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ch06Student:
___________________________________________________________________________
1. The global environment is a set of forces and conditions in
the world outside an organizations boundary that affect how it
operates and shape its behavior.
True False
2. The quality of managers understanding of forces in the global
environment and their ability to respond appropriately to those
forces are critical factors affecting organizational
performance.
True False
3. Opportunities and threats that result from changes in the
task environment are easier to identify and respond to than events
in the general environment.
True False
4. Forces in the task environment have little impact on
short-term decision making.
True False
5. Distributors are the individuals and companies that provide
an organization with the input resources it needs to produce goods
and services.
True False
6. Global outsourcing has grown enormously to take advantage of
differences in the cost and quality of resources available in
different countries.
True False
7. Competitors are organizations that produce goods and services
that are similar and comparable to a particular organizations goods
and services.
True False
8. A high level of rivalry typically results in price
competition that increases existing prices.
True False
9. Potential competitors are organizations that are not
presently in a task environment but have the resources to enter if
they so choose.
True False
10. Cost advantages associated with large operations are called
economies of scale.
True False
11. The greater the economies of scale of an existing
organization, the lower are the barriers to entry for new
competitors.
True False
12. Low rivalry results in a task environment where competitive
pressures are intense and managers have few opportunities to
acquire the resources they need to make their organizations
effective.
True False
13. Economic, technological, sociocultural, demographic,
political, and legal forces in the general environment often have
important effects on forces in the task environment that determine
an organizations ability to obtain resources.
True False
14. Forces in the general environment do not require continuous
monitoring because they do not affect ongoing decision-making and
planning.
True False
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15. Economic forces affect the general health and well-being of
a country or world region.
True False
16. Managers today have fewer ways to supervise and coordinate
geographically dispersed employees.
True False
17. National culture is the traditional system of relationships
established between people and groups in a society.
True False
18. Economic forces are outcomes of changes in, or changing
attitudes toward, the characteristics of a population, such as age,
gender, ethnic origin, race, sexual orientation, and social
class.
True False
19. The aging of the population of a country is an example of a
demographic force that affects organizations in the country.
True False
20. Nations forming political unions that allow free exchange of
resources and capital is an example of the political and legal
forces in the environment.
True False
21. Falling trade barriers pose a serious threat to the nation's
domestic market because they increase competition in the task
environment.
True False
22. The flow of capital around the world has helped establish an
open global environment.
True False
23. Globalization has increased the levels of interdependence
between people and nations.
True False
24. Political capital is the flow of people around the world
through immigration, migration, and emigration.
True False
25. The flow of natural resources, parts, and components between
companies and countries is called human capital.
True False
26. Tariffs are taxes that governments impose on goods in the
domestic market that are only circulated within the nation.
True False
27. The aim of import tariffs is to encourage the entry of
foreign goods into a country's market.
True False
28. The free-trade doctrine predicts that if each country agrees
to specialize in the production of the goods and services that it
can produce most efficiently, this will make the best use of global
capital resources and will result in lower prices.
True False
29. The establishment of free-trade areas is disadvantageous for
manufacturing organizations since it increases their costs.
True False
30. Superstitions are unwritten, informal codes of conduct that
prescribe appropriate behavior in particular situations and are
considered important by most members of a group or
organization.
True False
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31. Norms that are considered to be central to the functioning
of society and to social life are called folkways.
True False
32. Folkways are those norms which include proscriptions against
murder, theft, adultery, and incest.
True False
33. The violation of folkways is a serious matter and is
punishable by law.
True False
34. According to Hofstede's model of national culture,
individualist societies adhere to the principle that people should
be judged by their contribution to the group.
True False
35. According to Hofstede, the gap between the rich and poor in
low-power-distance societies is very wide.
True False
36. According to Hofstede, in low-power-distance countries, the
government uses taxation and social welfare programs to reduce
inequality and improve the welfare of the least fortunate.
True False
37. Societies that have a nurturing orientation, according to
Hofstede, value personal relationships highly.
True False
38. Societies high on uncertainty avoidance, according to
Hofstede, value diversity and tolerate differences in personal
beliefs and actions.
