Environment, Innovation, And | Exam Questions Ch.4 - Management Canada 5e | Complete Test Bank by John R. Schermerhorn Jr. DOCX document preview.
CHAPTER 4
ENVIRONMENT, INNOVATION, AND SUSTAINABILITY
Question type: True/False
1) Offshoring is the return of jobs from foreign locations as companies establish new domestic operations.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 4.1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
2) Rising labour costs, higher shipping costs, and public criticisms about destroying local jobs can cause global firms to return to their home countries.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
3) The legal-political conditions in the global business environment are uniform across all countries.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 4.1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
4) Inflation, income levels, and job outlook are part of the socio-cultural conditions in the general environment.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 4.1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
5) The baby boomers are “digital natives” who grew up in technology- enriched homes, schools, and friendship environments.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 4.1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
6) Some of the important socio-cultural conditions of the general environment include more people of colour and more women entering the workforce, accompanied by decreases in both religious diversity and the number of workers coming from non-traditional families.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
7) 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.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 4.1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
8) Competitive advantage achieved through costs will help an organization earn profits with prices that one’s competitors have difficulty matching.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
9) Customers and owners are important resource input stakeholders in an organization’s value creation, whereas suppliers and communities are important product output stakeholders in an organization’s value creation.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
10) The more uncertain the environment, the easier it is to analyze environmental conditions and predict future states of affairs.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
11) The least challenging and certain situation is an environment that is both complex and dynamic.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
12) High environmental uncertainty occurs when the rate of change in the environment is low and the complexity of the environment is low.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
13) Innovation is a low priority when executives and leaders try to steer organizations through complex and uncertain environments.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
14) Creating positive change in organizations is easy, despite the complexity, uncertainty, anxiety, and risk involved.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
15) Product innovations result in better ways of doing things.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
16) Invention is the generation of a novel idea or unique approach to solving problems or crafting opportunities.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
17) Business model innovations result in new ways of making money for the firm.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
18) Within the context of Gary Hamel’s “wheel of innovation,” scaling concerns testing ideas in concept; discussing them with peers, customers, clients, or technical experts; and building initial models, prototypes, or samples.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
19) The initial 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.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
20) 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.”
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
21) Highly innovative organizations have top managers who understand the innovation process, tolerate criticism and differences of opinion, take all possible steps to keep goals clear, and maintain the pressure to succeed.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
22) Environmental capital is the supply of natural resources that we use to sustain life and produce goods and services for society.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
23) Sustainable development places greater importance on the needs of the present generation than on the needs of future generations.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
24) The executives of Dunes Inc. 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 Dunes Inc. uses the triple bottom line approach.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
25) An organization that does not provide health insurance to employees can be categorized as one with poor human sustainability.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
26) Pfeffer’s concern on human sustainability focuses on the importance of employees as they are organizational stakeholders.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
Question Type: Multiple Choice
27)The general environment of organizations comprises
- the groups and persons with whom an organization interacts and conducts business
- Economic, legal-political, socio-cultural, technological, and natural environment
- missions, strategies and internal practices
- all external conditions that set the context for managerial decision-making.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
28) Internet censorship
a. occurs solely as a response to events such as elections, protests, or riots.
b. is the deliberate blockage and denial of public access to information posted on the Internet.
c. is based on the right for expansive free speech and access to content on the Internet.
d. occurs when authorities block content to mislead the public.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
29) Generational cohorts consist of
a. segmentation of a jurisdiction population
b. people who have the similar ideas, problems, and attitudes
c. people born within a few years of one another and who experience somewhat similar life events during their formative years
d. people born within a relative timeframe in a general jurisdiction
e. people who live in multigenerational groupings within a general jurisdiction
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
30) Legal-political conditions in the general environment include:
a. norms, customs, and social values regarding human rights, trends in education and related social institutions, and demographic patterns in society.
b. existing and proposed laws and regulations, and the policies of the government and political parties.
c. the way we work, how we live, and how we raise our families
d. the external environment and the competition
e. social problems, such as poverty, famine, disease, and literacy.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
31) A sustainable business
a. is defined by the integration of economic, environmental, and social goals, activities, and plans.
b. both meets the needs of customers and protects the natural environment for future generations.
c. does not embrace change or constant reinvention.
d. focuses on profitability and exploitation of natural resources.
e. undertakes a traditional approach toward competition, environmental policies and human rights.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
32) High-uncertainty environments require
a. the ability of decision makers to avoid new circumstances
b. the ability of decision makers to respond to all circumstances with equal tact and professionalism
c. the ability of decision makers to conduct a full risk analysis of new circumstances and new information prior to making decisions
d. the ability of decision makers to respond quickly as new circumstances arise and new information becomes available.
e. the ability of decision makers to respond in due course to all new insights and events
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
33) ________ environment consists of economic, legal-political, socio-cultural, technological, and natural environment conditions.
a) Specific
b) Task
c) General
d) Stakeholder
e) Customer
Learning Objective 4.1: Summarize key trends in the external environment of organizations
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
34) General environment conditions exclude which one of the following categories?
a) technological conditions
b) human relations conditions
c) economic conditions
d) legal-political conditions
e) natural environment conditions
Learning Objective 4.1: Summarize key trends in the external environment of organizations
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
35) Which of the following represents the economic conditions in the general environment?
a) patents
b) infrastructure
c) Internet access
d) unemployment rate
e) norms
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
36) Economic conditions in the general environment include ___.
