MGMT 310 Exam 1 (Chapters 1-4)

Globalization

Integration and interdependence of economic, technological, sociocultural, and political systems across diverse geographic regions Advocated by leading economists and politician post - World War II Movement led to the creation of several international trade agreements

Rule of Engagement

- Generate better information than your rivals - Analyze that information t make informed choices - Quickly select among choices - Covert strategic choices into decisive action

Distributive Justice

A subset that deals with the distribution of wealth and prosperity among members of a society

A firm's strategic choices and leadership approaches need to: A. Adapt and change to retain their relevance B. Steer clear of cultural and socioeconomic influences C. Be independent of each other D. Be rigid and concrete to be effective

A. Adapt and change to retain their relevance

Managerial View

Business framework where the firm is seen as a mechanism for converting raw materials into products to sell to customers

Which of the following dimensions is NOT part of the General Environment? A. Sociocultural B. Economic C. Technological D. Consumer E. Politcal/Legal

D. Consumer

Ethical Framework: Utilitarianism

Ethical philosophy claiming that behaviors are considered moral if they produce the greatest good, or utility, for the greatest number of people

Who is responsible for the "bureaucratic organization?"

Max Weber

The Art of War - Chinese Military Treatise written by Sun Tzu

More important to out-think than to outmaneuver the opponent though physical force

Which of the following is the last step in the four-step process to implementing CSR? a. Create a social dimension to the value proposition. b. Select the social issues to be addressed. c. Create a corporate social agenda. d. Identify points of intersection between the company and society.

a. Create a social dimension to the value proposition.

Which continent has the highest concentration of trade (i.e., trade among countries within a particular region)? a. Europe b. Africa c. North America d. Asia

a. Europe

When a business grows through unrelated diversification, acquiring companies in different industries, it is called __________. a. a conglomeration b. a strategy c. the planning process d. a competitive advantage

a. a conglomeration

_______is the notion that rules should be clearly stated, consistently obeyed, and impartially enforced. a. Ethics b. Conventional morality c. Procedural justice d. Kantianism

c. Procedural justice

The release of evidence of illegal or immoral conduct by a member of an organization to executives in the company or regulating agencies outside the company is known as: a. a fiduciary b. lobbying c. whistle-blowing d. insider trading

c. whistle-blowing

Managerial Skills

Technical Skills Interpersonal Skills Conceptual Skills

Regional Trade Agreements

Trade agreements incorporating a number of nations in a given region o E.g., NAFTA, ASEAN, MERCOSUR, the EU Sought to improve trade through various means

Moral Dilemmas Faced by Organizations: Privacy

- A person's right to determine the type and extent of information that is disclosed about him or her - Requires managers to strike a balance between respecting privacy and learning about their subordinates

External Environments

- Industry analysis - Customer analysis - Supplier analysis - Competitor analysis

Leadership

Ability to drive change an innovation through inspiration and motivation

Ethical Concerns Faced by Individuals: Whistle-Blowing

The release of information by a member of an organization that is evidence of illegal or immoral conduct to executives in a company or regulating agencies outside a company

Conceptual skills are more often used by:

Top Management

_______is an ethical philosophy claiming that morality's primary function is to develop virtuous character. a. Preconventional morality b. Postconventional morality c. Virtue ethics d. Distributive justice

c. Virtue ethics

A ____________entails how a company will position itself among competitors. a. global strategy b. transnational strategy c. business-level strategy d. corporate-level strategy

c. business-level strategy

NAFTA does not: a. open borders for many industries. b. form the largest trading bloc in the world in terms of its members' combined GDP. c. eliminate tariffs among Canada, Mexico, and the United States. d. maintain any restrictions on agricultural products

d. maintain any restrictions on agricultural products

Comparative Advantage

- *Countries should specialize in producing goods for which they have the lowest opportunity cost of production* o Specialization in a particular product, helps become an efficient producer - *Free trade leads to a more efficient allocation of resources* o Results in all countries that are involved in trade benefitting from access to cheaper goods

Internal Environment

- Goals - Internal Resources - Culture - Employee capabilities

Is CSR Good for Business?

