Q&A Hero

Q: When a company decides to produce different products for different customers, ________. A) the number of stakeholders decreases B) environmental complexity increases C) the organizational domain decreases D) environmental stability increases

Q: Which of the following terms refers to the strength, number, and interconnectedness of the specific and general forces that an organization has to manage? A) environmental complexity B) environmental dynamism C) environmental richness D) environmental naturalness

Q: Which of the following is most likely to increase the environmental complexity for a company? A) the company changes its organizational structure from divisional to functional B) the company decreases its number of suppliers C) the company diversifies its business in an entirely new industry D) the company changes its organizational structure from centralized to decentralized

Q: Which of the following statements is definitely true regarding environmental complexity? A) Environmental richness and environmental dynamism are inversely proportional to each other. B) As a company begins to produce a wider variety of products for different groups of customers, its environmental complexity begins to decrease. C) Environmental complexity is a function of the organizational structure selected by a company. D) The more interconnected the forces in an organization's specific and general environments, the more uncertainty the organization faces.

Q: Which of the following forces is a general environment factor? A) suppliers B) interest rates C) distributors D) customers

Q: McDonald's is trying to determine whether it should make its own fast-food containers or buy them from international suppliers. This decision is a part of the ________ management. A) structural environment B) competitive interdependency C) global supply chain D) symbiotic interdependency

Q: The specific environment consists of forces from ________. A) outside stakeholder groups that directly affect an organization's ability to secure resources B) inside stakeholder groups that directly affect an organization's structure C) general environment that directly affect an organization's human resource practices D) inside stakeholder groups that directly affect an organization's competitive strategies

Q: ________ are a part of an organization's specific environment. A) Shop floor workers B) Shareholders C) Suppliers D) Managers

Q: A defense company decided to sell the services of its scientists to commercial clients. This company is changing its ________. A) organizational domain B) symbiotic interdependencies C) competitive interdependencies D) core competences

Q: The term ________ refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves. A) organizational design B) organizational domain C) organizational richness D) organizational structure

Q: Formal linkage mechanisms minimize the transaction costs associated with reducing uncertainty, opportunism, and risk.

Q: Third-party linkage mechanisms tend to increase the complexity of the environment and thus reduce its richness.

Q: Strategic alliances are a linkage mechanism that can be used to manage both competitive and symbiotic interdependencies.

Q: Cartels and collusion increase the stability and richness of an organization's environment and reduce the complexity of relations among competitors.

Q: Both collusions and cartels are illegal in the United States.

Q: The keiretsu system is a form of minority ownership.

Q: The alliance resulting from a network is less formal than the alliance resulting from a contract.

Q: A joint venture is the least formal type of strategic alliance.

Q: Cooptation is a strategy used for managing competitive resource interdependencies.

Q: A collusion is an agreement that commits two or more companies to share their resources to develop joint new business opportunities.

Q: An interlocking directorate is a linkage that results when a director from one company sits on the board of another company.

Q: Cooptation is a strategy that manages symbiotic interdependencies by neutralizing problematic forces in the specific environment.

Q: Interdependencies are symbiotic when the outputs of one organization are inputs for another.

Q: Symbiotic and competitive interdependencies exist in the specific environment.

Q: The interdependencies that exist between an organization and its suppliers and distributors are known as competitive interdependencies.

Q: Symbiotic interdependencies are the interdependencies that exist among organizations that compete for scarce inputs and outputs.

Q: As the level of environmental complexity increases, the level of environmental uncertainty decreases.

Q: An increase in the level of competition leads to a proportionate increase in the level of environmental richness.

Q: An increase in the level of environmental richness leads to an increase in the environmental uncertainty.

Q: The richer the environment, the more difficult it is for organizations to obtain resources.

Q: Environmental richness is a function of how much and how quickly forces in the specific and general environments change over time and thus increase the uncertainty an organization faces.

Q: In a rich, stable, and simple environment, resources are easy to come by and uncertainty is low.

Q: Environmental dynamism is a function of the amount of resources available to support an organization's domain.

Q: The environment of an organization is considered to be unstable and dynamic if the organization cannot predict the way in which the forces will change over time.

Q: An organization can reduce environmental uncertainty by entering into global markets.

Q: By decreasing the number of suppliers, an organization can reduce the complexity of its environment.

Q: As a company begins to produce a wider variety of products for different groups of customers, its environmental complexity goes on decreasing.

Q: One way to reduce uncertainty is to increase the number of specific and general environmental forces that are interconnected. Because, when forces begin to interact, the environment becomes more predictable.

Q: Environmental complexity is a function of the strength, number, and interconnectedness of the specific and general forces that an organization has to manage.

Q: The forces that constitute the specific environment shape the general environment and affect the ability of all organizations in a particular environment to obtain resources.

Q: Economic forces, such as interest rates, are considered to be specific environmental forces rather than a general environmental forces.

Q: Global supply chain management is the process of coordinating the flow of raw materials, components, semifinished goods, and finished products around the world.

Q: The specific environment consists of forces from outside stakeholder groups that directly affect an organization's ability to secure resources.

Q: Suppliers are a part of the specific environment of an organization.

Q: Shareholders are a part of an organization's specific environment.

Q: The term organizational domain refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves.

