The Big Squeeze Unit Review

Sonja works at a company with a very relaxed atmosphere among all the employees. This atmosphere is part of the company's a. organizational culture. b. subculture. c. power distance. d. uncertainty avoidance.

a. organizational culture. The relaxed atmosphere in Sonja's office is part of the company's organizational culture—the customs, traditions, and habits of its employees.

Every new business owner must pay attention to forces operating outside the company that affect its chances for success. These forces are referred to as a. the external environment. b. competition. c. cultural intelligence. d. demographics.

a. the external environment. Forces operating outside a business that affect its chances of success are referred to as the business's external environment.

George thinks his culture is superior to all other cultures. This is known as a. collectivism. b. ethnocentrism. c. stereotyping. d. individualism.

b. ethnocentrism. Thinking your culture is superior to others is known as ethnocentrism.

Which of the following is a benefit of international trade: A. An improved standard of living B. Higher prices for goods and services C. stronger trade restrictions D. An increased trade deficit

A. An improved standard of living International trade provides important consumer goods to countries where these products are not available or are in short supply. Making these goods available to all countries improves the standard of living throughout the world.

A business suddenly moves its operations to a new town, leaving its current employees jobless. Its reason for taking this action, which some consider unethical, might be that the action: A. Is not illegal B. Benefits the community C. Is committed by unethical employees D. Doesn't hurt anyone

A. Is not illegal The business's reason for taking this action would most likely be that the action is not illegal. In addition, it probably cuts costs and benefits the company. It does not, however, benefit the community where the jobs are lost—it hurts that community and those employees.

Government can prevent unqualified persons from operating a business by? A. Refusing to grant them a license. B. Closing their bank accounts. C. Raising their taxes D. Helping their competitors

A. Refusing to grant them a license. In some types of businesses, owners/operators must meet certain standards to obtain a license to operate the business. The government can refuse to grant a license to unqualified applicants.

Why does the government set and collect taxes? A. To help pay the expenses of the government B. To increase the use of technology C. To provide economic security D. To help businesses grow and prosper

A. To help pay the expenses of the government Some of these taxes are set and collected on products sold by businesses.

The U.S. produces widgets faster and cheaper than Switzerland. In this example, the U.S. has a(n) _____________ advantage A. absolute B. comparative C. constructive D. predictable

A. absolute The uneven distribution of productive resources enables one country to be able to produce a good or service more cheaply than another country can.

Companies that operate at the international level should be aware of political factors that affect trade, such as civil unrest or? A. embargoes B. currency rates C. business cycle D. competitors

A. embargoes An embargo is an action that suspends all import-export trade with another country. Most government-imposed embargoes are used for political reasons or during hostilities.

Which of the following government actions is most likely to stimulate the economy: A. lowering tax rates B. raising the prime interest rate C. printing less money D. borrowing more money

A. lowering tax rates This will probably stimulate the economy because disposable income, the money people have left after paying taxes, will increase. Raising the prime interest rate, printing less money, and borrowing more money tend to depress the economy

Which of the following is a reason that a US company would decide to offer its products in other countries: A. to expand to new, untapped markets B. to sell obsolete, outdated products C. to subsidize developing countries D. to provide jobs to people in other countries

A. to expand to new, untapped markets By offering their products in other countries, businesses are able to reach new markets to which they have not previously been able to sell their products.

Which of the following is an example of nonverbal communication that might have a different meaning to business people in other parts of the world. A. Inviting customers to a social function B. Shaking hands when greeting a customer C. Writing letters in a foreign language D. Preparing an audiovisual presentation

B. Shaking hands when greeting a customer Nonverbal communication is communication that uses body language instead of words, or to support words. Body language, such as shaking hands, is not used the same way in all countries. In some cultures, shaking hands is the accepted way of greeting a customer or a friend. In other cultures, businesspeople greet each other in different ways such as bowing or nodding.

Which of the following factors has aided the most in creating a global business environment: A. Government B. Technology C. Cultural changes D. Exchange rates

B. Technology Technologies of all types have enabled global markets to function effectively. As examples, refrigeration has enabled perishable products to be transported between countries; and computers have facilitated communication and exchange of payments

Which of the following situations would most likely indicate the need to adapt to changes in the business environment: A. The number of your business's competitors has decreased B. The supply of materials used in manufacturing a product has decreased C. The demand for your product is stable D. The business has experienced little employee turnover during the past year

B. The supply of materials used in manufacturing a product has decreased Businesses must be alert to changes occurring in their environments so that they can be proactive in making changes rather than being reactive once changes have taken place. A reduction in the supply of materials used in manufacturing the business's products indicates that the business will be paying higher prices for the materials, or the business should find substitute materials to replace those currently used.

