L2 - Global Environment & Management Theory

Question 1

What is the external environment of an organization?

A) The major forces outside the organization that have the potential to influence its performance
B) The general conditions that exist within an organization
C) The internal culture and values of an organization
D) The physical setting within which the organization operates

Answer 1

A) The major forces outside the organization that have the potential to influence its performance

Explanation: The external environment consists of major forces outside the organization that can influence its performance.

Question 2

What is an open system in the context of an organization?

A) A system that operates independently of its environment
B) A system that interacts with its environment and is influenced by it
C) A system that focuses solely on internal processes
D) A system that does not change over time

Answer 2

B) A system that interacts with its environment and is influenced by it

Explanation: An open system interacts with its environment and is influenced by external factors.

Question 3

What are the two main components of the organizational environment?

A) External environment and Internal environment
B) Technological environment and Economic environment
C) Legal environment and Political environment
D) Social environment and Cultural environment

Answer 3

A) External environment and Internal environment

Explanation: The organizational environment consists of the external environment (forces outside the organization) and the internal environment (conditions within the organization).

Question 4

Which elements are part of the external environment?

A) Customers, Suppliers, Competitors, Government agencies
B) Organizational culture, Physical setting, Member interactions
C) Internal policies, Employee behavior, Management practices
D) Financial planning, Marketing strategies, Human resources

Answer 4

A) Customers, Suppliers, Competitors, Government agencies

Explanation: The external environment includes elements such as customers, suppliers, competitors, and government agencies.

Question 5

What is the mega-environment?

A) The broad conditions and trends in the societies in which an organization operates
B) The specific outside elements with which an organization interfaces
C) The internal culture and values of an organization
D) The physical setting within which the organization operates

Answer 5

A) The broad conditions and trends in the societies in which an organization operates

Explanation: The mega-environment refers to the broad conditions and trends in the societies where an organization operates.

Question 6

How does the technological element impact an organization?

A) It influences the production of products and services
B) It creates new opportunities or threats for managers
C) It can make products obsolete quickly
D) All of the above

Answer 6

D) All of the above

Explanation: The technological element impacts an organization by influencing the production of products and services, creating new opportunities or threats, and potentially making products obsolete quickly.

Question 7

What factors influence the economic element of an organization?

A) Inflation, Interest rates, Recessions, Unemployment rate
B) Technological advances, Customer preferences, Market trends
C) Legal regulations, Political stability, Social norms
D) Internal policies, Employee behavior, Management practices

Answer 7

A) Inflation, Interest rates, Recessions, Unemployment rate

Explanation: The economic element is influenced by factors such as inflation, interest rates, recessions, and the unemployment rate.

Question 8

What does the legal-political element encompass?

A) The legal and governmental systems within which an organization operates
B) The technological advances affecting an organization
C) The economic conditions influencing an organization
D) The internal culture and values of an organization

Answer 8

A) The legal and governmental systems within which an organization operates

Explanation: The legal-political element encompasses the legal and governmental systems within which an organization operates.

Question 9

What does the sociocultural element include?

A) Attitudes, values, norms, beliefs, behaviors, and demographic trends
B) Legal regulations, Political stability, Social norms
C) Technological advances, Customer preferences, Market trends
D) Internal policies, Employee behavior, Management practices

Answer 9

A) Attitudes, values, norms, beliefs, behaviors, and demographic trends

Explanation: The sociocultural element includes attitudes, values, norms, beliefs, behaviors, and demographic trends characteristic of a given geographic area.

Question 10

How does the international element affect an organization?

A) It provides new customers, suppliers, and competitors
B) It affects the ability of the organization to conduct business abroad
C) It involves fluctuations of currency against foreign currencies
D) All of the above

Answer 10

D) All of the above

Explanation: The international element affects an organization by providing new customers, suppliers, and competitors, influencing the ability to conduct business abroad, and involving currency fluctuations.

Question 11

What is the task environment?

A) The specific outside elements with which an organization interfaces in the course of conducting its business
B) The broad conditions and trends in the societies in which an organization operates
C) The internal culture and values of an organization
D) The physical setting within which the organization operates

Answer 11

A) The specific outside elements with which an organization interfaces in the course of conducting its business

Explanation: The task environment consists of the specific outside elements with which an organization interfaces while conducting its business.

Question 12

Who are considered competitors in the task environment?

A) Other organizations that offer or have the potential to offer rival products and services
B) Internal departments within the organization
C) Government agencies and regulatory bodies
D) Suppliers and labor unions

Answer 12

A) Other organizations that offer or have the potential to offer rival products and services

Explanation: Competitors in the task environment are other organizations that offer or have the potential to offer rival products and services.