True False
39. According to Hofstede, a national culture with a long-term
orientation rests on values such as thrift and persistence in
achieving goals.
True False
40. Organizations with culturally homogeneous management teams
are best equipped to tailor their management systems to meet the
requirements of different cultures.
True False
41. What benefits does the global environment offer
organizations?
A.
The global environment provides organizations with several
opportunities to increase efficacy and efficiency.
B. The global environment is easy to operate within and is
constant, straightforward, and predictable. C.
Fluctuating sociocultural factors never affect the performance
of organizations which function at a global level.
D.
Organizations are faced with fewer challenges and risks when
they grow to prominence internationally.
E. Organizations that operate internationally seldom compete for
scarce and valuable resources.
42. Which of the following is true of the task environment?
A.
It includes the wide-ranging global, technological,
sociocultural, and political forces that affect organizations.
B. It contains the forces that have the least immediate effect
on managers and their decisions. C. It contains opportunities and
threats that are harder to identify than those in the general
environment. D. It is a framework of environmental policies that
dictate the CSR policies of global organizations. E. It is the set
of forces that originate with global suppliers, distributors,
customers, and competitors.
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43. Which of the following is true of the general
environment?
A.
It contains opportunities and threats that are easier to
identify and respond to than those in the task environment.
B.
It comprises the set of forces that originate with global
suppliers, distributors, customers, and competitors.
C.
It includes the wide-ranging global, technological,
sociocultural, and political forces that affect organizations.
D. It contains the forces that have the most immediate effect on
managers and their decisions. E. It contains forces that have very
little impact upon the performance of organizations.
44. In what way is the task environment similar to the general
environment?
A. They are both a set of geopolitical forces that are
predictable and unchanging. B. They both present managers with few
opportunities and risks when operating at a global level.
C. They are both a set of forces and conditions that operate
beyond an organization's
boundaries.
D. They both contain challenges that are easily identified
and anticipated.
E. They are both forces that are easy to control and have little
impact on organizational
performance.
45. In what way does the task environment differ from the
general environment?
A. Threats in the general environment are easier to respond to
than threats in the task environment. B.
Forces in the task environment have a more immediate and direct
effect on managers than forces in the general environment.
C. Opportunities in the task environment are less easy to
identify than opportunities in the general environment.
D.
Unlike the task environment, the general environment deals with
conditions that effect an organization's ability to obtain inputs
and dispose outputs.
E.
Unlike the general environment, the task environment includes
the global, economic, sociocultural, political, and legal forces
that affect an organization.
46. Companies that provide other organizations with input
resources are known as _____.
A. suppliers B. competitors C. distributors D. processors E.
consumers
47. Jay's Furniture Factory gets its raw material from the local
timber yard. The timber yard acts as Jay's _____.
A. competitor B. distributor C. retailer D. supplier E.
consumer
48. A supplier's bargaining position is especially strong
when:
A. the input supplied has multiple sources and channels of
distribution. B. the input supplied has inexpensive and easily
available substitutes. C. the input supplied is a fundamental
component of the organization's product. D. the input supplied is
found freely and can be accessed by people with little effort. E.
the input supplied is not protected by any patent.
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49. Apple Inc. contracts with companies in Taiwan to make inputs
such as the chips, batteries, and LCD displays that power its
digital devices at lower costs. This strategy is an example of
_____.
A. global exporting B. global franchising C. global importing D.
global networking E. global outsourcing
50. _____ are organizations that help other organizations sell
their goods or services directly to customers.
A. Producers B. Suppliers C. Distributors D. Manufacturers E.
Processors
51. Amethyst, an Italian house of high fashion, designs and
creates luxury items like jewelry and hair accessories. It sells
its merchandise only through Fiesta a multinational retail store.
Fiesta acts as Amethyst's _____.
A. producer B. supplier C. distributor D. manufacturer E.
processor
52. Individuals and groups that buy the goods and services an
organization produces are called _____.
A. customers B. suppliers C. distributors D. competitors E.
processors
53. Jeremy has a personal library with over 5,000 novels of
various genresmost of them bought from Benison's Bookhouse. He is
an example of Benison Bookhouse's _____.
