Management, 12th Edition Binder Ready Version Test Bank by Ace Test Banks

Management, 12th Edition Binder Ready Version By Schermerhorn EditionMultinational Financial Management, 12th Edition

Schermerhorn-Management, 12th edition

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Ch01: Introducing Management

True or False Questions

Intellectual capital is a personal asset for individuals. Answer: True Page: 5 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Commitment represents your talents or job-relevant capabilities. Answer: False Page: 5 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A knowledge worker is a person whose physical capabilities are the most critical assets. Answer: False Page: 5 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Tech IQ is the ability to use technology and commitment to stay informed on the latest technological developments. Answer: True Page: 6 Learning Objective: 1.1 Difficulty: Easy AACSB: Use of information technology Bloom’s Taxonomy: Knowledge

National boundaries hardly count anymore in the world of business. Answer: True Page: 6 Learning Objective: 1.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

Minorities constitute less than one-third of the U.S. population. Answer: False Page: 9 Learning Objective: 1.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

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The first leaf in the shamrock organization consists of a core group of “freelancers” and “independent contractors.” Answer: False Page: 10 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In a free-agent economy, people do not change jobs very often. Answer: False Page: 10 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

All organizations are open systems that interact with their environments. Answer: True Page: 11 Learning Objective: 1.2 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

10.

Performance effectiveness is defined as the quantity and quality of outputs relative to the cost of inputs. Answer: False Page: 12 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

If a company fails to achieve its desired goals but manages to preserve its resources, we can say that its productivity is effective but not efficient. Answer: False Page: 12 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

12.

Performance efficiency is an output measure of resource cost associated with goal accomplishment. Answer: False Page: 13 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

13.

In the context of present day organizational trends, organizations and their members are networked for intense, real-time communication and coordination.

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Schermerhorn-Management, 12th edition

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Answer: True Page: 13 Learning Objective: 1.2 Difficulty: Moderate AACSB: Communication abilities Bloom’s Taxonomy: Knowledge 14.

A manager is a person who supports, activates, and is responsible for the work of others. Answer: True Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

Middle managers are in charge of overseeing the overall operations of the organization. Answer: False Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

The top managers of an organization constitute an executive team that is not accountable to any higher authority in the organization. Answer: False Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

Top managers are supposed to set strategy and lead the organization consistent with its purpose and mission. Answer: True Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

Typical job titles for middle managers include department head, team leader, and supervisors. Answer: False Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

19.

Line managers are responsible for work that makes a direct contribution to the organization’s outputs. Answer: True

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Schermerhorn-Management, 12th edition

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Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 20.

Functional managers are primarily involved in using their special technical expertise to advise and support line workers. Answer: False Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

Effective managers successfully help others achieve both high performance and satisfaction in their work. Answer: True Page: 16 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

The upside-down pyramid view of organizations shows customers at the top being served by workers who are supported by managers. Answer: True Page: 17 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

The top managers are primarily responsible for all the four management functions and the other managers are in charge of any one of the functions. Answer: False Page: 18 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

Through controlling, a manager identifies desired results and ways to achieve them. Answer: False Page: 18 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

In the management process, if the planning is impeccable, then there is no need for controlling. Answer: False Page: 20 Learning Objective: 1.4

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Schermerhorn-Management, 12th edition

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Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 26.

According to Mintzberg, a manager’s informational roles are limited to being a figurehead. Answer: False Page: 21 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

According to Mintzberg, as a monitor, a manager provides direction and instills enthusiasm. Answer: False Page: 21 Learning Objective: 1.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

28.

Through agenda setting, good managers develop action priorities that include goals and plans spanning long and short time frames. Answer: True Page: 22 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

The learning focus in management is on developing skills and competencies to deal with the complexities of human behavior and problem solving in organizations. Answer: True Page: 23 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

Long-term career success depends mainly on lifelong learning. Answer: True Page: 23 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

31.

A person high in emotional intelligence will know when her or his emotions are about to become disruptive, but does not usually sense when another person’s emotions are negatively influencing a relationship. Answer: False Page: 24 Learning Objective: 1.5 Difficulty: Moderate

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Schermerhorn-Management, 12th edition

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AACSB: Communication abilities Bloom’s Taxonomy: Comprehension

Multiple Choice Questions

32.

________ is the collective brainpower or shared knowledge of a workforce that can be used to create value. A. Social capital B. Intellectual capital C. Workforce diversity D. Productivity E. Competency Answer: B Page: 5 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

The intellectual capital equation states: Intellectual Capital = A. Competency × Commitment B. Competency ÷ Commitment C. Knowledge × Concept D. Knowledge ÷ Concept E. Intellect × Talent Answer: A Page: 5 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

________ represents one’s willingness to work hard in applying one’s capabilities to important tasks. A. Intellect B. Productivity C. Commitment D. Effectiveness E. Competency Answer: C Page: 5 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

Which of the following is the defining characteristic of knowledge workers? A. They work only in the information technology industry. B. They have a high degree of cohesiveness and are prone to groupthink. C. They are valued for their minds, not just their physical capabilities. D. They are grouped together for a specific purpose and are disbanded when their task is completed.

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E. They are a part of an unofficial group emerging from relationships and shared interests among members. Answer: C Page: 5 Learning Objective: 1.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 36.

The members of a ________ team are most likely to hold meetings, access common databases, share information and files, make plans, and solve problems together, all without ever meeting face to face. A. virtual B. specialized C. cross-functional D. self-managed E. formal Answer: A Page: 6 Learning Objective: 1.1 Difficulty: Moderate AACSB: Use of information technology Bloom’s Taxonomy: Comprehension

37.

________ is the worldwide interdependence of resource flows, product markets, and business competition. A. Collectivism B. Globalization C. Nationalization D. Diversification E. Orientalism Answer: B Page: 6 Learning Objective: 1.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

38.

In today’s world, Americans find that their customer service call is answered in Ghana, their CAT scan read by a radiologist in India, and their tax return prepared by an accountant in the Philippines. This has become possible primarily due to ________. A. collectivism B. the glass ceiling effect C. the regional trade agreements D. globalization E. distributed leadership Answer: D Page: 6 Learning Objective: 1.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Comprehension

39.

Which of the following is a negative outcome closely associated with globalization?

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Schermerhorn-Management, 12th edition

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A. Groupthink B. Functional chimneys problem C. Job migration D. National barriers E. Debt financing Answer: C Page: 7 Learning Objective: 1.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Comprehension 40.

Job migration occurs primarily: A. when firms shift jobs from one country to another. B. due to the ecological fallacy. C. when workforce diversity increases. D. when workers move from their home country to another country. E. due to an increase in the productivity of the workforce. Answer: A Page: 7 Learning Objective: 1.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

41.

Which of the following is defined as the code of moral principles that sets standards for what is “good” and “right” as opposed to “bad” and “wrong” in the conduct of a person or group? A. Synergy B. Ethics C. Behavior D. Cohesiveness E. Individualism Answer: B Page: 7 Learning Objective: 1.1 Difficulty: Easy AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

42.

________ describes differences among workers in gender, race, age, ethnicity, religion, sexual orientation, and able-bodiedness. A. Ethics B. Workforce diversity C. Masculinity-femininity D. Creative economy E. Competency Answer: B Page: 9 Learning Objective: 1.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

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43.

Smith, an employee of Carbon Inc., thinks that business leaders should “be white.” Owing to this view, he holds a grudge against his manager, Adisa, who is of Asian origin. Smith often displays defiant behavior at the workplace. Smith’s behavior is an example of ________. A. prejudice B. whistleblowing C. subordination D. harassment E. bullying Answer: A Page: 9 Learning Objective: 1.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

44.

________ is the display of negative, irrational attitudes toward members of diverse populations. A. Job dissatisfaction B. Subordination C. Intimidation D. Whistleblowing E. Prejudice Answer: E Page: 9 Learning Objective: 1.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

45.

________ actively denies minority members the full benefits of organizational membership. A. Discrimination B. Subordination C. Migration D. Free-riding E. Social loafing Answer: A Page: 9 Learning Objective: 1.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

46.

The ________ effect is an invisible barrier limiting career advancement of women and minorities. A. ecological fallacy B. masculinity-femininity C. job migration D. nationalization E. glass ceiling Answer: E Page: 9 Learning Objective: 1.1 Difficulty: Easy

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Schermerhorn-Management, 12th edition

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AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 47.

