Student name:__________

TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Operating in the global environment is more predictable than operating in the domestic
market.
⊚ true
⊚ false

2) Recent disruptions in the global supply chain during the COVID-19 pandemic are most likely
dealt with in the task environment.
⊚ true
⊚ false

3) When new competitors enter an industry, prices in the industry typically increase.
⊚ true
⊚ false

4) The greater the economies of scale of existing organizations, the lower are the barriers to
entry for new competitors.
⊚ true
⊚ false

5) Most profit-oriented organizations are threatened during economic downturns, but not-for-
profit organizations tend to flourish.
⊚ true
⊚ false

6) While the typical organization in the United States emphasizes the importance of the group,
the typical organization in Japan emphasizes the importance of the individual.
⊚ true
⊚ false

7) A shift in the age distribution of the population of the United States is an example of a
demographic force that affects organizations in the United States.
⊚ true
⊚ false

8) A government imposes tariffs on imports to protect its industries and workers from inflation.
⊚ true
⊚ false
9) Governments of countries that resort to raising tariff barriers ultimately reduce employment
in their countries.
⊚ true
⊚ false

10) The norms of a society are written rules of codes of conduct that tell people what they are
allowed to do or not do.
⊚ true
⊚ false

11) An employee decided to inflate her expense reports for reimbursement because she felt she
wasn’t being paid enough. This is a violation of mores.
⊚ true
⊚ false

12) Societies that are high on uncertainty avoidance, such as the United States, value diversity
and tolerate differences between people in their actions.
⊚ true
⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
13) The wide-ranging global, economic, technological, sociocultural, and political forces that
affect the organization and its task environment make up the ________ environment.
A) competitive
B) near
C) task
D) general

14) Karl manages a division of a greeting card manufacturer. He attends a conference and
receives advice from four experienced managers. Based on what you have read, which piece
of advice should Karl take?
A) "Make the company a global organization so it can benefit from emerging markets."
B) "Make the company a local organization so it can be protected from new
competitors."
C) "There will always be competitors, so focus on long-term demographic trends instead
of worrying about the competition."
D) "There will always be demographic changes, so focus on beating competitors instead
of analyzing customer trends."
15) An organization's task environment includes the forces and conditions that originate with
A) a country’s culture.
B) the economy.
C) a country’s politics.
D) suppliers.

16) Compared to the changes in the task environment, those in the general environment are often
A) harder to identify.
B) easier to respond to.
C) threats, not opportunities.
D) of less consequence.

17) The set of forces and conditions that originate with global suppliers, distributors, customers,
and competitors and affect an organization's ability to obtain inputs and dispose of its outputs
is the ________ environment.
A) demographic
B) legal
C) task
D) societal

18) Barb manages an international supply chain. She is concerned because the company's
revenues and profits have dipped recently. Some of the managers she supervises say that the
problems have to do with the general environment in which the company operates, while
others insist that the problems are related to the task environment. What step could Barb take
to determine whether the general environment, the task environment, or both are at the root
of the problem?
A) Barb could interview suppliers to determine what problems (if any) they have with
distributors.
B) Barb could direct one of her employees to research whether the problems are
economic or political in nature.
C) Barb could tell a researcher to find out whether recent financial changes relate to the
economy in general or to the company's specific fields and locations.
D) It's impossible to differentiate the task environment from the general environment, so
Barb can't do anything in this situation.
19) Mathew is interviewing for a management job with an international manufacturer. One of the
interviewers asks him whether he would rather focus on the task environment or the general
environment in this management position. What is the best answer for Mathew to give?
A) "I'd like to focus on the task environment because it has the most immediate and
direct effect on managers, so I could make a real difference."
B) "Focusing on the general environment interests me because I want to improve the
organization's ability to obtain inputs and dispose of outputs."
C) "I can focus on both because the task environment and the general environment are
basically the same thing."
D) "Since companies are becoming more homogeneous because of globalization, neither
the label 'task environment' nor 'general environment' really applies anymore."

20) Sheng is a management consultant. He is working with a well-established software developer

that has employees in four countries. Sheng has noticed that senior management at the
company excels at managing suppliers and competing with rivals. However, the managers
know little about new laws related to software in the countries where they do business, and
they have not focused on the fact that the company's customer base is aging. What should
Sheng suggest in his report to the company CEO?
A) Instead of monitoring the task environment, spend time and money addressing the
general environment.
B) Instead of monitoring the general environment, spend time and money addressing the
task environment.
C) Keep up the good work as far as the task environment is concerned, but put more
time, resources, and expertise into addressing the general environment.
D) Relocate all of the company's offices, plants, and jobs to one country so the task
environment and general environment become the same.

21) Worldwide Gadgets sells goods and services that other companies offer but does not provide
any organization with the input resources needed to produce goods and services. Based on
this information, we can thus say that Worldwide Gadgets is a
A) supplier, not a competitor.
B) competitor, not a distributor.
C) distributor, not a supplier.
D) supplier, not a distributor.
22) Two companies specialize in designing bikes for triathletes in the North American market.
Thus, each company would see the other as a
A) supplier.
B) competitor.
C) distributor.
D) customer.

23) Globex helps ABC Corporation sell ABC Corporations washing machines. Globex does not
use the machines. Which statement describes either company correctly?
A) Globex is a distributor.
B) Globex is a customer.
C) ABC Corporation is a supplier.
D) ABC Corporation is a customer.

24) Actions of suppliers, distributors, customers, and competitors can affect managers' ability to
obtain resources and dispose of outputs, and thus, have a significant impact on the company's
A) socioeconomic environment.
B) short-term decision making.
C) political influence.
D) power distance.

25) An organization's major customer puts pressure on the organization to reduce prices on its
products. This is an example of influence exerted by the organization's ________
environment.
A) demographic
B) task
C) legal
D) sociocultural

26) Rose Lynn is a senior manager for an international chain of fitness centers. Two suppliers
provide exercise machines for her company. What is the best advice on how Rose Lynn
should manage her suppliers?
A) Keep the relationships as they are and focus on other matters, since suppliers are not
essential to this type of organization.
B) Seek out potential new suppliers who can meet or exceed the quality standards of
existing suppliers.
C) Eliminate one of the suppliers based on the quality of machinery and speed of
shipping.
D) Eliminate one of the suppliers based on the lowest total price for each machine.
27) Halloran Ltd. provides Guest Technologies with raw materials that it needs to produce its
products. In this context, which category does Halloran Ltd. belong to?
A) suppliers
B) competitors
C) distributors
D) customers

28) A supplier's bargaining position is strong when

A) the input is vital to the organization.
B) there are a large number of suppliers for an input.
C) the supply is free.
D) the supply is not protected by a patent.

29) Chicago Systems manufactures computer chips and is based in the United States. This year
the company has begun working with suppliers in other countries, but the suppliers' quality
levels have been erratic and prices high. Based on what you have read, what is the most cost-
effective way to combat this problem?
A) Hire a broker or intermediary in a supplier's country to determine if that country has a
supplier capable of keeping quality standards high.
B) Fire all the suppliers but one, and use the increased amount of work to bargain for a
lower cost per chip.
C) Hire only U.S.-based suppliers so Chicago can take advantage of lower transportation
costs and can more closely supervise product creation.
D) Eliminate all suppliers and create computer chips in house with a specially trained
staff.

30) According to a recent report, many jobs that had been outsourced were brought back to the
United States in 2020. One of the reasons for this was
A) it was less expensive to use domestic supply chains.
B) high unemployment meant there were more jobs to fill in the United States.
C) civil unrest was causing delays in global supply chains.
D) there was a need to shorten supply chains.

