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3 Chapter The Environment and Corporate Culture True/False Questions 1. IBMs new
strategy is to focus less on technology and more on relationships. Answer: True 2. Level: 2
Page: 81 Type: F Factors external to the organizations have been primarily the focus of
management as a discipline. Answer: False Level: 2 Page: 82 Type: F 3. The two layers of an
organization's external environment are the general environment and the task environment.
Answer: True Level: 1 Page: 82 Type: F 4. The outer layer, the general environment, is
widely dispersed and affects organizations directly. Answer: False Level: 1 Page: 83 Type:
F 5. Two important sectors of the economic dimension of a firm's general environment are
customers and competitors. Answer: False Level: 2 Page: 83 Type: F 6. Current employees,
management, and especially corporate culture are part of an organization's internal
environment. Answer: True Level: 1 Page: 83 Type: F 7. Economic problems in other parts
of the world have a tremendous impact on U.S. companies. Answer: True Level: 2 Page: 84
Type: F 8. The general economic health of the country or region in which the organization
operates is part of the technological dimension. Answer: False Level: 1 Page: 84 Type: F
Chapter Three * The Environment and Corporate Culture Test Bank * Page 62 9. It can be
said that managers are working under conditions of uncertainty when they do not have
sufficient information about environmental factors to understand and predict
environmental needs and changes. Answer: True Level: 1 Page: 84 Type: F 10. The economic
dimension of the general environment represents the demographic characteristics. Answer:
False Level: 2 Page: 85 Type: F 11. An example of part of the legal-political dimension of
the general environment is a government's report on the decline of unemployment rate to
11.9 percent. Answer: False Level: 3 Page: 87 Type: A 12. President Clinton's signing of the
telecommunications bill in 1996 deregulating the industry is an example of the
legal-political dimension of the general environment. Answer: True Level: 3 Page: 87 Type:
A 13. McDonalds, Burger King, and Checkers are competitors since all three sell fast food to
individuals. Answer: True Level: 2 Page: 88 Type: A 14. The raw materials that
organizations use to produce its outputs are provided by customers. Answer: False Level:
1 Page: 88 Type: F 15. Other organizations in the same industry or type of business that
provide goods or services to the same set of customers are referred to as suppliers. Answer:
False Level: 1 Page: 88 Type: F 16. People in the environment who can be hired to work for
an organization make up the labor market. Answer: True Level: 1 Page: 88 Type: F 17. If
Johnson Lumber provides trees for Westvaco Paper Manufacturing, then Johnson Lumber is
considered a supplier for Westvaco. Answer: True Level: 2 Page: 91 Type: A 18. A
boundary-spanning role is an effort to spot trends that enable managers to predict future
Chapter Three * The Environment and Corporate Culture Test Bank * Page 63 events.
Answer: False 19. Level: 2 Page: 91 Type: F A sales executive for General Motors fills an
essential boundary-spanning role. Answer: True Level: 2 Page: 92 Type: A 20. Competitive
intelligence professionals are really just in-house snoops who obtain information about
other companies. Answer: True Level: 1 Page: 92 Type: F 21. Mergers and joint ventures
rarely occur in the U.S. due to the stable environment and lack of technological change.
Answer: False Level: 1 Page: 95 Type: F 22. The internal environment within which
managers work includes corporate culture, sociocultural aspects, and customers. Answer:
False Level: 2 Page: 95 Type: F 23. Symbols, stories, heroes, slogans, and ceremonies
combine to create an organization's culture. Answer: True Level: 2 Page: 96 Type: F 24. The
set of key values, beliefs, and norms, that are shared by members of an organization are
combined to create the symbols of an organization. Answer: False Level: 2 Page: 96 Type:
F 25. A figure that exemplifies the deeds, character, and attributes of a corporate culture
is called a symbol. Answer: False Level: 2 Page: 96 Type: F 26. A narrative based on rumors,
within the organization that can lead to destructive results if not carefully controlled by
management is called an organizational story. Answer: False Level: 2 Page: 97 Type: F 27.
A story is a phrase or sentence that succinctly expresses a key corporate value. Answer:
False Level: 1 Page: 97 Type: F Chapter Three * The Environment and Corporate Culture
Test Bank * Page 64 28. The mythical sales representative at Robinson Jewelers who
delivered a wedding ring directly to the church because the ring had been ordered late is an
example of a hero. Answer: True Level: 1 Page: 97 Type: F 29. An achievement culture is
found in an environment that is dynamic and requires high-risk decision-making. Answer:
False Level: 2 Page: 100 Type: F 30. The clan culture is suited to organizations that are
concerned with serving specific customers in the external environment but without the
intense need for flexibility and rapid change. Answer: False Level: 2 Page: 101 Type: F 31.
The achievement culture is a results-oriented culture that values competitiveness,
aggressiveness, personal initiative, and willingness to work long and hard to achieve results.
Answer: True Level: 2 Page: 101 Type: F 32. The bureaucratic culture has an external focus
and a consistency orientation for a dynamic environment. Answer: False Level: 2 Page: 101
Type: F 33. The cultural leader articulates a vision for the organizational culture that
employees can believe in and that generates excitement. Answer: True Level: 1 Page: 104
Type: F Multiple Choice Questions 1. Palmisanos new strategy requires IBM to be
__________. a. b. c. d. e. fast flexible innovative relationship focused all of the above Level:
3 Page: 81 Type: F Answer: e 2. According to the opening case, IBM once a leader in the
technology industry, was almost a hasbeen by losing __________ dollars in one year. a. 7
million Chapter Three * The Environment and Corporate Culture Test Bank * Page 65 b. c. d.
e. 8 million 7 billion 8 billion 5 billion Level: 2 Page: 81 Type: F Answer: d 3. Which of these
includes all elements existing outside the boundary of the organization that have the
potential to affect the organization? a. b. c. d. e. Organizational environment Internal
environment Task environment General environment Technological environment Level : 2
Page : 82 Type : F Answer : a 4. Which of these is a part of an organization's internal
environment? a. b. c. d. e. Its customers Its salespeople The consumer price index Its
suppliers Its competitors Level: 2 Page: 83 Type: F Answer: b 5. __________ system draws
resources from the external environment and releases goods and services back to it. a.