A. customer B. supplier C. distributor D. competitor E.
processor
54. As the only store to design and sell curtains in the suburb
of Oakland, the merchandise sold by Plush Parade is overpriced.
Noticing this, Diana's Draperies sets up a showroom in the same
suburb, reasoning that with lower prices, they would be able to
attract more customers. Diana's Draperies is Plush Parade's
_____.
A. partner B. distributor C. competitor D. processor E.
franchiser
55. An organization that is not presently in a task environment
but has the resources to enter if it so chooses is called a
potential:
A. supplierB. competitorC. distributorD. processorE.
consumer
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56. The more difficult it is to enter the task environment:
A. the easier it is to keep prices high. B. the lower is the
barrier to entry. C. the harder it is to obtain customers. D. the
more competitors an organization faces. E. the less expensive it is
to enter the industry.
57. Which of the following statements supports the fact that Toy
Track operates in a task environment with a low barrier to
entry?
A. Toy Track has few competitors and faces no challenges from
other organizations. B. Toy Track is able to sell its products
easily, even though they are overpriced. C. The task environment
within which Toy Track operates is expensive to enter. D. The task
environment within which Toy Truck operates is easy to enter. E.
Toy Track is unable to obtain customers, even though it has no
rivals or competitors.
58. Which of the following statements supports the fact that
Candlewick Inc. operates in a task environment with a high barrier
to entry?
A. The task environment within which Candlewick Inc. operates is
inexpensive to enter. B. Candlewick Inc. is able to sell its
products easily, even though they are overpriced. C. Candlewick
Inc. has many competitors and faces challenges from them
frequently. D. The task environment within which Candlewick Inc.
operates is easy to enter. E. Candlewick Inc. is unable to obtain
customers, despite the excellent quality of its products.
59. _____ result(s) from factors such as manufacturing products
in very large quantities, buying inputs in bulk, or making more
effective use of organizational resources than do competitors by
fully utilizing employees skills and knowledge.
A. Brand loyalty B. Demographic forces C. Political forces D.
Brand positioning E. Economies of scale
60. _____ refers to customers' preference for the products of
organizations currently in the task environment.
A. Brand recognition B. Brand positioning C. Brand loyalty D.
Brand saturation E. Brand awareness
61. Dolphin's Diner, a famous seafood chain, has opened its
newest restaurant in a small town. It soon finds that the only
customers it attracts are tourists, because the locals prefer to go
to The Clam Cafan older but more expensive restaurant. The Clam Caf
enjoys significant _____.
A. brand saturation B. brand emersion C. brand loyalty D. brand
dilution E. brand acceleration
62. _____ is the traditional system of relationships established
between people and groups in a society.
A. Cultural imperialism B. Cultural pluralism C. National
culture D. Social structure E. Social relativism
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63. Which of the following can be defined as the set of values
and the norms of behavior which are approved or sanctioned by a
particular society?
A. National culture B. Social stratification C. Cultural
pluralism D. Organizational culture E. Social structure
64. Inflation is an example of a(n) _____ force in an
organization's environment.
A. social B. economic C. demographic D. ergonomic E. legal
65. _____ are outcomes of changes in the skills and equipment
managers use to design, produce, or distribute goods and
services.
A. Cultural forces B. Political forces C. Demographic forces D.
Technological forces E. Sociocultural forces
66. Unlike previous generations, salespeople today can work from
home offices, communicate with colleagues in different parts of the
world almost instantly, and commute electronically to work. This
flexibility is due to changes in_____.
A. economic forces B. political forces C. demographic forces D.
technological forces E. sociocultural forces
67. Nadine belongs to an egalitarian society, one in which few
distinctions are made between individuals and groups. Her society
is low on _____.
A. cultural diversity. B. gender equality C. national culture D.
social stratification E. cultural pluralism
68. Jean is the CEO of Creative Tribune, an advertising firm in
Winchester. Many distinctions exist between the different classes
of people in her society. Most of the top managers in her
organization, for example, come from the upper classes.This implies
that society in Winchester has a high degree of _____.