31) When a company contracts with suppliers in other countries to make the various inputs that
go into its products or to assemble the final products to reduce costs, ________ occurs.
A) inverted sourcing
B) power distance
C) global outsourcing
D) shared services
32) A company based in Vietnam performs the routine data entry tasks for a New York-based
insurer. This arrangement is an example of
A) global outsourcing.
B) power distance.
C) inverted sourcing.
D) shared services.

33) Which organization is a distributor?

A) the International Brotherhood of Electrical Workers union
B) DHL, an international shipping company
C) individuals who buy phones for their families
D) Ruby Tuesday, a "fast casual" restaurant chain

34) Organizations that help other organizations to sell their goods to customers are known as
A) competitors.
B) distributors.
C) customers.
D) suppliers.

35) As a new marketing manager, Sean noticed that sales were slipping. He needed to figure out
a way for the company to be more responsive to its customers. What is the best advice for
Sean?
A) Focus on the most profitable customers and give them special benefits.
B) Exploit opportunities by finding large companies who are interested in becoming
customers.
C) Segment the customer base into distinct groups, and figure out how to appeal to each
group.
D) Avoid threats by focusing on customers' enduring tastes and needs.

36) A firm that has not traditionally been a competitor of Dom’s Tools suddenly creates a new
type of product that directly competes with Dom’s products. This is an example of
A) demographic forces in the general environment.
B) competitors in the task environment.
C) suppliers in the task environment.
D) politics in the general environment.
37) Good Luck Cosmetics manufactures and sells a skincare line. It does not currently make or
sell lipstick, but it could do so in future. A cosmetics company that makes and sells lipstick
could view Good Luck Cosmetics as a potential
A) supplier.
B) competitor.
C) distributor.
D) consumer.

38) Lights and Fans manufactures ceiling fans in a small town. Which company is a potential
competitor to Lights and Fans?
A) a manufacturer in the same town that pays its workers slightly more than Lights and
Fans does
B) a maker of floor-level and pocket-sized battery-operated fans
C) a distributor of ceiling fans to North America, Europe, and Asia
D) a technical school that trains its students to repair ceiling fans

39) Factors that make it difficult and costly for a company to establish a presence in a particular
task environment or industry are
A) political forces.
B) barriers to entry.
C) isolating mechanisms.
D) free trade agreements.

40) Which of these is an example of a barrier to entry?

A) the lack of well-trained employees who have experience in a specialized area
B) government regulations that set few or no restrictions on establishing a business in
that field
C) the ability to manufacture components or products in small quantities
D) the ability to specialize in one specific type of product for a niche audience

41) Within an industry, the existing economies of scale, brand loyalties, and government
regulations that impede access to the task environment create
A) global outsourcing.
B) power distance.
C) barriers to entry.
D) barriers to exit.
42) A new company wanted to enter the consumer products market, but since it was small, it
didn’t have the economies of scale larger companies enjoyed. Without these,
A) the barriers to entry will be high.
B) the investment will be small.
C) it will be easier to create brand loyalty.
D) tariff rates will be higher.

43) In a task environment where there are few competitors, it is

A) harder to reach economies of scale.
B) harder to create brand loyalty.
C) easier to obtain customers.
D) harder to keep prices high.

44) It is easier to obtain customers and keep prices high in a task environment where there are
few
A) competitors.
B) customers.
C) suppliers.
D) distributors.

45) Parul quits her job managing an independently owned restaurant to take a new job managing
a chain of restaurants. She notices that her new employer buys higher quantities of food and
other supplies, and the cost per item is much less. These cost advantages are the result of
A) brand loyalty.
B) economies of scale.
C) boundary spanning.
D) power distance.

46) Economies of scale result from actions such as

A) manufacturing products in small quantities.
B) keeping the demand high by cutting supply.
C) creating products that are exclusive.
D) buying inputs for the products in bulk.
47) By fully using its employees' skills and knowledge, a software company is making more
effective use of organizational resources than does its competitors. It is thus increasing
A) economies of scale.
B) the company culture.
C) intellectual capital.
D) soft skills.

48) If it is difficult and costly to enter a task environment, then for companies already within that
task environment or industry,
A) the barriers to entry are low.
B) threat of competition is high.
C) it is easier to obtain customers.
D) it is harder to keep prices high.

49) If established organizations enjoy significant brand loyalty, a new entrant will
A) find it neither difficult nor costly to obtain a share of the market.
B) easily establish itself as another company enjoying brand loyalty.
C) bear huge costs to build customer awareness of its products.
D) deter potential competitors from entering the task environment.

50) Which statement accurately defines brand loyalty?

A) It is the repurchase behavior shown by customers due to the fear of trying a new
brand.
B) It is the customers' preference for the products currently in the task environment.
C) It is the perception of customers that some brands are equivalent.
D) It implies that the brand delivers what it promises.

51) Building customer awareness of the newcomer's product is very costly in the face of which
source of barriers to entry?
A) economies of scale
B) technological barriers
C) government regulations
D) brand loyalty
52) In the drug manufacturing industry, AbbVie operates with massive economies of scale in the
production of many drugs. Thus, a potential entrant into the industry will have a
A) much wider customer base.
B) higher level of production costs.
C) competitive advantage in pricing.
D) cheaper distribution system.

53) A high percentage of the customers of Soaring Sport stores buy Soaring Sport brand shoes at
least three-fourths of the time that they buy shoes. In the context of barriers to entry, this
product has a large degree of
A) distributor loyalty.
B) demographic force.
C) brand loyalty.
D) potential competition.

54) Paresh, a sales manager, noticed that customers repeatedly bought the more expensive Real
Sound headphones instead of the less expensive substitutes that his company produces.
Paresh told the vice president of sales that Real Sound likely has a high level of
A) demographic force.
B) brand loyalty.
C) potential competition.
D) distributor loyalty.

55) The combination of equipment, information, knowledge, and skills that a manager uses in the
production and distribution of goods is known as
A) economies of scale.
B) a competitive advantage.
C) technology.
D) the national culture.

56) Social structure is the traditional system of relationships established between ________ in a
society.
A) splinter groups and rights holders
B) people and groups
C) belief systems and cultural traditions
D) companies and employees
57) The collection of values that a society considers important and the norms of behavior that are
approved by the society is
A) sociocultural forces.
B) economies of scale.
C) the national culture.
D) demographic forces.

58) Riley, a brand manager, transferred from the United States to Japan. He discovered that
although people in the United States highly value individualism, people in Japan expect
individuals to conform to group expectations. Riley concluded that Japan places more of an
emphasis on
A) cultural relativism.
B) ethnocentrism.
C) collectivism.
D) political differences.

59) Today in most industrialized nations, as a consequence of falling birth and death rates, the
absolute number of older people has increased substantially. This is an example of ________
change.
A) sociocultural
B) economic
C) political
D) demographic

60) According to the U.S. Census Bureau’s 2020 census, the racial makeup of the United States
is changing rapidly, with an increase in the multiracial population of over 250% since 2010.
This is a(n) ________ change.
A) sociocultural
B) economic
C) political
D) demographic

61) Chandra, an executive at a department store chain, finds that the median age of the
population in the chain's region is increasing by about three years every decade. This is an
example of which type of force in the general environment?
A) political
B) economic
C) demographic
D) sociocultural
62) The population of the United States is shifting from the Northeast to the Southwest. This is
an example of which type of force in the general environment?
A) political
B) legal
C) sociocultural
D) demographic

63) Deregulation and privatization are a part of which forces in the general environment?
A) political and legal
B) technological and industrial
C) cognitive and sociocultural
D) macroeconomic and microeconomic

64) A tax that a government imposes on goods imported into the country is known as a(n)
A) sanction.
B) quota.
C) embargo.
D) tariff.

