Chapter Three

Strategic Response

Maintaining the status quo, altering strategy, or adopting entirely new strategy

Acquisition

Occurs when one firm buys another, sometimes against its will

For each action, indicate the environmental threat that action was intended to mitigate. Facebook is funding the development of infrastructure that will provide Internet access in developing countries.

Suppliers

Match each event in the following table with a specific dimension of the TASK environment. An environmental group's staging of protests outside BP service stations to call attention to the oil spill's effects on wildlife

Regulators

Information Management

Relying on boundary spanners and environmental scanning

If an organization empowers managers to make more decisions, the organization is responding to change with:

Flexibility

International dimension

The extent to which an organization is involved in or affected by business in other countries The United States-Mexico-Canada Agreement (USMCA) is an example of an element of the international dimension.

Degree of Homogeneity

The extent to which the environment is relatively simple or relatively complex These two dimensions interact to determine the level of uncertainty in the organization

Rate of Change

The extent to which the environment is relatively stable or relatively dynamic

For each example in the following table, choose whether it belongs in the general, task, or internal environment. The availability of new forms of energy with a less detrimental impact on the environment

The general environment

Social Responsibility

The organization's sense of obligation to protect and improve the society in which it operates.

Diversity

Used in the business world to refer to demographic differences among people. These include differences in gender, age, ethnicity, and religion.

Alliance

(Partnership) Firm undertakes a new venture with another firm

Organization Culture

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 to be important

Most uncertainty

Very dynamic and complex Example: Technology company

General Environment

The set of broad dimensions and forces in an organization's surroundings that create its overall context Dimensions: economic, technological, sociocultural, political-legal, and international

Using your knowledge of the environmental forces, indicate which environmental force is represented by each example. A Starbucks opened around the corner from the local coffee shop.

Competitors

Using your knowledge of the environmental forces, indicate which environmental force is represented by each example. There are thousands of brands of craft beer.

Competitors

Moderate uncertainty

Complex but simple environment OR Simple but dynamic environment Example: Clothing company is simple but dynamic

For each example in the following table, choose whether it belongs in the general, task, or internal environment. The introduction of tablet computers

General environment

Multiculturalism

The opportunities and challenges posed by the many differences among the people in the organization's environment, including different locations, values, and experiences.

One major way to shape culture is to...

...bring outsiders into important managerial positions Adopting new slogans, telling new stories, staging new ceremonies, and breaking with tradition can also alter culture

Internal environment

Conditions and forces within the organization

Regulatory Agencies

Created by the government to protect the public from certain business practices or to protect organizations from one another Examples: SEC, FDA

Match each event in the following table with a specific dimension of the TASK environment. Advertising that highlights BP's commitment to sustainable energy sources, such as biofuels

Customers (BP's customers include motorists who may choose to patronize (or avoid) service stations based on their perception of BP's environmental efforts.)

An organization that begins to source materials from more suppliers to ensure it always has materials is responding to change with:

Direct Influence

Employees

the people who make the products and provide the services that allow a firm to exist

Suppliers

Organizations that provide resources for other organizations (It is recommended to not rely on one singular supplier)

Interest Groups

Organized by their members to try and influence organizations

Competitors

Other organizations that compete with it for resources, such as customer dollars, loans, real estate, etc

Match each event in the following table with a specific dimension of the GENERAL environment. An established process for determining whether oil companies are responsible for oil spills and a requirement that guilty companies pay large fines

Political-legal

The degree to which a government regulates business relates to the _______________ of the general environment.

Political-legal dimension

How do organizations respond to their environments?

-Information Management -Strategic response -Mergers, Acquisitions, and Alliances -Organization Design and Flexibility -Direct Influence -Social responsibility

Five Competitive Forces:

-Threat of new entrants -Competitive rivalry -Threat of susbtitute products -Power of buyers -Power of suppliers

For each action, indicate the environmental threat that action was intended to mitigate. Facebook acquired Instagram.

Competitors

Match each event in the following table with a specific dimension of the TASK environment. An increase in business for alternative energy companies that make fuels that can be substituted for oil

Competitors

Board of Directors

A governing body selected by the stockholders and charged with overseeing the general management of the firm to ensure that it is being run in a way that best serves the stockholders' interests.

Environmental scanning

Actively monitoring the environments through activities such as observation and reading

Boundary Spanners

An employee, such as a sales representative or a purchasing agent, who spends much of his or her time in contact with others outside the organization, to find out what other organizations are doing

Using your knowledge of the environmental forces, indicate which environmental force is represented by each example. Walmart makes large purchases from suppliers to stock inventory for its customers.