A. social stratification B. gender inequality C. cultural
imperialism D. cultural pluralism E. economic equality
69. Greg belongs to a society which makes very few distinctions
between people and groups. This is reflected in his company, Sonata
DCM, the managers of which represent several different classes and
cultures. The society to which he belongs is _____.
A. low on cultural diversity B. low on social stratification C.
high on economic inequality D. high on race-discrimination E. low
on cultural pluralism
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70. Which of the following forces are outcomes of changes in or
changing attitudes toward the characteristics of a population?
A. Demographic B. Terminal C. Ethnographic D. Geopolitical E.
Instrumental
71. A decline in the number of young people joining the
workforce and an increase in the number of active employees who are
postponing retirement are examples of _____ forces in the general
environment.
A. demographic B. terminal C. ethnographic D. geopolitical E.
Instrumental
72. The outcomes of the changes in the laws and regulations of a
society are known as _____.
A. technological forces B. political forces C. economic forces
D. demographic forces E. sociocultural forces
73. Deregulation, privatization, and the removal of legal
barriers to trade are examples of changing _____ forces
A. sociocultural B. political C. technological D. ethnographic
E. demographic
74. Which of the following is the result of globalization?
A. Globalization weakens cultural barriers and reduces
dissimilarities between nations. B. Globalization prevents the
economic systems of different countries from merging with each
other. C. Globalization decreases the interconnectedness of the
world's markets and businesses. D. Globalization decreases
organizational efficiency and effectiveness. E. Globalization
hinders the flow of financial and resource capital between
countries.
75. All of the following are principal forms of capital that
flow between countries except:
A. human capital. B. virtual capital. C. political capital. D.
resource capital. E. financial capital.
76. _____ capital flows through the processes of overseas
investment, credit, lending, and aid.
A. Human B. Technological C. Political D. Resource E.
Financial
77. The Republic of Karibo has been losing capital steadily over
the last five years. As a result of this:
A. its rate of unemployment has decreased. B. the standard of
living has fallen. C. the impact of the recession has lessened. D.
the gap between the rich and poor has narrowed. E. its economy has
stabilized.
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78. Which of the following is true of political capital?
A. It is the flow of people around the world through
immigration, migration, and emigration. B. It is the flow of
natural resources, parts, and components between companies and
countries. C. It is the flow of information and data across the
world through the social media. D.
It is the flow of money capital across world markets through
overseas investment, credit, lending, and aid.
E.
It is the flow of power and influence around the world using
diplomacy, persuasion, aggression, and force of arms.
79. Which of the following factors played an important role in
speeding up globalization?
A. The imposition of government-enforced import-tariffs that
protected the domestic economy B. The export-restrictions which
ensured that the people of a country had access to their own
products C. Declining barriers to trade and investment that eased
the flow of capital throughout the world D. The rejection of the
free-trade doctrine which increased global outsourcing E. The
fortification of trade and investment barriers between each
country
80. Which of the following contributed to the lowering of
barriers caused by distance and cultural differences?
A. The imposition of government-enforced tariffs on imports B.
The development of communication and transportation technology C.
The rejection of the free-trade doctrine D. The imposition of
government-enforced tariffs on exports E. The restrictions placed
on the flow of capital between nations
81. Which of the following is true of regional trade
agreements?
A. They enforce regional restrictions on the cross-border flow
of resources and reinforce import-tariffs. B.
They expose companies based in one member country to increased
competition from companies in other member countries.
C.
They hinder the spread of globalization by setting up trade
barriers between different countries of the same region.
D.
They provide manufacturing organizations with fewer
opportunities to reduce costs and provide managers with fewer
threats.
E.
They are created to reduce overall tariffs on goods that flow
within a country and increase tariffs on goods that flow between
regions.
82. Which of the following is an advantage of the establishment
of free-trade agreements?
A. They protect domestic industries and jobs by taxing goods
imported from outlying regions.
B. They protect the well-being of people by restricting the flow
of goods being exported from
their country.
C. They reduce the impact of globalization by preventing the
loss of capital from a country. D. They provide managers with a
threat-free environment to work within. E. They provide
manufacturing organizations with opportunities to reduce production
costs.
