Chapter 2—Understanding the External and Organizational Environments
MULTIPLE CHOICE
1. Reasons for the recent expansion of Chinese firms into the United State include all EXCEPT:
a.
U.S. wages levels for manufacturing jobs have declined
b.
Rising transportation costs
c.
Changing economic conditions in both U.S. and China
d.
Strong encouragement by Chinese political leaders
e.
Approaching expiration of tax credits offered by U.S. state governments
2. The specific elements of the external environment include all EXCEPT:
a.
economic conditions
b.
labor markets
c.
country cultures
d.
human resources
e.
the political landscape
3. Factors involved in Deere & Company’s organizational restructuring to compete in a changing and
demanding global market included all EXCEPT:
a.
a strong dealer network
b.
loyal customers
c.
a rich cultural heritage
d.
strong margins
e.
heavy assets
4. Which of the following is NOT a specific element of an organization’s internal environment:
a.
technology
b.
company culture
c.
business strategy
d.
human resources
e.
None of the above
5. Which of the following is expected to learn to use advanced HRIS technologies and apply them to gain
competitive advantage:
a.
top management
b.
middle management
c.
line managers
d.
HR professionals
e.
employees
6. The term “open market” refers to the:
a.
large number of jobs available to recent college graduates
b.
ability of the average company to differentiate itself from its competitors in the
marketplace
c.
ease with which foreign competitors can enter the markets of other countries
d.
ease with which a recent college graduate can enter the job market
e.
ability of companies to merge with and acquire their competition within markets
7. Reliable Packaging, which has competed on cost for several years, has found itself losing market share
because of the cost-cutting initiatives from its competitors. In order to survive, Reliable Packaging
should consider:
a.
replacing its top management team
b.
firing employees
c.
changing its technology
d.
changing the location of its firm
e.
diversifying into industries where cost pressures are less severe
8. Polartic relies on its ______________ to remain competitive in its markets.
a.
ability to compete with low-cost labor in other countries
b.
knowledge resources and research capabilities
c.
prime market location
d.
lower costs due to outsourcing
e.
All of the above
9. Changes that are shaping HR practices at IBM include:
a.
shifting jobs offshore
b.
establishing jobs in new locations
c.
moving to low-cost labor
d.
going where there is low-cost competition
e.
All of the above
10. The concept of economic cycles is used to describe the fluctuation in economic activity that occurs
a.
over short periods of time in developed market economies
b.
over long periods of time in developed market economies
c.
over short periods of time in undeveloped market economies
d.
over short periods of time in developed market economies
e.
None of the above
11. A reduction-in–force (RIF):
a.
tends to have long-term beneficial effects on employee job satisfaction
b.
is a commonly-used cost-savings practice during recessions
c.
has been specifically outlawed as discriminatory by the Fair Labor Standards Act
d.
is most effective during late-stage economic expansions
e.
tends to significantly increase job security for redundant employees
12. The North American Free Trade Act (NAFTA):
a.
went into effect during the 19th century
b.
has only two participants-the United States and Canada
c.
resulted in the establishment of maquiladoras along the US-Mexico border
d.
removed all tariffs from non-technical products
e.
has led to little change in the U.S. manufacturing sector
13. Which of the following statements about the North American Free Trade Act (NAFTA) is true?
a.
NAFTA has had minimal impact on how U.S. manufacturers do business.
b.
NAFTA is an agreement signed by the U.S., Canada, and Mexico.
c.
In order to be a member of NAFTA, Mexico had to agree to join no other international
trade alliances.
d.
NAFTA has removed all tariffs from non-technical products that were sold among the
companies who signed the agreement.
e.
All of the above statements about NAFTA are true.
14. “Maquiladoras” have had the following effect on Mexico and the United States:
a.
Low wage jobs in the U.S. have all gone there
b.
Population growth along the U.S.-Mexico border was higher in the U.S. border towns
c.
Unemployment levels went down in the U.S. border towns
d.
Average wages increased on both sides of the U.S.-Mexico border
e.
Both countries would be better off if the work had moved to the Far East
15. Which of the following statements about the Central American Free Trade Agreement (CAFTA) is
true?
a.
The countries that belong to the CAFTA have similar political environments.
b.