- Higher CSR activity causes lower financial performance in the future - Should be viewed as an investment that will lead to: o Improved efficiency o Innovation o Long-term financial success

Moral Dilemmas Faced by Organizations: Environmental

- Increasing pollution and depletion of natural resources - Managers face the question of how much they should conserve

Development of Strategy

- Is the first step toward creating value for customers and achieving profitability - Is both a planned and emergent and evolving process - Is directed as a top-down process under the guidance of an upper management team lead by the CEO - Does not always flow in a linear fashion due to the dynamic nature of the business environment - Involves making a series of strategic choices

Corporate Social Responsiveness: Behavior of Responsive Firms

- Monitor and assess environmental conditions on a constant basis - Seek to identify the needs of their stakeholders - Design plans and policies to respond to changing conditions

Corporate Planning

- The need to understand the competitive landscape led by early business leaders to focus on corporate planning - The planning process involved the development of detailed forecasts and business-level goals and objectives

Three Components of Strategy --> Strategic Positioning

1. Managing trade-offs 2. Choosing a set of activities 3. Creating fit

Task Environment: Suppliers

A company that provides resources or services for a firm to help in its creation of products and services

Vision

A concept or picture of what a firm wants to achieve and how it plans to accomplish that

Competitive Advantage

A firm achieves a competitive advantage when it creates more economic value than competitors by engaging in a strategy that is difficult or impossible for others to duplicate

Scientific Management

A focus on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods

Core Competencies

A network of unique activities that strategically fit together an are difficult to replicate

Ethical Framework: Fiduciary

A person who is entrusted with property, information, or power to act on behalf of a beneficiary

Mission Statement

A statement that defines a firm's reason for existence

Procedural Justice

A subset claiming that rules should be clearly stated, consistently obeyed, and impartially enforced

According to Weber, which of the following is a feature of an ideal bureaucracy? A. Clear differentiation of tasks and responsibilities among individuals B. Coordination achieved through interpersonal communication and networking C. A flat structural organization with few or no levels of separation between managers and their subordinates D. The prevalence of informal social relations at work

A. Clear differentiation of tasks and responsibilities among individuals

To build contextual intelligence, a manager should not: A. Map stakeholder relationships B. Stay attuned to trend C. Develop an awareness of history D. Seize firsthand experience

A. Map stakeholder relationships

Management

Act of working with and through a group of people to accomplish a desired goal or objective in an efficient and effective manner

Task Environment: Competitors

Any organization that creates goods or services targeted at a similar group of customers

Transnational Strategies

Balance a firm's international activities among efficiency, local responsiveness, and organizational learning

Human Relations Movement

Belief that organizations must be understood as systems of interdependent human begins who share a common interest in the survival and effective functioning of the firm

Stakeholder View

Business framework that identifies and analyzes multiple groups that interact with the firm and attempts to align organizational practices to satisfy the needs of these various groups

Shareholder View

Business framework where the job of top managers is to produce the highest possible stick market valuation of the firm's assets

The stakeholder view of the firm does all of the following except: A. Aligns organizational practices to satisfy the needs of these various groups B. Helps managers understand the internal and external environment. C. Aims to produce the highest possible stock market valuation of the firm's assets. D. Identifies and analyzes multiple groups that interact with the firm

C. Aims to produce the highest possible stock market valuation of the firm's assets

Forecasting the likely result that might occur when several events and stakeholders are linked together is known as: A. Contingency planning B. Trend analysis C. Scenario building D. Strategic reviewing

C. Scenario building

VUCA is an acronym for ___________ that captures the context in which today's organizations compete. A. Visionary, uncertain, coordinated, and applied B. Volatile, unclear, certain, and allowable C. Volatile, uncertain, complex, and ambiguous D. Verifiable, uncharacteristic, complex, and ancillary

