Management Ch. 2

69. (p. 63) Giving customers what they want or need, they way they want it, the first time is known as A. planned giving. B. planned obsolescence. C. customer service. D. premier service. E. operations management.

c

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

f

72. (p. 64) Managers at Molly's Closet, a clothing retailer, engage in an annual organizational assessment as part of an attempt to predict changes as well as possible opportunities and threats. They look at issues such as who their competitors are, how many entry barriers there are in the industry and what substitutes exist for their products. This assessment is called A. scenario development. B. forecasting. C. benchmarking. D. environmental scanning. E. SWOT analysis.

d

90. (p. 68) 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. A. cooptation B. voluntary action C. competitive pacification D. competitive aggression E. environmental scanning

d

t/f A substitute for a company's offering is a potential opportunity

f

t/f ) A switching cost is a fixed cost a buyer faces when changing suppliers.

t

t/f The fastest-growing age group in the US civilian labor force is the group between 30 and 40 years old.

f

t/f When investors bid up stock prices, companies have less capital to fuel their strategies.

f

100. (p. 70) Prospectors are A. companies that continually change the boundaries for their task environments by seeking new products and markets, diversifying and merging, or acquiring new enterprises. B. companies that aggressively monitor and protect the established boundaries of their competitive environment. C. financially sound in unstable industries. D. firms that sell one or more businesses. E. in the mature stage of the product life cycle

a

44. (p. 52) Advances in genetic engineering and biotechnology are expected to produce some food products that will become available year-round even in northern climates. These changes will provide grocers with an opportunity to reduce their shipping costs while at the same time, offering fresher produce to their customers. These advances are an example of changes in the A. technological environment. B. economic environment. C. political environment. D. demographic environment. E. ecological environment.

a

49. (p. 55, Figure 2.4) Which of the following is an element of Michael Porter's model for analyzing the competitive environment? A. Substitutes and complements B. New suppliers C. New customers D. Regulatory forces E. SBU strategy

a

50. (p. 55, Figure 2.4) The competitive environment consists of A. the firm, and its rivals, suppliers, customers (buyers), new entrants, and substitute or complementary products. B. only those organizations which the focal organization relies upon to provide supplies and materials. C. those people who comprise the workers of the organization that complete the organization's activities. D. those organizations that hold the firm accountable to their stakeholders. E. those broader influences that affect a firm's competitive advantage.

a

55. (p. 57) Conditions which may prevent new firms from entering an industry (i.e., the use of patents) are referred to as A. barriers to entry. B. roadblocks. C. unfair trade practices. D. insider trading. E. trade protectionism.

a

56. (p. 57) Hospitals and universities are very expensive to run due not only to the capital equipment that is required for each, but also due to the personnel such as specialized medical doctors and researchers. The cost of these types of institutions is an example of A. enhancing barriers to entry. B. eliminating protectionism. C. unfair competition. D. enhancing trade protectionism. E. eliminating barriers to entry.

a

57. (p. 57) The highest barrier to entry of the following items is A. brand identification. B. competitor experience. C. pricing practices. D. the economy. E. technology. Some major barriers to entry include government policy, capital requirements, brand identification, cost disadvantages, and distribution channels.

a

60. (p. 59, Table 2.1) Which of the following is an example of a potential substitute product? A. polyester for cotton B. ink cartridges for printers C. mops for detergent D. iTunes for iPod E. furniture for apartments

a

68. (p. 63) 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 A. customers. B. suppliers. C. substitute companies. D. competitors. E. new construction companies.

a

70. (p. 63) Environmental uncertainty results from A. complexity B. simplicity. C. cooperation. D. simple issues. E. a incrementally changing environment.

a

75. (p. 64-65) _____________ create(s) alternative combinations of different factors into a total picture of the environment and the firm. A. Scenarios B. Forecasting C. Benchmarking D. Competitive intelligence E. Buffering

a

79. (p. 65) The best advice for using forecasts is A. use multiple forecasts and perhaps average their predictions. B. forecasts become more accurate the further into the future you predict. C. forecasts improve the data used to construct them. D. the more complex the forecast, the more accurate it is. E. Unexpected events are all the more reason to stick to the forecast.

a

82. (p. 66) The process of sharing power with employees is called A. empowerment. B. job sharing. C. benchmarking. D. vertical synergy. E. team building.

a

88. (p. 67) Methods for adapting the technical core to changes in the environment are called A. flexible processes. B. smoothing effects. C. buffering. D. benchmarking. E. environmental scanning.

a

92. (p. 68) When Sudsy Company advertises its soap products as better than Bubble Company's soap products, Sudsy Co. is demonstrating A. competitive aggression. B. competitive pacification. C. benchmarking. D. political action. E. cooptation.

