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Chapter 1-8 Solutions Instant Download

MGT 500 Week 5 Midterm Exam Solved

Chapter 1—Innovative Management for a Changing World TRUE/FALSE 1. The nature of management is to control and dictate others in an organization. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

3-4 TYP: F

2. Managers need a new approach that relies less on command and control and more on communication and coordination, in the new world of work. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Communication | Environmental Influence

4 TYP: F

3. In today’s turbulent and hypercompetitive global environment, managers must help their companies innovate more than ever. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

4 TYP: F

4. The late famed management theorist Peter Drucker is often credited with creating the modern study of management. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

5 TYP: F

5. Managers get things done by coordinating and motivating other people. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

6 TYP: F


6. The attainment of organizational goals through planning, organizing, leading and controlling reflects the essence of the management process. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

6 TYP: F

7. Where the organization wants to be in the future and how to get there defines controlling. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: F

8. Organizing means defining goals for future organizational performance and deciding on the tasks and resources needed to attain them. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: F

9. Leading is the use of influence to motivate employees to achieve organizational goals. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

10. The use of influence to motivate employees to achieve organizational goals defines organizing. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

11. How an organization goes about accomplishing a plan is a key part of the management function of controlling. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

12. Using influence to motivate employees describes the management function of leading. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

13. The use of influence to motivate employees to achieve the organization's goals refers to controlling. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F


14. Organizing means creating a shared culture and values. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

15. Controlling involves monitoring employee's activities and taking corrective action as necessary. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

16. An organization is a social entity that is goal directed and deliberately structured. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

17. In the definition of an organization, deliberately structured means being made up of two or more people and designed to achieve some outcomes. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

18. Efficiency refers to the degree to which the organization achieves a stated objective. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

19. Efficiency can be calculated as the amount of resources used to produce a product or service. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

20. To perform effectively, all managers must possess conceptual, human, and technical skills, though the degree of each skill necessary at different levels of an organization may vary. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

10

21. All managers have to pay attention to costs and according to research, the best way to improve organizational effectiveness is by severe cost cutting. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

10


22. Human skill is the cognitive ability to see the organization as a whole system and the relationships among its parts. ANS: PTS: 1 DIF: 2 REF: 10 NAT: AACSB Reflective Thinking | Leadership Principles TYP: F 23. Only the top managers in organizations need conceptual skills since it involves planning. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

10

24. A manager's ability to work with and through other people and to work effectively as a group member is called human skills. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

11

25. Technical skills are most important at lower organizational levels while human skills become more important as managers move up the organizational hierarchy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

11

26. Technical skills are utilized in the understanding and proficiency of general tasks. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

11

27. One of the biggest mistakes during turbulent times is managers' failure to comprehend and adapt to the rapid pace of change in the world around them. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

12 TYP: F

28. Managers use conceptual, human, and technical skills to perform the four management functions of planning, organizing, leading, and controlling in all organizations. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

13

29. First-line managers are responsible for setting organizational goals, defining strategies for achieving them, monitoring and interpreting the external environment, and making decisions that affect the entire organization. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

14


30. Middle managers are responsible for setting organizational goals, defining strategies for achieving them, and making decisions that affect the entire organization. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: F

31. Antonio is head of the advertising department at Terrific Tortillas, Inc. He can be described as a general manager. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: A

32. Juan, as a manager, is generally concerned with the near future and is expected to establish good relationships with peers around the organization, encourage teamwork, and resolve conflicts. Juan can be described as a middle manager. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: A

33. Given the significantly reduced importance of the middle manager's jobs in today's workplace, these levels have been eliminated in organizations. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: F

34. First line managers are the managers who have the responsibility for making the significant strategic policy decisions, often with staff managers assisting them in these decisions. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: F

35. Staff managers are responsible for the manufacturing and marketing departments that make or sell the products or services. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: F

36. According to research, managers most enjoy activities such as leading others, networking, and leading innovation. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

16 TYP: F

37. Manager least enjoy activities such as controlling subordinates and managing time pressures. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

16 TYP: F


38. A general manager is responsible for a self-contained division. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

15 TYP: F

39. The individual performer is a generalist and coordinates a broad range of activities. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

17 TYP: F

40. The manager is a specialist and a "doer." ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

17 TYP: F

41. Becoming a successful manager means thinking in terms of building teams and networks, becoming a motivator and organizer within a highly interdependent system of people and work. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

17

42. Manager's Shoptalk in Chapter 1 asks you to consider issues such as the increased workload and the challenge of supervising former peers to help you decide if you really want to become a manager. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

18 TYP: F

43. Managerial activity is often characterized by routine, continuity, and lengthy timeframe. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

19

44. A manager forwards information to other organization members in the disseminator role. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

20-21 TYP: F

45. In the spokesperson role, a manager forwards information to other organization members. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

46. The interpersonal roles performed by managers include figurehead, leader, and liaison.


ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

47. The informational roles that managers perform include monitor, disseminator, and spokesperson. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

48. The monitor role involves the initiation of change. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

49. In the figurehead role, the manager performs ceremonial and symbolic duties. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

50. The disturbance handler role involves the initiation of change, thinking about the future and how to get there. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

51. Fortunately for managers, the disseminator and spokesperson roles are identical. ANS: PTS: 1 DIF: 1 NAT: AACSB Reflective Thinking | HRM

REF:

21 TYP: F

52. Managers in small businesses tend to emphasize roles different from those of managers in large corporations. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

23

53. Not-for-profit organizations, such as The Red Cross and the Girl Scouts, represent a major application of management talent. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

23

54. We might expect managers in nonprofit organizations to place more emphasis on the roles of spokesperson, leader, and resource allocator. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

24 TYP: F


55. Managers in not-for-profit organizations, according to research, should place less emphasis on the roles of spokesperson, leader, and resource allocator. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

24

56. One of the most striking changes affecting organizations and management is technology. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

24 TYP: F

57. In the new workplace, the valued worker is one who learns quickly, shares knowledge, and is comfortable with risk, change, and ambiguity. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

26

58. The primary characteristic of the new workplace is that it is centered on loyal and homogeneous employees. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

26 TYP: F

59. The new workplace is organized around networks rather than rigid hierarchies, and work is often virtual. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

26 TYP: F

60. Organizations are increasingly shifting significant chunks of what were once considered core functions to outsiders via outsourcing, joint ventures, and other complex alliances. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

24 TYP: F

61. In the new workplace, managers should focus on developing teamwork, collaboration, and teamwork. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

26

62. Success in the new workplace depends on the strength and quality of independent employees.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

26

63. Organizations are learning to value stability and efficiency over change and speed because of changes in technology, globalization, and diversity. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Technology | Environmental Influence

24-25 TYP: F

64. Companies can survive over the long run without innovation as long as they are successful imitators. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

4 TYP: F

65. Despite the need for companies to control costs in today’s economy, innovation has become the new imperative. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

5 TYP: F

66. Recognizing the value of employees involves the organizing role of management. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

6 TYP: F

67. Resources such as efficiency and effectiveness are used by managers to attain organizational goals. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

7 TYP: F

68. Allocating resources across the organization is part of the organizing management function. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

7 TYP: F

69. An important phase within the controlling function of management is making corrections when necessary. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

8 TYP: F

70. When an organization is deliberately structured, it is designed to achieve some outcome, such as making a profit. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F


71. By calculating the amount of resources used to produce a single automobile at a manufacturing plant, managers are determining organizational effectiveness. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: A

72. The ultimate responsibility of managers is to achieve high performance by balancing efficiency and effectiveness. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

10 TYP: F

73. The ability to motivate others is considered a technical management skill. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

11 TYP: F

74. The majority of business failures are the result of poor human skills. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

12 TYP: F

75. Facilitating individual employee performance is an important role for top managers. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

13 TYP: F

76. A human resource manager would be considered a staff manager. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

15

77. A project manager is also considered a staff manager because he or she is charged with coordinating people across several departments to accomplish a specific project. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

13-15 TYP: F

78. Most top executives routinely work at least 12 hours a day and spend 50 percent or more of their time traveling. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

19 TYP: F

MULTIPLE CHOICE 1. The nature of management is to cope with ____ and far-reaching challenges. a. simple b. planned


c. diverse d. organized e. controlled ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

3-4 TYP: F

2. Managers, in today's work environment, rely less on ____ and more on ____ leadership. a. coordination and communication; control and command b. autocratic; empowering c. empowerment and innovation; productivity and efficiency d. effectiveness and efficiency; quality and profit e. ethics and social responsibility; profit and cost-savings ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

25 TYP: F

3. Without ____, no company can survive over the long run. a. cost-cutting b. outsourcing c. command-and-control approach d. total quality teamwork e. innovation ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

4 TYP: F

4. One of the important ideas in the text's definition of management is a. the management functions of planning, organizing, leading, and controlling. b. the attainment of societal goals. c. effectiveness is more important than efficiency. d. management is unique to for-profit organizations. e. efficiency is more important than effectiveness. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

6 TYP: F

5. When senior managers at Gap, Inc. decided to become the number one service-quality clothing company in the world, they were engaging in the management function of a. planning. b. organizing. c. leading. d. controlling. e. dreaming.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: A

6. Selecting goals and ways to attain them refers to a. controlling. b. planning. c. organizing. d. staffing. e. leading. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: F

7. Which of these can best describe organizing? a. Assigning responsibility for task accomplishment. b. Using influence to motivate employees. c. Monitoring activities and making corrections. d. Selecting goals and ways to attain them. e. None of these. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: F

8. Which of the following is not a function of management? a. Plan b. Control c. Organize d. Lead e. Performance ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: F

9. How an organization goes about accomplishing a plan is a key part of the management function of a. planning. b. organizing. c. leading. d. controlling. e. motivating. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: F

10. When Terry Doyle of CommuniCom, Inc. created smaller, more independent maintenance units, he was performing the function of a. controlling. b. human relations skills. c. leading. d. organizing. e. resourcing.


ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

7 TYP: A

11. Using influence to motivate employees describes which of these functions? a. Controlling b. Planning c. Leading d. Monitoring e. Organizing ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

12. Which of these is the use of influence to motivate employees to achieve organizational goals? a. Leading b. Controlling c. Organizing d. Planning e. Staffing ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

13. Amanda Rowley, President of Autos-R-Us, recognizes the factory employees for their outstanding performance at the monthly awards banquet on the shop floor by presenting a plaque and a check for $100. She is engaging in the management function of a. bribery. b. organizing. c. technical skills. d. leading. e. controlling. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: A

14. Monitoring activities and making corrections are part of a. organizing. b. planning. c. leading. d. staffing. e. controlling. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

15. Tool Techies, Inc. uses phone surveys of customers to gather information about service and quality. This is an example of the management function of a. planning. b. technical skills. c. organizing.


d. controlling. e. conceptual skills. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: A

16. ____ is the management function concerned with monitoring employees' activities, keeping the organization on track toward its goals, and making corrections as needed. a. Planning b. Resource allocation c. Controlling d. Organizing e. Efficiency ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: F

17. When Troy measures his employees' performance and compares their performance against the goals he set for them, he is performing which of these functions? a. Staffing b. Leading c. Organizing d. Controlling e. Planning ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

8 TYP: A

18. A social entity that is goal directed and deliberately structured is referred to as a(n) a. organization. b. management. c. employee. d. student. e. task. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

19. The degree to which an organization achieves a stated goal refers to a. effectiveness. b. synergy. c. conceptual skill. d. efficiency. e. human skill.


ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

20. Which of the following refers to the amount of resources used to achieve an organization's goal? a. Effectiveness b. Synergy c. Performance d. Efficiency e. Management ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: F

21. For a widget manufacturing company, worker-hours per widget is a measure of a. organizational effectiveness. b. organizational performance. c. organizational efficiency. d. organizational structure. e. none of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

9 TYP: A

22. Conceptual, human, and technical skills are important to which managerial level? a. Top managers b. Middle managers c. First-line managers d. Non managers e. All of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

10

23. ____ skills is the cognitive ability to see the organization as a whole and the relationship among its parts. a. Human b. Resource allocation c. Conceptual d. Negotiation e. Technical ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

10

24. Juan Perez is the President of WV Railroad. His organization faces issues related to the environment, government regulation, and competition. He will need to rely primarily on his a. conceptual skills. b. technical skills. c. human skills. d. controlling skills.


e. interpersonal skills. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

3 REF: TYP: A

10

25. ____ are most important at the top management level. a. Conceptual skills b. Human skills c. Technical skills d. Project skills e. All of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

10

26. A manager's ____ skill is demonstrated in the way a manager relates to other people. a. conceptual b. human c. technical d. leading e. controlling ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

11

27. Which of the following skill is the manager's ability to work with and through other people and to work effectively as a group member? a. Human b. Conceptual c. Technical d. Intellectual e. Planning ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

11

28. Which skills include specialized knowledge and analytical ability? a. Conceptual b. Human c. Technical d. Controlling e. Planning ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

11

29. 1Which of the following are most important at lower organizational levels? a. Planning skills b. Human skills c. Conceptual skills d. Technical skills e. None of these


ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

11

30. Organizations often lose good employees because front-line managers fail to ____. a. give direction b. offer challenge c. show respect d. show recognition e. listen to new ideas ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

11

31. ____ is the understanding of and proficiency in the performance of specific tasks. a. Human skill b. Conceptual skill c. Interpersonal skill d. Technical skill e. Leadership skill ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

1 REF: TYP: F

11

32. The biggest mistake that many manager's make is the failure to ____. a. clarify direction b. communicate effectively c. display compassion to employees d. create employee recognition programs e. focus on productivity ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

12 TYP: F

33. Critical management missteps include: a. poor communication skills b. reactionary behavior c. inability to build a team d. failure to adapt e. all of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

12 TYP: F

34. According to the text, what are the skills used by managers when performing the four functions of management? a. Conceptual, interpersonal, and organizational b. Functional, problem-solving, and technical c. Analytical, interpersonal, and financial d. Conceptual, human, and technical e. Communication, strategic, and innovative


ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

13

35. Which of the following are responsible for the entire organization? a. Top managers b. Middle managers c. First-line managers d. Controlling managers e. Organizing managers ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

14 TYP: F

36. What is the main concern of first-level managers? a. Monitoring the external environment and determining the best strategy to be competitive b. Putting top management plans into action across the organization c. Allocating resources and coordinating teams d. Linking groups of people e. Facilitating individual performance ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

13

37. The most important responsibilities for ____ managers include communicating a shared vision for the organization and shaping corporate culture. a. top b. middle c. first-line d. leading e. organizing ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

14 TYP: F

38. Marley is the executive director of the local Community for Critters. Her level in the management hierarchy is that of a(n) a. first-line manager. b. middle manager. c. top manager. d. consultant. e. operative. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: A

39. Consider the following three managers from Outrageous Outfitters, Inc. Tiffany Blanchard is the president, Timothy Thompson is the director of marketing, and Karen Baxter is a maintenance supervisor. Which of the following statements is true? a. Karen Baxter does more planning than Tiffany Blanchard. b. Timothy Thompson does more leading than Karen Baxter. c. Tiffany Blanchard does more controlling than Timothy Thompson.


d. Tiffany Blanchard does more planning than Karen Baxter. e. None of these. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

13 TYP: A

40. Donna Hyde is the head of the finance department at Muumuu Manufacturing, Inc. Her level in the management hierarchy is that of a(n) a. first-line manager. b. middle manager. c. top manager. d. chief executive officer. e. operative. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: A

41. Patty Rohrer is the director of human resources at Pet Grooming, Inc. She can be best described as a a. top level manager. b. project manager. c. general manager. d. first-line manager. e. functional manager. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: A

42. ____ managers are responsible for departments that perform a single functional task and have employees with similar training and skills. a. Top b. Middle c. First-line d. Bottom e. Functional ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: F

43. Today's middle manager is responsible for creating a ____ rather than managing the flow of information up and down the hierarchy. a. vertical chain b. horizontal network c. diagonal system of communication d. spiral network e. chaos-based evaluation system


ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: F

44. Kyle Erckard, manager of the jewelry division of a major dept. store, coordinated the work of several people across several departments to accomplish a $500,000 fundraising for an animal shelter. He can best be described in his fundraising activities as a(n) a. top manager. b. middle manager. c. project manager. d. first-line manager. e. operative. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: A

45. Which of the following best describes Terrance's position as a project manager? a. He is responsible for several departments that perform different functions. b. He is required to have significant human skills. c. He is responsible for self-contained division and all the departments within it. d. He supervises employees with similar training and skills. e. All of these. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: A

46. Temporary management professionals responsible for a temporary work project that involves the participation of people from various functions and levels of the organization are called ____. a. middle managers b. project managers c. interim managers d. first line managers e. functional managers ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: F

47. Calvin Strine is the office manager of a local accounting firm. His level in the management hierarchy is that of a(n) a. first-line manager. b. middle manager. c. top manager. d. consultant. e. operative.


ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: A

48. Which of the following best describes Stacey's position as a functional manager? a. She is responsible for several departments that perform different functions. b. She organizes people across departments to perform a specific task. c. She is responsible for a self-contained division and all the departments within it. d. She supervises employees with similar training and skills. e. None of these. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: A

49. Which of these managers are responsible for the manufacturing and marketing departments that make or sell the product or service? a. Top b. Line c. First-line d. Staff e. Project ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: F

50. Which of these managers are in charge of departments such as finance and HR that support line departments? a. Line b. Project c. Top d. Operatives e. Staff ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: F

51. ____ are responsible for departments that perform a single task and have employees with similar training skills. a. Top managers b. Middle managers c. General managers d. Functional managers e. First-Line managers ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

14 TYP: F


52. Taylor Brittingham is a general manager. Which of the following best describes her position? a. She is responsible for several departments that perform different functions. b. She organizes people across departments to perform a specific task. c. She is responsible for one specific department (e.g., marketing). d. She supervises employees with similar training and skills. e. None of these ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

15 TYP: A

53. One of the things managers enjoy doing the most is: a. financial planning b. controlling activities c. planning for future decisions d. leading others e. hiring new employees ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

15 TYP: F

54. Research shows that managers enjoy all of the following except: a. networking b. innovation c. leading others d. managing time e. all of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

15 TYP: F

55. Of all management duties, one of the things managers like the least is: a. financial planning b. controlling activities c. planning for future decisions d. handling paperwork e. networking ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

15 TYP: F

56. The individual performer is a(n) ____; whereas, the manager has to be a(n) ____. a. specialist; generalist b. "leader"; doer c. generalist; specialist d. producer; expert e. communicator; operator ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

17 TYP: F


57. The individual identity includes which of the following? a. Generalist, coordinates diverse tasks b. Gets things done through others c. Works relatively independently d. A network builder e. Works in highly interdependent manner ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

17 TYP: F

58. Which of the following includes the manager identity? a. Specialist, performs specific tasks b. Gets things done through own efforts c. An individual actor d. A network builder e. Works relatively independently ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

17 TYP: F

59. Being a successful manager means thinking in terms of all of the following, except: a. building teams. b. generating the most profit. c. becoming a motivator. d. becoming an organizer. e. establishing networks. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

17 TYP: F

60. Manager's Shoptalk in Chapter 1 outlines all of the following issues would-be managers should consider except: a. The increased workload b. The challenge of supervising former peers c. The headache of responsibility for other people d. Being caught in the middle e. The technical aspects of management ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

19 TYP: F

61. According to the Manager’s Shoptalk in Chapter 1, before becoming a manager, would-be managers should consider which of the following: a. time for the increased workload b. challenge of supervising former peers c. the responsibility of managing others d. being caught in the middle e. all of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

19 TYP: F


62. Managers shift gears quickly and therefore, the average time spent on any one activity is less than ____. a. nine minutes b. an hour c. one workday d. a half hour e. a half day ANS: PTS: 1 DIF: 3 NAT: AACSB Reflective Thinking | HRM

REF:

19 TYP: F

63. Which of the following is not one of the conceptual categories of managerial roles Mintzberg defined? a. informational b. interpersonal c. decisional d. intrapersonal e. all of these are managerial roles defined by Mintzberg ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

64. Which of the following is an informational role, according to Mintzberg? a. Entrepreneur role b. Leader role c. Monitor role d. Disturbance handler role e. Figurehead role ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

65. Gail Griffith, manager of the finance division, distributes relevant information everyday to all her employees enabling them to make quality decisions. Gail is performing which of the following roles? a. Monitor role b. Disseminator role c. Spokesperson role d. Disturbance handler role e. Figurehead role ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: A

66. The president of Pepsi Company is the keynote speaker at a retirement dinner for a long time bottler. This is an example of which of the following roles? a. Liaison role b. Figurehead role c. Negotiator role d. Leader role e. Monitor role


ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

20 TYP: A

67. According to Mintzberg, when Amanda attends a subordinate's wedding she is performing which of these roles? a. Monitoring b. Figurehead c. Spokesperson d. Leader e. Liaison ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

20 TYP: A

68. If Bradley Hak is responsible for maintaining information links both inside and outside organizations by using mail, phone calls, and conducting meetings as daily activities, he would be considered a a. figurehead. b. liaison. c. negotiator. d. monitor. e. spokesperson. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

20 TYP: A

69. Which of the following is not a decisional role? a. Entrepreneur b. Negotiator c. Resource allocator d. Disturbance handler e. Liaison ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

70. The ____ role involves resolving conflicts among subordinates between the managers department and other departments. a. resource allocator b. entrepreneur c. negotiator d. liaison e. disturbance handler ANS: PTS:

1

DIF:

2

REF:

21


NAT: AACSB Analytic | Leadership Principles

TYP: F

71. According to Mintzberg, which of these is an interpersonal role? a. Monitor b. Negotiator c. Liaison d. Disturbance handler e. Spokesperson ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

72. Maintaining information links are the activities consistent with the ____ role. a. leader b. spokesperson c. monitor d. liaison e. entrepreneur ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

73. Which of the following roles involve bargaining with others to meet the unit or departmental goals? a. Negotiator b. Resource allocator c. Figurehead d. Monitor e. Leader ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

74. If a manager finds a severe decline in employee morale and direction, they may need to spend more time in the ____ role. a. negotiator b. resource allocator c. figurehead d. monitor e. leader ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

22 TYP: F

75. What is the role of the liaison? a. The liaison role pertains to decisions about how to allocate people, time, equipment, money, and other resources to attain desired outcomes. b. The liaison role involves the initiation of change. c. The liaison role pertains to the development of information sources both inside and outside the organization. d. The liaison role involves handling ceremonial and symbolic activities for the department or organization.


e. The liaison role involves formal negotiations and bargaining to attain outcomes for the manager's unit of responsibility. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

76. What is the role of the negotiator? a. The negotiator role involves formal negotiations and bargaining to attain outcomes for the manager's unit of responsibility. b. The negotiator role involves seeking current information from many sources. c. The negotiator role involves the initiation of change. d. The negotiator role involves resolving conflicts among subordinates or between the manager's department and other departments. e. The negotiator role pertains to the development of information sources both inside and outside the organization. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

21 TYP: F

77. If a manager finds several new competitors on the horizon, they may need to spend more time in the which role? a. Negotiator b. Resource allocator c. Figurehead d. Monitor e. Leader ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

22 TYP: F

78. To meet the needs of the organization, all managers carry out the three major categories of roles. They are: ____, ____, and ____ roles. a. monitor, figurehead, and liaison b. leader, monitor, and spokesperson c. disseminator, entrepreneurial, disturbance handler d. decisional, spokesperson, and leader e. informational, interpersonal, and decisional ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

20 TYP: F

79. Since not-for-profit organizations do not have a conventional ____, managers may struggle with the question of what constitutes results and effectiveness. a. hierarchy b. bottom line c. information system d. decision-making process e. structure ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

24


80. A manager in for-profit business focuses primarily on ____, while a manager of a non-profit focuses on ____. a. the bottom-line, employee morale b. the bottom-line, social impact c. profitability, customer satisfaction d. market share, the bottom-line e. customer satisfaction, organization reputation ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

23-24 TYP: F

81. One of the roles that a small business manager may emphasize over their counterpart in a large organization is ____. a. information processing b. spokesperson c. liaison d. resource allocator e. leader ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

23 TYP: F

82. In the new workplace, work is ____, in contrast to the old workplace where work was ____. a. flexible; diverse b. mechanical; flexible c. flexible; structured d. autocratic; structured e. calm; flexible ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

25 TYP: F

83. The benefits of using interim managers include: a. an organization's use of specialist skills b. no long-term commitment for the organization c. the manager has some flexibility d. the manager faces new and interesting challenges e. all of these ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

26 TYP: F

84. ____ is not a force affecting transition from the old workplace to the new workplace.. a. Focus b. Insourcing c. Workforce d. Technology e. Pace ANS: PTS:

1

DIF:

3

REF:

25


NAT: AACSB Analytic | Leadership Principles

TYP: F

85. Success in the new workplace depends on the strength and quality of ____. a. individual workers b. independent teams c. followers d. collaborative relationships e. vendors ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

26

86. __________ has become the new imperative, despite the need for companies to control costs in today’s economy. a. Technology b. Outsourcing c. Innovation d. Communication e. Delegation ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

5 TYP: F

87. With its “community of interest” in a pre-Facebook era, the Grateful Dead band’s ability to ________ is a principle factor for its success over several decades. a. innovate b. communicate c. generate revenue d. compete e. monitor ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

5 TYP: F

88. Regina, owner and operator of a small restaurant, believes that her most important task as manager is establishing goals for the restaurant and deciding what must be done to achieve them. This involves which aspect of what managers do? a. Organizing b. Motivating and communicating c. Measuring d. Developing people e. Setting objectives ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

6 TYP: A


89. Which of the following is a function of management? a. Human resources b. Raw materials c. Efficiency d. Planning e. Effectiveness ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

7 TYP: F

90. Robert, a top-level manager at an advertising agency, spends a significant part of his work day identifying goals for future organizational performance and deciding how to use resources to attain these goals. This involves which management function? a. Controlling b. Leading c. Organizing d. Planning e. Delegating ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

7 TYP: A

91. Problems within the finance industry in 2008 have been attributed to a breakdown in which managerial function? a. Controlling b. Leading c. Organizing d. Planning e. Delegating ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

8 TYP: F

92. By definition, an organization is considered ___________ because it is made up of two or more people. a. efficient b. a social entity c. effective d. goal-directed e. deliberately structured ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

9 TYP: F

93. Jessica was recently praised by her supervisor for displaying superior customer service during an encounter with a problem customer. This is an example of organizational:


a. b. c. d. e.

information processing efficiency effectiveness structure goal-setting

ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Operations Management

9 TYP: A

94. Stefan, a supermarket cashier, recently received an award for having the highest scan rate among all cashiers. This is an example of organizational: a. performance b. efficiency c. effectiveness d. structure e. goal-setting ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Operations Management

9 TYP: A

95. Within her role as a small business consultant, Alexa analyzes how organizations fit into their industries, the communities, and the broader social environment. This type of analysis involves which management skill? a. Organizing b. Technical c. Human d. Conceptual e. Delegation ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

10 TYP: A

96. Sabrina recently helped her subordinates at work resolve an interpersonal conflict by listening to the problem and serving as a mediator. This is an example of use of which management skill? a. Human b. Strategic c. Technical d. Conceptual e. Analytical ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

11 TYP: A

97. Sally is vice president of administration at a large non-profit charity for animals. She most likely falls within which management level? a. CEO


b. c. d. e.

Line employee Staff manager Top manager Middle manager

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

13 TYP: A

98. Shyloh is a research analyst who gets things done mostly through her own efforts, relying on herself rather than others. Shyloh can best be described as a(n): a. First-line manager b. Middle manager c. Individual performer d. Top manager e. Functional manager ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

17 TYP: A

CASE Scenario - Barry Miller The promotion to first line manager took place just six weeks ago for Barry Miller. He was well qualified for the promotion, but the new job still required a lot of training. One of the challenges has been to coordinate the production of his team with the needs of the sales department and with the availability of raw materials from his suppliers. Setting priorities and developing schedules to accomplish the work is a part of Barry's job that he has really enjoyed. The challenges to maintain high rapport and to build a strong team with his employees have already brought him a lot of satisfaction. In reflecting about the last six weeks, Barry concludes that he is very happy about his new job.

1. In his job, Barry needs to a. plan. b. organize. c. lead. d. control. e. all of these. ANS: PTS: 1 DIF: 2 REF: 6 NAT: AACSB Analytic | Leadership Principles Questions

KEY: Scenario


TYP: A 2. The managerial skill that is least important at Barry's middle-level management position is a. conceptual. b. human. c. technical. d. all of these skills are vital. e. none of these skills are important. ANS: PTS: 1 DIF: 2 REF: 11 NAT: AACSB Analytic | Leadership Principles Questions TYP: A

KEY: Scenario

3. By maintaining information links, Barry Miller was exhibiting the interpersonal role of a. figurehead. b. leader. c. liaison. d. monitor. e. spokesperson. ANS: PTS: 1 DIF: 2 HRM KEY: Scenario Questions

REF: 21

NAT: AACSB Analytic |

TYP: A

4. With setting priorities and setting schedules, Barry was participating in the decisional role of a. entrepreneur. b. disturbance handler. c. disseminator. d. resource allocator. e. monitor. ANS: PTS: 1 DIF: 2 HRM KEY: Scenario Questions

REF: 21

NAT: AACSB Analytic |

TYP: A

COMPLETION 1. The nature of management is to cope with ____________________ and far-reaching challenges.


