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Chapter 3: Organizational Environments and Culture TRUE/FALSE 1. External environments are the forces and events outside a company that have the potential to influence or affect it. ANS: T PTS: 1 DIF: Easy REF: 82 TOP: AACSB Reflective Thinking KEY: Environmental Influence 2. According to its rate of environmental change, an organization’s environment can be either stable or dynamic, but not both. ANS: F According to punctuated equilibrium theory, companies often experience both stable and dynamic external environments. PTS: 1 DIF: Difficult REF: 83 TOP: AACSB Reflective Thinking KEY: Environmental Influence 3. Environmental complexity refers to the degree of change in the external factors that affect organizations. ANS: F Environmental complexity is the number of external factors in the environment that affect organizations. Environmental change refers to the rate at which a company’s general and specific environments change. PTS: 1 DIF: Moderate REF: 83-84 TOP: AACSB Reflective Thinking KEY: Environmental Influence 4. Resource scarcity is the degree to which an organization’s external environment has an abundance or scarcity of critical organizational resources. ANS: T PTS: 1 DIF: Moderate REF: 85 TOP: AACSB Reflective Thinking KEY: Environmental Influence 5. The two kinds of external organizational environments are the general environment that affects all organizations and the specific environment that is unique to each company. ANS: T PTS: 1 DIF: Moderate REF: 86 TOP: AACSB Reflective Thinking KEY: Environmental Influence 6. The general environment consists of the economy and the technological, sociocultural, and political/legal trends that indirectly affect all organizations. ANS: T PTS: 1 DIF: Easy REF: 86 TOP: AACSB Reflective Thinking KEY: Environmental Influence 7. The greater the rate of environmental change, environmental complexity, and resource scarcity, the less confident managers are that they can understand and predict the trends affecting their businesses. ANS: T PTS: 1 DIF: Difficult REF: 86 Review 1 TOP: AACSB Reflective Thinking KEY: Environmental Influence 8. When the owner of L’Occitane bath and beauty products realized how acute the sense of smell is in people who are visually challenged, he began printing all of the company’s product instructions in Braille. This change was a response to the customer component of the company’s specific environment. ANS: T PTS: 1 DIF: Easy REF: 86 TOP: AACSB Analytic KEY: Environmental Influence 9. The general external environment is unique to each firm’s industry and directly affects the way it conducts day-to-day business. ANS: F This is the definition of the specific environment. The general environment consists of the economy and the technological, sociocultural, and political/legal trends that indirectly affect all organizations.... View Full Document

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