Chapter 1

Question 1

Organization

Answer 1

a tool people use to coordinate their actions to obtain something they desire or value.

Question 2

Entrepreneurship

Answer 2

The process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs.

Question 3

Organizational Environment

Answer 3

The set of forces and conditions that operate beyond an organization’s boundaries but affect its ability to acquire and use resources.

Question 4

Economies of scale

Answer 4

Cost savings that result when goods and services are produced in large volume on automated production lines

Question 5

Economies of scope

Answer 5

Cost savings that result when an organization is able to use underutilized resources more effectively because they can be share across different products or tasks.

Question 6

Transaction costs

Answer 6

The costs associated with negotiating, monitoring and governing exchanges between people

Question 7

Organizational theory

Answer 7

The study of how organizations function and how they affect and are affected by the environment in which they operate

Question 8

Organizational Structure

Answer 8

The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals

Question 9

Organizational culture

Answer 9

The set of shared values and norms that control organizational members’ interactions with each other and with suppliers, customers, and other people outside the organization.

Question 10

Organizational design

Answer 10

The process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals.

Question 11

Organizational change

Answer 11

The process by which organizations redesign their structures and cultures to move from their present state to some desired future state to increase their effectiveness

Question 12

Contingency

Answer 12

An event that might occur and must be planned for

Question 13

Competitive advantage

Answer 13

The ability of one company to outperform another because its managers are able to create more value from the resources at their disposal

Question 14

Core competences

Answer 14

Managers’ skills and abilities in value-creating activities

Question 15

Strategy

Answer 15

The specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors

Question 16

External resources approach

Answer 16

A method managers use to evaluate how effectively an organization manages and controls its external environment

Question 17

Internal systems approach

Answer 17

A method that allows managers to evaluate how effectively an organization functions and resources operate

Question 18

Technical approach

Answer 18

A method managers use to evaluate how efficiently an organization can convert some fixed amount of organizational resources into finished goods and services

Question 19

Official goals

Answer 19

guiding principles that the organization formally states in its annual report and in other public documents

Question 20

Mission

Answer 20

Goals that explain why the organization exists and what it should be doing

Question 21

Operative goals

Answer 21

Specific long-term and short-term goals that guide managers and employees as they perform the work of the organization