Contemporary Management Gareth Jones 11e - Test Bank

Contemporary Management Gareth Jones 11e – Test Bank

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Contemporary Management, 11e (Jones)

Chapter 6 Managing in the Global Environment

1) A company must operate in more than two countries around the world to be considered a global organization.

Answer: FALSE

Explanation: A global organization is one that operates in more than one country.

Difficulty: 2 Medium

Topic: Globalization

Learning Objective: 06-01 Explain why the ability to perceive, interpret, and respond appropriately to the global environment is crucial for managerial success.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

2) Opportunities and threats that result from changes in the task environment are easier to identify and respond to than events in the general environment.

Answer: TRUE

Explanation: 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.

Difficulty: 2 Medium

Topic: Globalization

Learning Objective: 06-02 Differentiate between the global task and global general environments.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

3) A high level of rivalry typically results in price competition that increases existing prices.

Answer: FALSE

Explanation: A high level of rivalry typically results in price competition, and falling prices reduce company revenues and profits.

Difficulty: 2 Medium

Topic: Competitive environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

4) ABC Corp has developed economies of scale, which lower the barriers to entry for new competitors.

Answer: FALSE

Explanation: 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.

Difficulty: 2 Medium

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

5) The aging of the population of a country is an example of a demographic force that affects organizations in the country.

Answer: TRUE

Explanation: The aging of the population has several implications for the workplace. Most significant are a relative decline in the number of young people joining the workforce and an increase in the number of active employees who are postponing retirement.

Difficulty: 2 Medium

Topic: Demographics

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

6) Nations forming unions, such as the EU, that allow free exchange of resources and capital are examples of the political and legal forces in the environment.

Answer: TRUE

Explanation: Political and legal forces are outcomes of changes in laws and regulations. Some nations are forming political unions that allow free exchange of resources and capital.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

7) Falling trade barriers pose a serious threat to the nation’s domestic market because they increase competition in the task environment.

Answer: TRUE

Explanation: By allowing overseas companies to compete in a nation’s domestic market for customers, falling trade barriers pose a serious threat because they increase competition in the task environment.

Difficulty: 2 Medium

Topic: Globalization

Learning Objective: 06-04 Explain why the global environment is becoming more open and competitive, and identify the forces behind the process of globalization that increase the opportunities, complexities, challenges, and threats managers face.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

8) Globalization has decreased the levels of interdependence between people and nations.

Answer: FALSE

Explanation: One result of globalization is that nations and people have become increasingly interdependent because the same forces affect them in similar ways.

Difficulty: 2 Medium

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

9) The aim of import tariffs is to encourage the entry of foreign goods into a country’s market.

Answer: FALSE

Explanation: The aim of import tariffs is to protect domestic industries and jobs from overseas competition by raising the price of these products from abroad, which discourages their entry.

Difficulty: 1 Easy

Topic: Globalization

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

10) According to Hofstede, low-power-distance countries’ societies prevent a large gap between rich and poor and minimize inequalities between different classes of citizens.

Answer: TRUE

Explanation: According to Hofstede, in low-power-distance countries, 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.

Difficulty: 2 Medium

Topic: Power distance

Learning Objective: 06-05 Discuss why national cultures differ and why it is important that managers be sensitive to the effects of falling trade barriers and regional trade associations on the political and social systems of nations around the world.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

11) What benefits does the global environment offer organizations?

A) The global environment provides organizations with opportunities to increase efficiency and effectiveness.
B) The global environment is easy to operate within and is constant, straightforward, and predictable.
C) Fluctuating sociocultural factors do not affect the performance of organizations that function at a global level.
D) Organizations are faced with fewer challenges and risks when they grow to prominence internationally.
E) Organizations that operate globally seldom need to compete for scarce and valuable resources.

Answer: A

Explanation: The changes that are taking place in the global environment underscore why it is important for managers to develop a global perspective as they strive to increase organizational efficiency and effectiveness.

Difficulty: 2 Medium

Topic: Globalization

Learning Objective: 06-01 Explain why the ability to perceive, interpret, and respond appropriately to the global environment is crucial for managerial success.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

12) The task environment includes

A) the wide-ranging global, technological, sociocultural, and political forces that affect organizations.
B) the forces that have the least immediate effect on managers and their decisions.
C) opportunities and threats that are harder to identify than those in the general environment.
D) a framework of environmental policies that dictate the CSR policies of global organizations.
E) the set of forces that originate with global suppliers, distributors, customers, and competitors.

Answer: E

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-02 Differentiate between the global task and global general environments.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

13) The general environment includes

A) opportunities and threats that are easier to identify and respond to than those in the task environment.
B) the set of forces that originate with global suppliers, distributors, customers, and competitors.
C) the wide-ranging global, technological, sociocultural, and political forces that affect organizations.
D) the forces that have the most immediate effect on managers and their decisions.
E) forces that have very little impact upon the performance of organizations.

Answer: C

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

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-02 Differentiate between the global task and global general environments.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

14) Which statement explains how the task environment is similar to the general environment?

A) They are both a set of geopolitical forces that are predictable and unchanging.
B) They both present managers with few opportunities and risks when operating at a global level.
C) They are both a set of forces and conditions that operate beyond an organization’s boundaries.
D) They both contain challenges that are easily identified and anticipated.
E) They are both forces that are easy to control and have little impact on organizational performance.

Answer: C

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

Difficulty: 3 Hard

Topic: External environment

Learning Objective: 06-02 Differentiate between the global task and global general environments.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

15) Which statement explains how the task environment differs from the general environment?

