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
29.
When a company contracts with suppliers in other countries to make the various inputs
that go into its products or to assemble the final products to reduce costs, ________
occurs.
A.
inverted sourcing
B.
power distance
C.
global outsourcing
D.
shared services
Global outsourcing occurs when a company contracts with suppliers in other countries to
make the various inputs or components that go into its products or to assemble the final
products to reduce costs.
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
30.
The routine data entry tasks for a California-based software company are done by a
company based in the Philippines. This is an example of ________.
A.
global outsourcing
B.
power distance
C.
inverted sourcing
D.
shared services
Global outsourcing occurs when a company contracts with suppliers in other countries to
make the various inputs or components that go into its products or to assemble the final
products to reduce costs.
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
31.
Organizations that help other organizations to sell their goods to customers are known as
________.
A.
B.
distributors
C.
customers
D.
suppliers
Distributors are organizations that help other organizations sell their goods or services to
customers.
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
32.
A firm that has not traditionally been a competitor of EcoPro suddenly creates a new type
of product that makes EcoPro products obsolete. This is an example of ________.
A.
demographic forces in the general environment
B.
competitors in the task environment
C.
suppliers in the task environment
D.
politics in the general environment
One of the most important forces that an organization confronts in its task environment is
competitors. Competitors are organizations that produce goods and services similar to a
particular organization’s goods and services. This includes new competitors who create
substitute products.
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
33.
Organizations that are not currently selling goods in a particular task environment but may
choose to enter this environment in the future are called potential ________.
A.
suppliers
B.
C.
distributors
D.
consumers
Potential competitors are organizations that are not presently in a task environment but
could enter if they so choose.
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
34.
Factors that make it difficult and costly for a company to enter a particular task
environment or industry are ________.
A.
political forces
B.
barriers to entry
C.
barriers to exit
D.
free trade agreements
Barriers to entry are factors that make it difficult and costly for a company to enter a
particular task environment or industry.
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
35.
Within an industry, the existing economies of scale, brand loyalties, and government
regulations that impede access to the task environment create ______________.
A.
global outsourcing
B.
power distance
C.
barriers to entry
D.
barriers to exit
Barriers to entry are factors that make it difficult and costly for a company to enter a
particular task environment or industry. It results from three main sources: economies of
scale, brand loyalty, and government regulations that impede 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
36.
For a company planning to enter a task environment or industry, the greater the
economies of scale within that task environment, ________.
A.
the higher will be the barriers to entry
B.
the smaller will be the investment
C.
the easier it will be to create brand loyalty
D.
the higher will be tariff rates
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the
fewer the competitors in an organization’s task environment and thus the lower the threat
of competition. With fewer competitors, it is easier to obtain customers and keep prices
high.
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
37.
In a task environment where there are few competitors, it is ________.
A.
harder to reach economies of scale
B.
harder to create brand loyalty
C.
easier to obtain customers
D.
harder to keep prices high
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the
fewer the competitors in an organization’s task environment and thus the lower the threat
of competition. With fewer competitors, it is easier to obtain customers and keep prices
high.
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
38.
It is easier to obtain customers and keep prices high in a task environment where there
are few ________.
A.
B.
customers
C.
suppliers
D.
distributors
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the
fewer the competitors in an organization’s task environment and thus the lower the threat
of competition. With fewer competitors, it is easier to obtain customers and keep prices
high.
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
39.
The cost advantages that are associated with large operations are known as ________.
A.
brand loyalty
B.
economies of scale
C.
boundary spanning
D.
power distance
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
challenges that each force presents to managers.
Topic: Competitive Environment
40.
Economies of scale result from actions such as ________.
A.
manufacturing products in small quantities
B.
keeping the demand high by cutting supply
C.
creating products that are exclusive
D.
buying inputs for the products in bulk
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
challenges that each force presents to managers.
Topic: Competitive Environment
41.
By fully utilizing its employees’ skills and knowledge, Pelican Gadgets is making more
effective use of organizational resources than do its competitors. It is thus increasing
________.
A.
economies of scale
B.
brand loyalty
C.
compliance with regulations
D.
barriers to exit
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
challenges that each force presents to managers.