ANS: 2. ____________________ is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources. ANS: 3. ____________________ is concerned with defining goals for future organizational performance. ANS: 4. ____________________ involves assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization. ANS: 5. The management function that involves the use of influence to motivate employees to achieve the organization's goals is referred to as ____________________. ANS: 6. ____________________ is the management function concerned with monitoring employees' activities, keeping the organization on track toward its goals, and making corrections as needed. ANS: 7. A social entity that is goal directed and deliberately structured is called a(n) ____________________. ANS: 8. The degree to which the organization achieves a stated goal is called ____________________. ANS: 9. Organizational ____________________ refers to the amount of resources used to achieve an organizational goal. ANS: 10. ____________________ skills refers to the cognitive ability to see the organization as a whole and the relationship among its parts. ANS:


11. Conceptual skills are especially important for ____________________ managers. ANS: 12. ____________________ skills refers to the manager's ability to work with and through other people and to work effectively as a group member. ANS:

13. ____________________ skills refers to the understanding and proficiency in the performance of specific tasks. ANS: 14. Department heads and division managers are examples of ____________________ managers. ANS: 15. ____________________ managers are directly responsible for the production of goods and services. ANS: 16. A(n) ____________________ is responsible for a temporary work project that involves the participation of people from various functions and levels of the organization, and perhaps from outside the company as well. ANS: 17. ____________________ are responsible for departments that perform a single functional task and have employees with similar training and skills. ANS: 18. ____________________ are responsible for several departments that perform different functions. ANS:

19. The individual performer is a(n) ____________________; whereas, the manager has to be a(n) ____________________.


ANS: 20. In the ____________________ role, managers seek and receive information, scan periodicals and reports, and maintain personal contacts. ANS: 21. In the ____________________ role, managers initiate improvement projects, identify new ideas, and delegate idea responsibility to others. ANS: 22. A(n) ____________________ would be responsible for performing ceremonial and symbolic duties such as greeting visitors and signing legal documents. ANS: 23. The ____________________ role involves deciding who gets what resources. ANS: 24. If a manager finds several new competitors on the horizon, he or she may need to spend more time in the ____________________ role. ANS:

25. One of the roles that a small business owner may emphasize over their counterpart in a large organization is that of a ____________________. ANS: SHORT ANSWER 1. List five of Mintzberg's ten managerial roles. ANS: 2. Identify the four functions of management. ANS: 3. List the three management skills necessary to perform effectively in organizations. ANS: ESSAY


1. Define management and describe two important ideas expressed in the definition. ANS: 2. Describe the four management functions. ANS: PTS: 1 DIF: 2 REF: 7 NAT: AACSB Analytic | Leadership Principles

TYP: F

3. Describe the skills necessary for performing a manager's job. Provide examples of each. ANS: 4. Why are conceptual skills most important for top managers? ANS: 5. Briefly discuss the relationship between management skills and management level. ANS:

6. What are technical skills? At what level are they most important and why? ANS: 7. Describe the three categories of managerial roles and explain how do they differ. ANS: 8. How do small business managers emphasize different management roles in comparison to larger business managers? ANS: 9. Identify and explain the change that has affected organizations and management the most. ANS:


Chapter 2—The Evolution of Management Thinking TRUE/FALSE 1. A historical perspective provides a narrower way of thinking, a way of searching for patterns and determining whether they recur across time periods. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

34 TYP: F

2. Studying history is a way to achieve strategic thinking, see the big picture, and improve conceptual skills. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

34

3. Social forces refer to those aspects of a culture that guide and influence relationships among people. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

4. Political forces are aspects of a culture that guide and influence relationships among people. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

5. Economic forces pertain to the availability, production, and distribution of resources in a society. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

6. In the Manager's Shoptalk of chapter 2, benchmarking and six sigma are the top two contemporary management tools. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

52 TYP: F

7. The technology-driven workplace is the most current management perspective. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

35 TYP: F


8. The early study of management as we know it today began with what is now called the technology-driven workplace. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Technology | Information Technologies

35 TYP: F

9. The classical perspective on management emerged during the early eighteenth century. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

35 TYP: F

10. A bar graph that measures planned and completed work along each stage of production by time elapsed is called a Gantt chart. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

36 TYP: F

11. The humanistic perspective contains three subfields: scientific management, bureaucratic organizations, and administrative principles. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

36

12. One of the criticisms of scientific management is it did not acknowledge variance among individuals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

37

13. Frederick W. Taylor developed Scientific Management and emphasized the fourteen principles of management that should guide managerial behavior. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

37 TYP: F

14. Taylor was awarded the title of "father of scientific management" since he was the sole contributor in the area of scientific management. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

15. Standardization of work and wage incentives are characteristics of behavioral science. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

37

16. Scientific management developed a standard method for performing each job. ANS: PTS:

1

DIF:

1

REF:

37


NAT: AACSB Analytic | Leadership Principles

TYP: F

17. With clear definitions of authority and responsibility, division of labor is one of the six characteristics of the ideal bureaucracy. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

38 TYP: F

18. Administrative acts and decisions recorded in writing is one of the six characteristics of the ideal bureaucracy. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

38 TYP: F

19. One of the important reasons for the success of UPS is the concept of bureaucracy. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

20. Fayol's unity of direction principle emphasizes that each subordinate receives orders from one, and only one superior. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

21. Unity of direction principle proposes that similar activities in an organization should be grouped together under one manager. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

22. The scalar chain is a hypothetical chain that provides horizontal links between unionized workers in different departments in an organization. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

23. Scientific management focuses on employee competence, whereas administrative principles focus on work flow through the organization. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

24. Follett and Barnard were early advocates of a more humanistic perspective on management that emphasized the importance of understanding human behavior, needs, and attitudes in the workplace as well as social interactions and group processes. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

40 TYP: F


25. Unfortunately, Mary Parker Follett's approach to leadership stressed the importance of engineering techniques rather than people. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

40 TYP: F

26. A social group within an organization is part of the informal organization. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

41 TYP: F

27. Most early interpretations of the Hawthorne studies agreed that money was the cause of the increased output. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

42 TYP: F

28. The Hawthorne studies led to the early conclusion that positive human relations can lead to significantly higher performance. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Motivation Concepts

42 TYP: F

29. The scientific management perspective refers to the management thinking and practice that emphasizes satisfaction of employees' basic needs as the key to increased worker productivity. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

45

30. Maslow's hierarchy of needs started with belongingness, progressed to safety, and finally led to esteem. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: F

31. According to Douglas McGregor, Theory X and Theory Y provide two opposing views of workers, where Theory X recognizes that workers enjoy achievement and responsibility, while Theory Y recognizes that workers will avoid work whenever possible. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: F

32. Maslow's hierarchy of needs started with safety needs. ANS: PTS:

1

DIF:

1

REF:

44


NAT: AACSB Analytic | HRM

TYP: F

33. Theory Y proposes that organizations can take advantage of the imagination and intellect of all of their employees. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: F

34. Organization development is a specific set of management techniques based in the behavioral science approach. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

45 TYP: F

35. The behavioral science approach develops theories about human behavior based on scientific methods and study. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

44 TYP: F

36. The field of management that specializes in the physical production of goods or services refers to operations management. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Operations Management

46 TYP: F

37. Operations management represents the field of management that specializes in the physical production of goods and services. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Operations Management

46 TYP: F

38. The management science perspective emerged after World War II to treat problems associated with improving manufacturing. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

46 TYP: F

39. When the shop foreman receives and rewards valuable suggestions from its workers, and this leads to continual improvement of production, synergy has occurred. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

48 TYP: A

40. Contingency theory suggests that managers are more successful if they learn the best way to manage and motivate their employees, and then apply this knowledge in a universally consistent way.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: A

41. A contingency view perceives every situation as unique. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

49

42. The inherent focus of TQM is on managing the total organization to deliver quality to the customer. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

49 TYP: F

43. Benchmarking involves finding out what the customer wants. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

49-50 TYP: F

44. The implementation of small, incremental improvements in all areas of the organization on an ongoing basis refers to continuous improvement. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

50 TYP: F

45. Supply chain management refers to the sequence of suppliers and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to consumers. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

50 TYP: F

46. The sequence of suppliers and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to consumers refers to CRM. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

53 TYP: F

47. Customer relationship management systems collect and manage large amounts of data about customers and make them available to employees. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Technology | Creation of Value

53 TYP: F

48. A supply chain is a network of multiple businesses and individuals that are connected through the flow of products or services. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

54 TYP: F


49. Outsourcing refers to contracting out selected functions or activities to other organizations that can do the work more cost-efficiently. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

53 TYP: F

50. A process whereby companies find out how others do something better than they do and then try to imitate or improve on it refers to outsourcing. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

53 TYP: F

51. Kaizen refers to an innovation mindset, used widely by Indian companies, that strives to meet customers’ immediate needs quickly and inexpensively. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

33 TYP: F

52. The changing attitudes, ideas, and values of Generation Y employees is an example of a social force. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

34 TYP: F

53. Scientific management evolved with the use of precise procedures in place of tradition and rules of thumb. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

36 TYP: F

54. A criticism of human relations management is that it ignores the social context and workers’ needs. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

37 TYP: F

55. The acceptance theory of authority states that people have free will and can choose whether to follow management orders. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

41 TYP: F

56. The Hawthorne studies resulted in the movement towards scientific management. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

41 TYP: F


57. The human relations movement is also referred to as the dairy farm view of management, meaning that contented cows give more milk, and satisfied workers will give more work. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

42 TYP: F

58. An assumption of Theory Y is that the average human being has an inherent dislike of work and will avoid it if possible. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Motivation Concepts

45 TYP: F

59. The management science approach uses qualitative data in management decision making. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Operations Management

46 TYP: F

60. Information technology is the most recent subfield of the quantitative perspective. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

46 TYP: F

61. The term “quants� refers to financial managers and others who base their decisions on complex quantitative analysis, under assumption that using advanced mathematics and technology can accurately predict how the market works. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

47 TYP: F

62. Contingency thinking is the ability to see both the distinct elements of a system or situation and the complex and changing interaction among those elements. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

47 TYP: F

63. Discerning circles of causality is an important element of systems thinking. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

48 TYP: F

64. Although developed by a Japanese business manager, the quality movement is strongly associated with American companies. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

49 TYP: F

65. Research shows that during difficult times in the business environment, managers are less likely to look for fresh ideas than they would during good times.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

51 TYP: F

MULTIPLE CHOICE 1. A(n) ____ perspective provides a broader way of thinking, a way of searching for patterns and determining whether they recur across time periods. a. analytical b. futuristic c. systematic d. methodical e. historical ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

2. ____ forces refer to those aspects of a culture that guide and influence relationships among people. a. Social b. Political c. Economic d. Technological e. Legal ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

3. Which of these forces comprises unwritten, common rules and perceptions about relationships? a. Economic forces b. Political forces c. Social forces d. Legal forces e. Personal forces ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

4. Which of these forces pertain to the availability, production, and distribution of resources in a society? a. Social b. Political


c. Economic d. Technological e. Legal ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: F

5. Strong anti-American sentiments in many parts of the world exemplify the effect of a. economic forces. b. political forces. c. demographic forces. d. technological forces. e. human relations forces. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

34 TYP: A

6. According to the Manager's Shoptalk of chapter 2, which of the following is not in the top five contemporary management tools? a. Collaborative innovation b. Mission and vision statements c. Benchmarking d. Strategic planning e. Customer relationship management ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

3 REF: TYP: F

52

7. According to the Manager's Shoptalk of chapter 2, Indian executives are more likely to use tools such as a. customer segmentation and business process reengineering. b. consumer ethnography and corporate blogs. c. strategic alliances and collaborative innovation. d. activity-based management and virtual teams. e. scenario planning and lean operations. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: F

52

8. ____ is the most current management perspective. a. Total quality management b. Contingency views c. Systems theory d. Open (collaborative) innovation e. Classical perspective ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

35 TYP: F

9. The nineteenth and early twentieth centuries saw the development of which management perspective?


a. b. c. d. e.

The human relations movement The behavioral sciences approach The classical perspective The quantitative management approach The TQM approach

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

35 TYP: F

10. Which of these perspectives emphasized a rational, scientific approach to the study of management and sought to make organizations efficient operating machines? a. The Humanistic Perspective b. The Behavioral Sciences Approach c. The Classical Perspective d. The TQM approach e. The Quantitative Management Approach ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

35-36 TYP: F

11. Which of these is a subfield of the classical management perspective that emphasized scientifically determined changes in management practices as the solution to improving labor productivity? a. The human relations movement b. The behavioral sciences approach c. The TQM approach d. The quantitative management approach e. The scientific management movement ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

12. Frank Gilbreth felt that efficiency equated with ____. a. one best way to do work b. leadership flows from the top down c. procedures and policies d. scientific management e. bureaucracy ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

13. Who is considered the "first lady of management?" a. Mary Parker Follett b. Lillian Gilbreth c. Carly Fiorona d. Maxine Weber e. Anne Adams ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F


14. The three subfields of the classical perspective include a. quantitative management, behavioral science, and administrative management. b. bureaucratic organization, quantitative management, and the human relations movement. c. administrative management, bureaucratic organization, and scientific management. d. scientific management, quantitative management, and administrative management. e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

15. ____ is considered the "father of scientific management." a. Frank B. Gilbreth b. Elton Mayo c. Henry Gantt d. Douglas McGregor e. Frederick W. Taylor ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

16. Which of the following is a bar graph that measures planned and completed work along each stage of production by time elapsed? a. Time and Work chart b. Gantt chart c. Time and Motion chart d. Production and Delivery chart e. Gilbreth chart ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

17. Frederick Taylor's contributions were in the field of a. scientific management. b. human resource management. c. human relations. d. quantitative management. e. total quality management. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

36 TYP: F

18. Which of the following is not a criticism of scientific management? a. It does not appreciate the social context of work. b. It does not appreciate the higher needs of workers. c. It does not appreciate the careful study of tasks and jobs. d. It does not acknowledge variance among individuals. e. It tends to regard workers as uninformed and ignored their ideas and suggestions.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

37 TYP: F

19. Standardization of work and wage incentives are characteristics of a. bureaucratic organizations. b. scientific management. c. quantitative management. d. administrative management. e. behavioral science. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

37 TYP: F

20. Which of these is a major criticism of scientific management? a. It ignored the social context of work. b. It ignored the impact of compensation on performance. c. It overemphasized individual differences. d. It overemphasized the intelligence of workers. e. It emphasized the social context of work. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

37 TYP: F

21. The bureaucratic organizations approach is a subfield within the ____. a. classical perspective b. systems theory c. scientific management d. learning organization e. management science view ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

37 TYP: F

22. According to Weber's ideas on bureaucracy, organizations should be based on which of these? a. Personal loyalty b. Personal references c. Rational authority d. Family ties e. Charismatic authority ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

38 TYP: F

23. Archies' Antiques, Inc., is characterized by separation of management from ownership and by clearly defined lines of authority and responsibility. These characteristics are consistent with the principles of a. scientific management.


b. c. d. e.

bureaucratic organizations. administrative management theory. human resource management. all of these.

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

38 TYP: A

24. All of the following are characteristics of Weberian bureaucracy EXCEPT: a. Labor is divided with clear definitions of authority and responsibility that are legitimized as official duties. b. Positions are organized in a hierarchy of authority, with each position under the authority of a higher one. c. All personnel are selected and promoted based on technical qualifications. d. Administrative acts and decisions are recorded in writing. e. Management is the same as the ownership of the organization. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

38 TYP: F

25. Max Weber felt selection of employees should be based on: a. education b. competence c. connections d. political skills e. efficient systems ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

26. Positions organized in a hierarchy of authority is an important characteristic of a. scientific management. b. bureaucratic organizations. c. quantitative management. d. the human relations movement. e. total quality management. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

27. UPS is successful in the small package delivery market. One important reason for this success is the concept of a. globalization. b. employee flexibility. c. loose standards. d. bureaucracy. e. non-bureaucratic organizational system. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F


28. Whereas scientific management focused on ______ , administrative principles approach focused on the _______. a. individual productivity, total organization b. organization productivity, individual effort c. efficient procedures, management by principle d. employee ability, employee loyalty e. employee competence, work flow through the organization ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

29. Mary Parker Follett contributed to which field? a. Humanistic approach b. Scientific management approach c. Total quality management approach d. Quantitative approach to management e. Systems approach to management ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

40 TYP: F

30. The assembly line is most consistent with which of the following general principles of management? a. Unity of command b. Division of work c. Authority d. Scalar chain e. Quality management ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: A

31. The principle that similar activities in an organization should be grouped together under one manager is the essence of the classical perspective known as a. unity of command. b. division of work. c. unity of direction. d. scalar chain. e. quality management. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

32. The use of specialization to produce more and better work with the same level of effort is consistent with the administrative management principle of a. unity of command. b. unity of direction. c. scalar chain. d. division of work. e. none of these ANS: PTS:

1

DIF:

1

REF:

39


NAT: AACSB Analytic | Leadership Principles

TYP: F

33. The ____ refers to a chain of authority extending from top to the bottom of the organization and including every employee. a. unity of command b. division of labor c. unity of direction d. scalar chain e. None of these ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

39 TYP: F

34. Mary Parker Follett thought of leadership as ____, rather than techniques. a. systems b. top managers c. people d. efficiencies e. floor managers ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

40 TYP: F

35. Chester Bernard felt that ____ could help a poorly managed organization. a. bureaucracy b. line managers c. efficiencies d. informal relations e. top/down flow of information ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

41 TYP: F

36. A social group within an organization is part of the a. formal organizational structure. b. informal organization. c. scalar chain. d. reorganization process. e. top management level. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

41 TYP: F

37. A significant contribution of Chester Barnard was the concept of a. bureaucracy. b. the informal organization. c. total quality management. d. scientific management. e. traditional theory of authority. ANS: PTS:

1

DIF:

1

REF:

41


NAT: AACSB Analytic | Leadership Principles

TYP: F

38. The ____ emphasized the importance of understanding human behaviors, needs, and attitudes in the workplace as well as social interactions and group processes. a. humanistic perspective b. classical perspective c. scientific management d. bureaucratic organizations e. contingency perspective ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

40 TYP: F

39. Which of these refers to the management thinking and practice that emphasizes satisfaction of employees' basic needs as the key to increased worker productivity? a. Scientific management perspective b. Human resource perspective c. Management science perspective d. Behavioral sciences approach e. Human relations movement ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

45 TYP: F

40. Most early interpretations of the Hawthorne studies argued that the factor that best explained increased output was a. money. b. days off. c. human relations. d. lighting. e. free food. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

42 TYP: F

41. The findings provided by the Hawthorne Studies provided the impetus for the ____, despite flawed methodology or inaccurate conclusions. a. classical perspective b. humanistic perspective c. scientific management d. bureaucratic organizations e. contingency perspective ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

42 TYP: F

42. The human resources perspective of management links motivation theories with ____. a. top management b. employee tasks c. floor managers d. efficiencies e. profit maximization


ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

42

43. A "dairy farm" view of management, i.e., contented cows give more milk, so satisfied workers will give more work was espoused by a. human relations management. b. human resource perspective. c. behavioral science approach. d. management science perspective. e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

42 TYP: F

44. Maslow's hierarchy of needs started with which of these needs? a. Esteem b. Love c. Safety d. Physiological e. Belongingness ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: F

45. Tommy believes his employees are responsible, creative, and able to work with minimal direction. He is a a. Theory X manager. b. Theory Y manager. c. Theory Z manager. d. Theory A manager. e. contingency theory manager. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: A

46. Beth Brant, production supervisor at Trustworthy Tools Mfg., Inc. believes that her employees dislike work, avoid responsibility, and therefore they need to be controlled and directed. Beth is a a. Theory X manager. b. Theory Y manager. c. realistic manager. d. Theory Z manager. e. Theory J manager. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: A

47. According to Douglas McGregor, the classical perspective on management is consistent with which of the following? a. Theory X manager b. Theory Y manager


c. Theory Z manager d. Theory A manager e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

44 TYP: F

48. The behavioral sciences approach is based on which of the following disciplines? a. Anthropology b. Economics c. Sociology d. Psychology e. All of these ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

44 TYP: F

49. Organizational development is one specific set of management techniques based in the ____ approach. a. management science b. systems theory c. behavioral sciences d. scientific management e. quantitative ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

45 TYP: F

50. The management science perspective emerged after World War II to treat problems associated with a. modern global warfare. b. environmental issues. c. employee involvement. d. Germany. e. improving manufacturing. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

46 TYP: F

51. The management science perspective applies all of the following to managerial problems EXCEPT a. statistics. b. qualitative techniques. c. mathematics. d. quantitative techniques. e. all of these are correct. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

46 TYP: F

52. Operations research grew out of World War II groups and is based on ____.


a. b. c. d. e.

group dynamics employees in crisis production in turbulent times mathematical equations a humanistic approach

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

46 TYP: F

53. The teamwork philosophy is based in part on the assumption that five people working together can produce more than five people working individually. This philosophy is consistent with the concept of a. transformation. b. entropy. c. synergy. d. feedback. e. quality. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

48 TYP: A

REF:

48 TYP: F

54. 10 + 10 = 25 reflects which of these? a. Entropy b. Synergy c. Open system d. Closed system e. Weberian math ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value 55. In ____ every situation is viewed as unique. a. a universalist view b. a contingency view c. a case view d. scientific management view e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: F

56. It is often difficult to make decisions about subsystems, because they are ____. a. interdependent b. independent c. managed differently d. filled with employees e. organizationally based ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

48 TYP: F


57. In order to determine how to deal with a problem employee, Sharon evaluated the employee, the problem, and the context in which the problem occurred. She is applying which of the following perspectives? a. Participative view b. Universalist view c. Autonomy view d. Contingency view e. Humanist view ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: A

58. A consultant who recommends the effectiveness of sensitivity training to every organization he serves is violating the basics of which of the following perspectives? a. Efficiency perspective b. Universalist perspective c. Contingency perspective d. Scientific management perspective e. Quantitative perspective ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: A

59. Which of the following is often considered the "father of the quality movement?" a. Weber b. Gilbreth c. Follett d. Deming e. Gehrke ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: F

60. ____ focuses on managing the whole organization to deliver quality to customers. a. Bureaucracy b. Theory Z c. Management-by-objective d. Total Quality Management e. Organization-customer relationship ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: F

61. Elements of TQM include a. employee detachment. b. focus on profits. c. benchmarking. d. accidental improvement. e. all of these. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

49 TYP: F


62. ____ is a process whereby companies find out how others do something better than they do and then try to imitate or improve on it. a. TQM b. Continuous improvement c. Benchmarking d. Empowerment e. MBO ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

49- 50 TYP: F

63. The implementation of small incremental improvements in all areas of the organization on an ongoing basis is referred to as a. benchmarking. b. empowerment. c. systems theory. d. contingency perspective. e. continuous improvement. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

50 TYP: F

64. Which of the following refers to managing the sequence of suppliers and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to consumers? a. E-commerce b. E-business c. Supply chain management d. Knowledge management e. Customer relationship management ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Technology | Creation of Value

53 TYP: F

65. Which of the following uses the latest information technology to keep in close touch with customers and to collect and manage large amounts of customer data? a. Supply Chain Management b. Learning Organizations c. Scientific Management d. Customer Relationship Management e. The Humanistic Approach ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Information Technologies

53 TYP: F


66. An innovation mindset that strives to meet customers’ immediate needs quickly and inexpensively is referred to as: a. Kaizen b. Just-in-time control c. Total quality management d. Jugaad e. XY Theory ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

33 TYP: F

67. Jessica is a recent college graduate who is seeking a job that includes telecommuting, shared jobs, flextime, and organization-sponsored sabbaticals. Based on this information, Jessica most likely belongs to which demographic group? a. Baby Boomer b. Generation X c. Generation Y d. Generation Z e. Tweener ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

34 TYP: A

68. Time and motion studies that resulted in drastic reduction in the time patients spent on the operating table were pioneered by: a. Edward Deming b. Henry Gantt c. Max Weber d. Mary Parker Follett e. Frank Gilbreth ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

36 TYP: F

69. Genex Dynamics is a ballistics company that uses the unity of command, scalar chain, and division of work principles. These are part of which management philosophy? a. Administrative principles approach b. Bureaucratic approach c. Scientific management approach d. Humanistic approach e. Behavioral sciences approach ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Operations Management

39 TYP: A


70. Matrix Dress Designs operates using the concept of empowerment, where employees act independently and with management facilitating rather than controlling workers. These qualities represent which management approach? a. Administrative principles approach b. Bureaucratic approach c. Scientific management approach d. Humanistic approach e. Behavioral sciences approach ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Group Dynamics

REF:

41 TYP: A

71. A key finding in the Hawthorne studies was which of these? a. Stronger lighting increased productivity b. More money resulted in increased productivity c. Productivity declined in all experiments d. Higher temperatures reduced productivity e. Human relations increased productivity ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

42 TYP: F

72. Theory X and Theory Y was developed by: a. Douglas McGregor b. Henry Gantt c. Max Weber d. Mary Parker Follett e. Frank Gilbreth ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

44 TYP: F

73. The Forestville Freeze is regionally known for its employee training programs. Managers at the Freeze conduct research to determine the best candidate interviewing techniques. This involves use of which management approach? a. Administrative principles approach b. Bureaucratic approach c. Behavioral sciences approach d. Humanistic approach e. Scientific management approach ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Motivational Concepts

44 TYP: A


74. Within his role as a financial accountant, Roger uses the capital asset pricing model and other mathematical tools to help clients keep track of their finances. Which perspective or approach does Roger apply most at his work? a. Quantitative perspective b. Qualitative perspective c. Humanistic approach d. Behavioral science approach e. Scientific management approach ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

46 TYP: A

75. The most recent subfield of the quantitative perspective is _________, which is reflected in management information systems designed to provide relevant information to managers in a timely and cost-efficient manner. a. Operations research b. Operations management c. Information technology d. Systems thinking e. Infrastructure development ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

46 TYP: F

76. Which of the following refers to financial managers and others who base their decisions on complex quantitative analysis, under assumption that using advanced mathematics and technology can accurately predict how the market works? a. Stems b. Yuppies c. Quals d. Quants e. Fins ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

47 TYP: F

77. From the 1950s until today, which management perspective has remained the most prevalent? a. Systems b. Qualitative c. Scientific management d. Quantitative e. Humanistic ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

47 TYP: F


78. Georgia, an airline CEO, often looks for patterns of movement within the airline industry, focusing on the qualities of rhythm, flow, direction, shape, and networks of relationships. This type of activity, referred to as ________thinking, allows Georgia to see the structures that underlie complex situations within the industry and company. a. systems b. qualitative c. quantitative d. conceptual e. contingency ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

48 TYP: A

79. After decades of being a manager, Jeffrey has learned that an organizational structure that is effective for one company is likely to be ineffective for a different company. This knowledge reflects which current management perspective? a. Systems thinking b. Contingency view c. Total quality management d. Benchmarking e. Scientific management view ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

49 TYP: A

80. __________ specifies a goal of no more than 3.4 defects per million parts. a. Benchmarking b. Total quality management c. Six sigma d. Balanced scorecard e. Jugaad ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

50 TYP: F

81. Which of the following is identified as a recent trend that has staying power? a. Corporate takeovers b. Hedging c. Insourcing d. Relationship management e. Task management ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

51 TYP: F


CASE Scenario - Britney Marr The opportunity to gain a foothold in the snack cracker industry had just been found. Britney Marr, an account executive manager for Baked Wheat Industries had developed an interest in wheat crackers two months ago when one of her newly hired account execs, Amy Bender, had convinced her about the high margins and promising future associated with that market. Marr had always believed that if you do your homework in hiring the best people then it only makes sense to listen to their recommendations and implement their suggestions. Marr had given her approval to Bender to explore opportunities to move into this promising new market. This morning, Bender had reported that the Jackson Corporation had severed its contract with Feel Good Crackers Incorporated. Apparently, the Feel Good salesman had shared sensitive information about Jackson at a cocktail party. Bender had already established a good relationship with Feel Good buyers and so recognized this as an opportunity to expand her market into wheat crackers. 1. Marr's behavior provides an example of a. the use of scalar rope. b. division of organization. c. the principle of inversion. d. unity of direction. e. all of these. ANS: PTS: 1 DIF: 2 REF: 39 NAT: AACSB Analytic | Leadership Principles Questions TYP: A

KEY: Scenario

2. Marr's management style reflects a belief in a. Theory Y. b. developing her employees through control. c. grieving theory. d. all of these. e. none of these. ANS: PTS: 1 DIF: 2 REF: 44 NAT: AACSB Analytic | Leadership Principles Questions TYP: A

KEY: Scenario


3. From a System's theory perspective a. Marr should increase teamwork, leading to more entropy. b. Marr should listen to and reward her people well to increase synergy. c. the Jackson account was lost because Feel Good was too closed to its environment. d. all of these. e. none of these. ANS: PTS: 1 DIF: 2 REF: 48 NAT: AACSB Analytic | Leadership Principles Questions TYP: A

KEY: Scenario

4. Contingency theory recommends a. Marr should manage all of her employees the way she manages Bender. b. the goal of every manager should be high return on investment, so Marr should expand her market only if it increases ROI. c. Bender should focus on her expertise, recognizing the potential risk of failure with a new market. d. all of these. e. none of these. ANS: PTS: 1 DIF: 2 REF: 49 NAT: AACSB Analytic | Leadership Principles Questions TYP: A

KEY: Scenario

COMPLETION 1. A(n) ____________________ perspective provides a broader way of thinking, a way of searching for patterns and determining whether they recur across time periods. ANS: 2. ____________________ refer to the aspects of a culture that guide and influence relationships among people. ANS:


