1|Page
COB 300 Management Exam 2
Questions and Answers | Reviewed
external environments - ✔✔are the forces and events outside a company that have the potential to
influence or affect it.
3 characteristics:
Resource scarcity
Environmental change
Environmental complexity
Environmental change - ✔✔rate at which a company's general and specific environments change.
stable environment - ✔✔the rate of environmental change is slow.
Wholefoods
Dynamic environments - ✔✔the rate of environmental change is fast.
Tech
X
Emily Charlene
Lead Athor
©All Rights Reserved, 2025
,2|Page
punctuated equilibrium theory - ✔✔companies go through long periods of stability (equilibrium) during
which incremental changes occur; followed by short, complex periods of dynamic, fundamental change
(revolutionary periods); and finishing with a return to stability (new equilibrium). 4
Environmental Complexity - ✔✔complexity refers to the number and the intensity of external factors in
the environment that affect organizations. Simple environments have few environmental factors, whereas
complex environments have many environmental factors. The dairy industry is an excellent example of a
relatively simple external environment.
resource scarcity - ✔✔the abundance or shortage of critical organizational resources in an organization's
external environment
Uncertainty - ✔✔extent to which managers can understand or predict which environmental changes and
trends will affect their businesses
When environmental change and complexity are at high levels and resource scarcity is high (i.e.,
resources are scarce), uncertainty is high, and managers may not be at all confident that they can
understand, predict, and handle the external forces affecting their businesses. When environmental
change and complexity are at low levels and resource scarcity is low (i.e., resources are plentiful),
uncertainty is low, and managers feel confident that they can understand, predict, and react to the
external forces that affect their businesses.
General environment - ✔✔the economic, technological, sociocultural, and political/legal trends that
indirectly affect all organizations
X
Emily Charlene
Lead Athor
©All Rights Reserved, 2025
,3|Page
Specific environment - ✔✔the customers, competitors, suppliers, industry regulations, and advocacy
groups that are unique to an industry and directly affect how a company does business
4 components of the general environment - ✔✔the economy, the tech, sociocultural, and political/legal
trends that indirectly affect all organizations.
Business confidence indices - ✔✔Because economic statistics can be poor predictors, some managers try
to predict future economic activity by keeping track of business confidence.
Business confidence indices show how confident actual managers are about future business growth.
Technology - ✔✔Technology is the knowledge, tools, and techniques used to transform inputs (raw
materials, information, and so on) into outputs (products and services). For example, the inputs of
authors, editors, and artists (knowledge) and the use of equipment like computers and printing presses
(technology) transformed paper, ink, and glue (raw materials) into this book (the finished product).
Although technological changes can benefit a business, they can also threaten it. Companies must
embrace new technology and find effective ways to use it to improve their products and services or
decrease costs. If they don't, they will lose out to those companies that do.
Sociocultural changes and trends influence organizations in two important ways. - ✔✔First, changes in
demographic characteristics, such as the number of people with particular skills or the growth of or
decline in the number of people with particular population characteristics (marital status, age, gender,
ethnicity) affect how companies staff their businesses.
X
Emily Charlene
Lead Athor
©All Rights Reserved, 2025
, 4|Page
Second, sociocultural changes in behavior, attitudes, and beliefs also affect the demand for a business's
products and services.
two basic strategies for monitoring customers - ✔✔reactive and proactive. Reactive customer monitoring
involves identifying and addressing customer trends and problems after they occur. Proactive monitoring
of customers means identifying and addressing customer needs, trends, and issues before they occur.
Competitors - ✔✔companies in the same industry that sell similar products or services to customers.
Competitive analysis - ✔✔a process for monitoring the competition that involves identifying competition,
anticipating their moves, and determining their strengths and weaknesses
Suppliers - ✔✔are companies that provide material, human, financial, and informational resources to
other companies.
Supplier dependence - ✔✔the degree to which a company relies on a supplier because of the importance
of the supplier's product to the company and the difficulty of finding other sources of that product
for over a decade Apple has been highly dependent on Samsung for the computer chips
Buyer dependence - ✔✔the degree to which a supplier relies on a buyer because of the importance of that
buyer to the supplier and the difficulty of finding other buyers for its products
While Samsung is one of Apple's key suppliers (i.e., supplier dependence), Apple, in turn, is Samsung's
key buyer of computer components.
X
Emily Charlene
Lead Athor
©All Rights Reserved, 2025
