Chapter 3 MHR flashcards & prep
Define these terms and give an example for stable and dynamic environment.
external environment
environmental change
stable environment
dynamic environment
punctuated equilibrium theory - correct answers1. External environments - the forces and events
outside a company that have the potential to influence or affect it.
2. Environmental Change - the rate at which a company's general and specific environments change.
3. Stable Environment - the rate of change is slow. (ex: wholesale food distribution)
4. Dynamic Environment - the rate of change is fast. (ex: high tech or new tech-- cellphones)
5. Punctuated Equilibrium theory - Companies' cycle through stable and dynamic environments. (small
changes, to big changes, and then to new equilibrium)
Define these terms:
environmental complexity
simple environment (give an example)
complex environment (give an example)
resource scarcity - correct answers1. Environmental Complexity - the number and the intensity of
external factors in the environment that affect organizations.
2. Simple environment - has few environmental factors.(dairy industry)
3. Complex environment - has many environmental factors. (PC industry)
4. Resource scarcity - the abundance or shortage of critical organizational resources in an organizational
environment.
What is environmental uncertainty and what three environmental characteristics is it based upon? -
correct answers1. Environmental Uncertainty - To what extent managers are able to understand or
predict the external changes and trends that affect their businesses.
2. the rate of environmental change, environmental complexity, and organizational resource scarcity
Stable environment vs. Dynamic environment
Simple environment vs. Complex environment
Abundant org resources vs. Scarce org. resources
= Low environmental uncertainty ||= high uncertainty
Medium uncertainty = other combinations
What are the two types of external environments? - correct answersTwo Types:
1. General environment - consists of the economic, technological, sociocultural, and political/legal
trends
-Indirectly affect all organizations.
2. Specific environment - consists of the customers, competitors, suppliers, industry regulations, and
advocacy groups that are unique to an industry
-directly affect how a firm does daily business.
define these terms:
, economic forces and trends
economic indicators
business confidence indices - correct answersEconomic forces and trends are one of the components of
the general environment (b/c growing econ=consumer spending power and more hiring)
1. Economic indicators (econ stats) -economic growth rate, unemployment rate, interest rates,
consumer price index, gross domestic products, retail sales, stock market prices, money supply change,
bankruptcies, etc.
2. Business confidence indices - indices that show managers' level of confidence about future business
growth.
managers often prefer to use business confidence indices to predict future economic activity since
economic indic. are inaccurate in tht case
What is technology and technological forces and trends? And what five things can technological
advancement create? - correct answers1. Technology - the knowledge, tools, and techniques used to
transform inputs into outputs. And technological forces and trends is the tech components of general
environment
2.
-New products, new markets, and new industries
-New production techniques
-New ways to manage and communicate
-New ways to design and produce products
-Technologies can extend human capabilities (ex: using robots to do dangerous work)
Technology can be a threat if not kept up with though
What are sociocultural forces/changes and trends? And in what two ways can they influence an
organization? - correct answers1. Sociocultural forces - the demographic characteristics, general
behavior, attitudes, and beliefs of people in a particular society.
Two ways:
1. Changes in demographic characteristics:
-The # of people with particular skills (less qualified people = less people to hire)
-The # of people with particular population characteristics (accommodations needed for ex: older age or
women with children)
2. Changes in behavior, attitudes, and beliefs:
-Increased health awareness (offering of physical fitness programs or wellness programs to respond to
the trend of increased health awareness)
What are political/legal forces and trends and what does it include? - correct answers1. Political and
legal forces and trends- the political/legal component of general environment
-Legislation
-Laws and regulations
-Court decisions
-Public policies
2. New laws and regulations impose additional responsibilities on companies.
3. The potential legal risks associated with managerial decisions (employees may sue so its important for
managers to be educated on law)
What is the first component of specific environment? In what 2 ways can we monitor customers? -
correct answers1. Customers - purchase products and services.
Define these terms and give an example for stable and dynamic environment.
external environment
environmental change
stable environment
dynamic environment
punctuated equilibrium theory - correct answers1. External environments - the forces and events
outside a company that have the potential to influence or affect it.
2. Environmental Change - the rate at which a company's general and specific environments change.
3. Stable Environment - the rate of change is slow. (ex: wholesale food distribution)
4. Dynamic Environment - the rate of change is fast. (ex: high tech or new tech-- cellphones)
5. Punctuated Equilibrium theory - Companies' cycle through stable and dynamic environments. (small
changes, to big changes, and then to new equilibrium)
Define these terms:
environmental complexity
simple environment (give an example)
complex environment (give an example)
resource scarcity - correct answers1. Environmental Complexity - the number and the intensity of
external factors in the environment that affect organizations.
2. Simple environment - has few environmental factors.(dairy industry)
3. Complex environment - has many environmental factors. (PC industry)
4. Resource scarcity - the abundance or shortage of critical organizational resources in an organizational
environment.
What is environmental uncertainty and what three environmental characteristics is it based upon? -
correct answers1. Environmental Uncertainty - To what extent managers are able to understand or
predict the external changes and trends that affect their businesses.
2. the rate of environmental change, environmental complexity, and organizational resource scarcity
Stable environment vs. Dynamic environment
Simple environment vs. Complex environment
Abundant org resources vs. Scarce org. resources
= Low environmental uncertainty ||= high uncertainty
Medium uncertainty = other combinations
What are the two types of external environments? - correct answersTwo Types:
1. General environment - consists of the economic, technological, sociocultural, and political/legal
trends
-Indirectly affect all organizations.
2. Specific environment - consists of the customers, competitors, suppliers, industry regulations, and
advocacy groups that are unique to an industry
-directly affect how a firm does daily business.
define these terms:
, economic forces and trends
economic indicators
business confidence indices - correct answersEconomic forces and trends are one of the components of
the general environment (b/c growing econ=consumer spending power and more hiring)
1. Economic indicators (econ stats) -economic growth rate, unemployment rate, interest rates,
consumer price index, gross domestic products, retail sales, stock market prices, money supply change,
bankruptcies, etc.
2. Business confidence indices - indices that show managers' level of confidence about future business
growth.
managers often prefer to use business confidence indices to predict future economic activity since
economic indic. are inaccurate in tht case
What is technology and technological forces and trends? And what five things can technological
advancement create? - correct answers1. Technology - the knowledge, tools, and techniques used to
transform inputs into outputs. And technological forces and trends is the tech components of general
environment
2.
-New products, new markets, and new industries
-New production techniques
-New ways to manage and communicate
-New ways to design and produce products
-Technologies can extend human capabilities (ex: using robots to do dangerous work)
Technology can be a threat if not kept up with though
What are sociocultural forces/changes and trends? And in what two ways can they influence an
organization? - correct answers1. Sociocultural forces - the demographic characteristics, general
behavior, attitudes, and beliefs of people in a particular society.
Two ways:
1. Changes in demographic characteristics:
-The # of people with particular skills (less qualified people = less people to hire)
-The # of people with particular population characteristics (accommodations needed for ex: older age or
women with children)
2. Changes in behavior, attitudes, and beliefs:
-Increased health awareness (offering of physical fitness programs or wellness programs to respond to
the trend of increased health awareness)
What are political/legal forces and trends and what does it include? - correct answers1. Political and
legal forces and trends- the political/legal component of general environment
-Legislation
-Laws and regulations
-Court decisions
-Public policies
2. New laws and regulations impose additional responsibilities on companies.
3. The potential legal risks associated with managerial decisions (employees may sue so its important for
managers to be educated on law)
What is the first component of specific environment? In what 2 ways can we monitor customers? -
correct answers1. Customers - purchase products and services.