production b. closed c. open d. information e. management Answer: c Level: 2 Page: 83 Type:
F is a part of Fords, a U.S. auto manufacturer, task environment. 6. a. b. c. d. e. Inflation
rate Chrysler Securities and Exchange Commission (SEC), a government regulating agency
Amazon.com, an online bookseller Fords corporate culture Level: 2 Page: 83 Type: A Answer:
b Chapter Three * The Environment and Corporate Culture Test Bank * Page 66 7. Ally
Likens received The Employee of the Month Award at Internal Workings Remodeling Service
in April. Ally would be considered a part of which of these for Internal Workings? a. b. c. d.
e. General environment Task environment Economic environment Internal environment
Political activity Level: 2 page: 83 Type: A Answer: d 8. The organizations a. b. c. d. e.
environment represents the outer layer of the environment and affects . task; indirectly
general; directly internal; directly internal; indirectly general; indirectly Level: 2 Page 83
Type: F Answer: e 9. Which of these is NOT a part of an organization's task environment.
a. b. c. d. e. Customers Labor markets Competitors Employers Suppliers Level: 2 Page: 83
Type: F Answer: d 10. Which of these is NOT a part of an organization's general
environment? a. b. c. d. e. Technological Economic Competitors Legal-political Sociocultural
Level: 1 Page: 83 Type: F Answer: c 11. Which dimension of the external environment
represents events originating in foreign countries as well as opportunities for American
companies in other countries? a. b. National dimension Global dimension Chapter Three *
The Environment and Corporate Culture Test Bank * Page 67 c. d. e. International dimension
Japans dimension U.S. dimension Level: 1 Page: 84 Type: F Answer: c 12. In a recent survey
of managers, __________ % said that multicultural experience is important for leaders. a.
b. c. d. e. 15 18 20 28 30 Level: 2 Page: 84 Type: F Answer: d 13. Scientific and
technological advancements in a specific industry as well as in society at large are included
in which general environment dimension? a. b. c. d. e. Sociocultural dimension Legal-political
dimension Economic dimension Technological dimension Corporate culture dimension Level:
1 Page: 84 Type: F Answer: d 14. The dimension of the general environment representing
the demographic characteristics, norms, customs, and values of the population within which
the organization operates is referred to as a(n) a. b. c. d. e. legal-political dimension.
economic dimension. technological dimension. corporate culture dimension. sociocultural
dimension. Level: 1 Page: 85 Type: F Answer: e 15. When Miami Herald launches a
Spanish-language newspaper, El Nuevo Herald, with articles emphasizing Hispanic, Cuban,
and Latin American news and sports, it is responding to changes in environment. a. b. c.
sociocultural technological economic Chapter Three * The Environment and Corporate
Culture Test Bank * Page 68 d. e. competitors suppliers Level: 2 Page: 85 Type: A Answer:
a 16. __________environment consists of demographic factors, such as population density.
a. b. c. d. e. Technological Sociocultural Legal-political Internal Economic Level: 2 Page: 85
Type: F Answer: b 17. The general environment dimension that includes consumer
purchasing power, the unemployment rate, and interest rates is called the a. b. c. d. e.
legal-political dimension. sociocultural dimension. technological dimension. economic
dimension. task dimension. Level: 2 Page: 86 Type: F Answer: d 18. A recent significant
trend in the economic environment is the frequency with which companies seem to be
involved in __________. a. b. c. d. e. mergers bankruptcy reorganizations layoffs expansions
outside the United States. Level: 2 Page: 86 Type: F Answer: a 19. A government inspection
has required your company to upgrade the safety equipment in the manufacturing process
of ice creamery. What dimension of the external environment has influenced these upgrades?
a. b. c. d. e. Technological Legal-political Task Sociocultural Economic Chapter Three * The
Environment and Corporate Culture Test Bank * Page 69 Answer: b 20. Level: 2 Page: 87
Type: A What dimension of the general environment includes federal, state, and local
government regulations? a. b. c. d. e. Technological Legal-political Economic Sociocultural
International Level: 1 Page: 87 Type: F Answer: b 21. An interest group that works within
the legal-political framework to influence companies to behave in socially responsible ways
is called a(n) a. b. c. d. e. pressure group. legal group. political influence group. social group.
none of the above. Level: 1 Page: 87 Type: F Answer: a 22. IBM, Gateway, and Compaq were
vying for dominance in the computer industry. This is an example of which of the following?
a. b. c. d. e. Task/legal political General/competitor Task/competitor General/economic
Task/technological Level: 2 Page: 88 Type: A Answer: c 23. When Ford Motor Company, the
U.S. auto manufacturer, buys tires for its cars from Firestone, it represents which
dimension of the following? a. b. c. d. e. Task/customer General/customer Task/competitor
Task/supplier Task/economic Level: 2 Page: 88 Type: A Answer: a 24. For Southwest
Airlines, all of the following can be suppliers EXCEPT Chapter Three * The Environment and
Corporate Culture Test Bank * Page 70 a. b. c. d. e. Exxon (providing jet fuel). Citibank
(providing finances). Delta Airlines (providing competition). Boeing (providing planes). All
of the above are suppliers for Southwest Airlines. Level: 3 Page: 88 Type: A Answer: c 25.
Integrated Computers, Inc. wants to compile a profile of the customer it will target in its
next promotional mailing. What environment would this be found in? a. b. c. d. e. Internal
environment Task environment Work environment General environment None of the above
Level: 2 Page: 88 Type: A Answer: b 26. __________ are included in an organization's task
environment. a. b. c. d. e. Suppliers Accounting procedures Technology Government
Demographic characteristics Level: 2 Page: 88 Type: F Answer: a 27. Traditionally, many
manufacturer and ________ relationships have been adversarial, but recently, companies
are finding that cooperation is the key to saving money, maintaining quality, and speeding
products to market. a. b. c. d. e. government employee supplier special interest groups
customer Level: 1 Page: 89 Type: F Answer: c 28. The organization. a. b. represents people
in the environment who can be hired to work for the competitors labor market Chapter
Three * The Environment and Corporate Culture Test Bank * Page 71 c. d. e. suppliers
customers government Level: 1 Page: 89 Type: F Answer: b 29. Abrahams Applesauce is in
the process of hiring sixty new workers. The personnel department has a large pool of
unskilled labor to draw from due to the high unemployment rate in the local area. Which
dimension of the external environment is involved here? a. b. c. d. e. Sociocultural
Competitors Technological Labor market Legal-political Level: 2 Page: 89 Type: A Answer:
d 30. Which statement below is correct? a. b. c. d. e. When environment is dynamic,
uncertainty is low. When the environment is unstable, uncertainty is low. A dynamic
environment has more uncertainty than a stable environment. The stability of the
environment does not determine the structure of the firm. None of the above. Level: 3 Page:
91 Type: F Answer: c 31. Which of the following is NOT a part of adapting the organization
to changes in the environment for coping with high environmental uncertainty? a. b. c. d.