Karen is the most qualified candidate for the job of marketing manager at Mob Inc. However, the recruiters do not hire her because they feel that a woman would not be able to handle the responsibilities associated with such a senior position. This is an example of the ________ effect. A. ecological fallacy B. globalization C. job migration D. glass ceiling E. nationalization Answer: D Page: 9 Learning Objective: 1.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

48.

The typical characteristic of a(n) ________ is that they typically operate with a core group of full-time long-term workers supported by others who work on contracts and part-time. A. shamrock organization B. ad hoc team C. combined task force D. project team E. joint task force Answer: A Page: 10 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

49.

Which of the following is the defining characteristic of a free-agent economy? A. People change jobs more often, and many work on independent contracts with a shifting mix of employers. B. The structure is totally centralized and the leader makes all key decisions and most communication is done by one on one conversations. C. It consists of boundary less organizations whose employees communicate only through the virtual media. D. In this system organizations are exempted from tax given that they use surplus revenues to achieve its goals rather than to distribute them as profit. E. The structure is fully functional and it consists of long-term employees who are mostly concerned with their respective areas of interest. Answer: A Page: 10 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

50.

Which of the following is a typical characteristic of an open system? A. It is an organization that is convened for a specific purpose and disbands when its task is completed.

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B. It is a system where each member has the authority to make decisions about how they share and complete their work. C. It is the system where communication flows only between individual members and a hub. D. It is the system in which subgroups have limited communication with one another. E. It is a system that transforms resource inputs from the environment into product outputs. Answer: E Page: 11 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 51.

________ accurately measures the quantity and quality of outputs relative to the cost of inputs. A. Commitment B. Productivity C. Competency D. Performance efficiency E. Tech IQ Answer: B Page: 12 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

The annual productivity report of Uranus Inc. states that it has achieved the targets it had set for the year 2011. However in this process, much of its resources have been wasted and the amount spent on resources is more than the estimated amount. Its productivity has been: A. effective and efficient. B. neither effective nor efficient. C. not effective but efficient. D. effective but not efficient. E. lower as compared to the previous year. Answer: D Page: 12 Learning Objective: 1.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

53.

The productivity of a company is neither efficient nor effective when its: A. goals are not achieved and resources are wasted. B. goals are achieved and resources are not wasted. C. goals are achieved but resources are wasted. D. performance effectiveness is high. E. goals are not achieved but resources are not wasted. Answer: A Page: 12 Learning Objective: 1.2 Difficulty: Moderate

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Schermerhorn-Management, 12th edition

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AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 54.

The productivity of a company is effective and efficient if its: A. goals are not achieved and resources are wasted. B. goals are achieved and resources are not wasted. C. goals are achieved but resources are wasted. D. performance effectiveness is low. E. goals are not achieved but resources are not wasted. Answer: B Page: 12 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

55.

________ is an output measure of task or goal accomplishment. A. Job satisfaction B. Competency C. Performance effectiveness D. Performance efficiency E. Tech IQ Answer: C Page: 12 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

The difference between performance effectiveness and performance efficiency is that the: A. former is an output measure of goal accomplishment and the latter is an input measure of the resource costs associated with goal accomplishment. B. former focuses on the quantity and quality of work performance, and the latter focuses on resource utilization. C. former emphasizes machine efficiency while the latter emphasizes human capital. D. former emphasizes the performance of the team as a whole and the latter emphasizes the performance of the individual employees. E. former measures the potential ability of the workers and the latter measures the actual output of the workers. Answer: A Page: 12-13 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

57.

John, who works for an insurance company, has the capacity to sell fifteen insurance policies a day. However, he sells only ten insurance policies a day. This is a typical example of ________. A. information asymmetry B. glass ceiling effect C. inefficiency D. ecological fallacy E. functional chimneys problem

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Answer: C Page: 13 Learning Objective: 1.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 58.

________ is an input measure of resource cost associated with goal accomplishment. A. Productivity B. Profit C. Performance effectiveness D. Performance efficiency E. Revenue Answer: D Page: 13 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

Which of the following is true in the context of present day organizational trends? A. Workers are more tolerant of hierarchy. B. Little attention is paid to preservation of natural resources. C. There is a greater focus on valuing human capital. D. Organizations are less horizontal in focus. E. Traditional top-down bosses are popular. Answer: C Page: 13 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

60.

In nonprofit organizations such as a hospital or university, the ________ is/are mainly responsible for the smooth running of the organization. A. team leaders B. board of trustees C. middle managers D. chief executive officer E. department head Answer: B Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

61.

Who elects the members of the board of directors? A. Top managers B. Stockholders C. Middle managers D. First-line managers E. Senior staff Answer: B Page: 14

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Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 62.

To which of the following categories does the chief financial officer (CFO) of an organization typically belong? A. Board of directors B. Middle managers C. First-line managers D. Top managers E. Board of trustees Answer: D Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

The chief information officer (CIO) of an organization belongs to the category of ________. A. board of directors B. middle managers C. first-line managers D. top managers E. board of trustees Answer: D Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

64.

Clinic directors in hospitals, deans in universities, and division managers in businesses belong to the category of ________. A. board of directors B. middle managers C. first-line managers D. top managers E. board of trustees Answer: B Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

________ are mainly in charge of guiding the performance of the organization as a whole or of one of its major parts. A. Top managers B. Board of directors C. Middle managers D. First-line managers E. Board of trustees Answer: A

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Page: 14 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 66.

Middle managers of an organization: A. are in charge of the organization as a whole. B. are appointed by the stockholders. C. oversee the work of large departments. D. hold titles such as department head, team leader, or supervisor. E. constitute an executive team that reports to the board. Answer: C Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

Team leaders ideally report to the ________. A. top managers B. board of directors C. board of trustees D. first-line managers E. middle managers Answer: E Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

68.

________ directly contribute to producing the organization’s goods or services. A. Line managers B. Staff managers C. Top managers D. Middle managers E. Trustees Answer: A Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

69.

Staff managers: A. directly contribute to producing the organization’s goods. B. use special technical expertise to advise and support line workers. C. look after the administration of nonprofit organizations. D. are appointed by the stockholders. E. elect the top managers. Answer: B Page: 15 Learning Objective: 1.3 Difficulty: Easy

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Schermerhorn-Management, 12th edition

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 70.

Keith is the sales manager of a firm and his responsibility is limited to the sphere of sales. Keith’s job profile indicates that he is the ________ of the firm. A. director B. general manager C. trustee D. stockholder E. functional manager Answer: E Page: 15 Learning Objective: 1.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

71.

Tom oversees all the operations in his firm, from purchasing to manufacturing to human resources to finance and accounting functions. Tom is a ________ of his firm. A. general manager B. line manager C. functional manager D. team leader E. director Answer: A Page: 15 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

72.

A manager in a public or nonprofit organization might be referred to as a(n): A. director B. president C. administrator D. team leader E. trustee Answer: C Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

________ is the requirement to show performance results to a supervisor. A. Productivity B. Competency C. Performance effectiveness D. Accountability E. Performance efficiency Answer: D Page: 15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

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Bloom’s Taxonomy: Knowledge 74.

Corporate governance is most likely to occur when: A. a board of directors holds top management accountable for organizational performance. B. minority members are denied the full benefits of organizational membership. C. the traditional top-down “do as I say” form of management prevails. D. top managers guide the performance of the organization as a whole. E. team leaders report to middle managers about the performance of the nonmanagerial workers. Answer: A Page: 16 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

________ is the overall essence of human experiences in the workplace. A. Productivity B. Competency C. Performance effectiveness D. Quality of work life E. Performance efficiency Answer: D Page: 16 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

76.

The upside-down pyramid view of organizations shows: A. managers at the top being in charge of the overall operations of the organization. B. customers at the top being served by workers who are supported by managers. C. that board of directors can hold top management accountable for organizational performance. D. that operating and frontline workers are at the bottom of the pyramid followed by the middle managers. E. that the primary job of top executives is to preserve the resources of the company. Answer: B Page: 17 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

Which of the following is typically the first step of the management process? A. Organizing B. Analyzing C. Leading D. Controlling E. Planning Answer: E Page: 18 Learning Objective: 1.4 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 78.

In the context of the management process, ________ is the process of setting objectives and determining what should be done to accomplish them. A. organizing B. inspiring C. leading D. planning E. controlling Answer: D Page: 18 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

79.