3. ____________________ refer to the influence of political and legal institutions on people and organizations. ANS: 4. ____________________ pertain to the availability, production, and distribution of resources in a society. ANS: 5. A management perspective that emerged during the nineteenth and early twentieth centuries that emphasized a rational, scientific approach to the study of management and sought to make organizations efficient operating machines is called ____________________. ANS: 6. ____________________ is considered the "father of scientific management." ANS: 7. Weber's vision of organizations that would be managed on an impersonal, rational basis is called a(n) ____________________. ANS: 8. A subfield of the classical management perspective that focused on the total organization rather than the individual worker, delineating the management functions of planning, organizing, commanding, coordinating, and controlling is called ____________________. ANS: 9. According to Fayol, similar activities in an organization should be grouped together under one manager. This administrative principle is known as ____________________. ANS: 10. A management perspective that emerged around the late nineteenth century that emphasized understanding human behavior, needs, and attitudes in the workplace is referred to as a(n) ____________________. ANS:


11. A management perspective that suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential is called a(n) ____________________. ANS: 12. Organizational development is one specific set of management techniques based in the ____________________ approach. ANS: 13. A management perspective that emerged after World War II, and applied mathematics, statistics, and other quantitative techniques to managerial problems is referred to as a(n) ____________________. ANS: 14. ____________________ refers to the field of management that specializes in the physical production of goods or services. ANS:

15. The concept that the whole is greater than the sum of its parts is known as ____________________. ANS: 16. The ____________________ view of management is an integration of the case and universalist viewpoints. ANS: 17. The process by which companies find out how others do something better than they do and then try to copy and/or improve it is known as ____________________. ANS: 18. ____________________ refers to the sequence of suppliers and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to consumers. ANS: 19. ____________________ collect and manage large amounts of data about customers and make them available to employees, enabling better decision making and superior customer service. ANS:


20. ____________________ refers to contracting out selected functions or activities to other organizations that can do the work more cost-efficiently. ANS:

SHORT ANSWER 1. List three of the basic ideas of scientific management. ANS: 2. List the three assumptions associated with McGregor's Theory X. ANS: ESSAY 1. The writings of Fayol, Taylor, and Weber provide the foundation for modern management. Identify the school of thought associated with each writer and compare the focus that each writer takes in relation to the organization. ANS: PTS: 1 DIF: 2 REF: 36-39 NAT: AACSB Analytic | Creation of Value

TYP: F

2. Discuss the advantages and disadvantages of Taylor's Scientific Management. ANS:

3. Briefly describe what happened in the Hawthorne Studies and explain the results and conclusions of these studies. ANS: 4. Describe the assumptions behind McGregor's Theory X and Theory Y. How do the theories relate to the classical perspective on management and early human relations ideas? ANS: 5. Briefly describe systems theory, including synergy. ANS:


6. Discuss the differences between the case view, the universalist view, and the contingency view. ANS:

Chapter 3—The Environment and Corporate Culture TRUE/FALSE 1. While Blockbuster has closed hundreds of stores and is likely to file for bankruptcy, Netflix expanded its customer base to over 13 million. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

61 TYP: F

2. Factors external to the organizations have been primarily the focus of management as a discipline. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

3. The general environment and the task environment are the two layers of an organization's external environment. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

4. The outer layer, the general environment, is widely dispersed and affects organizations directly. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

5. To be effective, managers must monitor and respond to the environment -- a closedsystems view. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

6. Customers and competitors are two important sectors of the economic dimension of a firm's general environment. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F


7. Current employees, management, and especially corporate culture are part of an organization's internal environment. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

8. The international dimension of the external environment represents events originating in foreign countries as well as opportunities for U.S. companies in other countries. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

63 TYP: F

9. In recent years, the most dramatic change in the international environment is the shift of economic power to Germany and France. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

63 TYP: F

10. The technological dimension of the external environment includes scientific and technological advancements in a specific industry as well as in society at large. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

63 TYP: F

11. The sociocultural dimension of the general environment includes societal norms and values. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F

12. The international dimension includes scientific and technological advancements in a specific industry as well as in society at large. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

63 TYP: F

13. According to Manager's Shoptalk in Chapter 3, the Chinese concept of guanxi is a supportive, mutually beneficial connection between two people. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

64 TYP: F

14. According to Manager's Shoptalk in chapter 3, one of the rules of doing business in China is remembering that relationships are short-term. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

64 TYP: F


15. Economic problems in other parts of the world have a tremendous impact on U.S. companies. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

65-66 TYP: F

16. The economic dimension of the general environment represents the demographic characteristics. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F

17. The economic dimension of the general environment includes consumer purchasing power. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F

18. An example of part of the legal-political dimension of the general environment is a government's report on the decline of unemployment rate. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

66 TYP: A

19. President Clinton's signing of the telecommunications bill in 1996 deregulating the industry is an example of the legal-political dimension of the general environment. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

66 TYP: F

20. The task environmental dimension includes all elements that occur naturally on earth, including plants, animals, rocks, and natural resources such as air, water, and climate. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

67 TYP: F

21. Customers are the people and organizations in the environment who acquire goods or services from the organization. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

68 TYP: F

22. Recently, there has been strong concern about climate change such as global warming caused by greenhouse gases, most notably carbon dioxide. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

67 TYP: F

23. McDonalds, Burger King, and Checkers are competitors since all three sell fast food to individuals.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: A

24. The raw materials that organizations use to produce its outputs are provided by customers. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: F

25. Other organizations in the same industry or type of business that provide goods or services to the same set of customers are referred to as suppliers. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: F

26. The labor market is made up by people in the environment who can be hired to work for an organization. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: F

27. If Johnson Lumber provides trees for Westvaco Paper Manufacturing, then Johnson Lumber is considered a supplier for Westvaco. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: A

28. Organizations must manage environmental uncertainty to be effective. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

70 TYP: F

29. An organization experiences high uncertainty when internal factors gradually change over time. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

70 TYP: F

30. A merger is an effort to spot trends that enable managers to predict future events. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

72 TYP: F

31. A sales executive for General Motors fills an essential boundary-spanning role. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

72 TYP: A


32. Competitive intelligence professionals are really just in-house snoops who obtain information about other companies. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

33. Competitive intelligence is an approach to boundary spanning which results from using sophisticated software to search through large amounts of internal and external data to spot patterns, trends, and relationships that might be significant. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

72 TYP: F

34. More organizations are requiring all employees to perform boundary-spanning because environmental shifts can happen quickly. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

72-73 TYP: F

35. Given the increasing environmental uncertainty, managers in partnering organizations are shifting from a partnership orientation to an adversarial orientation. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

36. A joint venture involves a strategic alliance or program by two or more organizations. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

74 TYP: F

37. Due to the stable environment and lack of technological change, mergers and joint ventures rarely occur in the U.S. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

74 TYP: F

38. The internal environment within which managers work includes corporate culture, sociocultural aspects, and customers. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

75 TYP: F

39. Culture can be defined as the ability to speak different languages. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

75 TYP: F

40. Physical symbols are associated with the surface level of organizational culture. ANS: PTS:

1

DIF:

2

REF:

75


NAT: AACSB Analytic | Environmental Influence

TYP: F

41. Symbols, stories, heroes, slogans, and ceremonies combine to create an organization's culture. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

76 TYP: F

42. The set of key values, beliefs, and norms, that are shared by members of an organization are combined to create the symbols of an organization. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

43. A symbol is a figure that exemplifies the deeds, character, and attributes of a corporate culture. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

44. A narrative based on rumors within the organization that can lead to destructive results if not carefully controlled by management is called an organizational story. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

45. A phrase or sentence that succinctly expresses a key corporate value is called a story. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

46. The mythical sales representative at Robinson Jewelers who delivered a wedding ring directly to the church because the ring had been ordered late is an example of a hero. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

47. A slogan is a phrase or sentence that succinctly expresses a key corporate value. ANS: PTS: 1 DIF: NAT: AACSB Analytic | HRM

2 REF: TYP: F

77

48. A ceremony is a planned activity at a special event that is conducted for the benefit of an audience. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Motivation Concepts

77 TYP: F


49. In adaptive cultures, managers are concerned with customers and processes that bring about useful change. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

78 TYP: F

50. The achievement culture emerges in an environment that requires fast response and high-risk decision-making. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

79 TYP: F

51. An achievement culture is found in an environment that is dynamic and requires highrisk decision-making. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

52. The involvement culture is suited to organizations that are concerned with serving specific customers in the external environment but without the intense need for flexibility and rapid change. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

53. A results-oriented culture that values competitiveness, aggressiveness, personal initiative, and willingness to work long and hard to achieve results is called the achievement culture. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

54. The bureaucratic culture has an external focus and a consistency orientation for a dynamic environment. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

55. Corporate culture plays a key role in creating an organizational climate that enables learning and innovative responses to threats from the external environment, challenging new opportunities, or organizational crises. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

81-82 TYP: F

56. When an organization pays little attention to either cultural values or business results, it is unlikely to survive for long. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

82 TYP: F


57. When an organization pays little attention to cultural values and instead focuses on business results, success will be difficult to sustain in the long run. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

82 TYP: F

58. Success will be difficult to sustain in the long run when an organization puts emphasis on both cultural values and business results. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

82 TYP: F

59. In a high performance culture, organizations put high emphasis on both culture and solid business performance as drivers of organizational success. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

82 TYP: F

60. A cultural leader defines and uses signals and symbols to influence corporate culture. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

84 TYP: F

61. The cultural leader articulates a vision for the organizational culture that employees can believe in and that generates excitement. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

84 TYP: F

62. Employees of an organization are considered part of the general environment. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

63. In China, business tends to be more personal. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

64 TYP: F

64. It is expected that the Hispanic population in the United States will shrink slightly over the next 30 years. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F


65. Over the last four years, the weakened U.S. economy has had a devastating impact on small business. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

66 TYP: F

66. In 2010, Canada was the country with the highest environmental performance index score. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

67 TYP: F

67. The most likely competitor for an automobile manufacturer would be a company in a different but related industry, such as a steel manufacturer. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: A

68. Labor market forces affecting organizations right now include the growing need for computer-literate knowledge workers and the necessity for continuous investment in human resources through recruitment, education, and training. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

69 TYP: F

69. To be successful, companies should only involve top-level executives in boundaryspanning activities. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

70. As managers are increasingly shifting to a partnering orientation as opposed to one that is adversarial in nature, the use of information sharing has increased. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

71. Cultural values in organizations are rarely observed, but are rather deeply embedded to the extent that members are not consciously aware of them. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

75 TYP: F

72. In determining what cultural values are important for the organization, managers should consider the external environment as well as the company’s strategy and goals. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

78 TYP: F


73. In today’s business environment, most companies operate in a stable and rigid environment. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

80 TYP: F

74. Quadrant C represents organizations that are focused primarily on bottom-line results and pay little attention to organizational values. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

82 TYP: F

75. Companies in Quadrant D put high emphasis on both culture and solid business performance as drivers of organizational success. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

82 TYP: F

76. Quadrant A organizations represent the high-performance culture, which is based on solid organizational mission and purpose, and adaptive values that guide decisions and business practices. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

83 TYP: F

MULTIPLE CHOICE 1. The environments in which businesses operate are increasingly ____, requiring managers to be ready to react and respond to even subtle environmental shifts. a. static b. universal c. constant d. dynamic e. traditional ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

2. ____ includes all elements existing outside the boundary of the organization that have the potential to affect the organization. a. Organizational environment b. Internal environment c. Task environment d. General environment e. Technological environment ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F


3. ____ system draws resources from the external environment and releases goods and services back to it. a. Production b. Closed c. Open d. Information e. Management ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

62 TYP: F

4. The ____ environment represents the outer layer of the environment and affects organizations ____. a. task; indirectly b. general; directly c. internal; directly d. internal; indirectly e. general; indirectly ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

5. All of these are a part of an organization's task environment EXCEPT a. Customers b. Labor markets c. Competitors d. Employers e. Suppliers ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

6. Which of these is NOT a part of an organization's general environment? a. Technological b. Economic c. Competitors d. Legal-political e. Sociocultural ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

7. ____ is a part of Ford's, the U.S. auto manufacturer, task environment. a. Inflation rate b. Chrysler c. Securities and Exchange Commission (SEC), a government regulating agency d. Amazon.com, an online bookseller e. Ford's corporate culture


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: A

8. ____ is a part of an organization's internal environment. a. Its customers b. Its salespeople c. The consumer price index d. Its suppliers e. Its competitors ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: F

9. Molly Madison received "The Employee of the Month" Award at Internal Workings Remodeling Service in April. Molly would be considered a part of which of these for Internal Workings? a. General environment b. Task environment c. Economic environment d. Internal environment e. Political activity ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: A

10. The ____ of the external environment represents events originating in foreign countries as well as opportunities for American companies in other countries. a. National dimension b. Global dimension c. International dimension d. Japan's dimension e. U.S. dimension ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

63 TYP: F

11. Scientific and technological advancements in a specific industry as well as in society at large are included in which general environment dimension? a. Sociocultural dimension b. Legal-political dimension c. Economic dimension d. Technological dimension e. Corporate culture dimension ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

63 TYP: F

12. Which dimension of the general environment represents the demographic characteristics, norms, customs, and values of the population within which the organization operates? a. Legal-political dimension b. Economic dimension


c. Technological dimension d. Corporate culture dimension e. Sociocultural dimension ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F

13. When Miami Herald launches a Spanish-language newspaper, El Nuevo Herald, with articles emphasizing Hispanic, Cuban, and Latin American news and sports, it is responding to changes in ____ environment. a. sociocultural b. technological c. economic d. competitors e. suppliers ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: A

14. ____ environment consists of demographic factors, such as population density. a. Technological b. Sociocultural c. Legal-political d. Internal e. Economic ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F

15. Anyone considering doing business in China, according to Manager's Shoptalk in Chapter 3, should keep in mind all of the following rules except: a. Business is always personal b. Don't skip the small talk c. Remember that relationships are not short-term d. Be efficient with use of time e. Make contact frequently ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

64 TYP: F

16. Which of the following rules, according to Manager's Shoptalk in Chapter 3, is about forging an emotional bond? a. Don't skip the small talk b. Business is always personal c. Remember that relationships are not short-term


d. Make contact frequently e. Be efficient with use of time ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

64 TYP: F

17. Lying at the heart of Chinese culture, ____ is a supportive, mutually beneficial connection between two people. a. kaizen b. ganqing c. renqing d. kansei e. guanxi ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

64 TYP: F

18. The general environment dimension that includes consumer purchasing power, the unemployment rate, and interest rates is called the a. legal-political dimension. b. sociocultural dimension. c. technological dimension. d. economic dimension. e. task dimension. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: F

19. A government inspection has required your company to upgrade the safety equipment in the manufacturing process of ice creamery. What dimension of the external environment has influenced these upgrades? a. Technological b. Legal-political c. Task d. Sociocultural e. Economic ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

66 TYP: A

20. The ____ dimension of the general environment includes federal, state, and local government regulations. a. technological b. legal-political c. economic d. sociocultural


e. international ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

66 TYP: F

21. An interest group that works within the legal-political framework to influence companies to behave in socially responsible ways is called a(n) a. pressure group. b. legal group. c. political influence group. d. social group. e. none of these. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

66 TYP: F

22. Which of the following dimensions of the general environment includes all elements that occur naturally on earth? a. Sociocultural dimension b. Technological dimension c. Economic dimension d. Natural dimension e. Environmental dimension ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

67 TYP: F

23. The people and organizations in the environment who acquire goods or services from the organization are a. competitors. b. suppliers. c. customers. d. employees. e. potential employees. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

68 TYP: F

24. Integrated Computers, Inc. wants to compile a profile of the customer it will target in its next promotional mailing. What environment would this be found in? a. Internal environment b. Task environment c. Work environment d. General environment e. None of these


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

68 TYP: A

25. For Southwest Airlines, all of the following can be suppliers EXCEPT a. Exxon (providing jet fuel). b. Citibank (providing finances). c. Delta Airlines (providing competition). d. Boeing (providing planes). e. All of these are suppliers for Southwest Airlines. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: A

26. ____ is(are) included in an organization's task environment. a. Suppliers b. Accounting procedures c. Technology d. Government e. Demographic characteristics ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: F

27. The ____ represents people in the environment who can be hired to work for the organization. a. competitors b. labor market c. suppliers d. customers e. government ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: F

28. Ally's Applesauce is in the process of hiring sixty new workers. The personnel department has a large pool of unskilled labor to draw from due to the high unemployment rate in the local area. Which dimension of the external environment is involved here? a. Sociocultural b. Competitors c. Technological d. Labor market e. Legal-political ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: F

29. The internal environment within which managers work includes all of the following except a. corporate culture b. production technology


c. organization structure d. physical facilities e. labor market ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

75 TYP: F

30. Which of the following roles are assumed by people and/or departments that link and coordinate the organization with key elements in the external environment? a. Figurehead b. Liaison c. Boundary-spanning d. Disturbance handler e. Leader ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

72 TYP: F

31. Which of the following is NOT a part of adapting the organization to changes in the environment for coping with high environmental uncertainty? a. Boundary-spanning roles b. Advertising/public relations c. Mergers/joint ventures d. Interorganizational partnerships e. All of these are a part of organizational response in adapting the organization to changes in the environment. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

72 TYP: F

32. ____ is an approach to boundary spanning which results from using sophisticated software to search through large amounts of internal and external data to spot patterns, trends, and relationships that might be significant. a. Merger intelligence b. Business intelligence c. Competitive intelligence d. Partnership intelligence e. Environment intelligence ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

72 TYP: F

33. Kristen's Jewelry Shop has just hired a comparative shopper to visit other local jewelry stores to gain product pricing information. What strategy is this describing? a. Boundary-spanning roles b. A flexible structure


c. Unfair practice d. Increase planning and forecasting e. Joint venture ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: A

34. Based on the notion that organizations are dealing with a very turbulent and uncertain external environment, more organizations are requiring ____ to perform boundaryspanning activities. a. top leaders b. middle managers c. line managers d. all employees e. suppliers ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

35. Companies can reduce boundaries and increase collaboration with other organizations by creating a. flexible structures. b. interorganizational partnerships. c. new company cultures. d. new supplier connections. e. none of these. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

36. Many organizations are adapting to the environment by developing more of a(n) ____ relationship rather than a(n) ____ relationship with competitors. a. adversarial, partnership b. partnership, adversarial c. strategic, competitive d. competitive, strategic e. none of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

73 TYP: F

37. When two or more organizations combine to become one, it is referred to as a a. joint venture. b. flexible structure. c. mechanistic structure. d. merger. e. inorganic venture. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

74 TYP: F


38. In a joint venture between large and small businesses, large businesses can provide all of the following EXCEPT a. sales staff. b. research staff. c. financial resources. d. distribution channels. e. top level management. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

74 TYP: F

39. Culture can be defined as a. the set of key values, beliefs, understandings, and norms shared by members of an organization b. the ability to speak different languages c. an object, act, or event that conveys meaning to others d. a narrative based on true events that is repeated frequently and shared by organizational employees e. none of these ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

75 TYP: F

40. The level of corporate culture which cannot be seen but can be discerned from how people explain and justify what they do is a. Invisible artifacts b. Expressed values and beliefs c. Slogans and ceremonies d. Dress and office layout e. None of these ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

75 TYP: F

41. The level of corporate culture in which values are so deeply embedded that members are no longer consciously aware of them is a. Invisible artifacts b. Expressed values and beliefs c. Underlying assumptions and deep beliefs d. Dress and office layout e. Slogans and ceremonies ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

75 TYP: F


42. ____ are associated with surface level of organizational culture. a. Values b. Norms c. Manners of dress d. Beliefs e. All of these ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

75 TYP: F

43. Which of the following would be considered a visual representation(s) of a company's corporate culture? a. All department heads have an executive office. b. Each department has an award plaque for employee of the month. c. All employees are dressed in professional business attire. d. Top level executives drive company owned sports car. e. All of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

76 TYP: F

44. An object, act, or event that conveys meaning to others is referred to as a a. symbol. b. slogan. c. story. d. hero. e. culture. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

45. Symbols, stories, and heroes are important because they a. entertain executive level management. b. address the concerns of government. c. acquaint customers to the organization. d. communicate the significant values of an organization. e. give employees something to talk about. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

76 TYP: F

46. ____ is a narrative based on true event that is repeated frequently and shared by organizational employees. a. Symbol b. Slogan c. Story d. Hero e. Culture ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F


47. A figure who exemplifies the deeds, character, and attributes of a corporate culture is referred to as a a. symbol. b. stories. c. slogan. d. hero. e. culture. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

48. Heroes are important to an organization due to the fact that they a. exemplify key values of the organization. b. exemplify a strong corporate culture. c. serve as examples to other employees. d. all of these. e. none of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

49. A ____ represents a phrase or sentence that succinctly expresses a key corporate value. a. symbol b. stories c. culture d. hero e. slogan ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

50. McDonald's "We Love to See You Smile" represents a a. ceremony. b. symbol. c. ritual. d. slogan. e. political activity. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

51. "Chiquita. Perfect for Life." was Chiquita's a. ceremony. b. slogan. c. symbol. d. ritual. e. all of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: A


52. If a company emphasizes that "no purchase is complete until the customer is satisfied," then it's a. utilizing a symbol. b. communicating its values to customers. c. using a slogan to present their values to customers and employees. d. utilizing a hero for the purpose of conveying values. e. using customers to harass the employees. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

77 TYP: F

53. Culture tends to differ between ____, but appears similar within ____. a. organizations, industries b. people, organizations c. groups, industries d. organizations, groups e. industries, geographical regions ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

78 TYP: F

54. All of the following are types of corporate cultures except a. adaptability culture. b. clan culture. c. consistency culture. d. involvement culture. e. achievement culture. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

55. The adaptability culture emerges in an environment that requires ____ response and ____ decision making. a. fast; high-risk b. fast; low-risk c. slow; high-risk d. slow; low-risk e. regulated; low-risk ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Group Dynamics

REF:

78 TYP: F

56. Which of the following cultures is suited to organizations that are concerned with servicing specific customers in the external environment but without the intense need for flexibility and rapid change? a. Adaptability culture b. Clan culture c. Achievement culture


d. Consistency culture e. None of these ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

57. The involvement culture has a(n) ____ focus on the involvement and participation of employees to rapidly meet changing needs from the environment. a. external b. internal c. structural d. competitive e. technological ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

58. The consistency culture has a(n) ____ focus and an orientation for a ____ environment. a. external; stable b. external; dynamic c. internal; stable d. internal; dynamic e. structural; dynamic ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Group Dynamics

REF:

79 TYP: F

59. Which of the following cultures values and rewards a methodical, rational, orderly way of doing things? a. Achievement culture b. Involvement culture c. Accomplishment culture d. Consistency culture e. Adaptability culture ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

80 TYP: F

60. ____ plays a key role in creating an organizational climate that enables learning and innovative responses to threats from the external environment, challenging new opportunities, or organizational crises. a. Mission statement b. Vision statement c. Competitive intelligence d. Employee training e. Corporate culture ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

81-82 TYP: F


61. What is likely to happen to organizations that pay little attention to either cultural values or business results? a. Unlikely to survive for long b. No help for performance during hard times c. Profitable in short run but difficult to sustain over long term d. High performance e. none of these ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

82 TYP: F

62. What is likely to happen to organizations that pay little attention to cultural values and instead stress business results? a. Unlikely to survive for long b. No help for performance during hard times c. Profitable in short run but difficult to sustain over long term d. High performance e. none of these ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

82 TYP: F

63. A high-performance culture is based on all of the following except a. solid organizational mission b. shared adaptive values c. individual employee ownership of bottom-line results d. individual employee ownership of organization's cultural backbone e. singular focus on business results ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Group Dynamics

REF:

83 TYP: F

64. In a study by Kotter and Haskett evidence is provided to support the claim that ____ is important for performance. a. managing cultural values b. leading partnerships within an industry c. surveying the external environment d. managing client relationships as boundary spanners e. empowering employees ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

83 TYP: F

65. Blockbuster’s weakened performance in recent years stems from which of the following? a. Weak internal culture


b. c. d. e.

Inability to respond to the changing environment Inability to become environmentally sustainable Growth in competition from oversees Weak supply chain management

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

62 TYP: A

66. Executives at One World Advertising have learned that it is necessary to establish strong personal relationships and emotional bonds with Chinese business partners. This relates most closely to which dimension of the general business environment? a. Natural b. Sociocultural c. Legal/Political d. International e. Internal ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

63 TYP: A

67. Stan is the owner of a small marketing firm. He designs ad campaigns that specifically target demographic groups within U.S. markets. Which demographic category currently has the largest market size? a. Baby boomers b. Generation X c. Generation Y d. Tweeners e. In-betweeners ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

65 TYP: A

68. Animal-One is a campaign organization that drums up public awareness about the use of animals in cosmetic testing. The group condemns traditional cosmetic companies while promoting smaller, all-natural companies that do not test on animals. AnimalOne can best be described as a(n): a. Whistle-blower b. Government organization c. Pressure group d. Sustainable organization e. Small business ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Ethical Responsibilities

66 TYP: A

69. In response to pressure from environmental advocates, organizations have become increasingly sensitive to diminishing: a. Natural resources b. Economic resources c. Financial resources d. Human resources e. Technology resources


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Ethical Responsibilities

66 TYP: F

70. SweetTooth Candies is a U.S.-based company that manufactures and distributes candy bars and snack foods globally. The company sources most of its cocoa and sugar from South American companies. This business relationship highlights which dimension of the task environment? a. Customers b. Competitors c. Labor market d. Culture e. Suppliers ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

69 TYP: A

71. _________ means that managers do not have sufficient information about environmental factors to understand and predict environmental needs and changes. a. Adaptation b. Risk c. Uncertainty d. Knowledge e. Education ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

70 TYP: F

72. Roberta is a top-level executive at a banking institution. She spends a significant part of her day meeting with local government officials, every day consumers, and federal banking officials to address key issues in the banking industry. Roberta’s role can best be described as: a. Boundary-spanning b. Adaptive c. Interorganizational d. External e. Internal ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

72 TYP: A

73. Three large electronics companies have recently collaborated to develop an innovative new cell phone. This is an example of which managerial trend? a. Outsourcing b. Interorganizational partnership c. Adversarial orientation d. Merger e. Boundary spanning


ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Information Technologies

73 TYP: A

74. In the current external business environment, which of the following is true? a. Corporate culture defines success b. The business environment is static c. Companies are more adversarial than ever before d. Mergers are declining e. Joint ventures are on the rise ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

74 TYP: F

75. Jefferson and Squire is an advertising firm that is viewed as having a fast-paced and posh corporate culture. The company uses bold coloring with expensive accents in all office dĂŠcor. This exemplifies which level of corporate culture? a. Visible artifacts b. Underlying assumptions c. Expressed values d. Heroes e. Ceremonies ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

75 TYP: A

76. Roadtec Tire Company has a corporate culture that emphasizes an internal focus on the involvement and participation of employees, placing high value on meeting the needs of employees. The company is known for its caring, family-like atmosphere. Which type of corporate culture does Roadtec possess? a. Adaptability culture b. Achievement culture c. Consistency culture d. Involvement culture e. Matrix culture ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

79 TYP: A

77. Research indicates that the one factor that increases a company’s value the most is: a. Investment in research and development b. People and how they are treated c. Technology investment d. A centralized organizational structure e. Attention to values ANS: PTS:

1

DIF:

2

REF:

81


NAT: AACSB Analytic | Environmental Influence

TYP: F

78. Terry manages a food distribution company that is highly focused on creating a strong cohesive culture, but the company does not tie organizational values directly to goals and desired business results. Terry’s company most likely falls in which quadrant of organizational performance and culture? a. Quadrant A b. Quadrant B c. Quadrant C d. Quadrant D e. Quadrant E ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

82 TYP: A

79. James, a casino manager, defines and uses signals and symbols to influence corporate culture by communicating central values to employees. As such, James can be described as what type of leader? a. Egalitarian leader b. Totalitarian leader c. Cultural leader d. Servant leader e. Transitional leader ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

84 TYP: A

CASE Scenario - Nikki Williams Nikki Williams was working as the sales manager for Industrial Instruments. Some of the sales executives were showing signs of burnout. They were losing interest in their jobs and were no longer motivated to gain new accounts. The reward system focused on old reliable accounts, but Nikki was now under pressure to expand the customer base. Nikki had recently been to a seminar on corporate value systems. She recognized that the company's CEO wanted to change the way employees thought about the firm and the way they related to one another. She further recognized that a lasting solution to her problem required a fundamental shift in perception. 1. To affect the value system, Nikki will be working primarily with a. the legal-political dimension. b. the sociocultural dimension. c. the internal cultural dimension. d. the economic dimension. e. the external dimension.