Boundary-spanning roles Advertising/public relations Mergers/joint ventures Flexible
structures e. All of the above are a part of organizational response in adapting the
organization to changes in the environment. Level: 2 Page: 91 Type: F Answer: b 32. Sarahs
Jewelry Shop has just hired a comparative shopper to visit other local jewelry stores to gain
product pricing information. What strategy is this describing? a. b. c. d. Boundary-spanning
roles A flexible structure Unfair practice Increase planning and forecasting Chapter Three
* The Environment and Corporate Culture Test Bank * Page 72 e. Joint venture Level: 2 Page:
92 Type: A Answer: a 33. Based on the notion that organizations are dealing with a very
turbulent and uncertain external environment, more organizations are requiring
__________ to perform boundaryspanning activities. a. b. c. d. e. top leaders middle
managers line managers all employees suppliers Level: 2 Page: 92 Type: F Answer: d 34.
Many organizations are adapting to the environment by developing more of a __________
relationship rather than a _________ relationship with competitors. a. b. c. d. e. adversarial,
partnership partnership, adversarial strategic, competitive competitive, strategic none of
the above Level: 2 Page: 93 Type: F Answer: b 35. Companies can reduce boundaries and
increase collaboration with other organizations by creating a. b. c. d. e. flexible structures.
interorganizational partnerships. new company cultures. new supplier connections. none of
the above. Level: 1 Page: 93 Type: F Answer: b 36. When two or more organizations combine
to become one, it is referred to as a a. b. c. d. e. joint venture. flexible structure.
mechanistic structure. merger. inorganic venture. Level: 1 Page: 95 Type: F Answer: d
Chapter Three * The Environment and Corporate Culture Test Bank * Page 73 37. In a joint
venture between large and small businesses, large businesses can provide all of the
following EXCEPT a. b. c. d. e. sales staff. research staff. financial resources. distribution
channels. top level management. Level: 2 Page: 95 Type: F Answer: e 38. Which of these
defines culture? a. The set of key values, beliefs, understandings, and norms shared by
members of an organization The ability to speak different languages An object, act, or
event that conveys meaning to others d. A narrative based on true events that is repeated
frequently and shared by organizational employees None of the above Level: 1 Page: 95
Type: F b. c. e. Answer: a 39. Which of these is associated with surface level of
organizational culture? a. b. c. d. e. Values Norms Manners of dress Beliefs All of the above.
Level: 2 Page: 95 Type: F Answer: c 40. Which of the following would be considered a visual
representation(s) of a company's corporate culture? a. b. c. d. e. All department heads have
an executive office. Each department has an award plaque for employee of the month. All
employees are dressed in professional business attire. Top level executives drive company
owned sports car. All of the above. Level: 2 Page: 96 Type: A Answer: e 41. An object, act,
or event that conveys meaning to others is referred to as a Chapter Three * The
Environment and Corporate Culture Test Bank * Page 74 a. b. c. d. e. symbol. slogan. story.
hero. culture. Level: 1 Page: 96 Type: F Answer: a 42. Symbols, stories, and heroes are
important because they a. b. c. d. e. entertain executive level management. address the
concerns of government. acquaint customers to the organization. communicate the
significant values of an organization. give employees something to talk about. Level: 1 Page:
96 Type: F Answer: d 43. Heroes are important to an organization due to the fact that they
a. b. c. d. e. exemplify key values of the organization. exemplify a strong corporate culture.
serve as examples to other employees. all of the above. none of the above. Level: 2 Page:
97-98 Type: F Answer: d 44. Which of these is a narrative based on true event that is
repeated frequently and shared by organizational employees? a. b. c. d. e. Symbol Slogan
Story Hero Culture Level: 1 Page: 97 Type: F Answer: c 45. A figure who exemplifies the
deeds, character, and attributes of a corporate culture is referred to as a a. b. c. d. e.
symbol. stories. slogan. hero. culture. Chapter Three * The Environment and Corporate
Culture Test Bank * Page 75 Answer: d 46. Level: 1 Page: 97 Type: F Which of these
represent a phrase or sentence that succinctly express a key corporate value? a. b. c. d. e.
Symbol Stories Culture Hero Slogan Level: 1 Page: 98 Type: F Answer: e 47. McDonalds We
Love to See You Smile represents a a. b. c. d. e. ceremony. symbol. ritual. slogan. political
activity. Level: 2 Page: 98 Type: A Answer: d 48. Chiquita. Perfect For Life. was Chiquitas
a. b. c. d. e. ceremony. slogan. symbol. ritual. all of the above. Level: 2 Page: 98 Type: A
Answer: b 49. If a company emphasizes that no purchase is complete until the customer is
satisfied, then it's a. b. c. d. e. utilizing a symbol. communicating its values to customers.
using a slogan to present their values to customers and employees. utilizing a hero for the
purpose of conveying using values. customers to harass the employees. Level: 1 Page: 98
Type: A Answer: c 50. What are managers concerned with in adaptive cultures? a.
