Name: Essentials of Contemporary Management 6Th Canadian Edition By Gareth R Jones - Test Bank - Eazyquizes
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Essentials of Contemporary Management 6Th Canadian Edition By Gareth R Jones – Test Bank

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Chapter 02

Managing the Organizational Environment

True / False Questions

Globalization has resulted in restricted capital flows.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Explain the changes in the global economy that lead to opportunities and threats for managing organizations.
Topic: 02-05 The Global Environment

Globalization is a set of forces that work together to integrate and connect systems across countries.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Explain the changes in the global economy that lead to opportunities and threats for managing organizations.
Topic: 02-05 The Global Environment

With globalization, nations become increasingly similar and interdependent.
TRUE

The organizational environment changes over time and therefore presents managers with opportunities and threats.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Explain the importance of understanding the organizational environment for managerial success.
Topic: 02-01 What Is the Organizational Environment?

The organization’s internal environment is divided into the task environment and the general environment.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Explain the importance of understanding the organizational environment for managerial success.
Topic: 02-01 What Is the Organizational Environment?

The internal organizational environment includes the culture and structure of the organization.
TRUE

The task environment (or industry-specific environment) is a set of external forces that affect an organization’s ability to obtain inputs and dispose of outputs.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Identify the main forces in an organization’s external environment and the challenges these forces present to managers.
Topic: 02-02 The External Organizational Environment

The task environment includes economic, technological, socio-cultural, demographic, political and legal, and global forces.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Identify the main forces in an organization’s external environment and the challenges these forces present to managers.
Topic: 02-02 The External Organizational Environment

The general environment includes economic, technological, socio-cultural, demographic, political and legal, and global forces.
TRUE

The general environmental forces pose easily identifiable opportunities and threats for managers.
FALSE

Forces in the industry-specific environment have immediate and direct effects on a managers’ ability to obtain resources or sell an organization’s goods and services.
TRUE

Overseas suppliers are increasingly specializing in just one part of the task of producing a product.
TRUE

The power of a distributor may get stronger if there are too many options for manufacturers and wholesalers to sell their products directly to customers.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Identify the main forces in an organization’s external environment and the challenges these forces present to managers.
Topic: 02-03 The Industry-Specific or Task Environment

Suppliers are individuals or firms that provide an organization with inputs that it needs to produce goods and services.
TRUE

Differences in customer preferences result in many companies standardizing products for different national markets.
FALSE

The suppliers, customers, and distributors that affect the organization’s ability to obtain inputs and to sell its outputs are forces in the task or industry-specific environment.
TRUE

A high level of rivalry between firms often results in price competition, and falling prices reduce access to resources and cause profits to decrease.
TRUE

All potential competitors are considered organizations that are part of the task environment.
FALSE

The wide-ranging set of forces and conditions that operate beyond an organization’s boundaries and affect the organization are known as forces in the general environment.
TRUE

For the typical manager, opportunities and threats resulting from changes in the task or industry-specific environment are more difficult to identify than events in the general environment.
FALSE

The task environment is also known as the industry-specific environment.
TRUE

Organizations which help other organizations to sell their goods and services to customers are known as distributors.
TRUE

Groups which buy goods that another organization produces are known as suppliers.
FALSE

An organization’s “competitors” are those organizations which try to sell their goods to the same customers as the organization is trying to sell its goods.
TRUE

A shift in the age distribution of the population of Canada is an example of a demographic force.
TRUE

The outcomes of the changes in the laws of a country are examples of the political and legal forces in the environment.
TRUE

Economic forces in the general environment include interest rates, inflation, and unemployment.
TRUE

Deregulation is an example of a socio-cultural force in the general environment that affects organizations.
FALSE

The global financial meltdown from 2008 to 2010 was a result of too much risk-taking and not enough oversight.
TRUE

Although cultures differ enormously around the world, most social structures are very similar.
FALSE

