Answer the following statement(s) true (T) or false (F)
1) Organizations are open systems that affect and are affected by their external environments.
2) Raw materials are an example of inputs.
3) When investors bid up stock prices, companies have less capital to fuel their strategies.
4) A more diverse workforce presents managers with challenges as well as opportunities.
5) According to Michael Porter's model, the competitive environment includes rivalry among current competitors and the impact of new entrants, substitute and complementary products, suppliers, and customers.
1. TRUE
Explanation: Organizations are open systems—that is, they are affected by and in turn affect their external environments. For example, they take in inputs from their environment and use them to create products and services that are outputs to their environment.
2. TRUE
Explanation: Inputs are the goods and services organizations take in and use to create products or services. Outputs are the products and services organizations create.
3. FALSE
Explanation: An important economic influence on a company is the stock market. When investors bid up stock prices, they are paying more to own shares in companies, which means the companies have more capital to fuel their strategies.
4. TRUE
Explanation: A more diverse workforce has many advantages, but managers must make certain they provide equality for women and minorities with respect to employment, advancement opportunities, and compensation.
5. TRUE
Explanation: Michael Porter's model says that the competitive environment includes rivalry among current competitors and the impact of new entrants, substitute and complementary products, suppliers, and customers. According to Porter, successful managers do more than simply react to the environment; they act in ways that actually shape or change the organization's environment.
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