Buyers

Strategic Partners/Strategic Allies

Two or more companies that work together in joint ventures or other partnerships Example: Walmart and McDonalds

Match each event in the following table with a specific dimension of the GENERAL environment. Low investor confidence in oil companies after the explosion

Economic

Regulators

Elements of the task environment that have the potential to control, legislate, or otherwise influence an organizations' policies and practices

For each example in the following table, choose whether it belongs in the general, task, or internal environment. A reminder to employees that business-casual attire is permitted only on Fridays

Internal environment

For each example in the following table, choose whether it belongs in the general, task, or internal environment. High job-satisfaction ratings from current employees

Internal environment

The Task Environment

Specific organizations or groups that influence the organization Includes competitors, customers, suppliers, startegic partners, and regulators

Match each event in the following table with a specific dimension of the TASK environment. A joint operation between BP and state employment agencies to train people to monitor beaches and pay them to perform environmental cleanup as needed

Strategic partners

For each action, indicate the environmental threat that action was intended to mitigate. AT&T, a cable provider, merged with DirecTV, a satellite provider.

Substitutes

Match each event in the following table with a specific dimension of the TASK environment. Conformance with BP's environmental and ethical standards to be included on BP's list of approved vendors and contractors

Suppliers

Using your knowledge of the environmental forces, indicate which environmental force is represented by each example. The local electric company is the only source of electricity in the community.

Suppliers

For each example in the following table, choose whether it belongs in the general, task, or internal environment. For Caterpillar, a heavy equipment manufacturer, an unanticipated jump in the price their suppliers charge for steel

Task environment

Match each event in the following table with a specific dimension of the GENERAL environment. The development of polymers that bond with oil to form a sponge-like material that is easily removed from the water

Technological

Sociocultural dimension

The customs, mores, values, and demographic characteristics of the society in which the organization operates For example, society might put more or less value on being environmentally friendly, or consumer tastes might shift away from alcoholic beverages and toward caffeinated beverages.

Corporate Governance

Who is responsible/accountable for governing the actions of a business The role of a corporation's executive staff and board of directors in ensuring that the firm's activities meet the goals of the firm's stakeholders

Owners

Whoever can claim property rights to an organization

Customers

Whoever pays money to acquire an organization's products or services

Why do managers today value diversity and/or multiculturalism?

-Globalization offers opportunities to multicultural organizations. -A diverse workforce is a competitive advantage.

The manager must understand...

...the current culture and then decide whether it should be maintained or changed Managers walk a fine line between maintaining a culture that still works effectively and changing a culture that has become dysfunctional

Using your knowledge of the environmental forces, indicate which environmental force is represented by each example. In 2015 and 2016, respectively, Amazon Handmade and Facebook Marketplace were launched as places where individuals could find buyers for one-of-a-kind items.

New entrants

Because 68 percent of Google's workforce is male and about 90 percent is White or Asian, what can be inferred about decision making at Google?

Less optimal due to lack of diversity

Direct Influence

Occurs when an organization leverages its strengths to influence the environment to its advantage. For example, it might purchase a supplier to ensure access to materials, market more aggressively to customers, or lobby lawmakers or bargain with government agencies to gain a more favorable environment.

Merger

Occurs when two or more firms combine to form a new firm

Organziation Design and Flexibility

Organization may get rid of many of its rules and begin allowing managers more latitude to act on their own discretion so that they can respond quickly to environmental change.

Political-legal dimension

The government regulation of business and the relationship between government and business Governments pass laws and exercise oversight that affect nearly every aspect of business; a vivid example is the legislation enacted in 2020 to respond to the spread of COVID-19. The stability and trustworthiness of a government also affects how confident an organization feels about conducting operations.

Technological dimension

The methods available for converting resources into products or services Examples of technologies include website shopping-cart apps, solar panels, and the CRISPR genetic-engineering technique.

Economic dimension

The overall health and vitality of the economic system in which the organization operates Economic growth, inflation, interest rates, and unemployment are typically important factors for business.

Least uncertainty

Simple and stable environment. Example: Subway offers a menu that doesn't change, has stable suppliers, and consistent competition

Environmental Change and Complexity

Focuses on two dimensions - the rate of change and the degree of homogeneity

Which of the following would be part of the task environment of a media company that makes videos?

-Consumers of video content -Competitors -NOT Social values around family-friendly content (general environment) -NOT Trade agreements governing export of videos (general environment)

If a manager has decided that the organizational culture should change, which action(s) should the manager consider taking?

-Express the new culture through rituals, stories, and ceremonies. -Reward employees who align with the new culture. -Develop a clear vision of what the culture should be.

External environment

Everything outside the organization's boundaries that might affect it. Includes the general environment and the task environment

FamHealth, a nonprofit organization that provides family counseling, contracts with another nonprofit with expertise in the treatment of substance abuse to make videos for its clients. The nonprofit that is making the videos is a _________ to FamHealth.

Supplier