a) philosophy and objectives of the political party or parties running the government, as well as laws and governmental regulations
b) inflation, income levels, gross domestic product, unemployment, and job outlook
c) norms, customs, and social values regarding human rights; trends in education and related social institutions; and demographic patterns in society
d) development and availability of technology, including scientific advancements
e) nature and conditions of the natural environment, including levels of public concern expressed through environmentalism
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
37) Legal-political conditions in the general environment include ___.
a) philosophy and objectives of the political party or parties running the government, as well as laws and governmental regulations
b) inflation, income levels, gross domestic product, unemployment, and job outlook
c) norms, customs, and social values regarding human rights; trends in education and related social institutions; and demographic patterns in society
d) development and availability of technology, including scientific advancements
e) nature and conditions of the natural environment, including levels of public concern expressed through environmentalism
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
38) Socio-cultural conditions in the general environment include ______.
a) philosophy and objectives of the political party or parties running the government, as well as laws and governmental regulations
b) inflation, income levels, gross domestic product, unemployment, and job outlook
c) norms, customs, and social values regarding human rights; trends in education and related social institutions; and demographic patterns in society
d) development and availability of technology, including scientific advancements
e) nature and conditions of the natural environment, including levels of public concern expressed through environmentalism
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
39) Technological conditions in the general environment include ___.
a) philosophy and objectives of the political party or parties running the government, as well as laws and governmental regulations
b) inflation, income levels, gross domestic product, unemployment, and job outlook
c) norms, customs, and social values regarding human rights; trends in education and related social institutions; and demographic patterns in society
d) development and availability of technology, including scientific advancements
e) nature and conditions of the natural environment, including levels of public concern expressed through environmentalism
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
40) Natural environment conditions in the general environment include ___.
a) philosophy and objectives of the political party or parties running the government, as well as laws and governmental regulations
b) inflation, income levels, gross domestic product, unemployment, and job outlook
c) norms, customs, and social values regarding human rights; trends in education and related social institutions; and demographic patterns in society
d) development and availability of technology, including scientific advancements
e) nature and conditions of the natural environment, including levels of public concern expressed through environmentalism
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 4.1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
41) A country faced 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?
a) political conditions
b) legal conditions
c) technological conditions
d) socio-cultural conditions
e) economic conditions
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
42) Which of the following involves outsourcing of jobs to foreign locations?
a) reshoring
b) offshoring
c) repatriation
d) nationalization
e) backshoring
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
43) Which of the following is a criterion of a good economic condition in the general environment?
a) the rising income inequality among the working class
b) the low unemployment rate in the society
c) the introduction of new developments in the technological areas
d) the introduction of carbon neutral methods for sustainable development
e) the occurrence of long-term joblessness among the people of the society
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
44) Adams Inc., an automobile corporation based in London, shifts its manufacturing activities to China in order to minimize its cost of production. Which strategy has is Adams Inc. adopted here?
a) repatriation
b) nationalization
c) backshoring
d) offshoring
e) reshoring
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: reflective Thinking
45) Which of the following would qualify as a reason for reshoring?
a) low costs in the target country
b) complicated logistics in the target country
c) excellent customer service in the target country
d) low shipping costs in the target country
e) low labour costs in the target country
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
46) Techni Asset, a software corporation based in Canada, used to operate from several countries with lower labour costs. When the firm started to incur high costs of production in the foreign countries and received complaints and criticisms about the loss of local jobs, the firm decided to return to its home country. This change made to the firm’s global strategy is an example of ___.
a) offshoring
b) outsourcing
c) nationalization
d) privatization
e) reshoring
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
47) The patent attorney of Rayon Inc. was accused of stealing the organization’s invention. This scenario is an example of the ______conditions of the general environment.
a) natural
b) legal-political
c) technological
d) socio-cultural
e) educational
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
48) The government of Floraine imposes certain rules and regulations regarding the interest rates and other transactions for its financial institutions. This is an example of the ___ conditions of the general environment.
a) natural
b) technological
c) socio-cultural
d) legal-political
e) educational
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
49) Which of the following examples illustrates the legal-political conditions in the general environment?
a) bureaucratic decisions made in a nation
b) financial market situation existing in a nation
c) health and nutritional values of a nation
d) information technology systems or infrastructure of a nation
e) population demographics of a nation
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
50) Crayons Inc., a media corporation headquartered in Toronto, 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?
a) economic conditions
b) socio-cultural conditions
c) legal-political conditions
d) technological conditions
e) natural environment conditions
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
51) Which of the following is a part of the socio-cultural conditions in the general environment?
a) inflation
b) financial markets
c) government policies
d) intellectual properties
e) demographics
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
52) Diversity issues relating to educational opportunity, access to technology, housing options, and so on are parts of the ___ conditions in the general environment.
a) economic
b) legal
c) technological
d) socio-cultural
e) political
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
53) The managers of Vortex Inc. stress 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.
a) economic
b) legal
c) socio-cultural
d) technological
e) political
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
54) The marketing executives of Exphyne 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 Exphyne Inc. focuses on the ___ conditions in the general environment to make sales.
a) technological
b) legal
c) philosophical
d) socio-cultural
e) political
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
55) Which of the following aspects of demographics comprises of generational cohorts?
a) income levels
b) race
c) age
d) ethnicity
e) gender
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
56) ___ are “digital immigrants” who have had to learn about technology as it became available.
a) Baby Boomers
b) Gen Ys
c) Gen Xs
d) Millennials
e) Gen Zs
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
57) 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?
a) Millennials
b) Gen Xs
c) Baby Busters
d) Golden Boomers
e) Baby Boomers
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
58) Vane has the ability to multitask and maintain continuous contact with others. She believes in receiving immediate gratification. This implies that Vane is most likely a ___.