83. The basic building blocks of national culture are:
A. values and norms. B. political and legal forces. C.
ethnographic forces. D. corporate values and organizational
culture. E. the task and general environment.
84. _____ are beliefs about what a society considers to be good,
right, desirable, or beautiful.
A. Folkways B. Values C. Laws D. Traditions E. Mores
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85. Which of the following is true of values?
A. Values are static and are impervious to change. B. Values are
abstract concepts invested with emotional significance. C. Values
are universally held beliefs and are identical across all
societies. D. Values are easily changed and the changes are easily
accepted. E. Values play a superficial role in a society's belief
system.
86. _____ are unwritten, informal codes of conduct that shape
the behavior of people toward one another and are held important by
most members of society.
A. Laws B. Policies C. Norms D. Values E. Philosophies
87. _____ are norms that are considered to be of central
importance to the functioning of society and to social life, the
violation of which brings serious retribution.
A. Mores B. Folkways C. Values D. Ceremonies E.
Superstitions
88. Which of the following is true about mores?
A. They do not bring about serious retribution when violated. B.
They are often enacted into laws. C. They are identical across all
societies. D. They concern routine social conventions of everyday
life. E. They comprise the body of folklore handed down over
generations.
89. Which of the following is true of folkways?
A. They bring about serious retribution when violated. B. They
are the norms upon which fundamental laws are based. C. They
concern the routine social conventions of everyday life. D. They do
not differ between societies. E. They are central to the
functioning of society.
90. Which of the following is an example of a more?
A. Societal taboos which censure murder, theft, and incest B.
Social conventions that dictate the usage of different types of
cutlery C. Customs that govern social interaction between neighbors
D. Traditions that prescribe gender-appropriate clothing in social
gatherings E. Superstitions held important by different members of
a society
91. Which of the following is an example of a folkway?
A. Laws in a country which make divorce permissible
B. Societal taboos that prohibit murder, theft, and incest
C. Religious doctrines which forbid the consumption of
particular types of food
D. Laws which prescribe punishments for different types of
offences E. Societal conventions that concern gender-appropriate
clothing
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92. According to Hofstede, individualist societies:
A. value societal welfare over that of individual members of
society. B. value personal freedom, personal success, and
self-expression. C. emphasize subordination of the individual to
the goals of the group. D. emphasize conformity to group norms and
strong identification with the group. E. require individuals to put
the needs of the group before their own.
93. According to Hofstede, collectivist societies:
A. emphasize self-expression, personal freedom, and individual
rights. B. adhere to the principle that people should be judged by
their contribution to the group. C. discourage individuals from
placing societal welfare above their own. D. encourage the pursuit
of individual goals and individual entrepreneurship. E. adhere to
the principle that people should be judged by their individual
achievements.
94. Lobo belongs to a society which values the subordination of
the individual to the group and discourages individual expressions
of thought. Inequality in the power and well-being of people is
believed to be due to differences in their physical and
intellectual capabilities, and heritage. According to Hofstede's
model of national culture, his society is:
A. high on power distance and low on individualism. B. low on
power distance and low on collectivism. C. high on individualism
and low on achievement-orientation. D. low on collectivism and low
on achievement-orientation. E. low on power distance and low on
individualism.
95. Which of the following, according to Hofstede, is
characteristic of societies with high power distance?
A. Inequalities between different classes in society are not
allowed to develop. B. The government uses taxation and social
welfare programs to reduce inequality. C. Inequalities in the
well-being of individuals are due to their work-achievements. D.
The gap between the rich and poor is very large. E. Resources are
communal and accessible to all members of society.
96. Which of the following, according to Hofstede, is
characteristic of societies with low power distance?
A. Large inequalities between different classes in society are
allowed to develop. B. The government uses taxation and social
welfare programs to reduce inequality. C. Inequalities in the
well-being of individuals are due to their birth and heritage. D.
Inequalities in the power-system are put down to individuals'
physical and mental capabilities. E. The law reinforces the social
and economic inequalities between different classes in society.
