MULTIPLE CHOICE

1. An organization's domain is:

a. the set of positions and departments within the organization.

b. the buildings and grounds that are owned or leased by the organization in which inputs are
transformed into outputs.

c. the organization's niche that has been staked out for itself with respect to products, services, and
markets served.

d. the technical core that is buffered by other departments so that it can operate as a closed system.

ANS: C

2. Sectors of the environment which have direct impact on the organization are called the:

a. task environment.

b. general environment.

c. organizational buffers.

d. environmental boundary-spanners.

ANS: A

3. The task environment is:

a. all elements that exist outside the organizational boundary.

b. sectors with which the organization interacts directly.

c. domain.

d. all jobs and positions inherent within the organizational activity.

ANS: B

4. An organization's environment includes all except:

a. labor market.

b. city, state, and federal laws.

c. competitors.

d. firm’s employees.

ANS: D
6. The ____ includes those sectors that might not have a direct impact on the daily operations of a firm
but will indirectly influence it.

a. general environment

b. international context

c. task environment

d. buffering roles

ANS: A

7. In the ____ sector, regulations influence every phase of organizational life.

a. sociocultural

b. human resources

c. international

d. government

ANS: D

8. All of the following, except ____, are examples of the general environment.

a. financial resources

b. human resources

c. economic conditions

d. government sector

ANS: B

9. Assessment of environmental uncertainty of an organization is based primarily on analysis of two

a. the need for information about the environment and the need for resources from the environment.

b. the number of sectors and the organization's niche.

c. the extent of turbulence and the amount of available resources.

d. differentiation and integration.

ANS: A
10. Which of the following is a proper dimension of the framework for assessing environmental
uncertainty?

a. Dispersion-contiguity

b. Simple-complex

c. Certain-uncertain

d. Internal-external

ANS: B

11. Which of the following means that decision makers do not have sufficient information about
environmental factors and they have a difficult time predicting external change?

a. Cooptation

b. Differentiation

c. Uncertainty

d. Integration

ANS: C

12. Which of the following is a proper dimension of the framework for assessing environmental
uncertainty?

a. Stable-unstable

b. Loose-tight

c. Known-unknown

d. High competitiveness-low competitiveness

ANS: A

13. When Johnson & Johnson had to cope with the unpredictable Tylenol poisoning issue, their
experience best exemplified the____ dimension of the environment.

a. simple

b. complex

c. stable

d. unstable

ANS: D
14. The greatest uncertainty for an organization occurs in which environment?

a. Complex, stable

b. Complex, unstable

c. Simple, unstable

d. Simple, stable

ANS: B

15. Organizations in which of the following types of industries would face the greatest amount of
environmental uncertainty?

a. Beer distributors because of simplicity

b. Universities because of complexity

c. Airlines because of instability

d. Appliance manufacturers because of complexity

ANS: C

16. Trend-setting toy companies or high-fashion clothing manufacturers have in common:

a. an environment that is stable but complex, therefore requiring a mechanistic structure.

b. an organic structure, from which we can reason that the environment is highly uncertain.

c. a large number of dissimilar external elements, which remain about the same over time.

d. an environment that is simple but unstable, creating relatively high uncertainty.

ANS: D

17. In the framework for assessing environmental uncertainty:

a. soft drink bottlers are examples of typical firms in the simple and unstable quadrant.

b. universities are examples of organizations typically found in the complex and stable quadrant.

c. electronic firms are typically found in the simple and stable quadrant.

d. fashion clothing or toy manufacturers would exemplify the complex and unstable quadrant.

ANS: B
18. Boundary-spanning roles

a. primarily link data to information.

b. buffer the manufacturing department from outside intrusion that would interfere with efficiency.

c. bring into the organization information about environmental changes.

d. move the firm to internationalism.

