the past 12 months, the sales manager for RLC Group instructed his marketing professional to perform a benchmarking analysis. What would you instruct the marketing professional do for this analysis?

A) identify key staff working for competitors

B) forecast sales by competitors

C) analyze competitors' customer demographics

D) identify competitors' best processes and compare with RLC's processes

E) develop scenarios for competitors

105) Describe how a manager will address demographic trends in the coming decades, in terms of age, gender, and ethnicity, for the firm's employees, customers, and suppliers.

106) List the five elements of a firm's macroenvironment, and illustrate how each element affects the firm.

107) Discuss the impact of immigration on the labor force of the United States.

108) Provide an example of a technology changing a business function, and provide supporting evidence of the value of that technology in that application.

109) Describe Porter's five forces in an organization's competitive environment.

110) List the actions and attitudes that reflect excellent customer service. Illustrate each from your own experiences as either a customer or a service provider.

111) Differentiate between unattractive and attractive competitive environments using Porter's model of competitive environment, and give an example for each situation.

112) As environmental uncertainty increases, managers must develop techniques and methods for collecting, sorting through, and interpreting information about the environment. Discuss four of these methods, explaining when and why each would be used.

113) To respond to their environment, managers and companies have a number of options, which can be grouped into three categories. Describe each of these categories.

114) Describe the four different approaches that organizations can take in adapting to environmental uncertainty.

115) Discuss any three independent strategies that a firm may use as a proactive response to its environment.

116) Differentiate among the following four strategic maneuvers: domain selection, diversification, merger and acquisition, and divestiture.

117) Discuss the clues utilized to diagnose a culture.

118) There are two parts to this question. What are the four types of organizational culture? Describe the culture of an organization in which you have either worked or studied. Which of the four types of organizational culture does your organization illustrate? Justify your answer.