a) Baby Boomer
b) Millennial
c) Gen X
d) Baby Buster
e) Golden Boomer
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
59) Finheat, 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.
a) natural
b) legal
c) technological
d) socio-cultural
e) political
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
60) Jamie has a diverse collection of the latest video games. He also owns a mobile phone with a number of applications. His school is well equipped with Internet facilities. Which of the following generational cohorts does Jamie most likely belong to?
a) Baby Boomer generation
b) Gen X generation
c) Baby Buster generation
d) Millennial generation
e) Golden Boomer generation
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
61) InGen 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.
a) natural
b) technological
c) legal
d) socio-cultural
e) political
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
62) Which of the following examples illustrates the technological conditions in the general environment?
a) features and applications available on an individual’s phone
b) income levels of an individual
c) housing options for an individual
d) job options for an individual
e) educational opportunities for an individual
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
63) Which of the following examples would qualify as a potential problem of the existing ever-present technological condition?
a) an organization advertising its products on social networking websites
b) an organization’s employees regularly engaging in online pastimes during work hours
c) an organization conducting regular virtual meetings with its clients
d) a musician promoting his debut musical project through media websites
e) an organization implementing digital sharing of files, presentations, and projects
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
64) A sustainable business
a) is involved in risk taking from position of performance difficulty.
b) has lack of information regarding what exists in the business environment and what developments may occur.
c) creates products or services that become so widely used that they largely replace prior practices and competitors.
d) meets the needs of customers as well as protects the natural environment for future generations.
e) is an organization motivated by desperation to escape existing difficulties.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
65) The specific environment can be described in terms of which of the following?
a) stakeholders
b) persons, groups, or institutions that are affected by the organization’s performance
c) the task environment
d) all of the above
e) none of the above
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Hard
AACSB: Analytic
66) Which of the following statements accurately describe the concept of environmental uncertainty?
a) Environmental uncertainty consists of two components – complexity of the environment and rate of change in the environment.
b) High environmental uncertainty occurs when the rate of change in the environment is high and the complexity of the environment is low.
c) Low environmental uncertainty occurs when the rate of change in the environment is low and the complexity of the environment is high.
d) All of the above statements accurately describe environmental uncertainty.
e) None of the above statements accurately describe environmental uncertainty.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
67) All of the following are true statements regarding environmental uncertainty except
a) there is a lack of complete information concerning what developments will occur in the external environment.
b) most organizations encounter relatively little uncertainty in their environments.
c) complexity refers to the number of different factors that exist in the environment.
d) the rate of change in factors in the environment is one component of environmental uncertainty.
e) environmental uncertainty makes it difficult to understand potential implications for the organization.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
68) ___ refers to the extent to which the organization is developing value for and satisfying the needs of important strategic constituencies.
a) Constituency development.
b) Organization development.
c) Value creation.
d) Strategic needs management.
e) Constituency creation.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
69) ___ means that there is a lack of complete information regarding what exists and what developments may occur in the external environment.
a) Environmental complexity
b) Environmental dynamism
c) Environmental change
d) Environmental uncertainty
e) Environmental information
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
70) In a country, the Web access through mobile devices doubled each year since 2009 and during 2010, on average, 2 million people used Facebook each day. Which of the following environmental condition does this information portray?
a) economic condition
b) legal-political condition
c) natural condition
d) socio-cultural condition
e) technological condition
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
71) The government of Drewtopia introduced a new program whereby all its business enterprises will adopt “green values,” and minimize and recycle its waste disposal. Which of the following conditions has the government taken care of by this decision?
a) economic
b) socio-cultural
c) political
d) natural
e) technological
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
72) The ___ environment includes the people and groups with whom an organization interacts.
a) general
b) natural
c) specific
d) macro
e) external
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
73) Stakeholders
a) are described as employees who move to foreign locations to reduce costs to the organization.
b) are individuals who propose laws and regulations, government policies, and the philosophy and objectives of political parties.
c) are owners of organizations who take risks motivated by desperation to get out of bad situations.
d) refer to the employees who return from different host countries and help in establishing new domestic operations.
e) are the persons, groups, and institutions directly affected by an organization.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
74) Which of the following is true of stakeholders?
a) Members of the specific or task environment are often described as stakeholders.
b) Stakeholders are influenced by their stakes, but they are not allowed to influence it in return.
c) An organization’s performance does not affect the stakeholders.
d) All stakeholders belong to the generational cohort of Baby Boomers.
e) All stakeholders are “digital natives” who grew up in technology-enriched homes, schools, and friendship environments.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
75) Which of the following falls on the positive side of risk-taking behaviour of organizations?
a) risk taking from position of performance difficulty
b) risk taking motivated by desperation to get out of bad situation
c) risk taking from hard time dealing with problems without losing focus
d) risk taking with the ability to deal with problems as they arise
e) risk taking from little staying power
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
76) Which of the following is true of value creation by businesses?
a) Businesses create value for customers through realized profits and losses.
b) Businesses create value for employees by wages earned and job satisfaction.
c) Businesses create value for competitors through the benefits of long-term business relationships.
d) Businesses create value for suppliers by the citizenship they display.
e) Businesses create value for local communities by stimulating markets and innovations that didn’t exist before.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
77) Four Rollers Corp., an automobile company, benefits by spending less than its competitors on labour, operations, promotions, and features offered. This enables the firm to charge relatively lower prices on its goods from its customers. Which of the following is a competitive advantage of the firm?
a) high quality
b) low costs
c) flexibility
d) delivery
e) adaptability
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
78) Which of the following examples illustrates a firm that has achieved competitive advantage through costs?