In the context of the management process, organizing is the process of: A. setting objectives and determining what should be done to accomplish them. B. assigning tasks, allocating resources, and coordinating work activities. C. preparing team members to achieve closure and disband. D. measuring performance and taking action to ensure desired results. E. motivating team members to increase team cohesiveness so as to ensure the occurrence of groupthink. Answer: B Page: 18 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

In the context of the management process, leading primarily involves: A. setting objectives and determining what should be done to accomplish them. B. assigning tasks, allocating resources, and coordinating work activities. C. arousing enthusiasm and inspiring efforts to achieve goals. D. preparing team members to achieve closure and disband. E. developing action priorities for accomplishing goals and plans. Answer: C Page: 19 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

In the context of the management process, which of the following best describes the process of controlling? A. It is the process of setting objectives and determining what should be done to accomplish them. B. It is the process of assigning tasks, allocating resources, and coordinating work activities. C. It is the process of arousing enthusiasm and inspiring efforts to achieve goals. D. It is the process of measuring performance and taking action to ensure desired results. E. It is the process of developing action priorities for accomplishing goals and plans. Answer: D

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Page: 20 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 82.

According to Mintzberg, a manager’s informational roles involve that of a(n) ________. A. leader B. disturbance handler C. disseminator D. entrepreneur E. resource allocator Answer: C Page: 21 Learning Objective: 1.4 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

83.

In accordance with the ten managerial roles mentioned by Mintzberg, as a monitor, a manager is required to: A. scan for information. B. provide direction. C. handle budgets. D. forge agreements. E. share information. Answer: A Page: 21 Learning Objective: 1.4 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

84.

According to Mintzberg, the interpersonal roles of a manager primarily involve: A. the giving, receiving, and analyzing of information. B. providing direction and instilling enthusiasm. C. handling budgets and distributing resources. D. making deals and forging agreements. E. interacting with people inside and outside the work unit. Answer: E Page: 21 Learning Objective: 1.4 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

85.

According to Mintzberg, as a resource allocator, a manager is mainly involved in: A. the giving, receiving, and analyzing of information. B. providing direction and instilling enthusiasm. C. handling budgets. D. making deals and forging agreements. E. interacting with people inside and outside the work unit. Answer: C Page: 21

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Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 86.

Being an entrepreneur, disturbance handler, resource allocator, and negotiator are part of the ________ roles of the manager. A. decisional B. informational C. interpersonal D. monitoring E. allocation Answer: A Page: 21 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

________ primarily involves developing action priorities for accomplishing goals and plans. A. Organizing B. Agenda setting C. Capitalizing D. Information scanning E. Controlling Answer: B Page: 22 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

88.

The process of creating positive relationships with people who can help advance agendas is referred to as ________. A. organizing B. networking C. capitalizing D. allocating E. controlling Answer: B Page: 22 Learning Objective: 1.4 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

89.

Which of the following best describes social capital? A. It is a unique form of ethical entrepreneurship that seeks novel ways to solve pressing social problems. B. It is the ability to manage ourselves and our relationships effectively. C. It is the capacity of creating positive relationships with people who can help advance agendas. D. It is the capacity to get things done with the support and help of others. E. It is the ability to think analytically to diagnose and solve complex problems.

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Answer: D Page: 22 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 90.

Which of the following best describes learning? A. It is a change in behavior that results from experience. B. It is the capacity to get things done with the support and help of others. C. It is the process of measuring performance and taking action to ensure desired results. D. It is the ability to use expertise to perform a task with proficiency. E. It is the ability to think analytically and achieve integrative problem solving. Answer: A Page: 23 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

91.

________ is the ability to translate knowledge into action that results in desired performance. A. Autogestion B. Commitment C. Self-management D. Productivity E. Skill Answer: E Page: 23 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

Technical skill is the ability to: A. work well in cooperation with other people. B. focus on the “soft” skills at work. C. use expertise to perform a task with proficiency. D. think analytically and diagnose and solve complex problems. E. manage ourselves and our relationships effectively. Answer: C Page: 23 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

93.

A prospective employer asks John, “What exactly can you do for us?” The employer is focusing on John’s ________ skills. A. human B. conceptual C. interpersonal D. critical thinking E. technical

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Answer: E Page: 23 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 94.

Knowing how to write a business plan, using statistics to analyze data from a market survey, and preparing visual aids for a presentation are part of a manager’s ________ skills. A. peripheral B. technical C. human D. conceptual E. advanced Answer: B Page: 23 Learning Objective: 1.5 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

95.

________ skill is the ability to think analytically to diagnose and solve complex problems. A. Conceptual B. Human C. Technical D. Kinesthetic E. Interpersonal Answer: A Page: 24 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

Human skills are also referred to as ________ skills. A. conceptual B. interpersonal C. technical D. emotional E. cooperation Answer: B Page: 24 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

Which of the following is a defining characteristic of a manager with good human skills? A. Capacity to break problems into smaller parts B. Knowing how to write a business plan C. A high degree of self-awareness D. Expertise at handling budgets and distributing resources

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E. Ability to inspire efforts to achieve goals Answer: C Page: 24 Learning Objective: 1.5 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 98.

A(n) ________ skill precisely refers to the ability to work well in cooperation with other people. A. conceptual B. technical C. emotional D. human E. analytical Answer: D Page: 24 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

________ is the ability to manage ourselves and our relationships effectively. A. Conceptual skill B. Technical skill C. Tech IQ D. Emotional intelligence E. Critical thinking Answer: D Page: 24 Learning Objective: 1.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions

100.

Why is job migration considered to be a side effect of globalization? How is it being dealt with in the U.S.? Answer: One controversial side effect to globalization is job migration, the shifting of jobs from one country to another. The U.S. economy has been a net loser to job migration while countries like China, India, and the Philippines are net gainers. Politicians and policymakers regularly debate the high costs of job migration as local workers lose jobs and their communities lose economic vitality. One side looks for new government policies to stop job migration and protect the jobs of U.S. workers. The other side calls for patience, believing that the national economy will strengthen and grow jobs in the long run as the global economy readjusts. Page: 7 Learning Objective: 1.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Comprehension

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101.

List some of the changes in present organizational trends. Answer: Here are some of the changes in present organizational trends: •Focus on valuing human capital: The premium is on high-involvement work settings that rally the knowledge, experience, and commitment of all members. • Demise of “command-and-control”: Traditional top-down “do as I say” bosses are giving way to participatory bosses who treat people with respect. • Emphasis on teamwork: Organizations are more horizontal in focus, and driven by teamwork that pools talents for creative problem solving. • Preeminence of technology: New developments in computer and information technology continually change the way organizations operate and how people work. • Importance of networking: Organizations and their members are networked for intense, real-time communication and coordination. • New workforce expectations: A new generation of workers is less tolerant of hierarchy, more informal, attentive to performance merit, and concerned for work– life balance. • Priorities on sustainability: Social values show more attention to preservation of natural resources for future generations and understanding how work affects human well-being. Page: 13 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

Discuss the hierarchical structure of typical business organizations. Answer: At the highest levels of business organizations, we find the board of directors whose members are elected by stockholders to represent their ownership interests. In nonprofit organizations such as a hospital or university, this level is often called a board of trustees, and it may be elected by local citizens, appointed by government bodies, or invited by existing members. The top managers including the chief executive officer (CEO), chief operating officer (COO), chief financial officer (CFO), chief information officer (CIO), chief diversity officer (CDO), president, and vice president constitute an executive team that reports to the board and is responsible for the performance of an organization as a whole or for one of its larger parts. Middle managers report to top managers and are in charge of relatively large departments or divisions consisting of several smaller work units. Examples are clinic directors in hospitals; deans in universities; and division managers, plant managers, and regional sales managers in businesses. Middle managers work with top managers, coordinate with peers, and support lower levels to develop and pursue action plans that implement organizational strategies to accomplish key objectives. Team leaders report to middle managers and supervise nonmanagerial workers. Page: 14-15 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

Briefly explain the four management functions. Answer: The four functions of management in what is called the management process are—planning, organizing, leading, and controlling. Planning is the process of setting performance objectives and determining what actions should be taken to accomplish them. Through planning, a manager identifies desired results and ways to achieve them.