Question 13

Who are considered suppliers in the task environment?

A) Organizations and individuals that supply the resources an organization needs to conduct its operations
B) Internal departments within the organization
C) Government agencies and regulatory bodies
D) Competitors and labor unions

Answer 13

A) Organizations and individuals that supply the resources an organization needs to conduct its operations

Explanation: Suppliers in the task environment are organizations and individuals that provide the resources needed for an organization to conduct its operations.

Question 14

What role do government agencies play in the task environment?

A) They provide services and monitor compliance with laws and regulations
B) They supply resources to the organization
C) They compete with the organization
D) They influence the internal culture of the organization

Answer 14

A) They provide services and monitor compliance with laws and regulations

Explanation: Government agencies in the task environment provide services and monitor compliance with laws and regulations at various levels.

Question 15

What is environmental uncertainty?

A) Conditions in which future environmental circumstances affecting an organization cannot be accurately assessed or predicted
B) The stability of the internal environment of an organization
C) The predictability of market trends
D) The consistency of organizational policies

Answer 15

A) Conditions in which future environmental circumstances affecting an organization cannot be accurately assessed or predicted

Explanation: Environmental uncertainty refers to conditions where future environmental circumstances affecting an organization cannot be accurately assessed or predicted, making it challenging for managers to plan and make decisions.

Question 16

What are the two main characteristics of the environment that contribute to uncertainty?

A) Complexity and Dynamism
B) Stability and Predictability
C) Simplicity and Consistency
D) Uniformity and Regularity

Answer 16

A) Complexity and Dynamism

Explanation: The two main characteristics of the environment that contribute to uncertainty are complexity (the number of factors that affect the organization) and dynamism (the rate at which these factors change).

Question 17

What are the three approaches to managing the environment?

A) Adaptation, Favourability influence, Domain shifting
B) Planning, Organizing, Leading
C) Forecasting, Smoothing, Buffering
D) Centralization, Decentralization, Specialization

Answer 17

A) Adaptation, Favourability influence, Domain shifting

Explanation: The three approaches to managing the environment are adaptation (changing internal operations to fit the environment), favourability influence (altering environmental elements to fit the organization’s needs), and domain shifting (changing the product/service mix to create a favorable interface).

Question 18

What does buffering involve in the context of adaptation?

A) Stockpiling inputs or outputs to cope with environmental fluctuations
B) Reducing the impact of market fluctuations
C) Predicting changing conditions and future events
D) Providing limited access to high-demand products or services

Answer 18

A) Stockpiling inputs or outputs to cope with environmental fluctuations

Explanation: Buffering involves stockpiling either inputs into or outputs from a production or service process to cope with environmental fluctuations.

Question 19

Which of the following is NOT a method of favourability influence?

A) Advertising and public relations
B) Boundary spanning
C) Recruiting
D) Stockpiling

Answer 19

D) Stockpiling

Explanation: Stockpiling is a method of adaptation, not favourability influence. Methods of favourability influence include advertising and public relations, boundary spanning, and recruiting.

Question 20

What does domain shifting involve?

A) Moving out of a current product, service, or geographic area into a more favorable domain
B) Reducing the impact of market fluctuations
C) Predicting changing conditions and future events
D) Providing limited access to high-demand products or services

Answer 20

A) Moving out of a current product, service, or geographic area into a more favorable domain

Explanation: Domain shifting involves moving out of a current product, service, or geographic area into a more favorable domain or expanding current domains through diversification or expansion of products/services offered.

Question 21

What is organizational culture?

A) A system of shared values, assumptions, beliefs, and norms uniting organizational members
B) The physical setting within which the organization operates
C) The external forces that influence the organization
D) The legal and governmental systems within which the organization operates

Answer 21

A) A system of shared values, assumptions, beliefs, and norms uniting organizational members

Explanation: Organizational culture is a system of shared values, assumptions, beliefs, and norms that unite organizational members and influence how they interact and work together.

Question 22

Which of the following is NOT a manifestation of organizational culture?

A) Symbols
B) Stories
C) Rites
D) Financial statements

Answer 22

D) Financial statements

Explanation: Manifestations of organizational culture include symbols, stories, rites, and ceremonies. Financial statements are not a manifestation of culture.

Question 23

What are the two main approaches in the evolution of management theory?