A) Threats in the general environment are easier to respond to than threats in the task environment.
B) Forces in the task environment have a more immediate and direct effect on managers than forces in the general environment.
C) Opportunities in the task environment are less easy to identify than opportunities in the general environment.
D) Unlike the task environment, the general environment deals with conditions that affect an organization’s ability to obtain inputs and dispose of outputs.
E) Unlike the general environment, the task environment includes the global, economic, sociocultural, political, and legal forces that affect an organization.

Answer: B

Explanation: 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. It contains the forces that have the most immediate and direct effect on managers because they pressure and influence managers daily.

Difficulty: 3 Hard

Topic: External environment

Learning Objective: 06-02 Differentiate between the global task and global general environments.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

16) Surrey Store gets its products directly from the manufacturer and sells them to consumers. In this case, the manufacturer is a

A) supplier.
B) competitor.
C) distributor.
D) processor.
E) consumer.

Answer: A

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

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

17) Johnson’s Furniture Factory gets its raw material from the local timber yard. The timber yard acts as Johnson’s

A) competitor.
B) distributor.
C) retailer.
D) supplier.
E) consumer.

Answer: D

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

18) A supplier’s bargaining position is especially strong when the input supplied

A) has multiple sources and channels of distribution.
B) has inexpensive and easily available substitutes.
C) is the sole source of that input.
D) is found freely and can be accessed by people with little effort.
E) is not protected by any patent.

Answer: C

Explanation: A supplier’s bargaining position is especially strong when the supplier is the sole source of an input and the input is vital to the organization.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

19) Apple contracts with companies in Taiwan to make inputs such as the chips, batteries, and LCD displays that power its digital devices at lower costs. This strategy is an example of global

A) exporting.
B) franchising.
C) importing.
D) networking.
E) outsourcing.

Answer: E

Explanation: The purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design is called global outsourcing.

Difficulty: 2 Medium

Topic: Global strategy

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

20) ________ are organizations that help other organizations sell their goods or services directly to customers.

A) Producers
B) Suppliers
C) Distributors
D) Manufacturers
E) Processors

Answer: C

Explanation: 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.

Difficulty: 1 Easy

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

21) Gemstone designs and creates luxury items like jewelry and hair accessories. It sells its merchandise only through Francone’s, a multinational retail store. Francone’s acts as Gemstone’s

A) producer.
B) supplier.
C) distributor.
D) manufacturer.
E) processor.

Answer: C

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

22) ________ are individuals and groups that buy the goods and services an organization produces.

A) Customers
B) Suppliers
C) Distributors
D) Competitors
E) Processors

Answer: A

Explanation: Individuals and groups that buy the goods and services an organization produces are called customers. An organization’s success depends on its responsiveness to customers—whether it can satisfy their needs.

Difficulty: 1 Easy

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

23) Justin has a personal library with over 5,000 novels, most of them bought from Barnes and Noble. He is an example of a Barnes and Noble

A) customer.
B) supplier.
C) distributor.
D) competitor.
E) processor.

Answer: A

Explanation: Individuals and groups that buy the goods and services an organization produces are called customers.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

24) As the only store to design and sell curtains in the suburb of Oakland, the merchandise sold by Décor and More tends to be overpriced. Noticing this, The Curtain Corner set up a showroom in the same suburb, reasoning that with lower prices, it would be able to attract more customers. The Curtain Corner is Décor and More’s

Décor and More tends to be overpriced because it is the only store to design and sell curtains in the suburb of Oakland. The owners of Curtain Corner set up a showroom in the same suburb reasoning that with lower prices it would be able to attract more customers. Curtain Corner is Décor and More’s

A) partner.
B) distributor.
C) competitor.
D) processor.
E) franchiser.

Answer: C

Explanation: Competitors are organizations that produce goods and services that are similar and comparable to a particular organization’s goods and services.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

25) A ________ is an organization that is NOT presently in a task environment but has the resources to enter if it so chooses.

A) potential supplier
B) potential competitor
C) distributor
D) supplier
E) competitor

Answer: B

Explanation: Competitors are organizations that produce goods and services that are similar and comparable to a particular organization’s goods and services. Potential competitors are organizations that are not presently in a task environment but have the resources to enter if they so choose.

Difficulty: 1 Easy

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

26) The more difficult it is to enter the task environment, the

A) easier it is to keep prices high.
B) lower is the barrier to entry.
C) harder it is to obtain customers.
D) more competitors an organization faces.
E) less expensive it is to enter the industry.

Answer: A

Explanation: 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.

Difficulty: 3 Hard

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

27) Toy Truck operates in a task environment with a low barrier to entry; therefore,

A) it has few competitors and faces no challenges from other organizations.
B) it is able to sell its products easily, even though they are overpriced.
C) the task environment is expensive to enter.
D) the task environment is easy to enter.
E) it is unable to obtain customers, even though it has no rivals or competitors.

Answer: D

Explanation: A low barrier to entry makes it relatively easy to enter a market.

Difficulty: 3 Hard

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

28) Candlestone operates in a task environment with a high barrier to entry, which means

A) the task environment is inexpensive to enter.
B) Candlestone is able to sell its products easily, even if they are overpriced.
C) Candlestone has many competitors and faces challenges from them frequently.
D) the task environment is easy to enter.
E) Candlestone is unable to obtain customers, despite the excellent quality of its products.

Answer: B

Explanation: Barriers to entry are factors that make it difficult and costly for a company to enter a particular task environment or industry. In other words, 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.

Difficulty: 3 Hard

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

29) Because Nadia wants to decrease the costs of her business, she uses ________ by choosing to buy inputs in bulk and manufacture products in large quantities

A) economic forces
B) demographic forces
C) potential competitors
D) brand positioning
E) economies of scale

Answer: E

Explanation: Economies of scale are the cost advantages associated with large operations. They 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.