Q: You are a consultant to a large telecommunications company that markets many products to many customers. The company has many competitors. Briefly describe the level of uncertainty and recommend strategies for managing the organizational environment.

Q: Describe the various strategies that can be used for managing competitive interdependencies.

Q: What is cooptation?

Q: Discuss the resource dependence theory.

Q: What is environmental complexity?

Q: Differentiate between specific environment and general environment.

Q: Define organizational domain.

Q: A small restaurant hires an advertising firm to handle promotions and advertising. This is an example of ________. A) franchising B) licensing C) outsourcing D) cooptation

Q: ________ is the process of moving a value creation activity that was performed inside an organization to outside where it is done by another company. A) Outsourcing B) Cooptation C) Franchising D) Licensing

Q: A ________ is a business authorized to sell a company's products in a certain area. A) cartel B) joint venture C) franchise D) collusion

Q: Which of the following statements about the difference between transaction cost theory and resource dependence theory is true? A) Transaction cost theory proposes the use of a merger as an interorganizational strategy but resource dependence theory advocates the use of joint venture. B) Transaction cost theory explains how to manage symbiotic interdependencies but resource dependence theory explain how to manage competitive interdependencies. C) Transaction cost theory is a better predictor than a resource dependence theory of why companies choose a certain form of interorganizational strategy. D) Resource dependence theory proposes the use of strategic alliances, but transaction cost theory recommends not using alliances.

Q: Internal transaction costs are called ________ costs to distinguish them from the transaction costs of exchanges between organizations in the environment. A) historic B) sunk C) opportunity D) bureaucratic

Q: Formal linkage mechanisms should be used when companies ________. A) exchange specific assets B) have many possible exchange partners C) operate in stable environment D) have matrix organizational structure

Q: Which of the following increases the threat that organization A will behave opportunistically towards organization B? A) Organization A is dependent on organization B for scarce resources. B) The environment of organization A is richer than the environment of organization B. C) Organization A provides a service to organization B that only a few organizations can replicate. D) The environment that both organizations operate in is stable.

Q: When an organization is forced to rely on a small number of trading partners, the risk of ________. A) bounded rationality increases B) bounded rationality decreases C) opportunism decreases D) opportunism increases

Q: Which of the following is most likely to increase transaction costs? A) having many possible trading partners B) investing in specific assets C) operating in a stable environment D) adopting a decentralized organizational structure

Q: The costs of negotiating, monitoring, and governing exchanges between people are known as the ________ costs. A) transaction B) historical C) sunk D) opportunity

Q: Which of the following methods of managing competitive interdependencies is most likely to be used by an organization to monopolize an industry and become the sole player in the industry? A) enter into a cartel B) enter into a joint venture C) enter into a merger D) enter into a long-term contract

Q: Typically, when a company gets associated with a third-party linkage mechanism, ________. A) the richness of the company's environment decreases B) the company can react more easily to the dynamism of the environment C) the complexity of the company's environment increases D) it loses its ability to enter into a strategic alliance

Q: A trade organization is an example of a ________. A) cartel B) joint venture C) third-party linkage mechanism D) collusion

Q: Which of the following strategies of managing competitive resource interdependencies involves a regulatory body that allows organizations to share information and regulate the way they compete? A) cartel B) third-party linkage mechanism C) joint venture D) cooptation

Q: Which of the following statements is true regarding a cartel? A) Forming a cartel is illegal in the United States. B) A cartel is a strategic alliance among two or more organizations that agree to establish and share the ownership of a new business. C) A cartel is formed by companies to manage their symbiotic resource interdependencies. D) Participating in a cartel decreases the richness of a company's environment.

Q: A ________ is an association of firms that explicitly agree to coordinate their activities. A) cartel B) strategic alliance C) collusion D) joint venture

Q: A ________ is a secret agreement among competitors to share information for a deceitful or illegal purpose. A) joint venture B) collusion C) strategic alliance D) cartel

Q: Which of the following interorganizational strategies for managing symbiotic interdependencies is the most formal? A) cooptation B) takeover C) strategic alliance D) franchising

Q: A ________ is a strategic alliance among two or more organizations that agree to establish and share the ownership of a new business. A) collusion B) merger C) joint venture D) cartel

Q: Which of the following strategies is most likely to be used for managing symbiotic resource interdependencies? A) collusion B) third-party linkage mechanism C) cartel D) minority ownership

Q: A ________ is a group of organizations, each of which owns shares in the other organizations in the group, and all of which work together to further the group's interests. It is a Japanese system. A) hoteru B) byouin C) hikouki D) keiretsu

Q: The Japanese system of keiretsu is a type of ________. A) long-term contract B) collusion C) minority ownership D) joint venture

Q: A joint venture is a type of ________. A) takeover B) collusion C) strategic alliance D) cartel

Q: Which of the following types of strategic alliances is the least formal? A) long-term contract B) network C) minority ownership D) joint venture

Q: Which of the following types of strategic alliances is the most formal? A) long-term contract B) network C) minority ownership D) joint venture

Q: A ________ is an agreement that commits two or more companies to share their resources to develop joint new business opportunities. A) cartel B) strategic alliance C) licensing agreement D) collusion

Q: Which of the following terms refers to a strategy that manages symbiotic interdependencies by neutralizing problematic forces in the specific environment? A) joint venture B) strategic alliance C) cooptation D) franchising