Chapter 2—Corporate Culture and the Environment
TRUE/FALSE
1. While Blockbuster has closed hundreds of stores and is likely to file for bankruptcy, Netflix expanded
its customer base to over 13 million.
2. Factors external to the organizations have been primarily the focus of management as a discipline.
3. The general environment and the task environment are the two layers of an organization’s external
environment.
4. The outer layer, the general environment, is widely dispersed and affects organizations directly.
5. Customers and competitors are two important sectors of the economic dimension of a firm’s general
environment.
6. Current employees, management, and especially corporate culture are part of an organization’s internal
environment.
7. The international dimension of the external environment represents events originating in foreign
countries as well as opportunities for U.S. companies in other countries.
8. In recent years, the most dramatic change in the international environment is the shift of economic
power to Germany and France.
9. The technological dimension of the external environment includes scientific and technological
advancements in a specific industry as well as in society at large.
10. The sociocultural dimension of the general environment includes societal norms and values.
11. The international dimension includes scientific and technological advancements in a specific industry
as well as in society at large.
12. According to Spotlight on Skills in Chapter 2, the Chinese concept of guanxi is a supportive, mutually
beneficial connection between two people.
13. According to Spotlight on Skills in Chapter 2, one of the rules of doing business in China is
remembering that relationships are short-term.
14. Economic problems in other parts of the world have a tremendous impact on U.S. companies.
15. The economic dimension of the general environment represents the demographic characteristics.
16. The economic dimension of the general environment includes consumer purchasing power.
17. An example of part of the legal-political dimension of the general environment is a government’s
report on the decline of unemployment rate.
18. President Clinton’s signing of the telecommunications bill in 1996 deregulating the industry is an
example of the legal-political dimension of the general environment.
19. The task environmental dimension includes all elements that occur naturally on earth, including plants,
animals, rocks, and natural resources such as air, water, and climate.
20. Customers are the people and organizations in the environment who acquire goods or services from the
organization.
21. Recently, there has been strong concern about climate change such as global warming caused by
greenhouse gases, most notably carbon dioxide.
22. McDonalds, Burger King, and Checkers are competitors since all three sell fast food to individuals.
23. The raw materials that organizations use to produce its outputs are provided by customers.
24. Other organizations in the same industry or type of business that provide goods or services to the same
set of customers are referred to as suppliers.
25. The labor market is made up by people in the environment who can be hired to work for an
organization.
26. If Johnson Lumber provides trees for Westvaco Paper Manufacturing, then Johnson Lumber is
considered a supplier for Westvaco.
27. Organizations must manage environmental uncertainty to be effective.
28. An organization experiences high uncertainty when internal factors gradually change over time.
29. A merger is an effort to spot trends that enable managers to predict future events.
30. Given the increasing environmental uncertainty, managers in partnering organizations are shifting
from a partnership orientation to an adversarial orientation.
31. A joint venture involves a strategic alliance or program by two or more organizations.
32. Due to the stable environment and lack of technological change, mergers and joint ventures rarely
occur in the U.S.
33. The internal environment within which managers work includes corporate culture, sociocultural
aspects, and customers.
34. Culture can be defined as the ability to speak different languages.
35. Physical symbols are associated with the surface level of organizational culture.
36. Symbols, stories, heroes, slogans, and ceremonies combine to create an organization’s culture.
37. The set of key values, beliefs, and norms, that are shared by members of an organization are combined
to create the symbols of an organization.
38. A symbol is a figure that exemplifies the deeds, character, and attributes of a corporate culture.
39. A narrative based on rumors within the organization that can lead to destructive results if not carefully
controlled by management is called an organizational story.
40. A phrase or sentence that succinctly expresses a key corporate value is called a story.
41. The mythical sales representative at Robinson Jewelers who delivered a wedding ring directly to the
church because the ring had been ordered late is an example of a hero.
42. A slogan is a phrase or sentence that succinctly expresses a key corporate value.
43. A ceremony is a planned activity at a special event that is conducted for the benefit of an audience.
44. In adaptive cultures, managers are concerned with customers and processes that bring about useful
change.
45. The achievement culture emerges in an environment that requires fast response and high-risk
decision-making.
46. An achievement culture is found in an environment that is dynamic and requires high-risk
decision-making.
