Chapter 3—The Environment and Culture of Organizations Key
1. Effective management recognizes the key elements of its environment and its ideal alignment and works to
achieve and maintain that alignment.
2. Task environments are the same from organization to organization because each company functions in the
same global environment.
3. Not all parts of the external and internal environment are equally important for all organizations.
4. The technology an organization uses is part of its internal environment.
5. The Labor Day holiday leads to more Americans driving, which leads to higher gas prices at the pump. This
is an example of the sociocultural element of the general environment.
6. Zoning regulations in some communities require significant landscaping around and in parking lots. This is
an example of the sociocultural element of the general environment.
7. Companies operating in only one country have no international dimension.
8. Managers can disregard the general environment because it is vague, imprecise, and long term.
9. When used in the task environment, the term competitor is limited to a firm that competes with another for
customers.
10. Barnes and Noble and Starbucks are suppliers.
11. Temporary employees or temps are organized into labor unions.
12. While managers strive to align their firms with the external environment, they must also remember that their
own work is carried out within the internal environment of their firms.
13. The physical work environment is becoming increasingly closed, requiring people to work from home.
14. The board of directors is responsible for acting in the best interest of executives.
15. Organizations use boundary spanners, an information management technique, to respond to their
environments.
16. Culture is the foundation of the organization’s internal environment.
17. Boeing and GE work together designing aircraft and engines respectively. They are an example of using an
alliance to respond to the environment.
18. Pharmaceutical companies that advise viewers of their commercials to “ask your doctor about…” are
engaging in direct influence.
19. Organizations influence their regulators through lobbying and bargaining.
20. Michael E. Porter’s five competitive forces are competitors, customers, suppliers, strategic partners, and
regulators.
21. An erratic economy increases uncertainty.
22. The internal process approach focuses on the degree to which an organization reaches its goals.
23. The goal approach focuses on the groups that have a stake in the organization.
24. Which of the following statements does NOT describe a characteristic of an organization’s external
environment?
25. ____ is a key part of the manager’s job.
26. When entrepreneur Gene Reilly’s dog couldn’t drink water, he developed a canine sports drink, which he
marketed and called Rebound. Which of the following is part of the general environment for Reilly’s company?
27. When a locally owned construction firm fears new competition from a national chain such as Toll Brothers
moving in, it is experiencing a change in its
28. The general environment of organizations have all EXCEPT which dimension?
29. General Motors sold an auto parts company because profitability was low. The primary environmental
dimension considered was
30. When HTC offered the first cell phone with a button dedicated to Facebook, it was responding to changes in
the ____ environmental dimension.
31. An organization’s general environment
32. When Kate Middleton started wearing pantyhose, sales in the UK increased 85%. That is an example of
which environment?
33. In 2011, unemployment was the highest it had been in more than a decade. This is part of the ____
dimension of organizations.
34. A(n) ____ would come under the heading of the economic element of the general environment.
35. The downgrade of U.S. federal debt created wild swings in the stock market. The uncertainty led to
consumer caution and less spending. This is an example of the ____ dimension.
36. The interest rates are an important aspect of which environment?
37. Which of the following events would NOT have a significant impact on an organization’s general
environment?
38. McAfee announced the detection of electronic spying by a foreign nation on the International Olympic
Committee before the Beijing Olympics. This is part of the ____ environment of the IOC.
39. The ____ dimension refers to the methods available for converting resources into products and services.
40. Twenty years ago most business failures were attributed to poor inventory management. Today
point-of-sales terminals are used at the checkout counters of most retail stores. These terminals allow retailers to
know what is selling, to see what needs to be reordered, and to better satisfy customers while not over investing
in inventory. Point-of-sales terminals have greatly influenced how retailers interact with the ____ dimension of
the general environment.
41. Executives carry smart phones that keep them connected to people and information all day. This is an
example of the ____ dimension of the external environment.
42. Many corporations have sophisticated security systems for information and employees. Which dimension of
the organization’s environment do these systems represent?
43. The ____ is the portion of an organization’s environment that deals with morals, values, and demographic
characteristics.
44. The death of Farrah Fawcett to anal cancer opened discussions that previously were taboo in the U.S. This is
an example of change in the
45. At the University of Miami a wealthy booster (now serving time in federal prison) said he spent millions on
cash, hookers, and entertainment for football players with the coaches knowledge.
46. ____ is(are) part of an organization’s general environment.