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Organizing is the process of assigning tasks, allocating resources, and coordinating work activities. Leading is the process of arousing enthusiasm and inspiring efforts to achieve goals. Controlling is the process of measuring performance and taking action to ensure desired results. Page: 17-20 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 104.

Discuss the various roles performed by a manager. Answer: The managerial roles fall into three categories—informational, interpersonal, and decisional roles. A manager’s informational roles involve the giving, receiving, and analyzing of information. A manager fulfilling these roles will be a monitor, scanning for information; a disseminator, sharing information; and a spokesperson, acting as official communicator. The interpersonal roles involve interactions with people inside and outside the work unit. A manager fulfilling these roles will be a figurehead, modeling and setting forth key principles and policies; a leader, providing direction and instilling enthusiasm; and a liaison, coordinating with others. The decisional roles involve using information to make decisions to solve problems or address opportunities. A manager fulfilling these roles will be a disturbance handler, dealing with problems and conflicts; a resource allocator, handling budgets and distributing resources; a negotiator, making deals and forging agreements; and an entrepreneur, developing new initiatives. Page: 21 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 2: Management Learning Past to Present

True/False Questions

The principles of scientific management were proposed by Frederick Taylor. Answer: True Page: 35 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Coordination refers to providing and mobilizing resources to implement the plan. Answer: False Page: 36 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Henri Fayol believed that management could be taught. Answer: True Page: 36 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Time study is the science of reducing a task to its basic physical motions. Answer: False Page: 36 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Formal rules and procedures are defining characteristics of Weber’s bureaucratic organization. Answer: True Page: 37 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

The disadvantage of administrative principles is that it includes excessive paperwork. Answer: False Page: 38 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

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The behavioral approaches assume that people are social and self-actualizing, enjoying social relationships, responding to group pressures, and searching for personal fulfillment. Answer: True Page: 38 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

After a series of scientific tests, Elton Mayo concluded that new “social setting” created for workers in the test room decreased the productivity of the employees. Answer: False Page: 40 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

According to Elton Mayo, people would restrict their output in order to avoid the displeasure of the group, even if it meant sacrificing pay that could otherwise be earned by increasing output. Answer: True Page: 40 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

The Hawthorne effect is the tendency of persons singled out for special attention to perform as expected. Answer: True Page: 41 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

According to the deficit principle, a satisfied need is a motivator of behavior. Answer: False Page: 41 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

12.

According to the progression principle, a satisfied need does not motivate behavior. Answer: False Page: 41 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

13.

Physiological needs and safety needs are higher-order needs in Maslow’s hierarchy of human needs.

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Answer: False Page: 42 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge 14.

Maslow’s ideas point managers toward finding ways to link volunteer work with opportunities to satisfy higher-order needs like esteem and self-actualization. Answer: True Page: 42 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

15.

Managers holding Theory Y assumptions approach their jobs believing that those who work for them generally dislike work, lack ambition, act irresponsibly, and prefer to be led rather than to lead. Answer: False Page: 43 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

16.

Managers who hold Theory Y assumptions cannot create self-fulfilling prophecies. Answer: False Page: 43 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

17.

Argyris asserts that psychological success occurs when people define their own goals. Answer: True Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Comprehension

18.

Argyris’s theory of adult personality counters Fayol’s concept of unity of direction. Answer: True Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Comprehension

19.

A grocery store is getting complaints from customers that waiting times are too long for checkouts during certain times of the day. This problem can be solved by the queuing theory. Answer: True Page: 45 Learning Objective: 2.3

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Difficulty: Hard AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge 20.

A real estate developer wants to control costs and finish building a new apartment complex on time. This problem can be solved by inventory analysis. Answer: False Page: 46 Learning Objective: 2.3 Difficulty: Hard AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

21.

People and technology are outputs in an open system. Answer: False Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Comprehension

22.

Goods and services are inputs in an open system. Answer: False Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic Skills Bloom’s Taxonomy: Comprehension

23.

A tight bureaucracy works best when the environment is relatively stable and operations are predictable and uncomplicated. Answer: True Page: 47 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

Trade secret is an example of intellectual assets. Answer: True Learning Objective: 2.3 Page: 48 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

Knowledge management involves making decisions based on hard facts about what really works. Answer: False Page: 49 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic Skills Bloom’s Taxonomy: Knowledge

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Multiple Choice Questions

26.

Which of the following assumes that people at work rationally consider opportunities made available to them and do whatever is necessary to achieve the greatest personal and monetary gain? A. Classical management approach B. Theory X C. Theory of human needs D. Behavioral management approach E. Modern management approach Answer: A Page: 34 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

Which of the following is a classical management approach? A. Theory X B. Theory Y C. Human needs theory D. Hawthorne studies E. Administrative principles Answer: E Page: 34 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

________ emphasizes careful selection and training of workers and supervisory support. A. Bureaucratic organization B. Theory X C. Theory Y D. Scientific management E. Administrative principles Answer: D Page: 35 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

Who is known as the father of scientific management? A. Henri Fayol B. Frederick Taylor C. Max Weber D. Douglas McGregor E. Abraham Maslow Answer: B Page: 35 Learning Objective: 2.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 30.

The primary goal of scientific management is to: A. make decisions based on hard facts about what really works. B. use large data bases and mathematics to solve problems. C. satisfy the physiological and psychological deficiencies of a person. D. improve the productivity of people by careful selection and training. E. make every employee an owner in the business. Answer: D Page: 35 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

31.

Pizza Cottage, a pizza delivery chain, assures delivery of pizza within half-an-hour of the placement of order. It employs various methods like specialization of work, motion study, and analysis of routes to make sure that the order reaches the customer in half-an-hour. Which of the following management techniques is Pizza Cottage most likely using? A. Maslow’s theory of human needs B. Bureaucratic organization C. Scientific management D. Hawthorne studies E. Theory X and Theory Y Answer: C Page: 35-36 Learning Objective: 2.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

32.

Which of the following led to advances in the areas of job simplification, work standards, and incentive wage plans? A. Administrative principles B. Theory of human needs C. Theory X D. Theory Y E. Motion study Answer: E Page: 36 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

33.

________ is to complete a plan of action for the future. A. Foresight B. Organization C. Command D. Coordination E. Control Answer: A Page: 36 Learning Objective: 2.1

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 34.

Which of the following best defines organization? A. To complete a plan of action for the future B. To provide and mobilize resources to implement the plan C. To lead, select, and evaluate workers to get the best work toward the plan D. To fit diverse efforts together and to ensure information is shared and problems solved E. To make sure things happen according to plan and to take necessary corrective action Answer: B Page: 36 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

________ is to lead, select, and evaluate workers to get the best work toward the plan. A. Foresight B. Organization C. Command D. Coordination E. Control Answer: C Page: 36 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

The manager of a company fits diverse efforts together. He ensures that information is shared and problems are solved. Which of the following management functions is he performing? A. Foresight B. Organization C. Command D. Coordination E. Control Answer: D Page: 36 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

37.

In a fresh juice manufacturing plant, the production team manufactures 2000 bottles of juice per day, while the sales team sells only 1700 bottles per day. Since the product is perishable, the extra output incurs losses to the company. Hence, the manager intervenes and sets a common standard for both the teams. Which of the following management duties is the manager performing? A. Control B. Foresight C. Coordination D. Organization E. Command Answer: C

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Page: 36 Learning Objective: 2.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 38.

________ is to make sure things happen according to plan and to take necessary corrective action. A. Foresight B. Organization C. Command D. Coordination E. Control Answer: E Page: 36 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

A manager employs 5 workers to produce a total of 36 units of a product per day. He soon realizes that the workers are able to produce only 30 units a day. He then employs an additional worker to meet the set target. Which of the following duties of management is he performing while taking the corrective action? A. Foresight B. Organization C. Command D. Coordination E. Control Answer: E Page: 36 Learning Objective: 2.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

Which of the following is true of the scalar chain principle? A. Each person should receive orders from only one boss. B. One person should be in charge of all activities that have the same performance objective. C. There should be a clear and unbroken line of communication from the top to the bottom in the organization. D. Guidelines must be written and kept for historical record. E. Workers should be selected and promoted on ability, competency, and performance. Answer: C Page: 36 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

A worker receives an order to meet the daily production target from one manager and an order to train the new workers from another. Which of the following principles does the company neglect? A. Scalar chain principle

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B. Unity of command principle C. Unity of direction principle D. Principle of motion study E. Principle of merit Answer: B Page: 36 Learning Objective: 2.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 42.