ANS: PTS: 1 DIF: 1 REF: 62 NAT: AACSB Analytic | Group Dynamics Questions TYP: A

KEY: Scenario

2. Nikki could use the following to affect the corporate culture: a. structured symbolic logic. b. stories about political heroes. c. stories about company officers, stressing a value. d. stories about economic depression. e. all of these. ANS: PTS: 1 DIF: 2 REF: 76-77 NAT: AACSB Analytic | Group Dynamics Questions TYP: F

KEY: Scenario

3. Nikki could hold _______, which are planned activities at special events to provide examples of company values. a. ceremonies b. slogans c. symbols d. pictures of heroes e. none of these ANS: PTS: 1 DIF: 1 REF: 78 NAT: AACSB Analytic | Group Dynamics Questions TYP: A

KEY: Scenario

4. Industrial Instruments operates in an environment that requires fast response and high-risk decision making. Which type of culture may be appropriate here? a. Consistency b. Adaptability c. Clan d. Achievement e. Involvement ANS: PTS: 1

DIF: 1

REF: 78


NAT: AACSB Analytic | Group Dynamics Questions TYP: A

KEY: Scenario

Scenario - Melissa Hill Melissa Hill, sales manager for One-Hit-Wonder Record Company, was trying to create a new strategy to turn around the declining record sales the company was facing. Melissa needed to find a way to find out what the customers really wanted, since One-Hit-Wonder didn't have accurate information like the competitors did. It was imperative that she find the correct strategy and information because the company was in financial trouble. The company's President wanted all employees to help find information and work as a team to develop better relationships that might help the company. He also stated that he wanted the company to remain an independent company. Melissa realized that through hard work and team efforts, the company could get back on its feet as soon as they got reliable information. 5. Melissa will be working primarily with a. the legal-political dimension. b. the labor market. c. the internal cultural dimension. d. pressure groups. e. the sociocultural dimension ANS: PTS: 1 DIF: 1 REF: 65 NAT: AACSB Analytic | Environmental Influence Questions TYP: A 6. The problem Melissa faced was a. culture gap. b. structural instability. c. environmental uncertainty. d. company transformation. e. legal problems. ANS:

KEY: Scenario


PTS: 1 DIF: 1 REF: 70 NAT: AACSB Analytic | Environmental Influence Questions TYP: A

KEY: Scenario

7. Which of the following would be the best way for One-Hit-Wonder to decrease its uncertainty? a. To create boundary-spanning roles b. To eliminate interorganizational partnerships c. To merge with another company d. To create a joint venture e. None of these ANS: PTS: 1 DIF: 1 REF: 72 NAT: AACSB Analytic | Environmental Influence Questions TYP: A

KEY: Scenario

8. Which of the following best describes One-Hit-Wonder's culture? a. Clan culture b. Achievement culture c. Consistency culture d. Adaptability culture e. None of these ANS: PTS: 1 DIF: 1 REF: 78 NAT: AACSB Analytic | Group Dynamics Questions TYP: A

KEY: Scenario

COMPLETION 1. The external ____________________ includes all elements existing outside the boundary of the organization that have the potential to affect the organization. ANS: organization 2. The ____________________ is the outer layer that is widely dispersed and affects organizations indirectly. ANS: 3. A(n) ____________________ includes the elements within the organization's boundaries.


ANS: 4. The ____________________ environment includes the sectors that conduct day-today transactions within the organization. ANS:

5. An example of ____________________ dimension is that Dixon Ticonderoga Co. is in trouble because of increased competition especially from low-cost pencil companies in China. ANS: 6. The ____________________ environment represents an ever-changing and uneven playing field compared with domestic environment. ANS: 7. The ____________________ dimension of the general environment includes scientific and technological advancements in a specific industry and in society. ANS: 8. The ____________________ dimension of the general environment represents the demographic characteristics as well as the norms, customs, and values of the general population. ANS: socioc 9. Lying at the heart of Chinese culture, ____________________ is a supportive, mutually beneficial connection between two people. ANS: gua 10. The general economic health of the country or region in which the organization operates is represented by the ____________________ dimension. ANS:

11. The ____________________ dimension includes government regulations at the local, state, and federal levels. ANS:


12. An interest group that works within the legal-political framework to influence companies to behave in socially responsible ways, is called a(n) ____________________. ANS: 13. Included in a(n) ____________________ environment are sectors that have a direct working relationships with the organization, among customers, competitors, suppliers, and the labor market. ANS: 14. The ____________________ of the general environment includes all elements that occur naturally on earth. ANS: 15. Managers today are concerned because technologically speaking, the ____________________ has given more power to customers and enabled them to directly impact an organization. ANS: 16. ____________________ are organizations in the same industry that provide goods or services to the same set of customers. ANS: 17. People and organizations that provide raw materials the organization uses to produce its output are called ____________________. ANS: 18. The ____________________ represents people in the environment who can be hired to work for the organization. ANS: 19. Not having sufficient information about environmental factors to understand and predict environmental needs and changes is called ____________________. ANS: 20. When environmental factors change rapidly, the organization experiences ____________________ uncertainty. ANS: 21. ____________________, ____________________, and ____________________ are three types of strategies that organizations can use to adapt to environmental changes.


ANS: 22. Roles assumed by people that link the organization with the external environment are called ____________________ roles. ANS: 23. Interorganizational partnerships allow companies to join together to become ____________________ and share ____________________. ANS: mor 24. A(n) ____________________ is when two or more organizations combine to make one organization. ANS: me 25. A(n) ____________________ involves a strategic alliance or program by two or more organizations. ANS: 26. ____________________ are becoming more popular as organizations strive to keep up with technological advancements and compete in the global economy. ANS: 27. ____________________ can be defined as the set of key values, beliefs, understandings, and norms shared by members of an organization. ANS: 28. An object, act, or event that conveys meaning to others is known as a(n) ____________________. ANS:

29. A(n) ____________________ is a narrative based on true events that is repeated frequently and shared among organizational employees. ANS: 30. The deeds of ____________________ are extraordinary, but not so extraordinary that other employees cannot perform the same deeds. ANS:


31. A slogan is a phrase or a sentence that concisely communicates a key corporate ____________________. ANS: 32. Adaptability culture emerges in an environment that requires ____________________ response and ____________________ decision making. ANS: 33. A culture that is a results-oriented that values competitiveness, aggressiveness, personal initiative, and willingness to work long and hard to achieve results is called ____________________. ANS: 34. The ____________________ culture places high value on HR, and the organization may be characterized by a caring, family-like atmosphere. ANS:

35. Organizations with internal focuses and consistency orientations for a stable environment should create a(n) ____________________ culture. ANS: 36. ____________________ plays a key role in creating an organizational climate that enables learning and innovative responses to threats from the external environment, challenging new opportunities, or organizational crises. ANS: 37. A primary way in which managers shape cultural norms and values to build a highperformance culture is through ____________________. ANS: 38. A(n) ____________________ defines and uses signals and symbols to influence corporate culture. ANS: SHORT ANSWER 1. List the five dimensions of the general environment. ANS:


2. List three visible artifacts of an organization's culture. ANS: 3. List two reasons why ceremonies are held in an organization. ANS: 4. Name one of the two dimensions that the categories of culture are based on. ANS: 5. Name one of the two dimensions that organizations with high-performance cultures emphasize. ANS: ESSAY 1. Define the organizational task environment. List the four things this environment includes that could influence an organization. ANS:

2. Name the five dimensions of the general environment and describe each dimension. ANS: 3. Briefly describe the task environment and its four primary sectors ANS: 4. What are the three basic strategies for dealing with increased uncertainty with respect to customers, competitors, suppliers, or government regulations? ANS: 5. Based on the model in the text, discuss the relationship between external environmental characteristics and uncertainty. ANS: 6. Discuss the different levels of culture. ANS:


7. List the four categories of culture and describe what kind of environments each fit best in. ANS: 8. Briefly discuss the two key areas that cultural leaders influence culture. ANS:

Chapter 4—Managing in a Global Environment TRUE/FALSE 1. In today's world, every manager needs to think locally. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F

2. Business has become a unified, global field as trade barriers fall, communication becomes faster and cheaper, and consumer tastes converge. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F

3. ABC Manufacturing is in the domestic stage. It has its market potential open to the countries that border its home country. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

91 TYP: A

4. To deal with the marketing of products in several countries individually, a company in the international stage often uses an international division. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: F

5. The second stage in the process of globalization is the international stage, where the company usually adopts a multidomestic approach. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: F

6. The multinational stage of corporate international development transcends any single home country. The ownership, control, and top management tend to be dispersed among several nationalities. ANS: PTS:

1

DIF:

1

REF:

92


NAT: AACSB Analytic | Environmental Influence

TYP: F

7. An example of global outsourcing is seen when Gap, Inc uses low-cost Caribbean labor to cheaply produce its clothing, and then finishes off and sells its clothing in the United States. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: A

8. With exporting, the corporation transfers its products for sale and its production facilities in foreign countries. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

9. Seeking cheaper sources of materials or labor offshore is called offshoring. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F

10. Countertrade is the barter of products for products rather than the sale of products for currency. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

11. An estimated 55 percent of world trade is countertrade. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

12. When Harbor Trades, a Korean-based company, makes resources including technology, managerial skills, and patent and trademark rights available to Nano Technologies, a Russian company whereby allowing Nano to make products similar to CBA, it is engaging in a countertrade agreement. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: A

13. A form of direct investment is franchising. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F

14. Joint venture is the most risky type of direct investment. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F


15. When a company builds a subsidiary from scratch in a foreign country it is called a greenfield venture. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

95 TYP: F

16. The least costly and least risky direct investment is called a greenfield venture. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

95

17. Direct investing means that the company is involved in managing the productive assets, which distinguishes it from other entry strategies that permit less managerial control. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

94

18. Outsourcing is perhaps the most widespread approach to international involvement in China and India. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

96 TYP: F

19. Infrastructure management is the management of business operations conducted in more than one country. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

20. The basic management functions of planning, organizing, leading, and controlling are the same whether a company operates domestically or internationally. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

21. The sub-divisions of the international environment are the economic, the sociocultural, and the legal-political environments. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

22. Some economic environments of business include resource and product markets, language, religion, and per capita income. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

99 TYP: F


23. A country's physical facilities that support economic activities make up its infrastructure. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

100 TYP: F

24. The criterion traditionally used to classify countries as developed or developing is per capita income. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

99 TYP: F

25. LDC's are less developed countries and tend to be found in the Southern Hemisphere including Africa, Asia and South America. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

99 TYP: F

26. Because of cheap labor, most international business firms are headquartered in the less developed countries of Asia and South America. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

99 TYP: F

27. Market risk is defined as the risk of loss of assets, earning power, or managerial control due to politically based events or actions by host governments. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: F

28. The countries experiencing political stability face the greatest threat of violence. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: F

29. A company's political risk includes riots, revolutions, civil disorders, and frequent changes in government. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: F

30. Unfortunately, many U.S. managers fail to realize that the values and behaviors that typically govern how business is done in the United States do not translate to the rest of the world. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F


31. Countries that value high power distances normally have cities that are geographically separated and so have the need to transport electrical energy over large distances. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F

32. The social value of uncertainty avoidance is evident in countries like Japan which support beliefs that provide stability and conformity among its citizenry. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

105 TYP: F

33. In countries with strong masculine social values including Austria and Japan, both men and women subscribe to the dominant masculine value. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

34. Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

105 TYP: F

35. The fifth dimension of Hofstede's social values is preliminary-term orientation and extended-term orientation. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

36. According to the GLOBE Project, a society with a high performance orientation places high emphasis on performance and rewards people for performance improvements and excellence. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

37. According to the GLOBE Project, gender differentiation refers to the extent to which a society maximizes gender role differences. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

38. According to Manager's Shoptalk in Chapter 4, the polite way to give your business card to a Japanese business person is when first meeting, presenting your card with both hands.


ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

105 TYP: F

39. According to Manager's Shoptalk in Chapter 4, being on-time for appointments is very important in Brazil. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

104 TYP: F

40. Social values greatly influence organizational functioning and management styles. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

41. According to the GLOBE Value Dimensions, Japan and Russia both have very high performance orientation. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

107 TYP: F

42. A low-context culture is a culture in which communication is used to enhance personal relationships. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

43. Linguistic pluralism occurs in countries like India where more than one language exist. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

44. A high-context interaction requires more time because a relationship has to be developed, and trust and friendship must be established. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

45. German, Swiss, and North American cultures are among the high-context cultures. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

46. When an organization has an instrumental attitude toward people it treats employees as a resource to be used. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F


47. When an organization has a humanistic attitude, it values employees as an end in themselves. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

48. Ethnocentrism refers to a natural tendency of people to regard their own culture as superior and to downgrade or dismiss other cultural values. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

49. Ethnocentrism refers to a natural tendency of people to regard their own culture as inferior to other cultures. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

50. A tendency to regard their own culture as superior and to downgrade other cultures reflects an attitude called geocentric. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

51. The goal of the European Union is to create a powerful single market system for Europe’s millions of consumers. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

112 TYP: F

52. An organization developed for the purpose of eliminating tariffs in trading between Japan and the United States is called The North American Freedom of Tariffs Administration (NAFTA). ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

112 TYP: F

53. Fifteen member states of the EU have adopted the rupee, as a single European currency. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

112 TYP: F

54. Large international firms typically are called multinational corporations. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

55. A multinational corporation typically receives more than 25 percent of its total sales revenues from operations inside the parent's home country.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

56. An MNC is managed as an integrated worldwide business system. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

57. The primary emphasis of polycentric companies is on their home countries. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

58. Geocentric companies are truly world-oriented and favor no specific country. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

59. Culture shock refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

60. Cultural intelligence refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

61. Culture shock refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

110 TYP: F

62. There are three components to cultural intelligence: cognitive, emotional, and physical. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

63. A manager’s reality is that isolation from international forces is entirely possible. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F


64. Globalization reached its peak in the 1970s, and is decreasing at a gradual rate. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F

65. The global stage of corporate international development is also referred to as the stateless stage. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: F

66. Licensing means engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F

67. One advantage to acquiring a wholly owned foreign affiliate is that the company that acquires it would then have complete control. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

95 TYP: F

68. The United States has the largest mobile phone market in the world. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

96 TYP: F

69. Whereas China is strong in software services, India is a rising power in manufacturing. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

96 TYP: F

70. Brazil is known to have a young, vibrant population and a rapidly growing middle class that is eager to experience the finer things in life. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

97 TYP: F

71. The estimated 2010 misery index figures suggest significantly less misery for almost every country as compared to figures at the beginning of the century. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

101 TYP: F


72. In India, it is not uncommon for social media companies such as Facebook and Twitter to be required by law to comply with requests to take down content considered incendiary by government entities. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F

73. A high performance orientation means that a society encourages toughness, assertiveness, and competitiveness. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

74. High-context cultures include Asian and Arab countries, whereas low-context cultures tend to be American and Northern European. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

75. High cultural intelligence requires that a manager be open and receptive to new ideas and approaches. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

111 TYP: F

76. In a recent Fortune magazine poll, 68 percent of Americans say other countries benefit the most from free trade. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

114 TYP: F

77. The term top of the pyramid refers to the more than four billion people who earn the least, as defined by per capita income. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

MULTIPLE CHOICE 1. Today's companies compete in a ____. a. growingly domestic

REF:

115 TYP: F


b. c. d. e.

low-context culture high-context culture Greenfield economy borderless world

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F

2. Companies that think ____ have a competitive edge. a. globally b. regionally c. nationally d. strategically e. "customers first" ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F

3. In which stage, market potential is limited to home country, with all production and marketing facilities located at home? a. Domestic b. International c. Global d. Multinational e. Stateless ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

91 TYP: F

4. In the ____ stage a company usually adopts a multidomestic approach. a. Global b. Multinational c. Stateless d. International e. Domestic ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: F

5. Global Dandelion, with marketing and production facilities located in many countries, is participating at what stage in the international arena? a. International stage b. Global stage c. Domestic stage d. Multinational stage


e. Interdomestic stage ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: A

6. Quality-cast Telecom with an international division would be participating in what stage of the international arena? a. Domestic stage b. International stage c. Multinational stage d. Global stage e. Binational stage ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: A

7. The process of globalization typically passes through all of the following stages EXCEPT a. domestic stage. b. global stage. c. international stage. d. interdomestic stage. e. multinational stage. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: F

8. Stateless stage is also referred to as the ____ stage. a. multinational b. global c. multidomestic d. international e. domestic ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: F

9. Color Copiers operates in a true global fashion, making sales and acquiring resources in whatever country offers the best opportunities and lowest cost, what stage of international development is it in? a. Stateless stage b. Multinational stage c. International stage d. Domestic stage e. Multidomestic stage ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

92 TYP: A

10. Which of the following refers to engaging in the international division of labor so as to obtain the cheapest sources of labor and supplies regardless of country? a. Franchising


b. c. d. e.

Licensing Market entry strategy Outsourcing Activity

ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

11. The Maquiladora industry along the Texas-Mexico border on the Mexico side uses cheap labor for assembling products. This lowers the price for U.S. consumers and is an example of a. licensing. b. joint venture. c. outsourcing. d. franchising. e. none of these. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: A

12. Most firms begin with which strategy to enter foreign markets? a. Exporting b. Greenfield venture c. Joint venture d. Acquisition e. Direct investment ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

13. Which of the following is an entry strategy in which the organization maintains its production facilities within its home country and transfers its products for sale in foreign markets? a. Franchising b. Licensing c. Exporting d. Greenfield venture e. Joint venture ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

14. What is exporting? a. Countertrade b. The barter of products for products, often used in developing nations c. Items produced in the home country for sale in foreign markets d. All of these e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F


15. A form of exporting to less-developed countries is called a. licensing. b. franchising. c. greenfield venture. d. joint venture. e. countertrade. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F

16. Heineken begins by exporting its product into new markets, and then ____ to a local brewer to establish its position in the market. a. countertrades b. licenses c. exports d. franchises e. markets ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: A

17. Which of the following is a form of franchising? a. Direct investing b. Licensing c. Exporting d. Countertrade e. Barter trade ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F

18. Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system. What type of strategy are you going to use? a. Wholly owned foreign affiliate b. A greenfield venture agreement c. A franchise d. An export agreement e. Barter trade ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: A

19. Which of the following pairs of alternatives closely resemble each other in the amount of ownership, control and risk obtained in operating international businesses? a. Direct investment/franchising b. Wholly owned foreign affiliate/countertrade c. Exporting/licensing d. Franchising/licensing e. All of these


ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F

20. A foreign subsidiary over which an organization has complete control is called a a. joint venture. b. licensing agreement. c. franchise. d. wholly owned foreign affiliate. e. foreign venture. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

95 TYP: F

21. The Write Pens, Inc. wants to reduce transferring costs by producing closer to the consumer in a foreign country. This will also help in reducing transportation and storage costs. Which strategy would be the best to use given the circumstances? a. Franchising b. Exporting c. Direct investing d. Barter agreement e. Licensing ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: A

22. Go RVing, a U.S. company, built a subsidiary from scratch in England. This is an example of a. franchising. b. greenfield venture. c. joint venture. d. exporting. e. licensing. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

95 TYP: A

23. The Nissan plant in Mississippi is an example of a ____. a. greenfield venture b. joint venture c. direct investment d. foreign affiliate e. direct acquisition ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

95 TYP: F

24. As a first step into international business, which two countries are most companies going to today? a. Russia and Japan b. Sweden and Germany c. China and India d. Brazil and Philippines


e. Indonesia and Brazil ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

96 TYP: F

25. ____ is the most widespread approach to international involvement in China and India. a. Importing b. Exporting c. Manufacturing d. Outsourcing e. Greenfield venture ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: F

26. The management of business operations conducted in more than one country is called a. global management. b. international management. c. outsourcing management. d. planning management. e. domestic management. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

27. ____ aspects of management do not change when doing business internationally. a. Planning b. Organizing c. Controlling d. Leading e. All of these ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

28. Language, values, religion, and education all describe which dimension in the international environment? a. Economic b. Legal c. Political d. Sociocultural e. Technological ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

29. In international operations, the economic environment represents all of the following factors EXCEPT a. infrastructure. b. resource and product markets. c. laws and regulations.


d. inflation. e. exchange rates. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

30. Resource development, infrastructure, and exchange rates all describe which dimension in the international environment? a. Economic b. Legal c. Political d. Sociocultural e. Technological ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

31. In international operations, the economic environment includes a. shared knowledge, beliefs and values. b. political risks. c. social organizations. d. infrastructure. e. tariffs, quotas, and taxes. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

32. Which of the following is a sociocultural factor in the international environment? a. Language b. Exchange rates c. Tariffs, taxes, and quotas d. Per capita income e. Infrastructure ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

33. ____ is normally used to classify countries as developed or developing. a. Exchange rates b. Interest rates c. Gross national product d. Per capita income e. Inflation rates ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

99

34. ____ generally are located in Asia, Africa and South America. a. MNCs b. EUs c. LDCs

TYP: F


d. WTOs e. MFNs ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

99 TYP: F

35. A country's physical facilities that support economic activities make up its ____. a. resource markets b. infrastructure c. physical markets d. product markets e. plants and equipment ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

100 TYP: F

36. If you built a computer company in Africa and then found that your product was having difficulty being distributed to customers because of the road system, your problem would be related to a. an inadequate infrastructure. b. an economy incapable of supporting growth. c. a poor resource market. d. a poor product market. e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

100 TYP: F

37. Your grocery store in India is having trouble getting the local farmers to supply you with the proper produce. This is a problem with India's a. product market. b. resource market. c. infrastructure. d. economy. e. power distance. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

100 TYP: F

38. Exchange rates are included in which of the following international environments? a. The legal-political sector b. The economic environment c. The sociocultural environment d. The barter system environment e. The government sector ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F


39. The legal-political environment, in international operations, includes which of the following? a. Shared knowledge, beliefs and values b. Political risks c. Social organizations d. Infrastructure e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: F

40. Political risk is defined as an organization's risk of ____ due to politically based events or actions by host governments. a. loss of assets b. managerial control c. earning power d. all of these e. managerial control and earning power only ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: F

41. A company's risk of loss of assets, earning power, or managerial control due to politically based events or action by host government is referred to as a. MFN. b. political risk. c. tariffs. d. political instability. e. terrorism. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: F

42. Rooftop International, Inc. buys insurance against host government takeover when investing in foreign countries. This is an example of which sector of the international environment? a. Legal-political b. Sociocultural c. Technological d. Economic e. Infrastructure ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

102-103 TYP: A

43. Which of the following is NOT a legal-political factor in the international environment? a. Laws and regulations b. Language c. Tariffs, quotas, taxes d. Political risk e. Government takeovers


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

98 TYP: F

44. A foreign terrorist kidnaps your firm's marketing VP while the VP is in the host country. This is a harsh example of a. economic development. b. infrastructure. c. political risk. d. international law. e. social risk. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: A

45. A nation's ____ includes the shared knowledge, beliefs and values, as well as the common modes of behavior and ways of thinking, among members of a society. a. power distance b. culture c. masculinity d. individualism e. uncertainty avoidance ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F

46. Cultural factors in foreign countries are ____ the political and economic factors. a. easier than b. similar to c. more perplexing than d. less important than e. none of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F

47. ____ refers to the degree to which people accept inequality in power among institutions, organizations, and people. a. Power distance b. Uncertainty avoidance c. Individualism d. Collectivism e. Masculinity ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F

48. Countries whose social values reflect low power distance a. are highly democratic. b. accept inequality in power among institutions, organizations and people. c. expect equality in power. d. avoid uncertainty.


e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

103 TYP: F

49. A loosely knit social framework in which individuals are expected to take care of themselves is called a. culture. b. individualism. c. ethnocentrism. d. masculinity. e. power distance. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

105 TYP: F

50. Collectivist values are represented in the social framework of which of these? a. The United States b. Australia c. Ecuador d. Great Britain e. All of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

105 TYP: F

51. Austria's cultural preference is for achievement, heroism, assertiveness, and material success. This would be considered a. power distance. b. individualism. c. masculinity. d. ethnocentrism. e. collectivism. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: A

52. ____ refers to a value characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity. a. Power distance b. Uncertainty avoidance c. Certainty avoidance d. Conformity seekers e. None of these ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

105 TYP: F

53. Which of these reflects a cultural preference for cooperation, group decision making, and quality of life? a. Individualism b. Collectivism


c. Masculinity d. Femininity e. Power distance ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

54. One of Hofstede's social values that was developed later is a. power distance. b. uncertainty avoidance. c. masculinity. d. collectivism. e. long-term orientation. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

55. Recent research by the GLOBE project has extended ____ research and offered new insights for managers. a. Hofstede's b. Walton's c. Weber's d. Fayol's e. Gilbreth's ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

56. All of the following are cultural dimensions as defined by the GLOBE Project, except: a. assertiveness b. gender differentiation c. social collectivism d. humane orientation e. masculinity ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

57. In countries where women are often in positions of high status, the Globe Project would describe that culture as high in ____. a. assertiveness b. uncertainty avoidance c. gender differentiation d. societal collectivism e. performance orientation ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

58. A country that places emphasis on fairness and values kindness would be described by the Globe Project as high in ____.


a. b. c. d. e.

assertiveness uncertainty avoidance gender differentiation humane orientation societal collectivism

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

106 TYP: F

59. According to Manager's Shoptalk in Chapter 4, what does the gesture of scratching one's head usually mean in Russia? a. "You're crazy." b. "I am listening carefully." c. "I want to get to know you better." d. "I'm confused or skeptical." e. "No." ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

104 TYP: F

60. According to Manager's Shoptalk in Chapter 4, one of the most universal gestures is: a. Arm up, shaking back and forth (waving) b. Scratching your chin (thinking) c. A smile (happiness or politeness) d. Closing your eyes (boredom) e. A pat on the back (congratulations) ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

104 TYP: F

61. Which of the following is defined as a culture in which communication is used to enhance personal relationships? a. Interpersonal culture b. High-context culture c. Power culture d. Low-context culture e. Family-oriented culture ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

62. Which of the following countries possesses a high degree of assertiveness? a. Spain b. Sweden c. Japan d. Iceland e. Switzerland ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

107 TYP: F

63. Which of the following countries possesses a low degree of gender differentiation?


a. b. c. d. e.

