Chapter 2

External Environment

Customers, suppliers, and competitors are part of an organization's ______________.

ethical leadership

Debra notes that Theo Chocolate has started holding its own operations to the same IMO standards of fair trade to which it holds its suppliers. This type of _______________ sends a powerful message to employees and customers.

what's right and what's wrong

Ethics is an individual's set of beliefs about ______________.

External environment

Everything outside an organization that might affect it - contains the general environment and the task environment

Managerial ethics

______________ are standards of behavior that guide individual managers in their work.

whistle-blowing

_______________ is an employee's disclosure of illegal or unethical conduct within the organization.

philanthropic giving

_______________ is the donation of resources to charities or other worthy causes.

Internal

The __________ environment consists of conditions and forces within the organization.

Internal

The __________ environment of business consists of the owners, board of directors, employees, and physical work environment.

Technological

The ___________ dimension refers to the methods available for converting resources into products or services.

Political-legal

The ____________ dimension refers to government regulation of business and the relationship between business and government.

most favored nation (MFN)

One provision of the GATT was the _________________ principle, which says that if a country extends preferential treatment to any other nation that has signed the GATT, it must give the same treatment to all countries that have signed the agreement.

tariff

A __________ is a tax on goods that cross national borders.

Strategic alliance

A _______________ curs when 2 or more firms jointly cooperate for mutual gain.

buy national law

A _______________ requires domestic consumers to buy domestically made goods.

quota

A country has imposed a _________ if it has limited how much of a product a foreign business may sell.

economic community

An _______________ is a set of countries that agree to reduce or eliminate trade barriers.

export restraint agreement

An _________________ is a deal struck with an exporting country to limit its exports; a country agrees to export restraints to avoid having the importing country enact a harsher export tariff.

1. C 2. D 3. B 4. A

The table lists disadvantages of various approaches to entering international markets. Indicate which approach each disadvantage belongs to. 1. Limited Control of business 2. Use of existing facilities 3. Creation of Competition 4. Tariffs A. Importing/Exporting B. Licensing C. Strategic Alliance D. Direct Investment

Current culture

In order to manage corporate culture, mangers must first understand the ________________.

quota

A ________ is a limit on how much of a good can be bought or sold.

1. economic 2. technological 3. political-legal

Complete the table by filling in the dimension of the general environment that corresponds to the given example. 1. Economic growth 2. Computer software 3. Government regulation

1. regulators 2. competitors 3. customers 4. suppliers 5. strategic partners

Complete the table by filling in the dimension of the task environment that corresponds to the given example. 1. Federal Occupational Safety and Health Administration (OSHA) 2. Two schools that recruit special education teachers 3. Shoppers, relative to a store 4. A maker of accounting software, to businesses that use the software 5. Two companies in a joint venture to develop an innovative product

General environment

Consists of broad dimensions and forces in an organization's surroundings that determines its overall context

1. general 2. task 3. task

For each example presented in the table, identify whether it is part of the general environment or the task environment. 1. Economic Dimension 2. Customers 3. Regulators

Legal compliance, Ethical compliance, Philanthropic giving

Formal organizational dimensions include:

D

In what way has the nature of the workforce changed in recent years? A. There is less diversity B. More workers are retiring at a younger age C. Employees can expect a long-term career with one organization D. Workers want and have more ownership of their work and how they perform their jobs

misaligned

Managers should seek to change the organizational culture when the culture has become ___________ with the organizational environment.

A, C, D

Managers use which of the following to influence organizational culture? Check all that apply. A. Slogans B. Expenses C. Symbols D. Heroes

General

The _________ environment of a business has three dimensions: economic, technological, and political-legal.

C and D

Which of the following are examples of ethical issues in information technology? Check all that apply. A. The need for a policy which prohibits lending corporate funds to members of the board B. The need for a policy which prohibits bribing foreign officials to overlook violations of the law C. The need to establish trust with customers by pledging to protect their private data D. The need to have a corporate data privacy policy

Owners

________ are whoever can claim property rights to an organization.

Regulators

___________ have the potential to control, regulate, or influence an organization's policies and practices.

Licensing

___________ is an arrangement whereby one company allow another to use its brand names, trademark, technology, patent, copyright, or other assets in exchange for a royalty based on sales.

Social Responsibility

_______________ is the set of obligations that an organization has to protect and enhance the societal context in which it functions.

Organizational culture

_______________ is the set of values, beliefs, behaviors, customs, and attitudes that helps the members of the organization understand what it stands for, how it does things, and what it considers important.

Economic, technological, and political-legal

What are the 3 dimensions of the general environment?

General Agreement on Tariffs and Trade (GATT)

The ___________________, 1948-1994, promoted international trade by lowering trade barriers between nations.

competitors, customers, suppliers, strategic partners, and regulators

The task environment of business includes:

Joint venture

A _____________ is a special type of strategic alliance in which the partners actually share ownership of a new enterprise.

ethical

If managers expect and enforce high ethical standards, other employees will be more likely to engage in __________ behavior.