Which of the following is true of the unity of direction principle? A. One person should be in charge of all activities that have the same performance objective. B. Guidelines must be written and kept for historical record. C. Each person should receive orders from only one boss. D. There should be a clear and unbroken line of communication from the top to the bottom in the organization. E. Workers should be selected and promoted on ability, competency, and performance. Answer: A Page: 36 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

Which of the following best describes clear division of labor? A. Rules and procedures are impartially and uniformly applied, with no one receiving preferential treatment. B. Jobs are well defined, and workers become highly skilled at performing them. C. Workers are selected and promoted on ability, competency, and performance, and managers are career employees of the organization. D. Written guidelines direct behavior and decisions in jobs, and written files are kept for historical record. E. Authority and responsibility are well defined for each position, and each position reports to a higher-level one. Answer: B Page: 37 Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

Which of the following best describes impersonality? A. Jobs are well defined, and workers become highly skilled at performing them. B. Workers are selected and promoted on ability, competency, and performance, and managers are career employees of the organization. C. Written guidelines direct behavior and decisions in jobs, and written files are kept for historical record. D. Authority and responsibility are well defined for each position, and each position reports to a higher-level one. E. Rules and procedures are impartially and uniformly applied, with no one receiving preferential treatment. Answer: E Page: 37

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Learning Objective: 2.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 45.

At MagnaTech Solutions, the workers under one manager are expected to follow specific timings for their shifts, while the workers under another manager are given the liberty of flexible timings. Which of the following characteristics of a bureaucracy has the company neglected? A. Clear division of labor B. Clear hierarchy of authority C. Unity of direction D. Careers based on merit E. Impersonality Answer: E Page: 37 Learning Objective: 2.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

46.

Which of the following is an advantage of bureaucracy? A. Relatively less paperwork B. Flexibility in the face of shifting client needs C. Reliability and stringency of discipline D. Employee enthusiasm E. Speed in handling problems Answer: C Page: 37 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

47.

Which of the following is a disadvantage of bureaucracy? A. Preferential treatment of some employees B. Unclear division of labor C. Excessive paperwork D. Unclear hierarchy of authority E. Absence of written guidelines Answer: C Page: 38 Learning Objective: 2.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

48.

The ________ approaches assume that people are social and self-actualizing, enjoying social relationships, responding to group pressures, and searching for personal fulfillment. A. classical B. scientific management C. contingency thinking D. behavioral E. modern Answer: D

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Page: 38 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 49.

Which of the following is true of Follet’s view on organizations? A. She viewed organizations as communities in which managers and workers should work in harmony. B. She warned against the dangers of less hierarchy. C. She supported the idea of managers dominating the workers. D. She propagated the idea of workers working individually, rather than in a group. E. She believed that it wasn’t the manager’s job to help people cooperate with one another. Answer: A Page: 39 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

50.

Which of the following management theories advocates employee ownership, profit sharing, and gain-sharing plans? A. Theory X and Theory Y B. Hawthorne studies C. Organization as systems D. Quality management E. Follett’s organizations as communities Answer: E Page: 39 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

51.

A manager wants to implement the conclusions of the Hawthorne study in his organization. He would: A. create written guidelines for workers. B. implement division of labor in the workplace. C. assure good human relations between the workers. D. reduce a job or task to its basic physical motion. E. define authority and responsibility of each worker. Answer: C Page: 40 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

52.

A manager finds out that the productivity of his workers has declined. Therefore, he creates a new social setting for the workers, where they share pleasant social relations with one another and receive special attention from the supervisor. The manager has implemented lessons from ________ to improve the productivity of his workers. A. the scientific management theory B. the theory of human needs C. Theory X and Theory Y

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D. the Hawthorne studies E. Fayol’s administrative principles Answer: D Page: 40 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 53.

According to Mayo’s research team, ________ in the test room resulted in higher productivity. A. economic incentives B. good human relations C. scientific management D. adequate rest pauses E. timely measurement of production Answer: B Page: 40 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

Which of the following theories proposes that groups can have strong negative, as well as positive, influences on individual productivity? A. Scientific management theory B. Bureaucratic organization C. Theory X and Theory Y D. Hawthorne studies E. Administrative principles Answer: D Page: 40 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

Which of the following best describes the Hawthorne effect? A. It refers to the tendency of people who are singled out for special attention to perform as anticipated because of expectations created by the situation. B. It implies that satisfied need does not motivate behavior. C. It refers to a need that is activated only when the next-lower-level need is satisfied. D. It implies that people dislike work, lack ambition, act irresponsibly, and prefer to be led. E. It implies that people are willing to work, like responsibility, and are self-directed and creative. Answer: A Page: 41 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

The deficit principle states that: A. a need is activated only when the next-lower-level need is satisfied. B. people dislike work, lack ambition, act irresponsibly, and prefer to be led.

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C. people are willing to work, like responsibility, and are self-directed and creative. D. people at work rationally consider opportunities made available to them and do whatever is necessary to achieve the greatest personal and monetary gain. E. a satisfied need is not a motivator of behavior. Answer: E Page: 41 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 57.

Mark, an employee of CBZ Ltd., earns a good compensation, has a good house, a stable job, a family, and close friends. He is recognized as a good manager, is respected by his subordinates, and has mastered his managerial skills. His company offers to pay his house rent if he negotiates a deal with a particular client. This offer fails to motivate him. Which of the following principles explains Mark’s behavior? A. Progression principle B. Principle of motion study C. Deficit principle D. Hawthorne effect E. Self-fulfilling prophecy Answer: C Page: 41 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

58.

Which of the following management theories is based on the deficit principle and the progression principle? A. Administrative principles B. Maslow’s theory of human needs C. Scientific management D. Hawthorne studies E. Theory X and Theory Y Answer: B Page: 41-42 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

Which of the following refer to the lowest needs in Maslow’s hierarchy of human needs? A. Esteem needs B. Self-actualization needs C. Social needs D. Safety needs E. Physiological needs Answer: E Page: 42 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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60.

The progression principle states that: A. a need is activated only when the next-lower-level need is satisfied. B. people dislike work, lack ambition, act irresponsibly, and prefer to be led. C. people are willing to work, like responsibility, and are self-directed and creative. D. people at work rationally consider opportunities made available to them and do whatever is necessary to achieve the greatest personal and monetary gain. E. a satisfied need does not motivate behavior. Answer: A Page: 42 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

61.

Sheldon works in a company where he gets minimum wages. He does not have sufficient money to pay his medical bills. His manager offers to award him with the “Best worker certificate” if he increases his productivity. This offer fails to motivate him. Which of the following explains Sheldon’s behavior? A. Progression principle B. Principle of motion study C. Deficit principle D. Hawthorne effect E. Self-fulfilling prophecy Answer: A Page: 42 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

62.

Recognition is an example of: A. safety needs. B. esteem needs. C. self-actualization needs. D. physiological needs. E. social needs. Answer: B Page: 42 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

Which of the following matches correctly? A. Affection—Esteem needs B. Protection—Self-actualization needs C. Prestige—Safety needs D. Physical well-being—Physiological needs E. Mastery—Social needs Answer: D Page: 42 Learning Objective: 2.2 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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64.

Which of the following is an example of a self-actualization need? A. Need for self-fulfillment B. Mastery C. Affection D. Protection E. Physical well-being Answer: A Page: 42 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

The CEO of a company has a good compensation, a house, a family and lots of friends. He is respected by his employees and is recognized as an efficient manager. Now he wants to start his own company. Which of the following needs is he responding to? A. Social needs B. Esteem needs C. Physiological needs D. Self-actualization needs E. Safety needs Answer: D Page: 42 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

66.

The worker of a company earns a wage that gives him good food, water, and good health. He also has a good house to live in. According to the progression principle, which of the following needs is most likely to motivate him next? A. Recognition B. Mastery C. Protection D. Self-fulfillment E. Affection Answer: E Page: 42 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

67.

The worker of a company is motivated by the need for security, protection, and stability in the events of day-to-day life. According to the progression principle, which of the following needs has already been satisfied? A. Recognition B. Physical well-being C. Affection D. Mastery E. Self-fulfillment Answer: B Page: 42 Learning Objective: 2.2

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Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 68.

At the level of ________ needs, the deficit and progression principles cease to operate. A. self-actualization B. social C. safety D. esteem E. physiological Answer: A Page: 42 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

69.