65) A rural bank in South Carolina loses customers when those customers decide to invest their
money in foreign banks that they can access online. The rural bank's management considers
this to be an example of
A) a negative effect related to human capital.
B) a negative effect related to financial capital.
C) a positive effect related to human capital.
D) a positive effect related to financial capital.

66) A country was engaging in human rights violations, so other countries blocked its entry into
the European Union to pressure it to improve its human rights record. This demonstrates the
use of ________ capital.
A) human
B) financial
C) resource
D) political
67) The U.S. government imposes a 25 percent tax on the selling price of any four-wheel-drive
SUV that is brought into the U.S. by a foreign car manufacturer to be sold in the United
States. What type of tax is the U.S. government imposing?
A) an export tariff
B) an import tariff
C) a franchise tax
D) a licensing tax

68) Companies from a small island nation are more efficient in the production of certain types of
apparel, while companies from the United States are more efficient in the production of
certain types of computers. Which economic theory predicts that capital would move to the
island nation to be invested there in the apparel industry and to the United States to be
invested in its computer companies?
A) rapid specialization theory
B) investor collectivism theory
C) free-trade doctrine
D) investor individualism doctrine

69) What was the original purpose of GATT?

A) to raise tariff barriers
B) to remove tariff barriers
C) to fund developing countries
D) to create an international bank

70) In 2020, the USMCA replaced what trade agreement?

A) ASEAN
B) NAFTA
C) CAFTA
D) Southern African Development Community

71) Fortuna’s company sends her to "expat training" before her international posting. The
training teaches the values, norms, knowledge, beliefs, moral principles, laws, customs, and
other practices that unite the citizens of the country where she is going. These values, norms,
beliefs, etc. are also known as
A) a representative democracy.
B) a free-trade economy.
C) the national culture.
D) culture shock.
72) In a society, the unwritten rules of conduct that state how people should act in particular
situations in that society are known as
A) rules.
B) norms.
C) rituals.
D) goals.

73) Hideaki’s company transfers him from Japan to the United States, where he finds that he is
expected to be much more casual than he is used to in terms of what he wears and how he
speaks to people. In the context of social norms, the customs and practices related to correct
dress and social manners are known as
A) folkways.
B) artifacts.
C) values.
D) rites.

74) A society has a common practice that men should remove their hats whenever they ride in
elevators that are also carrying women. This is an example of which type of norm?
A) ritual
B) folkway
C) standard
D) mantra

75) Ismat moves to a different country to manage IT employees. She discovers that this society
has what she considers surprising ideas about what is bad, wrong, undesirable, or
unattractive. These ideas are
A) values.
B) mores.
C) rites.
D) folkways.

76) A society has commonly accepted laws against driving while intoxicated, and violations of
those laws bring severe penalties. This is an example of which type of norm?
A) mores
B) sanctions
C) folkways
D) rituals
77) Values are deeply embedded in society and
A) often change through a slow and painful process.
B) are static and remain unchanged.
C) change quickly via smooth transitions.
D) are the same across all societies.

78) Belinda always drives faster than the speed limit, but one day she hit a pedestrian crossing
the street at a crosswalk. Belinda was in trouble for her violation of
A) rules.
B) folkways.
C) mores.
D) rituals.

79) Dale is an expatriate, but he violated a folkway in a business meeting. Because of this
violation, his international hosts probably thought of him as
A) powerful and socially refined.
B) immoral or wicked.
C) eccentric or ill-mannered.
D) a law breaker.

80) If a society believes that self-expression is important to the people in that society, then the
society is said to value
A) social background.
B) individualism.
C) objectivism.
D) power distance.

81) If a society values the group more than the individual, and believes that people should be
judged by the quality of their contribution to the group instead of their individual
achievement, then the society is said to value
A) individualism.
B) power distance.
C) collectivism.
D) objectivism.
82) Hanna is moving to another country to manage a call center for her employer. The country
she is moving to has low power distance. Which situation is Hanna most likely to discover in
this new country?
A) rudeness and insubordination among the employees who report to her
B) CEOs who make dozens or hundreds of times as much as the average worker makes
C) many and varied social welfare programs, such as childcare assistance and subsidized
doctor visits
D) fear and nervousness among the employees who report to her

83) The degree to which people in a society accept the idea that inequalities in the well-being of
its citizens are due to differences in people's physical and intellectual capabilities is known as
A) individual power.
B) power philosophy.
C) independence power.
D) power distance.

84) When workers in a society become wealthy and pass their wealth to their children, thereby
increasing the gap between the rich and the poor in that society, the society is said to have
high
A) power distance.
B) individualism.
C) achievement orientation.
D) short-term orientation.

85) The government uses taxation and social welfare programs to reduce inequality and improve
the welfare of the least fortunate in ________ countries.
A) low-power-distance
B) high-power-distance
C) long-term-orientation
D) short-term-orientation

86) Rossi comes from a culture that values equality, works for the improvement of the welfare of
the less fortunate, and values warm personal relationships more than goal achievement.
Rossi’s culture has
A) high collectivism and short-term orientation.
B) low power distance and strong nurturing orientation.
C) high power distance and nurturing orientation.
D) low uncertainty avoidance and high individualism.
87) Which statement best defines uncertainty avoidance?
A) It is the belief that inequalities are due to differences in physical and intellectual
capabilities.
B) It is a worldview that subordinates the individual to the goals of the group.
C) It is behavior considered important by most members of a group or an organization.
D) It is the degree to which societies tolerate risk.

88) Alistair says, "In my country, we put an emphasis on getting things done properly. We say,
'Fall seven times, get up eight.'" A society that emphasizes this attitude has
A) low power distance.
B) high power distance.
C) long-term orientation.
D) short-term orientation.

89) Hal, a sales manager, is about to emigrate to a country where people tend to emphasize
"living for the moment." A more formal name for this cultural emphasis is
A) high power avoidance.
B) low power avoidance.
C) long-term orientation.
D) short-term orientation.

90) In a fast-developing country, the government uses taxation and programs to ensure the
welfare of the least fortunate. This country is an example of low power distance because
A) large inequalities between citizens are not allowed to develop.
B) individuals are treated as being superior to the group.
C) people whose behaviors differ from the norm are respected.
D) happiness and living for the present are valued.

91) In countries that are rooted in a culture of collectivism, it is easy to spot

A) admiration for personal success.
B) conformity to group norms.
C) high regard for individual entrepreneurs.
D) belief in individual rights.
92) Dewanda’s company has a roughly equal number of male and female managers. In fact, it is
written in the corporate charter. What cultural dimension does this company embody?
A) assertiveness
B) institutional collectivism
C) power distance
D) gender egalitarianism

93) The Globe Project’s cultural dimension of assertiveness relates to

A) the degree to which individuals are rewarded for performance improvement.
B) the degree to which members of organizations are confrontational and aggressive in
their relationships.
C) the degree to which an organization encourages and rewards individuals for being fair
and kind to others.
D) the extent to which a society or organization uses rules, regulations, and procedures to
alleviate the unpredictability of future events.

ESSAY. Write your answer in the space provided or on a separate sheet of paper.
94) Briefly explain a task environment. What effect does it have on managers?

An organization's task environment is the set of forces and conditions that originate with global
suppliers, distributors, customers, and competitors; these forces and conditions affect an
organization's ability to obtain inputs and dispose of its outputs.
The task environment contains the forces that have the most immediate and direct effect on
managers because they pressure and influence managers daily. For example, the recent
disruptions in the global supply chain caused in part by COVID-19 increased consumer demand,
and a shortage of workers had logistics managers in both domestic and global organizations
scrambling to keep critical supplies and components moving to their final destination.
95) An organization's suppliers can have an important impact on the success of the organization.
Explain what qualities you will look for in suppliers when you are a manager. If you already
work with suppliers, you may include an example from your own experience.