47. The involvement culture is suited to organizations that are concerned with serving specific customers
in the external environment but without the intense need for flexibility and rapid change.
48. A results-oriented culture that values competitiveness, aggressiveness, personal initiative, and
willingness to work long and hard to achieve results is called the achievement culture.
49. The bureaucratic culture has an external focus and a consistency orientation for a dynamic
environment.
50. Corporate culture plays a key role in creating an organizational climate that enables learning and
innovative responses to threats from the external environment, challenging new opportunities, or
organizational crises.
51. When an organization pays little attention to either cultural values or business results, it is unlikely to
survive for long.
52. When an organization pays little attention to cultural values and instead focuses on business results,
success will be difficult to sustain in the long run.
53. Success will be difficult to sustain in the long run when an organization puts emphasis on both cultural
values and business results.
54. In a high performance culture, organizations put high emphasis on both culture and solid business
performance as drivers of organizational success.
55. A cultural leader defines and uses signals and symbols to influence corporate culture.
56. The cultural leader articulates a vision for the organizational culture that employees can believe in and
that generates excitement.
57. Employees of an organization are considered part of the general environment.
58. In China, business tends to be more personal.
59. It is expected that the Hispanic population in the United States will shrink slightly over the next 30
years.
60. Over the last four years, the weakened U.S. economy has had a devastating impact on small business.
61. In 2010, Canada was the country with the highest environmental performance index score.
62. The most likely competitor for an automobile manufacturer would be a company in a different but
related industry, such as a steel manufacturer.
63. Labor market forces affecting organizations right now include the growing need for computer-literate
knowledge workers and the necessity for continuous investment in human resources through
recruitment, education, and training.
64. To be successful, companies should only involve top-level executives in boundary-spanning activities.
65. As managers are increasingly shifting to a partnering orientation as opposed to one that is adversarial
in nature, the use of information sharing has increased.
66. Cultural values in organizations are rarely observed, but are rather deeply embedded to the extent that
members are not consciously aware of them.
67. In determining what cultural values are important for the organization, managers should consider the
external environment as well as the company’s strategy and goals.
68. In today’s business environment, most companies operate in a stable and rigid environment.
69. Quadrant C represents organizations that are focused primarily on bottom-line results and pay little
attention to organizational values.
70. Companies in Quadrant D put high emphasis on both culture and solid business performance as drivers
of organizational success.
71. Quadrant A organizations represent the high-performance culture, which is based on solid
organizational mission and purpose, and adaptive values that guide decisions and business practices.
MULTIPLE CHOICE
1. The environments in which businesses operate are increasingly ____, requiring managers to be ready
to react and respond to even subtle environmental shifts.
a.
static
b.
universal
c.
constant
d.
dynamic
e.
traditional
2. ____ includes all elements existing outside the boundary of the organization that have the potential to
affect the organization.
a.
Organizational environment
b.
Internal environment
c.
Task environment
d.
General environment
e.
Technological environment
3. ____ system draws resources from the external environment and releases goods and services back to it.
a.
Production
b.
Closed
c.
Open
d.
Information
e.
Management
4. All of these are a part of an organization’s task environment EXCEPT
a.
Customers
b.
Labor markets
c.
Competitors
d.
Employers
e.
Suppliers
5. Which of these is NOT a part of an organization’s general environment?
a.
Technological
b.
Economic
c.
Competitors
d.
Legal-political
e.
Sociocultural
6. ____ is a part of Ford’s, the U.S. auto manufacturer, task environment.
a.
Inflation rate
b.
Chrysler
c.
Securities and Exchange Commission (SEC), a government regulating agency
d.
Amazon.com, an online bookseller
e.
Ford’s corporate culture
7. ____ is a part of an organization’s internal environment.
a.
Its customers
b.
Its salespeople
c.
The consumer price index
d.
Its suppliers
e.
Its competitors
8. Molly Madison received “The Employee of the Month” Award at Internal Workings Remodeling
Service in April. Molly would be considered a part of which of these for Internal Workings?
a.
General environment
b.
Task environment
c.
Economic environment
d.
Internal environment
e.
Political activity
9. The ____ of the external environment represents events originating in foreign countries as well as
opportunities for American companies in other countries.
a.
National dimension
b.