Difficulty: 2 Medium

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

30) Brand ________ refers to customers’ preference for the products of organizations currently in the task environment.

A) recognition
B) positioning
C) loyalty
D) saturation
E) awareness

Answer: C

Explanation: Brand loyalty is customers’ preference for the products of organizations currently in the task environment.

Difficulty: 1 Easy

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

31) Seafood Diner, a seafood restaurant chain, opened its newest restaurant in a small town. It soon found that the only customers it attracted were tourists because the locals preferred to go to The Clam Shack—an older but more expensive restaurant. The Clam Shack enjoyed significant brand

A) saturation.
B) emersion.
C) loyalty.
D) dilution.
E) acceleration.

Answer: C

Explanation: Brand loyalty is customers’ preference for the products of organizations currently 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.

Difficulty: 2 Medium

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

32) The most potentially threatening force that managers must deal with in the task environment is

A) rivalry between competitors.
B) managing the global supply chain.
C) negotiating and administering agreements with unions and their representatives.
D) a reliable supply of input resources.
E) a distributor demands that the company reduces the prices of its goods and services.

Answer: A

Explanation: Rivalry between competitors is potentially the most threatening force managers must deal with. It makes it increasingly difficult for managers to gain access to the resources an organization needs to make goods and services.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

33) Caste systems in India are examples of

A) cultural imperialism.
B) cultural pluralism.
C) national culture.
D) social structure.
E) social relativism.

Answer: D

Explanation: Social structure is the traditional system of relationships established between people and groups in a society. Societies differ substantially in social structure. Caste systems in India and Tibet and the recognition of numerous social classes in Great Britain and France produce a multilayered social structure.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

34) Being a large powerful retailer, Walmart has done each of these, EXCEPT which one?

A) Walmart has controlled its suppliers’ access to customers by demanding suppliers reduce their prices.
B) Walmart has demanded that their overseas suppliers pay their workers based on U.S. standards.
C) Walmart has bought only from competitors of a supplier, if the supplier refuses to reduce their prices.
D) Walmart has demanded additional fees from U.S. suppliers for using its distribution centers and warehouses.
E) Walmart has changed the frequency of payment to some vendors, typing payments to how quickly a supplier’s inventory is bought.

Answer: B

Explanation: Walmart has not demanded that their overseas suppliers pay their workers based on U.S. standards.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

35) ________ is the set of values and the norms of behavior which are approved or sanctioned by a particular society.

A) National culture
B) Social stratification
C) Cultural pluralism
D) Organizational culture
E) Social structure

Answer: A

Explanation: 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. Societies differ substantially in the values and norms they emphasize.

Difficulty: 1 Easy

Topic: Culture

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

36) Inflation is an example of a(n) ________ force in an organization’s environment.

A) social
B) economic
C) demographic
D) ergonomic
E) legal

Answer: B

Explanation: Economic forces affect the general health and well-being of a country or world region. They include interest rates, inflation, unemployment, and economic growth.

Difficulty: 1 Easy

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

37) ________ forces are outcomes of changes in the skills and equipment managers use to design, produce, or distribute goods and services.

A) Cultural
B) Political
C) Demographic
D) Technological
E) Sociocultural

Answer: D

Explanation: Technology is the combination of tools, machines, computers, skills, information, and knowledge that managers use to design, produce, and distribute goods and services; technological forces are outcomes of changes in that technology.

Difficulty: 1 Easy

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

38) Standard Power is a new company in the electrical industry, and with the company’s success, it is building a strong reputation. What impact will this company most likely have on the other companies in the electrical industry?

A) Prices and profits will increase.
B) Competition will decrease.
C) Competition will increase and prices and profits will decrease.
D) Competition will decrease and prices and profits will increase.
E) The new company will not have an impact on the other companies.

Answer: C

Explanation: When new competitors enter an industry, competition increases and prices and profits decrease.

Difficulty: 2 Medium

Topic: Competitive environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

39) Unlike previous generations, salespeople today can work from home offices, communicate with colleagues in different parts of the world almost instantly, and commute electronically to work. This flexibility is due to changes in _______ forces.

A) economic
B) political
C) demographic
D) technological
E) sociocultural

Answer: D

Explanation: Salespeople in many companies work from home offices and commute electronically to work. They communicate with other employees through companywide electronic communication networks using smartphones and other mobile devices to orchestrate “face-to-face” meetings with coworkers across the country or globe.

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

40) Noreen is a member of an egalitarian culture, one in which few distinctions are made between individuals and groups. Her culture is low on

A) cultural diversity.
B) gender equality.
C) national culture.
D) social stratification.
E) cultural pluralism.

Answer: D

Explanation: In societies that have a high degree of social stratification, there are many distinctions among individuals and groups. Social stratification is lower in relatively egalitarian countries and reveals few distinctions among people.

Difficulty: 2 Medium

Topic: Culture

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

41) Violette is the CEO of Lafarge Advertising, based in Paris. Many distinctions exist between the different classes of people in her society. Most of the top managers in her organization, for example, come from the upper classes. This implies that French society has a high degree of

A) social stratification.
B) gender inequality.
C) cultural imperialism.
D) cultural pluralism.
E) economic equality.

Answer: A

Explanation: There are many distinctions among individuals and groups in societies that have a high degree of social stratification. Most top managers in France come from the upper classes of French society, but top managers in the United States come from all strata of American society.

Difficulty: 2 Medium

Topic: Culture

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

42) Garry is a member of a society that makes very few distinctions between people and groups. This is reflected in his company, the managers of which represent several different classes and cultures. The society to which Garry belongs is

A) low on cultural diversity.
B) low on social stratification.
C) high on economic inequality.
D) high on race discrimination.
E) low on cultural pluralism.