In the United States, collectivism is highly valued.
FALSE

Most industrialized nations are experiencing the aging of their populations as a consequence of falling birth and death rates and the aging of the baby boom generation.
TRUE

The manager’s job is being fundamentally changed by new technology.
TRUE

The social structure of a country affects the socio-cultural forces acting on organizations.
TRUE

The aim of import tariffs is to foster growth opportunities for foreign investors.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-03 Explain the changes in the global economy that lead to opportunities and threats for managing organizations.
Topic: 02-06 Declining Barriers to Trade and Investment

Declining barriers to trade and investment have facilitated globalization.
TRUE

On average, the tariff barriers among the governments of developed countries declined from over 40 percent in 1948 to about 3 percent today, causing a dramatic increase in world trade.
TRUE

The free-trade doctrine predicts that if each country agrees to specialize in the production of the goods and services that it can produce most efficiently, this will make the best use of global capital resources and will result in lower prices.
TRUE

Barriers of distance and culture have closed the global environment and kept managers focused on their domestic market.
TRUE

Since the end of the Second World War, a continuing stream of advances in communications and transportation technology has worked to reduce the barriers of distance and culture that affected Unilever and all global organizations.
TRUE

One of the most important innovations in transportation technology that has opened the global environment has been the growth of commercial jet travel.
TRUE

The establishment of free-trade areas creates an opportunity for manufacturing organizations because it lets them reduce their costs.
TRUE

Some managers view regional free-trade agreements as a threat because they expose a company based in a one-member country to increased competition from companies based in the other member countries.
TRUE

In general, the larger an organization is, the greater is the number of environmental forces that managers must respond to.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-04 Explain the ways managers can minimize threats and uncertainty from forces in the external environment.
Topic: 02-09 Managing the External Environment

The task of the top-management team in reducing the impact of environmental forces, is to create strategies that will take advantage of opportunities and counter threats.
TRUE

The main task of middle managers is to collect relevant data on forces in the task environment.
TRUE

Marketing department managers handle pressures from suppliers.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-04 Explain the ways managers can minimize threats and uncertainty from forces in the external environment.
Topic: 02-10 Reducing the Impact of Environmental Forces

Sales and service department managers handle pressures from customers.
TRUE

Financial managers and accounting departments handle the forces in the economic realm.
TRUE

Changes in technological forces are dealt with by Research and Development department managers.
TRUE

The highest degree of uncertainty for a manager occurs when the rate of change and the degree of complexity in the environment is high.
TRUE

By better connecting companies’ success with societal improvement, it opens up many ways to serve new needs, gain efficiency, create differentiation, and expand markets.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-05 Evaluate the major challenges managers face in gaining a competitive advantage in the global economy.
Topic: 02-12 Challenges for Management in a Global Environment

Shared value creation focuses on identifying and expanding the connections between societal and economic progress.
TRUE

The prominence of global organizations is putting pressure on managers of all organizations to improve their performance.
TRUE

To gain a competitive advantage in the global economy, firms can use five building blocks.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-05 Evaluate the major challenges managers face in gaining a competitive advantage in the global economy.
Topic: 02-13 Building a Competitive Advantage

The four building blocks of a competitive advantage are increasing efficiency, offering superior quality, creating new or better products, and being responsive to customer needs.
TRUE

Managers face the following challenges in today’s global economy: creating shared value in building a competitive advantage, maintaining ethical standards, and utilizing new technologies.
TRUE

Codes of ethical conduct are a useful tool for managers to train and control the behaviour of employees and partners.
TRUE

Multiple Choice Questions

Which of the following represents a threat to managers by large distributors?
A.Controlling customer access to an organization’s goods and services
B. Increasing orders
C. Changing demographics
D. Socio-cultural impact
E. Efficiently managing uncertainty and change in an evolving market

All of the following are considered potential customer of a computer manufacturer, except:
A.small businesses
B. government agencies
C. colleges
D. individuals
E. the environment