China Brazil Italy South Korea Denmark

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

107 TYP: F

64. Which of the following countries possesses a high performance orientation? a. Israel b. Sweden c. Taiwan d. Russia e. Venezuela ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

107 TYP: F

65. Countries that use several languages a. are ethnocentric. b. are geocentric. c. are likely to have high uncertainty avoidance. d. have linguistic pluralism. e. are polycentric. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

66. In a(n) ____, people use communication primarily to exchange facts and information. a. power culture b. informational culture c. high-context culture d. mid-context culture e. low-context culture ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F

67. A ____ interaction requires more time because a relationship has to be developed, and trust and friendship must be established. a. high-context b. sales c. business d. low-context e. personal ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

108 TYP: F


68. A cultural attitude marked by the tendency to regard one's own culture as superior to others is called a. ethnocentrism. b. polycentrism. c. geocentrism d. technocentrism. e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

69. When organization managers have a(n) ____ attitude, they value employees as an end in themselves. a. ethnocentric b. humanistic c. instrumental d. pluralistic e. performance ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

70. When organization managers have a(n) ____ attitude, they treat employees as resources to be used. a. ethnocentric b. humanistic c. instrumental d. pluralistic e. performance ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

71. How many nations signed on for negotiation when GATT was created in 1947? a. 15 b. 23 c. 28 d. 40 e. 57 ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence 72. The European Union has expanded to a ____-nation alliance a. 14 b. 12 c. 27 d. 16 e. 21

111 TYP: F


ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

112 TYP: F

73. Which of the following has a goal to guide the nations of the world toward free trade and open markets? a. GATT b. WTO c. GLOBE d. EU e. NAFTA ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

111 TYP: F

74. The ____ is a single European currency that replaced 12 national currencies and unify a huge marketplace. a. Mark b. Franc c. MFN d. Euro e. Pound ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

112 TYP: F

75. Which organization originated and supports the idea of small businesses operating on a global level? a. GLOBE b. EU c. NAFTA d. ASEAN e. GATT ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

113 TYP: F

76. Carrie's Car Care receives more than 25% of its total sales revenues from operations outside of the United States. Carrie's would be considered a a. foreign national. b. wealth company. c. multinational corporation. d. globalization corporation. e. None of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: A

77. Which of the following characteristics distinguish a multinational corporation? a. Top management is expected to take a global perspective. b. The corporation is controlled by a single management authority. c. It is managed as an integrated worldwide business system.


d. All of these e. Top management is expected to take a global perspective and The corporation is controlled by a single management authority only. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

78. Which of the following companies place an emphasis on their home countries? a. Polycentric b. Geocentric c. Ethnocentric d. Global e. Regiocentric ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

79. ____ places an emphasis on a worldwide perspective. a. Polycentric companies b. Geocentric companies c. Ethnocentric companies d. Regiocentric companies e. Domestic companies ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

114 TYP: F

80. All of the following are components of cultural intelligence, EXCEPT: a. Physical b. Cognitive c. Emotional d. Analytical e. All of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

109 TYP: F

81. Which of the following refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it? a. Societal chaos b. Civilization distress c. Culture confusion d. Societal disorder e. Culture shock ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence 82. Which of these is a low-context culture? a. German b. Chinese

110 TYP: F


c. Korean d. Arab e. Japanese ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

107 TYP: F

83. All of the following are considered emerging economies EXCEPT: a. Brazil b. Russia c. India d. China e. Canada ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

89 TYP: F

84. The extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries is called: a. Standardization b. Industrialization c. Globalization d. Internationalism e. Linguistic pluralism ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

90 TYP: F

85. Creative Coverings is a small interior design company owned and managed by Lisa Smith. Since the company was established seven years ago, Lisa has only worked with clients near her hometown in Maryland. Creative Coverings fits into which stage of globalization? a. Domestic b. Regional c. International d. Multinational e. Global ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

91 TYP: A

86. Exporting, licensing, and direct investing are called __________ strategies because they represent alternative ways to sell products and services in foreign markets. a. globalized b. expansion c. retrenchment d. market entry e. concentrated business ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

93 TYP: F


87. CRL, a European plastics manufacturer, is considering forming an alliance with a U.S. military goods manufacturer to develop a new type of polymer that can be used for international industrial and military applications. Such a partnership represents what type of direct investment? a. Franchising b. Joint Venture c. Wholly owned affiliate d. Greenfield venture e. Outsourcing ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

94 TYP: A

88. For the past several years, foreign companies have invested more in business in ________ than in any other place in the world. a. Brazil b. India c. China d. United States e. Russia ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

96 TYP: F

89. With its large English-speaking population, _______ has numerous companies offering services such as call-center operations, data-processing, computer programming, and technical support. a. Greenland b. Russia c. China d. Mexico e. India ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

97 TYP: F

90. When the 2008 financial crisis began in the United States, it resulted in the collapse of the housing market and the failure of several large financial institutions. This crisis spread rapidly to the rest of the world. This example demonstrates which trend in the global economic environment? a. Economic development differs widely among countries of the world b. Market demands differ for products and services throughout the world c. Political instability is the primary result of economic failure d. World markets are economically interconnected e. Cultural factors have a greater impact on world markets than do economic factors ANS: PTS:

1

DIF:

3

REF:

100


NAT: AACSB Analytic | Environmental Influence

TYP: A

91. A.R.C. is a large non-profit humanitarian aid organization that has been forced to pull out of several African markets in recent years due to civil wars and large-scale violence. This demonstrates which frequently cited problem for international companies? a. Political instability b. Communist governments c. Economic instability d. Political risk e. Financial risk ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

102 TYP: A

92. Jana has a high tolerance for the unstructured, the unclear, and the unpredictable. She can best be described as having: a. High uncertainty avoidance b. Low uncertainty avoidance c. High degree of individualism d. Low degree of individualism e. Low level of power distance ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

105 TYP: A

93. Kim, a Japanese expatriate working in Denmark, tends to use communication primarily to build personal social relationships. She feels that relationships and trust are more important than business. Kim is surprised that her business associates in Denmark do not share the same views. Based on this information, Kim most likely grew up in what type of culture? a. Human-oriented b. Passive c. Assertive d. Low-context e. High-context ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

108 TYP: A

94. Sam is known by his colleagues as a great communicator, with an uncanny ability to shift speech patterns, expressions, and body language to be in tune with people from different cultures. Based on this example, Sam is strong in which component of cultural intelligence? a. Cognitive b. Emotional c. Physical


d. Tangible e. Intangible ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

111 TYP: A

95. In 2010, which of the following countries formed a free trade area with the ten countries that make up the Association of Southeast Asian Nations (ASEAN)? a. Laos b. United States c. Mexico d. China e. Japan ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

113 TYP: F

96. ________ is a concept that proposes that corporations can alleviate poverty and other social ills by selling to the world’s poorest people. a. Cream of the crop b. Skimming the barrel c. Bottom of the pyramid d. Top of the peak e. Base hierarchy ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

115 TYP: F

97. The Digitec company has recently decided to design and manufacture a laptop that retails for under $50, in an effort to make information technology available to people in places like rural Africa and rural India. This is known as what type of strategy? a. Bottom of the pyramid strategy b. Skimming the barrel strategy c. Cream of the crop strategy d. Top of the peak strategy e. Base price strategy ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Information Technologies CASE Scenario - Sharon Cannon

115 TYP: A


Sharon Cannon was an MBA student in Detroit, Michigan, with a managerial position at the Ford Motor Company plant. She was invited to join a company that had entered into a joint venture with a German firm to manage a Volkswagen plant. Sharon would be under contract for one year, with an option to renew for a total of three years. Her salary would be 350% more than she was currently earning, and she would be given two all-expenses paid vacations each year. The money and the benefits sounded very nice, but Sharon wasn't sure what the best choice would be. 1. The degree of international involvement for the joint venture is an example of a. outscoring. b. exporting. c. licensing. d. direct investing. e. greenfield venture. ANS: PTS: 1 DIF: 2 REF: 94 NAT: AACSB Analytic | Environmental Influence Questions TYP: A

KEY: Scenario

2. The American firm joining in the joint venture a. faces lower risk than if it were using a wholly-owned foreign affiliate. b. enjoys greater control than is it were using the wholly-owned affiliate. c. can anticipate a lower cost than a company that uses global outscoring. d. all of these. e. none of these. ANS: PTS: 1 DIF: 2 REF: 94 NAT: AACSB Analytic | Environmental Influence Questions TYP: A

KEY: Scenario

3. If she should decide to take the job, she will be most successful in a foreign assignment if she has a. culture shock b. cultural intelligence c. linguistic pluralism d. ethnocentrism e. geocentrism ANS: PTS: 1 DIF: 2 REF: 109 NAT: AACSB Analytic | Environmental Influence Questions

KEY: Scenario


TYP: A COMPLETION 1. In the ____________________ stage, exports increase, and the company usually adopts a multidomestic approach, probably using an international division to deal with the marketing of products in several countries individually. ANS: 2. In the ____________________ stage, the company has marketing and production facilities located in many countries and more than one-third of annual sales come from outside the home country. ANS: 3. ____________________ means engaging in the international division of labor so that manufacturing can be done in countries with the cheapest sources of labor and supplies. ANS: 4. ____________________ is the barter of products for products rather than the sale of products for currency. ANS: 5. Whereby a company builds a subsidiary from scratch in a foreign country, is referred to as a(n) ____________________, and is the most risky type of direct investment. ANS: 6. ____________________ is the management of business operations conducted in more than one country. ANS: 7. When it comes to economic development, a currently developing country is also called a(n) ____________________. ANS: 8. ____________________ is the criterion traditionally used to classify countries as developed or developing. ANS: 9. A country's physical facilities that support economic activities make up its ____________________.


ANS: 10. ____________________ (objects, taboos, holidays) is a sociocultural factor in the international environment. ANS: 11. The risk of loss due to actions by host country governments is known as ____________________. ANS: 12. Riots, revolutions, civil disorders, and frequent changes in government that affect the operations of an international company shows ____________________ in a country. ANS: 13. Companies need to be cautious of ____________________ and ____________________ when going international because they differ from country to country. ANS: 14. A nation's ____________________ includes the shared knowledge, beliefs, and values, as well as the common modes of behavior and ways of thinking, among members of a society. ANS: 15. The degree to which people accept inequality in power among institutions, organizations, and people is called ____________________. ANS: 16. A value characterized by people's intolerance for uncertainty and ambiguity and resulting support for beliefs that promise certainty and conformity refers to ____________________. ANS: 17. A preference for a loosely knit social framework in which individuals are expected to take care of themselves is called ____________________. ANS:


18. A preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests refers to ____________________. ANS: 19. ____________________ stands for preference for achievement, heroism, assertiveness, work centrality (with resultant high stress), and material success. ANS: 20. ____________________ reflects the values of relationships, cooperation, group decision making, and quality of life. ANS: 21. In countries where women are often in positions of high status, the Globe Project would describe that culture as high in ____________________. ANS: 22. A country that places emphasis on fairness and values kindness would be described by the Globe Project as high in ____________________. ANS:

23. In a(n) ____________________, people use communication primarily to exchange facts and information. ANS: 24. ____________________ means that people have a tendency to regard their own culture as superior to other cultures. ANS: 25. An alliance begun in 1957 to improve economic and social conditions among its members, it has evolved into the 27-nation __________. ANS: 26. The ____________________ is the single European currency that has replaced 12 national currencies. ANS:


27. ____________________ went into effect in early 1994, effectively creating a megamarket among the U.S., Canada, and Mexico. ANS: 28. A multinational corporation typically receives at least ____________________% of its total sales revenues from outside the parent's home country. ANS: 29. MNCs that are oriented toward the markets of individual foreign host countries are considered ____________________. ANS: 30. MNCs that are truly world-oriented and favor no specific country are considered ____________________. ANS: 31. ____________________ refers to a person's ability to use reasoning and observation skills to interpret unfamiliar gestures and situations and devise appropriate behavioral responses. ANS: 32. ____________________ refers to the frustration and anxiety that result from constantly being subjected to strange and unfamiliar cues about what to do and how to do it. ANS: 33. The frustration and anxiety that results from constantly being subjected to strange and unfamiliar cues about what to do and how to do it is called ____________________. ANS: SHORT ANSWER 1. List the four stages of globalization. ANS: 2. List the three examples of direct investing mentioned in your text. ANS: 3. List three examples of a country's infrastructure. ANS:


4. List the four dimensions of national value systems identified by Hofstede. ANS: 5. List five of the countries that make up the European Union (EU). ANS: 6. List the three components of cultural intelligence. ANS:

ESSAY 1. Describe the four stages of globalization with specific reference to strategic orientation, stage of development, cultural sensitivity, and manager assumptions. ANS: 2. What is global outsourcing? Identify a unique variation of global outsourcing. ANS: 3. Direct investing means that the company is involved in managing the productive assets in a foreign country. There are three options for direct investing. Name and compare these three options. ANS: 4. Identify and briefly explain at least two key factors in economic, sociocultural and political-legal environments that affect an organization. ANS:

5. Briefly explain the difference between high power distance and low power distance. ANS: 6. Describe GATT and the World Trade Organization.


ANS: 7. Explain NAFTA. ANS: 8. Briefly describe the social characteristic of ethnocentrism and explain how this can have an impact on the success of an international manager. ANS:

9. Briefly describe two personal challenges for global managers. ANS:

Chapter 5—Managing Ethics and Social Responsibility TRUE/FALSE 1. A public poll finds that 79 percent of respondent believe cheating in business is more common today than it was ten years ago. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Ethical Responsibilities

123 TYP: F

2. The domain of codified law pertains to behavior about which the law has no say and for which an individual or organization enjoys complete freedom. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

122 TYP: F

3. Ethics, found between the domains of law and free choice, is the code of moral principles that governs any individual or groups. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: F

4. Free choice lies between the domains of codified law and ethics. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities 5. If something is ethical, it must not be illegal.

122 TYP: F


ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: F

6. An ethical dilemma arises in a situation when each alternative choice or behavior is undesirable because of potentially harmful ethical consequences. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

125 TYP: F

7. The moral agent is an individual who must make an ethical choice in an organization. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

125 TYP: F

8. Utilitarian, individualism, moral-rights, and objective dualism are the four approaches that guide ethical decision-making. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

9. The basis for the recent trend among companies to police employee personal habits such as alcohol and tobacco consumption on the job is called the utilitarian ethic. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

10. Monitoring the Internet to maintain the company's ethical climate and workplace productivity could be considered part of an individualistic approach. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

11. The ethical concept that acts are moral when they promote the individual's best long term interests, which ultimately leads to the greater good, is known as the moral rights approach. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

12. The ethical concept that argues that moral behaviors produce the greatest good for the greatest number of people is objective dualism. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

13. In the individualism approach, the right of free speech must be considered.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

14. Individualism is popular in the highly organized society of today because it supports immediate self-gain. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

15. The right of free consent, the right to privacy, and the right of freedom of conscience are rights that should be considered in the moral rights approach. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

16. Procedural justice requires that different treatment of people not be based on arbitrary characteristics. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

17. The justice approach is closest to the thinking underlying the domain of free choice. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

18. Procedural justice requires that rules be stated clearly, consistently and impartially enforced, and administered fairly. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

19. The Preconventional level of Personal Moral Development lives up to expectations of others, upholds laws, and fulfills duties and obligations of the social system. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

20. Level 3 of the Personal Moral Development model is Conventional. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

21. Most of the laws guiding human resource management are based on the individualism approach. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F


22. Individuals, at the preconventional level, are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

23. Individuals are concerned with external rewards and punishments at the principled level. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

24. An individual at the postconventional level lives up to expectations of others, fulfills duties and obligations of social systems, and upholds law. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

25. Principled level of moral development is also referred to as the postconventional level. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

26. The majority of managers operate at the preconventional level of personal moral development. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

27. Approximately 20% of American adults, according to your text, ever reach the postconventional level of moral development. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

28. The great majority of managers operate at level two, the conventional level. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

29. MANAGER'S SHOPTALK in Chapter 5 recommends that when challenging your boss on ethical issues you do not demand a resolution on the spot. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

131 TYP: F

30. The NEW MANAGER SELF-TEST in Chapter 5 suggests that orienting new people, even though it is not required, often reflects a person’s level of moral development.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

132 TYP: F

31. Social responsibility is management's obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organization. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

132 TYP: F

32. Social responsibility covers a narrow range of issues, many of which are unambiguous with respect to right or wrong. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

33. Important stakeholders in corporations include the government and the community. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

34. A stakeholder is any group within or outside the organization that has a stake in the organization's performance. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

35. All stakeholders of an organization are its stockholders but not all stockholders are its stakeholders. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

36. Special interest groups include trade associations, political action committees and consumerists. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

37. Economic development that generates wealth and meets the needs of the current population while preserving the environment for the needs of future generations refers to sustainability. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

135 TYP: F

38. One study found that MBA students would forgo an average of $13,700 in compensation to work for a sustainable company. ANS: PTS:

1

DIF:

3

REF:

135


NAT: AACSB Ethics | Ethical Responsibilities

TYP: F

39. Economic, legal, ethical, and discretionary responsibilities are the four areas of social responsibility which can be used to evaluate corporate social performance. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

136 TYP: F

40. Economic responsibility defines what society deems as important with respect to appropriate corporate behavior. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

136 TYP: F

41. Ethical responsibility includes behaviors that are not necessarily codified into law and may not serve the corporation's direct economic interests. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

137 TYP: F

42. Ethical behavior occurs when decisions enable an individual or company to gain at the expense of society. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

137 TYP: F

43. Unfortunately, discretionary responsibility is involuntary and is mandated by economics, law, or ethics. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

137 TYP: F

44. A formal statement of the organization's values regarding moral principles and governing its response to social values is called a code of ethics. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

45. Managers who are essentially ethical individuals make up the first pillar of an ethical organization. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

46. Principle-based statements define fundamental values and contain general language about company responsibilities, quality of products, and treatment of employees.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

47. Policy-based statements generally outline the procedure to be used in specific ethical situations. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

48. One of the newest positions in organizations is the chief operating officer, a response to widespread financial wrongdoing in recent years. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

140 TYP: F

49. A group of executives appointed to oversee company ethics is an ethics committee. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

140 TYP: F

50. A chief ethics officer is a company executive who oversees all aspects of ethics and legal compliance. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

140 TYP: F

51. Ethics training programs are not an important supplement as long as a well-written code of ethics exists. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

140 TYP: F

52. The disclosure by an employee of illegal, immoral, or illegitimate practices by the organization is called whistle-blowing. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

141 TYP: F

53. Managers are often concerned good citizenship will hurt performance. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

141 TYP: F

54. Courage does not play a role in the development of unethical or even illegal behavior. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

121 TYP: F


55. Managers carry a tremendous responsibility for setting the ethical climate in an organization and can act as role models for others. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

124 TYP: F

56. Most ethical dilemmas in business involve a conflict between stakeholders and shareholders. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

126 TYP: F

57. The virtue ethics approach to ethical decision making sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

58. The virtue ethics approach to ethical decision making says that moral behavior stems from personal virtues. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

59. A survey of 6,000 global consumers in the fall of 2008 found that 87 percent believe it is their “duty� to contribute to a better environment. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

135 TYP: F

60. Economic responsibility, carried to the extreme, is called the profit-maximizing view. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

136 TYP: F

61. Although public confidence in business managers is at an all-time low, politics, sports, and non-profit organizations have not been affected. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: F

MULTIPLE CHOICE 1. Which of the following refers to the code of moral principles and values that govern behaviors with respect to what is right and wrong? a. Social responsibility b. Free domain c. Ethics d. Codified law


e. Discretionary responsibility ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Ethical Responsibilities

122 TYP: F

2. An organization's decision to produce a new product is in the a. domain of codified law. b. domain of free choice. c. domain of ethics. d. domain of compensatory justice. e. domain of social responsibility. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: A

3. A new drug has not been approved by the FDA to sell in the U.S. because further testing is needed. The company has a chance to sell its product in another country immediately to start recovering the costs of R & D and production three years ahead of time. This example places the decision in which of the categories from the text? a. The ethical domain b. The domain of free choice c. The legal domain d. The obstructive category e. The protective domain ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: A

4. Which of the following is a(n) is the individual who must make an ethical choice in an organization? a. The symbolic leader b. An obstructive manager c. The defensive individual d. The moral agent e. An authoritarian manager ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

125 TYP: F

5. Sharon is a manager at Softest Tissue Corporation. She is faced with an interesting problem. One of her employees has been cheating the company out of expense money. Sharon must decide whether or not to fire this employee. In this role, Sharon is acting as a. a moral agent. b. an ethical theorist. c. a symbolic leader. d. an authoritarian leader. e. an obstructive manager.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

125 TYP: A

6. The assumption that "If it's not illegal, it must be ethical," ignores which of the following? a. Domain of codified law b. Domain of ethics c. Domain of free choice d. Discretionary responsibility e. Domain of symbolism ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: F

7. A situation that arises when all alternative choices or behaviors have been deemed undesirable because of the potentially negative ethical consequences, making it difficult to distinguish right from wrong, is considered a. a moral agent. b. a social responsibility. c. an ethical dilemma. d. an ethical standard. e. discretionary responsibility. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

125 TYP: F

8. A normative approach to ethical decision making a. reduces ethical dilemmas to easy-to-understand formulas. b. uses various approaches to describe guiding values for decisions. c. states that everyone must use their employer's value system at work. d. dictates only one way to choose to resolve dilemmas. e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

9. Which approach is the ethical concept that moral behaviors produce the greatest good for the greatest number? a. Defensive b. Justice c. Utilitarian d. Individualism e. Moral-rights ANS: PTS:

1

DIF:

1

REF:

127


NAT: AACSB Ethics | Ethical Responsibilities

TYP: F

10. Robbie's Robots decided to continue operations at one plant while shutting down another. The decision was justified on the basis of what was best for the total corporation. This is an example of the a. utilitarian approach. b. individualism approach. c. moral-justice approach. d. justice approach. e. illegal approach. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: A

11. Caleb is a manager at Computer-Care Company. He is expected to consider the effort of each decision alternative on all parties and select the one that optimizes the satisfaction for the greatest number of people. This is an example of the a. utilitarian approach. b. individualism approach. c. moral-justice approach. d. justice approach. e. soft-line managerial approach. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: A

12. Which ethical approach are companies citing to justify their policing of employee's personal habits on and off the job, such as alcohol and tobacco consumption? a. Justice approach b. Utilitarian approach c. Individualism approach d. Moral-justice approach e. Discretionary responsibility ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

13. The ____ ethic was the basis for the state of Oregon's decision to extend Medicaid to 400,000 previously ineligible recipients by refusing to pay for high-cost, high-risk procedures. a. justice b. moral-rights c. obstructive d. individualism e. utilitarian


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: A

14. When everyone is pursuing self-direction, the greater good is ultimately served because people learn to accommodate each other in their own long-term interest is an example of ____. a. utilitarian approach b. individualism approach c. moral-justice approach d. justice approach e. social responsibility ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: A

15. Which of the following is NOT a normative ethics approach? a. Utilitarian approach b. Individualism approach c. Social responsibility approach d. Moral-rights approach e. All of these are normative approaches as described in the text. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

16. The golden rule "do unto others as they would do unto you" is a. an example of the utilitarian approach to ethical behavior. b. representative of the moral-justice approach to moral decision making. c. an example of the values that guide the individualism approach to ethical behavior. d. silly and outdated. e. an example of the justice approach to ethical behavior. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: A

17. Human beings have fundamental rights and liberties that cannot be taken away by another individual's decision. This ethical decision making approach is known as the a. utilitarian approach. b. individualism approach. c. moral-rights approach. d. dualism approach. e. None of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

18. The ____ refers to the ethical concept that moral decisions are those that best maintain the rights of those people affected by them. a. individualism approach b. justice approach c. utilitarian approach


d. moral-rights approach e. discretionary responsibility approach ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

19. Which of the following is NOT one of the moral rights that could be considered during decision-making? a. The right to free consent b. The right to invade privacy c. The right to free speech d. The right of freedom of conscience e. The right to life and safety ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

20. ____ refers to the concept that different treatment of people should not be based on arbitrary characteristics. a. Procedural justice b. Compensatory justice c. Distributive justice d. Organizational justice e. Moral-justice ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

21. Individualism is most closely related to a. social responsibility. b. free choice. c. economic responsibility. d. codified law. e. togetherness. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

22. ____ to ethical decision-making is consistent with due process, free consent, privacy, freedom of conscience and free speech. a. Moral-rights approach b. Individualism approach c. Utilitarian approach d. Justice approach e. Dual-economic approach ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

23. Sexual harassment is unethical because it violates an important part of which approach to ethical behavior? a. The utilitarian approach


b. c. d. e.

The individualism approach The justice approach The moral-rights approach The defensive approach

ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

24. The ethical decision approach that requires persons to be guided by standards of equity, fairness and impartiality is the a. moral-rights approach. b. individualism approach. c. utilitarian approach. d. justice approach. e. discretionary responsibility. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

25. The moral rights approach that deals with performing experimental treatment on unconscience trauma patient is the a. right of free consent. b. right to privacy. c. right of freedom of conscience. d. right of free speech. e. right of due process. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

26. Which of the following is not a concern to managers under the justice approach? a. Compensatory justice b. Distributive justice c. Procedural justice d. Obstructive justice e. All of these ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

127-128 TYP: F

27. Disk Replacement Services has just completed a procedure manual to handle employee grievances. One of the main criteria is to make it clear to employees that rules will be administered fairly and consistently. Disk Replacement operates on a. the procedural justice approach. b. the utilitarian approach. c. the individual approach.


d. the defensive approach. e. the free-choice approach. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: A

28. Which of these refers to procedural justice? a. The concept that different treatment of people should not be based on arbitrary characteristics b. The concept that rules should be clearly stated and consistently and impartially enforced c. The concept that individuals should be compensated for the cost of their injuries by the party responsible d. The concept that people should be treated differently e. None of these ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

29. The concept that the party responsible should compensate individuals for the cost of their injuries is referred to as a. distributive justice. b. injury justice. c. procedural justice. d. organizational justice. e. compensatory justice. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

30. The thinking underlying the domain of ____ is the closest to the justice approach. a. social responsibility b. free choice c. law d. discretionary responsibility e. ethics ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

128 TYP: F

31. Most of the laws guiding human resource management are based on the a. utilitarian approach. b. moral-rights approach. c. individualism approach. d. justice approach.


e. collectivism approach. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

127 TYP: F

32. ____ is NOT included in the model of personal moral development described in your text. a. Preconventional level b. Conventional level c. Principled level d. Postconventional level e. All of these are included in the model ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

33. In what stage of personal moral development is a person mostly concerned with external rewards and personal consequences of an action? a. Preconventional b. Conventional c. Principled d. Discretionary e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

34. Most people have learned to conform to expectations of good behavior expected by colleagues, family, friends, and society. They are in what stage of moral development? a. Preconventional b. Conventional c. Discretionary d. Principled e. Traditional ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

35. Which of these best illustrates the preconventional stage of moral development? a. Everybody else is doing it, so it must be okay. b. What would my boss think if I did this? c. I know this is not right, and I will not do it, even if everyone else is. d. What am I going to get from making this decision? e. All of these ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

36. The conventional stage of moral development is best described by which of the following statements? a. I won't do that because the boss will be upset with me.


b. c. d. e.

Everybody else is doing it, so it must be okay. I know this is not right, and I will not do it, even if everyone else is. What am I going to get from making this decision? All of these

ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: A

37. The ____ leadership style matches with the preconventional level of personal moral development. a. autocratic b. team oriented c. servant leadership d. guiding/encouraging e. transforming ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

38. ____ matches with the preconventional level of personal moral development. a. Work group collaboration b. Task accomplishment c. Empowered employees d. Full participation e. Transforming ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

39. Which of these employee behaviors matches with the conventional level of personal moral development? a. Task accomplishment b. Empowered employees c. Work group collaboration d. Full participation e. Act in own interest ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

40. Which of the following stages is the stage of personal moral development in which an individual develops an internal set of standards and values? a. Preconventional b. Conventional c. Principled d. Discretionary e. Social ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F


41. People making decisions based on an internal set of beliefs that has more meaning to them than the expectations of others a. are in the preconventional level of moral development. b. are in the conventional level of moral development. c. are in the principled level of moral development. d. do not care what people think of them. e. none of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129-130 TYP: F

42. ____ matches with the postconventional level of personal moral development. a. Team oriented b. Autocratic c. Guiding/encouraging d. Coercive e. Servant leadership ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

43. Which of these employee behaviors matches with the postconventional level of personal moral development? a. Empowered employees, full participation b. Task accomplishment c. Act in own interest d. Work group collaboration e. Autocratic ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

44. The great majority of managers operate at the a. preconventional level. b. principled level. c. conventional level. d. postconventional level. e. autocratic level. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

129 TYP: F

45. Only about ____ percent of American adults reach the level-three stage of moral development. a. two b. four c. eleven d. fifteen e. twenty ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F


46. Regarding the levels of personal moral development, the majority of managers operate at the ____ level. a. preconventional b. autocratic c. postconventional d. conventional e. transformative ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: F

47. MANAGER'S SHOPTALK in Chapter 5 suggests all of the following when challenging the boss on ethical issues EXCEPT: a. do your research b. begin the meeting by taking the floor c. pay attention to your word choice and demeanor d. take care how you suggest your alternative solution e. be patient ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

131 TYP: F

48. The obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization is referred to as a. organizational responsibility. b. social responsibility. c. discretionary responsibility. d. economic responsibility. e. none of these. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

132 TYP: F

49. Which of these is true about the policy a bank adopts toward its investing of depositor's money? a. It is an expression of its philosophy of social responsibility. b. It is important only to the community. c. It has no ethical implications. d. It would represent its personal state of moral development. e. All of these. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: A

50. Any group within or outside the organization that has a stake in the organization's performance is called a. a supplier. b. an international customer. c. a stakeholder. d. OPEC.


e. a trade association. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

51. Primary stakeholders of an organization include a. employees. b. customers. c. investors and shareholders. d. suppliers. e. all of these. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

52. All of the following are examples of special interest groups EXCEPT a. professional associations. b. trade associations. c. political action committees. d. courts. e. consumerists. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

53. What type of a stakeholder would a nature conservation group be for a paper manufacturing company? a. Supplier b. Competitor c. Employee d. Special interest group e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

133 TYP: F

54. With a philosophy of ____, managers weave environmental and social concerns into every strategic decision, revise policies and procedures to support these efforts and goals. a. sustainability b. conservation c. ethics d. preservation e. human concerns ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

135 TYP: F

55. ____ is economic development that generates wealth and meets the needs of their current generation while focusing on future generations. a. Ethical management b. Activist strategy


c. Sustainability d. Market strategy e. Future management ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

135 TYP: F

56. Which of the following concepts argues that organizations can find innovative ways to create wealth at the same time they are preserving natural resources? a. Preservation b. Conservation c. Environmentalism d. Protectionism e. Sustainability ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

135 TYP: F

57. According to the book's model for judging corporate social performance, social responsibility is divided into what into four sections? a. Ethical, legal, technical, and rational b. Mandatory, technical, discretionary, and economic c. Legal, mandatory, economic, and ethical d. Discretionary, legal, economic, and ethical e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

136 TYP: F

58. ____ is considered a decision that enables an individual or company to benefit at society's expense. a. A legal behavior b. An unethical behavior c. An economic responsibility d. A discretionary responsibility e. A responsible behavior ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

137 TYP: F

59. ____ includes behavior that is not always written down and may actually not serve an organization's bottom-line. a. Legal responsibility b. Economic responsibility c. Ethical responsibility d. Discretionary responsibility e. None of these ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

137 TYP: F


60. With respect to appropriate corporate behavior, what society deems ____ as important. a. ethical responsibility b. discretionary responsibility c. economic responsibility d. legal responsibility e. moral responsibility ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

136 TYP: F

61. Which of the following responsibilities is purely voluntary and is guided by a company's desire to make social contributions not mandated by economics, law, or ethics? a. Ethical b. Economic c. Legal d. Discretionary e. Stakeholder ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

137 TYP: F

62. ____ is the responsibility that goes beyond societal expectations to contribute to the community welfare. a. Ethical responsibility b. Discretionary responsibility c. Economic responsibility d. Legal responsibility e. Technical responsibility ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

138 TYP: F

63. ____ means that managers are honest and trustworthy, fair in their dealings with employees and customers, and behave ethically in both their personal and professional lives. a. Ethical leadership b. Followership c. Corporate espionage d. Command-and-control approach e. Concern for production leadership ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

138 TYP: F

64. A code of ____ is a formal statement of the company's values concerning ethics and social issues. a. integrity b. trust c. citizenship d. ethics


e. honesty ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

65. Statements that define fundamental values and reference organizational responsibilities, products and employees are often called ____. a. principle-based b. policy-based c. ethically-based d. codified e. codes of organizational integrity ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

66. An example of an ethical structure is a. chief ethics officer. b. a formal statement of company values. c. an equal opportunity policy. d. whistle-blowing. e. corporate speech. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

140 TYP: F

67. When an official is given the responsibility of overseeing all aspects of ethics and legal compliance. S/he is referred to as a. a whistle-blower. b. a chief ethics officer. c. vice-president of human resource management. d. a yes-man. e. a political play. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

140 TYP: F

68. Which of these is the disclosure by an employee of an illegal activity? a. Tattling b. Whistle-blowing c. Organizational communication d. The filing of a disclosure statement e. Snooping ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

141 TYP: F

69. ____ is not part of the structures and systems pillar of an ethical organization. a. Corporate culture b. Code of ethics c. Ethics committee d. Whistle-blowing mechanisms


e. Rewarding ethical behavior ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

139 TYP: F

70. The relationship between social responsibility and financial performance has been shown to be ____. a. non-existent b. positive c. negative d. not important e. a reflection of top leadership ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

141 TYP: F

71. Anne Chinoda, top executive at Florida Blood Centers, is under pressure to resign because she took a $71,000 pay increase just months before she laid off 42 employees. Chinoda’s decision lies in the a. domain of codified law. d. domain of social responsibility. b. domain of free choice. e. none of these. c. domain of ethics. ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

123 TYP: A

72. A recent poll found that ________ percent of people surveyed say corporate America’s moral compass is pointing in the wrong direction. a. 10 d. 76 b. 29 e. 98 c. 52 ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

124 TYP: F

73. When the USS Indianapolis sank after being torpedoed, one Navy pilot disobeyed orders and risked is life to save men who were being picked off by land sharks. The Navy pilot was operating from the ________ level of moral development. a. preconventional d. lowest b. conventional e. conservative c. postconventional ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Ethics | Ethical Responsibilities

130 TYP: A

74. The profit-maximizing view of economic responsibility is advocated by ________. a. Milton Friedman d. Warren Buffett b. Arthur Anderson e. Steve Jobs c. Donald Trump ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

136 TYP: F


75. Of the following, which may whistle-blowers suffer? a. Job loss d. Hostile work environment b. Ostracism by coworkers e. All of the above c. Transfer to lower-level position ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

141 TYP: F

76. Examples of unethical behavior toward ________ include a hostile work environment and violations of health and safety rules. a. customers d. suppliers b. financiers e. employees c. society ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Ethics | Ethical Responsibilities

124 TYP: F

77. The decision by ABC International to downsize and reduce its labor force is in the a. domain of codified law. d. social responsibility. b. domain of free choice. e. none of these. c. domain of ethics. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Ethics | Ethical Responsibilities

122-123 TYP: A

CASE Scenario - Larry Campbell The pressure was on again. Larry Campbell, the Vice President at ToolTime Hardware, Inc., was receiving requests from men and women inside the firm and outside the firm, asking him to review the company's promotion policies. Of the 52 middle and high level executives, only three were women. The pressure was to review the policies that had led to this perceived imbalance and, if appropriate, take the steps necessary for correction. 1. The decision to recruit, hire, train and promote both men and women equally is based on the ethical approach of a. utilitarian approach. b. individualism approach. c. moral rights approach. d. all of these provide the basis. e. none of these. ANS: PTS: 1 DIF: 2 REF: 127 NAT: AACSB Ethics | Ethical Responsibilities Questions TYP: A

KEY: Scenario


2. Using the justice approach for ethical decision-making, the logic of promoting qualified men and women would be supported by a. equal rights justice. b. distributive justice. c. procedural justice. d. compensatory justice. e. all of these. ANS: PTS: 1 DIF: 2 REF: 128 NAT: AACSB Ethics | Ethical Responsibilities Questions TYP: A

KEY: Scenario

3. A(n) _______ would outline the procedures Larry should use in this and other ethical situations. a. principle-based statement b. code of ethics c. corporate credo d. policy-based statement e. ethics committee ANS: PTS: 1 DIF: 2 REF: 139 NAT: AACSB Ethics | Ethical Responsibilities Questions TYP: A

KEY: Scenario

COMPLETION 1. __________ is the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong. ANS: 2. When values and standards are written into the legal system, it is referred to as ______. ANS: 3. A(n) ________ arises in a situation when each alternative choice or behavior is undesirable because of potentially harmful ethical consequences.