Answer: B

Explanation: In societies that have a high degree of social stratification, there are many distinctions among individuals and groups. Most top managers in France come from the upper classes of French society, but top managers in the United States come from all strata of American society.

Difficulty: 2 Medium

Topic: Culture

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

43) Which type of forces are outcomes of changes in or changing attitudes toward the characteristics of a population?

A) demographic
B) terminal
C) ethnographic
D) geopolitical
E) instrumental

Answer: A

Difficulty: 1 Easy

Topic: Demographics

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

44) A decline in the number of young people joining the workforce and an increase in the number of active employees who are postponing retirement are examples of ________ forces affecting the workforce.

A) demographic
B) terminal
C) ethnographic
D) geopolitical
E) instrumental

Answer: A

Explanation: 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. A decline in the number of young people joining the workforce and an increase in the number of active employees who are postponing retirement are examples of demographic forces.

Difficulty: 1 Easy

Topic: Demographics

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

45) ________ forces are outcomes of the changes in the laws and regulations of a society.

A) Technological
B) Political and legal
C) Economic
D) Demographic
E) Sociocultural

Answer: B

Explanation: Political and legal forces are outcomes of changes in laws and regulations.

Difficulty: 1 Easy

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

46) Due to changing ________ forces, Constantine’s oil company benefited greatly from decreased regulation of his industry.

A) sociocultural
B) political and legal
C) technological
D) ethnographic
E) demographic

Answer: B

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

Difficulty: 2 Medium

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

47) An effect of globalization is it

A) increases similarities between members of nations.
B) prevents the economic systems of different countries from merging with each other.
C) decreases the interconnectedness of the world’s markets and businesses.
D) decreases organizational efficiency and effectiveness.
E) hinders the flow of financial and resource capital between countries.

Answer: A

Explanation: The result of globalization is that nations and peoples become increasingly interdependent because the same forces affect them in similar ways. As nations become more interdependent, they become more similar to one another in the sense that people develop a similar liking for diverse products.

Difficulty: 2 Medium

Topic: Globalization

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

48) ________ capital is most affected by immigration and emigration.

A) Human
B) Virtual
C) Political
D) Resource
E) Financial

Answer: A

Explanation: Human capital includes the flow of people around the world through immigration, migration, and emigration.

Difficulty: 1 Easy

Topic: Globalization

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

49) ________ capital flows through the processes of overseas investment, credit, lending, and aid.

A) Human
B) Technological
C) Political
D) Resource
E) Financial

Answer: E

Explanation: Financial capital is the flow of money capital across world markets through overseas investment, credit, lending, and aid.

Difficulty: 1 Easy

Topic: Globalization

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

50) The Republic of Maribali has been losing capital to other countries steadily over the last five years. What is likely to happen as a result?

A) Its rate of unemployment will be decreased.
B) The standard of living will fall.
C) The impact of the recession will be lessened.
D) The gap between the rich and poor will narrow.
E) Its economy will stabilize.

Answer: B

Explanation: When capital leaves a country, the results are higher unemployment, recession, and a lower standard of living for its people.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

51) Political capital is the flow of

A) people around the world through immigration, migration, and emigration.
B) natural resources, parts, and components between companies and countries.
C) information and data across the world through the social media.
D) money across world markets through overseas investment, credit, lending, and aid.
E) power and influence around the world using diplomacy, persuasion, aggression, and force of arms.

Answer: E

Explanation: Political capital is 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.

Difficulty: 1 Easy

Topic: Globalization

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

52) When the United States sent military troops into Iraq, it was using ________ capital to influence policy.

A) power
B) natural resource
C) social
D) economic
E) political

Answer: E

Difficulty: 2 Medium

Topic: Globalization

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

53) What factor played an important role in speeding up globalization?

A) increased government-enforced import tariffs that protected the domestic economy
B) export restrictions which ensured that the people of a country had access to their own products
C) declining barriers to trade and investment that eased the flow of capital throughout the world
D) rejection of the free-trade doctrine, which increased global outsourcing
E) fortification of trade and investment barriers between each country

Answer: C

Explanation: One of the main factors that has speeded globalization by freeing the movement of capital has been the decline in barriers to trade and investment.

Difficulty: 2 Medium

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

54) The lowering of barriers of distance and culture affecting global organizations has been caused in part by the

A) imposition of government-enforced tariffs on imports.
B) advancements of communication and transportation technology.
C) rejection of the free-trade doctrine.
D) imposition of government-enforced tariffs on exports.
E) restrictions placed on the flow of capital between nations.

Answer: B

Explanation: Since the end of World War II, a continuing stream of advances in communications and transportation technology has worked to reduce the barriers of distance and culture that affected all global organizations.

Difficulty: 2 Medium

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

55) Regional trade agreements may

A) enforce regional restrictions on the cross-border flow of resources and reinforce import tariffs.
B) expose companies based in one member country to increased competition from companies in other member countries.
C) hinder the spread of globalization by setting up trade barriers between different countries of the same region.
D) provide manufacturing organizations with fewer opportunities to reduce costs and provide managers with fewer threats.
E) be created to reduce overall tariffs on goods that flow within a country and increase tariffs on goods that flow between regions.

Answer: B

Explanation: The establishment of free-trade areas creates an opportunity for manufacturing organizations because it lets them reduce their costs. Some managers view regional free-trade agreements as a threat because they expose a company based in one member country to increased competition from companies based in the other member countries.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

56) What is an advantage of free-trade agreements?