97. Clara belongs to a society which values assertiveness,
performance, competition, and results. Her society also encourages
freedom of expression and personal success, but makes few
provisions for the welfare of the weak. According to Hofstede's
model of national culture, which of the following is true of her
society?
A. Her society has an achievement orientation and is high on
individualism. B. Her society has an achievement orientation and is
high on collectivism. C. Her society has a nurturing orientation
and is low on individualism. D. Her society has a nurturing
orientation and is low on performance orientation. E. Her society
has a performance orientation and is high on collectivism.
98. Max belongs to a society which is rigid and skeptical about
people whose behaviors or beliefs differ from the norm. His society
also values warm, personal relationships over success and
performance. According to Hofstede's model of national culture,
which of the following is true of his society?
A. His society is low on uncertainty avoidance and has an
achievement orientation. B. His society is high on uncertainty
avoidance and has a nurturing orientation. C. His society is low on
uncertainty avoidance and has a performance orientation. D. His
society is high on uncertainty avoidance and has an achievement
orientation. E. His society is low on uncertainty avoidance and has
a nurturing orientation.
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99. Holly belongs to a culture which values the subordination of
individuals to the group. The national culture also values personal
stability and living for the present. Which of the following,
according to Hofstede, is true of Holly's culture?
A. It is high on individualism and has a long-term orientation
B. It is low on collectivism and has a long-term orientation. C. It
is high on individualism and has a short-term orientation D. It is
high on collectivism and has a short-term orientation E. It is low
on collectivism and has a short-term orientation.
100.According to Hofstede, which of the following is true of
countries with a long-term orientation?
A. They have a high rate of per capita savings. B. Citizens
prioritize happiness over achievement and perseverence. C. Citizens
live for the present and value personal stability. D. Citizens tend
to spend more and save less. E. Organizations emphasize immediate
results over year-end goals.
101.What is the global environment? Briefly explain its impact
on managers and their organizations.
102.Briefly describe the task environment. How do forces in the
task environment impact managers?
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103.In what way can suppliers with a strong bargaining position
threaten managers and their organizations? What threat can an
organization pose its suppliers?
104.What are barriers to entry? Describe in brief the three main
sources from which barriers to entry result.
105.Describe the five major forces of the general environment
briefly.
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106.Define globalization and explain why the global market is
becoming more open.
107.Discuss the four principal forms of capital that flow
between countries.
108.Define tariffs and discuss the consequences of both
increasing and removing import-tariffs.
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109.Briefly discuss the factors that led to the decline of
distance and cultural barriers and the impact this had upon
companies operating in the global environment.
110.Describe the basic building blocks of national culture
briefly.
111.List the five dimensions upon which Hofstede placed national
culture. Discuss the necessity for managers who work with different
national cultures to acknowledge these dimensions.
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112.Describe the dimensions of uncertainty avoidance and power
distance developed by Hofstede.
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ch06 Key 1. TRUE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
6. TRUE
7. TRUE
8. FALSE
9. TRUE
10. TRUE
11. FALSE
12. FALSE
13. TRUE
14. FALSE
15. TRUE
16. FALSE
17. FALSE
18. FALSE
19. TRUE
20. TRUE
21. TRUE
22. TRUE
23. TRUE
24. FALSE
25. FALSE
26. FALSE
27. FALSE
28. TRUE
29. FALSE
30. FALSE
31. FALSE
32. FALSE
33. FALSE
34. FALSE
35. FALSE
36. (p. 201) TRUE
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37. TRUE
38. FALSE
39. TRUE
40. FALSE
41. A
42. E
43. C
44. C
45. B
46. A
47. D
48. C
49. E
50. C
51. C
52. A
53. A
54. C
55. B
56. A
57. D
58. B
59. E
60. C
61. C
62. D
63. A
64. B
65. D
66. D
67. D
68. A
69. B
70. A
71. A
72. B
73. B
74. A
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75. B
76. E
77. B
78. E
79. C
80. B
81. B
82. E
83. A
84. B
85. B
86. C
87. A
88. B
89. C
90. A
91. E
92. B
93. B
94. A
95. D
96. B
97. A
98. B
99. D
100. A
101. The global environment is a set of forces and conditions in
the world outside an organization's boundary that affect how it
operates and shape its behavior. These forces change over time and
thus present managers with opportunities and threats. Some changes
in the global environment, such as the development of efficient new
production technology, the availability of lower-cost components,
or the opening of new global markets, create opportunities for
managers to make and sell more products, obtain more resources and
capital, and thereby strengthen their organization. In contrast,
the rise of new global competitors, a global economic recession, or
an oil shortage poses threats that can devastate an organization if
managers are unable to sell its products so that revenues and
profits plunge. The quality of managers' understanding of forces in
the global environment and their ability to respond appropriately
to those forces are critical factors affecting organizational
performance.