Global dimension
c.
International dimension
d.
Japan’s dimension
e.
U.S. dimension
10. Scientific and technological advancements in a specific industry as well as in society at large are
included in which general environment dimension?
a.
Sociocultural dimension
b.
Legal-political dimension
c.
Economic dimension
d.
Technological dimension
e.
Corporate culture dimension
11. Which dimension of the general environment represents the demographic characteristics, norms,
customs, and values of the population within which the organization operates?
a.
Legal-political dimension
b.
Economic dimension
c.
Technological dimension
d.
Corporate culture dimension
e.
Sociocultural dimension
12. When Miami Herald launches a Spanish-language newspaper, El Nuevo Herald, with articles
emphasizing Hispanic, Cuban, and Latin American news and sports, it is responding to changes in
____ environment.
a.
sociocultural
b.
technological
c.
economic
d.
competitors
e.
suppliers
13. ____ environment consists of demographic factors, such as population density.
a.
Technological
b.
Sociocultural
c.
Legal-political
d.
Internal
e.
Economic
14. Anyone considering doing business in China, according to Spotlight on Skills in Chapter 2, should
keep in mind all of the following rules except:
a.
Business is always personal
b.
Don’t skip the small talk
c.
Remember that relationships are not short-term
d.
Be efficient with use of time
e.
Make contact frequently
15. Which of the following rules, according to Spotlight on Skills in Chapter 2, is about forging an
emotional bond?
a.
Don’t skip the small talk
b.
Business is always personal
c.
Remember that relationships are not short-term
d.
Make contact frequently
e.
Be efficient with use of time
16. Lying at the heart of Chinese culture, ____ is a supportive, mutually beneficial connection between
two people.
a.
kaizen
b.
ganqing
c.
renqing
d.
kansei
e.
guanxi
17. The general environment dimension that includes consumer purchasing power, the unemployment rate,
and interest rates is called the
a.
legal-political dimension.
b.
sociocultural dimension.
c.
technological dimension.
d.
economic dimension.
e.
task dimension.
18. A government inspection has required your company to upgrade the safety equipment in the
manufacturing process of ice creamery. What dimension of the external environment has influenced
these upgrades?
a.
Technological
b.
Legal-political
c.
Task
d.
Sociocultural
e.
Economic
19. The ____ dimension of the general environment includes federal, state, and local government
regulations.
a.
technological
b.
legal-political
c.
economic
d.
sociocultural
e.
international
20. An interest group that works within the legal-political framework to influence companies to behave in
socially responsible ways is called a(n)
a.
pressure group.
b.
legal group.
c.
political influence group.
d.
social group.
e.
none of these.
21. Which of the following dimensions of the general environment includes all elements that occur
naturally on earth?
a.
Sociocultural dimension
b.
Technological dimension
c.
Economic dimension
d.
Natural dimension
e.
Environmental dimension
22. The people and organizations in the environment who acquire goods or services from the organization
are
a.
competitors.
b.
suppliers.
c.
customers.
d.
employees.
e.
potential employees.
23. Integrated Computers, Inc. wants to compile a profile of the customer it will target in its next
promotional mailing. What environment would this be found in?
a.
Internal environment
b.
Task environment
c.
Work environment
d.
General environment
e.
None of these
24. For Southwest Airlines, all of the following can be suppliers EXCEPT
a.
Exxon (providing jet fuel).
b.
Citibank (providing finances).
c.
Delta Airlines (providing competition).
d.
Boeing (providing planes).
e.
All of these are suppliers for Southwest Airlines.
25. ____ is(are) included in an organization’s task environment.
a.
Suppliers
b.
Accounting procedures
c.
Technology
d.
Government
e.
Demographic characteristics
26. The ____ represents people in the environment who can be hired to work for the organization.
a.
competitors
b.
labor market
c.
suppliers
d.
customers
e.
government
27. Ally’s Applesauce is in the process of hiring sixty new workers. The personnel department has a large
pool of unskilled labor to draw from due to the high unemployment rate in the local area. Which
dimension of the external environment is involved here?
a.
Sociocultural
b.
Competitors
c.
Technological
d.
Labor market
e.