A) They protect domestic industries and jobs by taxing goods imported from outlying regions.
B) They protect the well-being of people by restricting the flow of goods being exported from their country.
C) They reduce the impact of globalization by preventing the loss of capital from a country.
D) They provide managers with a threat-free environment to work within.
E) They provide manufacturing organizations with opportunities to reduce production costs.

Answer: E

Explanation: The establishment of free-trade areas creates an opportunity for manufacturing organizations because it lets them reduce their costs. They can do this either by shifting production to the lowest-cost location within the free-trade area or by serving the whole region from one location rather than establishing separate operations in each country.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

57) NAFTA is an example of a

A) regional free-trade agreement.
B) global financial institution.
C) collective bargaining agreement.
D) protective tariff agreement.
E) military alliance.

Answer: A

Explanation: NAFTA is a regional free trade agreement between the United States, Canada, and Mexico.

Difficulty: 2 Medium

Topic: Globalization

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

58) The basic building blocks of national culture are

A) values and norms.
B) political and legal forces.
C) ethnographic forces.
D) corporate values and organizational culture.
E) the task and general environment.

Answer: A

Explanation: National culture includes the values, norms, knowledge, beliefs, moral principles, laws, customs, and other practices that unite the citizens of a country. The basic building blocks of national culture are values and norms.

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

59) ________ are beliefs about what a society considers to be good, right, desirable, or beautiful.

A) Folkways
B) Values
C) Laws
D) Traditions
E) Mores

Answer: B

Explanation: Values are beliefs about what a society considers to be good, right, desirable, or beautiful—and their opposites.

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

60) Values are

A) static and resistant to change.
B) invested with emotional significance.
C) universally held beliefs and the same across all societies.
D) easily changed and the changes are easily accepted.
E) superficial in a society’s belief system.

Answer: B

Explanation: Values are more than merely abstract concepts; they are invested with considerable emotional significance.

Difficulty: 2 Medium

Topic: Culture

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

61) ________ are unwritten, informal codes of conduct that shape the behavior of people toward one another and are held important by most members of a group or organization.

A) Laws
B) Policies
C) Norms
D) Values
E) Philosophies

Answer: C

Explanation: 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. They shape the behavior of people toward one another.

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

62) Proscriptions against murder, theft and adultery are ________ that are central to the functioning of society.

A) mores
B) folkways
C) values
D) laws
E) superstitions

Answer: A

Explanation: 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.

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

63) Mr. Jones was caught stealing power tools from his next-door neighbor. What type of norm did Mr. Jones violate?

A) mores
B) folkways
C) values
D) morals
E) superstitions

Answer: A

Difficulty: 3 Hard

Topic: Culture

Bloom’s: Apply

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

64) Examples of mores are

A) societal taboos which censure murder, theft, and incest.
B) social conventions that dictate the usage of different types of cutlery.
C) customs that govern social interaction between neighbors.
D) traditions that prescribe gender-appropriate clothing in social gatherings.
E) superstitions held important by different members of a society.

Answer: A

Difficulty: 2 Medium

Topic: Culture

Bloom’s: Understand

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

65) Examples of folkways are

A) laws in a country which make divorce permissible.
B) societal taboos that prohibit murder, theft, and incest.
C) religious doctrines that forbid the consumption of particular types of food.
D) laws that prescribe punishments for different types of offenses.
E) societal conventions that concern gender-appropriate clothing.

Answer: E

Explanation: 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.

Difficulty: 2 Medium

Topic: Culture

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

66) People who violate folkways are often thought to be

A) immoral.
B) unethical.
C) ill-mannered.
D) criminals.
E) mean.

Answer: C

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

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

67) According to Hofstede, individualist societies

A) value societal welfare over that of individual members of society.
B) value personal freedom, personal success, and self-expression.
C) emphasize subordination of the individual to the goals of the group.
D) emphasize conformity to group norms and strong identification with the group.
E) require individuals to put the needs of the group before their own.

Answer: B

Explanation: According to Hofstede, 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.

Difficulty: 1 Easy

Topic: Individualism/Collectivism

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

68) Hofstede defined collectivist societies as those that

A) emphasize self-expression, personal freedom, and individual rights.
B) adhere to the principle that people should be judged by their contribution to the group.
C) discourage individuals from placing societal welfare above their own.
D) encourage the pursuit of individual goals and individual entrepreneurship.
E) adhere to the principle that people should be judged by their individual achievements.

Answer: B

Difficulty: 1 Easy

Topic: Individualism/Collectivism

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

69) By ________, Hofstede was referring to 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.

A) power distance
B) individualism
C) collectivism
D) uncertainty avoidance
E) long-term orientation

Answer: A

Explanation: Power distance, according to Hofstede, 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.

Difficulty: 1 Easy

Topic: Power distance

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

70) Hayato was raised to believe that the individual is less important than the group as a whole. He also believes that physical and intellectual capabilities and heritage account for the inequality in the power and well-being of members of his society. Hayato’s society is

A) high on power distance and low on individualism.
B) low on power distance and low on collectivism.
C) high on individualism and low on achievement orientation.
D) low on collectivism and low on achievement orientation.
E) low on power distance and low on individualism.

Answer: A

Explanation: According to Hofstede, 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. 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.

Difficulty: 3 Hard

Topic: Power distance

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

71) Hofstede’s model defined societies with high power distance as having

A) no inequalities between different classes in society.
B) a government that uses taxation and social welfare programs to reduce inequality.
C) inequalities in the well-being of individuals due to their work achievements.
D) a large gap between rich and poor.
E) resources that are accessible to all members of society.

Answer: D

Explanation: According to Hofstede, 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.