Student examples will vary. A sample answer follows:

Suppliers must be reliable. An important aspect of a manager's job is to make sure that the flow
of input resources is steady. Without that steady supply of needed people, knowledge, and
equipment, it's nearly impossible to succeed in management.
Suppliers must also produce high-quality supplies. Most people think of raw materials or
machine parts when they think of high-quality supplies, but organizations need high-quality
people as well. Before an organization decides to open a factory or office in a new area,
managers need to find out whether local schools can supply workers who have the needed
training and can behave appropriately.
A competitive supplier environment, with at least two or three excellent suppliers, is a
tremendous advantage to almost any organization. When I am a manager, I will research what
my organization can do to increase competition among vendors. A supplier's bargaining position
is especially strong when (1) the supplier is the sole source of an input and (2) the input is vital to
the organization. In contrast, when an organization has many suppliers for a particular input, it is
in a relatively strong bargaining position with those suppliers and can demand low-cost, high-
quality inputs from them.

96) Explain briefly the role of a distributor. If distributors become powerful, what will be the
impact on an organization?

Distribution of products is essential for organizations to get their products to their customers in a
timely fashion. Distributors are organizations that help other organizations sell their goods or
services to customers. The decisions managers make about how to distribute products to
customers can have important effects on organizational performance.
The changing nature of distributors and distribution methods can bring opportunities and threats
for managers. If distributors become so large and powerful that they can control customers'
access to a particular organization's goods and services, they can threaten the organization by
demanding that it reduce the prices of its goods and services.
97) Customers are the most important group in the success of any company. Discuss the various
types of customers that exist for Dell Computer and discuss how Dell needs to respond
differently to the needs of its different customer groups if it is to be successful.

Dell's customers can be segmented into several groups: (1) individuals who buy computers for
home use, (2) small companies, (3) large companies, and (4) government agencies and
educational institutions.
Changes in the number and types of customers or in customers' tastes and needs result in
opportunities and threats. An organization's success depends on its response to customers. For
Dell Computer, which is a part of the PC industry, customers are demanding thinner computers,
better graphics and speed, and increased wireless and Internet connections—and lower prices—
and PC companies must respond to the changing types and needs of customers.
98) In the context of the task environment, write a brief note on competitors. Explain what you
believe are the benefits and hazards of competition. Include an example of competitors you
have seen in the business world—either from your own experience or from what you have
read in the media.

Student examples will vary. A sample answer follows:

One of the most important forces an organization confronts in its task environment is
competitors. Competitors are organizations that produce goods and services that are similar and
comparable to a particular organization's goods and services. In other words, competitors are
organizations trying to attract the same customers. Rivalry between competitors is potentially the
most threatening force managers must deal with. A high level of rivalry typically results in price
competition, and falling prices reduce customer revenues and profits. Although extensive rivalry
between existing competitors is a major threat to profitability, so is the potential for new
competitors to enter the task environment. Potential competitors are organizations that are not
presently in a task environment but have the resources to enter if they so choose. When new
competitors enter an industry, competition increases, and prices and profits decrease.
I believe that having active competitors in a business environment is challenging to managers
because it causes increased pressure to reduce costs, improve products, and enlarge the customer
base. However, all those pressures benefit the customer because cheaper, better products become
available. One example of this is the gyms in my town. When a new gym opened, the existing
gym bought new workout machines, offered more classes, and discounted membership fees.
Other gym goers and I benefited from this increased competition, but employees of the existing
gym probably worried about how their business would be affected.
99) The barriers to entry result from three sources. Explain in brief the three sources.

Barriers to entry result from three sources: economies of scale, brand loyalty, and government
regulations. Economies of scale are the cost advantages associated with large operations.
Economies of scale result from factors such as manufacturing products in very large quantities,
buying inputs in bulk, or making more effective use of organizational resources than do
competitors by fully utilizing employees' skills and knowledge. If organizations already in the
task environment are large and enjoy significant economies of scale, then their costs are lower
than the costs that potential entrants will face, and newcomers will find it very expensive to enter
the industry.
Brand loyalty is customers' preference for the products of organizations currently existing in the
task environment. If established organizations enjoy significant brand loyalty, then a new entrant
will find it extremely difficult and costly to obtain a share of the market. Newcomers must bear
huge advertising costs to build customer awareness of the goods or services they intend to
provide. Government regulations function as a barrier to entry at both the industry and the
country levels. Many industries that were deregulated experienced a high level of new entry after
deregulation. This forced existing companies in those industries to operate more efficiently or
risk being put out of business.
100) What do economic forces include? How do they affect the general environment of the
organization? What are the challenges that they present to managers?

Economic forces include interest rates, inflation, unemployment, and economic growth.
Economic forces produce many opportunities and threats for managers. Low levels of
unemployment and falling interest rates give more people more money to spend, and as a result
organizations have an opportunity to sell more goods and services. Good economic times affect
the supply of resources that become easier or more inexpensive to acquire, and organizations
have an opportunity to flourish.
In contrast, worsening macroeconomic conditions pose a major threat because they limit
managers' ability to gain access to the resources their organizations need. Profit-seeking
organizations have fewer customers for their goods and services during economic downturns.
Nonprofits receive fewer donations during economic downturns.
Poor economic conditions make the environment more complex and managers' jobs more
difficult and demanding. Managers may need to reduce the number of individuals in their
departments and increase the motivation of remaining employees, and managers and workers
alike may need to identify ways to acquire and utilize resources more efficiently.
101) What are technological forces? Explain their implications for managers and
organizations. Then provide an example of how technological forces changed management in
one industry. Your example can be based on your own experience or on something you have
read or seen in news media.

Student examples will vary. A sample answer follows:

Technological forces are outcomes of changes in the technology that managers use to design,
produce, or distribute goods and services.
Technological forces can have profound implications for managers and organizations.
Technological change can make established products obsolete, forcing managers to find new
ways to satisfy customer needs. Although technological change can threaten an organization, it
also can create a host of new opportunities for designing, making, or distributing new and better
kinds of goods and services.
One industry that underwent significant technological changes was home entertainment. In the
United States, video rental stores such as Blockbuster did not realize what strong competition
DVD-by-mail companies would be. The vast majority of video stores went out of business, and
the home entertainment industry became more focused on online user experience rather than in-
store transactions. Netflix successfully managed its own technological transition from DVD-by-
mail service to streaming media service.
102) Discuss the results of globalization on companies and their customers. Include an
example of how globalization has affected your life. Your example can be related to your
career or to something you have experienced in your personal life.

Student examples will vary. A sample answer follows:

Globalization is the set of specific and general forces that work together to integrate and connect
economic, political, and social systems across countries, cultures, or geographic regions. The
result of globalization is that nations and peoples become increasingly interdependent because
the same forces affect them in similar ways. The fates of peoples in different countries become
interlinked as the world's markets and businesses become increasingly interconnected. As nations
become more interdependent, they tend to become more similar to one another in their tastes and
preferences.
When I started my career as a call center manager, I managed 20 employees who all worked in
the same building in Nebraska. Now I manage five employees in Nebraska and 44 employees in
Chennai, India. As my company became part of a global network of employees, I learned how to
supervise employees from a different culture and in a different time zone. The employees in
Chennai have become interconnected with our Nebraska employees, and each group depends on
the other to excel in customer service.

103) List and explain the four principal forms of capital flow between countries.

There are four principal forms of capital flow between countries.