a) a firm that uses patented technology to deliver goods and services to customers on time
b) a firm’s ability to adjust and adapt to different demographic segments and satisfy their needs
c) a firm that invests only a small amount on promotion and maximizes profits by charging low prices
d) a firm’s technology that creates high quality products and services
e) a firm that specializes in developing timely new products
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
79) Linkage Communications produces mobile phones, smart phones, and laptops. In terms of longevity and user-friendliness, the firm’s products are rated the best. Additionally, it offers applications and features with the latest technology. Which of the following has enabled Linkage Communications to achieve a competitive advantage over its competitors?
a) quality
b) costs
c) flexibility
d) delivery
e) adaptability
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
80) Which of the following examples illustrates a firm that has achieved competitive advantage through technology?
a) a firm that invests less on its production processes
b) a firm that focuses on producing zero defect products
c) a firm that uses patented expertise in developing a nuanced product
d) a firm that spends very less on advertising and promotional costs
e) a firm that caters to only a selected few customer needs
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
81) Which of the following examples displays a firm with a competitive advantage achieved through quality?
a) an organization that is famous for its durable products
b) a corporation that reduces its expenses by finding new production processes
c) a firm that delivers goods and services faster than its competitors
d) an organization that gains profits by charging less prices
e) a company that tailors its goods and services to fit consumer needs and preferences
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
82) The Oomph Factor, an online retail firm, owns a patented technology that ensures that its goods and services reach customers on time. The firm also has the ability to develop timely new products. The firm has gained competitive advantage through ___.
a) quality
b) costs
c) flexibility
d) delivery
e) adaptability
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
83) Which of the following illustrates a firm that has achieved competitive advantage through delivery?
a) a firm that uses technology to produce durable products
b) a firm that develops timely new products
c) a firm that has the flexibility to operate successfully in any business environment
d) a firm that makes small financial investments at the time of production
e) a firm that can adapt and change according to the needs of different customers
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
84) Which of the following illustrates a firm that has achieved competitive advantage through flexibility?
a) a firm that creates customized products based on each of its customer’s preferences
b) a firm that produces goods by maintaining high quality standards
c) a firm that ensures speedy delivery of goods compared to its competitors
d) a firm that develops products with unique features that are not made available by any of its competitors
e) a firm that develops timely new products
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
85) Competitive advantage can be achieved through ___ by finding ways and using technology to adjust and tailor products and services to fit customer needs in ways that are difficult for one’s competitor to match.
a) quality
b) costs
c) flexibility
d) delivery
e) durability
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
86) Which of the following is true of environmental uncertainty?
a) The less uncertain the environment, the harder it is to analyze environmental conditions and predict the future state of affairs.
b) The least challenging situation is an environment that is both complex and dynamic.
c) High-uncertainty environments require less flexibility in organizational designs and work practices as different circumstances arise every now and then.
d) High-uncertainty environments require people to make decisions gradually since new circumstances arise constantly.
e) The uncertainty of an organization can be analyzed using degree of complexity and rate of change.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
87) Cufflinks, an outstanding house for tailored suits, has always had satisfied customers owing to their ingenuity in facilitating top fashion trends. It is innovative in adapting to changing vogues and demands of its customers. Through which of the following ways does Cufflinks gain a competitive advantage?
a) costs
b) flexibility
c) delivery
d) quantity
e) profits
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
88) The R&D department of Meredith Inc., a tire manufacturer, discovers a new material to be used as an alternative to rubber that brings down the manufacturing costs. This allows the company to offer its products at a price lower than the market price. The newly discovered material is the company’s
a) disruptive innovation.
b) competitive advantage.
c) natural capital.
d) environmental capital.
e) competitive environment.
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
89) Innovation refers to the
a) lack of information regarding what exists in the environment.
b) people and groups with whom an organization interacts.
c) process of taking a new idea and putting it into practice.
d) return of jobs from foreign locations as companies establish new domestic operations.
e) things that an organization does extremely well and that gives it an advantage.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
90) Brazen Inc. introduced a new line of deodorized clothes produced with natural ingredients such as flowers and fruits, to reduce the impact of the environmental hazards caused by the production of deodorants. This implies that Brazen Inc. was engaging in ___.
a) process innovation
b) business model innovation
c) product innovation
d) skimming
e) performance innovation
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
91) Which of the following is an example of a product innovation?
a) a firm launching a new flavour to its existing range of candies
b) a firm allowing customers to mail the desired designs of goods
c) a firm introducing a new online shopping model
d) a firm introducing new technology to ease the installation process
e) a firm changing its line of business from manufacturing automobiles to producing music
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
92) Footlore Inc. introduced a sophisticated new range of shoes that prevents any type of injury to the wearer’s feet. This is an example of a
a) process innovation.
b) product innovation.
c) business model innovation.
d) social business innovation.
e) paradigm innovation.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
93) Discovering a potential product or a way to modify an existing product involves the ___ step of the product development process.
a) initial experimentation
b) feasibility screening
c) idea creation
d) feasibility determination
e) final application
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
94) What is the best way to describe a product that is a disruptive innovation?
a) The product offers higher quality at a lower price.
b) The product occupies a majority of the market share.
c) The product is incompatible with a previous version of the product.
d) The product is so new customers require new behaviours for its use.
e) The product makes customers uneasy when it is used.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
95) Apple’s iPod is an example of what type of innovation?
a) continuous
b) service
c) breakthrough
d) product
e) accidental
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
96) Apple’s iTunes is an example of what type of innovation?
a) continuous
b) service
c) breakthrough
d) product
e) accidental
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
97) Which of the following forms of innovation focuses on better ways of doing things?
