MGMT 320 Exam UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Dynamic Environment of Business - CORRECT ANSWER The constantly changing
external forces that shape how businesses operate; example: technology shifts, social values,
wars, and pandemics.
Dynamic Forces - CORRECT ANSWER Factors that explain how today's business
environment developed; example: social expectations, chance, income inequality.
Chance (Luck) - CORRECT ANSWER Random events that create business success or
failure; example: Microsoft getting the IBM contract due to personal connections.
Changing Social Expectations - CORRECT ANSWER Shifts in what society expects
from businesses; example: pressure for ESG and diversity programs today.
Income Inequality - CORRECT ANSWER Differences in income and wealth across
populations; example: top earners holding a large share of wealth.
Income Mobility - CORRECT ANSWER The ability for people to move up or down
income levels over time; example: whether poor children become wealthy adults.
Stakeholder Expectations Shift - CORRECT ANSWER Businesses now expected to
care about more than profits; example: environmental and social responsibilities.
Shareholder Value View - CORRECT ANSWER Belief that firms should focus mainly
on profits for owners; example: opposition to DEI and ESG spending.
Business Roundtable Statement - CORRECT ANSWER Group of CEOs saying firms
should serve all stakeholders; example: shift away from pure shareholder focus.
, ESG - CORRECT ANSWER Environmental, Social, and Governance practices firms
adopt; example: sustainability reporting and diversity policies.
Vertical Integration - CORRECT ANSWER When a firm controls multiple stages of
production; example: IBM making hardware, software, and servicing.
Antitrust Regulation - CORRECT ANSWER Laws preventing monopolies and unfair
competition; example: U.S. government suing IBM in 1969.
Open Architecture - CORRECT ANSWER System where others can build compatible
products; example: IBM PC allowing other companies to make parts.
Outsourcing - CORRECT ANSWER Key business functions done by outside firms;
example: IBM outsourcing its operating system to Microsoft.
IBM Strategic Error - CORRECT ANSWER Letting Microsoft own and license the
operating system; example: Microsoft selling Windows to many PC makers.
Network Effects - CORRECT ANSWER Value increases as more users adopt a
product; example: Windows becoming standard across computers.
First-Mover Advantage - CORRECT ANSWER Early entry gives market dominance;
example: Microsoft dominating PC operating systems.
Path Dependence - CORRECT ANSWER Early decisions shape long-term outcomes;
example: IBM's OS decision locking in Microsoft's success.
Gini Index - CORRECT ANSWER Measure of income inequality; higher value means
more inequality; example: U.S. higher than many European countries.
Government Transfers - CORRECT ANSWER Public services or payments reducing
inequality; example: parental leave and healthcare programs.
QUESTIONS AND CORRECT ANSWERS
Dynamic Environment of Business - CORRECT ANSWER The constantly changing
external forces that shape how businesses operate; example: technology shifts, social values,
wars, and pandemics.
Dynamic Forces - CORRECT ANSWER Factors that explain how today's business
environment developed; example: social expectations, chance, income inequality.
Chance (Luck) - CORRECT ANSWER Random events that create business success or
failure; example: Microsoft getting the IBM contract due to personal connections.
Changing Social Expectations - CORRECT ANSWER Shifts in what society expects
from businesses; example: pressure for ESG and diversity programs today.
Income Inequality - CORRECT ANSWER Differences in income and wealth across
populations; example: top earners holding a large share of wealth.
Income Mobility - CORRECT ANSWER The ability for people to move up or down
income levels over time; example: whether poor children become wealthy adults.
Stakeholder Expectations Shift - CORRECT ANSWER Businesses now expected to
care about more than profits; example: environmental and social responsibilities.
Shareholder Value View - CORRECT ANSWER Belief that firms should focus mainly
on profits for owners; example: opposition to DEI and ESG spending.
Business Roundtable Statement - CORRECT ANSWER Group of CEOs saying firms
should serve all stakeholders; example: shift away from pure shareholder focus.
, ESG - CORRECT ANSWER Environmental, Social, and Governance practices firms
adopt; example: sustainability reporting and diversity policies.
Vertical Integration - CORRECT ANSWER When a firm controls multiple stages of
production; example: IBM making hardware, software, and servicing.
Antitrust Regulation - CORRECT ANSWER Laws preventing monopolies and unfair
competition; example: U.S. government suing IBM in 1969.
Open Architecture - CORRECT ANSWER System where others can build compatible
products; example: IBM PC allowing other companies to make parts.
Outsourcing - CORRECT ANSWER Key business functions done by outside firms;
example: IBM outsourcing its operating system to Microsoft.
IBM Strategic Error - CORRECT ANSWER Letting Microsoft own and license the
operating system; example: Microsoft selling Windows to many PC makers.
Network Effects - CORRECT ANSWER Value increases as more users adopt a
product; example: Windows becoming standard across computers.
First-Mover Advantage - CORRECT ANSWER Early entry gives market dominance;
example: Microsoft dominating PC operating systems.
Path Dependence - CORRECT ANSWER Early decisions shape long-term outcomes;
example: IBM's OS decision locking in Microsoft's success.
Gini Index - CORRECT ANSWER Measure of income inequality; higher value means
more inequality; example: U.S. higher than many European countries.
Government Transfers - CORRECT ANSWER Public services or payments reducing
inequality; example: parental leave and healthcare programs.
