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Unformatted text preview: MGT 3200 TEST 1 Questions from the book: Chapter 2: I. 1. What are the internal strategies for dealing with environmental uncertainty? a. Internal strategies are tactical actions hat organizations can choose in adapting the organization to, reducing, or at least managing environmental uncertainty. There are 5 strategies: i. Changing domain ii. Recruiting iii. Buffering iv. Smoothing v. Rationing 2. What is involved in changing domain as a way to deal with environmental uncertainty? a. When competition heats up or profitability evaporates from an organization’s chosen market, an organization can change its domain and compete in a different market. Uncertainty can also be managed by moving to a more accommodating, even friendly, environment. For example, insurers can stop writing new policies in states with frequent natural disasters. 3. How does recruiting help an organization cope with environmental uncertainty? a. One way to manage uncertainty is by hiring top employees from a major competitor. In other situations, recruitment can mean hiring a former government official who had responsibility for regulating your industry. 4. What is input buffering? Output buffering? a. Input buffering – manages the fluctuations caused by the interruption of supplies of materials needed to manufacture the product. This strategy often takes the form of stockpiling materials or the outright purchase of suppliers. b. Output buffering – finished goods are warehoused until they can be absorbed by the environment. The buffering process can move fast or slow, depending on the demands of the environment. 5. What is smoothing? a. Smoothing is a method of maintaining continuous demand for a product or service. Smoothing results in efficient use of assets, reducing costs by eliminating the need to buy more equipment. 6. How does pricing influence smoothing? a. Pricing is a mechanism that is often used to smooth customer demand; price reductions increase demand. 7. What is rationing? a. Service providers often use rationing as a way of ensuring that all their time is productive. Without rationing, too many people to process may arrive at once, resulting in disgruntled customers who will seek service elsewhere. 8. What are the external strategies for dealing with environmental uncertainty? a. External strategies are organizational attempts to change environmental circumstances, thereby reducing environmental uncertainty. There are five external strategies: i. Advertising ii. Contracting iii. Co-opting iv. Coalescing v. Lobbying 9. What is contracting? What are its benefits? Who benefits most? a. Seasonal products such as natural gas are often sold to consumers on contract. Contracting is a naturally beneficial arrangement....
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- Spring '06
- Management, Business Portfolio Matrix