Which of the following is a true statement about business ethics and the law: A. Everything that is illegal is also unethical. B. The two are not the same thing, but they do overlap. C. Everything that is unethical is also illegal. D. The two have nothing to do with each other.

B. The two are not the same thing, but they do overlap. Business ethics and law are not the same thing—they are like two overlapping circles. Where they overlap, there are actions that are both legal and ethical. However, there are also actions that are ethical yet illegal and actions that are unethical yet legal. The two concepts are often closely related.

A country with a weak currency value tends to A. experience high unemployment rates. B. decrease its imports and increase its exports. C. gain consumer confidence which limits spending. D. rely solely on trade centers to manage the flow of exports.

B. decrease its imports and increase its exports. A country with a weak currency must pay more to countries with strong currency values to purchase necessary goods and services. Because it is more expensive to import goods, a country with a weak currency tends to decrease its imports and increase its exports. Exports increase because nations possessing a strong currency can obtain more products at a cheaper price from the country with the weak currency.

One reason that some U.S. businesses have moved some of their operations to foreign countries is to A. reduce currency fluctuations. B. lower their labor costs. C. improve domestic relations. D. meet communication standards.

B. lower their labor costs. Because many developing countries have less stringent labor laws than the U.S., some U.S. based businesses have moved some of their operations (e.g., call centers) to other countries. This practice is often called outsourcing. By moving operations to developing countries, the businesses save money because they can pay laborers lower wages.

Nic's company is making some quick changes in response to shifting market conditions. The ability to easily realign its people and resources appropriately is called: A. flexibility B. scalability C. visibility D. cohesiveness

B. scalability Scalability refers to an organization's ability to quickly and easily realign its people and market change. Flexibility refers to adjusting to changes as they occur.

Why should a business practice good ethics? A. The government will fine an unethical business. B. An unethical business will go bankrupt. C. An ethical business contributes toward its own success. D. An ethical business makes more money than all its competitors.

C. An ethical business contributes toward its own success. Businesses that practice good ethics usually build positive public images and attract long-term customers; therefore, a business that invests in practicing good ethics is making an important investment into itself.

Which of the following is a situation that might make businesspeople from other countries fell uncomfortable and impact their ability to conduct business. A. Offering to take others to lunch or dinner B. Calling in advance to schedule appointments C. Standing very close to others during conversations D. Wearing business type clothing that is conservative

C. Standing very close to others during conversations . In some countries, it is socially accepted and appropriate for businesspeople to stand very close together when conversing. However, people from other cultures often prefer to keep more distance and feel uncomfortable when someone stands very close.

An American businessperson in London was offered a "cuppa" by the company's receptionist. The businessperson did not know that the receptionist was offering a cup of tea. This is an example of A. being uneducated. B. a business subculture. C. a language barrier. D. economic differences.

C. a language barrier. Culture influences verbal communication, even in countries that basically speak the same language. In those countries, different words for objects and different modes of expressing ideas cause misunderstandings and may be language barriers.

A business's philanthropic responsibility involves its contributions to A. scientific research. B. political campaigns. C. charity. D. the economy.

C. charity. A business's philanthropic responsibility involves its contributions to charity. Philanthropic responsibility is part of a business's overall social responsibility.

A nation that exports more than it imports maintains a A. trade deficit. B. balance of trade. C. trade surplus. D. lower standard of living.

C. trade surplus. A trade surplus exists when a nation's exports are greater than its imports. A trade surplus increases the gross domestic product and can lead to a higher standard of living and more job opportunities.

Which of the following is the best action for businesses to take in order to adapt to changing markets? A. Focus efforts on business's product with the highest profit B. Protect the business's core products C. Reduce investments in research and development D. Implement innovative strategies and ideas

D. Implement innovative strategies and ideas Businesses need to be proactive when markets are changing. Sticking with the way things have always been done and protecting core products will hamper a business's ability to grow and succeed.

Which of the following is an environmental factor that affects the performance of businesses that market products on a global level: A. Land formation B. Storage space C. Health coverage D. Political risk

D. Political risk The environment in which businesses operate have an effect on their performance. Many businesses market products on a global level so the political situation in different countries is an important environmental factor. Businesses often evaluate the risk of operating in certain countries based on the political stability of the government.

Businesses that successfully adapt to current market situations often realize that A. cutting costs is important. B. more financing is necessary. C. diversification is the key. D. change is an opportunity.

D. change is an opportunity. Markets change over time, and today's market is different than the market that existed several years ago. To be successful, businesses need to adapt to current market situations. Those that are able to do this realize that change is an opportunity, a favorable means to meet an objective.

