How Can Managers Effectively Plan When the External Environment Is

question 106

Multiple Choice

How can managers effectively plan when the external environment is continually changing?

• A) They should discontinue formal planning.
• B) They should set general but rigid plans.
• C) They should be ready to change directions if environmental conditions warrant.
• D) They should continue to follow the set organizational plans as persistence will eventually pay off.
• E) They should only set short-term goals.

---

Definitions:

Real Wages

The buying capacity of earnings, when accounted for inflation, showing the amount of goods and services that can be purchased.

CPI

The Consumer Price Index is an indicator that calculates the overall average prices of a selection of consumer items and services, including food, transportation, and healthcare, which is utilized to measure inflation.

Winner-Take-All Markets

Markets in which the top performers are able to capture a very large share of the rewards, and the rest are left with very little.

Substitution Effect

The economic understanding that as prices rise or incomes decrease, consumers will replace more expensive items with less costly alternatives.