4-1
Chapter 04 Managing in the Global Environment Answer Key
True / False Questions
1.
Today global exchanges are becoming so complex that some companies specialize solely
in managing other companies’ global supply chains.
TRUE
Today global exchanges are becoming so complex that some companies specialize in
managing other companies’ global supply chains.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Globalization
2.
When new competitors enter an industry, prices in the industry typically increase.
FALSE
When new competitors enter an industry, competition increases, and prices and profits
decrease.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Barriers to Entry
3.
The higher the barriers to entry in an industry, the more difficult it is to enter the task
environment of that industry.
TRUE
The more difficult and costly it is to enter the task environment, the higher are the barriers
to entry.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Barriers to Entry
4.
Cost advantages associated with large operations are called economies of scale.
TRUE
Economies of scale are the cost advantages associated with large operations. Economies
of scale result 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.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
5.
The greater the economies of scale of existing organizations, the lower are the barriers to
entry for new competitors.
FALSE
If organizations already in the task environment are large and enjoy significant economies
of scale, their costs are lower than the costs that potential entrants will face, and
newcomers will find it expensive to enter the industry.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Barriers to Entry
6.
Low levels of unemployment and falling interest rates give people less money to spend.
FALSE
Low levels of unemployment and falling interest rates give people more money to spend,
and as a result organizations can sell more goods and services.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Competitive Environment
7.
Most profit-oriented organizations are threatened during economic downturns, but not–
for-profit organizations tend to flourish.
FALSE
Profit-seeking organizations such as hotels and retail stores have fewer customers during
economic downturns, and nonprofits such as charities and colleges face decline in
donations because of the economic downturn.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Competitive Environment
8.
While the typical organization in the United States emphasizes the importance of the
group, the typical organization in Japan emphasizes the importance of the individual.
FALSE
National culture is the set of values that a society considers important and the norms of
behavior that are approved or sanctioned in that society. Societies differ substantially in
the values and norms they emphasize. For example, in the United States individualism is
highly valued, and in Korea and Japan individuals are expected to conform to group
expectations.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
9.
A shift in the age distribution of the population of the United States is an example of a
sociocultural force that affects organizations in the United States.
FALSE
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. A shift in the age distribution of the population of the United States is an
example of a demographic force that affects organizations in the United States.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Demographics
10.
A tax that a government imposes on an imported good is known as a tariff.
TRUE
A tariff is a tax that a government imposes on goods imported into one country from
another.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-04 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.
Topic: Globalization
11.
A government imposes tariffs on imports to protect its industries and workers from
inflation.
FALSE
The aim of import tariffs is to protect domestic industries and jobs, such as those in the
auto or steel industry, from overseas competition by raising the price of these products
from abroad.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-04 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.
Topic: Globalization
12.
Governments of countries that resort to raising tariff barriers ultimately increase
employment.
FALSE
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—wherever that is in the world.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-04 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.
Topic: Globalization
13.
The norms of a society are written rules of codes of conduct that tell people how they are
supposed to act in given situations.
FALSE
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.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-05 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.
Topic: Group Norms
14.
In a society, a folkway violation can lead to serious retribution.
FALSE
Mores are norms that are considered to be of central importance to the functioning of
society and to social life. Accordingly, the violation of mores brings serious retribution.
Mores include proscriptions against murder, theft, adultery, and incest.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-05 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.
15.
Societies that are high on uncertainty avoidance, such as the United States, value diversity
and tolerate differences between people in their actions.
FALSE
Societies low on uncertainty avoidance, such as the United States and Hong Kong, are
easygoing, value diversity, and tolerate differences in personal beliefs and actions.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-05 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.
Topic: Uncertainty Avoidance
Multiple Choice Questions
16.
Which of the following is part of an organization’s general environment?
A.
Customers
B.
Technology
C.
Competitors
D.
The general environment includes the wide-ranging global, economic, technological,
sociocultural, demographic, political, and legal forces that affect the organization and its
task environment.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-01 Explain why the ability to perceive, interpret, and respond appropriately to the global
environment is crucial for managerial success.
Topic: Globalization
17.
Which of the following is part of an organization’s task environment?
A.
Culture
B.
Economy
C.
Politics
D.
Competition
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
organization’s ability to obtain inputs and dispose of its outputs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-01 Explain why the ability to perceive, interpret, and respond appropriately to the global
environment is crucial for managerial success.
Topic: Globalization
18.
Compared to the changes in the task environment, those in the general environment are
often ________.