a) product innovation
b) process innovation
c) business model innovation
d) social business innovation
e) paradigm innovation
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
98) ___ is the process of turning new ideas into products or processes that can increase profits through greater sales or reduced costs.
a) Product development
b) Process value analysis
c) Commercializing innovation
d) Marketing research
e) Supply chain management
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
99) ___ is the stage of the product development process in which ideas are shared with others and prototypes are tested.
a) Idea creation
b) Initial experimentation
c) Feasibility determination
d) Feasibility screening
e) Final application
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
100) The ___ step of the product development process involves the commercialization of a new product for sale to customers or clients.
a) final application
b) initial experimentation
c) feasibility determination
d) feasibility screening
e) idea creation
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Easy
AACSB: Reflective Thinking
101) Which of the following is an example of a process innovation?
a) a firm putting coupons on the Web
b) a firm introducing a new social media site
c) a firm introducing “ready to assemble” furniture
d) a firm converting the movie rental business into a subscription business
e) a firm creating the world’s largest online marketplace
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
102) Highly innovative organizations have top managers who do all of the following except
a) understand the innovation process.
b) tolerate criticism and differences of opinion.
c) create conflict to stimulate creativity.
d) take all possible steps to keep goals clear.
e) maintain the pressure to succeed.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
103) Eureka Electronics Inc. offers computer programs and software programs including software drivers and plug-ins that can be self-installed easily. The firm’s introduction of programs that can be self-installed is an example of ___ innovation.
a) product
b) process
c) business model
d) reverse
e) social business
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
104) Which of the following scenarios best describes a process innovation?
a) a firm launching a new car model with basic features and systems
b) a restaurant where customers are allowed to order dishes after taking a sample
c) a footwear manufacturer introducing a unique range of shoes
d) a firm introducing a new software to protect computers from viruses
e) a firm changing its line of business from manufacturing eyewear to producing watches
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
105) A business model innovation results in
a) new ways for firms to make money.
b) better ways of doing things.
c) introduction of new or improved goods.
d) the creation of new services.
e) environmental uncertainty.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
106) Celluloid Inc., a photography firm, entered into other activities such as cinematography, advertisement creations, and short-film making, to make more money for the firm. This implies that Celluloid Inc. had engaged in a ___ innovation.
a) product
b) process
c) business model
d) reverse
e) pricing
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
107) Which of the following is an example of a business model innovation?
a) a firm introducing a new model of its smartphone
b) a firm introducing “ready to install” software
c) a firm introducing a range of meals that can be cooked instantly
d) a firm introducing its new range of accessories to go with its clothesline
e) a firm introducing a new social networking website to connect with its customers
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
108) Garsynth Corporation specializes in preparing eco-friendly products out of solid waste, old newspapers, and waste plastic. The firm employs individuals belonging to the weaker economic sections of the city. The company has engaged in ___ innovation.
a) product
b) red ocean
c) reverse
d) breakthrough
e) social business
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
109) Which of the following is an example of a social business innovation?
a) an organization working on maintaining cleanliness in the cities
b) a firm specializing in producing customized bags based on preferences of the purchasers
c) a firm introducing a range of meals that can be cooked instantly
d) a firm removing the use of intermediaries to deal with customers directly
e) a record label using an exclusive process to record music albums
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Reflective Thinking
110) Microcredit lending is an example of ___ innovation.
a) reverse
b) social business
c) disruptive
d) environmental
e) green
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
111) Which of the following steps in the innovation process involves thinking about new possibilities?
a) imagining
b) experimenting
c) assessing
d) designing
e) scaling
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
112) Harry Smith of Honeybee Haven needs to expand the production of honey to meet new contract obligations. Harry has spent some time now in thinking up new ways to modify the beehives to increase they bees’ production of high-quality honey. What is the next step?
a) imagining
b) experimenting
c) assessing
d) designing
e) scaling
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Reflective Thinking
113) A group of employees of Smithson Inc., a software firm, were analyzing the practicality and feasibility of a software program by releasing a few samples of the program on the Internet for a month. Which of the following steps of the innovation process were the employees engaging themselves in?
a) imagining
b) experimenting
c) assessing
d) designing
e) scaling
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
114) Red Sun Inc., an automobile manufacturer, developed a new car model. The firm worked on identifying the strengths and weaknesses of the new model, the costs that would be incurred in its manufacture, and its target markets. Which of the following steps of the innovation process was the firm involved in?
a) imagining
b) experimenting
c) assessing
d) designing
e) scaling
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
115) Which of the following steps in the innovation process consists of implementing what has been learned and commercializing new products or services?
a) scaling
b) experimenting
c) assessing
d) designing
e) imagining
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
116) Animo Inc., a firm that specializes in animation, released its latest patented animation software in the market to increase its profits by improving sales. Which of the following steps of the innovation process was executed by the firm?
a) imagining
b) experimenting
c) assessing
d) designing
e) scaling
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
117) Which of the following is the final step in the “wheel of innovation?”
a) imagining
b) experimenting
c) assessing
d) designing
e) scaling
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
118) Which of the following is true of reverse innovation?
a) It taps the potential for innovation existing at higher organizational levels.
b) It emphasizes recognition of innovations developed in well-established markets.
c) It recognizes innovations existing in diverse settings or locations.
d) It involves a lack of complete information regarding what exists in the environment.
e) It focuses on identifying strengths and weaknesses, and potential costs and benefits.