a

40. (p. 50) The SEC recently proposed regulations requiring companies to disclose more details about executive compensation. This illustrates an important interaction between organizations and their relevant A. demographics. B. regulators. C. attorneys. D. labor officials. E. suppliers.

b

45. (p. 52) Managers with ready access to information A. increase costs. B. gain a significant competitive edge. C. lose power. D. decrease their span of control. E. always increase sales.

b

46. (p. 53) Measures of various characteristics of the people who make up groups or other social units are called A. psychographics. B. demographics. C. social characteristics. D. lifestyle analytics. E. unit characterization.

b

52. (p. 55) A low-cost airline described as one of the excellent companies in the bestseller of the early 1980s, InSearch of Excellence is no longer in business. Industry analysts state that although the service and price provided by the airline was what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. This scenario is illustrative of which aspect of the competitive environment? A. Customers B. Competitors C. Regulators D. The economy E. The political environment of the time

b

53. (p. 55) Wal-Mart recently engaged Amazon.com in a price war, offering best-selling books for first $10, then $9, and now Target Stores has jumped into the war with best sellers for $8.98. This scenario is an example of which aspect of the competitive environment? A. Customers B. Competitors C. Regulators D. The economy E. The political environment of the time

b

58. (p. 57) The development of new products that may replace sales of existing products is referred to as the threat of A. new entrants. B. substitutes. C. diminished supply. D. technology. E. complements.

b

62. (p. 61) Fixed costs buyers face if they change suppliers are called A. changing costs. B. switching costs. C. supplier costs. D. retailer costs. E. sunk costs.

b

66. (p. 62) The main difference between a final consumer and an intermediate consumer is A. the final consumer usually pays cash for the purchase whereas the intermediate customer uses a credit card. B. an intermediate consumer will utilize the purchase in order to sell their product/service to final consumers whereas a final customer use the product him/herself. C. final consumers purchase more (in dollar value) than do intermediate consumers. D. intermediate consumers are usually more flexible than final consumers. E. final consumers have more bargaining power than intermediate customers.

b

74. (p. 64-65) A narrative that describes a particular set of future conditions is called A. benchmarking. B. a scenario. C. forecasting. D. managerial outcomes analysis. E. competitive intelligence.

b

81. (p. 65) In an attempt to improve upon customer service, Terrapin Toys decided to assign a team to investigate what kinds of services competing companies offered. The team discovered that a smaller company, Gorilla Games, Inc., seemed to have outstanding customer service. The team then determined the major differences between the two companies and developed a plan to incorporate the best elements of Gorilla Games, Inc into Terrapin Toys. This illustrates effective A. environmental dynamism. B. benchmarking. C. strategic maneuvering. D. cooperative action. E. forecasting.

b

87. (p. 67) Leveling normal fluctuations at the boundaries of the environment is called A. buffering. B. smoothing. C. flexible processes. D. empowerment E. kanban.

b

89. (p. 67) The National Bicycle Industrial Company (NBIC) of Japan specializes in mass customization. Customers can choose the frame and other parts of the bicycle and it is made to their order. This is one example of how NBIC uses A. kanban. B. flexible processes. C. smoothing. D. benchmarking. E. environmental scanning.

b

91. (p. 68) When Yancy's Yogurt Company acts on its own to promote the yogurt industry as a whole, the company is practicing A. competitive aggression. B. competitive pacification. C. public relations. D. voluntary cooptation. E. cooperative action.

b

94. (p. 68) The two types of proactive strategies for influencing an organization's environment include A. dependent strategies and independent strategies. B. independent action and cooperative action. C. cooperative strategies and strategic maneuvering. D. strategic maneuvering and dependent strategies. E. independent action and strategic maneuvering.

b

97. (p. 69) 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.

b

98. (p. 69) PharmaCo and Allbest Meds have joined forces with one another to lobby against health care reform. This action is referred to as A. contraction. B. coalition. C. cooptation. D. domain selection. E. benchmarking.

b

36. (p. 48) Organizations that are affected by and that affect their environment are called A. inputs. B. outputs. C. open systems. D. closed systems. E. social systems.

c

37. (p. 48) Amy Jane, a new manager at Delectable Baked goods, has been asked to focus on the competitive environment of the organization. Which of these factors is among those that Amy Jane should focus on? A. Government policies B. Demographics C. Suppliers D. Technology E. Social factors

c

38. (p. 49) Using international bribery as a business tactic is illegal for U.S. firms. This statement reflects which type of environmental force at work? A. Competitive B. Economic C. Legal/political D. Societal values E. Demographics

c

41. (p. 50) The economy is a crucial component of the macroenvironment. Which of the following statements is most true about economic macro effects? A. The impact of changes in the economy is predictable to competitors. B. Changes in the economy are impossible to quantify. C. There are complex interconnections among the economies of different countries. D. High-level managers have little awareness of economic indicators. E. The economy has no macro effects on managers.