102. The task environment is the set of forces and conditions
that originate with global suppliers, distributors, customers, and
competitors; these forces and conditions affect an organizations
ability to obtain inputs and dispose of its outputs. The task
environment contains the forces that have the most immediate and
direct effect on managers because they pressure and influence
managers daily. Forces in the task environment result from the
actions of suppliers, distributors, customers, and competitors both
at home and abroad. These four groups affect a managers ability to
obtain resources and dispose of outputs daily, weekly, and monthly
and thus have a significant impact on short-term decision
making.
103. A major supplier-related threat that confronts managers
arises when suppliers' bargaining position is so strong that they
can raise the prices of the inputs they supply to the organization.
A supplier's bargaining position is especially strong when (1) the
supplier is the sole source of an input and (2) the input is vital
to the organization. In contrast, when an organization has many
suppliers for a particular input, it is in a relatively strong
bargaining position with those suppliers and can demand low-cost,
high-quality inputs from them. Often an organization can use its
power with suppliers to force them to reduce their prices.
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104. Barriers to entry are factors that make it difficult and
costly for a company to enter a particular task environment or
industry. Barriers to entry result from three main sources:
economies of scale, brand loyalty, and government regulations that
impede entry. Economies of scale are the cost advantages associated
with large operations. Brand loyalty is customers preference for
the products of organizations currently in the task environment.
Government regulations function as a barrier to entry at both the
industry and the country levels when they deregulate industries or
impose import-tariffs upon goods.
v) Political forces are outcomes of changes in laws and
regulations.iv) Demographic forces are outcomes of changes in, or
changing attitudes toward, the characteristics of a population,
such as age, gender, ethnic origin, race, sexual orientation, and
social class.iii) Sociocultural forces are pressures emanating from
the social structure of a country or society or from the national
culture.ii) Technology is the combination of tools, machines,
computers, skills, information, and knowledge that managers use to
design, produce, and distribute goods and services; technological
forces are outcomes of changes in that technology.i) Economic
forces are the interest rates, inflation, unemployment, economic
growth, and other factors that affect the general health and
well-being of a nation or the regional economy of an
organization.105. The five major forces in the general environment
are economic, technological, sociocultural, demographic, and
political and legal forces.:
106. The most important reason why the global environment has
become more open and competitive is the increase in globalization.
Globalization is the set of specific and general forces that work
together to integrate and connect economic, political, and social
systems across countries, cultures, or geographic regions. The
result of globalization is that nations and peoples become
increasingly interdependent because the same forces affect them in
similar ways. As a result of falling trade barriers, managers view
the global environment as openthat is, as an environment in which
companies are free to buy goods and services from, and sell goods
and services to, whichever companies and countries they choose.
They also are free to compete against each other to attract
customers around the world. All large companies must establish an
international network of operations and subsidiaries to build
global competitive advantage.
iv) Political capital: the flow of power and influence around
the world using diplomacy, persuasion, aggression, and force of
arms to protect the right or access of a country, world region, or
political bloc to the other forms of capital.iii) Resource capital:
the flow of natural resources, parts, and components between
companies and countries, such as metals, minerals, lumber, energy,
food products, microprocessors, and auto parts.ii) Financial
capital: the flow of money capital across world markets through
overseas investment, credit, lending, and aid.107. i) Human
capital: the flow of people around the world through immigration,
migration, and emigration.
