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Questions and Answers
Which of the following components is NOT part of the external environment?
Which of the following components is NOT part of the external environment?
The sociocultural component considers only economic factors.
The sociocultural component considers only economic factors.
False
What are the two dimensions of environmental uncertainty?
What are the two dimensions of environmental uncertainty?
Degree of change and degree of complexity
The external environment's __________ involves issues associated with globalization.
The external environment's __________ involves issues associated with globalization.
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Which factor is considered when assessing the economic component of the external environment?
Which factor is considered when assessing the economic component of the external environment?
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Match the types of organizations with their respective characteristics:
Match the types of organizations with their respective characteristics:
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An organization categorized as complex has a minimal need for sophisticated knowledge.
An organization categorized as complex has a minimal need for sophisticated knowledge.
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What is the specific environment in relation to an organization?
What is the specific environment in relation to an organization?
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Which of the following is considered a dimension of organizational culture?
Which of the following is considered a dimension of organizational culture?
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Organizational culture is only concerned with the formal rules and policies of the organization.
Organizational culture is only concerned with the formal rules and policies of the organization.
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What influences the way organizational members act?
What influences the way organizational members act?
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The degree to which management decisions take into consideration the effect on people within the organization is referred to as _____ orientation.
The degree to which management decisions take into consideration the effect on people within the organization is referred to as _____ orientation.
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Match the following dimensions of culture with their descriptions:
Match the following dimensions of culture with their descriptions:
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What is a primary characteristic of Tesla Motors' organizational culture?
What is a primary characteristic of Tesla Motors' organizational culture?
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Cultural values and practices within an organization can remain static over time.
Cultural values and practices within an organization can remain static over time.
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Describe the concept of organizational culture in one sentence.
Describe the concept of organizational culture in one sentence.
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What is a characteristic of a strong organizational culture?
What is a characteristic of a strong organizational culture?
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Top management has no impact on an organization's culture.
Top management has no impact on an organization's culture.
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How do new employees learn an organization's culture?
How do new employees learn an organization's culture?
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The original source of an organization's culture usually reflects the vision of the ______.
The original source of an organization's culture usually reflects the vision of the ______.
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Match the following aspects of culture with their characteristics:
Match the following aspects of culture with their characteristics:
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What effect did the CEO of Gravity have on wage increases?
What effect did the CEO of Gravity have on wage increases?
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A weak culture allows for a strong connection between shared values and behaviors within the organization.
A weak culture allows for a strong connection between shared values and behaviors within the organization.
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What is NOT considered a common way that organizational culture is expressed?
What is NOT considered a common way that organizational culture is expressed?
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What is a consequence of having employees tell stories about company history?
What is a consequence of having employees tell stories about company history?
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The symbolic view suggests that managers have complete control over organizational success.
The symbolic view suggests that managers have complete control over organizational success.
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Identify one challenge managers face in today's external environment.
Identify one challenge managers face in today's external environment.
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The _____ conveys to employees the expected behaviors and important aspects of the organization.
The _____ conveys to employees the expected behaviors and important aspects of the organization.
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Which of the following components is NOT part of the external environment affecting organizations?
Which of the following components is NOT part of the external environment affecting organizations?
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Match the following terms with their definitions:
Match the following terms with their definitions:
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Organizational stories are meant to diminish the significance of past events in a company.
Organizational stories are meant to diminish the significance of past events in a company.
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Name an example of a material artifact in an organization.
Name an example of a material artifact in an organization.
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Which of the following factors is an economic component of an organization's external environment?
Which of the following factors is an economic component of an organization's external environment?
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Which factor provides information about population characteristics such as age, sex, marital status, education, and geographical location?
Which factor provides information about population characteristics such as age, sex, marital status, education, and geographical location?
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The two dimensions of environmental uncertainty are degree of change and degree of impact.
The two dimensions of environmental uncertainty are degree of change and degree of impact.
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What is described as the shared values, principles, traditions, and ways of doing things that influence the actions of organization members?
What is described as the shared values, principles, traditions, and ways of doing things that influence the actions of organization members?
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In 2013, people cited stories about the first president of the college to support their arguments about the spirit of the university. This is an example that culture comes from ____________.