Customers and processes that bring about useful change Chapter Three * The Environment
and Corporate Culture Test Bank * Page 76 b. c. d. e. Themselves All people who have ideas
on changing the company Their immediate work group All of the above Level: 2 Page: 99
Type: F Answer: a 51. Culture tends to differ between __________, but appears similar
within __________. a. b. c. d. e. organizations, industries people, organizations groups,
industries organizations, groups industries, geographical regions Level: 2 Page: 99 Type: F
Answer a 52. All of the following are types of corporate cultures except a. b. c. d. e.
adaptability culture. clan culture. consistency culture. involvement culture. achievement
culture. Level: 2 Page: 100 Type: F Answer: d 53. The adaptability culture emerges in an
environment that requires ______ response and ______ decision making. a. b. c. d. e. fast;
high-risk fast; low-risk slow; high-risk slow; low-risk regulated; low-risk Level: 3 Page:
100 Type: F Answer: a 54. __________ is suited to organizations that are concerned with
servicing specific customers in the external environment but without the intense need for
flexibility and rapid change. a. b. c. d. e. Adaptability culture Clan culture Achievement
culture Consistency culture None of the above Chapter Three * The Environment and
Corporate Culture Test Bank * Page 77 Answer: c 55. Level: 2 Page: 101 Type: F The
involvement culture has a(n) ________ focus on the involvement and participation of
employees to rapidly meet changing needs from the environment. a. b. c. d. e. external
internal structural competitive technological Level: 1 Page: 101 Type: F Answer: b 56. The
consistency culture has a(n) ________ focus and an orientation for a ________ environment.
a. b. c. d. e. external; stable external; dynamic internal; stable internal; dynamic structural;
dynamic Level: 3 Page: 102 Type: F Answer: c 57. What is significant about corporate
culture? a. b. c. d. e. It is exactly the same for all companies within an industry. It is the
same regardless of the organization's environment. It holds the people of an organization
together. It is only important to the top levels of management. Having a culture directly
translate into higher profitability. Level: 2 Page: 102 Type: F Answer: c 58. Which of these
is false about culture? a. It serves as a compass for employee behavior. b. It enables
dispersed employees to work in concert toward shared goals that meet changing needs from
the environment. c. It serves as the glue that gives people a sense of belonging. d. Having
a culture directly translates into higher profitability. e. All of the above are correct.
Answer: d Level: 2 Page: 102-103 Type: F 59. By defining and using signals and symbols,
__________ influence corporate culture. Chapter Three * The Environment and Corporate
Culture Test Bank * Page 78 a. b. c. d. e. corporate leaders team leaders cultural leaders
industry leaders directional leaders Level: 1 Page: 104 Type: F Answer: c 60. In a study by
Kotter and Haskett evidence is provided to support the claim that __________ is important
for performance. a. b. c. d. e. managing cultural values leading partnerships within an
industry surveying the external environment managing client relationships as boundary
spanners empowering employees Level: 2 Page: 104 Type: F Answer: a 61. Leaders create a
culture that everyone can believe in by directly involving employees in determining what the
companys ________ should be. a. b. c. d. e. structure values budget socialization process
selection process Level: 2 Page: 104 Type: F Answer: b 62. For values to guide the
organization, managers must __________. a. b. c. d. e. make sure employees actions fit in
the culture model the behavior select employees that fit understand how to do business ask
employees to stretch boundaries Level: 2 Page: 105 Type: F Answer: b Scenario Questions
Scenario Holly Davis Holly Davis was working as the sales manager for Industrial
Instruments. Some of the sales executives were showing signs of burnout. They were losing
interest in their jobs and were no Chapter Three * The Environment and Corporate Culture
Test Bank * Page 79 longer motivated to gain new accounts. The reward system focused on
old reliable accounts, but Holly was now under pressure to expand the customer base. Holly
had recently been to a seminar on corporate value systems. She recognized that the
companys CEO wanted to change in the way employees thought about the firm and in the
way they related to one another. She further recognized that a lasting solution to her
problem required a fundamental shift in perception. 1. Holly could use the following to
affect the corporate culture: a. b. c. d. e. structured symbolic logic. stories about political
heroes. stories about company officers, stressing a value. stories about economic
depression. all of the above. Type: A Answer: c 2. It appears that one of the problems that
Holly faced was the presence of a __________ gap. a. b. c. d. e. culture logic generation
transformation symbolic Type: A Answer: a 3. Industrial Instruments operates in an
environment that requires fast response and high-risk decision making. Which type of
culture may be appropriate here? a. b. c. d. e. Consistency Adaptability Clan Achievement
Involvement Type: A Answer: b 4. To affect the value system, Holly will be working
primarily with a. b. c. d. e. the legal-political dimension. the sociocultural dimension. the
internal cultural dimension. the economic dimension. the external dimension. Type: A
Chapter Three * The Environment and Corporate Culture Test Bank * Page 80 Answer: c
Scenario Emma Whitman Emma Whitman, sales manager for Music Hits Record Company, was
trying to create a new strategy to turn around the declining record sales the company was
facing. Emma needed to find a way to find out what the customers really wanted, since
Music Hits didnt have accurate information like the competitors did. It was imperative that
she find the correct strategy and information because the company was in financial trouble.
The companys President wanted all employees to help find information and work as a team
to develop better relationships that might help the company. He also stated that he wanted
the company to remain an independent company. Emma realized that through hard work and
team efforts, the company could get back on its feet as soon as they got reliable
information. 1. The problem Emma faced was a. b. c. d. e. culture gap. structural instability.
environmental uncertainty. company transformation. legal problems. Type: A Answer: c 2.
Which of the following would be the best way for Music Hits to decrease its uncertainty?
a. b. c. d. e. To create boundary-spanning roles To eliminate interorganizational
partnerships To merge with another company To create a joint venture None of the above
Type: A Answer: a 3. Which of the following best describes Music Hits culture? a. b. c. d. e.
Clan culture Achievement culture Consistency culture Adaptability culture None of the
above Type: A Answer: d 4. Emma will be working primarily with a. b. the legal-political
dimension. the labor market. Chapter Three * The Environment and Corporate Culture Test
Bank * Page 81 c. d. e. the internal cultural dimension. pressure groups. the sociocultural
dimension Type: A Answer: e Short-Answer Questions 1. The external includes all elements
existing outside the boundary of the organization that have the potential to affect the
organization. Answer: organizational environment 2. The indirectly. Page: 82 is the outer
layer that is widely dispersed and affects organizations Page: 83 Answer: general
environment 3. An includes the elements within the organization's boundaries. Page: 83
Answer: internal environment 4. The _______ environment includes the sectors that
conduct day-to-day transactions within the organization. Answer: task Page: 83 5. List the
five dimensions of the general environment. Answer: Technological, sociocultural, economic,
legal/political, and international. Page: 84 6. An example of ________ dimension is that
Dixon Ticonderoga Co. is in trouble because of increased competition especially from
low-cost pencil companies in China. Answer: international Page: 84 7. The ________
environment represents an ever-changing and uneven playing field compared with domestic
environment. Answer: global Page: 84 8. The ________ dimension of the general
environment includes scientific and technological advancements in a specific industry and
in society. Chapter Three * The Environment and Corporate Culture Test Bank * Page 82
Answer: technological 9. Page: 84 The dimension of the general environment represents the
demographic characteristics as well as the norms, customs, and values of the general
population. Answer: sociocultural Page: 85 10. The general economic health of the country
or region in which the organization operates is represented by the ________ dimension.