 Human capital is the flow of people around the world through immigration, migration,
and emigration.
 Financial capital is the flow of money capital across world markets through overseas
investment, credit, lending, and aid.
 Resource capital is the flow of natural resources, parts, and components between
companies and countries such as metals, minerals, lumber, energy, food products,
microprocessors, and auto parts.
 Political capital is the flow of power and influence around the world using diplomacy,
persuasion, aggression, and force of arms to protect a country's or world region's or
political bloc's access to the other forms of capital.
104) What is a tariff? Explain the reason for removing tariffs and the effects of governments
raising tariff barriers. Then explain whether you believe tariffs are wise in most cases.

A tariff is a tax that a government imposes on goods imported into one country from another.
The aim of import tariffs is to protect domestic industries and jobs from overseas competition by
raising the price of these products from abroad.
The reason for removing tariffs is that, very often, when one country imposes an import tariff,
others follow suit and the result is a series of retaliatory moves as countries progressively raise
tariff barriers against each other. During the recent economic crisis, the governments of most
countries worked hard not to fall into the trap of raising tariffs to protect jobs and industries in
the short run because they knew the long-term consequences of this would be the loss of even
more jobs. Governments of countries that resort to raising tariff barriers ultimately reduce
employment and undermine the economic growth of their countries because capital and
resources will always move to their most highly valued use wherever that is in the world.
Temporary tariffs may be wise if one country is “dumping” unwanted or inferior products into
another country at a price that local competitors cannot hope to match. Also, the threat of tariffs
can be an effective bargaining tool for a government that believes that foreign organizations are
behaving unfairly. However, in most cases tariffs cause more problems than they solve. They
drive up costs for consumers. They encourage local producers to keep their profits rather than
plowing them back into technological or other improvements. And they mean less efficiency and
therefore lower profits for investors.

105) What is meant by the free-trade doctrine? Explain with an example, real or fictional.

The free-trade doctrine predicts that if each country agrees to specialize in the production of the
goods and services that it can produce most efficiently, this will make the best use of global
capital resources and will result in lower prices.
In other words, if a U.S. company were the most efficient manufacturer of a certain product, this
product would be likely to be produced in the United States over time. Similarly, if some other
country were the most efficient producer of some other product, that product would most likely,
over time, come to be produced in that country.
106) Define the Trans-Pacific Partnership (TPP). Explain how U.S. participation in it has
changed in recent years. Then explain whether you think U.S. participation in TPP is wise
and why you believe that.

Student examples will vary. A sample answer follows.

The Obama administration negotiated for several years for the United States to join the Trans-
Pacific Partnership, a trade agreement between the United States and 11 other countries. In 2017,
President Donald Trump issued an executive order pulling the country out of the TPP, taking a
stand against foreign competitors as part of his "America First" strategy.
I believe it was a good idea for the United States to participate in the TPP. Globalization must be
monitored carefully, but in general it helps consumers, investors, and governments. By standing
alone, the United States is missing out on lower prices for consumers.

107) Hofstede's model of national culture states five dimensions along which national cultures
can be placed.
Select any two of these five dimensions and discuss how each of these dimensions creates a
different type of climate in which an organization can do business.

Student examples will vary. A sample answer follows:

One model of national culture was developed by Geert Hofstede. Hofstede developed five
dimensions along which national cultures can be placed: individualism/collectivism, power
distance, achievement/nurturing orientation, uncertainty avoidance, and long-term/short-term
orientation.
Long-term versus short-term orientation: Orientation toward life and work affects business
climate in terms of the values that people place on thrift and persistence. A national culture with
a long-term orientation rests on values such as thrift (saving) and persistence in achieving goals.
A national culture with a short-term orientation is concerned with maintaining personal stability
or happiness and living for the present.
Uncertainty avoidance: Societies as well as individuals differ in their tolerance for uncertainty
and risk. Societies low on uncertainty avoidance are easygoing, value diversity, and tolerate
differences in personal beliefs and actions. Societies high on uncertainty avoidance are more
rigid and skeptical about people whose behaviors or beliefs differ from the norm. In these
societies, conformity to the values of the social and work groups to which a person belongs is the
norm, and structured situations are preferred because they provide a sense of security.
108) With reference to Hofstede's model of national culture, explain power distance and its
impact on society.

By power distance, Geert Hofstede meant the degree to which societies accept the idea that
inequalities in the power and well-being of their citizens are due to differences in individuals'
physical and intellectual capabilities and heritage. This concept also encompasses the degree to
which societies accept the economic and social differences in wealth, status, and well-being that
result from differences in individual capabilities. Societies in which inequalities are allowed to
persist or grow over time have high power distance. In high-power-distance societies, workers
who are professionally successful amass wealth and pass it on to their children, and, as a result,
inequalities may grow over time. In such societies, the gap between rich and poor, with all the
attendant political and social consequences, grows very large. In contrast, in societies with low
power distance, large inequalities between citizens are not allowed to develop. In low-power-
distance countries, the government uses taxation and social welfare programs to reduce
inequality and improve the welfare of the least fortunate. These societies are more attuned to
preventing a large gap between rich and poor and minimizing discord between different classes
of citizens.
Answer Key
Test name: chapter 4

1) FALSE

2) TRUE

3) FALSE

4) FALSE

5) FALSE

6) FALSE

7) TRUE

8) FALSE

9) TRUE

10) FALSE

11) TRUE

12) FALSE

13) D
The general environment includes the wide-ranging global, economic, technological,
sociocultural, demographic, political, and legal forces that affect the organization and its task
environment.

14) A
Managers of companies large and small have found that to survive and prosper in the 21st
century, most companies must become global organizations.

15) D
The task environment is the set of forces and conditions that originate with global suppliers,
distributors, customers, and competitors; these forces and conditions affect an organization's
ability to obtain inputs and dispose of its outputs.

16) A
For the individual manager, opportunities and threats resulting from changes in the general
environment are often more difficult to identify and respond to than are events in the task
environment. However, changes in these forces can have major impacts on managers and their
organizations.

17) C
The task environment is the set of forces and conditions that originate with global suppliers,
distributors, customers, and competitors; these forces and conditions affect an organization's
ability to obtain inputs and dispose of its outputs.

18) C
The task environment is the set of forces and conditions that originate with suppliers,
distributors, customers, and competitors and affect an organization's ability to obtain inputs and
dispose of its outputs because they influence managers daily. The general environment includes
the wide-ranging global, economic, technological, sociocultural, demographic, political, and
legal forces that affect the organization and its task environment.

19) A
The task environment is the set of forces and conditions that originate with suppliers,
distributors, customers, and competitors and affect an organization's ability to obtain inputs and
dispose of its outputs because they influence managers daily. The task environment contains the
forces that have the most immediate and direct effect on managers because they pressure and
influence managers daily. For the individual manager, opportunities and threats resulting from
changes in the general environment are often more difficult to identify and respond to than are
events in the task environment.

20) C
Although the company has done a good job focusing on the task environment, it's also important
to monitor the general environment as well.

21) C
Suppliers are the individuals and organizations that provide an organization with the input
resources it needs to produce goods and services. Distributors are organizations that help other
organizations sell their goods or services to customers.

22) B
Competitors are organizations that produce goods and services that are similar and comparable to
a particular organization's goods and services. In other words, competitors are organizations
trying to attract the same customers.

23) A
Customers are the individuals and groups that buy the goods and services an organization
produces. Distributors are organizations that help other organizations sell their goods or services
to customers. Suppliers are the individuals and organizations that provide an organization with
the input resources it needs to produce goods and services.

24) B
Forces in the task environment result from the actions of suppliers, distributors, customers, and
competitors both at home and abroad. These four groups affect a manager's ability to obtain
resources and dispose of outputs daily, weekly, and monthly and thus have a significant impact
on short-term decision making.

25) B
The task environment is the set of forces and conditions that originate with global suppliers,
distributors, customers, and competitors; these forces and conditions affect an organization's
ability to obtain inputs and dispose of its outputs.