Difficulty: 2 Medium

Topic: Power distance

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

72) Societies with low power distance have been defined by Hofstede as those in which

A) large inequalities between different classes in society are allowed to develop.
B) the government uses taxation and social welfare programs to reduce inequality.
C) inequalities in the well-being of individuals are due to their birth and heritage.
D) the gap between the rich and poor grows very large.
E) professional workers amass wealth.

Answer: B

Explanation: According to Hofstede, 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.

Difficulty: 2 Medium

Topic: Power distance

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

73) Susie belongs to a society that values assertiveness, performance, competition, and results. Her society also encourages freedom of expression and personal success but makes few provisions for the welfare of the weak. According to Hofstede’s model of national culture, what is true about her society?

A) It has an achievement orientation and is high on individualism.
B) It has an achievement orientation and is high on collectivism.
C) It has a nurturing orientation and is low on individualism.
D) It has a nurturing orientation and is low on performance orientation.
E) It has a performance orientation and is high on collectivism.

Answer: A

Explanation: According to Hofstede, societies that have an achievement orientation value assertiveness, performance, success, competition, and results. 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.

Difficulty: 3 Hard

Topic: Individualism/Collectivism

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

74) Batu belongs to a society that is rigid and skeptical about people whose behaviors or beliefs differ from the norm. His society also values warm, personal relationships over success and performance. According to Hofstede’s model of national culture, what is true about his society?

A) It is low on uncertainty avoidance and has an achievement orientation.
B) It is high on uncertainty avoidance and has a nurturing orientation.
C) It is low on uncertainty avoidance and has a performance orientation.
D) It is high on uncertainty avoidance and has an achievement orientation.
E) It is low on uncertainty avoidance and has a nurturing orientation.

Answer: B

Explanation: According to Hofstede, societies high on uncertainty avoidance (such as Japan and France) are more rigid and skeptical about people whose behaviors or beliefs differ from the norm. In these societies, structured situations are preferred because they provide a sense of security.

Difficulty: 3 Hard

Topic: Uncertainty avoidance

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

75) Chin-Mae belongs to a culture that values the subordination of individuals to the group. The national culture also values personal stability and doesn’t focus on the future. According to Hofstede, what is true about Chin-Mae’s culture?

A) It is high on individualism and has a long-term orientation.
B) It is low on collectivism and has a long-term orientation.
C) It is high on individualism and has a short-term orientation.
D) It is high on collectivism and has a short-term orientation.
E) It is low on collectivism and has a short-term orientation.

Answer: D

Explanation: According to Hofstede, a national culture with a long-term orientation rests on values such as saving and persistence in achieving goals. 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.

Difficulty: 3 Hard

Topic: Individualism/Collectivism

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

76) According to Hofstede, countries with a long-term orientation

A) have a high rate of per capita savings.
B) have citizens who prioritize happiness over achievement and perseverance.
C) have citizens who live for the present and value personal stability.
D) have citizens who tend to spend more and save less.
E) foster organizations that emphasize immediate results over year-end goals.

Answer: A

Explanation: According to Hofstede, 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. Societies with a long-term orientation are well known for their high rate of per capita savings.

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

77) In Western cultures, an example of individualism values is

A) a tolerance of differences in personal beliefs.
B) warm personal relationships being important.
C) persistence in achieving goals.
D) the subordination of the individual to the goals of the group.
E) a high regard for individual entrepreneurs.

Answer: E

Explanation: In Western countries, individualism usually includes admiration for personal success, a strong belief in individual rights, and high regard for individual entrepreneurs.

Difficulty: 2 Medium

Topic: Individualism/Collectivism

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

78) Collectivism values include

A) assertiveness.
B) warm personal relationships.
C) persistence in achieving goals.
D) subordination of the individual to the goals of the group.
E) a high regard for self-expression.

Answer: D

Explanation: Collectivism values subordination of the individual to the group, or collective, as well as adherence to the principle that people should be judged by their contribution to the group.

Difficulty: 1 Easy

Topic: Individualism/Collectivism

Bloom’s: Remember

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

79) Hofstede’s nurturing orientation values

A) diversity.
B) assertiveness.
C) warm personal friendships.
D) performance.
E) achievement.

Answer: C

Explanation: Societies that have a nurturing orientation value the quality of life, warm personal relationships, and services and care for the weak.

Difficulty: 1 Easy

Topic: Culture

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

80) Which organization demonstrates Hofstede’s cultural dimension of a short-term orientation?

A) Mary’s Magnets, with its large amount of cash on hand for future purchases
B) John’s Tacos, with a strict policy of not spending time on anything that will not help the company achieve its goals
C) Barbara’s Bangles, a company that encourages its employees to have a high rate of savings for retirement
D) Cho’s Chalupas, a pop-up store that moves every two weeks to a new location (her employees love it!)
E) The Restoration Place, whose owner, Kylie, doesn’t care if her employees are happy as long as they are productive and make her money

Answer: D

Explanation: A short-term orientation is concerned with maintaining personal stability or happiness and living for the present.

Difficulty: 2 Medium

Topic: Culture

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

81) The GLOBE Project’s cultural dimension of ________ focuses on the degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families.

A) in-group collectivism
B) institutional collectivism
C) assertiveness
D) performance orientation
E) humane orientation

Answer: A

Explanation: In-group collectivism focuses on the degree to which individuals express pride, loyalty, and cohesiveness in their organizations or families.

Difficulty: 1 Easy

Topic: Individualism/Collectivism

Bloom’s: Remember

AACSB: Diversity

Accessibility: Keyboard Navigation

82) Taryn’s organization places high value on employees who are confrontational and aggressive in their relationships with others. The GLOBE Project would rate this organization as high in which cultural dimension?