47. Flowers can be purchased from florists, supermarkets, discount stores, and street vendors. In the 1920s, the
most popular flower was the narcissus. In the 1960s, daisies were extremely popular. In the latter part of the
twentieth century, roses were popular. This changing taste in flowers reflects changes in the ____ dimension of
the general environment.
48. Facebook has enabled people to stay in contact with friends. It also hurts relationships when too much
information is shared. This reflects the ____ element of the general environment.
49. Some consumers are willing to pay thousands of dollars for plastic surgery in an attempt to gain an
advantage over others. This is an example of the ____ dimension.
50. Sociocultural forces
51. When a deep water oil rig exploded in the Gulf of Mexico, the Obama administration initially imposed a
moratorium on deep water drilling. This is an example of the ____ dimension.
52. For more than a century, Americans moved from rural to metropolitan areas. Then in the 1950s, Americans
made a mass exit from the city to the suburbs. Now many of these suburb dwellers are moving back to the rural
areas. They are developing micropolitan areas, which offer many of the advantages of the metropolitan areas,
but without the population crush, the traffic jams, and the high crime rates. This trend affects the location of
many businesses and is part of the ____ dimension in which they operate.
53. The relationship between business and government is part of the ____ dimension.
54. A jihadist called for a violent attack on David Letterman after the comedian made fun of Al Qaeda leaders.
Letterman rarely does a single show without making fun of American leaders. This is an example of differences
in the ____ dimension.
55. The Dodd-Frank Wall Street Reform and Consumer Protection Act is legislation that creates more
regulation of the finance markets. This is an example of the ____ dimension.
56. The Patient Protection and Affordable Care Act (PPACA, or Obamacare) requires individuals to obtain
health insurance. This is an example of the ____ dimension.
57. Julie is responsible for her company’s military veteran mentor program. She will have to operate in the ____
environment.
58. Which of the following is a reason that virtually every organization is affected by the international
dimension?
59. The extent to which an organization is affected by or involved in businesses in other countries refers to its
60. The task environment is more specific than the general environment. It includes all EXCEPT
61. All of the following are included in the task environment EXCEPT
62. Competitors are BEST described as
63. Social media impacts the amount of mail sent through the U.S. Postal Service. This is an example of ____.
64. Which of the following would NOT be an example of a competitor?
65. Wells Fargo provides mortgages. Homebuyers are potential ____.
66. In one year hospitals around the country ran out of 180 different drugs. The pharmaceutical companies are
____ to hospitals.
67. What do a market research firm, Kelly Temporary Services, BusinessWeek magazine, and Citicorp Bank all
have in common?
68. The Federal Communications Commission monitors radio broadcasts for inappropriate content. This is an
example of the ____ component.
69. Which of the following is NOT one of the elements in the task environment for St. Jude Children’s
Hospital?
70. The regulator element of the task environment consists of
71. Which of the following statements is NOT characteristic of strategic alliances as an element of the task
environment?
72. One of the basic forms of regulator is a(n)
73. A(n) ____ is two or more companies that work together in joint ventures.
74. When KFC wanted to enter the Japanese market, it contacted Mitsubishi, one of Japan’s largest poultry
producers. Mitsubishi provided an understanding of Japanese culture and some of the financing, while KFC
provided the rest of the financing and its franchising expertise. The activities of KFC and Mitsubishi took place
in the ____ component of the task environment.
75. Outside members of the board of directors are usually chosen
76. ____ is an element in the organization’s internal environment.
77. The internal environment of a corporation consists of
78. The components of the internal environment do NOT include which of the following?
79. Which of the following is part of the internal environment for Taco Bell?
80. Workers who purchase company stock have a dual role in the internal environment as
81. Chelsea Lumber Company has very low turnover, and the employees are frequently seen volunteering in the
community. This suggests a(n) ____ where employees and the communities are highly valued.
82. The extent to which the environment is relatively stable or dynamic is referred to as the degree of
83. The degree of ____ is the extent to which the organizational environment is relatively simple or complex.
84. One of the basic frameworks used to describe how environments affect organizations is
85. The level of ____ faced by organizations is determined by the degree of homogeneity and the degree of
change in their environments.
86. The culture of an organization is often established by the
87. The least environmental uncertainty is faced by organizations with a ____ environment.
88. In a scandal at Tyco, shareholders sued the ____ for negligence in failing to monitor properly.
89. A manufacturer of recyclable plastic containers is operating in an environment that is relatively free of
uncertainty. This means that the manufacturer is operating in a ____ environment.
90. A dynamic environment is one that