Answer: economic Page: 86 11. The levels. dimension includes government regulations at
the local, state, and federal Page: 87 Answer: legal-political 12. An interest group that
works within the legal-political framework to influence companies to behave in socially
responsible ways, is called a(n) . Answer: pressure group Page: 87 13. Included in a(n)
_______ environment are sectors that have a direct working relationships with the
organization, among customers, competitors, suppliers, and the labor market. Answer: task
Page: 88 14. Managers today are concerned because technologically speaking, the ________
has given more power to customers and enabled them to directly impact an organization.
Answer: Internet Page: 88 15. ________ are organizations in the same industry that
provide goods or services to the same set of customers. Answer: Competitors Page: 88 16.
________ are being waged worldwide in all industries because of organizations need to
attract and retain customers. Answer: competitive wars Page: 88 17. People and
organizations that provide raw materials the organization uses to produce its output are
called . Answer: suppliers Page: 88 Chapter Three * The Environment and Corporate Culture
Test Bank * Page 83 18. The organization. represents people in the environment who can be
hired to work for the Page: 89 Answer: labor market 19. Not having sufficient information
about environmental factors to understand and predict environmental needs and changes is
called ________. Answer: uncertainty Page: 91 20. When environmental factors change
rapidly, the organization experiences ________ uncertainty. Answer: very high Page: 91 21.
________, ________, and ________ are three types of strategies that organizations can use
to adapt to environmental changes. Answer: boundary-spanning roles, interorganizational
partnerships, mergers or joint ventures. Page: 91 22. Roles assumed by people that link the
organization with the external environment are called _______ roles. Answer:
boundary-spanning Page: 91 23. Interorganizational partnerships allow companies to join
together to become ________ and share ________. Answer: more effective; scarce
resources Page: 93 24. Managers are addressing corporate culture issues by increasing
emphasis on _______ and _______ of new employees. Answer: selection; socialization Page:
94 25. A(n) _______ is when two or more organizations combine to make one organization.
Answer: merger Page: 95 26. A(n) involves a strategic alliance or program by two or more
organizations. Page: 95 Answer: joint venture 27. ________ are becoming more popular as
organizations strive to keep up with Chapter Three * The Environment and Corporate
Culture Test Bank * Page 84 technological advancements and compete in the global economy.
Answer: Joint ventures 28. Page: 95 List three things that larger firms can provide small
businesses when the two become joint ventures. Answer: Possible responses would include
sales staff, distribution channels, financial resources, and research staffs. Page: 95 29. can
be defined as the set of key values, beliefs, understandings, and norms shared by members
of an organization. Answer: Culture Page: 95 30. List three visible artifacts of an
organization's culture. Answer: Possible responses would include dress, heroes, office
layout, symbols, slogans, and ceremonies. Page: 96 31. An object, act, or event that conveys
meaning to others is known as a(n) _______. Answer: symbol Page: 96 32. A(n) is a narrative
based on true events that is repeated frequently and shared among organizational
employees. Answer: story Page: 97 33. The deeds of ______ are extraordinary, but not so
extraordinary that other employees cannot perform the same deeds. Answer: heroes Page:
97 34. A slogan is a phrase or a sentence that concisely communicates a key corporate
_______. Answer: value Page: 98 35. List two reasons why ceremonies are held in an
organization. Answer: Possible responses would include: to reinforce valued
accomplishments, to create a bond among people by allowing them to share an important
event, and to anoint and celebrate heroes. Chapter Three * The Environment and Corporate
Culture Test Bank * Page 85 Page: 99 36. Name one of the two dimensions that the
categories of culture are based on. Answer: Responses will be either (1) the extent to which
the external environment requires flexibility or stability, or (2) the extent to which a
companys strategic focus is internal or external. Page: 100 37. Adaptability culture
emerges in an environment that requires _______ response and _______ decision making.
Answer: fast; high-risk 38. Page: 100 A culture that is a results-oriented that values
competitiveness, aggressiveness, personal initiative, and willingness to work long and hard
to achieve results is called ________. Answer: achievement culture Page: 101 39. The
______ culture places high value on HR, and the organization may be characterized by a
caring, family-like atmosphere. Answer: involvement Page: 101 40. Organizations with
internal focuses and consistency orientations for a stable environment should create a(n)
________ culture. Answer: consistency Page: 102 Essay Questions 1. Define the
organizational task environment. List the four things this environment includes that could
influence an organization. ANSWER: The external organizational environment is all elements
that exist outside the organizations boundaries that have the potential to affect the
organization. The environment includes: competitors, resources, technology, and economic
conditions. Level: 2 Page: 83 Chapter Three * The Environment and Corporate Culture Test
Bank * Page 86 2. Name the five dimensions of the general environment and describe each
dimension. ANSWER: The five dimensions of the general environment are international,
sociocultural, economic, and legal-political. International dimension refers to evens
originating in foreign countries as well as opportunities for American companies in other
countries. Technological dimension refers to the scientific and technological advancements
within a specific industry and society. Sociocultural dimension represents the demographic
characteristics of the general population. Economic dimension represents the general
economic health of the country or area in which the organization operates. Legal-political
dimension refers to the local, state, and federal regulations and the political activities
designed to influence company behavior. Level: 2 Page: 84-87 3. Briefly describe the task
environment and its four primary sectors ANSWER: The task environment is the portion of
the external environment that directly influences the organization's operations and
performance. The task environment is made up of customers, competitors, suppliers, and
the labor market. These sectors typically conduct day-to-day transactions with the
organization. Level: 2 Page: 88-89 4. What are the two basic strategies for dealing with
high environmental uncertainty? ANSWER: The two strategies are to adapt the
organization to changes in the environment and to influence the environment to make it
more compatible with organizational needs. Level: 2 Page: 91 5. Based on the model in the
text, discuss the relationship between external environmental characteristics and
uncertainty. ANSWER: The external environment can be evaluated along two dimensions.
