Chapter 2

Question 1

Acquisition

Answer 1

One firm buying another

Question 2

Barriers to entry

Answer 2

Conditions that prevent new companies from entering an industry

Question 3

Benchmarking

Answer 3

The process of comparing an organization’s practices and technologies with those of other companies

Question 4

Buffering

Answer 4

Creating supplies of excess resources in case of unpredictable needs

Question 5

Competitive environment

Answer 5

The immediate environment surrounding a firm; includes suppliers, customers, rivals, and the like

Question 6

Competitive intelligence

Answer 6

Information that helps managers determine how to compete better

Question 7

Cooperative strategies

Answer 7

Strategies used by two or more organizations working together to manage the external environment

Question 8

Defenders

Answer 8

Companies that stay within a stable product domain as a strategic maneuver

Question 9

Demographics

Answer 9

Measures of various characteristics of the people who make up groups or other social units

Question 10

Diversification

Answer 10

A firm’s investment in a different product, business, or geographic area

Question 11

Divestiture

Answer 11

A firm selling one or more businesses

Question 12

Domain selection

Answer 12

Entering a new market or industry with an existing expertise

Question 13

Empowerment

Answer 13

The process of sharing power with employees, thereby enhancing their confidence in their ability to perform their jobs and their belief that they are influential contributors to the organization

Question 14

Environmental scanning

Answer 14

Searching for and sorting through information about the environment

Question 15

Environmental uncertainty

Answer 15

Lack of information needed to understand or predict the future

Question 16

External environment

Answer 16

All relevant forces outside a firm’s boundaries, such as competitors, customers, the government, and the economy

Question 17

Final consumer

Answer 17

Those who purchase products in their finished form

Question 18

Flexible processes

Answer 18

Methods for adapting the technical core to changes in the environment

Question 19

Forecasting

Answer 19

Method for predicting how variables will change the future

Question 20

Independent strategies

Answer 20

Strategies that an organization acting on its own uses to change some aspect of its current environment

Question 21

Inputs

Answer 21

Goods and services organizations take in and use to create products or services

Question 22

Intermediate consumer

Answer 22

A customer who purchases raw materials or wholesale products before selling them to final customers

Question 23

Macro-environment

Answer 23

The general environment; includes governments, economic conditions, and other fundamental factors that generally affect all organizations

Question 24

Merger

Answer 24

One or more companies combining with another

Question 25

Open systems

Answer 25

Organizations that are affected by, and that affect, their environment

Question 26

Organization culture

Answer 26

The set of important assumptions about the organization and its goals and practices that members of the company share

Question 27

Outputs

Answer 27

The products and services organizations create

Question 28

Prospectors

Answer 28

Companies that continually change the boundaries for their task environments by seeking new products and markets, diversifying and merging, or acquiring new enterprises

Question 29

Scenario

Answer 29

A narrative that describes a particular set of future conditions

Question 30

Smoothing

Answer 30

Leveling normal fluctuations at the boundaries of the environment

Question 31

Strategic maneuvering

Answer 31

An organization’s conscious efforts to change the boundaries of its task environment

Question 32

Supply chain management

Answer 32

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

Question 33

Switching costs

Answer 33

Fixed costs buyers face when they change suppliers