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
119) Which of the following concepts 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”?
a) disruptive innovation
b) product innovation
c) reverse innovation
d) incremental innovation
e) social business innovation
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
120) ___ innovation pulls new products and services from settings, where they are often created under-pricing constraints, and pushes them into use elsewhere.
a) Disruptive
b) Reverse
c) Luxurious
d) Product
e) Business model
Answer b
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
121) Which of the following creates products or services that become so widely used that they largely replace prior practices and competitors?
a) disruptive innovation
b) sustainability
c) sustaining innovation
d) transformational innovation
e) incremental change
Answer a
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
122) Rhapsody Inc. created a new line of cameras that work on solar energy. These solar cameras reduced the demand for digital cameras and gradually replaced the use of digital cameras and ended competition. Which of the following is prominent in this instance?
a) positioning innovation
b) incremental change
c) process improvement
d) disruptive innovation
e) process innovation
Answer d
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
123) Comtrot, a mobile application developer, outsourced the development of an application to a cheaper location in another country. The application would notify users about their blood pressures twice a week. The final product was marketed in the country of Comtrot’s origin. Which of the following does this situation demonstrate?
a) disruptive innovation
b) sustainability
c) reverse innovation
d) social business innovation
e) process innovation
Answer c
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
124) Pandemonium, a software enterprise, introduced a new gaming console in a small way with stimulating features. In six months its popularity and its sales increased extensively. The major players in the business were overshadowed by this new gaming console. Which of the following best describes this situation?
a) environmental capital
b) sustainable development
c) sustainable innovation
d) reverse innovation
e) disruptive innovation
Answer e
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
125) Fredrick comes up with an innovative range of watches. He has built a prototype and has given it to his friends for checking its feasibility and examining its practical use. According to the Hamel’s “wheel of innovation,” which of the following steps has Fredrick undertaken?
a) assessment
b) scaling
c) imagining
d) experimenting
e) designing
Answer e
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
126) Lewang has decided to launch an innovative product that would help the blind access their emails through a voice application. He has finished designing the product and accessing the costs and its market applicability. Keeping in mind Hamel’s “wheel of innovation,” what is the next step that Lewang should ideally undertake?
a) He should check for its sustainability.
b) He should initiate the process of scaling.
c) He should implement reverse innovation.
d) He should increase the price of the product.
e) He should access the rate of change in environment.
Answer b
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
127) The commitment to protect the rights of present and future generations as co-stakeholders of present-day natural resources is termed as ___.
a) disruptive innovation
b) sustainability
c) environmental uncertainty
d) reverse innovation
e) scaling
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
128) ___ meets the needs of the present generation without compromising the ability of future generations to meet their needs.
a) Cultural diversity
b) Sustainable development
c) Environmental protection
d) ISO 9000
e) Intergenerational collaboration
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
129) Sustainable development has become a top priority for which major organization?
a) World Trade Organization
b) World Health Organization
c) International Standards Organization
d) The United Nations
e) none of the above
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Hard
AACSB: Analytic
130) Which of the following is true of sustainability?
a) It is a lack of information regarding what exists in the environment and what developments may occur.
b) It is a system by which an organization is directed or controlled.
c) It refers to the relationship between an organization’s management, its employees, its stakeholders, and the government.
d) It is a commitment to live and work in ways that protect the rights of both the present and the future generations.
e) It does not apply to the non-living things present on earth.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
131) The process of using environmental resources to support societal needs today while also preserving and protecting them for future generations is referred to as ___.
a) triple bottom line experiment
b) global warming
c) sustainable development
d) scaling
e) greenhouse effect
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
132) The supply of natural resources which sustain life and produce goods and services for society is referred to as ___.
a) global warming
b) environmental capital
c) green innovation
d) triple bottom line
e) greenhouse effect
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
133) Which of the following holds true regarding sustainable businesses?
a) A sustainable business operates with nature by exploiting it.
b) A sustainable business strives for a win-lose outcome where the environment gains and the organization loses.
c) A sustainable business creates products or services that become so widely used that they result in the exhaustion of the resources.
d) A sustainable business can result in an environmental uncertainty.
e) A sustainable business works by meeting the needs of customers while advancing the well-being of the natural environment.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
134) In a press release, a major fast food chain issues the statement: “Since 2007, we have reduced our reliance on paper products by 30%.” This is an example of
a) ethical procedures.
b) global issues.
c) corporate social initiative.
d) social performance.
e) a sustainable business model.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Easy
AACSB: Analytic
135) Which of the following would qualify as one of the main goals of a sustainable business?
a) carbon reduction
b) profit maximization
c) global warming
d) scaling
e) greenhouse effect
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
136) Black Corporation focuses on providing maximum support to its employees as it considers them its most important organizational stakeholders. The firm has a system of flexible working hours to reduce the stress of employees and zero-day notice periods. It permits employees to work from home through its virtual network. From this information, it can be inferred that Black Corporation
a) has a high rate of sustainable innovation.
b) focuses on the differences of generational cohorts.
c) highlights the importance of the triple bottom line.
d) has a high rate of human sustainability.
e) focuses on the ideals of environmental capital.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
137) Arguments that corporations should engage in socially responsible behaviour include all of the following except
a) social responsibility decreases the need for restrictive government regulation.
b) businesses have the resources and obligation to act in socially responsible ways.
c) socially responsible behaviour improves the public image of business.
d) pursuing socially responsible goals may dilute the purpose of the business.
e) long-run profits for the business may improve or even be dependent on its degree of social responsibility.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
138) Food Chow, a grocery retail business, stopped the use of plastic bags and encouraged the use of reusable bags. This indicates that the firm is practicing ___.
a) sustainable business
b) triple bottom line
c) scaffolding
d) competitive advantage
e) reverse innovation
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
139) Which of the following is an example of human sustainability?
a) Glenneth & Co., a pharmaceutical company, recruits employees on a temporary basis.