A) Systems Theory and Contingency Approach
B) Scientific Management and Bureaucratic Management
C) Human Relations Movement and Quantitative Management
D) Classical Management and Behavioral Management

Answer 23

A) Systems Theory and Contingency Approach

Explanation: The two main approaches in the evolution of management theory are Systems Theory (viewing organizations as systems) and Contingency Approach (arguing that appropriate managerial action depends on the situation).

Question 24

What did early management ideas emphasize?

A) The importance of working and social conditions for employees
B) The need for organizations to operate in a rational manner
C) The scientific study of work methods to improve efficiency
D) The use of mathematical models and statistical methods

Answer 24

A) The importance of working and social conditions for employees

Explanation: Early management ideas emphasized the importance of working and social conditions for employees, as well as ideas on work specialization, production efficiency, and incentive plans.

Question 25

What was a limitation of early management contributions? A) They were uncoordinated efforts B) They related to specific problems C) They did not see management as a separate field or skill D) All of the above

Answer 25

D) All of the above ## Footnote Explanation: Early management contributions were uncoordinated efforts, related to specific problems, and did not see management as a separate field or skill.

Question 26

What does the classical management viewpoint emphasize? A) Managing work and organizations more efficiently B) Understanding human behavior in organizations C) Using mathematical models for decision making D) Viewing organizations as systems

Answer 26

A) Managing work and organizations more efficiently ## Footnote Explanation: The classical management viewpoint emphasizes managing work and organizations more efficiently and includes approaches like scientific management, bureaucratic management, and administrative management.

Question 27

What is the focus of scientific management? A) The scientific study of work methods to improve worker efficiency B) The need for organizations to operate in a rational manner C) The principles used by managers to coordinate internal activities D) The importance of working and social conditions for employees

Answer 27

A) The scientific study of work methods to improve worker efficiency ## Footnote Explanation: Scientific management focuses on the scientific study of work methods to improve worker efficiency.

Question 28

What are the four principles of scientific management according to Frederick W. Taylor? A) Select and train the best, Determine the most efficient work methods, Cooperate with workers, Divide work/responsibility B) Plan, Organize, Lead, Control C) Forecast, Buffer, Smooth, Ration D) Adapt, Influence, Shift, Manage

Answer 28

A) Select and train the best, Determine the most efficient work methods, Cooperate with workers, Divide work/responsibility ## Footnote Explanation: The four principles of scientific management according to Frederick W. Taylor are selecting and training the best workers, determining the most efficient work methods, cooperating with workers to ensure the best method is used, and dividing work and responsibility between workers and managers.

Question 29

What does bureaucratic management emphasize? A) The need for organizations to operate in a rational manner rather than relying on arbitrary whims B) The scientific study of work methods to improve worker efficiency C) The principles used by managers to coordinate internal activities D) The importance of working and social conditions for employees

Answer 29

A) The need for organizations to operate in a rational manner rather than relying on arbitrary whims ## Footnote Explanation: Bureaucratic management emphasizes the need for organizations to operate in a rational manner rather than relying on the arbitrary whims of owners and managers.

Question 30

Who is associated with the development of bureaucratic management? A) Max Weber B) Frederick W. Taylor C) Henri Fayol D) Mary Parker Follett

Answer 30

A) Max Weber ## Footnote Explanation: Max Weber is associated with the development of bureaucratic management.

Question 31

What does administrative management focus on? A) Principles used by managers to coordinate the organization's internal activities B) The scientific study of work methods to improve worker efficiency C) The need for organizations to operate in a rational manner D) The importance of working and social conditions for employees

Answer 31

A) Principles used by managers to coordinate the organization's internal activities ## Footnote Explanation: Administrative management focuses on the principles used by managers to coordinate the organization's internal activities.

Question 32

Which of the following is NOT one of Fayol's 14 Principles of Administrative Management? A) Division of work B) Unity of command C) Financial planning D) Equity

Answer 32

C) Financial planning ## Footnote Fayol's 14 Principles of Administrative Management include division of work, unity of command, and equity, but not financial planning.

Question 33

What does the principle of division of labor entail? A) Allowing for job specialization to increase efficiency B) Ensuring employees have only one boss C) Providing justice and fair treatment to all employees D) Encouraging employees to act on their own

Answer 33

A) Allowing for job specialization to increase efficiency ## Footnote Explanation: The principle of division of labor involves allowing for job specialization, which increases output by making employees more efficient.

Question 34

What does the principle of unity of command state? A) Employees should have only one boss B) Authority should be centralized at the top of the organization C) There should be a single plan of action to guide the organization D) Employees must obey and respect the rules that govern the organization

Answer 34

A) Employees should have only one boss ## Footnote Explanation: The principle of unity of command states that employees should have only one boss to avoid confusion and conflicting instructions.