c

43. (p. 52) New methods of communication, production and even the development of entire new industries are the results of the changes in A. demographics. B. societal preferences. C. technology. D. the economy. E. politics.

c

51. (p. 55) A firm's current competition, suppliers, customers and the threat of new entrants or of substitutes are all elements in the A. task environment. B. microenvironment. C. Porter model for competitive analysis. D. industrial microenvironment. E. Peters model for organizational excellence.

c

54. (p. 55) Which of the following is a competitor which a mass merchandiser like Target must identify and anticipate the actions of? A. Consumer advocacy groups B. Mass merchandiser suppliers C. Wholesale outlets like Sam's or Price Club D. Companies entering new markets E. All of the above are potential competitors.

c

59. (p. 57) When microwave ovens were originally introduced, they posed a potential threat to the producers of conventional ovens. Over several decades, the effect of microwaves on the sales of conventional ovens has been minimal; in fact, most homes today utilize both appliances. Also, technology has not advanced much in this area and industry profits are flat. Based on this information A. the threat of new entrants for either type of oven is high. B. the threat of competitive rivalry for either type of oven is high. C. the threat of new entrants for either type of oven is low. D. the threat of substitutes for either type of oven is high. E. the regulatory influence on these ovens is high and changing.

c

63. (p. 61) ABC Bank utilizes the janitorial services of Bob's Scrub-A-Dub-Dub to keep their buildings clean. Bob's provides all the necessary cleaning supplies, training of crews, background security checks (since the crews work after hours) and all other associated expenses. The other available janitorial services do not typically provide security checks and a client such as a bank would have to hire guards to watch the work of the janitors. This expense effectively limits the bank to utilizing only Bob's services. This illustrates the concept of A. high employment costs. B. unfavorable supplier status. C. high switching costs. D. favorable quality status. E. complementary products.

c

65. (p. 62) A customer who purchases raw materials or wholesale products before selling them is called a(n) A. final customer. B. middle customer. C. intermediate consumer. D. first tier supplier. E. preliminary customer.

c

73. (p. 64) An outcome of environmental scanning is __________, the information necessary to decide how best to manage in the competitive environment managers have identified. A. an organizational plan B. entry barrier concepts C. competitive intelligence D. corporate espionage plans E. competitive counter-plans

c

77. (p. 65) The method for predicting how variables will change the future is called A. budgeting. B. scenario development. C. forecasting. D. benchmarking. E. environmental scanning

c

78. (p. 65) In determining how interest rates will change the future, a manager would use A. budgeting. B. scenario development. C. forecasting. D. benchmarking. E. environmental scanning.

c

80. (p. 65) _______________ means identifying the best-in-class performance by a company in your area and then comparing your processes to theirs. A. Scenario planning B. Forecasting C. Benchmarking D. Environmental scanning E. Adapting

c

83. (p. 66) 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. A. smoothing B. benchmarking C. empowerment D. kanban E. buffering

c

86. (p. 67) The growth of contingent workers in the U.S. labor force due to unpredictable labor demand is an illustration of A. adapting at the core. B. flexible processes. C. buffering. D. smoothing. E. empowerment.

c

93. (p. 68) Strategies that an organization acting on its own uses to change some aspect of its current environment are called A. flexible strategies. B. buffering strategies. C. independent strategies. D. smoothing strategies. E. cooperative strategies.

c

95. (p. 68) When two or more companies work together to alter their current environment they are using A. monopolistic strategies. B. strategic maneuvering. C. cooperative strategies. D. dependent strategies. E. codependent strategies.

c

96. (p. 70) Domain selection, diversification, mergers/acquisitions and divestiture are all examples of A. illegal boundary management. B. maneuvering the competition. C. strategic maneuvering. D. independent strategies. E. portfolio maneuvering.

c

39. (p. 50) Robert was recently hired as the workplace safety compliance officer at Diligent Drilling Company. Robert will have the responsibility to monitor regulations from which of these government agencies? A. FCC B. EPA C. SEC D. OSHA E. NLRB

d

42. (p. 50) Interest rates, inflation, the federal deficit, and unemployment levels are all elements in which aspect of the macroenvironment? A. The social environment B. The international environment C. The regulatory environment D. The economic environment E. The demographic environment

d

47. (p. 53) Which of the following statements about workforce demographics is true? A. Training of entry-level workers is not needed in today's modern workplace. B. Workforce demographics have little to do with human resource strategies. C. Entry-level workers are likely to be relatively scarce over the next five years. D. Population growth influences the size and composition of the labor force. E. Technical tasks can be sent overseas to be accomplished, but companies usually then have to pay more for labor.