C. Volatile, uncertain, complex, and ambiguous

Which of the following actions is more likely to be taken by a manager rather than a leader? A. Striving for change and innovation through inspiration and motivation B. Setting direction for a firm and aligning people to focus on the organization's vision C. Working with a group of people to accomplish a desired goal in an efficient manner D. Defining the competitive landscape of an organization and setting strategic goals for the long term

C. Working with a group of people to accomplish a desired goal in an efficient manner

International Strategies

Combine elements of multinational and global strategies by using foreign subsidiaries to produce and distribute products

Ethical Concerns Faced by Individuals: Conflicts of Interest

Conflicts that occurs when employees or managers engage in activities on behalf of the company, and have a personal interest in the outcome of those activities

Strategic CSR

Corporate social responsibility activities that are directly related to their business activities so that they can combine social welfare with financial welfare - Must be planned specifically to support core business activities - Supervised carefully to create value for the community and the firm - Evaluated regularly to ensure that CSR activities benefit society while also benefitting the business

Sally is the manager of Grubb It, a fast-food outlet. She is looking out for trends or events that could turn out to be a problem for the outlet in the future. She believes that the outlet's close proximity to a school could pose a problem, because of a growing concern over childhood obesity. In this scenario, Sally is involved in: A. A strategic review process B. Contingency planning C. Stakeholder mapping D. Environmental scanning

D. Environmental scanning

The _________ saw the firm as a mechanism for converting raw materials into products to sell to customers. A. Contingent view B. Stakeholder view C. Shareholder view D. Managerial view

D. Managerial view

Which of the following is the first step in the stakeholder mapping process? A. Determine stakes for each stakeholder B. Identify specific subsets within stakeholders C. Define connections between various stakeholders D. Map all stakeholder relationships of the firm

D. Map all stakeholder relationships of the firm

Nathan works at GoDrive Rentals, a car rental company. His job involves motivating and developing the company's sales teams as well as working with senior executives in developing and refining the company's marketing and sales strategies. From the given description, it can be concluded that Nathan is most likely a(n): A. HR manager B. Senior executive C. Entry-level employee D. Middle-level manager

D. Middle-level manager

_______ focuses on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods. A. The contingent view of management B. A bureaucracy C. The human relations movement D. Scientific management

D. Scientific management

General Environment : Sociocultural Dimension

Demographic characteristics as well as the values and customs of a society

Ethical Framework: Virtue Ethics

Ethical philosophy claiming that morality's primary function is to develop virtuous character

Ethical Framework: Kantianism

Ethical philosophy claiming that motives and universal rules are important aspects in judging what is right or wrong

Which of the following trade agreements attempted to facilitate trade by creating a unified currency across member nations?

European Union

Global Strategies

Focus on developing overall scale economies and global efficiency instead of catering to local tastes

General Environment : Economic Dimension

General economic environment in the markets where the firm performs activities

Internal Environment: Board of Directors

Group of individuals elected by shareholders and charged with overseeing the general direction of the firm

Conglomeration

Growth through unrelated diversification, i.e., by acquiring firms in different industries

Strategy Formulation

Identifying how a firm can best align its resources to carve out a defensible position in the marketplace

Ethical Concerns Faced by Individuals: Bribery

Offering something valuable to a party to act on his or her behalf, often to an unfair advantage

Internal Environment: Culture

Pattern of basic assumptions about the way in which an organization and individuals in it should work and interact with each other

Internal Environment: Owners

People or institutions that maintain legal control of an organization

Task Environment: Customers

People or other organizations that buy a firm's products and services

Internal Environment: Employees

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

Strategy

Pursuing a set of unique activities that provide value to customers; making trade-offs about which businesses to pursue, what products to produce, and which customers to serve; and aligning resources to achieve organizational objections

General Environment : Political Dimension

Refers to the political events and activities in a market that affect a firm

General Environment : Legal Dimension

Regulations and laws that a firm encounter in its markets

Objectives

Series of quantifiable milestones or benchmarks by which a firm can assess its progress

Which perspective on business is widely used today?