b) Margaret works every day for eleven hours as a receptionist in a law firm.
c) Carmel Works, a software company, provides ample health insurance coverage for its employees as well as their dependents.
d) Preacher & Abel, a cosmetic company, cut down on the wages of its employees to reduce cost of production.
e) Brent Inc. takes the initiative of planting trees across the town in which it operates.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
140) The management challenge in contemporary organizations is best summarized in which of the following statements?
a) Managers must simultaneously maintain high-performance standards as well as ethical and socially responsible operations.
b) Every manager must strive to achieve organizational goals even if it compromises his/her values.
c) Economic performance is the most important objective that managers must achieve.
d) Maintaining ethical standards and promoting social responsibility are the most important objectives managers must achieve.
e) Management in today’s business environment should be approached in essentially the same way that it was in the past.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
141) Harry Smith has been a beekeeper for almost 40 years, and was trained by his father, who was trained by his father before him. Harry does not work with gloves nor does he wear protective equipment, when working with his “girls” as he calls them. And while he does get stung once or twice each season, he is fully aware of what conditions prompted such a response from the bees. Catching and/or removing swarms of bees is part of his business. Often, he will offer this service for free, relocating the bees to a new hive within his own bee yard, or giving the swarm to a new beekeeper just starting out. This “risky” business is on the:
- Positive side of risk-taking behaviour
- Negative side of risk-taking behaviour
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Comprehension
Difficulty: Medium
AACSB: Analytic
142) Harry Smith of Honeybee Haven has been approached by a local grocery chain owner who has approached Harry with a proposal to carry Honeybee Haven’s honey in its stores. Accepting this proposal would require Harry to increase his operation tenfold to produce enough honey to service both the grocery chain and his existing clients. Honey production is dependent on both the number of bees and number of hives, but also the weather and type of crops grown within a ten-mile radius of the bee-yard. This situation represents one of
- High uncertainty
- Environmental uncertainty
- High risk
- High complexity
- Low complexity
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
143) Harry Smith operations Honeybee Haven as part of his farming operation. He has recently developed a new type of beehive that will increase honey production tenfold. This is an example of competitive advantage achieved through
- costs
- quality
- delivery
- flexibility
- innovation
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Hard
AACSB: Analytic
144) Harry Smith of Honeybee Haven has used the traditional Langstroth frame in his beehives for decades. He has recently been exploring a new type of frame on the market that permits easier extraction of honey from the hives without removing the frame itself. This is an example of:
- Process innovation
- Product innovation
- Business model innovation
- All of the above
Answer c
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Hard
AACSB: Reflective Thinking
145) Honeybee Haven is a relatively small operation. Harry Smith is a sole proprietor and employs two beekeeping apprentices to help out during the busy summer months. He keeps beehives at the farm, and ‘rents’ out hives to local area farmers to pollinate certain crops. Harry supplies honey to local shops and sells directly to the public through his website. He also teaches beekeeping at the local library as a volunteer. These groups, organizations and people are:
- Investors
- Employees
- Interested parties
- Stakeholders
- benefactors
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
146) Harry Smith employs two assistant beekeepers at Honeybee Haven. Harry provides beekeeper suits, netted head gear, long gloves and all other equipment necessary for his employees to safely and efficiently monitor the beehives. In winter months, after the bees are secured for the cold weather, Harry has his employees work on repair and refit of the wooden hives and marketing activities in preparation for the next season. Honeybee Haven is demonstrating concern for:
- Human sustainability
- Environmental sustainability
- Profit
- Competitive advantage
- Climate change
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority.
Section Reference 4.4: Environment and Sustainability.
Bloom’s: Analysis
Difficulty: Medium
AACSB: Reflective Thinking
147) Harry Smith owner and operator of Honeybee Haven is a third-generation beekeeper. His daughter, Henrietta has just finished her undergraduate degree in business and has returned home from school. Henrietta has grown up in the bee yard and is a beekeeper herself. At school she has learned about how business and the natural environment must co-exist. She is trying now to influence her father into considering expansion of the beekeeping operation to included education, marketing and speaking engagements to champion the cause of the honeybee. These activities are examples of:
- Triple bottom line
- Profit, people and plant
- Sustainable business strategy
- Competitive advantage
- Green innovation
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority.
Section Reference 4.4: Environment and Sustainability.
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
148) Honeybee Haven takes particular care to ensure the health and safety of its employees by ensuring that they have the proper equipment, as well as caring for the health of the bees by ensuring hives are inspected by government inspectors. This in turn assures that honey is of the highest quality resulting in increased sales and profits. Honeybee Haven is following a model referred to as:
- Green
- Triple bottom line
- Sustainable
- Innovative
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority.
Section Reference 4.4: Environment and Sustainability.
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
Question type: Short answer
149) Describe the most important aspects of each dynamic force that surrounds and influences the general environment of an organization.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
150) Describe the primary elements of the general environment and of the specific environment.
Economic conditions –– health of the economy in terms of inflation, income levels, gross domestic product, unemployment, and job outlook.
Social-cultural conditions –– norms, customs, and values on such matters as human rights; trends in education and related social institutions; as well as demographic patterns in society.
Legal-political conditions –– prevailing philosophy and objectives of the political party or parties running the government, as well as laws and government regulations.
Technological conditions –– development and availability of technology, including scientific advancements.
Natural environment conditions –– nature and conditions of the natural environment, including levels public concern expressed through environmentalism.
The specific environment (or task environment) consists of the actual organizations, groups, and persons with whom an organization interacts and conducts business. The primary elements of the specific environment are the organization’s important stakeholders, which include the following:
Customers ––consumer or client groups, individuals, and organizations that purchase the organization’s goods and/or use its services.