The countries that belong to the CAFTA have very similar cultures.
c.
CAFTA participating countries responded to the creation of NAFTA by establishing a
free-trade zone that excluded the U.S. and Canada.
d.
The countries that belong to the CAFTA have declined to consider further expansion of its
free-trade zone in the Western Hemisphere.
e.
None of the above are true.
16. Which of the following statements about the European Union (EU) is true?
a.
EU-member countries have similar political environments.
b.
EU-member countries have very similar cultures.
c.
EU-member countries make up the largest economic zone in the world.
d.
EU-member countries have nearly identical unemployment rates.
e.
EU-member countries have stronger employee privacy protection policies compared to
U.S. regulations.
17. Which of the following statements about the Association of Southeast Asian Nations (ASEAN) is
NOT true?
a.
ASEAN-member countries have dissimilar political environments.
b.
ASEAN-member countries have very dissimilar cultures.
c.
ASEAN-member countries make up the third-largest free trade zone in the world.
d.
ASEAN-member countries are also members of APEC.
e.
ASEAN-member countries have excluded China from membership for its refusal to
remove its tariffs on goods from member countries.
18. The International Labor Organization, Social Accountability International and the World Trade
Organization are examples of _____.
a.
agencies of the United Nations
b.
nongovernmental organizations
c.
anticapitalistic movements
d.
agencies of the European Union
e.
intergovernmental groups created by NAFTA
19. State Health Alliance, a chain of eight hospitals, wants to undergo the SA8000 certification process for
Social Accountability International (SAI). This will require the hospital chain to do all of the
following EXCEPT:
a.
to voluntarily undergo an intensive audit
b.
to permit scheduled and unscheduled inspections
c.
to contribute to the funding of SAI-sponsored ethics and sustainability causes
d.
to comply with child labor, forced labor, and employee health and safety standards.
e.
All of the above are required for SA800 certification
20. _____ is intended to provide a forum for members to conduct trade negotiations and settle trade
disputes, as well as the only global entity able to enforce decisions in its own court.
a.
OPEC
b.
International Labor Organization (ILO)
c.
World Trade Organization (WTO)
d.
North American Free Trade Association (NAFTA)
e.
European Union (EU)
21. Which of the following tactics were used by watchdogs and activist groups in trying to change BP’s
corporate practices after its Deepwater Horizon drilling rig exploded:
a.
Creating a Facebook page promoting a boycott of BP
b.
Collecting signatures from persons pledging not to buy BP products
c.
Distributing bumper stickers focusing on the environmental damage that resulted from the
oil spill
d.
All of the above
e.
a and b only
22. Anticipated changes in the U.S. labor in the next 20 years include:
a.
slowed growth
b.
a decrease in skills availability
c.
greater competition for employees
d.
increased dependence on migrants
e.
all of the above
23. Which of the following statements BEST describes the global labor market?
a.
There is no shortage of potential employees in the global labor market.
b.
Most U.S. companies find that there is no better work force anywhere in the world than
they can find at home.
c.
The global work force is not as well educated as the U.S. workforce.
d.
Employers find few, if any, college educated students in developing countries.
e.
All of the above statements describing the global labor market are true.
24. Which of the following costs of the AIDS epidemic is a concern for employers evaluating whether to
rely on workers in India and China as part of their future workforce?
a.
Medical care for affected employees
b.
Benefits payments to employees and their families
c.
Accidents due to ill workers and inexperienced replacements
d.
Depressed morale
e.
All of the above are legitimate concerns
25. The forces pressuring U.S. companies to globalize have affected all of the following human resources
areas EXCEPT:
a.
computer technology
b.
work design
c.
management styles
d.
staffing
e.
compensation
26. Which of the following events is likely to challenge a company’s ability to manage diversity?
a.
A U.S. company decides to set up manufacturing facilities in Mexico.
b.
A company with a decidedly participative style of management merges with one that has
an autocratic leader.
c.
A company in Buffalo, NY hires 40 computer technicians from Quebec, Canada.
d.
A Massachusetts investment company decides to open an office near Mississippi casinos.
e.
In all of the above situations, the human resource department will have to manage
diversity.