The letter ‘T’ in the PESTI acronym stands for:
A.Threats
B. Technology
C. Transnational
D. Translation
E. Tariffs

The combination of equipment and skills which managers use in the production and distribution of goods is known as:
A.economies of scale
B. inflation
C. competitive advantage
D. technology
E. the general environment

All of the following are examples of the industry-specific or task environment of the organization, except:
A.distributors
B. customers
C. competitors
D. suppliers
E. technological forces

Organizations which produce goods that are similar to another organization’s goods are known as:
A.suppliers
B. distributors
C. competitors
D. customers
E. intermediaries

Regional trade agreements like NAFTA result in all except which of the following?
A.Declining barriers to trade
B. Increased capital flows between partner nations
C. Decline in labour intensive production in Canada and the USA
D. Opportunities for managers to expand internationally
E. Decreased competition

All of the following are examples of the general environment of the organization except:
A.demographic forces
B. legal and political forces
C. distributors
D. global forces
E. technological forces

Organizations which supply another organization with the raw materials which it needs to produce goods are known as:
A.suppliers
B. competitors
C. distributors
D. customers
E. potential competitors

Organizations which help other organizations to sell their goods to customers are known as:
A.competitors
B. potential competitors
C. distributors
D. customers
E. consultants

The power of a distributor may be weakened if:
A.there is only one intermediary
B. there are too many options for manufacturers and wholesalers
C. direct sales to final consumers are prohibited
D. trade barriers are removed
E. competition decreases

Changes in the work patterns of women such as a larger percentage of mothers with children under the age of five are working would be an example of which type of force on the organization?
A.General environment
B. Task environment
C. Economic environment
D. Political environment
E. Legal environment

Chapter 04

Managing Planning and Strategy

True / False Questions

Planning is a three-step activity.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-01 Describe how planning and strategizing are related to organizational performance and competitive advantage.
Topic: 04-01 Planning and Strategy

The five steps in the planning process are: determining the vision, mission and major goals of the organization; analyzing the forces in the environment; formulating strategies to accomplish goals; implementing those strategies; and evaluating the success of the strategy in achieving the mission and goals.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-01 Describe how planning and strategizing are related to organizational performance and competitive advantage.
Topic: 04-01 Planning and Strategy

An SOP is a written instruction describing the exact series of actions that should be followed in a specific situation.
TRUE

Planning gives managers a sense of direction and purpose.
TRUE

In general, corporate-level planning is the primary responsibility of top management while business-level planning is the primary responsibility of supervisors.
FALSE

First-line managers are responsible for tactical plans with short-term time horizons for their departments or teams.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-01 Describe how planning and strategizing are related to organizational performance and competitive advantage.
Topic: 04-03 Levels of Planning and Types of Plans

The intended duration of a plan is known as a rolling plan.
FALSE

A rolling plan is one that is updated every year to reflect changes in the organizational environment.
TRUE

Corporate and business-level plans are generally short term relative to functional level plans.
FALSE

Standing plans are used in situations in which programmed decision making is appropriate while single-use plans are developed to handle nonprogrammed decision making in unusual or one-of-a-kind situations.
TRUE

Plans are prepared statements of intent, they cannot be altered without board approval.
FALSE

Effective plans have only two qualities: unity and continuity.
FALSE

Henri Fayol said that effective plans have five qualities.
FALSE

Scenario planning is the same thing as contingency planning.
TRUE

An example of contingency planning is when shell oil generated multiple scenarios about conditions in the world oil market that might prevail in the future, and then developed plans of what the company should do in the event that any of these scenarios actually occurred.
TRUE

Managers use scenario planning to generate different future scenarios of conditions in the environment.
TRUE

Crisis management is the same as contingency planning.
FALSE

The degree to which a firm can recover from a crisis depends on how transparent and open the top managers are with stakeholders.
TRUE

The goal of GE lighting to reduce production costs by 20% over three years is a corporate-level goal.
FALSE