ANS: C

19. Bobby Barista is a researcher in the R&D department at 3M. Part of her job is to read technical and
scientific journals, and to attend conferences to find out what new developments are occurring. When
she is doing this part of her job she is carrying out a ____ role.

a. buffering

b. maintenance

c. boundary spanning

d. managerial

ANS: C

20. Allowing customers in an auto dealership service department to talk directly to the mechanic rather
than to a service manager:

a. is an example of creating a buffering role.

b. is creating a boundary-spanning role.

c. will make the company less fluid.

d. will make the company less responsive to customers.

ANS: B

21. ____ refers to the high-tech analysis of large amounts of internal and external data to spot patterns
and relationships that might be significant.

a. Business intelligence

b. Competitive intelligence

c. Boundary spanning

d. Environment intelligence

ANS: A
22. Which of the following is a cross-functional group of managers and employees, led by a competitive
intelligence professional, who work together to gain a deep understanding of a specific business issue?

a. Intelligence team

b. Business team

c. Boundary team

d. Task force

ANS: A

23. The differences in cognitive and emotional orientations among managers in different functional
departments, and the difference in formal structure among these departments is referred to as:

a. integration.

b. resource dependence.

c. cooptation.

d. differentiation.

ANS: D

24. In organizations characterized by very ____ and ____ environments, almost no managers are
assigned to integration roles.

a. simple, stable

b. simple, unstable

c. complex, stable

d. complex, unstable

ANS: A

25. ____ is the quality of collaboration among departments.

a. Differentiation

b. Integration

c. Uncertainty

d. Cooptation

ANS: B
26. Organizations in rapidly changing environments tend to have ____ management processes.

a. differentiated

b. mechanistic

c. organic

d. dependent

ANS: C

27. ____ is a way that high uncertainty influences organizational characteristics.

a. Extensive planning and forecasting

b. Few departments

c. No integrating roles

d. Mechanistic structure

ANS: A

28. ____ means that organizations depend on the environment but strive to acquire control over
resources to minimize their dependence.

a. Integration

b. Resource dependence

c. Organic process

d. Cooptation

ANS: B

29. A(n) ____ involves the purchase of one organization by another so that the buyer

assumes control.

a. acquisition

b. merger

c. joint venture

d. domain

ANS: A
30. ____ result in the creation of a new organization that is formally independent of the parents.

a. Strategic alliances

b. Supplier arrangements

c. Joint ventures

d. Cooptation

ANS: C

31. Roger Ramon is a militant member of a faculty union at a medium-sized college. When the union's
negotiating committee is reporting to a meeting of the faculty, he always finds fault with the work of
that committee and strongly advocates striking. When a member of the negotiating committee resigns
because of illness, the union's executive committee appoints Roger to take his place. This is an example
of:

a. formal strategic alliance.

b. cooptation.

c. change of domain.

d. public relations.

ANS: B

32. A(n) ____ is a formal linkage that occurs when a member of the board of directors of one company
sits on the board of directors of another company.

a. joint venture

b. interlocking directorate

c. integration

d. indirect interlock

ANS: B

33. Which of the following occurs when leaders from important sectors in the environment are made
part of an organization?

a. Integration

b. Joint venture

c. Resource dependence

d. Cooptation
34. ____ is especially important in highly competitive consumer industries and in

industries that experience variable demand.

a. Advertising

b. Cooptation

c. Executive recruitment

d. Contracts

ANS: A

35. An organization can change its domain most directly by:

a. hiring a new CEO.

b. changing the nature of the labor-management agreements.

c. divesting a division of the organization.

d. moving to a more favorable structure.

ANS: C

36. ____ can be used to erect regulatory barriers against new competitors or to squashunfavorable
legislation.

a. Cooptation

b. Contracts

c. Joint venture

d. Political strategy

ANS: D

37. “Generation C” refers to people born after:

a. 1970.

b. 1980.

c. 1990.

d. 2000.