ANS: 4. The ________ is an individual responsible for making an ethical choice. ANS:

5. The ethical concept that moral behaviors produce the greatest good for the greatest number is referred to as ________ approach. ANS: 6. The _________ approach contends that acts are moral when they promote the individual's best long-term interests. ANS: 7. The _________ approach assets that human beings have fundamental rights and liberties that cannot be taken away by an individual's decision. ANS: 8. The ________ approach holds that moral decisions must be based on standards of equity, fairness, and impartiality. ANS: 9. __________ justice requires that different treatment of people not be based on arbitrary characteristics. ANS: 10. ________ justice requires that rules should be clearly stated and consistently and impartially enforced. ANS:

11. ________ justice argues that individuals should be compensated for the cost of their injuries by the party responsible. ANS: 12. At the _________ level of personal moral development, individuals are most concerned with external rewards and punishments.


ANS: 13. People learn to conform to the expectations of good behavior that are set by peers and society at the _________ level. ANS: 14. Individuals at the __________ level are guided by an internal set of values and standards and will even disobey rules or laws that violate these principles. ANS: 15. Most managers operate at the _________ level. ANS: 16. Management's obligation to make choices that will contribute to the well being of both the organization and society is known as __________. ANS: 17. A(n) _________ is any group within or outside the organization that has a stake in the organization's performance. ANS: 18. Organizations that are ________ responsible consider the effects of their actions on all stakeholder groups and may invest in a number of philanthropic causes that benefit stakeholders. ANS: 19. __________ refers to interacting with the community in which a company does business in a way that makes money for the company but also improves the long-term well-being of the community. ANS: F 20. When a company does just what is necessary to satisfy legal requirements, it falls under the _________ approach in shades of green. ANS: 21. ___________ responsibility is purely voluntary and guided by a company's desire to make social contributions not mandated by economics, law, or ethics. ANS:


22. A(n) __________ is a formal statement of the company's values concerning ethics and social issues; it communicates to employees what the company stands for. ANS:

23. __________ generally outline the procedures to be used in specific ethical situations, such as marketing practice, conflicts of interest, and observance of laws. ANS: 24. A group of executives assigned to oversee the organization's ethics by ruling on questionable issues and disciplining violators is referred to as a(n) _________. ANS: 25. __________ programs help employees deal with ethical questions and translate the values stated in a code of ethics into everyday behavior. ANS: 26. Employee disclosure of illegal organization activities is known as ________. ANS: 27. The relationship between social responsibility and financial performance has been shown to be __________. ANS: 28. A decision to monitor employees’ nonwork activities violates the right to ________. ANS:

29. The ________ approach to ethical decision making sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account. ANS: 30. The ________ approach to ethical decision making says that moral behavior stems from personal virtues. ANS: vir


31. The ________ approach to economic responsibility means that economic gain is the only social responsibility and can lead companies into trouble. ANS: SHORT ANSWER 1. List the four criteria for ethical decision-making described in the book. ANS: 2. List three of the six moral rights that should be considered during decision making. ANS:

3. List three examples of primary stakeholders. ANS: 4. List the four responsibilities of corporate social performance. ANS: ESSAY 1. Define ethics and explain how the domain of ethics relates to law and free choice. ANS: 2. List the four approaches that are used to describe values for guiding ethical decision making. Briefly describe each. ANS: 3. Briefly explain the justice approach to ethics and then explain the three types of justice. ANS: 4. List and define the stages of moral development. ANS: PTS: 1

DIF: 2

REF: 129


NAT: AACSB Ethics | Ethical Responsibilities

TYP: F

5. What is social responsibility? Why is it considered a difficult concept to grasp? ANS: 6. Explain the concept of a stakeholder and list five common stakeholders. ANS: 7. List and define the criteria of corporate social responsibility. ANS: 8. Explain the differences between principle-based statements and policy-based statement in an organization's code of ethics. ANS:

Chapter 6—Managing Small Business Start-Ups TRUE/FALSE 1. Sole proprietorships are the fastest growing segment of small business in both the U.S. and Canada. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

147 TYP: F

2. The fastest growing segment of small business in both the U.S. and Canada is partnerships. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

147 TYP: F

3. The process of initiating a business venture, gathering and organizing the appropriate resources, and assuming the associated risks and rewards refers to Entrepreneurship. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

4. Sole proprietorships are the fastest growing segment of small business. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

147


5. Entrepreneurs in the sustainer category are rewarded by the personal satisfaction of being business owners. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

6. Entrepreneurs in the sustainer category alike the chance to balance work and personal life and often don't want the business to grow too large. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

7. Entrepreneurs in the optimizer category are rewarded by the personal satisfaction of being business owners. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

8. Optimizers are rewarded by chance to work on something new and creative. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

9. Small businesses represent 68 percent of all firms and employ about three quarters of all private sector employees. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

150 TYP: F

10. The primary focus of most entrepreneurs is retail, manufacturing and/or service type of businesses. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

151 TYP: F

11. Hong Kong is the most entrepreneurial country, with 47.4 percent of individuals age 18 to 64 starting a new business. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

150 TYP: F

12. Small businesses, according to the Small Business Administration, employ more than 90 percent of the private workforce in the United States and are responsible for 85 percent of all business innovations. ANS: PTS:

1

DIF:

3

REF:

151-152


NAT: AACSB Analytic | Creation of Value

TYP: F

13. Entrepreneurship and small business in the United States is an engine for job creation and innovation. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

151 TYP: F

14. Women and minorities who have found their opportunities limited in the corporate world are seeing intrapreneurship as the only way to go. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

153 TYP: F

15. Immigrants are more likely to start small businesses than native-born Americans. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

152 TYP: F

16. Entrepreneurs are in more control of their environment, generally speaking, and can be expected to have an external locus of control. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

154 TYP: F

17. People who have high achievement needs like to set their own goals, which are moderately difficult. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

155 TYP: F

18. Every time Tina Faye does poorly on an exam and blames some outside factor, she can be described as having an external locus of control. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: A

19. The psychological characteristic that allows a person to be untroubled by disorder and uncertainty is called tolerance for ambiguity. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: F

20. A tolerance for ambiguity is a psychological characteristic that enables a person to accept the threat of competition and potential risk. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: F


21. Entrepreneurs are able to deal easily with delays and exhibit high levels of patience, knowing that the results will be worth the wait. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: F

22. Social entrepreneurs have a primary goal of improving society rather than maximizing profits. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Ethical Responsibilities

157 TYP: F

23. Social entrepreneurship combines the creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for the better. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Ethical Responsibilities

156 TYP: F

24. A document specifying the business details prepared by an entrepreneur prior to opening a new business is known as a business plan. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

159 TYP: F

25. Since a corporation is a legal structure reserved for large firms, small businesses have two basic choices for legal structure of their company: proprietorship and partnership. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

26. Forty-one percent of people start a business to fulfill a dream. ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

159 TYP: F

27. A proprietorship is an unincorporated business owned by two or more people. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

28. The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

29. Two principle advantages of forming a corporation are continuity and limits on the owners' liability. ANS: PTS:

1

DIF:

2

REF:

160


NAT: AACSB Analytic | Creation of Value

TYP: F

30. Borrowing money that has to be repaid at a later date in order to start a business is equity financing. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

163 TYP: F

31. Borrowing from family and friends is a common source of debt financing for a startup business. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

162 TYP: F

32. Equity financing is when funds are invested in exchange for ownership in the company. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

163 TYP: F

33. A venture capital firm is a group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

163 TYP: F

34. A business opportunity that provides shared office space, shared secretarial assistance, management support services, and management advice to entrepreneurs is a franchise. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

164 TYP: F

35. The advantage of buying an existing business is the ability to develop and design the business in the entrepreneur's own way. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

164 TYP: F

36. A business incubator is an independent company producing a product or service similar to that produced by the entrepreneur's former employer. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

165 TYP: F

37. An attractive innovation for entrepreneurs who want to start a business from scratch is to join a business incubator. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

165 TYP: F


38. To succeed in the competitive online market, aspiring entrepreneurs need to identify a market niche that isn't being served by other companies. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

167 TYP: F

39. The first stage of growth for an entrepreneurial company is the investment stage. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

168 TYP: F

40. The main problems are producing the product or service and obtaining customers in the survival stage of growth. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

168 TYP: F

41. A domain name gives a company an address on the Web and a unique identity. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

167 TYP: F

42. The takeoff stage is the last of the five stages of growth for an entrepreneurial company. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F

43. In the start-up stage of an entrepreneurial business, formal planning tends to be nonexistent except for the business plan. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F

44. At the success stage, the company's substantial financial gains may come at the cost of losing its advantages of small size. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F

45. At Stage 3 of growth for an entrepreneurial firm, managers often are hired to take over duties performed by the owner. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

170 TYP: F

46. The owner should start implementing more structured control systems by Stage 3 of growth for an entrepreneurial firm.


ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F

47. The failure rate for high-tech business is lower than the failure rate for conventional businesses. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

48. During turbulent times, small business formation is the primary process by which an economy recreates and reinvents itself. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

49. The economic recession of the late 2000s has had minimal effect on small businesses. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

151 TYP: F

50. Owning 40 percent of the private businesses in the United States, women create about 50 percent of the venture-backed technology start-ups. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

153 TYP: F

51. Minorities show a high rate of entrepreneurship in the United States, owning 5.8 million firms in 2007 that generated $1 trillion in revenues. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

153 TYP: F

52. Particularly in a turbulent environment, the three most important traits of successful entrepreneurs are realism, flexibility, and passion. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

156 TYP: F

53. Social entrepreneurs are leaders who are committed to both good business and ensuring high profitability. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

156 TYP: F

54. The first step in pursuing an entrepreneurial dream is to come up with a viable idea. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

158


55. The most common source of new business ideas comes from in-depth understanding of an industry or profession. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

159

56. A business plan should be detailed, encompassing at least 100 pages. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

160

57. Setting standards too high is a common pitfall for keeping a small business running successfully. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

161

58. The Small Business Administration (SBA) can provide loan financing for small business start-up. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

162 TYP: F

59. The sluggish economic market of the late 2000s has made the franchise real estate market a seller’s market. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

165 TYP: F

60. Professional Web sites should be easy to navigate and intuitive, and should avoid common mistakes such as typos, excessively large files, too much information, and sensory overload. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Information Technologies

167 TYP: F

61. At the success stage of growth, a company’s substantial financial gains may come at the cost of losing its advantages of small size, including flexibility and the entrepreneurial spirit. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

MULTIPLE CHOICE

REF:

169 TYP: F


1. Which of the following is the process of starting a business venture, organizing the resources, and taking the risks? a. Intrapreneurship b. Entrepreneurship c. Small business administration d. Venture capital e. Equity financing ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

2. A(n) ____ is someone who recognizes a viable idea for a business product or service and carries it out. a. intrapreneur b. entrepreneur c. manager d. leader e. introvert ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

3. Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose's activities can be described as a(n) a. entrepreneurship. b. intrapreneurship. c. useless idea. d. large business. e. partnership. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: A

4. An entrepreneur a. assumes the risks of the business. b. reaps the rewards of the business. c. assumes the financial and legal risks of ownership. d. recognizes a viable idea for a business product or service and carries it out. e. all of these. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F


5. Tracy's Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy's Trikes exemplifies which of the categories of small business owners? a. Optimizers b. Idealists c. Hard workers d. Sustainers e. Jugglers ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: A

6. If a small business owner enjoys the chance to balance work and personal life, he would be considered a(n) a. idealist. b. optimizer. c. hard worker. d. juggler. e. sustainer. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: F

7. Which of the following are high-energy people who enjoy handling every detail of their own businesses? a. Jugglers b. Idealists c. Sustainers d. Optimizers e. Hard workers ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

149 TYP: F

8. Small businesses represent ____ percent of all firms and employ about half of all private sector employees. a. 86.3 b. 21.9 c. 99.7 d. 54.2 e. 72.8 ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

150 TYP: F


9. Which of the following is the type of business that most entrepreneurs start? a. Retail b. Manufacturing c. Service d. All of these e. Retail and manufacturing only ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

151 TYP: F

10. According to the Small Business Administration, which of these defines a small business? a. It has fewer than 500 employees. b. It has sales less than $5 million a year. c. It has fewer than $100 million in assets. d. The SBA's definition of small business is one that is independently owned and operated and not dominant in its field of action. e. It has fewer than 50 employees and $1 million in sales. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

150 TYP: F

11. Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the ____ to start new businesses. a. Small Business Administration b. Internet c. bookstore d. mall e. Internal Revenue Service ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

151 TYP: F

12. Small firms that file for patents typically produce ____ more patents per employee than large patenting firms. a. twice b. 3 to 4 times c. 6 to 7 times d. 9 to 10 times e. 13 to 14 times ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

152 TYP: F

13. Which of the following demographic factors distinguish entrepreneurs from others? a. They are likely the youngest child in their family. b. Most entrepreneurs launch their businesses between the ages of 35 and 55. c. Their parents likely worked for large companies. d. They are likely the children of immigrants. e. All of these. ANS: PTS:

1

DIF:

2

REF:

152


NAT: AACSB Analytic | Individual Dynamics

TYP: F

14. In the United States, minorities own ____ firms. a. 5.8 million b. 1.3 billion c. 872,000 d. 8.9 million e. 2.9 million ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

153 TYP: F

15. ____ refers to the belief by individuals that their future is within their control and that external forces will have little influence. a. Awareness of passing time b. Tolerance for ambiguity c. Internal locus of control d. External locus of control e. Deferred locus of control ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: F

16. Lauren Dean strongly believes in her abilities and feels that she controls her own destiny. She can be described as having a(n) a. tolerance for ambiguity. b. internal locus of control. c. external locus of control. d. low energy level. e. awareness of passing time. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: A

17. Which of these characteristics is associated with entrepreneurship? a. A high need for power b. A high need for affiliation c. An internal locus of control d. An external locus of control e. Low energy level ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: F

18. The belief by individuals that their future is not within their control, but rather is influenced by some external force is considered a. an external locus of control. b. an internal locus of control. c. a result of a need to achieve. d. a tolerance for ambiguity. e. a result of a boost of self-confidence.


ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: F

19. Which of the following is the belief by individuals that their future is not within their control but rather is influenced by external forces? a. Awareness of passing time b. Tolerance for ambiguity c. Internal locus of control d. External locus of control e. Deferred locus of control ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: F

20. All of these are entrepreneurial characteristics EXCEPT a. self-confidence. b. tolerance for ambiguity. c. external locus of control. d. high energy level. e. awareness of passing time. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: F

21. Which of these means that people are motivated to excel and pick situations in which success is likely? a. External locus of control b. Tolerance for Ambiguity c. Awareness of passing time d. Internal locus of control e. Need to achieve ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: F

22. Ami believes that such things as luck or chance will determine her future success. Ami has a. an internal locus of control. b. a high need for achievement. c. a tolerance for ambiguity. d. an external locus of control. e. high level of self-confidence. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: A

23. Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial characteristics does she probably possess? a. A high need for achievement b. A high need for power c. An external locus of control d. An inability to deal with uncertainty


e. Intolerance for ambiguity ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: A

24. Melissa is a very good middle manager. However, she has long wanted to open her own business. Which of Melissa's characteristics is not consistent with entrepreneurship? a. Taryn has high self-confidence. b. Taryn tends to put things off till later. c. She is untroubled by uncertainty. d. She has a high energy level. e. She has high need to achieve. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: A

25. Which of the following is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty? a. Tolerance for ambiguity b. External locus of control c. Need to achieve d. Awareness of passing time e. Internal locus of control ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: F

26. Entrepreneurs tend to a. need clear instructions. b. like specific instructions. c. be impatient. d. lack self-confidence. e. have low energy level. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: F

27. What is the primary goal of the social entrepreneur? a. maximizing profits b. improving society c. reaching social circles d. finding funding e. writing grants ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Ethical Responsibilities

157 TYP: F

28. ____ combines creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for better. a. Contemporary entrepreneurship b. Traditional entrepreneurship


c. Modern-day entrepreneurship d. Social entrepreneurship e. Conventional entrepreneurship ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

156 TYP: F

29. One of the first characteristics or points of a successful business plan is a. a profile of potential customers and market needs. b. demonstrate a clear, compelling vision that creates an air of excitement. c. the key ingredient of the business that will attract million of customers. d. the entrepreneur's background and role in the company. e. essential information about funding received so far. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

159 TYP: F

30. Which of the following is the most cited source of new business ideas? a. Brainstorming b. In-depth understanding of industry/profession c. A hobby d. Copying someone else e. None of these ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

159 TYP: F

31. Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as a. a SWOT analysis. b. a business portfolio. c. a business plan. d. a competitive analysis. e. a mission statement. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

159 TYP: A

32. Which of these refers to an unincorporated business owned by an individual for profit? a. Partnership b. Sole proprietorship c. Corporation d. Association e. Trade alliance ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

33. Which of the following is NOT an appropriate legal structure for an entrepreneurial company? a. Proprietorship


b. c. d. e.

Corporation Partnership Trade alliance All of these are appropriate legal structures for an entrepreneurial company.

ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

34. Which of the following is a popular small business form because it is easy to start and has few legal requirements? a. A partnership b. A proprietorship c. A corporation d. An association e. A trade alliance ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

35. Vaughn Hager started his one-man consulting business under the name Hager Associates. The legal structure for the company can best be described as a(n) a. proprietorship. b. partnership. c. trade alliance. d. corporation. e. one man operation. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: A

REF:

160 TYP: F

36. A(n) ____ has a legal life of its own. a. partnership b. proprietorship c. corporation d. association e. trade alliance ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

37. The drawback(s) of proprietorship include a. the unlimited liability of the partners. b. conflicts with partners. c. existence regardless of whether the owners live or dies. d. difficulty in obtaining financing. e. complexity and cost. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F


38. Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1500 toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as a a. proprietorship. b. partnership. c. trade alliance. d. corporation. e. None of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: A

39. Which of the following is an unincorporated business owned by two or more? a. A partnership b. A proprietorship c. A corporation d. An association e. A trade alliance ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

40. An artificial entity created by the state and existing apart from its owners is known as a. a partnership. b. a proprietorship. c. a corporation. d. an association. e. a trade alliance. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

41. What are the two principal advantages of forming a corporation? a. Unlimited liability and potential conflicts with partners b. Freedom from debt and relatively simple structure c. Continuity and limits on owner's liability d. Unlimited liability and continuity e. Continuity and non-tax structure ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

160 TYP: F

42. ____ refers to borrowing money that has to be repaid in order to start a business. a. Venture capital b. Debt financing c. Equity financing d. Franchising e. Licensing ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

162 TYP: F


43. A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits is known as a. an equity financing firm. b. franchising. c. a venture capital firm. d. a corporation. e. a trade alliance. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

163 TYP: F

44. A venture capital firm wants to invest in businesses with a high rate of return. In return, they will a. invest large amounts of money. b. provide necessary assistance and advice. c. provide information to help the entrepreneur prosper. d. all of these. e. provide necessary assistance and advice and provide information to help the entrepreneur prosper only. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

163 TYP: F

45. Which of these refers to the financing that consists of funds that are invested in exchange for ownership in the company? a. Venture-debt b. Debt financing c. Equity financing d. Franchising e. Licensing ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

163 TYP: F

46. Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in the entrepreneur's own way? a. Participate in a business incubator b. Start a new business c. Buy a franchise d. Buy an existing business e. All of these ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

164 TYP: F

47. An advantage of which of these tactics is that there is a shorter start-up time and an existing track record? a. Participate in a business incubator b. Start a new business c. Buy a franchise


d. Buy an existing business e. Debt financing ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

164 TYP: F

48. ____ refers to an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner. a. Franchising b. Business incubation c. Spinning-off d. Globalization e. Right offerings ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

164 TYP: F

49. Which of these is true about the business incubator? a. It gives up control since every business is run the same way. b. It provides shared office space, management support services, and management advice. c. It develops an international business. d. It provides an established name and advertising. e. All of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

165 TYP: F

50. ____ was one of the top 10 fastest-growing franchises in 2008. a. Arby's b. Krispy Kreme c. Subway d. Wendy's e. Dairy Queen ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value 51. The majority of the incubators are operated by a. large corporations. b. non-profit organizations. c. small businesses. d. international businesses. e. college drop-outs.

REF:

165 TYP: F


ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

166 TYP: F

52. Entrepreneurs who aspire to start online businesses implement all the following steps EXCEPT: a. create a professional Web site. b. choose a domain name. c. build online relationships d. determine physical location. e. identify a profitable market niche. ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

167 TYP: F

53. Managers must tailor their planning, organizing, leading, and controlling to fit a. the current stage of growth. b. financial needs. c. inventory levels. d. the number of orders to be filled. e. their comfort level. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

168 TYP: F

54. Marion is an entrepreneur. At this stage of his company's growth, his main concerns are do we have enough customers and money. What stage of growth is Marion's company in? a. Start-up b. Survival c. Takeoff d. Resource maturity e. Success ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

168 TYP: A

55. Samuel Rohrer is providing consumers with a new, unique business. The stage of the growth where his business has demonstrated that it is a workable business entity is considered the a. start-up stage. b. survival stage. c. success stage. d. takeoff stage. e. resource maturity stage. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

168 TYP: A

56. At which stage of growth is the company if it is solidly based and profitable?


a. b. c. d. e.

Resource maturity Takeoff Survival Success Existence

ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F

57. Janelle is very innovative and attentive to detail. As she starts her own company, she leads her employees and ensures that every detail is attended to. As her company grows, she finds it more difficult to deal with and motivate her employees. She is more interested in the product. What stage of growth is Janelle's company going through? a. Resource maturity b. Takeoff c. Survival d. Success e. Existence ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: A

58. Formal planning, such as a strategic plan, is usually instituted during which stage? a. Start-up b. Survival c. Takeoff d. Success e. Resource maturity ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F

59. The key problem, at the ____ stage of growth, is how to grow rapidly and finance that growth. a. existence b. survival c. takeoff d. resource maturity e. success ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: F


60. ABC company has made substantial financial gains, but may start to lose the advantages of small size. Which stage of growth is this company experiencing? a. Resource maturity b. Takeoff c. Survival d. Success e. Existence ANS: PTS: 1 DIF: 1 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: A

61. The Swingset Company is at the stage where if financing is available and it is properly managed, rapid growth can occur. What stage is the Swingset Company experiencing? a. Resource maturity b. Takeoff c. Survival d. Success e. Start-up ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

169 TYP: A

62. During the latter stages of entrepreneurial growth, the manager a. must learn to delegate and decentralize authority. b. must institute greater use of rules and procedures. c. must hire sufficient management to handle the growth. d. all of these. e. none of these. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

170 TYP: F

63. The ____ is the driving force during the early stages of development of a business. a. financial support b. leader's vision c. leader's personality d. competitive threat e. government pressure ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

170 TYP: F

64. During the ____ stage, the company will need to make greater use of budgets, standard cost systems, and statistical reports.


a. b. c. d. e.

existence survival takeoff success maturity

ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

170 TYP: F

65. Alfred is interested in opening his own business, so he pays a visit to the local Small Business Administration (SBA) to learn more about the potential risks. He learns that about _____ percent of all small businesses fail within two years of opening. a. 10 b. 20 c. 30 d. 50 e. 70 ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

148 TYP: A

66. Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing work and family, she does not foresee her home business growing significantly in the near future. Connie can best be described as what type of entrepreneur? a. Idealist b. Sustainer c. Optimizer d. Juggler e. Hard worker ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

148 TYP: A

67. In 2008, which country had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business? a. Bolivia b. Peru c. Columbia d. Angola e. Dominican Republic ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

150 TYP: F

68. The Small Business Association (SBA) reports that small businesses create at least _______ percent of America’s new jobs. a. 30 b. 32 c. 46 d. 64 e. 82


ANS: PTS: 1 DIF: 3 NAT: AACSB Analytic | Creation of Value

REF:

151 TYP: F

69. What percentage of women entrepreneurs have employees? a. Five b. Ten c. Twenty d. Fifty e. Eighty ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

153 TYP: F

70. Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes unconventional risks to make her new company successful. These examples most closely relate to which personality trait of entrepreneurs? a. Need to achieve b. Patience c. Tolerance for ambiguity d. High energy level e. Self-confidence ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

154 TYP: A

71. Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This most closely relates to which personality trait of entrepreneurs? a. Need to achieve b. Impatience c. Tolerance for ambiguity d. High energy level e. Self-confidence ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Individual Dynamics

155 TYP: A

72. Social entrepreneurs are committed to both good business and: a. Swaying political opinion of consumers b. Improving the natural environment c. Positive social change d. Non-profit goals e. Big profits ANS: PTS:

1

DIF:

2

REF:

156


NAT: AACSB Analytic | Environmental Influence

TYP: F

73. Jamila is a successful artist and entrepreneur who makes all of her work out of recycled goods because she believes in sustainability. She can be described as a social entrepreneur that is committed to: a. International human rights b. Environmental protection c. Children’s rights d. Industrial protectionism e. Consumerism ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Environmental Influence

157 TYP: A

74. The most common reason for becoming an entrepreneur is: a. Joining the family business b. To control one’s future c. To be one’s own boss d. To fulfill a dream e. The result of being laid off ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Individual Dynamics

159 TYP: F

75. All of the following are common reasons why small business ventures fail EXCEPT: a. Sloppy accounting b. Naive hiring c. Lack of controls d. Long-term focus e. Unrealistic focus ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

161

76. What is the most common way that entrepreneurs finance the start-up of a new business? a. Self-financing from savings or credit cards b. Loans from friends, family, or business associates c. Bank loans d. Lines of credit e. Venture capital ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

162 TYP: F


77. Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she decided to quit her job and make crafts full-time, selling them on her new company Web site. Which tactic of becoming a business owner did Wendy use? a. Equity financing b. New business start-up c. Buying an existing business d. Buying a franchise e. Merger and acquisition ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

164

78. Max is the Web site manager for a local florist. The company’s owner would like Max to redesign the Web site so that customers can connect directly with florist employees on a daily basis about products and specials. This relates to which step in establishing an online business? a. Finding a niche market b. Creating a professional Web site c. Choosing a target market d. Choosing a domain name e. Building online relationships ANS: PTS: 1 DIF: 3 REF: NAT: AACSB Analytic | Information Technologies

167 TYP: A

79. Dawn, the finance manager of a sporting goods manufacturing company, uses accounting records to track monthly operational budgets to ensure that the company’s financial targets are being met. This is an important task in which stage of the managerial process? a. Delegating b. Planning c. Controlling d. Leading e. Organizing ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

170

CASE Scenario - Holly and Trent While many others dreamed about owning their own business, Holly Gabrel decided to do something about it. Holly knew that being self-employed required long hours and hard work, but with the help of her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses now on the market. Holly and Trent obtained a patent on their invention, and began production and marketing.