27. Which of the following statements about managing in the global arena is true?
a.
Managers have to realize that culture shapes the preferences and behaviors of their
stakeholders.
b.
A successfully managed company can export its method of management to another culture
and correctly expect to be successful there.
c.
A good manager will still make good decision even if he is working in a culture he does
not understand.
d.
Managers in a culture that is individualistic must only give indirect feedback if they want
to be accepted in a supervisory position.
e.
Managers need to realize that as soon as an individual crosses from one country to
another, the culture has changed.
28. The forces pressuring U.S. companies to globalize have many implications for managing human
resources. Cultural differences are reflected the differences in HR policies adopted by employers in
which of the following areas:
a.
standardization of accounting practices
b.
translation of sales presentations
c.
use of incentive pay to motivate workers
d.
gathering of global competitive data
e.
monitoring of near-term economic and social environments
29. Geert Hofstede’s research shows that different societies encourage and reward different behaviors.
According to the Dimensions for Comparing National Cultures (Exhibit 2.7) which of the following
countries most values a performance orientation (performance improvements and excellence,
acceptance of feedback)?
a.
Russia
b.
Argentina
c.
Singapore
d.
Denmark
e.
Kuwait
30. Which of the following statements about the age of factories and mass production technologies is true?
a.
At the turn of the 20th century, people were eager to move to the city and work in factories.
b.
Job satisfaction was so great during this period that income was not a great motivator.
c.
Employees arrived at their factory jobs with most of the skills they needed to operate the
machines.
d.
Factories were the first types of organizations that required human resource management.
e.
None of the above statements about the age of factories and mass production technologies
is true.
31. Which of the following statements about the use of computers at the New Balance athletic shoe factory
in Maine is true?
a.
Skilled employees are using sophisticated computer technology to produce shoes faster
than most overseas competitors are producing shoes using low-tech workers.
b.
Production rates are expected to decrease unless New Balance can find enough domestic
workers
c.
Originally, New Balance used computer technology purely for record keeping.
d.
It is easy to predict how computer technology will impact New Balance employees.
e.
New Balance will never be able to use expert computer systems because the shoe industry
is so labor intensive and low tech.
32. Certain businesses are much more adept at taking full advantage of computer technology. Which of the
following businesses would you expect to be the most adept at using computer technologies?
a.
day-care center
b.
landscaping service
c.
janitorial service
d.
pet boarding kennel
e.
medical services
33. What was central to implementing YRC’s customer-focused strategy?
a.
a merger with another firm
b.
sophisticated technologies
c.
the decision to globalize
d.
a change in the economy
e.
none of the above
34. Which of the following is a reason for using mobile devices to help manage employees more
effectively?
a.
Manage their global workforce
b.
Increase operational efficiency
c.
Meet expectations of multiple generations in the workforce
d.
All of the above
e.
Only a and c
35. Which of the following is NOT a reason for using applications (apps) on mobile phones to deliver a
variety of HR services?
a.
Provide information to job applicants
b.
Offer short training modules
c.
Manage interview schedules
d.
Coordinate work arrangements
e.
Provide notification of permanent layoff
36. Although pork is becoming an increasingly popular meat, most people don’t realize that pork meat is
tough. Pork processors can tenderize the meat, but there is a problem with testing for tenderness. One
international meat processing firm has tasked a group with finding an inexpensive method of testing
tenderness. The project has been assigned to the firm’s employees in Brazil, Canada, Germany, and the
U.S. These people communicate via computers. This group will not work together once they find a
solution. This is an example of:
a.
autonomous technology
b.
a strategic alliance
c.
an interconnected network
d.
a virtual workforce (team)
e.
job rotation
37. The employees of a national media, advertising, and publicity firm could be described as a virtual
workforce because:
a.
they have the ability to communicate using e-mail with all other employees.
b.
they use a type of groupware commonly used in their industry.
c.
they work at home without managerial supervision.
d.
so few employees are needed.
e.
they are geographically dispersed yet able to work in electronically connected teams.
38. Which of the following statements about a human resource information system (HRIS) is true?
a.
Allow employees to access general information (e.g., policies, procedures, company
events) using a company intranet.
b.