Stakeholder View

Mission

The activities a firm performs for its customers

Social Values

The deeply rooted system of principles that guide individuals in their everyday choices and interactions

Business-Level Strategy

The determination of how a company will compete in a given business and position itself among its competitors

Multinational Strategies

The parent company organizes local subsidiaries and gives them autonomy to develop products tailored to local tastes

General Environment : Technological Dimension

The processes, technologies, or systems that a firm can use to produce outputs

Corporate-Level Strategy

The way a company seeks to create value through the configuration and coordination of multi-market activities

Contingent View

View of the firm where effective organizational structure is based on fit or alignment between the organization and various aspects of its environment

Which of the following is a shortcoming of utilitarianism? a. It leads to a tyranny of the majority and a failure to respect minorities. b. It assumes that managers put their own interests first. c. It stresses that happiness and pleasure are not important in life. d. It does not take into account the greatest good for the greatest number of people.

a. It leads to a tyranny of the majority and a failure to respect minorities.

The mission of a firm provides: a. a description of the activities that a firm performs for its customers. b. a series of quantifiable milestones with which a firm can assess its progress. c. information on what a firm wants to achieve and how it plans to accomplish that. d. an outline of what a firm hopes to achieve within a specific time frame.

a. a description of the activities that a firm performs for its customers

The most favored nation principle, agreed upon by GATT members, meant that: a. a tariff rate granted to one member of GATT would be extended to all members. b. foreign firms would be subject to the same rules and regulations as a country's domestic firms. c. a country should extend the privileges of its citizens to tourists from other member nations. d. trade disputes would be settled by the unanimous agreement of all parties to the dispute.

a. a tariff rate granted to one member of GATT would be extended to all members.

The internal environment includes all of the following except: a. customers. b. owners. c. board of directors. d. employees.

a. customers.

A(n) _____ strategy attempts to provide a standardized product to all markets without taking into consideration the local tastes and responsiveness of the regions in which the product is being sold. a. global b. international c. transnational d. multinational

a. global

Which of the following statements is true of Kantianism? a. It holds the "greatest happiness principle" as the foundation to its ethical theory. b. It assumes that motives are important when judging moral action. c. It focuses purely on the positive and negative consequences of actions. d. It suggests that people should use a cost-benefit analysis to select the option that best suits their own interests.

b. It assumes that motives are important when judging moral action.

Cindy was called in for interview at a women's fashion magazine for the post of editor. During the interview, the interviewer told Cindy that the work environment of the organization was very vibrant, and that although employees worked long hours, they also regularly enjoyed themselves at employer-sponsored dinner parties and weekend trips. In this case, the interviewer was telling Cindy about the _____ of the organization. a. general environment b. culture c. legal dimension d. task environment

b. culture

In a(n) _____, two firms come together to form a new company in a market. a. alliance b. joint venture c. licensing agreement d. wholly-owned subsidiary

b. joint venture

A contractual arrangement whereby a firm allows another firm to use its technology without permitting the use of a common brand name is known as: a. a joint venture b. licensing c. an alliance d. franchising

b. licensing

According to the economist Milton Friedman, the goal of a business is to: a. serve the society b. make profits c. generate job opportunities d. satisfy all its stakeholders

b. make profits

Which of the following statements is true of the theory of comparative advantage? a. As a country specializes in a product, it becomes a less efficient producer. b. Free trade between nations leads to higher unemployment. c. Countries should specialize in producing goods with the lowest opportunity cost of production. d. Countries involved in trade lack access to cheaper products.

c. Countries should specialize in producing goods with the lowest opportunity cost of production.

In order to evaluate the external fit of a strategy, a firm must ask which of the following questions? a. Can the firm effectively execute the strategy? b. Does the strategy provide a distinct, differentiated, and sustainable position in the marketplace? c. Does the strategy fit with the environmental landscape? d. Does the strategy leverage the firm's key resources?

c. Does the strategy fit with the environmental landscape?

