UIUC BADM 310 Exam 3 (revised) || with 100% Correct
Answers.
Global Environment correct answers The set of global forces and conditions that operates
beyond an organization's boundaries but affects a manager's ability to acquire and utilize
resources
-uncertain and unpredictable
-opportunities and threats
Global Organization correct answers An organization that operates and competes in more than
one country
Task Environment correct answers The set of forces and conditions that originates with
suppliers, distributors, customers, and competitors and affect an organization's ability to obtain
inputs and dispose of its outputs because they influence managers daily
-Has immediate and direct effects on firm
-The arena in which profits are fought over
Suppliers correct answers Individuals and organizations that provide an organization with the
input resources it needs to produce goods and services (raw materials, component parts, labor-
employees)
What effect can powerful suppliers have? correct answers They can raise prices and reduce firm
profits
When is the power of suppliers high? correct answers When no alternative sources (patents,
others are branding, unique capabilities) & when the input is vital
Competitors correct answers Organizations that produce goods and services that are similar to a
particular organization's goods and services
-Org.s that try and attract the same customer
-Rivalry between competitors can be the largest threat
Potential Competitors correct answers Organizations that presently are not in a task environment
but could enter if they so choose
When are competitors a more powerful force? correct answers When competition price-based
(vs. feature-based), when barriers to entry are low
Distributors correct answers Organizations that help other organizations sell their goods or
services to customers
When is the power of distributors high? correct answers If they control access to customers or if
there are no alternative channels
,Customers correct answers Individual and groups that buy the goods and services an
organization produces
Barriers to Entry correct answers Factors that make it difficult and costly for an organization to
enter a particular task environment or industry
Examples of barriers to entry correct answers Brand loyalty, Economics of Scale, Government
Regulations
Brand Loyalty correct answers Customers' preferences for the products of organizations
currently existing in the task environment
Economies of Scale correct answers Cost advantages associated with large operations
Government Regulations correct answers regulations that impede entry
General Environment correct answers The wide-ranging global economic, technological,
sociocultural, demographic, political, and legal forces, that affect an organization and its task
environment
-Has longer-term but potentially critical effects
Economic Forces correct answers Interest rates, inflation, unemployment, economic growth, and
other factors that affect the general health and well-being of a nation or the regional economy of
an organization
Technological Forces correct answers Outcomes of changes in the technology managers use to
design, produce, or distribute goods and services
Sociocultural Forces correct answers Pressures emanating from the social structure of a country
or society or from the national culture
Social Structure correct answers The arrangement of relationships between individuals and
groups in a society
National Culture correct answers The set of values that a society considers important and the
norms of behavior that are approved or sanctioned in that society
What are national cultures build upon? correct answers Values (basic underpinnings of society)
& norms (mores & folkways)
Implications for managers of national cultures correct answers -Management practices that are
effective in one culture may not work well in another
-Manager's behaviors must account for values and norms
, Demographic Forces correct answers 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
Political and Legal Forces correct answers Outcomes of changes in laws and regulations, such as
deregulation of industries, privatization of organizations, and increased emphasis on
environmental protection.
Globalization correct answers The set of specific and general forces that work together to
integrate and connect economic, political, and social systems across countries, cultures, or
geographical regions so that nations become increasingly interdependent and similar.
Disadvantages/concerns of global outsourcing correct answers For individual firms, global
supply chains are well proven, but:
-Concerns about responsiveness and capabilities of global supply chains
-Concerns about losing control of quality and intellectual property
Technology correct answers The combination of skills and equipment that managers use in
designing, producing, and distributing goods and services
Free-Trade Doctrine correct answers The idea that if each country specializes in the production
of the goods and services that it can produce most effectively, this will make the best use of
global resources
Tariff correct answers A tax that a government imposes on imported or, occasionally, exported
goods
What is the goal of a tariff? correct answers To protect domestic industry and jobs
Regional trade agreements correct answers Often reduce tariffs to essentially zero, ascendant in
recent decades
-NAFTA, EU
North American Free Trade Agreement (NAFTA) correct answers Aim was to abolish 99% of
tariffs between North America
CAFTA correct answers Regional trade agreement designed to eliminate tariffs on products
between the US and all counties in Central America
Distance separated markets correct answers Improvements in transportation technology and fast,
secure communications greatly reduce barriers of physical distances
Culture separated markets correct answers -Language barriers made managing overseas
businesses difficult
-Cultural practices meant products and management techniques had to be customized