First, one can evaluate (high to low) a number of factors in the environment. Second, one
can evaluate (high to low) the rate of change of those factors. When both variables are low,
low uncertainty characterizes the external environment. When both variables are high, the
external environment is marked by a high level of uncertainty. A highly uncertain
environment requires organizations to adapt and/or attempt to influence the external
environment. Level: 3 Page: 91-92 Chapter Three * The Environment and Corporate Culture
Test Bank * Page 87 6. Discuss the different levels of culture. ANSWER: Culture can be
analyzed at three levels. At the surface, there are the visible representations of culture,
such as ceremonies and patterns of behaviors. These representations are easily observable.
The second level of culture can be found in expressed ideas and values. These ideas and
values can be identified through an analysis of such things as symbols and stories. The third
level of culture refers to those values and understandings that are so deeply held that they
are unobservable and operate at the level of the subconscious and/or unconscious. Level: 3
Page: 95-97 7. What are the two types of heroes? Give at least one example of each and
why the examples are heroes. ANSWER: Real heroes are heroes who actually existed and
worked for the organization. The text gives Lee Iacocca as an example of a real hero. He
worked for $1 a year when he first went to Chrysler to prove the courage of his convictions.
Mythical heroes are symbolic heroes. The example the text gives is the mythical sale
representative who delivered a wedding ring directly to the church because the ring had
been ordered late. Level: 2 Page: 97-98 8. List the four categories of culture and describe
what kind of environments each fit best in. ANSWER: Adaptability culture fits best in fast
response and high-risk decision making environments. Achievement culture fits best in
results-oriented cultures that value competitiveness, aggressiveness, personal initiative,
and willingness to work long and hard to achieve results. Involvement culture fits best in
internal and employee-need focused environments where the organization is seen as having
a caring, family-like atmosphere. Consistency culture fits best in internal focused
organization that has a consistency orientation for a stable environment. Level: 2 Page:
99-102 9. Briefly discuss the two key areas that cultural leaders influence culture. ANSWER:
The cultural leader articulates a vision for the organizational culture that employees can
Chapter Three * The Environment and Corporate Culture Test Bank * Page 88 believe in and
that generates excitement. This means the leader defines and communicates central values
that employees believe in and will rally around. The cultural leader heeds the day-to-day
activities that reinforce the cultural vision. The leader makes sure that work procedures
and rewards systems match and reinforce the values. Actions speak louder than words, so
cultural leaders walk their talk. Level: 2 Page: 104 Chapter Three * The Environment and
Corporate Culture Test Bank * Page 89
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ch04_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 4 Managing in a Global Environment True/False Questions 1. Wal-Mart is a
well-established company with a global interest who is facing minimal challenges in
developing a successful international business. Answer: False 2. Level: 2 Page: 118 T...
ch05_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 5 Ethics and Social Responsibility True/False Questions 1. Timberlands focus on
philanthropy costs the company more than $2 million in sales each year. Answer: True 2.
Level: 2 Page: 155 Type: F Enron, in mid-2000 was Americas 7th largest co...
Ch06_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 6 Managing Small Business Start-Ups True/False Questions 1. Carol Weinstock
recognized a market for multicultural greeting cards and launched EthnoGraphics. She
would be a good example of an entrepreneur. Answer: True 2. Level: 1 Page: 192 Ty...
Ch07_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 7 Managerial Planning and Goal Setting True/False Questions 1. The Europa Hotel
survived terrorism by carefully planning security measures for guests, employees, and the
building. Answer: True 2. Level: 2 Page: 237 Type: F Because everything...
Ch08_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 8 Strategy Formulation and Implementation True/False Questions 1. Because of
Nintendos errors in strategy, they have fallen from number one to number three in the video
game industry. Answer: True 2. Level: 2 Page: 267 Type: F Given the need...
Ch09_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 9 Managerial Decision Making True/False Questions 1. Decision making is easy,
given that everybody makes decisions everyday. Answer: False 2. Level: 1 Page: 302 Type:
F Decision-making must not be done amid ever-changing factors, unclear inf...
Ch10_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 10 Designing Adaptive Organizations True/False Questions 1. Organizing is the
deployment of organizational resources to achieve strategic goals. Answer: True 2. Level:
1 Page: 350 Type: F Organizing defines what to do while strategy defines ...
Ch11_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 11 Managing Change and Innovation True/False Questions 1. Organizational change
refers to the adoption of a new idea or behavior by an organization. Answer: True 2. Level:
1 Page: 392 Type: F Redesign and renewal of the total organization is...
Ch12_Daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 12 Human Resource Management True/False Questions 1. Human resource
management is the set of activities that are undertaken to attract, develop and maintain
an effective work force. Answer: True 2. Level: 1 Page: 429 Type: F Human resource m...
gomez_tif_10
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part V Compensation Chapter 10 Managing Compensation OBJECTIVE QUESTIONS 1. In the
opening case in chapter 10, an experienced computer programmer complains that new hires
start at Sigma, Inc. at 15% more than his salary. Dr. Smiths answer reveals th...
gomez_tif_09
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 9 Developing Careers Chapter 9 Developing Careers OBJECTIVE QUESTIONS 1.
Career development differs from training in that: a) career development has a short-term
focus. Training has a long-term focus. b) career development is initiated by e...
gomez_tif_08
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 8 Training the Workforce Chapter 8 Training the Workforce OBJECTIVE QUESTIONS
1. Organizations face a number of important training issues such as: a) How can training
keep pace with a changing organizational environment? b) How will trainin...
gomez_tif_07
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 7 Appraising and Managing Performance Chapter 7 Appraising and Managing
Performance OBJECTIVE QUESTIONS 1. Which of the following is a comprehensive list of the
functions in performance appraisal? a) Identifying, measuring, and managing hum...
gomez_tif_06
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 6 Managing Employee Separations, Downsizing, and Outplacement Chapter 6
Managing Employee Separations, Downsizing, and Outplacement OBJECTIVE QUESTIONS 1.
During the early 2000s, which of the following was true of the business and employmen...
gomez_tif_05
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part III Staffing Chapter 5 Recruiting and Selecting Employees OBJECTIVE QUESTIONS 1.