Mary is the manager of Peace, an international campaigning organization where volunteers work without being paid. Which of the following needs should Mary focus on to increase the productivity of the volunteers? A. Physical well-being B. Safety C. Respect D. Biological maintenance E. Protection Answer: C Page: 42 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

70.

According to Theory X: A. people are social and self-actualizing. B. a satisfied need does not motivate behavior. C. people at work rationally consider opportunities made available to them. D. a need is activated only when the next-lower-level need is satisfied. E. people dislike work, lack ambition, act irresponsibly, and prefer to be led. Answer: E Page: 43 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

According to Theory Y: A. people are willing to work, like responsibility, and are self-directed and creative. B. people are social and self-actualizing C. a satisfied need does not motivate behavior. D. people at work rationally consider opportunities made available to them E. a need is activated only when the next-lower-level need is satisfied. Answer: A Page: 43 Learning Objective: 2.2 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 72.

Which of the following is true of a self-fulfilling prophecy? A. It does not occur to managers who hold Theory X assumptions. B. It occurs when a person acts in ways that confirm another’s expectations. C. It does not occur to managers who hold Theory Y assumptions. D. It is the tendency of persons singled out for special attention to perform as expected. E. It tries to match management practices with situational demands. Answer: B Page: 43 Learning Objective: 2.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

Ross is a manager who assumes that his workers dislike work and act irresponsibly. He tries to command and control his workers in every possible way. According to the self-fulfilling prophecy, his workers are most likely to: A. take initiatives. B. become creative. C. become passive and dependent. D. be self-directed. E. perform responsibly. Answer: C Page: 43 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

74.

Michelle is a manager who assumes that her workers are willing to work, like responsibility, and are self-directed. She encourages them to be more involved in their jobs and grants them reasonable freedom. Michelle’s subordinates are most likely to: A. act passively. B. become dependent. C. perform reluctantly. D. perform irresponsibly. E. take initiatives. Answer: E Page: 43 Learning Objective: 2.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

75.

Theory X is similar to Theory Y in that managers holding Theory X assumptions: A. believe that people are willing to work and like responsibility. B. believe that people are self-directed and creative. C. typically create responsible workers. D. create self-fulfilling prophecies. E. create opportunities to satisfy esteem and self-actualizing needs. Answer: D Page: 43 Learning Objective: 2.2

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Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 76.

According to Argyris: A. managers who treat people positively and as responsible adults will achieve the highest productivity. B. the principle of specialization increases opportunities for self-actualization. C. bureaucracy allows workers to control their work. D. the concept of unity of direction leads to psychological success. E. people dislike work, lack ambition, act irresponsibly, and prefer to be led. Answer: A Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

77.

Argyris’s theory of adult personality is similar to the Theory Y in that, Argyris’s theory: A. assumes people dislike work and lack ambition. B. assumes people prefer to be led. C. limits opportunities for self-actualization. D. argues that managers must treat people as responsible adults. E. creates conditions for psychological failures. Answer: D Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

78.

Argyris’s theory of adult personality differs from the scientific management theory in that, Argyris’s theory: A. develops rules of motion. B. develops a clear and consistent approach to work. C. proposes excessive supervision of employees. D. uses the concept of “time study” to improve efficiency. E. criticizes the principle of specialization. Answer: E Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

79.

According to Argyris’s theory of adult personality, which of the following creates dependent and passive workers? A. Bureaucracy B. Organization as systems C. Organizations as communities D. Scientific management E. Maslow’s theory of human needs Answer: A Page: 43 Learning Objective: 2.2

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Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 80.

According to Argyris’s theory of adult personality, which of the following may create conditions for psychological failure? A. The deficit principle B. The progression principle C. The concept of motion study D. The concept of unity of direction E. The principle of specialization Answer: D Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

81.

________ is the use of large data bases and mathematics to solve problems and make informed decisions using systematic investigation. A. Analytics B. Evidence-based management C. Total quality management D. Contingency thinking E. Proxemics Answer: A Page: 45 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

82.

A coal extracting company is worried about the depleting coal reserves in various parts of the world. It wants to make future projections for reserve sizes and depletion rates that are useful in the planning process. Which of the following quantitative approaches should the company apply? A. Inventory analysis B. Mathematical forecasting C. Queuing theory D. Linear programming E. Network models Answer: B Page: 45 Learning Objective: 2.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

83.

A food chain is getting complaints from customers that waiting times are too long from the time of order placement to the time of delivery during certain times of the day. The outlet wants to allocate service personnel and workstations based on alternative workload demands and in a way that minimizes both customer waiting times and costs of service workers. Which of the following quantitative approaches is the outlet most likely to apply? A. Inventory analysis B. Mathematical forecasting

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C. Queuing theory D. Linear programming E. Network models Answer: C Page: 45 Learning Objective: 2.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 84.

________ helps control stocks by mathematically determining how much to automatically order and when. A. Queuing theory B. Mathematical forecasting C. Inventory analysis D. Linear programming E. Network models Answer: C Page: 45 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following is true of linear programming? A. It makes future projections useful in the planning process. B. It helps control inventories by mathematically determining how much to automatically order and when. C. It allocates service personnel and workstations based on alternative workload demands. D. It calculates how best to allocate production among different machines. E. It breaks large tasks into smaller components and diagrams them in step-by-step sequences. Answer: D Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

86.

Network models are used to: A. make future projections useful in the planning process. B. control inventories by mathematically determining how much to automatically order and when. C. allocate service personnel and workstations based on alternative workload demands. D. calculate how best to allocate production among different machines. E. break large tasks into smaller components and diagram them in step-by-step sequences. Answer: E Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

In an open system, which of the following is an input? A. The oven used by the baker

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B. The service offered by the baker C. The gourmet cheese offered by the deli D. A loaf of bread E. A sandwich sold at a deli Answer: A Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 88.

In an open system, which of the following is an output? A. Technology B. People C. Supplies D. Money E. Goods Answer: E Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

89.

________ tries to match managerial responses with problems and opportunities specific to different people and settings. A. Total quality management B. Knowledge management C. Evidence-based management D. Contingency thinking E. Quantitative analysis Answer: D Page: 46 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

Which of the following works best in a stable and predictable environment? A. Tight bureaucracy B. Evidence-based management C. Human relations approach D. Knowledge management E. Quality management Answer: A Page: 47 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

91.

From a contingency perspective, a tight bureaucracy: A. is a dynamic way of organizing things. B. is best suited in organizations that are quick in adapting to changing circumstances. C. is best suited for quick handling of problems.

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D. works best in a relatively unstable environment. E. works best when the operations are predictable and uncomplicated. Answer: E Page: 47 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 92.

________ is an organization-wide commitment to continuous improvement, product attribute, and customer needs. A. Quantitative analysis B. Total quality management C. Theory X D. Theory Y E. Scientific management Answer: B Page: 47 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

93.

Which of the following is true of total quality management? A. It makes quality principles part of the organization’s strategic objectives. B. It is applied only to a few aspects of operations. C. It applies exclusively to the managers. D. It applies to the inputs of a system. E. It is a one-time improvement process. Answer: A Page: 47 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

Which of the following is a predominant principle of total quality management? A. Contingency thinking B. Continuous improvement C. Quantitative analysis D. Progression principle E. Deficit principle Answer: B Page: 47 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

An ISO certification is a global indicator of the importance of: A. knowledge management. B. evidence-based management. C. total quality management. D. quantitative analysis. E. contingency thinking.

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Answer: C Page: 47 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 96.

________ is the process of using intellectual capital for competitive advantage. A. Evidence-based management B. Knowledge management C. Quantitative analysis D. Total quality management E. Scientific management Answer: B Page: 48 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

Which of the following is an intellectual asset? A. Receivables B. Inventory C. Patents D. Equipment E. Cash Answer: C Page: 48 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

A learning organization that continuously improves, using the lessons of experience, is one that mainly practices ________. A. bureaucracy B. administrative principles C. scientific management D. evidence-based management E. knowledge management Answer: E Page: 49 Learning Objective: 2.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

Which of the following best describes evidence-based management? A. It is the process of using intellectual capital for competitive advantage. B. It involves making decisions based on hard facts about what really works. C. It is the use of large data bases and mathematics to solve problems. D. It is the science of reducing a task to its basic physical motions. E. It emphasizes careful selection and training of workers and supervisory support. Answer: B Page: 49

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Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Essay Questions

100.