A business should conduct environmental scans on a continuous basis so that it can: A. control the external environment B. change customer's attitudes C. save money D. respond to opportunities and threats quickly

D. respond to opportunities and threats quickly A business should conduct environmental scans on a continuous basis so that it can respond to opportunities and threats quickly. Scanning on a continuous basis will not change customers' attitudes, save money, or allow a business to control the external environment.

Which of the following is a reason a company might organize itself under the laws of a different country than those of its "home" country: a. To save on taxes b. To remain competitive c. To build brand value d. To take advantage of technology

a. To save on taxes One reason a company might organize itself under the laws of a different country than its "home" country is to save on taxes. Some countries, known as tax havens, have little to no taxes.

One difference between business ethics and the law is that business ethics a. are often unwritten. b. must be published. c. are enforced by government. d. are easy to determine.

a. are often unwritten. One difference between business ethics and the law is that business ethics are often unwritten. The law, on the other hand, must be published. The law, not business ethics, is enforced by government. Since ethics are not always clear-cut, business ethics can be difficult to determine.

The most common form of corruption affecting international trade is a. bribery. b. government involvement. c. negotiation. d. nonverbal communication.

a. bribery. The most common form of corruption affecting international trade is bribery, or giving money to someone in return for some sort of favor. Bribes are often made to government officials, but government involvement in trade is not necessarily corrupt.

The goals of government are to protect the rights of individuals and businesses and to provide a stable environment, but the main goal of business is to a. make a profit. b. save the environment. c. provide the best products. d. provide a safe working environment.

a. make a profit. Making a profit is the main goal of business. Profit is the monetary reward a business owner receives for taking the risk involved in investing in business.

Which of the following is a benefit that businesses receive from using the Internet: a. Improved methods of manufacturing b. Faster connections with suppliers c. Easier use of satellite radio d. The ability to call employees on the road

b. Faster connections with suppliers The Internet gives businesses faster and easier ways to communicate with both customers and suppliers—through e-mail, chat, video conferencing, etc.

Which of the following is a potential consequence of poor business ethics: a. Decreased internal problems b. Negative public image c. Increased customer loyalty d. Reduced risk of lawsuits

b. Negative public image Receiving a negative public image is a potential consequence for a business that practices poor ethics. Customers don't want to do business with companies they perceive to be unethical.

Which of the following is the most rapidly changing category of information included in an environmental scan: a. Demographics b. Technology c. Government d. Competition

b. Technology Technology is the most rapidly changing category of information included in an environmental scan. Not keeping up with technology can be fatal to a business, so scanning technology is very important. Demographics, the government, and competition tend to change at slower rates than technology.

Since Amie deals with people from many different countries, she attempts to become sensitive to differences in their customs and traditions. Amie is cultivating a. lobbying. b. cultural intelligence. c. social responsibility. d. competition.

b. cultural intelligence. Amie is attempting to cultivate cultural intelligence, or the knowledge, willingness, and ability to adjust her opinions and behaviors so that she values and is sensitive to people and ideas from other cultures. This is a valuable skill for someone working with others from a variety of different countries.

A society in which group ties are very loose is known as a(n) a. "feminine" society. b. individualist society. c. collectivist society. d. uncertainty-avoiding society.

b. individualist society. A society in which group ties are very loose is known as an individualist society, according to Hofstede's dimensions of national cultures. A collectivist society is integrated into strong groups.

Laura is part of a group that is traveling to the state capitol to convince legislators to pass laws that are favorable for small businesses. This is a practice known as a. globalization. b. lobbying. c. outsourcing. d. environmental scanning.

b. lobbying. Laura is participating in a lobbying effort, a practice in which a person or group attempts to influence lawmakers to pass or block certain legislation.

A business should conduct environmental scans on a continuous basis so that it can a. change customers' attitudes. b. respond to opportunities and threats quickly. c. save money. d. control the external environment.

b. respond to opportunities and threats quickly. A business should conduct environmental scans on a continuous basis so that it can respond to opportunities and threats quickly. Scanning on a continuous basis will not change customers' attitudes, save money, or allow a business to control the external environment.

Businesses must gather information about the competition during an environmental scan. Which of the following is an example of brand competition: a. Beauty salons v. veterinarians b. Grocery stores v. fitness centers c. Coke v. Pepsi d. Microsoft v. Wal-Mart

c. Coke v. Pepsi Coke v. Pepsi is an example of brand competition, or competition between two similar products.

How has technology changed the nature of competition? a. Competition has significantly decreased. b. Only big companies can stay competitive. c. Companies must stay in step with new technologies. d. All competition is now conducted online.

c. Companies must stay in step with new technologies. To remain competitive, companies must stay in step with creating and using the newest technologies. Technology has increased the intensity of business competition and has allowed smaller businesses to compete with larger ones.