Carmen is working through a process to ensure her company of the right number of people
with the right skills to meet their goals in delivering service and outputs...
gomez_tif_04
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 4 Managing Diversity Chapter 4 Managing Diversity OBJECTIVE QUESTIONS: 1. You
are the HRM manager in a company with a highly diverse workforce. Over lunch you are
explaining to a Caucasian, middle-class, line manager that she needs to use d...
gomez_tif_03
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part II The Contexts of Human Resource Management Chapter 3 Understanding Equal
Opportunity and the Legal Environment OBJECTIVE QUESTIONS 1. The HR departments legal
responsibilities include: a) monitoring the companys HR decisions. b) rendering leg...
gomez_tif_02
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 2 Managing Work Flows and Conducting Job Analysis Chapter 2 Managing Work
Flows and Conducting Job Analysis OBJECTIVE QUESTIONS 1. To compete and use its
material and human resources effectively, an organization needs a proper fit between i...
gomez_tif_01
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 1 Meeting Present and Emerging Strategic Human Resource Challenges MULTIPLE
CHOICE QUESTIONS 1. As the director of HR, you are in a meeting with your corporate
officers discussing the firms deliberate use of human resources to gain a competit...
gomez_mhr05_im_17
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Six Chapter 17 International HRM Challenge CHAPTER OVERVIEW 17.3) (PPT 17.1- This
chapter demonstrates how managers can effectively utilize HRM practices to enhance their
firms competitive response in an era when the opportunities and challeng...
gomez_mhr05_im_16
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Six Chapter 16 Managing Workplace Safety and Health CHAPTER OVERVIEW 16.2) (PPT
16.1- Organizations realize the importance of social responsibility and that safe
organizations are more effective organizations. Moreover, the law requires that t...
gomez_mhr05_im_15
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Six Chapter 15 Working with Organized Labor CHAPTER OVERVIEW 15.3) (PPT 15.1-
Some employees prefer to work in a unionized setting, whereas others prefer a workplace
that is not unionized. This chapter explores the labor-management relationshi...
gomez_mhr05_im_14
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Six Chapter 14 Respecting Employee Rights and Managing Discipline CHAPTER
OVERVIEW 14.3) (PPT 14.1- This chapter examines employee rights and employee discipline.
The concepts of employee rights, management rights, and the employment-at-will d...
gomez_mhr05_im_13
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 13 Chapter 13 Developing Employee Relations CHAPTER OVERVIEW 13.3) (PPT
13.1- This chapter addresses the importance of effective employee relations. It explores
the roles of managers and employee relations specialists, and it describes how ...
gomez_mhr05_im_12
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Five Chapter 12 Designing and Administering Benefits CHAPTER OVERVIEW 12.3) (PPT
12.1- The chapter begins with a broad view of the importance of employee benefits and how
they are associated with the total compensation package. The two categor...
gomez_mhr05_im_11
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 11 Chapter 11 Rewarding Performance CHAPTER OVERVIEW 11.3) (PPT 11.1- This
chapter focuses on the effective design and implementation of pay-forperformance
systems. First, it addresses the major challenges and pitfalls facing managers in th...
gomez_mhr05_im_10
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Five Chapter 10 Managing Compensation CHAPTER OVERVIEW 10.2) (PPT 10.1- The
way a firm handles compensation-related issues has a direct impact on employees and the
business. Compensation affects the firm\'s ability to attract, retain, and motiv...
gomez_mhr05_im_09
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Four Chapter 9 Developing Careers CHAPTER OVERVIEW 9.2) (PPT 9.1- This chapter
focuses on the career development process. Firstly, career development is defined. Secondly,
the major managerial challenges related to career development are explo...
gomez_mhr05_im_08
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 8 Chapter 8 Training the Workforce CHAPTER OVERVIEW 8.3) (PPT 8.1-
Organizations face several questions with respect to training. For example, they have to
respond to \"How can we effectively and efficiently deliver training to employees?\" a...
gomez_mhr05_im_07
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Four Chapter 7 Appraising and Managing Performance CHAPTER OVERVIEW (PPT
7.1-7.2) An important function of effective management is accurate measurement of
employee performance. This chapter discusses the foundation, design, and implementation
o...
gomez_mhr05_im_06
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Three Chapter 6 Managing Employee Separations, Downsizing, and Outplacement
CHAPTER OVERVIEW 6.1-6.2) (PPT Conducting a termination or layoff is one of the most
sensitive and difficult things that a manager will ever have to do. There are a nu...
gomez_mhr05_im_05
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Three Chapter 5 Recruiting and Selecting Employees CHAPTER OVERVIEW 5.2) (PPT
5.1- This chapter focuses on staffing, one of the most important HR activities in which the
manager is involved. First, the hiring process is defined and discussed. ...
gomez_mhr05_im_04
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 4 Chapter 4 Managing Diversity CHAPTER OVERVIEW 4.2) (PPT 4.1 - One of the
greatest challenges facing organizations today is managing workforce diversity in a way
that both respects the employees\' unique attitudes and promotes a shared sens...
gomez_mhr05_im_03
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Part Two Chapter 3 Understanding Equal Opportunity and the Legal Environment CHAPTER
OVERVIEW 3.2) (PPT 3.1- This chapter examines the aspects of HR law and regulations. The
goal is to identify and discuss the laws themselves and how best to comply...
gomez_mhr05_im_02
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 2 Chapter 2 Managing Work-flows and Conducting Job Analysis CHAPTER
OVERVIEW 2.2) (PPT2.1- (PPT 2.3-2.5) Work-flow is a highly dynamic process, and a
well-designed organizational structure will ensure that work is performed efficiently
and ...
gomez_mhr05_im_01
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 1 Chapter 1 Meeting Present and Emerging Strategic Human Resource Challenges
CHAPTER OVERVIEW 1.1-1.2) (PPT This first chapter provides a broad overview of the
strategic human resource challenges organizations face, and provides a framework...
ch21_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 21 Operations and Service Management True/False Questions 1. R.R. Donnelly was
losing money because of the outdated operation systems the company had in place. Answer:
True 2. Level: 1 Page: 774 Type: F The technical core, in an automobile c...
Ch20_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 20 Information Technology and E-Business True/False Questions 1. A key aspect in
the success of Wal-Mart is updating the information technology infrastructure. Answer:
True 2. Level: 2 Page: 742 Type: F By providing managers with more inform...
Ch19_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 19 Managerial and Quality Control True/False Questions 1. Organizational control
is the systematic process of regulating organizational activities to make them consistent
with the expectations in plans, targets, and standards of performance. ...