1. With the entrepreneurial personality, Holly can be expected to have all of the following traits EXCEPT a. internal locus of control. b. tolerance for ambiguity. c. high need to achieve. d. patience. e. all of these. ANS: PTS: 1 DIF: 2 REF: 154 NAT: AACSB Analytic | Individual Dynamics Questions TYP: A

KEY: Scenario

2. After fully developing their new business idea, Holly and Trent recognize the need to develop a business plan. Typical business plans will include all of the following, EXCEPT a. mission or vision of the company. b. information about the suppliers. c. policy for extending credit to customers. d. analysis of critical risks that threaten success. e. all of these should be included. ANS: PTS: 1 DIF: 2 REF: 159-160 NAT: AACSB Analytic | Creation of Value Questions TYP: A

KEY: Scenario

3. If the business is legally Holly's, then the business form would be a. proprietorship. b. partnership. c. corporation. d. chapter S42.5. e. None of these. ANS: PTS: 1 DIF: 2 REF: 160 NAT: AACSB Analytic | Creation of Value Questions TYP: A

KEY: Scenario

COMPLETION 1. Entrepreneurs in the ____________________ category like the idea of working on something that is new, creative, or personally meaningful.


ANS: 2. The process of initiating a business venture, organizing it, and assuming its risks is known as ____________________. ANS: 3. A(n) ____________________ recognizes a viable idea for a business product or service and carries it out. ANS: 4. Entrepreneurship and small business in the United States is an engine for ____________________ and ____________________. ANS: 5. In the next decade, ____________________ and ____________________ businesses could end up being the emerging growth companies. ANS: 6. A(n) ____________________ locus of control is the belief by individuals that their future is within their control. ANS: 7. A(n) ____________________ locus of control is the belief by individuals that their future is not within their control but rather is influenced by external forces. ANS: 8. A human quality linked to entrepreneurship in which people are motivated to excel and pick situations in which success is likely is called the ____________________. ANS: 9. ____________________ entrepreneurs are committed to both good business and changing the world for the better. ANS: 10. ____________________ is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty. ANS: 11. A(n) ____________________ is a document specifying the business details prepared by an entrepreneur in preparation for opening a new business.


ANS: 12. An unincorporated business owned by an individual for profit is known as a(n) ____________________. ANS: 13. A(n) ____________________ is an unincorporated business owned by two or more people. ANS: 14. A(n) ____________________ is an artificial entity created by the state and existing apart from its owners. ANS: 15. Borrowing money that has to be repaid at a later date in order to start a business is ____________________. ANS: 16. ____________________ financing consists of funds that are invested in exchange for ownership in the company. ANS:

17. A(n) ____________________ is a group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits. ANS: 18. ____________________ firms are groups of companies or individuals that invest money in exchange for a stake in the company. ANS: 19. By ____________________, an entrepreneur has the advantage to develop and design the business in his/her own way. ANS: 20. ____________________ is an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.


ANS: 21. The ____________________ provides shared office space, management support services, and management advice to entrepreneurs. ANS: 22. The majority of the incubators are operated by ____________________. ANS:

23. In the ____________________ stage, the main problems for entrepreneurial firms are producing the product or service and obtaining customers. ANS: 24. The key problem, at the ____________________ stage of growth, is how to grow rapidly and finance that growth. ANS: SHORT ANSWER 1. List five of the six characteristics of entrepreneurs. ANS: 2. Name three of the four ways entrepreneurs can become business owners. ANS: 3. List the five stages of growth for an entrepreneurial company. ANS:

ESSAY 1. Name and describe the five different categories of small business owners. ANS:


3. What is tolerance for ambiguity? Why is it an important trait? ANS: 4. Name five of the ten characteristics of a successful business plan. ANS: 5. Define a corporation and briefly discuss the primary advantages and disadvantages of forming a corporation. ANS: 6. What is the fundamental difference between the suppliers of debt and equity financing? ANS: 7. What is a business incubator? How can it help a business? ANS: 8. List and briefly describe the stages of growth for an entrepreneurial company. ANS:

Chapter 7—Managerial Planning and Goal Setting TRUE/FALSE 1. Because everything else stems from leading, of the four management functions, leading is considered the most fundamental. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

178 TYP: F

2. Managers must understand no plan is perfect, but should grow and change to meet new conditions. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

178 TYP: F

3. A desired future state that the individual or organization attempts to realize is a goal.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

178

4. Goals specify today's means; plans specify future ends. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

178

5. Goal setting is the act of determining the organization goals and the means for achieving them. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

178

6. The mission is the basis for the strategic level of goals and plans, which in turn shapes the tactical and operational level. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

179

7. Tactical goals and plans are the responsibility of front-line managers and supervisors. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

179

8. Tactical goals and plans are the responsibility of middle managers. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

179

9. A broad definition of the organization's values, aspiration and reason for being, along with a recognition of the scope and operations that distinguishes the organization refers to a Business Strategic Statement. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181

2 REF: TYP: F

178

10. A plan tells "why" to achieve the goal. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

11. Goals help managers decide where they need to allocate resources. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Leadership Principles

190 TYP: F

12. Goals and plans provide a sense of direction and focus on specific targets and direct employee efforts toward important outcomes.


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

190 TYP: F

13. Step 1 in Management by Objectives is to review progress ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Operations Management

187 TYP: F

14. Plans provide a standard of assessment. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

190

15. In step 1 of Management By Objectives, overall performance is appraised ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

187 TYP: F

16. An organization's mission describes its reason for existence. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181

17. Strategic plans and goals are those that focus on where the organization wants to be in the future and pertain to the organization as a whole. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

182

18. A broad statement of where the organization wants to be in the future refers to a mission statement. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

181

19. Operational plans and goals are those that focus on the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184

20. Tactical plans are designed to help execute the major strategic plans and to accomplish a specific part of the company's strategy. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

183 TYP: F


21. Tactical goals are specific, measurable results expected from departments, work groups, and individuals within the organization. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

183 TYP: F

22. Top managers make the broad strategic plan and identify specific tactical plans. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

179 TYP: F

23. The department manager's tool for daily and weekly operations is called the operational plan. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

184

24. Operational planning specifies plans for department managers, supervisors, and individual employees. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

179 TYP: F

25. A visual representation of the key drivers of an organization's success and shows how specific goals and plans in each area are linked is called an operations map. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184

26. Building good relationships with suppliers and partners would be considered customer service goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

185

27. Management by objectives, single-use plans, and standing plans are all management planning approaches. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

28. Specific and measurable goal characteristics apply only to the lower-level goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

29. Goals are most effective when they are specific, measurable, challenging and linked to rewards.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

30. Goals must be set for every aspect of employee behavior or organizational performance to be effective. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

31. The goals should be easy, for employees to feel motivated, so that they can achieve them easily which in turn increases their motivation level. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Motivation Concepts

186 TYP: F

32. MBO refers to managing by opportunity. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

186

33. The final step in the MBO process is to review progress. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

187

34. An action plan defines the course of action needed to achieve the stated goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

187

35. The most difficult step in an MBO process is reviewing progress. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

187

36. Managers believe they are better oriented toward goal achievement when MBO is used. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

187

37. Standing plans define company responses to specific situations such as natural emergencies or competitive setbacks. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

188

38. Single-use plans are ongoing plans that are used to provide guidance for tasks performed repeatedly within the organization.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

39. Three critical planning methods are contingency planning, building scenarios, and crisis planning. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

191

40. Crisis plans define company responses to be taken in the case of emergencies, setbacks, or unexpected conditions. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

191

41. If Renae, manager at Leak Free Roofing, wanted to develop a contingency plan for Leak Free, she would need to look at factors such as new equipment, the economy, and the company workers' compensation cases. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

191

42. Contingency plans can also be considered as scenarios. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

191

43. Trend management is looking at trends and discontinuities and imagining possible alternative futures. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Leadership Principles

191 TYP: F

44. Some firms engage in crisis planning to enable them to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organization. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

192

45. The first stage in crisis prevention includes setting up effective communication system. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

193 TYP: F

46. Prevention and preparation are the two stages of crisis management. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

193


47. The ABC Corporation should create a crisis management group that is not crossfunctional, but does work together well under pressure. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

193 TYP: F

48. The CEO of Andre's Autos, Inc. must do all of the planning for the company because that is the way to do things in today's workplace. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

194

49. Turtle Terrace should use traditional planning since that is the type of planning every company uses. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

194

50. In a complex and competitive business world, traditional planning done by a select few is the only planning that works. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Environmental Influence

194 TYP: F

51. Managers work with planning experts to develop their own goals and plans in decentralized planning. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

194

52. In centralized planning, managers work with planning experts to develop their own goals and plans. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

194

53. Planning cannot tame a turbulent environment. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

178

54. Defining operational goals and plans occurs in the plan development phase of the organizational planning process. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181

55. Strategic planning tends to be long term and may define organizational action steps from two to five years in the future.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

182

56. Goals are typically stated in quantitative terms. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184

57. Providing innovative solutions to customer needs is a goal that would be placed in the internal business process category on a strategy map. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

185

58. Managers use strategic goals to direct employees and resources toward achieving specific outcomes that enable the organization to perform efficiently and effectively. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

59. In order for goals to be effective, they should be challenging but realistic. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

60. A key benefit of management by objectives is that it aligns individual and departmental goals with company goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

61. A major difference between rules and policies is that rules are broad in scope whereas policies are narrow in scope. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

62. One of the biggest benefits of planning is that, in turbulent environments, plans create greater organizational flexibility. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

190

63. Crisis planning forces managers to mentally rehearse what they would do if their best laid plans collapse. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

192


64. When detecting signals from the external environment as a part of crisis planning, managers are in the preparation stage. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

193

65. Stretch goals are typically so far beyond the current levels that people have to be innovative to find ways to reach them. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

193

66. Sales in relation to targets is an example of a balanced scorecard metric. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

195

67. Intelligence teams are useful when an organization confronts a major intelligence challenge. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Creation of Value

REF:

196 TYP: F

68. Goals and plans are valuable to an organization because they provide rationale for decisions, a guide to action, and an increase in motivation and commitment. ANS: PTS: 1 DIF: 1 REF: NAT: AACSB Analytic | Motivation Concepts

190 TYP: F

69. When a company faces rapid change, problems with planning can occur. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

190

MULTIPLE CHOICE 1. ____ refers to a desired future state that an organization attempts to realize. a. Plan b. Vision statement c. Goal d. Mission statement e. Idea ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

2. ____ specify future ends and ____ specify today's means. a. Goals, plans b. Plans, goals

178


c. Planning, organizing d. Ideas, behaviors e. Mission, vision ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

178

3. A blueprint specifying the resource allocations schedules, and other actions necessary for attaining goals is referred to as a(n) a. goal. b. plan. c. mission. d. vision. e. objective. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

178

4. ____ is the act of determining the organization's goals and the means for achieving them. a. Brainstorming b. Organizing c. Planning d. Developing a mission e. A blueprint ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

178

5. The planning process begins with which of these? a. The development of operational goals b. The development of a mission statement c. Communication of goals to the rest of the organization d. A company-wide meeting e. Brainstorming ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181

6. The ____ is the basis for the strategic level of goals and plans which in turn shapes the ____ and ____ level. a. goal, mission, tactical b. objective, operational, mission c. operational goal, mission and tactical d. mission, tactical, operational e. tactical plan, operational, mission ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

7. ____ is primarily responsible for strategic goals/plans. a. Middle management

179


b. c. d. e.

Board of directors Consultants Top management Lower management

ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

179

8. ____ is primarily responsible for operational goals/plans. a. Middle management b. Board of directors c. Consultants d. Top management e. Lower management ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

179

9. Which of these is(are) primarily concerned with tactical goals/plans? a. Middle management b. Board of directors c. Consultants d. Senior management e. Lower management ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

179

10. Sherry is a first-line supervisor at Rooftop Corporation. She is most concerned with which level of goals? a. Operational goals b. Tactical plans c. Strategic goals d. Mission statement e. Vision ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184

11. Which of the following symbolizes the legitimacy of the organization to external audiences? a. Operational goals b. Tactical plans c. Strategic goals d. Mission statement e. Tactical goals ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181


12. Roxanne is a manager at Geronimo Gaming. She recently attended a seminar on goal setting. She wishes to use goals to provide a sense of direction to her staff. She is using goals as a. a way to legitimize her department. b. a source of motivation. c. a standard of performance. d. a guide to action. e. impress others. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

190

13. Which of the following is not a reason why planning positively affects a company’s performance? a. Goals and plans provide legitimacy for customers b. Goals and plans set a standard of performance c. Goals and plans guide resource allocation d. Goals and plans are a guide to action e. Goals and plans are a source of motivation and commitment ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

190

14. Which of the following is not a step in the organizational planning process? a. Monitor and learn b. Plan operations c. Translate the plan d. Develop the plan e. Plan marketing tactics ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181

15. Which of the following is NOT a tool for executing a plan? a. Management by objectives b. Operations map c. Performance dashboards d. Single use plans e. Decentralized responsibility ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184

16. A statement that identifies distinguishing characteristics of an organization is known as a. a goals statement. b. a values statement. c. an income statement. d. a mission statement. e. a competitive-edge statement.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

181

17. Which of these are described by mission statements? a. Corporate values b. Product quality c. Location of facilities d. All of these e. None of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

181

18. The organization's reason for existence is known as a. the organization's value. b. the organization's vision. c. the organization's mission. d. the organization's goal. e. the organization's service. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

181

19. "We respect our employees and value their diversity" is an example of a statement you are most likely to find in the organization's a. mission. b. strategic goals. c. tactical goals. d. strategic plans. e. tactical plans. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: F

181

20. "We seek to become the premier business school in the west" is an example of a statement you are most likely to find in the organization's a. tactical goals. b. operational goals. c. mission. d. tactical plans. e. operational plans. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: F

181

21. ____ refers to a broadly stated definition of the organization's basic business scope and operations that distinguishes it from similar types of organizations. a. Mission statement b. Goal statement


c. Management by objective d. Goal setting e. Corporate competitive-value statement ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

181

2 REF: TYP: F

181

22. At the top of the goal hierarchy is the a. strategic goals. b. tactical goals. c. operational goals. d. mission. e. employee goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

23. ____ are the broad statements of where the organization wants to be in the future. a. Operational goals b. Tactical goals c. Strategic goals d. Operational goals e. Tactical plans ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

182

24. The official goals of the organization are best represented by the ____. a. strategic goals b. tactical goals c. operational goals d. competitive goals e. none of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

182

25. A long-term time frame is most closely associated with a. operational plans. b. tactical plans. c. strategic plans. d. mission plans. e. tactical goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

182

26. ____ are called the action steps by which an organization intends to attain its strategic goals. a. Tactical goals b. Operational goals c. Tactical plans


d. Operational plans e. Strategic plans ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

182

27. ____ goals lead to the attainment of ____ goals, which in turn lead to the attainment of ____ goals. a. Operational, strategic, tactical b. Tactical, operational, strategic c. Strategic, tactical, operational d. Operational, tactical, strategic e. None of these. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: F

182-184

28. Goals that define the outcomes that major divisions and departments must achieve in order for the organization to reach its overall goals is called a. strategic goals. b. tactical goals. c. operational goals. d. a mission. e. a plan. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

183

29. Sarah is a middle manager at Stylin' Sneakers Corporation. She is most likely responsible for the achievement of ____ goals. a. operational b. tactical c. strategic d. lower-level e. top-level ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

179

30. Which of the following refer to specific results expected from individuals? a. Operational goals b. Tactical goals c. Strategic goals d. Operational plans e. Mission statements ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184


31. Which of the following represent plans developed at the organization's lower levels that specify action steps toward achieving operational goals and that support tactical planning activities? a. Tactical plans b. Strategic plans c. Operational plans d. Supervisory plans e. Organizational plans ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

184

32. The ____ is the department manager's tool for daily and weekly operations. a. conventional goal b. strategic goal c. strategic plan d. operational plan e. targeted plan ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

184 TYP: F

33. Which of the following is a visual representation of the key drivers of an organization's success, showing the cause-and-effect relationships among goals and plans? a. Operational plan b. Gantt chart c. Strategy map d. SWOT analysis e. Strategic plan ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

184

34. According to the strategy map described in chapter 7, which of the following is NOT a type of goal? a. Financial performance goals b. Customer service goals c. Internal business process goals d. Learning and growth goals e. External business process goals ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

185

35. Managers use ____ to direct employees and resources toward achieving specific outcomes that enable the organization to perform efficiently and effectively. a. strategic goals b. operational goals c. growth goals d. financial results e. internal business process goals


ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Operations Management

184 TYP: F

36. Which of these is lacking in the goal "profits should be increased in the coming year?" a. Specific and measurable b. Challenging but realistic c. Covers key result areas d. Defined time period e. None of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

186

37. Kate is a salesperson at a large retail chain. She was assigned a goal of $265,000 in sales for the current quarter. She is unhappy because she knows that the most any salesperson has sold in one quarter in the past is $150,000. Her goal of $265,000 is probably a. not specific and measurable. b. not realistic. c. irrelevant. d. lacking a specific time period. e. does not cover key result area. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

186

38. You are violating which of these goal characteristics when you attempt to create goals for every aspect of employee behavior? a. Specific and measurable b. Linked to rewards c. Defined time period d. Cover key result areas e. Challenging but realistic ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

186

39. Darren set goals for each of his employees. Each employee ended up with at least twenty-five goals. This process violates which of the following criteria for effective goals? a. Specific and measurable b. Challenging but realistic c. Covers key result areas d. Defined time period e. Linked to rewards ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

186

40. All of the following are characteristics of effective goal setting EXCEPT


a. b. c. d. e.

goals should be challenging but not unreasonably difficult. goals should be set for every aspect of employee behavior. specific and measurable. cover key results area. linked to rewards.

ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

41. The ultimate impact of goals depended on the extent to which goal achievement is linked to a. rewards. b. salary increases. c. promotions. d. all of these. e. salary increases and promotions. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

186

42. ____ is the first step in the MBO process. a. Setting goals b. Developing action plans c. Appraising overall performance d. Reviewing progress e. None of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

187

43. Which of these is a method of management whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance? a. Organizational planning b. Management by objectives c. Goal setting d. Mission development e. Vision development ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

186-187

44. High Fence Corporation is currently implementing an MBO program. Managers and employees jointly set objectives and develop action plans, and goal achievement is evaluated on an annual basis. High Fence is missing which major activity that must occur in order for MBO to be successful? a. Developing a mission statement b. Developing tactical goals c. Reviewing progress d. Reviewing operational plans e. None of these


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

187

45. In using MBO, objectives should be set a. by the supervisor. b. by the employee. c. jointly by the supervisor and the employee. d. by the accounting department. e. by top management. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

187

46. Frostburg Fireplaces has used MBO for the past year. Top management just finished evaluating overall performance. The next step in the MBO process should be a. to develop new action plans. b. to develop new objectives based on the review of last year's performance. c. to begin a new MBO "cycle", using the same objectives as last year. d. to wait several months to allow information to be digested. e. none of these. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

187

47. ____ is the final step in the MBO process. a. Appraise overall performance b. Develop an action plan c. Review progress d. Set goals e. Conduct periodic checkups ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

187

48. Which of the following is NOT one of the benefits of MBO? a. Performance can be improved at all company levels. b. Employees are motivated. c. Efforts are focused on activities that will lead to goal attainment. d. Operational goals are able to displace strategic goals. e. Individual and department goals are aligned with company goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

49. Which of these is true about single-use plans? a. They are developed to achieve a set of goals that are unlikely to be repeated in the future. b. They are used to provide guidance for tasks performed repeatedly within the organization. c. They define plans that define company responses to specific situations, such as emergencies or setbacks. d. They are most important in the organizations.


e. None of these. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

50. Standing plans are a. developed to achieve a set of goals that are unlikely to be repeated in the future. b. used to provide guidance for tasks performed repeatedly within the organization. c. define company responses to specific situations, such as emergencies or setbacks. d. the most important in the organizations. e. none of these. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

188

1 REF: TYP: F

188

51. A project is an example of a a. policy. b. standing plan. c. procedure. d. single-use plan. e. rule. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

52. Cheyenne Creamery requires that all absent employees bring a note from their doctor when returning to work. This is an example of a a. single-plan use. b. standing plan. c. program. d. procedure. e. project. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

188

53. Numerous ____ are likely to be part of an overall ____. a. programs, project b. policies, project c. standing plans, program d. projects, program e. programs, rule ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

54. ____ define boundaries within which to make a decision. a. Programs b. Policies c. Rules d. Procedures e. Project

188


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

55. An example of a ____ is a statement supporting the organization's efforts in the area of sexual harassment. a. procedure b. rule c. policy d. single-use plan e. program ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

188

56. "No food and/or drinks in the classroom" is an example of a a. procedure. b. rule. c. policy. d. single-use plan. e. project. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

188

57. Which of these are true about contingency plans? a. They are developed to achieve a set of goals that are unlikely to be repeated in the future. b. They are used to provide guidance for tasks performed repeatedly within the organization. c. They define company responses to specific situations, such as emergencies or setbacks. d. They are most important in the organizations. e. None of these. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

191

1 REF: TYP: F

191

58. Contingency plans are also referred to as a. standing plans. b. rules. c. scenarios. d. procedures. e. operationally tactical plans. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

59. ____ involves looking at trends and discontinuities and imagining possible alternative future to build a framework within which unexpected future events can be managed. a. Scenario building


b. c. d. e.

Crisis planning Contingency planning Trend management Caution planning

ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

191

60. ____ enables firms to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organization if managers aren't prepared with a quick and appropriate response. a. Incident planning b. Contingency planning c. Strategic planning d. Crisis planning e. Emergency planning ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

192

61. The crisis management plan should be a ____ that specifies the actions to be taken, and by whom, if a crisis occurs. a. vague, verbal plan b. detailed, verbal plan c. long, difficult to read plan d. vague, written plan e. detailed, written plan ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

194

62. Which of the following is NOT involved in the stages of crisis planning? a. Setting up effective communication systems b. Creating detailed crisis management plans c. Investigating all stakeholders d. Designating a crisis management team and spokesperson e. Building relationships ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

193

63. Traditionally, if Stephanie, CEO of Butterfly Pillows, needed to conduct corporate planning, it would be performed by all of the following EXCEPT a. central planning departments. b. decentralized planning groups. c. top executives. d. consulting groups. e. the president of the company. ANS: PTS: 1 DIF: 2 NAT: AACSB Analytic | Group Dynamics

REF:

194 TYP: A


64. The traditional approach to corporate planning was to a. have a decentralized planning staff. b. have a centralized planning department. c. set up a planning task force. d. set up planning committees. e. use TQM approach. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

194

65. Alabama Airlines has three planning specialists who help division managers develop their own division plans. Serving as consultants to the divisions, the planning specialists give advice about strengths, weaknesses, opportunities, and threats. Alabama Airlines is utilizing what approach to the planning function? a. Centralized planning department b. Decentralized planning staff c. Planning task force d. Centralized planning committee e. TQM ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

194

66. Of the strategic management functions, which is considered the most fundamental? a. Executing b. Analyzing c. Controlling d. Planning e. Leading ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

178

67. The planning process starts with: a. A formal mission that defines the organization’s purpose b. Tactical planning c. Strategic planning d. Operational planning e. Controlling performance ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

179


68. Silver Star Automobiles holds monthly planning and operational reviews to ensure that it is on track for meeting organizational goals. This involves which stage of the organizational planning process? a. Developing the plan b. Translating the plan c. Plan operations d. Executing the plan e. Monitoring and learning ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

181

69. Which type of plan helps managers implement the overall strategic plan? a. Operational b. Contingency c. Tactical d. Crisis e. Corporate-level ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

183

70. In developing a strategy map for her interior design business, Carla has decided to promote employee development by providing online training tools. This involves goals in which strategy map category? a. Financial performance goals b. Learning and growth goals c. Internal business process goals d. Customer service goals e. Supply chain goals ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

185

71. Focusing manager and employee efforts on activities that will lead to goal attainment is a benefit of what management method? a. Tactical planning b. Contingency planning c. Single-use planning d. Management by objectives e. Management by walking around ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

188

72. Eugene, a human resource manager of a medium-sized technology business, has learned that employees are wasting valuable work time by visiting Facebook and other social media Web sites. As a result, Eugene’s plans to establish a new company policy that limits use of social media to only those tasks that are company related. This would be considered what type of plan? a. Project plan b. Single-use plan


c. Tactical plan d. Operational plan e. Strategic plan ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

188

73. Which of the following is a commonly-cited limitation of planning? a. Plans limit employee motivation and commitment b. Plans make resource allocation more difficult c. Plans make it more difficult to measure standards of performance d. Plans boost intuition and creativity e. Plans can create a false sense of security ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

190

74. Jerrica, a finance manager at LRV industries, is asked by her boss to develop a plan in the event that company sales drop by 20 percent or more. This type of plan is known as a(n): a. Contingency planning b. Financial planning c. Crisis planning d. Consumer protection e. Environmental planning ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

191

75. The two stages of crisis planning include: a. Prevention and control b. Planning and leading c. Prevention and preparation d. Preparation and control e. Leading and organizing ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

192

76. Jeff is a top manager at a textile factory. He is developing a crisis plan in the event that the company has a toxic spill or accident. Which of the following should Jeff undertake to prepare for such a crisis? a. Building relationships with neighboring businesses b. Detecting signals from the natural environment c. Polling employees on the likelihood of an environmental disaster d. Designating a crisis management team in the event of an environmental disaster


e. Dismantling the company’s ties to the external media ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

193

77. ___________ are reasonable yet highly ambitious goals that are so clear, compelling, and imaginative that they fire up employees and engender excellence. a. Operational goals b. Stretch goals c. Strategic goals d. Tactical goals e. Bottom-up goals ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

194

78. Sam is in charge of strategy control at Lanser’s, a large clothing retailer. He regularly tracks sales in relation to targets, number of products on back order, and percentage of customer service calls resolved within specified time periods. These metrics are known as: a. Financial indicators b. Tactical goals c. Performance dashboards d. Balanced scoreboards e. Operational standards ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

195

79. A(n) _________ is a cross-functional group of managers and employees who work together to gain a deep understanding of a specific business issues, with the aim of presenting insights related to that issue. a. Espionage team b. Functional team c. Task force d. Project team e. Intelligence team ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

196

80. At Save-tech, Sophia, director of marketing, is a member of a cross-functional group of managers and employees. The purpose of the group is to gain a deep understanding company’s competitive environment and periodically present these findings to top management. Sophia is involved in what type of team? a. Intelligence team b. Functional team c. Task force d. Project team e. Espionage team


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

196

81. One major limitation of goals and plans is: a. Goals and plans guide resource allocation b. Goals and plans may cause rigidity in a turbulent environment c. Goals and plans decrease employee motivation d. Goals and plans decrease employee commitment e. None of the above ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

190

CASE Scenario - Katelynn Kareem Managers at WXYZ just announced that the new management program would be focused around MBO concepts. Katelynn Kareem had been a manager at WXYZ for ten years and she was not certain if this new MBO approach was going to fit her department. She had strong commitment to achieving the company's objectives, but she also knew her employees well enough to know that some didn't share the same commitment. 1. Katelynn can anticipate enjoying the advantages of MBO which include a. increased orientation toward goal achievement. b. performance can improve at all company levels. c. employees are more motivated. d. increased orientation toward goal achievement and motivation. e. all of these. ANS: PTS: 1 DIF: 2 REF: 188 NAT: AACSB Analytic | Motivation Concepts Questions TYP: A

KEY: Scenario

2. What can Katelynn expect to be doing during the final step of the MBO process? a. Setting goals b. Reviewing progress c. Appraising overall performance d. Defining mission e. Developing action plans ANS: PTS: 1 Strategy

DIF: 2

REF: 187

NAT: AACSB Analytic |


KEY: Scenario Questions

TYP: A

3. In the MBO process, after the first step of setting objectives is accomplished, the next step that Katelynn should expect is a. reviewing progress toward company goals. b. appraising overall performance. c. developing action plans. d. having a company party to celebrate. e. none of these. ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 187

NAT: AACSB Analytic |

TYP: A

COMPLETION 1. A(n) ____________________ is a desired future state that the organization attempts to realize. ANS: 2. A(n) ____________________ is a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks, and other actions. ANS: 3. The act of determining the organization's goals and the means for achieving them is referred to as ____________________. ANS: 4. ____________________ and plans are the responsibilities of middle managers. ANS:

5. Operational plans that focus on specific tasks and processes that help to meet tactical and strategic goals are developed by ____________________ managers and supervisors. ANS: r 6. ____________________ describes the organization's reason for existence. ANS:


7. A(n) ____________________ is a broadly stated definition of basic business scope and operations that distinguishes the organization from others of a similar type. ANS: 8. Broad statements describing where the organization wants to be in the future are called ____________________. ANS: 9. ____________________ define the action steps by which an organization intends to attain its strategic goals. ANS: 10. Goals that define the outcomes that major departments must achieve in order for the organization to reach its overall goals are known as ____________________ goals. ANS:

11. ____________________ are designed to help execute major strategic plans and to accomplish a specific part of the company's strategy. ANS: 12. The specific results expected from departments, work groups, and individuals are the ____________________ goals. ANS: 13. ____________________ plans are developed at the lower levels of the organization to specify action steps toward achieving operational goals and to support tactical plans. ANS: 14. ____________________ is a method whereby managers and employees define goals for every department, project, and person and use them to monitor subsequent performance. ANS: 15. Managers believe that they are better oriented toward goal achievement when ____________________ is used. ANS:


16. ____________________ plans are used to provide guidance for work-related tasks that are performed repeatedly within the organization. ANS:

17. ____________________ plans are developed to achieve a set of goals that are not likely to be repeated in the future. ANS: 18. ____________________ are ongoing plans that are used to provide guidance for tasks performed repeatedly within the organization. ANS: 19. Plans that define company responses to specific situations, such as emergencies, setbacks, or unexpected conditions are called ____________________ plans. ANS: o 20. A special type of contingency plan that is used when events are sudden and devastating and require immediate response is called ____________________. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 192

NAT: AACSB Analytic |

21. The crisis management plan should be a(n) ____________________ that specifies the actions to be taken, and by whom, if a crisis occurs. ANS: 22. A group of planning specialists assigned to major departments and divisions to help managers develop their own strategic plans is called ____________________. SHORT ANSWER 1. List four reasons why planning generally positively affects a company’s performance? ANS: 2. List the five characteristics of effective goals. ANS:


3. List the four major activities that must occur in order for MBO to succeed. ANS: 4. What are the two stages of crisis management? ANS: ESSAY 1. In what ways do plans and goals benefit an organization? ANS: 2. Compare the four levels of goals and plans. ANS: 3. Briefly define the characteristics of an effective goal. ANS: 4. List and define the four major activities that must occur in order for management by objectives (MBO) to succeed. ANS: 5. List three innovative approaches to planning. ANS:

Chapter 8—Strategy Formulation and Execution TRUE/FALSE 1. Strategic management largely determines which organizations succeed and which ones struggle. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

203

2. Front-line managers have the final responsibility for strategic planning.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

3. Top managers and chief executives have the final responsibility for strategic planning. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

4. Research has shown that strategic thinking and planning positively affect a firm's performance and financial success. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

203

5. Better-Than-The-Rest, Inc.'s ability to market its products better than its competitors is an example of its core competence. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

204-205

6. Core competence is the plan of action that prescribes resource allocation and other activities for dealing with the environment. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

7. The essence of formulating strategy is choosing how the organization will be identical to its key competitors in the industry. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

8. Competitive advantage refers to the set of decisions and actions used to formulate and implement strategies. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

9. The interaction of Production and Sales working together to produce profit greater than the total of both working separately is an example of synergy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

205

10. The combination of benefits received and costs paid by the customer refers to value. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

205


11. Value occurs when the organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

205

12. Corporate-level strategy pertains to the organization as a whole. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

206

13. The "How do we compete?" question concerns functional-level strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

206

14. Strategic decisions at the business level concern amount of advertising, direction and extent of R & D, product changes, new product development, equipment and facilities, and expansion or contraction of product lines. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

207

15. The three levels of strategy are business, corporate, and global. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

206

16. Strategy implementation involves the planning and decision making that lead to the establishment of the firm's goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

208

17. The administration and implementation of the strategic plan is strategy execution. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

208

18. SWOT analysis includes a review of the internal threats and opportunities. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

209

19. Executives acquire information about external opportunities and strengths from a variety of reports, including budgets, financial ratios, profit and loss statements, and surveys of employee attitudes and satisfaction.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

209

20. Internal analysis examines overall organization structure, management competence and quality, and human resource characteristics. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

209

21. Threats are characteristics of the internal environment that may prevent the organization from achieving its strategic goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

209

22. The task environment sectors are the most relevant to strategic behavior and include the behavior of competitors, customers, suppliers, and the labor supply. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: F

210

23. The mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage for the corporation pertains to portfolio strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

211

24. The BCG (Boston Consulting Group) matrix evaluates SBUs with respect to their business growth rate and geographical location. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

212

25. The question mark exists in a new, rapidly growing industry but has only a small market share, according to the BCG Matrix. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

212

26. In BCG Matrix, the circle size represents the relative profit made by each business in the company's portfolio. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

213

27. According to the BCG Matrix, the cash cow has a large market share in a rapidly growing industry.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

28. The dog, according to the BCG Matrix, is a poor performer. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

29. Diversification is a strategy of moving into new lines of business. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

213

30. The bargaining power of customers is one of Porter's five competitive forces. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

215

31. According to Porter, the bargaining power of the government is one of the five competitive forces affecting an organization's competitive environment. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

215

32. Vertical integration means a firm expands into businesses that either produce the supplies needed to make products or that distribute and sell those products to customers. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

213

33. The Internet tends to lower the bargaining power of suppliers. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

215

34. With the leveling force of the Internet and information technology, it has become easier for many companies to find ways to distinguish themselves from their competitors. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216

35. Differentiation, cost leadership, and focus are three of Porter's competitive strategies. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216


36. Cost leadership is a type of competitive strategy with which the organization seeks to distinguish its products or services from that of competitors. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216

37. A differentiation strategy can increase rivalry with competitors if buyers are loyal to a company's brand. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216

38. Organization's with a focus strategy concentrate on a specific regional market or buyer group. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

217

39. Strategic partnerships are the current trend, rather than mergers and acquisitions. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

219

40. The world-wide standardization of product design and advertising refers to globalization. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

220

41. The export strategy treats the world as a single global market. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

221

42. The transnational strategy handles markets independently for each country. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

221-222

43. With a multidomestic strategy, a company will achieve the globalization or standardization of marketing and production approaches. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

221

44. A multidomestic strategy standardizes global products/advertising strategies.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

221

45. A transnational strategy seeks to achieve both global integration and national responsiveness. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

222

46. Human resources, in strategy implementation, are the ability to influence people to adopt the new behaviors need. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

225

47. In strategy implementation, leadership is the ability to influence people to adopt the new behaviors needed. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

224

48. Effective implementation is not a necessity if the strategies are truly creative. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

223

49. For successful execution, alignment of everyone in the organization must occur. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

223-224

50. Communication is one of the most important methods for effective strategy execution. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

225

51. A firms' leadership is responsible for recruiting, selecting, training, transferring, promoting, and laying off employees. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

225

52. Strategic thinking is more important -profit businesses than for non-profit organizations. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

202


53. A director of finance would most likely be interested in executing functional level strategies. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

202

54. Business-level strategies include all of the major functions, including finance, research and development, marketing, and manufacturing. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

207

55. The final stage of the strategic management process is execution of the new strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

208

56. Some companies hire competitive intelligence professionals to scan the external environment and provide data and research on relevant domestic and global trends. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

209

57. Opportunities are characteristics of the internal environment that have the potential to help the organization achieve or exceed its strategic goals. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

210

2 REF: TYP: F

212

58. An SBU stands for Star Business Unit. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

59. Unrelated diversification occurs when an organization expands into a totally new line of business. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

213

60. As a result of the growth of the Internet, barriers to entry into new markets are now much higher than ever before. ANS: PTS: 1 DIF: 2 REF: NAT: AACSB Analytic | Information Technologies

215 TYP: F

61. The concentration of suppliers and the availability of substitute suppliers are significant factors in determining supplier power.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

215

62. Cost leadership firms are more likely to reward employee innovation than differentiation firms or focus firms. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

215

63. In a turbulent business climate, managers should focus on strategic stability rather than flexibility. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

219

64. A transnational strategy combines degrees of both global standardization and national responsiveness. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

220

65. A multidomestic strategy helps an organization reap efficiencies by standardizing product design and manufacturing, using common suppliers, and eliminating overlapping facilities. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

221

66. A top-down management style has been identified as a silent killer of strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

224

67. For the social networking site Facebook, technological know-how and an aggressive and innovative culture are significant strengths to include in its SWOT analysis. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

210

MULTIPLE CHOICE 1. The set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals is known as a. strategy formulation. b. strategic planning. c. strategic management. d. strategy implementation. e. strategy evaluation.


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

204

2. The plan of action that prescribes resource allocation and other activities for dealing with the environment and helping the organization attain its goals is known as a(n) a. goal. b. objective. c. mission. d. vision. e. strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

3. Which of the following is a business activity that an organization does especially well relative to its competition? a. Strategy b. Synergy c. Cash cow d. Core competence e. Multidomestic ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

204

4. The condition that exists when the organization's parts interact to produce a joint effect that is greater than the sum of the parts acting alone is known as a. core competence. b. synergy. c. value creation. d. business-level strategy. e. multidomestic strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

205

5. ____ can be defined as the combination of benefits received and costs paid by the customer. a. Organizational benefits b. Value c. Cost-benefit diversity d. Synergy e. Core competence ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

205

6. When properly managed, ____ can create additional value with existing resources, providing a big boost to the bottom line.


a. b. c. d. e.

synergy competitors government contacts command structure cooperation among customers

ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

205

7. When AT&T decided to buy Media One, a cable company, it was pursuing a a. functional-level strategy. b. internal growth strategy. c. multi-domestic strategy. d. corporate-level strategy. e. business-level strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

206

8. When Philip-Morris, the tobacco giant, bought Kraft, Inc., it was pursuing a a. corporate-level strategy. b. business-level strategy. c. functional-level strategy. d. multidomestic strategy. e. retrenchment strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

206

9. Which of the following pertains to the organization as a whole? a. Business-level strategy b. Functional-level strategy c. Corporate-level strategy d. Operational-level strategy e. Competitive-level strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

206

10. Sears' decision to sell off much of its financial services division is an example of a a. corporate-level strategy. b. business-level strategy. c. functional-level strategy. d. growth strategy. e. stability strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

11. A corporate-level strategy is concerned with the question a. what business are we in? b. how do we compete?

206


c. how do we support our chosen strategy? d. where do we market our products? e. should we promote from within? ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

206

12. When Coca-Cola introduced Surge, a new citrus soft-drink, what type of strategy was being pursued? a. Functional-level strategy b. Multi-domestic strategy c. Corporate-level strategy d. Retrenchment strategy e. Business-level strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

207

13. Ford's decision to completely redesign its Ford Taurus can be classified as a a. corporate level strategy. b. business level strategy. c. functional level strategy. d. retrenchment strategy. e. stability strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

207

14. Decisions regarding the proper amount of advertising for a particular good or service are related to a. corporate-level strategies. b. functional-level strategies. c. tactical-level strategies. d. business-level strategies. e. retrenchment strategies. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

207

15. Which of these questions is central to a functional-level strategy? a. What business are we in? b. How do we compete? c. How do we support our chosen strategy? d. What business do we buy? e. Where to market our products? ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

206


16. ____ refers to the use of managerial tools to direct resources toward the achievement of strategic goals. a. Strategy formulation b. Strategy coordination c. Strategy execution d. Strategy control e. Strategy planning ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

208

17. Which of the following refers to the planning and decision making that lead to the establishment of the organization's goals and of a specific strategic plan? a. Strategy formulation b. Strategy implementation c. Strategy coordination d. Strategy control e. SWOT ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

208

18. Fred has been assigned to conduct a SWOT analysis for his organization, Flintstones, Inc. As part of this assignment, Fred will a. conduct an external wage survey. b. search for the strengths, weaknesses, opportunities, and threats that impact his firm. c. choose a grand strategy for his firm. d. do a cost/benefit analysis. e. develop a mission. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

209

19. Techniques used to monitor external environments include a. hiring scanning organizations. b. hiring the competitive intelligence professionals. c. government reports. d. professional journals. e. all of these. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

209

20. Classy Clay has extremely creative employees who, in the opinion of the organization, keep the company ahead of the competition. The creativity of these employees would be classified as a. an internal weakness. b. an external opportunity. c. an external strength.


d. an internal strength. e. a neutral factor. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

209

21. Where does the information about opportunities and threats comes from? a. An analysis of the organization's internal environment b. A department by department study of the organization c. Scanning the external environments d. Employee grievances e. Financial ratios of the organization ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

210

22. Flush Away, Inc. is particularly concerned about pending legislation in Congress that would further regulate their organization. This legislation would be classified as a. an external opportunity. b. an internal strength. c. an external threat. d. an external weakness. e. a congressional chaos. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

209

23. Which of the following is NOT a strength of the social network company, Facebook? a. A new legislation that opens the international markets b. Technological know-how c. An aggressive and innovative culture d. A partnership with Microsoft e. Work networks are exploding and older generations prefer Facebook ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

210

24. How business units and product lines fit together in a logical way is the essence of a. business-level strategy. b. portfolio strategy. c. competitive strategy. d. financial strategy. e. functional strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

211

25. The BCG matrix organizes along which of the following dimensions? a. Market share and profit b. Sales and market share c. Business growth rate and market share d. Business growth rate and profit


e. Sales and profits ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

26. Double Click, Inc. has a number of strategic business units. Their hand-held computer unit has a large market share in this rapidly growing industry. Their hand-held computer business would be classified as a. a dog. b. a star. c. a question mark. d. a cash cow. e. stuck in the middle. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

212

27. Which of these is true about the cash cow? a. It generates tremendous profits in a rapidly growing industry. b. It has a small market share in a rapidly growing industry. c. It has a small market share in a slow growth industry. d. It has a large market share in a slow growth industry. e. It is generally a dead business that should be divested. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

28. The star has a a. large market share in a rapidly growing industry. b. large market share in a slow growth industry. c. small market share in a rapidly growing industry. d. small share of a slow growth market. e. moderate market share in a slow growth industry. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

29. Which of the following portfolio categories is made up of poor performers who command only a small share of a slow growth market? a. Star b. Cash cow c. Question mark d. Dog e. Cat ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

30. The question mark has a a. large market share in a rapidly growing industry. b. large market share in a slow growth industry. c. small market share in a rapidly growing industry.

212


d. small share of a slow growth market. e. moderate market share in a slow growth industry. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

31. Which of these is true about the dog division? a. It has a large market share in a rapidly growing industry. b. It has a large market share in a slow growth industry. c. It has a small market share in a rapidly growing industry. d. It has a small share of a slow growth market. e. It has a moderate market share in a rapidly growing industry. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

32. Gillette operates numerous strategic business units. Most of its units in the personal care division have low market share but high business growth. These units are classified as _____. a. dogs b. question marks c. stars d. cash cows e. none of these ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

212

33. The purpose of ________ is to expand the firm’s business operations to produce new kinds of valuable products and services? a. retrenchment. b. diversification. c. liquidation. d. cash cow. e. internal growth. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

213

34. Which of the following strategies refers to moving into a new business that is related to the company's existing business activities? a. Horizontal integration b. Vertical integration c. Unrelated diversification d. Related diversification e. Strategic partnership ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

213


35. According to the BCG Matrix, which of the following exists in a mature, slow-growth industry, but is a dominant business in the industry, with a large market share? a. Question mark b. Asterisk c. Dog d. Star e. Cash cow ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

212

36. Barriers to entry are related to which competitive force? a. Rivalry among competitors b. Potential new entrants c. Threat of substitute products d. Bargaining power of buyers e. Bargaining power of suppliers ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

215

37. All of the following are Porter's competitive forces EXCEPT a. differentiation. b. bargaining power of buyers. c. bargaining power of suppliers. d. threat of substitute products. e. potential new entrants. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

215

38. Which of the following is NOT one of Porter's competitive forces? a. Potential new entrants b. Bargaining power of suppliers c. Bargaining power of stockholders d. Bargaining power of customers e. Rivalry among competitors ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

215

39. Which of Porter's five forces is influenced by all of the other four? a. Threat of substitute products b. Rivalry among competitors c. Bargaining power of buyers d. Potential new entrants e. Bargaining power of suppliers ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216


40. Which of the following strategies involve an attempt to distinguish the firm's products or services from others in the industry? a. Cost leadership b. Differentiation c. Focus d. Internal growth e. Liquidation ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216

41. Which strategy can be profitable for an organization when customers are loyal and willing to pay high prices? a. Focus b. Globalization c. Overall cost leadership d. Differentiation e. Liquidation ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216

42. The ____ strategy involves seeking efficient facilities, cutting costs and using tight cost controls to be more efficient than competitors. a. cost leadership b. differentiation c. focus d. internal growth e. liquidation ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

216

43. The human resource department at Paula's Powerwheels is implementing a number of functional level strategies. These strategies include focusing on ways to retain and develop a stable work force and ways to improve efficiency in the organization. These functional-level strategies are consistent with which of the following strategies? a. Overall cost leadership b. Differentiation c. New product development d. New market development e. Divestiture ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

216

44. With a(n) ____ strategy, the organization concentrates on a specific regional market or buyer group. a. cost leadership b. differentiation c. focus d. internal growth


e. liquidation ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

217

45. Mingles, Inc. concentrates its efforts on its target market of 18 to 25 year olds. It is using a(n) ____ strategy. a. focus b. differentiation c. overall cost leadership d. multidomestic e. universal strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

217

46. If ABC International has standardized its product line throughout the world it is pursuing a a. multidomestic strategy. b. retrenchment strategy. c. diversity strategy. d. globalization strategy. e. liquidation strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: A

220

47. The assumption that a single global market exists would lead to a a. globalization strategy. b. multidomestic strategy. c. diversity strategy. d. domestic strategy. e. liquidation strategy. ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

220

48. Which of the following strategies would be appropriate when the need for both national responsiveness and global integration is low? a. Globalization b. Multidomestic c. Export d. Transnational e. Import


ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

220

49. ____ refers to the modification of product design and advertising strategies to suit the specific needs of individual countries. a. Domestic strategy b. Global strategy c. Transnational strategy d. Multidomestic strategy e. Market design strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

221

50. Which of the following refers to a strategy that combines global coordination to attain efficiency with flexibility to meet specific needs in various countries? a. Domestic strategy b. Global strategy c. Transnational strategy d. Multidomestic strategy e. Region design strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

222

51. Some people argue that ____ is the most difficult and most important part of strategic management. a. SWOT analysis b. strategic formation c. strategic execution d. strategic analysis e. strategy evaluation ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

223

52. Persuasion, motivation, and changes in cultures and values are examples of which of the dimensions used to implement strategy? a. Leadership b. Structural design c. Human resources d. Information and control systems e. Compensation ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

224

53. Which of the following is NOT one of the tools used for putting strategy into action? a. Visible leadership b. Diversification c. Human Resources d. Communication


e. Clear roles and accountability ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

225

54. The ____ function recruits selects, trains, transfers, promotes, and lays off employees to achieve strategic goals. a. production b. leadership c. information and control systems d. structural design e. human resource ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

225

55. To remain competitive, companies should develop strategies that focus on core competencies, providing synergy, and creating value for: a. Customers b. Suppliers c. Stockholders d. Employees e. Board members ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

204

56. After Sunshine Systems merged with RTD Enterprises, company executives noticed that due to increased employee collaboration between the two units, costs were down and revenues increased within both areas. This is an example of what business phenomenon? a. Strategy execution b. Portfolio strategy c. Core competency d. Synergy e. Delivering value ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

206

57. Janessa is the CEO of a privately-held software company. In defining corporate-level strategies, which of the following questions would she most likely be concerned with? a. How do we compete? b. What business are we in? c. How does marketing support the business? d. How can we maximize profits? e. How can we make manufacturing processes more efficient? ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

206


58. ________-level strategy pertains to the major functional departments within the business unit. a. Operational b. Corporate c. National d. Business e. Functional ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

1 REF: TYP: F

207

59. Which of the following lists the strategic management process in proper order? a. Formulate strategy; Evaluate strategy; Perform SWOT analysis; Define new mission/goals; Execute strategy; Control strategy b. Perform SWOT analysis; Evaluate current mission/goals; Formulate strategy; Execute strategy; Define new mission/goals c. Evaluate current mission/goals; Define new mission/goals; Formulate strategy; Execute strategy; Perform SWOT analysis d. Evaluate current mission/goals; Perform SWOT analysis; Define new mission/goals; Formulate strategy; Execute strategy e. Define new mission/goals; Execute strategy; Formulate strategy; Evaluate new mission/goals; Perform SWOT analysis ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: F

208

60. Sherri has been asked to participate on a cross-functional task force that is charged with performing an audit checklist for her advertising firm. The task force will analyze organizational strengths and weaknesses as they apply to the firm. Sherri’s task is to analyze management quality, staff quality, degree of centralization, and organizational charts. This level of analysis pertains to which area of the audit? a. Management and organization b. Marketing c. Human resources d. Research and development e. Production ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

209

61. What type of organizational unit has a unique business mission, product line, competitors, and markets relative to other units in the same corporation? a. Product unit b. Functional unit c. Strategic business unit d. Operational unit e. Business consulting group unit ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

211


62. Gatekeep Utilities is a subsidiary of GW Enterprises. Gatekeep has a mission and product line that is unique from GW. Gatekeep’s competitors are also very different from those of its parent, and the subsidiary markets to a very different group of customers. As such, Gatekeep can be described as a(n): a. Product unit b. Functional unit c. Operational unit d. Strategic business unit e. Boston consulting group unit ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

211

63. When an organization expands into a totally new line of business, it is implementing a strategy of: a. Related diversification b. Unrelated diversification c. Cross-functional diversification d. Product line diversification e. Industry diversification ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

213

64. Semway, a regional bank, recently announced that it would soon begin offering financial planning services. This is an example of which of these? a. Related diversification b. Unrelated diversification c. Cross-functional diversification d. Product line diversification e. Industry diversification ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

213

65. Which of the following is true regarding the impact of the Internet on Porter’s Five Forces affecting industry competition? a. Internet increases barriers to entry b. Internet decreases bargaining power of suppliers c. Internet shifts power away from end customers d. Internet cuts down on substitute product threats e. Internet blurs differences among competitors ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

2 REF: TYP: F

215


66. Sugar manufacturers have been steadily losing business as a result of increasing use of high-fructose corn syrup in processed foods. However, sugar sales are beginning to increase again in recent months. This example most closely demonstrates which of Porter’s Five Forces? a. Bargaining power of suppliers b. Bargaining power of consumers c. Rivalry among competitors d. Threat of new entrants e. Threat of new substitutes ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

216

67. General Products Inc. is a small clothing designer and manufacturer located in the United States. A vast majority of the company’s revenues comes from U.S. sales, although about ten percent of the company’s revenue come from sales to Canada. General Products Inc. can best be described as using which global corporate strategy? a. Globalization strategy b. Multidomestic strategy c. Export strategy d. Transnational strategy e. Domestic strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

221

68. FLY Industries is a global conglomerate company headquartered in the United States that does business in over fifty countries. The company seeks to balance global efficiencies and local responsiveness by hiring locally as well as from home. It can best be described as using which global corporate strategy? a. Globalization strategy b. Multidomestic strategy c. Export strategy d. Transnational strategy e. Domestic strategy ANS: PTS: 1 DIF: NAT: AACSB Analytic | Strategy

3 REF: TYP: A

221

69. People need to understand how their individual actions can contribute to achieving an organizational strategy. This can be accomplished by delegating authority, creating teams, and defining roles. These actions are part of which tool for putting strategy into action? a. Visible leadership b. Candid communication c. Human resources d. Clear roles and accountability e. Bargaining power of employees ANS: PTS:

1

DIF:

2

REF:

225


NAT: AACSB Analytic | Strategy

TYP: F

CASE Scenario - Theresa Teutul Theresa Teutul was an executive with Digital Industries, a leading manufacturer of color televisions. She recognized that the color television market in the late 1970's was facing significant challenges. After two decades of highly successful development and marketing, the sales of color televisions had slowed and replacing older color television sets largely created her market. 1. Using the logic of the BCG grid, Theresa should recognize that her strategic business unit was in which quadrant? a. Star b. Cash Cow c. Question Mark d. Dog e. None of these ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 212

NAT: AACSB Analytic |

TYP: A

2. The strategy that the BCG matrix suggests that Theresa should take for this SBU is a. invest and grow. b. liquidate while still profitable. c. ask her astrologer for advice. d. keep the SBU healthy and use its excess earnings to invest in other SBU's. e. divestiture. ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 212 TYP: A

NAT: AACSB Analytic |


3. Which one of the following is not one of the competitive forces that Porter recommends that Theresa should recognize? a. Potential new entrants b. Bargaining power of buyers c. Threat of substitute products d. Bargaining power of suppliers e. All of these are competitive forces. ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 215-216

NAT: AACSB Analytic |

TYP: A

Scenario - SS.com Faced with rapidly growing business, Swift Stocks, Inc., a global brokerage company with the largest market share, recently announced that it has established an on-line stock investment and trading subsidiary, SS.com, where investors can trade stocks at the lowest rates in the industry. The .com subsidiary has less than one percent market share but it faces a very high business growth rate. In the brokerage industry the competition is fierce and all players are cutting their on-line commission rates. 4. Swift Stock's traditional brokerage business could be classified as a a. cash cow. b. dog. c. star. d. question mark. e. stuck in the middle business. ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 212 TYP: A

5. SS.com subsidiary for Swift Stocks can be classified as a a. cash cow. b. dog. c. star. d. question mark. e. stuck in the middle business. ANS:

NAT: AACSB Analytic |


PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 212

NAT: AACSB Analytic |

TYP: A

6. If Swift Stock's traditional brokerage business were to face a declining business growth, it may need to be reclassified as a a. cash cow. b. dog. c. star. d. question mark. e. dead business. ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 212

NAT: AACSB Analytic |

TYP: A

7. Swift Stock is following which strategy, according to Porter, through the .com subsidiary? a. Stability b. Cost leadership c. Focus d. Differentiation e. Retrenchment ANS: PTS: 1 DIF: 2 Strategy KEY: Scenario Questions

REF: 216

NAT: AACSB Analytic |

TYP: F

COMPLETION 1. ____________________ is the set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 204

NAT: AACSB Analytic |

2. The plan of action that prescribes resource allocation and other activities for dealing with the environment and helping the organization attain its goals is called a(n) ____________________.


ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 204

NAT: AACSB Analytic |

3. A business activity that an organization does particularly well relative to its competition is known as a(n) ____________________. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 204

NAT: AACSB Analytic |

4. When organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone, ____________________ occurs. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 205

NAT: AACSB Analytic |

5. The question What business are we in? concerns ____________________ strategy. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 206

NAT: AACSB Analytic |

6. The question How do we compete? concerns ____________________ strategy. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 206

NAT: AACSB Analytic |

7. The question How do we support the business-level competitive strategy? concerns ____________________ strategy. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 206

NAT: AACSB Analytic |


8. ____________________ includes the planning and decision making that lead to the establishment of the firm's goals and the development of a specific strategic plan. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 208

NAT: AACSB Analytic |

9. The use of managerial and organizational tools to direct resources toward accomplishing strategic results is known as ____________________. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 208

NAT: AACSB Analytic |

10. ____________________ is a type of corporate-level strategy that pertains to the organization's mix of strategic business units. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 211

NAT: AACSB Analytic |

11. In the BCG matrix, the dog has ____________________ market share and ____________________ business growth rate. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 212

NAT: AACSB Analytic |

12. The acquisition of a business that is related to current product lines or that takes the corporation into new areas is called ____________________. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 213

NAT: AACSB Analytic |


13. In the BCG matrix, the star has a(n) ____________________ market share in a rapidly growing industry. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 212

NAT: AACSB Analytic |

14. The ____________________ strategy involves an attempt to distinguish the firm's products or services from others in the industry. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 216

NAT: AACSB Analytic |

15. With a(n) ____________________ strategy, the organization aggressively seeks efficient facilities, pursues cost reductions, and uses tight cost controls to produce products more efficiently than competitors. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 216

NAT: AACSB Analytic |

16. With a(n) ____________________ strategy, the organization concentrates on a specific regional market or buyer group. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 217

NAT: AACSB Analytic |

17. The ____________________ is driving and supporting the move toward partnership thinking. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 220

NAT: AACSB Analytic |

18. The standardization of product design and advertising strategies throughout the world is called ____________________.


ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 220

NAT: AACSB Analytic |

19. When an organization chooses a(n) ____________________ strategy, it means that business decisions such as product design are made on a country-by-country basis. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 221

NAT: AACSB Analytic |

20. A(n) ____________________ strategy seeks to achieve both global integration and national responsiveness. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 222

NAT: AACSB Analytic |

21. The ability to influence people to adopt the new behaviors needed for strategy implementation is called ____________________. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 224

NAT: AACSB Analytic |

22. It is argued that ____________________ is the most difficult and most important part of strategic management. ANS: PTS: 1 Strategy TYP: F

DIF: 2

REF: 223

SHORT ANSWER 1. List the three global corporate strategies. ANS:

NAT: AACSB Analytic |


2. List the four components of a SWOT analysis. ANS: 3. List Porter's competitive forces. ANS: ESSAY 1. Name and describe the three types of global strategies. ANS: 2. Compare and contrast the three levels of strategy in an organization. ANS: 3. In order for companies to remain competitive, their strategies must focus on three things. Describe these three focuses. ANS: 4. Differentiate between strategy formulation and strategy implementation. ANS: 5. Briefly describe the Boston Consulting Group matrix, including its dimensions, quadrants, and strategic recommendations. ANS:

6. Briefly describe the five competitive forces identified by Michael E. Porter. ANS: 7. Briefly discuss Porter's three competitive strategies. ANS:

8. Briefly describe the tools for putting strategy into action. ANS:


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