Topic: Competitive Environment
42.
If it is difficult and costly to enter a task environment, then for companies already within a
task environment or industry ________.
A.
the barriers to entry are low
B.
threat of competition is high
C.
it is easier to obtain customers
D.
it is harder to keep prices high
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the
fewer the competitors in an organization’s task environment and thus the lower the threat
of competition. With fewer competitors, it is easier to obtain customers and keep prices
high.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 3 Hard
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
43.
If established organizations enjoy significant brand loyalty, a new entrant will ________.
A.
find it neither difficult nor costly to obtain a share of the market
B.
easily establish itself as another company enjoying brand loyalty
C.
bear huge costs to build customer awareness of its products
D.
deter potential competitors from entering the task environment
If established organizations enjoy significant brand loyalty, a new entrant will find it
difficult and costly to obtain a share of the market. Newcomers must bear huge
advertising costs to build customer awareness of the goods or services they intend to
provide.
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
44.
Which of the following statements accurately defines brand loyalty?
A.
It is the repurchase behavior shown by customers due to the fear of trying a new
brand.
B.
It is the customers’ preference for the products currently in the task environment.
C.
It is the perception of customers that some brands are equivalent.
D.
It implies that the brand delivers what it promises.
Brand loyalty is customers’ preference for the products of organizations currently existing
in the task environment. If established organizations enjoy significant brand loyalty, a new
entrant will find it difficult and costly to obtain a share of the market.
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: Competitive Environment
45.
Building customer awareness of the newcomer’s product is very costly in the face of which
of the following sources of barriers to entry?
A.
Economies of scale
B.
Technological barriers
C.
Government regulations
D.
Brand loyalty
If established organizations enjoy significant brand loyalty, then a new entrant will find it
extremely difficult and costly to obtain a share of the market. Newcomers must bear huge
advertising costs to build customer awareness of the goods or services they intend to
provide.
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
46.
In the drug manufacturing industry, Gateway Labs is a company operating at massive
economies of scale in the production of many drugs. Thus a potential entrant into the
industry will have a ________.
A.
much wider customer base
B.
higher level of production costs
C.
competitive advantage in pricing
D.
cheaper distribution system
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. Amazon.com, for example, enjoys
significant economies of scale relative to most other online companies because of its
highly efficient distribution system.
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
47.
A high percentage of the customers of Action Sport purchase Action Sport shoes at least
three-fourths of the time that they purchase shoes. In the context of barriers to entry, this
product has a large degree of ________.
A.
distributor loyalty
B.
demographic force
C.
brand loyalty
D.
potential competition
Brand loyalty is customers’ preference for the products of organizations currently existing
in the task environment.
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
48.
Customers repeatedly choose to purchase Max Drive products instead of several less
expensive substitutes produced by competitors. We can thus attribute a high level of
________ to Max Drive.
A.
demographic force
B.
brand loyalty
C.
potential competition
D.
distributor loyalty
Brand loyalty is customers’ preference for the products of organizations currently existing
in the task environment.
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: Competitive Environment
49.
In the context of the global general environment, which of the following accurately defines
economic forces?
A.
Laws ensuring fair distribution of resources among the people
B.
Pressures from the social structure of a society or from the national culture
C.
Skills impacting the process of designing and producing goods and services
D.
Factors such as interest rates, inflation, unemployment, and economic growth
Economic forces affect the general health and well-being of a country or world region.
They include interest rates, inflation, unemployment, and economic growth. Economic
forces produce many opportunities and threats for managers.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
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
50.
In an organization’s general environment, inflation is an example of a(n) ________ force.
A.
sociocultural
B.
economic
C.
demographic
D.
political
Economic forces include interest rates, inflation, unemployment, and economic growth.
AACSB: Analytical Thinking
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
51.
The combination of equipment and skills that a manager uses in the production and
distribution of goods is known as ________.
A.
economies of scale
B.
competitive advantage
C.
technology
D.
national culture
Technology is the combination of tools, machines, computers, skills, information, and
knowledge that managers use in the design, production, and distribution of 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: Technology