A.
harder to identify
B.
easier to respond to
C.
threats, not opportunities
D.
of less consequence
For the individual manager, opportunities and threats resulting from changes in the
general environment are often more difficult to identify and respond to than are events in
the task environment. However, changes in these forces can have major impacts on
managers and their organizations.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 04-01 Explain why the ability to perceive, interpret, and respond appropriately to the global
environment is crucial for managerial success.
Topic: Globalization
19.
The set of forces and conditions that originate with global suppliers, distributors,
customers, and competitors and affect an organization’s ability to obtain inputs and
dispose of its outputs is the ________ environment.
A.
demographic
B.
legal
C.
task
D.
societal
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
organization’s ability to obtain inputs and dispose of its outputs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-01 Explain why the ability to perceive, interpret, and respond appropriately to the global
environment is crucial for managerial success.
Topic: Globalization
20.
The wide-ranging global, economic, technological, sociocultural, and political forces that
affect the organization and its task environment is the ________ environment.
A.
competitive
B.
near
C.
task
D.
general
The general environment includes the wide-ranging global, economic, technological,
sociocultural, demographic, political, and legal forces that affect the organization and its
task environment.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 04-01 Explain why the ability to perceive, interpret, and respond appropriately to the global
environment is crucial for managerial success.
Topic: Globalization
21.
Global Blenders sells goods and services that other companies offer but does
not
provide
any organization with the input resources needed to produce goods and services. Based
on this information, we can thus say that Global Blenders is a ________.
A.
supplier, not a competitor
B.
competitor, not a distributor
C.
distributor, not a supplier
D.
supplier, not a distributor
Suppliers are the individuals and organizations that provide an organization with the input
resources it needs to produce goods and services. Distributors are organizations that help
other organizations sell their goods or services to customers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Differentiate between the global task and global general environments.
Topic: Competitive Environment
22.
Vlanco Electronics and Highway Computers both make laptop computers in the same price
range for the European market. Thus each would see the other as a ________.
A.
supplier
B.
competitor
C.
distributor
D.
customer
Competitors are organizations that produce goods and services that are similar and
comparable to a particular organization’s goods and services. In other words, competitors
are organizations trying to attract the same customers. Suppliers are the individuals and
organizations that provide an organization with the input resources it needs to produce
goods and services.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Differentiate between the global task and global general environments.
Topic: Competitive Environment
23.
Caltronix helps Gen Marco sell Marco washing machines. Caltronix does not use the
machines. Which of the following describes either company correctly?
A.
Caltronix is a distributor.
B.
Caltronix is a customer.
C.
Gen Marco is a supplier.
D.
Gen Marco is a customer.
Customers are the individuals and groups that buy the goods and services an organization
produces. Distributors are organizations that help other organizations sell their goods or
services to customers. Suppliers are the individuals and organizations that provide an
organization with the input resources it needs to produce goods and services.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Differentiate between the global task and global general environments.
Topic: Competitive Environment
24.
With Dell Computer, the actions of suppliers, distributors, customers, and competitors
affect their managers’ ability to obtain resources and dispose of outputs, and thus, have a
significant impact on Dell’s ________.
A.
political environment
B.
short-term decision making
C.
demographics
D.
sociocultural environment
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
manager’s ability to obtain resources and dispose of outputs daily, weekly, and monthly
and thus have a significant impact on short-term decision making.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Differentiate between the global task and global general environments.
Topic: Competitive Environment
25.
An organization’s major customer puts pressure on the organization to reduce prices on its
products. This is an example of influence exerted by the organization’s ________
environment.
A.
demographic
B.
task
C.
legal
D.
sociocultural
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
organization’s ability to obtain inputs and dispose of its outputs.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-02 Differentiate between the global task and global general environments.
Topic: Competitive Environment
26.
Heartz Ltd. provides Glayton Technologies with input resources that it needs to produce
its products. In this context, which of the following categories does Heartz Ltd. belong to?
A.
B.
Competitors
C.
Distributors
D.
Customers
Suppliers are the individuals and companies that provide an organization with the input
resources (such as raw materials, component parts, or employees) that it needs to
produce goods and services.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Competitive Environment
27.
For Dell Computer, the educational institutions that train future Dell employees are its
________.
A.
distributors
B.
customers
C.
suppliers
D.
representatives
Suppliers are the individuals and companies that provide an organization with the input
resources (such as raw materials, component parts, or employees) that it needs to
produce goods and services.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-03 Identify the main forces in the global task and general environments, and describe the
challenges that each force presents to managers.
Topic: Competitive Environment
28.
A supplier’s bargaining position is strong when ________.
A.
the input is vital to the organization
B.
there are a large number of suppliers for an input
C.
the supply is free
D.
the supply is not protected by a patent
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.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand