chapter 2

Question 1

General environment:

Answer 1

The set of broad dimensions
and forces in an organization’s surroundings that
determine its overall context

Question 2

Task environment:

Answer 2

Specific organizations or groups
that affect the organization

Question 3

Internal environment

Answer 3

The conditions and forces within an organization

Question 4

General Environment dimension

Answer 4

• Economic dimension: Overall health and vitality of the
  economic system in which the organization operates.
  − Includes growth, inflation, interest rates, and unemployment
• Technological dimension: Methods available for converting
  resources into products or services
  − CAD/CAM technologies, Web-based technologies in all areas of
  business
• Political-legal dimension: Government regulation of
  business, relationship between business and government

Question 5

Political-legal dimension:

Answer 5

Government regulation of
business, relationship between business and government

− Free market economy
− Political stability of international and local governments
− Pro- or anti-business sentiment in government influences
business activity. Includes antitrust issues, taxes, regulation
- Affects ability to compete

Question 6

task: Competitor

Answer 6

− An organization that competes with other
organizations for resources

Question 7

task: Customer

Answer 7

− Whoever pays money to acquire an organization’s
products or services

Question 8

task: Supplier

Answer 8

− An organization that provides resources for other
organizations

Question 9

task: Regulator

Answer 9

A body that has the potential to control, legislate,
or otherwise influence the organization’s policies and
practices

Question 10

task: Regulatory agencies:

Answer 10

An agency created by the
government to regulate business activities

Question 11

task: Interest groups

Answer 11

A group organized by its members to
attempt to influence organizations

Question 12

task: Strategic partner

Answer 12

Also called strategic ally. An organization
working together with one or more other organizations in a
joint venture or similar arrangement

Question 13

Internal: Owner

Answer 13

− Whoever can claim property rights to an organization

Question 14

Internal: Board of directors

Answer 14

− Governing body that is elected by a corporation’s
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

Question 15

internal: Physical work environment

Answer 15

− Includes the actual physical environment and the work that
people do

Question 16

Ethics

Answer 16

• An individual’s personal beliefs about whether a behavior,
  action, or decision is right or wrong

Question 17

Ethical behavior:

Answer 17

• Behavior that conforms to generally accepted social norms

Question 18

Unethical behavior:

Answer 18

• Behavior that does not conform to generally accepted social
  norms

Question 19

Exporting

Answer 19

− Making a product in the firm’s domestic marketplace
and selling it in another country

Question 20

Importing

Answer 20

− Bringing a good, service, or capital into the home
country from abroad

Question 21

Licensing

Answer 21

− An arrangement whereby one company allows another
company to use its brand name, trademark, technology,
patent, copyright, or other assets in exchange for a
royalty based on sales

Question 22

Strategic alliance

Answer 22

− A cooperative arrangement between two or more firms for
mutual gain

Question 23

Joint venture

Answer 23

− A special type of strategic alliance in which the partners
share in the ownership of an operation on an equity basis

Question 24

Direct investment:

Answer 24

− When a firm builds or purchases operating facilities or
subsidiaries in a different country

Question 25

Maquiladoras:

Answer 25

− Light assembly plants built close to the U.S. border and are
given special tax breaks by the Mexican government

Question 26

importing or exporting advanteges

Answer 26

1. Small cash outlay
2. Little risk
3. No adaptation necessary

Question 27

importing or exporting Disadvantages

Answer 27

1. Tariffs and taxes
2. High transportation costs
3. Government restrictions

Question 28

Licensing Advantages

Answer 28

1. Increased profitability
2. Extended profitability

Question 29

Licensing disadvantages

Answer 29

1. Inflexibility
2. Competition

Question 30

Strategic alliances or joint ventures Advantages

Answer 30

1. Quick market entry
2. Access to materials and technology

Question 31

Strategic alliances or joint ventures Disadvantages

Answer 31

1. Shared ownership (limits control and profits)

Question 32

Direct investment advantages

Answer 32

1. Enhanced control
2. Existing infrastructure

Question 33

Direct investment disadvantages

Answer 33

1. Complexity
2. Greater economic and political risk
3. Greater uncertainty