Explain the conclusion of the Hawthorne Studies. Answer: Elton Mayo and his colleagues conducted the Hawthorne Studies and concluded that the new “social setting” created for workers in the test room made them want to do a good job. They shared pleasant social relations with one another and got lots of special attention that made them feel important. They were given a lot of information and were frequently asked for their opinions. Mayo’s team concluded that good “human relations” in the test room resulted in higher productivity. Page: 40 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

101.

Explain the two underlying principles that form a basis for Maslow’s theory of human needs. Answer: Abraham Maslow described a need as a physiological or psychological deficiency a person feels the compulsion to satisfy, suggesting that needs create tensions that can influence a person’s work attitudes and behaviors. Maslow’s theory is based on two underlying principles. The first is the deficit principle—a satisfied need is not a motivator of behavior. People act to satisfy “deprived” needs, those for which a satisfaction “deficit” exists. The second is the progression principle—the five needs exist in a hierarchy of “prepotency.” A need at any level is activated only when the next-lower-level need is satisfied. Page: 41-42 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

What are the two different assumptions that create a self-fulfilling prophecy? Answer: Theory X and Theory Y are the two assumptions that create self-fulfilling prophecies. Managers with Theory X assumptions, for example, act in a very directive “command-and-control” fashion that gives people little personal say over their work. These supervisory behaviors create passive, dependent, and reluctant subordinates, who tend to do only what they are told to or required to do. This reinforces the original Theory X viewpoint. In contrast to Theory X, managers with Theory Y assumptions tend to behave in “participative” ways that allow subordinates more job involvement, freedom, and responsibility. This creates opportunities to satisfy esteem and self-actualization needs; workers tend to perform as expected with initiative and high performance. Page: 43 Learning Objective: 2.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

Discuss organizations as systems. Answer: Organizations have long been described as cooperative systems that achieve great things by combining resources and the contributions of many individuals to achieve a

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common purpose. But the reality is that cooperation among the many people and parts is often imperfect and can be improved upon. This is why it’s important to understand the full complexity of an organization as a system of interrelated parts or subsystems that work together to achieve a common purpose. It is helpful to view organizations as open systems that interact with their environments in the continual process of transforming inputs—people, technology, information, money, and supplies—into outputs—goods and services for their customers and clients. Page: 46 Learning Objective: 2.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 03: Ethics and Social Responsibility True/False Questions 1.

Values are broad beliefs about what is appropriate behavior. Answer: True Page: 59 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

Terminal values are preferences regarding the means to desired ends. Answer: False Page: 59 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

Among the terminal values held important by managers are honesty, ambition, imagination, and self-discipline. Answer: False Page: 59 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

The utilitarian view considers ethical behavior to be that which delivers the greatest good to the greatest number of people. Answer: True Page: 60 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

Ethical behavior under a moral rights view is based on the belief that ethical decisions treat people impartially and fairly, according to legal rules and standards. Answer: False Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

Procedural justice involves the degree to which policies and rules are fairly applied to all individuals. Answer: True

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Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 7.

Distributive justice is the degree to which others are treated with dignity and respect. Answer: False Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

Commutative justice involves the degree to which outcomes are allocated fairly among people and without respect to individual characteristics based on ethnicity, race, gender, age, or other particularistic criteria. Answer: False Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

A drawback of the utilitarian view is that it relies on the assessment of future outcomes that are often difficult to predict and that are tough to measure accurately. Answer: True Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

10.

Cultural relativism suggests ethical standards apply universally across all cultures. Answer: False Page: 62 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

11.

Ethical imperialism is an attempt to impose one’s ethical standards on other cultures. Answer: True Page: 62 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

12.

Cultural relativism is a form of ethical imperialism. Answer: False

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Page: 62 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 13.

An American international business executive guided by rules of moral absolutism would argue that the use of slavery is acceptable in another country as long as it is consistent with local laws. Answer: False Page: 62 Learning Objective: 3.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

14.

An ethical dilemma is a situation that offers potential benefit or gain and that may also be considered unethical. Answer: True Page: 63 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

15.

Questions such as “Is it legal?,” “Is it right?,” “Whom does it affect?,” “Who benefits?,” and “Who gets hurt?” are referred to as spotlight questions. Answer: False Page: 64 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

16.

Asking spotlight questions is a powerful way to test whether a decision is consistent with an individual’s personal ethical standards. Answer: True Page: 64 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

17.

In Kohlberg’s preconventional level of moral development, moral thinking is largely limited to issues of punishment, obedience, and personal interest. Answer: True Page: 65 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

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18.

In Kohlberg’s conventional level of moral development, the individual is strongly principlecentered. Answer: False Page: 65 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

19.

The ethics culture in an organization sets high standards and may even push people to behave more ethically than they otherwise would. Answer: True Page: 66 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

20.

A common statement by a rationalizer is “It’s in everyone’s best interests.” This response involves the mistaken belief that because someone can be found to benefit from the behavior, the behavior is also in the individual’s or the organization’s best interests. Answer: True Page: 67 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

21.

An amoral manager chooses to behave unethically. Answer: False Page: 69 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

22.

According to Archie Carroll, most managers remain mostly uninformed or undisciplined in considering the ethical aspects of our behavior. Answer: True Page: 69 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

23.

Strong work group identities that encourage loyalty and self-censorship are barriers to whistle blowing. Answer: True Page: 71 Learning Objective: 3.3 Difficulty: Moderate

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AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension 24.

Corporate social responsibility means taking personal responsibility to always respect and protect the interests of society at large. Answer: False Page: 71 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

25.

The triple bottom line evaluates organizational performance on economic, social, and environmental criteria. Answer: True Page: 72 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

26.

The three Ps of organizational performance are patience, politeness, and planning. Answer: False Page: 72 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

27.

Competitors, labor unions, public-interest groups, and legal institutions are all shareholders of an organization. Answer: False Page: 73 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

28.

Demand legitimacy indicates the extent to which a stakeholder’s concerns need immediate attention. Answer: False Page: 73 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

29.

According to the classical view of CSR, the principal obligation of management should be to owners and shareholders. Answer: True Page: 74

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Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension 30.

Corporate governance is making sure day-to-day performance is achieved ethically and in socially responsible ways. Answer: False Page: 77 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

Multiple Choice Questions 31.

Ethics is defined as the _____ code of principles that sets standards of good or bad, or right or wrong, in one’s conduct. A. social B. legal C. moral D. cultural E. religious Answer: C Page: 58 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

32.

Which of the following is a terminal value? A. Honesty B. Ambition C. Imagination D. Self-discipline E. Happiness Answer: E Page: 59 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

33.

Which of the following is an instrumental value? A. Honesty B. Self-respect C. Freedom D. Family security E. Happiness Answer: A Page: 59

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Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 34.

The ________ view of ethical understanding and reasoning abilities considers ethical behavior to be that which delivers the greatest good to the greatest number of people. A. individualism B. religious C. justice D. utilitarian E. moral rights Answer: D Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

35.

Susan Miles, the CEO of Alpha Computing Inc., shut down offshore operations of Alpha Computing Inc. during a period of economic recession. This resulted in over 20% cut in the workforce but was instrumental in keeping the company profitable and in saving the jobs of remaining workers. Which ethical viewpoint would Susan most likely use to justify her decision? A. Individualism B. Religious C. Justice D. Utilitarian E. Moral rights Answer: D Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

36.

The individualism view of ethical behavior is based on the belief that one’s primary commitment is to the long-term advancement of self-interests. Lying and cheating for immediate gain are not tolerated by this ethical view point because lying and cheating: A. are inherently harmful to a person’s psyche. B. serve no one’s interest in the long run. C. are against the law. D. are contrary to all religious beliefs. E. cause an unfair distribution of resources. Answer: B Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

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37.

In business practice, the ________ view of ethical understanding and reasoning abilities may result in greed and a tendency to “push the law to its outer limits.” A. individualism B. religious C. justice D. utilitarian E. moral rights Answer: A Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

38.

According to the individualism view of ethical behavior, society will be best off if: A. individuals make decisions based on the greater common good. B. everyone works toward the betterment of society. C. everybody lives by the letter of the law. D. everyone acts in a way that maximizes his or her own happiness. E. everyone follows a universal moral code of behavior. Answer: D Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

39.