ANS: C
38. As part of the “green movement,” Nike began making shoes with recycled materials and eco-friendly
glues. The big oil company Valero is using windmills to run its refineries more efficiently and produce
petroleum-based fuels more easily. These examples belong to which sector of the general environment?

a. Sociocultural

b. Economic

c. Government

d. Technology

ANS: A

39. Chapter 4’s Bookmark examines the volatile nature of today’s business world and gives some tips for
managing in a fast-shifting environment. Which of the following is not one of those tips?

a. Seek out and welcome diverse ideas

b. Understand the environment as it was in the past

c. Ruthlessly assess your organization

d. Avoid the common causes of manager failure to confront reality,

including filtered information and selective hearing

ANS: B

40. Oil companies, aerospace firms, and telecommunications firms function within a _____
environment.

a. simple, stable

b. complex, stable

c. simple, unstable

d. complex, unstable

ANS: D

42. _____ gives top executives a systematic way to collect and analyze public

information about rivals and use it to make better decisions.

a. Business intelligence

b. Competitive intelligence

c. Cooptation

d. Integration

ANS: B
43. When one individual is the link between two companies, this is typically referred

to as a _____ interlock.

a. direct

b. indirect

c. organic

d. mechanistic

ANS: A

TRUE/FALSE

1. The general environment includes sectors with which the organization interacts directly and which
have a direct and regular impact on the organization's ability to achieve its goals.

ANS: F

2. The organizational environment is defined as all elements that exist outside the boundary of the
organization and have the potential to affect all or part of the organization.

ANS: T

3. The international environment includes sectors with which the organization interacts directly and that
have a direct impact on the organization's ability to achieve its goals.

ANS: F

4. The socio-cultural sector refers to city, state, federal laws and regulations, taxes, courts systems, and
political processes that may be in an organization's environment.

ANS: F

5. The technology sector refers to techniques of production, science, computers, information

ANS: T

6. The general environment includes those sectors that might not have a direct impact on the daily
operations of a firm but will indirectly influence it.

ANS: T

7. The environmental conditions of complexity and change create a greater need to gather information
and to respond based on that information.

ANS: T
8. Incompetence means that decision makers do not have sufficient information about environmental
factors.

ANS: F
9. The complex-stable dimension concerns environmental complexity, which refers toheterogeneity, or
the number and dissimilarity of external elements relevant to an organization's operations.

ANS: F

10. A hardware store would be in a complex environment

ANS: F

11. The greatest uncertainty for an organization occurs in the simple, unstable environment.

ANS: F

12. Complex + Unstable environments = high uncertainty

ANS: T

13. As the complexity in the external environment increases, so does the number of positions and
departments within the organization, which in turn increases internal complexity.

ANS: T

14. Rather than establish buffer departments, a newer approach in many organizationsis to drop the
buffers and expose the technical core to its uncertain environment.

ANS: T

15. The boundary-spanning role is designed to bring information to the organization about changes in
the environment, but not to work in reverse to take information into the environment about the
organization.

ANS: F

16. Boundary spanners can prevent the organization from stagnating by keeping top managers informed
about environmental changes.

ANS: T

17. The purpose of boundary-spanning roles is to absorb uncertainty from the environment.

ANS: F

18. Competitive intelligence refers to the high-tech analysis of large amounts of internal and external
data to spot patterns and relationships that might be significant.

ANS: F

19. Differentiation refers to differences in cognitive and emotional orientations among managers in
different functional departments.

ANS: T
20. A company in a highly uncertain environment is more likely to need a formal integrator.

ANS: T

21. One outcome of high differentiation is that coordination between departments becomes more
difficult until integrative devices are put in place.

ANS: T

22. When differentiation is high, integration should be high if the level of environmental uncertainty is
high.

ANS: T

23. In rapidly changing environments, an organic structure is usually better.

ANS: T

24. If the external environment is stable, a mechanistic and formal organization can be successful.

ANS: T

25. Planning guarantees successful coping with an unstable environment.

ANS: F

26. Resource dependence means that organizations depend on the environment but strive to acquire
control over resources to minimize their dependence.

ANS: T

27. An acquisition is the unification of two or more organizations into a single unit.

ANS: F

28. When organizations depend on the environment but strive to acquire control over resources to
minimize their dependence, it is referred to as cooptation.