Question 35

What does the principle of centralization refer to? A) The degree to which authority rests at the top of the organization B) The arrangement of employees where they will be of the most value C) The provision of justice and fair treatment to all employees D) The fostering of creativity and innovation by encouraging employees to act on their own

Answer 35

A) The degree to which authority rests at the top of the organization ## Footnote Explanation: The principle of centralization refers to the degree to which authority is concentrated at the top of the organization.

Question 36

What does the principle of remuneration of personnel entail? A) Workers must be paid a fair wage for their services B) Employees must obey and respect the rules that govern the organization C) Long-term employment is important for skill development D) The interest of the organization takes precedence over that of the individual employee

Answer 36

A) Workers must be paid a fair wage for their services ## Footnote Explanation: The principle of remuneration of personnel states that workers must be paid a fair wage for their services.

Question 37

What is the focus of behavioural theorists in management? A) Understanding various factors affecting human behaviour in organizations B) Managing work and organizations more efficiently C) Using mathematical models for decision making D) Viewing organizations as systems

Answer 37

A) Understanding various factors affecting human behaviour in organizations ## Footnote Explanation: Behavioural theorists focus on understanding various factors that affect human behaviour in organizations.

Question 38

Who emphasized the importance of group functioning in management? A) Hugo Munsterberg B) Mary Parker Follett C) Frederick W. Taylor D) Max Weber

Answer 38

B) Mary Parker Follett ## Footnote Mary Parker Follett emphasized the importance of group functioning in management.

Question 39

What did the Hawthorne studies highlight? A) The importance of supervisory style on employee performance B) The need for organizations to operate in a rational manner C) The scientific study of work methods to improve efficiency D) The use of mathematical models for decision making

Answer 39

A) The importance of supervisory style on employee performance ## Footnote Explanation: The Hawthorne studies highlighted the importance of supervisory style on employee performance.

Question 40

What is Abraham Maslow known for in the context of management? A) Employee motivation through the Hierarchy of Needs B) Leadership styles through Theory X and Theory Y C) Scientific management principles D) Bureaucratic management principles

Answer 40

A) Employee motivation through the Hierarchy of Needs ## Footnote Explanation: Abraham Maslow is known for his Hierarchy of Needs, which explains employee motivation.

Question 41

Which need is at the top of Maslow's Hierarchy of Needs? A) Physiological B) Safety C) Social D) Self-actualization

Answer 41

D) Self-actualization ## Footnote Explanation: Self-actualization is at the top of Maslow's Hierarchy of Needs, representing the fulfillment of one's potential.

Question 42

What do leaders who hold Theory X assumptions believe about employees? A) Employees are inherently lazy and lack ambition B) Employees do not dislike work and want to contribute C) Employees are capable of self-direction and seek responsibility D) Employees can make good decisions

Answer 42

A) Employees are inherently lazy and lack ambition ## Footnote Explanation: Leaders who hold Theory X assumptions believe that employees are inherently lazy and lack ambition, representing a negative perspective on human behavior.

Question 43

What do leaders who hold Theory Y assumptions believe about employees? A) Employees are inherently lazy and lack ambition B) Employees do not dislike work and want to contribute C) Employees need to be controlled and avoid responsibility D) Employees seek security and avoid work

Answer 43

B) Employees do not dislike work and want to contribute ## Footnote Explanation: Leaders who hold Theory Y assumptions believe that employees do not dislike work and want to make useful contributions to the organization, representing a positive perspective on human behavior.

Question 44

What does the quantitative management viewpoint focus on? A) Mathematics, statistics, and information aids to support managerial decision making B) Understanding human behavior in organizations C) Managing work and organizations more efficiently D) Viewing organizations as systems

Answer 44

A) Mathematics, statistics, and information aids to support managerial decision making ## Footnote Explanation: The quantitative management viewpoint focuses on using mathematics, statistics, and information aids to support managerial decision making and organizational effectiveness.

Question 45

What is the goal of management science within the quantitative management viewpoint? A) Increasing decision effectiveness through the use of sophisticated mathematical models and statistical methods B) Managing production and delivery of an organization’s products and services C) Designing and implementing computer-based information systems for use by management D) Understanding various factors affecting human behavior in organizations

Answer 45

Answer: A) Increasing decision effectiveness through the use of sophisticated mathematical models and statistical methods ## Footnote Explanation: Management science aims to increase decision effectiveness through the use of sophisticated mathematical models and statistical methods.