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Exam 2: The External Environment and Organizational Culture

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Question 71

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Which of the following scenarios would be the most favorable to an existing firm in the industry according to the Porter model of the competitive environment?

A) Many competitors,few entry barriers,and few customers.
B) Many competitors,high threat of entry,many customers.
C) Few entry barriers,many substitutes,many customers.
D) High industry growth,many barriers to entry,customers have low bargaining power.
E) Low industry growth,few barriers to entry,suppliers have low bargaining power.

F) A) and D)
G) B) and E)

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Question 72

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Higher Place University has just formed a board of trustees and invited 25 of its wealthiest alumni to join.In this example HPU is demonstrating

A) contraction.
B) cooptation.
C) coalition.
D) political action.
E) voluntary action.

F) B) and E)
G) A) and E)

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Question 73

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Discuss three independent strategies that a firm may use as a proactive response to its environment.

Jay recently was promoted to a management position in a firm that had been extremely bureaucratic.However,the environment changed dramatically and the new management team knew it needed to change the organization quickly if it was to survive.Jay suggested that the management team allow the employees to develop more confidence in their ability to do a good job by sharing power with them.The others on the team were skeptical,but they allowed Jay to experiment.In this situation Jay is suggesting using __________ to increase employee confidence in their ability to do the job.

Management of the network of facilities and people that obtains materials from the outside,transforms them into products and distributes the products to customers is called

A strong organization culture is one in which everyone understands and believes in the firm's goals,priorities and practices.

All organizations operate in a macroenvironment.

Differentiate between the following four strategic maneuvers: domain selection,diversification,merger and acquisition,and divestiture.

The external environment includes all relevant forces outside the organization's boundaries.

Wal-Mart recently engaged Amazon.com in an online price war in an attempt to become the largest Internet retailer in the world.This is an example of __________ on the part of Wal-Mart.

Insurance for a car is a complementary product/service for the car.

Sam's Siding traditionally provides sub-contracting services to construction firms.There are many firms like Sam's in the marketplace and Sam's does about 85% of their work for Bill's Building.Bill typically negotiates quite heavily with his prospective customers,which ultimately reduces Sam's profits.This situation is indicative of the high bargaining power of

Creating supplies of excess resources in case of unpredictable needs is called

Scenario A. Connie's Collectibles is a small antique jewelry store that specializes in antique jewelry. In analyzing the environment, Connie has uncovered several interesting findings: 1. Connie has recently purchased more inventory than in the past. The customers from whom she buys are selling off more jewelry because their children are not interested in this type of jewelry and these customers would prefer to liquidate their jewelry to help them with their daily expenses since they no longer wear most of it. 2. Connie has recently discovered that her business is in a historical preservation district so as she considers remodeling the shop, she has found she must pay attention to the guidelines set forth in the governing laws. 3. Connie's buyer-customer base seems to be changing. The tastes of the younger generation near her shop are shifting to modern jewelry so the customer base to which she sells is shrinking. 4. Connie has been told that she should investigate selling her inventory via the Internet but she does not own (or understand how to use) a computer. 5. In reading a survey of regional business, Connie discovered that there are no other antique jewelry stores within a 200 mile radius of hers. -Finding 2 is most closely associated with which element of the macroenvironment?

Which of the following would be considered a consumer?

While the stock market can impact a firm,it has no effect on the behavior of individual managers.

Scenario D. Margarita works for a small company, which processes and cans tomatoes and other vegetables. She reports to the CFO. It is her job to predict the costs of raw materials for the next five years. She uses various research sources including the news to learn who the competition is and what they have been doing. In fact she subscribes to an analyst e-newsletter that tells her about crop availability and weather conditions all around the globe. Every month she develops a spreadsheet for her boss indicating the likely costs of vegetables given the type of weather conditions expected in each area of the world and thus the availability of particular crops. She is also involved in a team that is investigating how to cut canning costs. They have recently met with Good Cans, a company that manufactures and cans tennis balls. Good Cans is considered the top company in the canning industry, especially around canning process knowledge and Margarita's team is comparing their processes to those of Good Cans to see how they might improve. -When predicting the costs for her company,Margarita is engaging in

An outcome of environmental scanning is __________,the information necessary to decide how best to manage in the competitive environment managers have identified.

Which of the following is an element of Michael Porter's model for analyzing the competitive environment?

The competitive environment consists of