In 2013, people cited stories about the first president of the college to support their arguments about the spirit of the university. This is an example that culture comes from ____________.
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What is the process that helps new employees learn the organization’s way of doing things?
What is the process that helps new employees learn the organization’s way of doing things?
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Which of the following statements is TRUE concerning environmental uncertainty?
Which of the following statements is TRUE concerning environmental uncertainty?
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Match the following terms with their correct definitions:
Match the following terms with their correct definitions:
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Study Notes
External Environment
- The external environment encompasses factors outside an organization that influence its performance.
- There are six main components of the external environment:
- Economic - focuses on factors like inflation, interest rates, and consumer spending.
- Demographic - focuses on population characteristics such as age, race, gender, and ethnicity.
- Political/Legal - focuses on government regulations and laws that influence how organizations operate.
- Sociocultural - focuses on societal and cultural factors like values, attitudes, and beliefs.
- Technological - focuses on scientific and industrial innovations.
- Global - focuses on issues related to globalization and the world economy.
Environmental Uncertainty
- Environmental uncertainty is a measure of how much information is available about the external environment and how predictable it is.
- Two dimensions of environmental uncertainty:
-
Degree of change - refers to how often the environment changes.
- Stable environments experience minimal change and are predictable.
- Dynamic environments frequently change and are unpredictable.
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Degree of complexity - refers to the number and variety of factors in the environment.
- Simple environments have few components that are similar, requiring minimal knowledge of components.
- Complex environments have many components that are dissimilar, requiring a high degree of knowledge of components.
-
Degree of change - refers to how often the environment changes.
The Specific Environment
- The specific environment refers to the elements of the external environment that are directly relevant to an organization's goals.
- Most management attention focuses on the specific environment.
- Stakeholders are any individuals or groups that have an interest in an organization's decisions and actions.
Organizational Culture
- Organizational culture is the shared values, principles, traditions, and ways of doing things that influence how members behave and distinguish the organization from others.
- Culture is a perception based on employee experience.
- Culture is descriptive of how members describe it.
- Culture is shared by employees who have common perceptions and experiences.
- Organizational culture is characterized by six dimensions:
- Adaptability - the degree to which employees are encouraged to be innovative and take risks.
- Attention to detail - the degree to which employees are expected to exhibit precision and analysis.
- Outcome orientation - the degree to which managers focus on results rather than processes.
- People orientation - the degree to which managerial decisions consider the impact on employees.
- Team orientation - the degree to which work is organized around teams.
- Aggressiveness - the degree to which employees are encouraged to be competitive and assertive.
Strong vs. Weak Cultures
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Strong cultures are characterized by:
- Widely shared values.
- Consistent messages about what is important.
- Employees who can tell stories about company history.
- Employees who strongly identify with the culture.
- A strong connection between shared values and behaviors.
-
Weak cultures are characterized by:
- Values limited to a few people.
- Contradictory messages about what is important.
- Employees with limited knowledge of company history.
- Employees with little identification with the culture.
- A weak connection between shared values and behaviors.
How Culture is Established and Maintained
- Culture is influenced by:
- Philosophy of the organization's founders - their vision often shapes the organization's culture.
- Selection criteria - the hiring process reinforces and maintains a culture based on particular values.
- Top management - their actions have a significant impact on organizational culture.
- Socialization - the process by which new employees learn the organization's culture.
How Employees Learn Culture
- Employees learn an organization's culture through:
- Stories - accounts of significant events or people, often involving founders or rule-breaking.
- Rituals - repetitive sequences of activities reinforcing important values.
- Material artifacts and symbols - objects that convey important values and expectations.
- Language - specialized terms and jargon that identify and unite members.
Omnipotent vs. Symbolic View of Management
- Omnipotent view of management suggests managers are directly responsible for an organization's success or failure.
- Symbolic view of management suggests much of an organization's success or failure is due to external factors outside the manager's control.
Constraints on Managerial Discretion
- Two constraints on managerial discretion:
- Organizational culture (internal) - values and norms influence decision-making.
- External environment - factors outside the organization impact decisions.
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Description
Test your knowledge on the external environment's components and the concept of environmental uncertainty. This quiz covers economic, demographic, political, sociocultural, technological, and global factors affecting organizations. Understand how these influences create variability and unpredictability in business contexts.