26) B
Changes in the nature, number, or type of suppliers produce opportunities and threats to which
managers must respond if their organizations are to prosper. In contrast, when an organization
has many suppliers for a particular input, it has a relatively strong bargaining position with those
suppliers and can demand low-cost, high-quality inputs from them. By increasing the number of
suppliers, Rose Lynn will strengthen her firm’s bargaining power.

27) A
Suppliers are the individuals and companies that provide an organization with the input resources
(such as raw materials, component parts, or employees) that it needs to produce goods and
services.

28) A
A supplier's bargaining position is especially strong when (1) the supplier is the sole source of an
input and (2) the input is vital to the organization.

29) A
Global companies use the services of overseas intermediaries or brokers, which are located close
to potential suppliers, to find the suppliers that can best meet the needs of their company. They
can design the most efficient supply chain for a company to outsource the component and
assemble operations required to produce its final products.

30) D
This was mostly because of COVID-19 and the need to shorten supply chains.

31) C
Global outsourcing occurs when a company contracts with suppliers in other countries to make
the various inputs or components that go into its products or to assemble the final products to
reduce costs.

32) A
Global outsourcing occurs when a company contracts with suppliers in other countries to make
the various inputs or components that go into its products or to assemble the final products to
reduce costs.

33) B
Distributors are organizations that help other organizations sell their goods or services to
customers. Package delivery companies such as FedEx, UPS, and the U.S. Postal Service have
become vital distributors for the millions of items bought online and shipped to customers by
online companies both at home and abroad.

34) B
Distributors are organizations that help other organizations sell their goods or services to
customers.

35) C
Customers are the individuals and groups that buy the goods and services an organization
produces. For example, Dell's customers can be segmented into several distinct groups: (1)
individuals who purchase PCs for home and mobile use, (2) small companies, (3) large
companies, and (4) government agencies and educational institutions. Changes in the number
and types of customers or in customers' tastes and needs create opportunities and threats. An
organization's success depends on its responsiveness to customers.

36) B
One of the most important forces that an organization confronts in its task environment is
competitors. Competitors are organizations that produce goods and services similar to a
particular organization's goods and services. This includes new competitors who create substitute
products.

37) B
Potential competitors are organizations that are not presently in a task environment but could
enter if they so choose.

38) B
Competitors are organizations trying to attract the same customers.

39) B
Barriers to entry are factors that make it difficult and costly for a company to enter a particular
task environment or industry.

40) A
Barriers to entry are factors that make it difficult and costly for a company to enter a particular
task environment or industry. The more difficult and costly it is to enter the task environment,
the higher are the barriers to entry.

41) C
Barriers to entry are factors that make it difficult and costly for a company to enter a particular
task environment or industry. It results from three main sources: economies of scale, brand
loyalty, and government regulations that impede entry.

42) A
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the fewer the
competitors in an organization's task environment and thus the lower the threat of competition.

43) C
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the fewer the
competitors in an organization's task environment and thus the lower the threat of competition.
With fewer competitors, it is easier to obtain customers and keep prices high.

44) A
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the fewer the
competitors in an organization's task environment and thus the lower the threat of competition.
With fewer competitors, it is easier to obtain customers and keep prices high.

45) B
Economies of scale are the cost advantages associated with large operations. Economies of scale
result from factors such as manufacturing products in very large quantities, buying inputs in
bulk, or making more effective use of organizational resources than do competitors by fully
utilizing employees' skills and knowledge.

46) D
Economies of scale are the cost advantages associated with large operations. Economies of scale
result from factors such as manufacturing products in very large quantities, buying inputs in
bulk, or making more effective use of organizational resources than do competitors by fully
utilizing employees' skills and knowledge.

47) A
Economies of scale are the cost advantages associated with large operations. Economies of scale
result from factors such as manufacturing products in very large quantities, buying inputs in
bulk, or making more effective use of organizational resources than do competitors by fully
utilizing employees' skills and knowledge.

48) C
Within a task environment or industry, the more difficult and costly it is to enter the task
environment, the higher are the barriers to entry. The higher the barriers to entry, the fewer the
competitors in an organization's task environment and thus the lower the threat of competition.
With fewer competitors, it is easier to win customers and keep prices high.

49) C
If established organizations enjoy significant brand loyalty, a new entrant will find it difficult
and costly to obtain a share of the market. Newcomers must bear huge advertising costs to build
customer awareness of the goods or services they intend to provide.

50) B
Brand loyalty is customers' preference for the products of organizations currently existing in the
task environment. If established organizations enjoy significant brand loyalty, a new entrant will
find it difficult and costly to obtain a share of the market.

51) D
If established organizations enjoy significant brand loyalty, then a new entrant will find it
extremely difficult and costly to obtain a share of the market. Newcomers must bear huge
advertising costs to build customer awareness of the goods or services they intend to provide.

52) B
If organizations already in the task environment are large and enjoy significant economies of
scale, their costs are lower than the costs that potential entrants will face, and newcomers will
find it expensive to enter the industry.

53) C
Brand loyalty is customers' preference for the products of organizations currently existing in the
task environment.

54) B
Brand loyalty is customers' preference for the products of organizations currently existing in the
task environment.

55) C
Technology is the combination of tools, machines, computers, skills, information, and
knowledge that managers use in the design, production, and distribution of goods and services.

56) B
Social structure is the arrangement of relationships between people and groups in a society.

57) C
National culture is the set of values that a society considers important and the norms of behavior
that are approved or sanctioned in that society.

58) C
Collectivism is a worldview that values subordination of the individual to the goals of the group
and adherence to the principle that people should be judged by their contribution to the group.
Japan is a noncommunist country where collectivism is highly valued.

59) D
Demographic forces are outcomes of changes in, or changing attitudes toward, the characteristics
of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class.

60) D
Demographic forces are outcomes of changes in, or changing attitudes toward, the characteristics
of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class.
61) C
Demographic forces are outcomes of changes in, or changing attitudes toward, the characteristics
of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class.

62) D
Demographic forces are outcomes of changes in, or changing attitudes toward, the characteristics
of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class.

63) A
Deregulation, privatization, and the removal of legal barriers to trade are a few of the many ways
in which changing political and legal forces can challenge organizations and managers.

64) D
A tariff is a tax that a government imposes on imported or, occasionally, on exported goods.

65) B
Financial capital is the flow of money capital across world markets through overseas investment,
credit, lending, and aid. In a negative sense, a fast flow of capital means that individual countries
or world regions can find themselves in trouble when companies and investors move their capital
to invest it in more productive ways in other countries or world regions.

66) D
Political capital relates to the flow of power and influence around the world using diplomacy,
persuasion, aggression, and force of arms to protect the right or access of a country, world
region, or political bloc to the other forms of capital.

67) B
A tariff is a tax that a government imposes on imported or, occasionally, on exported goods. The
aim of import tariffs is to protect domestic industries and jobs, such as those in the auto or steel
industry, from overseas competition by raising the price of goods from abroad.

68) C
The free-trade doctrine predicts that the best use of global resources and lower prices will occur
if each country in such a situation focuses on producing what products it can produce more
efficiently.

69) B
Historically, countries that accepted this free-trade doctrine set as their goal the removal of
barriers to the free flow of goods, services, and capital between countries. They attempted to
achieve this through an international treaty known as the General Agreement on Tariffs and
Trade (GATT).

70) B
In North America, NAFTA, which became effective on January 1, 1994, had the aim of
abolishing the tariffs on 99 percent of the goods traded between Mexico, Canada, and the United
States by 2004. In 2020, this was replaced by the USMCA, which included several new rules.

71) C
National culture includes the values, norms, knowledge, beliefs, moral principles, laws, customs,
and other practices that unite the citizens of a country.