The goal of GE lighting to reduce production costs by 20% over three years is a functional-level goal.
TRUE

A mission statement is a broad declaration of the organization and/or a statement of its dreams for the future.
FALSE

A mission statement is a broad declaration of an organization’s overriding purpose intended to identify its products and customers and distinguish itself from other similar organizations.
TRUE

Good goal formulation means making goals which are SMART + C.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-05 Defining the Vision, Mission, and Goals

The following is an example of a vision statement: “a computer on every desk, in every home, and in every office.”
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-05 Defining the Vision, Mission, and Goals

A goal is a broad declaration of the organization and/or a statement of its dreams for the future.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-05 Defining the Vision, Mission, and Goals

The first step of the planning process is the determination of the organization’s vision, mission, and goals.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-05 Defining the Vision, Mission, and Goals

The organization’s vision is generally set by the CEO.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-05 Defining the Vision, Mission, and Goals

In the second step of the planning process, managers decide how to allocate the resources required to implement the strategies.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-04 Steps in the Planning Process

In the second step of the planning process, managers analyze the organization’s current strengths and weaknesses to formulate strategy.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-04 Steps in the Planning Process

Two techniques managers can use to analyze the organizational environment for threats and opportunities are SWOT and Porter’s Four Forces model.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-04 Steps in the Planning Process

A SWOT analysis stands for systems, weaknesses, opportunities, and technologies.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-03 Explain how managers use planning techniques to evaluate the opportunities and threats in the organization’s environment and formulate strategy.
Topic: 04-07 SWOT Analysis

The letter “O” in the SWOT acronym stands for “obligation.”
FALSE

A SWOT analysis begins with an examination of the internal dynamics of the organization.
TRUE

Michael Porter identified four factors that are major threats in the external environment.
FALSE

Michael Porter’s Five Forces model is a well-known model that helps managers isolate forces in the external environment that are potential threats.
TRUE

Corporate strategies include concentrating on a single business, diversification, international expansion, and vertical integration.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-04 Differentiate among corporate-level; business-level; and functional-level strategies.
Topic: 04-10 Corporate-Level Strategy

Retrenching and concentrating on a single industry is an example of a corporate-level strategy.
TRUE

A business-level strategy is called differentiation when a firm sets itself apart from the competition by adopting superior quality.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Differentiate among corporate-level; business-level; and functional-level strategies.
Topic: 04-10 Corporate-Level Strategy

“To reduce costs in all departments below that of rival competitors.” – This statement is an example of a business-level strategy.
TRUE

Attaining superior quality products and services is a way of gaining a competitive advantage in a particular market or industry.
TRUE

A cost-leadership strategy is a business-level strategy that serves many market segments.
TRUE

Private label brands like President’s Choice and No Name brands exemplify a differentiation strategy.
TRUE

A differentiation strategy is one in which the managers try to distinguish the organization’s product from the products of competitors.
TRUE

Differentiation tends to increase the costs of products which can be recouped by charging higher prices.
TRUE

According to Porter, managers must choose between two basic ways of increasing the value of an organization’s products: higher quality or lower costs.
TRUE

XYZ Corp, a hypothetical retailers of consumer goods pursues a focused differentiation strategy in that it focuses on large retail chains and strives to be the lowest-cost company serving that segment of the market.
FALSE

Luxury car producers follow a focused-differentiation strategy.
TRUE

Departments such as sales and marketing formulate business-level strategies.
FALSE

Functional-level strategies add value to the company or lower the costs of creating value.
TRUE

An example of adding value in the research and development department of an organization is to improve existing products.
TRUE

A functional-level strategy to accomplish the goal of reducing costs in the production department, might be to invest in state-of-the-art European facilities.
TRUE

Evaluating the success of the strategy involves monitoring progress, evaluating performance, and taking corrective action to make sure that the mission and goals are being achieved.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-15 Evaluating Strategy

Strategy implementation involves three steps.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-14 Strategy Implementation