Suppliers ––providers of the human, information, and financial resources and raw materials needed for the organization’s operations.
Competitors –– organizations that offer the same or similar goods and services to the same consumer or client groups.
Regulators –– government agencies and representatives, at the local, state, and national levels, that enforce laws and regulations affecting the organization’s operations.
Investors/owners ⎯ individuals, groups, and other organizations/institutions that hold an equity interest in the business.
Learning Objective 4.1: Summarize key trends in the external environment of organizations.
Section Reference 1: The External Environment
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
151) What are the dimensions of environmental uncertainty?
Learning Objective 4.2: Discuss value creation and competitive advantage in complex environments.
Section Reference 4.2: Environment and Value Creation
Bloom’s: Knowledge
Difficulty: Medium
AACSB: Analytic
152) Why is innovation important for organizational survival and success in a turbulent environment?
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
153) What are the three types of innovation? What do they result in?
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
154) Describe the five steps of the “wheel of innovation.”
Learning Objective 4.3: Describe how organizations embrace technology and pursue innovation.
Section Reference 4.3: Environment and Innovation
Bloom’s: Knowledge
Difficulty: Easy
AACSB: Analytic
155) How do global corporations view sustainable development and provide an example of a global corporation fulfilling its commitments to sustainable development?
Corporate responsibility standards, norms, principles and guidelines aim to provide generally accepted reference points for improving aspects of social and environmental performance. Although mostly voluntary, some are emerging as de facto industry standards that provide the desired legitimacy, consistency and comparability required by business and its stakeholders.
For a firm to fulfill a commitment to sustainable development, its executives must lead in ways that demonstrate stewardship in protecting the natural environment and preserving its resources for the future. Many international standards and networks started as attempts to help guide organizations on how to improve the consistency of their products, reduce their impact on the environment (ISO 14000) or to generally improve their environmental and social management. These programs are voluntary and involve a range of activities, from a simple commitment to investigate sustainability issues to the adherence to strict protocols for environmental and social standards. Sustainability is now a regular focus at the annual World Economic Forum at Davos, where many of the world’s most powerful business and political leaders gather annually to reflect on the key challenges of the year ahead.
General Electric (GE) is an example of a company fulfilling its commitments on sustainable development. In 2010, GE earned the top rank in Global 100 list of the most sustainable large corporations in the world at the World Economic Forum in Davos. This was due to its industry leading ratio of sales to waste, strong board gender diversity, and a doubling of its carbon productivity from 2006 to 2008, reducing its total carbon emissions while increasing sales from $150 billion to $181 billion.
Philips Electronics is another fine example of a company that appears to have an advanced-stage sustainability strategy. Philips Electronics has developed special medical vans that allow urban doctors to reach remote villages to diagnose and treat patients via satellite. It has also developed low-cost water-purification technology and a smokeless wood-burning stove that could reduce the 1.6 million deaths annually worldwide from pulmonary diseases linked to cooking smoke. Philips is also abandoning its leading incandescent lighting business in favour of more energy-efficient compact fluorescent, and eventually LED lighting.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Medium
AACSB: Analytic
156) What is corporate social responsibility? In your opinion, should businesses be responsible for human sustainability in their management practices? Support your answer with appropriate reasons.
In the 21st century economy, it is hard to argue against corporate social responsibility. One way to approach this is by exploring the linkage between organizations’ corporate social responsibility and their financial performance. In the short term, financial success might be achieved by ignoring social responsibility. In the long term, however, proper attention must be given to social responsibility in order for the company to survive and prosper. Indeed, in today’s world, the public at large expects businesses and other organizations to act with genuine social responsibility. Additionally, increasing empirical evidence indicates that high performance in social responsibility can be associated with strong financial performance and, at worst, has no adverse financial impact. Moreover, recent evidence suggests the existence of a virtuous circle in which corporate social responsibility leads to improved financial performance and this, in turn, leads to additional socially responsible actions.
Another approach for supporting the contention that businesses should be socially responsible draws upon the four criteria for evaluating corporate social performance. These criteria, which can be arranged in a hierarchy of impact, are the following:
- the organization’s economic responsibility, which is met when it earns a profit through the provision of goods and services desired by customers.
- the organization’s legal responsibility, which is fulfilled when it operates within the law and according to the requirements of various external regulations.
- the organization’s ethical responsibility, which is met when its actions voluntarily conform to both legal expectations and the broader values and moral expectations of society.
- the organization’s discretionary responsibility, which involves the organization’s voluntary movement beyond basic economic, legal, and ethical expectations to provide leadership in advancing the well-being of individuals, communities, and society as a whole.
The argument can be made that businesses are more likely to survive and succeed over the long term when they fulfill a responsibility that has greater impact. Thus, a higher probability of survival and success would occur by fulfilling the legal responsibility than by just fulfilling the economic responsibility. Likewise, fulfilling the ethical responsibility likely produces still further increases in the probability of business success and survival. Fulfilling the discretionary responsibility should provide a business with the greatest chance of survival and success.
Learning Objective 4.4: Explain the challenges of sustainability as an environmental priority
Section Reference 4.4: Environment and Sustainability
Bloom’s: Application
Difficulty: Hard
AACSB: Analytic
Document Information
Connected Book
Management Canada 5e | Complete Test Bank
By John R. Schermerhorn Jr
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Chapter 2 Management Learning Past To Present
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Chapter 3 Ethics And Social Responsibility
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Chapter 4 Environment, Innovation, And Sustainability
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Chapter 5 Global Management And Cultural Diversity
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Chapter 6 Entrepreneurship And New Ventures
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