Chapter 2: Managing in a global environment

Question 1

Organization boundaries and environments

Answer 1

external (factors beyond an organization’s boundaries that cannot be controlled)
Organizational (that which separates the organization from its environment)

Question 2

Organizational environments

Answer 2

• economic
• technical
• political-legal
• socio-cultural
  -business
• global
• emerging challenges and opportunities

Question 3

Key economic goals

Answer 3

• growth (economic)
• stability (economic)
• full employment

Question 4

Business cycle

Answer 4

pattern of short-term ups and downs (peak, recession, trough, and recovery)

Question 5

aggregate output

Answer 5

total quantity of goods and services produced by an economic system during a given period

Question 6

standard of living

Answer 6

total quantity and quality of goods and services that a country’s citizens can purchase with their currency

Question 7

productivity

Answer 7

compares the output of an economic system with the resources that are needed to produce that output

Question 8

Gross national product (GNP)

Answer 8

all goods and services produced by a national economy within a given period regardless of production location

Question 9

Gross domestic product (GDP)

Answer 9

all goods and services produced by a national economy within a given period with domestic factors of production

Question 10

Balance of trade

Answer 10

exports - imports

Question 11

national debt

Answer 11

amount of money government owes its creditors

Question 12

threats to economic statibility

Answer 12

inflation, deflation, unemployment

Question 13

inflation

Answer 13

widespread price increases in economic system

Question 14

Consume price index (CPI)

Answer 14

a tool to measure inflation

Question 15

deflation

Answer 15

a period of generally falling prices

Question 16

types of unemployment

Answer 16

frictional (workers willingly between jobs), seasonal (only have work during specific seasons of year), cyclical (only have work when economy is good - unemployed because business has decreased profits), structural (worker lacks skills for jobs)

Question 17

five forces in business environment

Answer 17

• threats of new entrants
• bargaining power of suppliers
• bargaining power of consumers
• threat of substitutes
• industry rivals

Question 18

business process management

Answer 18

process-oriented teams (not department-oriented organizations)

Question 19

Acquisitions and mergers

Answer 19

• can be horizontal, vertical, or conglomerate mergers
• can be friendly or hostile takeovers

Question 20

Divestitures and spinoffs

Answer 20

selling part of existing business or setting it up as a new corporation

Question 21

poison pill

Answer 21

• a defense tactic that management can adopt to make a firm less attractive

Question 22

globalization

Answer 22

integration of markets globally