Suppliers

____________ include organizations that provide resources for other organizations.

licensing

If a manager decides to allow a company in another country to pay royalties for the right to make a product and sell it, which approach is the manager using?

Ethical behaior

____________ is behavior that conforms to generally accepted social norms.

B

Because Walmart's retail approach is big stores with a large selection of merchandise at discount prices, in which country should Walmart experience the most success? A. A country characterized by large populations with very low incomes B. A country like Singapore, where people are price conscious C. A country like Singapore, with a preference for foreign brands D. A country with a complex and indirect channel of distribution

Economic

The __________ dimension includes the overall health of the economic system in which the organization operates, which is related to inflation, interest rates, unemployment, and so on.

A, B, and C

As VP of sales and marketing, Debra is very interested in the likely impact of corporate social responsibility (CSR) on Theo Chocolates. She asks you for your opinion. What do you tell her? Check all that apply. A. Businesses are partners in society, along with the government and the general population. B. Studies have shown that companies with strong reputations for good citizenship tend to gain a greater market share for their products. C. Many large businesses have surplus revenues that can be effectively spent to help solve social problems. D. Corporate social responsibility is generally good for sales because public opinion has begun to value sustainable and fair trade practices, but companies known for high CSR tend to attract a lower caliber of employee.

United States Mexico Canada Agreement (USMCA)

The __________________ treaty, successor to the North American Free Trade Agreement (NAFTA), is a step toward forming a North American economic community.

GATT

The international trade agreement that first incorporated the principle of most favored nation (MFN) status was the _________.

Task environment

The specific organizations or groups that have a direct impact on a firm

1. D 2. C 3. A 4. B

The table lists advantages of various approaches to entering international markets. Indicate which approach each advantage belongs to. 1. Use of existing facilities 2. Fast entry to market 3. Low cost 4. Profits over a long period of time A. Importing/Exporting B. Licensing C. Strategic Alliance D. Direct Investment

exporting and importing Licensing Strategic Alliances Direct Investment

What are the 4 general levels of international business?

Franchising

What is a special form of licensing?

A

What is organizational culture? A. The set of values, beliefs, behaviors, customs, and attitudes that define what the organization stands for, how it does things, and what it considers important B. The values, beliefs, behaviors, customs, and attitudes of top executives, which are different from those of lower-level employees C. A commitment to sponsor artists in the communities in which the organization does business and where its employees live

Unethical behavior

____________ is behavior that does not confirm to generally accepted social norms.

A

Someday an employee may approach you to disclose unethical conduct. You want your employees to know what will happen if they do this, so you decide to present a few hypothetical scenarios at the next staff meeting. What do you tell them you'd do if one of them blows the whistle on unethical conduct at the organization? A. Welcome their contribution. B. Order them not to mention it to anyone again. C. Demote them. D. Fire them.

Sarbanes-Oxley Act

The ___________________ effectively writes ethical leadership into law because it requires CEOs and CFOs to personally vouch for the truthfulness and fairness of their companies' financial disclosures.

World Trade Organization (WTO)

The ___________________, 1995-present, continues the mission of the GATT. The WTO encourages member nations to adopt nondiscriminatory and predictable trade policies, reduce trade barriers through multilateral negotiations, and establish fair procedures for resolving trade disputes.

B and D

Which of the following are areas of ethical concern for managers? Check all that apply. A. How much the government regulates the organization B. How the organization treats its employees C. How often managers consult with attorneys about the legality of their business practices D. How employees treat the organization

A and C

Which of the following are arguments against businesses practicing social responsibility? Check all that apply. A. The purpose of a business is to make a profit for its owners, not to solve social problems. B. Businesses do not create problems and therefore should not be responsible for solving them. C. Businesses have enormous power already, and giving them control of social programs would give them even more power. D. Businesses are not a part of the society in which they operate.

Board of directors

____________ are elected by stockholders and are responsible for corporate governance and charged with overseeing the management of the firm to ensure that it is being run in a way that best serves the stockholder's interest.

Code of ethics

_____________ a formal, written statement of the values and ethical standards that guide the firm's actions.

Ethics

_____________ are an individual's personal belies regarding right and wrong behavior.

Competitors

_____________ consist of other organizations that compete for the same resources.

Ethical compliance

_____________ is the degree to which members of the organization follow commonly held ethical standards of behavior.

Customers

________________ are those who pay money to acquire an organization's products or services.

Legal compliance

_________________ means conforming to applicable local, state, federal, and international laws.

Direct investment

_____________ occurs when a firm headquartered in one country builds or purchase operating facilities or subsidiaries in a foreign country.