d

61. (p. 60) Organizations must acquire a variety of resources in order to produce a product or service of value. These resources may include materials, equipment, financing or even employees. The sources that provide these various resources are referred to as A. resource firms. B. placement centers. C. retailers. D. suppliers. E. customs houses.

d

64. (p. 61) 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. collaboration. B. switching costs. C. cooptation. D. supply chain management. E. customer service.

d

76. (p. 64) 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.

d

85. (p. 66) Carol owns a small gift shop on the East Coast. She is hoping the economy rebounds this fall as she had to order her Christmas and other holiday gifts in February to be sure she has enough inventory for the surge in sales that the holiday season usually but not always brings to her retail store. In this example, Carol is using __________ to be sure she has enough gifts for those extra holiday customers that she hopes will brave the economic woes and shop for gifts. A. just-in-time inventory management B. smoothing C. kanban D. buffering E. adapting at the core

d

99. (p. 70) The entrance by a company into another market or industry for which it has an existing expertise is called A. a cooperative strategy. B. strategic maneuvering. C. a strategic alliance. D. domain selection. E. cooptation.

d

48. (p. 54) __________ trends regarding how people think and behave have major implications for management of the labor force, corporate social actions and strategic decisions about products and markets. A. Psychological B. Political C. Economic D. Technological E. Societal

e

67. (p. 62) Which of the following would be considered a consumer? A. OSHA B. Neiman Marcus C. An individual D. IBM E. All of the above would be considered a consumer.

e

71. (p. 63) _____________ refers to the degree of discontinuous change that occurs within the industry. A. Environmental complexity B. Environmental disfunction C. Environmental contracting D. Cooptation E. Environmental dynamism

e

84. (p. 67) Creating supplies of excess resources in case of unpredictable needs is called A. just-in-time inventory management. B. smoothing. C. flexible processes. D. kanban. E. buffering.

e

t/f Southwest Airlines demonstrates competitive pacification as an independent strategy by cutting fares when it enters a new market.

f

t/f Stories told by employees almost never have any connection to the true culture of the organization.

f

t/f ) Powerful suppliers can increase an organization's profits, especially if the organization cannot pass on price increases to its customers.

f

t/f A barrier to entry is a condition that prevents customers from using a firm's products or services.

f

t/f A value chain is the managing of the network of facilities and people that obtain materials from outside the organization, transform them into products, and distribute them to customers.

f

t/f Benchmarking represents alternative combinations of different factors into a total picture of the environment and the firm.

f

t/f Defenders are more likely to engage in strategic maneuvering than prospectors.

f

t/f Environmental scanning means sorting through information available to the public to interpret what is important and what is not.

f

t/f Family leave, flexible working hours and child care assistance have been introduced as a result of the re-entrance of older workers into the workplace.

f

t/f In a dynamic environment, bureaucratic organizations are more efficient than organic organizations.

f

t/f In the future the labor force will be even more homogenous than it is today.

f

t/f One reason that the labor force will not be more ethnically diverse than it is today is due to the immigration situation.

f

t/f Psychographics are measures of various characteristics of the people who make up groups or other social units.

f

t/f Regulatory agencies set rules but do not have the power to investigate company practices nor take legal action to ensure compliance with the law.

f

t/f ) A more diverse workforce presents managers with challenges as well as opportunities.

t

t/f ) Insurance for a car is a complementary product/service for the car.

t

t/f A firm's competitive environment is composed of the firm, its competitors, suppliers and distributors.

t

t/f A strong organization culture is one in which everyone understands and believes in the firm's goals, priorities and practices.

t

t/f All organizations operate in a macroenvironment.

t

t/f Competitive intelligence is the information necessary to decide how best to manage in the competitive environment.

t

t/f Customer service means giving customers what they want, the way they want it, the first time.

t

t/f Dasani bottled water is a competitor to Pepsi.

t

t/f Equipment is an example of an input to an organization.

t

t/f Firms that develop strategies that don't include technological advances will realize obsolescence and extinction.

t

t/f Melissa, a retail manager, encourages her employees to solve customers' problems without her approval of the particular situation. In this example Melissa has empowered her employees.

t

t/f Organizations are open systems that affect and are affected by their external environments.

t

t/f Porter's Model for competitive analysis is one example of analyzing the competitive environment for adapting to and even influencing the nature of competition.

t

t/f The external environment includes all relevant forces outside the organization's boundaries.

t

t/f The first question in understanding competitive environments is, "Who is the competition?"

t

t/f U. S. government policies both impose strategic constraints and provide opportunities for organizations.

t