Ch18_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 18 Teamwork True/False Questions 1. The traditional assembly line requires
workers to perform multiple tasks, not repetitive tasks. Answer: False 2. Level: 1 Page:
659 Type: F A group of two or more people who interact and coordinate their w...
Ch17_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 17 Communication True/False Questions 1. Managers spend 80 percent of every
working day reading or writing. Answer: False 2. Level: 2 Page: 624 Type: F Communication
permeates every management function. Answer: True Level: 1 Page: 625 Type: ...
Ch16_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 16 Motivation True/False Questions 1. Motivation is the arousal, direction and
persistence of behavior. Answer: True 2. Level: 1 Page: 588 Type: F Employee motivation
affects productivity, and part of a managers job is to channel motivation ...
Ch15_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 15 Leadership True/False Questions 1. Leadership occurs among people, involves
the use of influence, and is used to attain goals. Answer: True 2. Level: 1 Page: 552 Type:
F Leadership is reciprocal. Answer: True Level: 1 Page: 552 Type: F 3...
Ch14_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 14 Dynamics of Behavior in Organizations True/False Questions 1. The concepts
and principles of OB are important to managers because in every organization human being
ultimately make the decision that controls how the organization will acquir...
Ch13_daft7e_TB
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Chapter 13 Meeting the Challenge of Diversity True/False Questions 1. The genuine efforts
to accept and manage diverse people in North America are a phenomenon of the 1970s.
Answer: False 2. Level: 2 Page: 466 Type: F Most managers, from any ethnic ...
2. Financial Planning Skills
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
Tutorial 2 Chapter 3 - Financial Planning Skills True/false and Discuss Q1. With the current
availability of computer packages, it is now not necessary for financial planners to explain
to clients the basis on which their advice is determined. The ri...
CH01
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
GLOBAL CORPORATE FINANCE Sixth Edition INSTRUCTOR\'S MANUAL Suk H. Kim University
of Detroit Mercy Seung H. Kim St. Louis University i PREFACE The purpose of the
Instructor\'s Manual for Global Corporate Finance is to help instructors use the textb...
CH02
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 2 MOTIVES FOR WORLD TRADE AND FOREIGN INVESTMENT CHAPTER OUTLINE I.
Motives for Foreign Trade a) The theory of comparative advantage (1) Why comparative
advantage occurs b) The theory of factor endowments c) Product life-cycle theory d)
Other...
CH03
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 3 THE BALANCE OF PAYMENTS CHAPTER OUTLINE I. An Overview of the Balance
of Payments a) Sources and uses of funds b) The balance of payments as a whole
Balance-of-Payments Accounts a) The current account Group A (1) Balance on goods (2)
Servi...
CH05
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 5 THE FOREIGN EXCHANGE MARKET AND PARITY CONDITIONS CHAPTER OUTLINE
I. Major Participants in the Exchange Market a) Commercial banks (1) Operating the
payment mechanism (2) Extending credit (3) Reducing risk (4) Exchange trading by
commercial...
CH06
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 6 CURRENCY FUTURES AND OPTIONS CHAPTER OUTLINE I. The Currency Futures
Market a) Futures market participants b) The futures market and the forward market c)
How to read currency futures quotes d) Market operations (1) Margin requirements (2) ...
CH07
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 7 FINANCIAL SWAPS CHAPTER OUTLINE I. The Emergence of the Swap Market a)
The origins of the swap market (1) Parallel loans (2) Back-to-back loans b) Drawbacks of
parallel and back-to-back loans c) The growth of the swap market Plain Vanilla S...
CH08
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 8 EXCHANGE RATE FORECASTING CHAPTER OUTLINE I. II. Measuring Exchange
Rate Changes Forecasting Needs of the Multinational Company a) Hedging decision b)
Working capital management c) Long-term investment analysis d) Long-term financing
decisi...
CH09
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 9 MANAGING TRANSACTION EXPOSURE AND ECONOMIC EXPOSURE CHAPTER
OUTLINE I. Basic Nature of Foreign Exchange Exposures a) Exposure management strategy
(1) Forecast the degree of exposure (2) Develop a reporting system to monitor exposure and
exc...
CH10
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 10 TRANSLATION EXPOSURE MANAGEMENT CHAPTER OUTLINE I. Translation
Rules a) Current/noncurrent method b) Monetary/nonmonetary method c) Temporal method
d) Current rate method e) Comparison of the four translation methods FASB No. 8 and FASB
No...
CH11
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 11 INTERNATIONAL FINANCIAL MARKETS CHAPTER OUTLINE I. Eurocurrency
Markets a) Creation of Eurodollars (1) Uses of Eurodollars b) Eurodollar instruments (1)
Eurodollar deposits (2) Eurodollar loans (2) Interest rates c) Euronote issue faciliti...
CH12
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 12 INTERNATIONAL BANKING ISSUES AND COUNTRY RISK ANALYSIS CHAPTER
OUTLINE I. International Banking Operations a) Worlds largest financial companies b) Types
of foreign banking offices (1) Representative offices (2) Correspondent banks (3) Bra...
CH14
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 14 FINANCING FOREIGN INVESTMENT CHAPTER OUTLINE I. Internal Sources of
Funds a) Funds from the parent (1) Equity contributions (2) Direct loans (3) Parent
guarantees b) Funds provided by operations c) Loans from sister subsidiaries External S...
CH15
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 15 INTERNATIONAL WORKING CAPITAL MANAGEMENT CHAPTER OUTLINE I. Basic
Concepts of Working Capital Management a) Importance of working capital management b)
Net working capital funding c) Economic constraints of current asset management (1) For...
CH16
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 16 INTERNATIONAL PORTFOLIO INVESTMENT CHAPTER OUTLINE I. Key
Terminologies a) Risk analysis: standard deviation b) Capital asset pricing model c)
Aggressive vs defensive stocks c) Correlation coefficients d) Portfolio return and risk e)
Effic...
CH18
Indiana State >> MANAGEMENT >> 5689-9856 (Fall, 2008)
CHAPTER 18 INTERNATIONAL CAPITAL BUDGETING DECISIONS CHAPTER OUTLINE I. The
Foreign Investment Decision Process a) Search for foreign investment b) Political climate c)
Company\'s overall strategy (1) Company goal (2) Company policy (3) Company resour...