A) uncertainty avoidance
B) institutional collectivism
C) assertiveness
D) performance orientation
E) humane orientation

Answer: C

Explanation: Assertiveness is the degree to which members of organizations are confrontational and aggressive in their relationships with others.

Difficulty: 2 Medium

Topic: Culture

Bloom’s: Apply

AACSB: Diversity

Accessibility: Keyboard Navigation

83) Which cultural dimension in the GLOBE Project is being demonstrated by an organization that encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others?

A) in-group collectivism
B) future orientation
C) gender egalitarianism
D) performance orientation
E) humane orientation

Answer: E

Explanation: Humane orientation is the degree to which an organization encourages and rewards individuals for being fair, altruistic, generous, caring and kind to others.

Difficulty: 2 Medium

Topic: Culture

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

84) Which organization is demonstrating the GLOBE Project’s cultural dimension of institutional collectivism?

A) Company A encourages all employees to recycle by providing receptacles in all common areas and giving a prize to the department that recycles the most material each month.
B) Company G requires all employees to attend a seminar on sexual harassment.
C) Company J provides a generous matching 401-K program to encourage its employees to save for retirement.
D) Company O gives bonuses for sales beyond set quotas.
E) Company X encourages its employees to compete for promotions and salary increases.

Answer: A

Explanation: Institutional collectivism is defined as the degree to which organizational and societal practices encourage and reward collective distribution of resources and collective action.

Difficulty: 3 Hard

Topic: Individualism/Collectivism

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

85) Which organization is demonstrating the GLOBE Project’s cultural dimension of uncertainty avoidance?

A) Company A encourages all employees to recycle by providing receptacles in all common areas and giving a prize to the department that recycles the most material each month.
B) Company G requires all employees to attend a seminar on sexual harassment.
C) Company J provides a generous matching 401-K program to encourage its employees to save for retirement.
D) Company O gives bonuses for sales beyond set quotas.
E) Company Y has a rules and regulations book that all employees are required to read and follow.

Answer: E

Explanation: Uncertainty avoidance is defined as the extent to which a society or organization uses rules, regulations, and procedures to alleviate the unpredictability of future events.

Difficulty: 3 Hard

Topic: Culture

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

86) How would you describe the global environment? Briefly explain its impact on managers and their organizations.

Answer: The global environment is a set of forces and conditions in the world outside an organization’s boundary that affect how it operates and shape its behavior. These forces change over time and thus present managers with opportunities and threats. Some changes in the global environment, such as the development of efficient new production technology, the availability of lower-cost components, or the opening of new global markets, create opportunities for managers to make and sell more products, obtain more resources and capital, and thereby strengthen their organization. In contrast, the rise of new global competitors, a global economic recession, or an oil shortage poses threats that can devastate an organization if managers are unable to sell its products so that revenues and profits plunge. The quality of managers’ understanding of forces in the global environment and their ability to respond appropriately to those forces are critical factors affecting organizational performance.

Difficulty: 3 Hard

Topic: Globalization

Learning Objective: 06-01 Explain why the ability to perceive, interpret, and respond appropriately to the global environment is crucial for managerial success.

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

87) If you were the manager of a manufacturing plant, how would forces in the task environment impact you?

Answer: 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. The task environment contains the forces that have the most immediate and direct effect on managers because they pressure and influence managers daily. 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.

Difficulty: 3 Hard

Topic: External environment

Learning Objective: 06-02 Differentiate between the global task and global general environments.

Bloom’s: Apply

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

88) A manager in the purchasing department noticed that the company’s supplier of widgets doubled its prices because it acquired two other widget suppliers. How has this supplier’s bargaining position changed, and how might this threaten managers and their organizations? Conversely, what threat can an organization pose to its suppliers?

Answer: A major supplier-related threat that confronts managers arises when suppliers’ bargaining position is so strong that they can raise the prices of the inputs they supply to the organization. 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. Often an organization can use its power with suppliers to force them to reduce their prices.

Difficulty: 3 Hard

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

89) You are considering expanding your chain of stores to another country, but you are concerned about the barriers to entry. Describe in brief the three main sources from which barriers to entry result. How would you manage these barriers?

Answer: Barriers to entry are factors that make it difficult and costly for a company to enter a particular task environment or industry. Barriers to entry result from three main sources: economies of scale, brand loyalty, and government regulations that impede entry. Economies of scale are the cost advantages associated with large operations. Brand loyalty is customers’ preference for the products of organizations currently in the task environment. Government regulations function as a barrier to entry at both the industry and the country levels.

Difficulty: 3 Hard

Topic: Barriers to entry

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

90) How do the five major forces of the general environment directly or indirectly impact a business? Use your favorite business to explain your answer.

Answer: The five major forces in the general environment are economic, technological, sociocultural, demographic, and political and legal forces. Student answers will vary but should demonstrate an understanding of the concepts.

Difficulty: 3 Hard

Topic: External environment

Learning Objective: 06-03 Identify the main forces in the global task and general environments, and describe the challenges that each force presents to managers.

Bloom’s: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

91) Define globalization and explain why the global market is becoming more open.

Answer: 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 most important reason why the global environment has become more open and competitive is the increase in globalization. The result of globalization is that nations and peoples become increasingly interdependent because the same forces affect them in similar ways. As a result of falling trade barriers, managers view the global environment as open—that is, as an environment in which companies are free to buy goods and services from, and sell goods and services to, whichever companies and countries they choose. They also are free to compete against each other to attract customers around the world. All large companies must establish an international network of operations and subsidiaries to build global competitive advantage.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

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92) Define each of the four principal forms of capital that flow between countries and give an example of each. Explain why companies are so anxious to undertake a risk in an uncertain global environment.