Allow employees and managers to enter performance data, display and analyze it for
trends over time, and use the data as input for both the employee’s personal development
plan and the organization’s longer-term workforce and succession planning.
c.
Make it easy to communicate a company’s values and strategy to all employees, regardless
of their location.
d.
Make it easy for firms to design and implement HR policies and practices that are
common across different cultures.
e.
All of the above statements are true.
39. A human resource information system (HRIS):
a.
is used to gather, analyze, and distribute information about the people in an organization
b.
contains information about the organizations’ internal and external environments
c.
is used to keep current with the needs of the organizations’ stakeholders
d.
provides information about competitors’ HR practices
e.
checks to see if environmental practices are in line with federal government regulations
40. Electronic human resource management (e-HRM):
a.
is useful for connecting employees who might otherwise never meet each other
b.
helps organizations develop a strategy for how to use social networking technologies to
improve employee performance and satisfaction
c.
refers to the use of IT for conducting HRM activities and for social networking among
employees
d.
appeals to Millennial employees.
e.
All of these are
41. Going from most specific to least specific, which of the following orderings best describes company
leadership?
a.
Vision, mission, values
b.
Mission, values, vision
c.
Mission, vision, values
d.
Values, mission, vision
e.
Values, vision, mission
42. Company subcultures:
a.
are common in international firms
b.
are likely to disappear after a merger or acquisition
c.
seldom emerge among employees in different divisions, occupations, or demographic
groups
d.
cannot peacefully coexist with the overall company culture
e.
all of the above
43. P&G operates many different divisions to sell its various consumer brands. Jif peanut butter is one of
the many products made by P&G. Imagine that P&G decided that Jif peanut butter should be the
peanut butter served in 80% of the school districts in the Southeastern U.S. by the end of 2009. For
P&G this would be an example of a(n):
a.
corporate strategy
b.
operational goal
c.
tactical goal
d.
business strategy
e.
functional strategy
44. A Virginia-based manufacturer of engine parts decided it wanted to compete on quality about 10 years
ago. Since then it has adopted all of the following practices EXCEPT:
a.
Total Quality Management (TQM)
b.
ISO 9000 certification
c.
Six Sigma procedures
d.
MNC Quality Classification
e.
All of these can be adopted
45. What is a major HR reason for the failure of many mergers and acquisitions?
a.
government involvement
b.
differences in corporate culture
c.
competitive reaction
d.
unpredictability of external environment
e.
economic shortcomings
TRUE/FALSE
1. The organizational environment refers to conditions within the organization itself.
2. Components of the external environment are highly interdependent, while components of the internal
environment are highly independent.
3. Globalization always results in improvements for all workers.
4. Following passage of the North American Free Trade Act (NAFTA), the average wages rose in towns
on both sides of the Mexico-U.S. border.
5. For internal political and security reasons, European Union policies provide employees in its member
countries with considerably less personal privacy protection as compared to regulations imposed on
U.S. companies.
6. Members of NGOs generally have no official authority to impose rules of business conduct.
7. Social Accountability International (SAI) formulates international labor standards regarding the right
to organize, collective bargaining, forced labor, equality of opportunity and treatment, safety and
health, and an array of other working conditions.
8. The World Trade Organization (WTO) is the most inclusive international trade organization, and yet it
is the only global body unable to enforce decisions through its own court.
9. It is believed that the U.S. labor market will experience a dramatic change over the next 20 years due
to the rapid decline of its multigenerational workplace.
10. Immigrant workers are more likely to be employed in professional specialty occupations and are
underrepresented in occupations that do not require a high school education.
SHORT ANSWER
1. List the three members of the HR triad.
2. What has been the effect of open markets and globalization on U.S. domestic business markets?
3. Why do U.S. companies actively recruit and hire so many foreign employees?
4. What is the commonly accepted definition of technology?
5. What is a human resource information system (HRIS)?
ESSAY
1. What are maquiladoras? What impact have they had on the economic landscape?
2. What are the causes of the skills shortage in the domestic workforce that is expected to plague U.S.
employers in the new economy?
3. Discuss the virtual workforce.
4. What are the drawbacks to adopting virtual workforce arrangements?
5. Why are HR policies and practices important in the development of company cultures?