72) B
Norms are unwritten, informal codes of conduct that prescribe appropriate behavior in particular
situations and are considered important by most members of a group or organization.

73) A
Folkways are the routine social conventions of everyday life. They concern customs and
practices such as dressing appropriately for particular situations, good social manners, eating
with the correct utensils, and neighborly behavior.

74) B
Folkways are the routine social conventions of everyday life. They concern customs and
practices such as dressing appropriately for particular situations, good social manners, eating
with the correct utensils, and neighborly behavior.

75) A
Values are beliefs about what a society considers to be good, right, desirable, or beautiful—or
their opposites. They provide the basic underpinnings for notions of individual freedom,
democracy, truth, justice, honesty, loyalty, social obligation, collective responsibility, the
appropriate roles for men and women, love, sex, marriage, and so on.

76) A
Mores are norms that are considered to be central to the functioning of society and to social life.
Accordingly, the violation of mores can be expected to bring serious retribution.

77) A
Although deeply embedded in society, values are not static. They change over time, but change
is often the result of a slow and painful process.

78) C
Mores are norms that are considered to be of central importance to the functioning of society and
to social life. Accordingly, the violation of mores brings serious retribution. Mores include
proscriptions against murder, theft, adultery, and incest. In many societies mores have been
enacted into law.

79) C
People who violate folkways are often thought to be eccentric or ill-mannered, but they are not
usually considered immoral or wicked.

80) B
Individualism is a worldview that values individual freedom and self-expression and adherence
to the principle that people should be judged by their individual achievements rather than by
their social background.

81) C
Collectivism is a worldview that values subordination of the individual to the goals of the group
and adherence to the principle that people should be judged by their contribution to the group.

82) C
Societies in which inequalities are allowed to persist or grow over time have high power
distance. In societies with low power distance, large inequalities between citizens are not
allowed to develop. The government uses taxation and social welfare programs to reduce
inequality and improve the welfare of the least fortunate.

83) D
Power distance is the degree to which societies accept the idea that inequalities in the power and
well-being of their citizens are due to differences in individuals' physical and intellectual
capabilities and heritage.

84) A
Power distance is the degree to which societies accept the idea that inequalities in the power and
well-being of their citizens are due to differences in individuals' physical and intellectual
capabilities and heritage. In high-power-distance societies, workers who are professionally
successful amass wealth and pass it on to their children, and, as a result, inequalities may grow
over time.

85) A
Power distance is the degree to which societies accept the idea that inequalities in the power and
well-being of their citizens are due to differences in individuals' physical and intellectual
capabilities and heritage. In societies with low power distance, large inequalities between
citizens are not allowed to develop.

86) B
In low-power-distance countries, the government uses taxation and social welfare programs to
reduce inequality and improve the welfare of the least fortunate. Societies that have a nurturing
orientation value the quality of life, warm personal relationships, and social services and care for
the weak.

87) D
Uncertainty avoidance is the degree to which societies are willing to tolerate uncertainty and
risk.

88) C
A national culture with a long-term orientation rests on values such as thrift (saving) and
persistence in achieving goals.

89) D
A national culture with a short-term orientation is concerned with maintaining personal stability
or happiness and living for the present.

90) A
In societies with low power distance, large inequalities between citizens are not allowed to
develop. In low-power-distance countries, the government uses taxation and social welfare
programs to reduce inequality and improve the welfare of the least fortunate. These societies are
more attuned to preventing a large gap between rich and poor and minimizing discord between
different classes of citizens.

91) B
Collectivism is a worldview that values subordination of the individual to the goals of the group
and adherence to the principle that people should be judged by their contribution to the group.
Strong identification with the group is said to create pressures for collective action, as well as
strong pressure for conformity to group norms and a relative lack of individualism.

92) D
Dewanda’s company has a high degree of gender egalitarianism.

93) B
The Globe Project cultural dimension of assertiveness relates to the degree to which members of
organizations are confrontational and aggressive in their relationships.

94) Essay
An organization's task environment is the set of forces and conditions that originate with global
suppliers, distributors, customers, and competitors; these forces and conditions affect an
organization's ability to obtain inputs and dispose of its outputs.
The task environment contains the forces that have the most immediate and direct effect on
managers because they pressure and influence managers daily. For example, the recent
disruptions in the global supply chain caused in part by COVID-19 increased consumer demand,
and a shortage of workers had logistics managers in both domestic and global organizations
scrambling to keep critical supplies and components moving to their final destination.

95) Essay
Student examples will vary. A sample answer follows:
Suppliers must be reliable. An important aspect of a manager's job is to make sure that the flow
of input resources is steady. Without that steady supply of needed people, knowledge, and
equipment, it's nearly impossible to succeed in management.
Suppliers must also produce high-quality supplies. Most people think of raw materials or
machine parts when they think of high-quality supplies, but organizations need high-quality
people as well. Before an organization decides to open a factory or office in a new area,
managers need to find out whether local schools can supply workers who have the needed
training and can behave appropriately.
A competitive supplier environment, with at least two or three excellent suppliers, is a
tremendous advantage to almost any organization. When I am a manager, I will research what
my organization can do to increase competition among vendors. A supplier's bargaining position
is especially strong when (1) the supplier is the sole source of an input and (2) the input is vital to
the organization. In contrast, when an organization has many suppliers for a particular input, it is
in a relatively strong bargaining position with those suppliers and can demand low-cost, high-
quality inputs from them.

96) Essay
Distribution of products is essential for organizations to get their products to their customers in a
timely fashion. Distributors are organizations that help other organizations sell their goods or
services to customers. The decisions managers make about how to distribute products to
customers can have important effects on organizational performance.
The changing nature of distributors and distribution methods can bring opportunities and threats
for managers. If distributors become so large and powerful that they can control customers'
access to a particular organization's goods and services, they can threaten the organization by
demanding that it reduce the prices of its goods and services.
97) Essay
Dell's customers can be segmented into several groups: (1) individuals who buy computers for
home use, (2) small companies, (3) large companies, and (4) government agencies and
educational institutions.
Changes in the number and types of customers or in customers' tastes and needs result in
opportunities and threats. An organization's success depends on its response to customers. For
Dell Computer, which is a part of the PC industry, customers are demanding thinner computers,
better graphics and speed, and increased wireless and Internet connections—and lower prices—
and PC companies must respond to the changing types and needs of customers.

98) Essay
Student examples will vary. A sample answer follows:
One of the most important forces an organization confronts in its task environment is
competitors. Competitors are organizations that produce goods and services that are similar and
comparable to a particular organization's goods and services. In other words, competitors are
organizations trying to attract the same customers. Rivalry between competitors is potentially the
most threatening force managers must deal with. A high level of rivalry typically results in price
competition, and falling prices reduce customer revenues and profits. Although extensive rivalry
between existing competitors is a major threat to profitability, so is the potential for new
competitors to enter the task environment. Potential competitors are organizations that are not
presently in a task environment but have the resources to enter if they so choose. When new
competitors enter an industry, competition increases, and prices and profits decrease.
I believe that having active competitors in a business environment is challenging to managers
because it causes increased pressure to reduce costs, improve products, and enlarge the customer
base. However, all those pressures benefit the customer because cheaper, better products become
available. One example of this is the gyms in my town. When a new gym opened, the existing
gym bought new workout machines, offered more classes, and discounted membership fees.
Other gym goers and I benefited from this increased competition, but employees of the existing
gym probably worried about how their business would be affected.