________refer to a business's duty to make a profit and increase shareholder value. a. Corporate social responsibility (CSR) b. Legal responsibilities c. Economic responsibilities d. Ethical responsibilities

c. Economic responsibilities

_____ refers to the integration and interdependence of economic, technological, sociocultural, and political systems across diverse geographic regions a. Comparative advantage b. The external environment c. Globalization d. The economic dimension

c. Globalization

Responsive firms are characterized by all the following behaviors except: a. they design plans and policies to respond to the changing conditions. b. they seek to identify the needs of their stakeholders. c. businesses maximize their profit within the limits of the law. d. they monitor and assess environmental conditions on a constant basis.

c. businesses maximize their profit within the limits of the law.

Cadmia, a small island nation, recently revised its income-tax law. The new law sought to increase taxes on wealthy corporations and citizens with higher incomes. Surprisingly, everyone responded positively to the tax revision as they believed that it will decrease inequality in the nation. In this scenario, the people of Cadmia have demonstrated support for: a. justice b. procedural justice c. distributive justice d. morality

c. distributive justice

Fyllor Inc., a manufacturer of office equipment such as fax machines and printers, regularly imports component parts and then assembles them to make finished products. A recent increase in the import duty on component parts has led to an increase in the price of the firm's products, and this in turn has led to a drop in sales. In this scenario, the drop in sales for Fyllor Inc. can be attributed to its: a. internal environment b. task environment c. general environment d. external environment

c. general environment

A firm's task environment includes: a. the demographic characteristics of its employee base. b. its organizational culture and structure. c. its competitors, suppliers, and customers. d. those regulations and laws that govern its operations.

c. its competitors, suppliers, and customers

All of the following statements about GATT are true except: a. GATT was formed as a temporary measure to lower tariffs. b. the agreement was based on most favored nation status, national treatment, and consensus. c. GATT was based on the principle of consensus. d. GATT remained in place and did not have a successor.

d. GATT remained in place and did not have a successor.

Which of the following is a disadvantage of franchising? a. The franchisor is responsible for monetary risk. b. Franchising is a low-cost means of market entry. c. The franchisor provides the brand name and managerial processes. d. The franchisor may lack the ability to enforce a guideline.

d. The franchisor may lack the ability to enforce a guideline.

Which of the following statements about strategy development is false? a. It is difficult to predict how competitors will respond to another firm's actions. b. Including frontline managers in the reassessment of strategy increases consensus on new tactics. c. Some firms have very stable strategies. d. The inputs to the emergent aspects of strategy development are top-down.

d. The inputs to the emergent aspects of strategy development are top-down.

Strategic CSR refers to corporate social responsibility activities that: a. garner maximum publicity and appreciation for the company. b. will make maximum impact on the community. c. can be implemented in less than six months. d. are directly related to the business objectives of a company.

d. are directly related to the business objectives of a company.

Ryan is the manager of Home Repairs Inc., a company that provides a wide range of repair and maintenance services. He claims that Home Repairs is the only company that sends technicians to a client's place for repair work within an hour of the client's call to the company. His company offers its services at very affordable prices. Home Repairs distinguishes itself from other companies by providing discounts for people who sign up for memberships. This scenario describes the company's: a. mission statement b. vision c. objectives d. core competencies

d. core competencies

Moral dilemmas faced by businesses include all of the following except: a. the transmission of information. b. shared information can lead to identity theft. c. information can be used for control, power, and manipulation. d. water pollution is a problem that challenges business and society.

d. water pollution is a problem that challenges business and society.

Historical Perspectives on Business: Bureaucratic Organization Structure

o Proposed by Max Weber o A clear differentiation of tasks and responsibilities o Coordination through strict hierarchy of authority and decision rights o Standardization of rules and procedures o Vertical separation of planning and execution Planning are made in the upper ranks of an organization and executed in the lower ranks