ANS: F

29. An interlocking directorate is a formal linkage that occurs when a member of the board of directors
of one company sits on the board of directors of another company.

ANS: T

30. Transferring or exchanging executives offers a method of establishing favorable linkages with
external organizations

ANS: T

31. In addition to establishing favorable linkages to obtain resources, organizations also may try to
change the environment.

ANS: T
32. An organization’s domain is the chosen environmental field of action, or the organization’s niche
that has been staked out for itself with respect to products, services, and markets served.

ANS: T

33. Every organization faces uncertainty globally but not domestically.

ANS: F

34. Munificence refers to the amount of resources available to support the organization’s growth.

ANS: T

35. A soft drink bottler functions in a complex, unstable environment.

ANS: F

36. The purpose of task roles is to absorb uncertainty from the environment.

ANS: F

37. As environmental uncertainty increases, organizations tend to become more mechanistic.

NS: F

38. With scenario planning, managers mentally rehearse different scenarios based on anticipating
various changes that could affect the organization.

ANS: T

ESSAY

Case 4.0

AligatorAde, a regional soft drink bottling plant in Clovis, California, produces according to the forecast
given to them by corporate planning in Michigan. The company uses the focus strategy, designating a
market of persons involved in athletic sports. AligatorAde sponsors Clovis Little League, and has a
reputation for positive support of sports activities.On the few occasions when production exceeds
demand, corporate warehousing juggles the distribution so that the regional producers such as
AligatorAde experience no significant loss. Although competitors have switched formulas several times,
AligatorAde has not changed their formula because market demand for their product is stable. (Top
management at corporate headquarters is considering adding a more fruity-flavored drink to their
product line, but a decisionis not yet made.)On the line, the Manufacturing Department produces large
batches of their drink. The product is prepared for distribution in both cans and bottles. Occasionally at
the end of a run, some bottles will have special team labels affixed by machine; profitability on those
few special runs is particularly high.The plant's organization chart shows that there is a plant manager
with four department heads reporting to her: Manufacturing Manager, Administrative Manager,
Marketing Manager, and Warehousing and Distribution Manager. The purchasing function is carried out
in Manufacturing, and what little R&D takes place at the regional plant is done in Marketing.
1. Reference Case 4.0 to answer the following question. Using the framework for environmental
uncertainty, analyze AligatorAde's environment, and then make recommendations to the regional
management of the plant based on your application of the framework. [Hint: Application of the
textbook is what gets points!]

ANS: The environment seems to be one of low uncertainty. As a result, you recommend that the
organization should have low departmental differentiation and low integration.

2. List and describe each of the task environment sectors.

3. List and give examples of each of the general environment sectors.

4. Explain how the international context of organizations is bringing the international

sector more and more into the task environment of organizations today.

5. Why does environmental complexity lead to organizational complexity? Explain

6. Distinguish between complexity and instability in an organization's environment.

7. Contrast the two dimensions (axes) of the framework for environmental uncertainty.

8. What type of environment would Tommy Hilfiger have on the stable-unstable dimension? Explain and
defend. Then use Tommy Hilfiger as an example for illustrating proper adaptation to that dimension of
the environment.

9. Compare and contrast the four quadrants in the framework for environmental uncertainty.

10. Explain the pro and con arguments to creation of buffering roles.

11. List and describe three organizational adaptations to environmental uncertainty.

12. Describe the roles of boundary-spanning and the different approaches to boundary spanning.

13. Discuss differentiation. How is integration connected to differentiation?

14. Describe both a mechanistic and an organic organization with which you are familiar (from reading
or personal experience), explaining why you have classified them as such. Comment on how well this
structure is suited to the environment of each organization

15. How do organizations use planning, forecasting, and responsiveness in stable and unstable
environments?

16. Draw and label the contingency framework for environmental uncertainty and organizational
responses.

17. What methods are suggested for dealing effectively with resource dependence?

18. Explain the differences between acquisitions, mergers, joint ventures, and partnerships