Which of the following technologies has made manufacturing more efficient: a. Satellites and software b. Cell phones c. Improved materials and methods d. The Internet

c. Improved materials and methods Improved materials and methods, such as plastics and textiles, have made manufacturing processes more efficient over time.

Which of the following is a true statement about a business's environment: a. It can be avoided. b. It consists of the economy and technology. c. It is always changing. d. It may not affect the business, depending on the industry.

c. It is always changing. A business's environment is always in flux. That's why environmental scanning is so important. A business's environment cannot be avoided, and it will affect every business regardless of the industry. It consists of many elements, more than just the economy and technology.

Wyatt's laptop is only a couple of years old, but he'd already like to replace it with a newer, updated model. What characteristic of the current business environment does this illustrate? a. Spending trends b. Growth of service businesses c. Shrinking product life cycles d. Globalization

c. Shrinking product life cycles Wyatt's situation is familiar to many consumers who own electronics—because of the constant advances in technology, products quickly become outdated or obsolete, thereby "shrinking" their life cycles.

One way in which government protects private property is to provide a. Federal Reserve Banks. b. local governmental programs. c. patents or copyrights. d. fire insurance policies.

c. patents or copyrights. The government issues patents or copyrights to inventors and artists to protect their work.

Millie deals with customers from a certain country on a regular basis. When she meets people from this country in a social setting, she assumes they will be just like all her customers. This is an example of a. power distance. b. uncertainty avoidance. c. stereotyping. d. ethnocentrism.

c. stereotyping. Millie is stereotyping her new acquaintances—generalizing them based on their cultural background.

Phil works from his home office on Tuesdays and Thursdays. This is known as a. information gathering. b. networking. c. telecommuting. d. collaborating.

c. telecommuting. When Phil works from home or any remote location, he is telecommuting. Technology makes this possible.

Which of the following is a public good that is provided by the government: a. Private schools b. Marketing research c. New automobiles d. Interstate highways

d. Interstate highways Public goods are goods and services that are used by all people and cannot be withheld from those who don't help to pay for them.

Which of the following is an example of a demographic trend: a. Shifting political climates b. Rising interest rates c. A concern for fitness and health d. The aging of the population

d. The aging of the population The aging of the population is a demographic trend since it refers to demographic data (age).

Which of the following is a true statement about the social factor of lifestyle and fashion trends: a. They influence retail businesses only. b. They are more important than economic trends. c. They do not affect customer needs. d. They change quite frequently.

d. They change quite frequently. Lifestyle and fashion trends influence customer needs and tend to change quickly and frequently, making it important for affected businesses to keep up with them on a regular basis.

A specific Internet technology that allows users to make voice and video calls online is called a. Electronic Transfer of Funds. b. Expert Systems. c. Hardware. d. Voice over Internet Protocol.

d. Voice over Internet Protocol. A specific Internet technology that allows users to make voice and video calls online is called VoIP, or Voice over Internet Protocol. It is used by communications companies such as Vonage and Skype.

An organization that has the ability to adapt quickly is a. culturally intelligent. b. open-minded. c. cohesive. d. agile.

d. agile. An organization that has the ability to adapt quickly is agile. An agile organization anticipates changes, changes quickly, and has the ability to align its people and other resources accordingly.

When a business uses computer technology to manage its money and move it among different accounts, it is taking advantage of a. hardware. b. expert systems. c. electronic data interchange. d. electronic transfer of funds.

d. electronic transfer of funds. When a business uses computer technology to manage its money and move it among different accounts, it is taking advantage of the electronic transfer of funds. This is the same technology you use at the ATM.

Businesses keep track of external changes as part of a process called a. cultural intelligence. b. globalization. c. lobbying. d. environmental scanning.

d. environmental scanning. Businesses keep track of external changes as part of a process known as environmental scanning. This process brings important information to light for a business's owners or managers, who can then make appropriate decisions and plans.

Amie talks to customers and suppliers from all over the world on a daily basis. Her company's involvement with people in so many different countries is due to the trend of a. environmental scanning. b. inflation. c. social responsibility. d. globalization.

d. globalization. Globalization is the rapid and unimpeded flow of capital, labor, and ideas across national borders. Over the past few decades, the business world has become more and more globalized.

Free exchange of ideas contributes to a. more instances of offshoring. b. fewer choices for consumers. c. decreased competition. d. greater business innovation.

d. greater business innovation. Free exchange of ideas contributes to greater business innovation. Due to globalization, ideas can be exchanged more freely than ever.