Multiple Choice Questions 1. Two of the key inputs to developing forecasts discussed in the text are a. Environmental scanning and stakeholder identification b. Environmental scanning and competitor intelligence c. Assessing internal strengths and environmental scanning d. Environmental scanning and a SWOT analysis 2. _____________ tracks the evolution of environmental trends, sequences of events or streams of activities. a. Environmental scanning b. Environmental monitoring c. Environmental surveying d. Competitive intelligence 3. Scanning the general environment would identify information on a. Substitute goods b. The aging population and ethnic shifts c. Customer and firm bargaining power d. Competitive rivalry 4. Gathering “competitive intelligence” a. Is good business practice b. Is illegal c. Is considered unethical d. Minimizes the need to obtain information in the public domain 5. Environmental forecasting involves developing plausible projections about the ________ of environmental change. a. Direction b. Scope c. Speed d. All of the above 6. A danger of forecasting discussed in the text is that a. In most cases, the expense of collecting the necessary data exceeds the benefit b. Forecasting’s retrospective nature provides little information about the future c. Managers may view uncertainty as “black and white” while ignoring important “gray areas.” d. It can create legal problems for the firm if regulators discover the company is making forecasts 7. The aging of the population of the United States a. Is a myth b. Increases demand for products geared to retirees c. Is an important sociocultural trend d. Is an important trend in the political and legal environment 8. The aging of the population, changes in ethnic composition, and effects of the baby boom are a. Macroeconomic changes b. Demographic changes c. Global changes d. Sociocultural changes 9. Increasingly larger numbers of women entering the work force since the early 1970s is an example of a. Demographic changes b. Political and legal environmental changes c. Sociocultural changes d. Technological developments 10. Emerging sociocultural changes in the environment include a. Changes in the ethnic composition b. The increasing educational attainment of women in the past decade c. Progressively less disposable income by consumers d. Changes in the geographic distribution of the population 11. All of the following are important elements of the political/legal segment of the general environment except a. The deregulation of utilities b. The Americans with Disabilities Act (ADA) c. The increased use of Internet technology d. Increases in the federally mandated minimum wage 12. Which of the following would be considered part of a firm’s general environment? a. Decreased entry barriers b. Higher unemployment rates c. Increased bargaining power of the firm’s suppliers d. Increased competitive intensity 13. Interest rate increases have a __________ impact on the residential home construction industry and a __________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. a. Positive; negligible b. Negative; negligible c. Negative; positive d. Positive; negative 14. To illustrate interrelationships among different segments of the general environment: The persistence of large U.S. trade deficits (__________) has led to greater demand for protectionist measures, such as trade barriers and quotas (__________). These measures lead to higher prices for U.S. consumers and fuel inflation (__________). a. Macroeconomic, sociocultural, political/legal b. Macroeconomic, political/legal, macroeconomic c. Macroeconomic, technological, macroeconomic d. Macroeconomic, global, macroeconomic 15. Which is considered a force in the “Five Forces model”? a. Increased deregulation in an industry b. The threat of government intervention c. Rivalry among

MGT 405 chapter 2


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