99) Essay
Barriers to entry result from three sources: economies of scale, brand loyalty, and government
regulations. Economies of scale are the cost advantages associated with large operations.
Economies of scale result from factors such as manufacturing products in very large quantities,
buying inputs in bulk, or making more effective use of organizational resources than do
competitors by fully utilizing employees' skills and knowledge. If organizations already in the
task environment are large and enjoy significant economies of scale, then their costs are lower
than the costs that potential entrants will face, and newcomers will find it very expensive to enter
the industry.
Brand loyalty is customers' preference for the products of organizations currently existing in the
task environment. If established organizations enjoy significant brand loyalty, then a new entrant
will find it extremely difficult and costly to obtain a share of the market. Newcomers must bear
huge advertising costs to build customer awareness of the goods or services they intend to
provide. Government regulations function as a barrier to entry at both the industry and the
country levels. Many industries that were deregulated experienced a high level of new entry after
deregulation. This forced existing companies in those industries to operate more efficiently or
risk being put out of business.

100) Essay
Economic forces include interest rates, inflation, unemployment, and economic growth.
Economic forces produce many opportunities and threats for managers. Low levels of
unemployment and falling interest rates give more people more money to spend, and as a result
organizations have an opportunity to sell more goods and services. Good economic times affect
the supply of resources that become easier or more inexpensive to acquire, and organizations
have an opportunity to flourish.
In contrast, worsening macroeconomic conditions pose a major threat because they limit
managers' ability to gain access to the resources their organizations need. Profit-seeking
organizations have fewer customers for their goods and services during economic downturns.
Nonprofits receive fewer donations during economic downturns.
Poor economic conditions make the environment more complex and managers' jobs more
difficult and demanding. Managers may need to reduce the number of individuals in their
departments and increase the motivation of remaining employees, and managers and workers
alike may need to identify ways to acquire and utilize resources more efficiently.

101) Essay
Student examples will vary. A sample answer follows:
Technological forces are outcomes of changes in the technology that managers use to design,
produce, or distribute goods and services.
Technological forces can have profound implications for managers and organizations.
Technological change can make established products obsolete, forcing managers to find new
ways to satisfy customer needs. Although technological change can threaten an organization, it
also can create a host of new opportunities for designing, making, or distributing new and better
kinds of goods and services.
One industry that underwent significant technological changes was home entertainment. In the
United States, video rental stores such as Blockbuster did not realize what strong competition
DVD-by-mail companies would be. The vast majority of video stores went out of business, and
the home entertainment industry became more focused on online user experience rather than in-
store transactions. Netflix successfully managed its own technological transition from DVD-by-
mail service to streaming media service.

102) Essay
Student examples will vary. A sample answer follows:
Globalization is the set of specific and general forces that work together to integrate and connect
economic, political, and social systems across countries, cultures, or geographic regions. The
result of globalization is that nations and peoples become increasingly interdependent because
the same forces affect them in similar ways. The fates of peoples in different countries become
interlinked as the world's markets and businesses become increasingly interconnected. As nations
become more interdependent, they tend to become more similar to one another in their tastes and
preferences.
When I started my career as a call center manager, I managed 20 employees who all worked in
the same building in Nebraska. Now I manage five employees in Nebraska and 44 employees in
Chennai, India. As my company became part of a global network of employees, I learned how to
supervise employees from a different culture and in a different time zone. The employees in
Chennai have become interconnected with our Nebraska employees, and each group depends on
the other to excel in customer service.

103) Essay
There are four principal forms of capital flow between countries.
 Human capital is the flow of people around the world through immigration, migration,
and emigration.
 Financial capital is the flow of money capital across world markets through overseas
investment, credit, lending, and aid.
 Resource capital is the flow of natural resources, parts, and components between
companies and countries such as metals, minerals, lumber, energy, food products,
microprocessors, and auto parts.
 Political capital is the flow of power and influence around the world using diplomacy,
persuasion, aggression, and force of arms to protect a country's or world region's or
political bloc's access to the other forms of capital.

104) Essay
A tariff is a tax that a government imposes on goods imported into one country from another.
The aim of import tariffs is to protect domestic industries and jobs from overseas competition by
raising the price of these products from abroad.
The reason for removing tariffs is that, very often, when one country imposes an import tariff,
others follow suit and the result is a series of retaliatory moves as countries progressively raise
tariff barriers against each other. During the recent economic crisis, the governments of most
countries worked hard not to fall into the trap of raising tariffs to protect jobs and industries in
the short run because they knew the long-term consequences of this would be the loss of even
more jobs. Governments of countries that resort to raising tariff barriers ultimately reduce
employment and undermine the economic growth of their countries because capital and
resources will always move to their most highly valued use wherever that is in the world.
Temporary tariffs may be wise if one country is “dumping” unwanted or inferior products into
another country at a price that local competitors cannot hope to match. Also, the threat of tariffs
can be an effective bargaining tool for a government that believes that foreign organizations are
behaving unfairly. However, in most cases tariffs cause more problems than they solve. They
drive up costs for consumers. They encourage local producers to keep their profits rather than
plowing them back into technological or other improvements. And they mean less efficiency and
therefore lower profits for investors.

105) Essay
The free-trade doctrine predicts that if each country agrees to specialize in the production of the
goods and services that it can produce most efficiently, this will make the best use of global
capital resources and will result in lower prices.
In other words, if a U.S. company were the most efficient manufacturer of a certain product, this
product would be likely to be produced in the United States over time. Similarly, if some other
country were the most efficient producer of some other product, that product would most likely,
over time, come to be produced in that country.

106) Essay
Student examples will vary. A sample answer follows.
The Obama administration negotiated for several years for the United States to join the Trans-
Pacific Partnership, a trade agreement between the United States and 11 other countries. In 2017,
President Donald Trump issued an executive order pulling the country out of the TPP, taking a
stand against foreign competitors as part of his "America First" strategy.
I believe it was a good idea for the United States to participate in the TPP. Globalization must be
monitored carefully, but in general it helps consumers, investors, and governments. By standing
alone, the United States is missing out on lower prices for consumers.

107) Essay
Student examples will vary. A sample answer follows:
One model of national culture was developed by Geert Hofstede. Hofstede developed five
dimensions along which national cultures can be placed: individualism/collectivism, power
distance, achievement/nurturing orientation, uncertainty avoidance, and long-term/short-term
orientation.
Long-term versus short-term orientation: Orientation toward life and work affects business
climate in terms of the values that people place on thrift and persistence. A national culture with
a long-term orientation rests on values such as thrift (saving) and persistence in achieving goals.
A national culture with a short-term orientation is concerned with maintaining personal stability
or happiness and living for the present.
Uncertainty avoidance: Societies as well as individuals differ in their tolerance for uncertainty
and risk. Societies low on uncertainty avoidance are easygoing, value diversity, and tolerate
differences in personal beliefs and actions. Societies high on uncertainty avoidance are more
rigid and skeptical about people whose behaviors or beliefs differ from the norm. In these
societies, conformity to the values of the social and work groups to which a person belongs is the
norm, and structured situations are preferred because they provide a sense of security.

108) Essay
By power distance, Geert Hofstede meant the degree to which societies accept the idea that
inequalities in the power and well-being of their citizens are due to differences in individuals'
physical and intellectual capabilities and heritage. This concept also encompasses the degree to
which societies accept the economic and social differences in wealth, status, and well-being that
result from differences in individual capabilities. Societies in which inequalities are allowed to
persist or grow over time have high power distance. In high-power-distance societies, workers
who are professionally successful amass wealth and pass it on to their children, and, as a result,
inequalities may grow over time. In such societies, the gap between rich and poor, with all the
attendant political and social consequences, grows very large. In contrast, in societies with low
power distance, large inequalities between citizens are not allowed to develop. In low-power-
distance countries, the government uses taxation and social welfare programs to reduce
inequality and improve the welfare of the least fortunate. These societies are more attuned to
preventing a large gap between rich and poor and minimizing discord between different classes
of citizens.