Principles of Management Chapter 4 Test Bank and Solutions 2025/ 2026 Complete Guide on Decision Making and Problem Solving

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Chapter 4 EXTERNAL AND INTERNAL ORGANIZATIONAL ENVIRONMENTS AND CORPORATE CULTURE


TRUE-FALSE QUESTIONS

Title: ANSWER: T REFERENCE: The Organization's External Environment LEARNING OUTCOME: 1
1. Overall, while economic data indicates that globalization has had a positive effect on the world
economy, a dark side also shows that two-thirds of all households in 25 advanced-economy countries had
incomes stagnate and/or decline between 2005 and 2014.
a. True
b. False

Title: ANSWER: F REFERENCE: The Organization's External Environment LEARNING OUTCOME: 1
2. Women have made gains in the workplace, today they comprise the largest share of top leadership jobs
—across politics and government, academia, the nonprofit sector, and business.
a. True
b. False

Title: ANSWER: T REFERENCE: The Organization's External Environment LEARNING OUTCOME: 1
3. Natural disaster and human induced environmental problems are events such as high-impact hurricanes,
and extreme temperatures as well as ‘man-made’ environmental disasters such as water and food crises;
large-scale involuntary migration are a force that affects organizations.
a. True
b. False

Title: ANSWER: F REFERENCE: External Environments and Industries LEARNING OUTCOME: 2
4. According to the Company Industry Fit model, universities and appliance manufacturers would generally
prosper in a simple-unstable environment.
a. True
b. False

Title: ANSWER: F REFERENCE: External Environments and Industries LEARNING OUTCOME: 2
5. According to the Company Industry Fit model, soft drink bottlers, chemical, and insurance companies
would fit and align more effectively in a stable (i.e., relative unchanging), simple, and low-uncertainty
(i.e., has mostly similar elements) external environment—cell 1.
a. True
b. False

Title: ANSWER: T REFERENCE: External Environments and Industries LEARNING OUTCOME: 2
6. Whereas in cell 4 of the Company Industry Fit model, an environment characterized by a high degree of
uncertainty with complex and unstable elements, industries and firms such as computer, aerospace,
airlines, and telecommunications firms would operate more effectively.
a. True
b. False

Title: ANSWER: T REFERENCE: Organizational Designs and Structures LEARNING OUTCOME: 3
7. Early organizational theorists broadly categorized organizational structures and systems as either
mechanistic or organic.

, Principles of Management


a. True
b. False

Title: ANSWER: F REFERENCE: Organizational Designs and Structures LEARNING OUTCOME: 3
8. Mechanistic organizational structures work best in unstable, complex, changing environments.
a. True
b. False

Title: ANSWER: T REFERENCE: Organizational Designs and Structures LEARNING OUTCOME: 3
9. Functional organizations are referred to as pyramid structures since they are governed as a hierarchical,
top-down control system.
a. True
b. False

Title: ANSWER: F REFERENCE: Organizational Designs and Structures LEARNING OUTCOME: 3
10. Functional structures initiated horizontal team-based structures that provided faster information
sharing, coordination, and integration between the formal organization and profit-oriented projects and
programs.
a. True
b. False

Title: ANSWER: T REFERENCE: Organizational Designs and Structures LEARNING OUTCOME: 3
11. Advantages of virtual teams and organizations include cost savings, decreased response time to
customers, and less harmful effects on the environment.
a. True
b. False

Title: ANSWER: F REFERENCE: The Internal Organization and External Environments LEARNING OUTCOME:
4
12. Open systems are less sensitive to environmental resources and possibilities, and closed systems are
more responsive and adaptive to environmental changes.
a. True
b. False

Title: ANSWER: T REFERENCE: The Internal Organization and External Environments LEARNING OUTCOME:
4
13. Companies and organizations change leadership and strategies and make structural and systems
changes to meet changing competition, market forces, and customers and end users’ needs and demands.
a. True
b. False

Title: ANSWER: T REFERENCE: Corporate Cultures LEARNING OUTCOME: 5
14. According to Drucker, corporate culture is more influential than strategy in terms of motivating
employees’ beliefs, behaviors, relationships, and ways they work since culture is based on values.
a. True
b. False

Title: ANSWER: F REFERENCE: Corporate Cultures LEARNING OUTCOME: 5

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