Legal-political
28. The internal environment within which managers work includes all of the following EXCEPT
a.
corporate culture
b.
production technology
c.
organization structure
d.
physical facilities
e.
labor market
29. Which of the following roles are assumed by people and/or departments that link and coordinate the
organization with key elements in the external environment?
a.
Figurehead
b.
Liaison
c.
Boundary-spanning
d.
Disturbance handler
e.
Leader
30. Which of the following is NOT a part of adapting the organization to changes in the environment for
coping with high environmental uncertainty?
a.
Boundary-spanning roles
b.
Advertising/public relations
c.
Mergers/joint ventures
d.
Interorganizational partnerships
e.
All of these are a part of organizational response in adapting the organization to changes in
the environment.
31. Based on the notion that organizations are dealing with a very turbulent and uncertain external
environment, more organizations are requiring ____ to perform boundary-spanning activities.
a.
top leaders
b.
middle managers
c.
line managers
d.
all employees
e.
suppliers
32. Many organizations are adapting to the environment by developing more of a(n) ____ relationship
rather than a(n) ____ relationship with competitors.
a.
adversarial, partnership
b.
partnership, adversarial
c.
strategic, competitive
d.
competitive, strategic
e.
none of these
33. When two or more organizations combine to become one, it is referred to as a
a.
joint venture.
b.
flexible structure.
c.
mechanistic structure.
d.
merger.
e.
inorganic venture.
34. Culture can be defined as
a.
the set of key values, beliefs, understandings, and norms shared by members of an
organization
b.
the ability to speak different languages
c.
an object, act, or event that conveys meaning to others
d.
a narrative based on true events that is repeated frequently and shared by organizational
employees
e.
none of these
35. The level of corporate culture which cannot be seen but can be discerned from how people explain and
justify what they do is
a.
Invisible artifacts
b.
Expressed values and beliefs
c.
Slogans and ceremonies
d.
Dress and office layout
e.
None of these
36. The level of corporate culture in which values are so deeply embedded that members are no longer
consciously aware of them is
a.
Invisible artifacts
b.
Expressed values and beliefs
c.
Underlying assumptions and deep beliefs
d.
Dress and office layout
e.
Slogans and ceremonies
37. ____ are associated with surface level of organizational culture.
a.
Values
b.
Norms
c.
Manners of dress
d.
Beliefs
e.
All of these
38. Which of the following would be considered a visual representation(s) of a company’s corporate
culture?
a.
All department heads have an executive office.
b.
Each department has an award plaque for employee of the month.
c.
All employees are dressed in professional business attire.
d.
Top level executives drive company owned sports car.
e.
All of these.
39. An object, act, or event that conveys meaning to others is referred to as a
a.
symbol.
b.
slogan.
c.
story.
d.
hero.
e.
culture.
40. Symbols, stories, and heroes are important because they
a.
entertain executive level management.
b.
address the concerns of government.
c.
acquaint customers to the organization.
d.
communicate the significant values of an organization.
e.
give employees something to talk about.
41. ____ is a narrative based on true event that is repeated frequently and shared by organizational
employees.
a.
Symbol
b.
Slogan
c.
Story
d.
Hero
e.
Culture
42. A figure who exemplifies the deeds, character, and attributes of a corporate culture is referred to as a
a.
symbol.
b.
story.
c.
slogan.
d.
hero.
e.
culture.
43. Heroes are important to an organization due to the fact that they
a.
exemplify key values of the organization.
b.
exemplify a strong corporate culture.
c.
serve as examples to other employees.
d.
all of these.
e.
none of these.
44. A ____ represents a phrase or sentence that succinctly expresses a key corporate value.
a.
symbol
b.
story
c.
culture
d.
hero
e.
slogan
45. McDonald’s “We Love to See You Smile” represents a
a.
ceremony.
b.
symbol.
c.
ritual.
d.
slogan.
e.
political activity.
46. “Chiquita. Perfect for Life.” was Chiquita’s
a.
ceremony.
b.
slogan.
c.
symbol.
d.
ritual.
e.
all of these.
47. If a company emphasizes that “no purchase is complete until the customer is satisfied,” then it’s
a.
utilizing a symbol.
b.
communicating its values to customers.
c.
using a slogan to present their values to customers and employees.
d.
utilizing a hero for the purpose of conveying values.
e.
using customers to harass the employees.