Implementation of strategy involves establishing a timetable that includes when goals are scheduled to be completed, such as a Gantt chart.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-14 Strategy Implementation

Implementing a strategy may require redesigning the structure, changing the culture, and developing new control systems in the organization.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-14 Strategy Implementation

Multiple Choice Questions

Which of the following is an important reason for planning?
A.Planning is a useful way of getting managers to participate in decision making
B. Planning is a means to give the organization a sense of direction
C. A plan can be useful as a device for controlling managers
D. A plan helps coordinate managers of the different divisions to ensure that they all pull in the same direction
E. All of these choices are important reasons for planning

Qualities of good goal formation include all of the following, except:
A. Specific
B. Measurable
C. Accountable
D. Time-related.
E. Realistic

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Describe planning as a five-step process.
Topic: 04-05 Defining the Vision, Mission, and Goals

Which of the following qualities of an effective plan suggests that at any time only one central, guiding plan should be put into operation to achieve an organizational goal?
A.Unity
B. Continuity
C. Accuracy
D. Flexibility
E. Vertical integration

Which aspect of planning is emphasized when it is said that managers need to make every attempt to collect and utilize all available information at their disposal?
A.Unity
B. Continuity
C. Accuracy
D. Flexibility
E. Vertical integration

Implementing strategy includes all of the following steps, except:
A.Allocating responsibility
B. Drafting a detailed action plan
C. Allocating appropriate resources
D. Establishing a timetable
E. Analyzing the environment

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-14 Strategy Implementation

Implementing strategy may require:
A.Allocating responsibility
B. Creating detailed action plans with a timeframe for achieving specific goals
C. Allocating appropriate resources
D. Holding specific people accountable for performance
E. All of the choices are correct

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-14 Strategy Implementation

A plan that indicates how a division intends to compete against its rivals in an industry is known as a:
A.corporate-level plan
B. corporate-level strategy
C. business-level plan
D. business-level strategy
E. functional-level plan

A plan that indicates in which industries and national markets an organization intends to compete is known as:
A.corporate-level plan
B. corporate-level strategy
C. business-level plan
D. business-level strategy
E. functional-level plan

Evaluating strategy involves which of the following?
A.Monitoring progress
B. Evaluating performance levels
C. Comparing performance against goals
D. Making corrections if the strategy is not achieving the mission and goals
E. All of these choices are part of evaluating strategy

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Describe how managers implement strategy and evaluate its success.
Topic: 04-15 Evaluating Strategy

The strategy in which managers try to gain a competitive advantage by focusing the energy of all the organization’s departments or functions on driving the organization’s costs down below the costs of its rivals is called:
A.Concentration on a single industry
B. Diversification
C. Cost leadership
D. International expansion
E. Vertical integration

All of the following are examples of corporate-level strategies except:
A. Concentration on a single industry
B. Diversification
C. Cost leadership
D. International expansion
E. Vertical integration

With a differentiation strategy, managers may try to gain a competitive advantage by distinguishing their products or services from competitors on all of the following dimensions, except:
A.Product design
B. Product quality
C. Customer service
D. Customer support
E. Distribution channels

When a company targets a specific language group to sell its products to, it is using a _______ strategy.
A.low-cost
B. focused
C. differentiation
D. cost-leadership
E. Stuck-in-the-middle

Successful innovation that gives a department something unique that its rivals lack is a(n) __________ strategy.
A.low-cost functional
B. corporate-level
C. differentiation
D. efficient
E. focused cost leadership

Through the use of a ________, managers try to gain a competitive advantage by driving the organization’s costs down below the cost of its rivals.
A.related diversification strategy
B. formulation strategy
C. differentiation strategy
D. cost-leadership strategy
E. vertical strategy

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Essentials of Contemporary Management 6Th Canadian Edition By Gareth R Jones – Test Bank

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Essentials of Contemporary Management 6Th Canadian Edition By Gareth R Jones – Test Bank

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