Answer: The four principal forms of capital that flow between countries are:

Human capital: the flow of people around the world through immigration, migration, and emigration
Financial capital: the flow of money capital across world markets through overseas investment, credit, lending, and aid
Resource capital: 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: 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

Companies seek their greatest returns or profits. Managers, employees, and companies are motivated to try to profit or benefit by using their skills to make products customers around the world want to buy.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

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93) Define tariffs and discuss the consequences of both increasing and removing import tariffs.

Answer: A tariff is a tax that a government imposes on goods imported into one country from another. The aim of increasing import tariffs is to protect domestic industries and jobs. 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. 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. 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.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking; Diversity

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94) Briefly discuss the factors that led to the decline of distance and cultural barriers and the impact this had upon companies operating in the global environment.

Answer: Historically, barriers of distance and culture closed the global environment and kept managers focused on their domestic market. A continuing stream of advances in communications and transportation technology worked to reduce the barriers of distance and culture that affected global organizations. The lowering of barriers to trade and investment and the decline of distance and culture barriers has created enormous opportunities for companies to expand the market for their goods and services through exports and investments in overseas countries. The shift toward a more open global economy has created not only more opportunities to sell goods and services in markets abroad but also the opportunity to buy more from other countries.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

95) Differentiate between values and norms and explain how they both impact national culture.

Answer: The basic building blocks of national culture are values and norms. 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. Values are more than merely abstract concepts; they are invested with considerable emotional significance. People argue, fight, and even die over values such as freedom or dignity. Although deeply embedded in society, values are not static and change over time; but change is often the result of a slow and painful process. 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. They shape the behavior of people toward one another.

Difficulty: 3 Hard

Topic: Culture

Bloom’s: Analyze

AACSB: Diversity

Accessibility: Keyboard Navigation

96) Use Hofstede’s five cultural dimensions, to discuss how differences in these dimensions affect a manager’s ability to work with people from different cultural backgrounds.

Answer: The five dimensions include individualism versus collectivism, power distance, achievement versus nurturing orientation, uncertainty avoidance, and long-term versus short-term orientation. Differences among national cultures have important implications for managers. Due to cultural differences, management practices that are effective in one country might be troublesome in another. Often management practices must be tailored to suit the cultural contexts within which an organization operates. Managers doing business with individuals from another country must be sensitive to the value systems and norms of that country and behave accordingly.

Difficulty: 3 Hard

Topic: Culture

Bloom’s: Analyze

AACSB: Diversity

Accessibility: Keyboard Navigation

97) Describe uncertainty avoidance as developed by Hofstede. Would you prefer to live in a society that is low on uncertainty avoidance, or would you want to live in a society that is high on uncertainty avoidance? Explain why.

Answer: Uncertainty avoidance is the degree to which societies are willing to tolerate uncertainty and risk. Societies low on uncertainty avoidance are easygoing, value diversity, and tolerate differences in personal beliefs and actions, while societies high on uncertainty avoidance are more rigid and skeptical about people whose behaviors or beliefs differ from the norm.

Student answers about living in a society with low or high uncertainty avoidance will vary.

Difficulty: 3 Hard

Topic: Uncertainty avoidance

Bloom’s: Understand

AACSB: Diversity

Accessibility: Keyboard Navigation

98) How has the lowering of barriers to trade and investment affected managers’ ability to expand their businesses?

Answer: The lowering of barriers to trade and investment and the decline of distance and culture barriers have created enormous opportunities for companies to expand the market for their goods and services through exports and investments in overseas countries. The shift toward a more open global economy has created not only more opportunities to sell goods and services in markets abroad but also the opportunity to buy more from other countries. A manager’s job is more challenging in a dynamic global environment because of the increased intensity of competition that goes hand in hand with the lowering of barriers to trade and investment.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

99) Describe the role that regional trade agreements like NAFTA play in a company’s decision of where to locate manufacturing and warehouse facilities. Explain how free trade areas affect business.

Answer: Regional trade agreements like NAFTA present opportunities and threats for managers and their organizations. After NAFTA was signed, for example, there was a flood of investment into Mexico from the United States, as well as many other countries such as Japan. Walmart, Costco, Ford, and many major U.S. retail chains expanded their operations in Mexico; Walmart, for example, is stocking many more products from Mexico in its U.S. stores, and its Mexican store chain is also expanding rapidly.

Regional free-trade agreements can also pose a threat because they expose companies based in one-member country to increased competition from companies based in the other member countries. NAFTA has had this effect; today Mexican managers in some industries face the threat of head-to-head competition against efficient U.S. and Canadian companies. But the opposite is true as well: U.S. and Canadian managers are experiencing threats in labor-intensive industries, such as the flooring tile, roofing, and textile industries, where Mexican businesses have cost advantages.

The establishment of free-trade areas creates an opportunity for manufacturing organizations because it lets them reduce their costs. They can do this either by shifting production to the lowest-cost location within the free-trade area (for example, U.S. auto and textile companies shifting production to Mexico) or by serving the whole region from one location rather than establishing separate operations in each country.

Difficulty: 3 Hard

Topic: Globalization

Bloom’s: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

100) Assume you live in a society that is high on individualism and has a long-term orientation. Describe what attributes you would likely exhibit.

Answer: Student answers will vary but should include some of the following characteristics: freedom and self-expression, people should be judged by their individual achievements rather than by their social background, admiration for personal success, a strong belief in individual rights, high regard for individual entrepreneurs, thrift, and persistence in achieving goals.

Difficulty: 3 Hard

Topic: Culture

Bloom’s: Apply

AACSB: Knowledge Application

Accessibility: Keyboard Navigation

Contemporary Management Gareth Jones 11e - Test Bank

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Contemporary Management Gareth Jones 11e - Test Bank

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