108. A tariff is a tax that a government imposes on goods
imported into one country from another. The aim of increasing
import tariffs is to protect domestic industries and jobs. The
reason for removing tariffs is that, very often, when one country
imposes an import tariff, others follow suit and the result is a
series of retaliatory moves as countries progressively raise tariff
barriers against each other. Governments of countries that resort
to raising tariff barriers ultimately reduce employment and
undermine the economic growth of their countries because capital
and resources will always move to their most highly valued use. The
free-trade doctrine predicts that if each country agrees to
specialize in the production of the goods and services that it can
produce most efficiently, this will make the best use of global
capital resources and will result in lower prices.
109. Historically, barriers of distance and culture closed the
global environment and kept managers focused on their domestic
market. A continuing stream of advances in communications and
transportation technology worked to reduce the barriers of distance
and culture that affected global organizations. The lowering of
barriers to trade and investment and the decline of distance and
culture barriers has created enormous opportunities for companies
to expand the market for their goods and services through exports
and investments in overseas countries. The shift toward a more open
global economy has created not only more opportunities to sell
goods and services in markets abroad but also the opportunity to
buy more from other countries.
110. The basic building blocks of national culture are values
and norms. Values are beliefs about what a society considers to be
good, right, desirable, or beautifulor their opposites. They
provide the basic underpinnings for notions of individual freedom,
democracy, truth, justice, honesty, loyalty, social obligation,
collective responsibility, the appropriate roles for men and women,
love, sex, marriage, and so on. Values are more than merely
abstract concepts; they are invested with considerable emotional
significance. People argue, fight, and even die over values such as
freedom or dignity. Although deeply embedded in society, values are
not static and change over time; but change is often the result of
a slow and painful process. Norms are unwritten, informal codes of
conduct that prescribe appropriate behavior in particular
situations and are considered important by most members of a group
or organization. They shape the behavior of people toward one
another.
111. The five dimensions include individualism versus
collectivism, power distance, achievement versus nurturing
orientation, uncertainty avoidance, and long-term versus short-term
orientation. Differences among national cultures have important
implications for managers. Due to cultural differences, management
practices that are effective in one country might be troublesome in
another. Often management practices must be tailored to suit the
cultural contexts within which an organization operates. Managers
doing business with individuals from another country must be
sensitive to the value systems and norms of that country and behave
accordingly.
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112. Uncertainty avoidance is the degree to which societies are
willing to tolerate uncertainty and risk. Societies low on
uncertainty avoidance are easygoing, value diversity, and tolerate
differences in personal beliefs and actions while societies high on
uncertainty avoidance are more rigid and skeptical about people
whose behaviors or beliefs differ from the norm. Power distance is
the degree to which societies accept the idea that inequalities in
the power and well-being of their citizens are due to differences
in individuals physical and intellectual capabilities and heritage.
Societies in which inequalities are allowed to persist or grow over
time have high power distance. In societies with low power
distance, large inequalities between citizens are not allowed to
develop with the help of government-run welfare programs.
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ch06 Summary Category # of Questions
AACSB: Analytic 76AACSB: Diversity 36Blooms: Apply 6Blooms:
Remember 53Blooms: Understand 53Difficulty: 1 Easy 38Difficulty: 2
Medium 68Difficulty: 3 Hard 6Jones - Chapter 06 112Learning
Objective: 06-01 Explain why the ability to perceive, interpret,
and respond appropriately to the global environment is crucial for
managerial success.
2
Learning Objective: 06-02 Differentiate between the global task
and global general environments. 8Learning Objective: 06-03
Identify the main forces in the global task and general
environments, and describe the challenges that each force presents
to managers.
48
Learning Objective: 06-04 Explain why the global environment is
becoming more open and competitive, and identify the forces behind
the process of globalization that increase the opportunities,
complexities, challenges, and threats managers face.
22
Learning Objective: 06-05 Discuss why national cultures differ
and why it is important that managers be sensitive to the effects
of falling trade barriers and regional trade associations on the
political and social systems of nations around the world.
32
Topic: Overview 2Topic: The Changing Global Environment 22Topic:
The General Environment 20Topic: The Role of National Culture
32Topic: The Task Environment 28Topic: What Is the Global
Environment? 8