In the ________ view, ethical behavior respects and protects fundamental rights. A. individualism B. justice C. moral rights D. utilitarian E. humanitarian rights Answer: C Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

40.

In the ________ view, ethical behavior treats people impartially and fairly. A. individualism B. justice C. moral rights D. utilitarian E. humanitarian Answer: B Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities

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Bloom’s Taxonomy: Knowledge 41.

________ justice involves the degree to which policies and rules are fairly applied to all individuals. A. Procedural B. Economic C. Distributive D. Commutative E. Interactional Answer: A Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

42.

Which of the following addresses biased hiring practices, favoring a particular community? A. Procedural justice B. Fundamental justice C. Distributive justice D. Commutative justice E. Interactional justice Answer: C Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

43.

Interactional justice involves the: A. degree to which policies and rules are fairly applied to all individuals. B. degree to which outcomes are allocated fairly among people and without respect to individual characteristics. C. degree to which people treat one another with dignity and respect. D. fairness of exchanges or transactions. E. honesty and integrity of business dealings. Answer: C Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

44.

Swift Auto, a franchisee outlet for Electro, an electric car company, sells John Hanks an older model car. Swift Auto sells the older model without informing John of the newer, better models released by Electro in the same price band. According to which justice dimension would Swift Auto’s conduct be considered unethical? A. Procedural B. Economic C. Distributive D. Commutative

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E. Interactional Answer: D Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 45.

Which of the following is a drawback of the utilitarian view of ethical behavior? A. It relies on the assessment of future outcomes that are often difficult to predict and are tough to measure accurately. B. It presumes that individuals are self-regulating; however, not everyone has the same capacity or desire to control their behaviors. C. It is possible for a few individuals to take advantage of the freedom allowed by this perspective and disrupt the degree of trust that exists within a business community. D. It does not ensure that the outcomes associated with protecting individual rights are beneficial to the majority of society. E. It places an emphasis on fairness and equity, both of which cannot be ensured simultaneously. Answer: A Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

46.

Which of the following is a drawback of the moral rights view of ethical behavior? A. It relies on the assessment of future outcomes that are often difficult to predict and are tough to measure accurately. B. It presumes that individuals are self-regulating; however, not everyone has the same capacity or desire to control their behaviors. C. It is possible for a few individuals to take advantage of the freedom allowed by this perspective and disrupt the degree of trust that exists within a business community. D. It does not ensure that the outcomes associated with protecting individual rights are beneficial to the majority of society. E. It places an emphasis on fairness and equity, both of which cannot be ensured simultaneously. Answer: D Page: 61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

47.

A Japanese expatriate argues that the practice of giving corporate gifts is acceptable in another country as long as it is consistent with local laws and customs. In this scenario, the Japanese expatriate is guided by ________. A. ethnocentrism B. moral relativism C. ethical imperialism D. cultural relativism

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E. moral absolutism Answer: D Page: 62 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 48.

________ is an attempt to impose one’s ethical standards on other cultures. A. Polycentrism B. Moral relativism C. Ethical imperialism D. Cultural relativism E. Moral absolutism Answer: C Page: 62 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

49.

According to Thomas Donaldson, the core values or “hyper-norms” that should transcend cultural boundaries focus on human dignity, basic rights, and ________. A. cultural tolerance B. social responsibility C. acceptance D. good citizenship E. stewardship Answer: D Page: 62 Learning Objective: 3.1 Difficulty: Easy AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

50.

Managers with strong ________, ones that provide personal rules or strategies for value-based decision making, will act more consistently and confidently than those without. A. religious affiliations B. ethical frameworks C. ethnocentric backgrounds D. social-centered behavior E. self-centered behavior Answer: B Page: 64 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

51.

Which of the following is a spotlight question when dealing with ethical dilemmas? A. What sort of trouble will I get into because of my decision?

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B. Are there any legal consequences to my decision? C. Who will be affected by my decision? D. How will I feel if my family finds out about my decision? E. How will my career be affected by my decision? Answer: D Page: 64 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension 52.

When faced with an ethical dilemma, spotlight questions are used to test possible decisions for: A. the risk of public disclosure. B. potential harm to self. C. the risk to job security. D. potential harm to others. E. possible legal implications. Answer: A Page: 64 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

53.

In Kohlberg’s preconventional level of moral development, decisions: A. are made according to internal principles. B. are likely to be based on following social norms. C. made follow rules to help society run smoothly. D. are likely to be directed toward achieving personal gain. E. are consistent with universal principles. Answer: D Page: 65 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

54.

At the postconventional level of moral development, the individual is strongly ________. A. social-centered B. peer-pressure oriented C. self-centered D. principle-centered E. punishment-driven Answer: D Page: 65 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

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55.

The Sarbanes-Oxley Act of 2002 makes it easier for corporate executives to be tried and sentenced to jail for ________. A. sexual harassment B. nepotism C. financial misconduct D. biodata fraud E. misuse of organizational facilities Answer: C Page: 66 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

56.

After doing something that might be considered unethical, a rationalizer says: “It’s not really illegal.” This expresses a mistaken belief that: A. one’s behavior is acceptable, especially in ambiguous situations. B. because someone can be found to benefit from the behavior, it is also in the individual’s or the organization’s best interests. C. a questionable behavior is really “safe” and will never be found out or made public. D. the organization’s (on behalf of whom the individual acts questionably) best interests stand above all others. E. as long as people have acted in good faith, their behavior is ethical. Answer: A Page: 67 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

57.

When rationalizers tell themselves that “no one will ever know about it,” they believe that: A. a questionable behavior is acceptable, especially in ambiguous situations. B. because someone can be found to benefit from the behavior, it is also in the individual’s or the organization’s best interests. C. a questionable behavior is really “safe” and will never be found out or made public. D. the organization’s (on behalf of whom the individual acts questionably) best interests stand above all others. E. as long as people have acted in good faith their behavior is ethical. Answer: C Page: 67 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

58.

When rationalizers proceed with a questionable action because of a mistaken belief that “the organization will stand behind me,” they believe that: A. a questionable behavior is acceptable, especially in ambiguous situations. B. because someone can be found to benefit from the behavior, it is also in the individual’s or the organization’s best interests. C. a questionable behavior is really “safe” and will never be found out or made public.

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D. the organization’s (on behalf of whom the individual acts questionably) best interests stand above all others. E. as long as people have acted in good faith their behavior is ethical. Answer: D Page: 67 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension 59.

George works for Spin, a billboard advertising agency, which hires billboards from owners on behalf of clients. George routinely accepts pay-offs from billboard owners in exchange for referring their billboards to clients. This behavior could result in his dismissal from Spin, if found out. Which statement is George most probably utilizing to rationalize his actions? A. “It’s not really illegal.” B. “It’s in everyone’s best interests.” C. “No one will ever know about it.” D. “The organization will stand behind me.” E. “I cannot be held responsible.” Answer: C Page: 67 Learning Objective: 3.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

60.

According to Archie Carroll, a(n) ________ manager is defined as a manager who chooses to behave unethically. A. amoral B. apathetic C. immoral D. individualist E. ethnocentric Answer: C Page: 69 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

61.

According to Archie Carroll, a(n) ________ manager disregards the ethics of an act or a decision, but does so unintentionally or unknowingly. A. amoral B. apathetic C. immoral D. individualist E. ethnocentric Answer: A Page: 69 Learning Objective: 3.3 Difficulty: Moderate

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AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 62.

In Kohlberg’s terms, which of the following types of manager is at the postconventional level of moral development? A. Unethical B. Amoral C. Ethnocentric D. Moral E. Immoral Answer: D Page: 69 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

63.

Archie Carroll suggests that most managers act ________. A. ethically B. amorally C. immorally D. morally E. unscrupulously Answer: B Page: 69 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

64.

A ________ is a formal statement of an organization’s values and ethical principles that set expectations for behavior. A. code of ethics B. mission statement C. code of conduct D. legal code E. value statement Answer: A Page: 70 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

65.

Which of the following is the top reason why almost half the workers in the United States fail to blow the whistle to report wrongdoings they observe at work? A. A very bureaucratic process of reporting B. Weak work group identities that discourage loyalty and self-censorship C. The fear of being reprimanded if caught D. The belief that no corrective action would be taken E. The lack of any commitment to the organization

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Answer: D Page: 71 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension 66.

Which of the following is true of a whistle blower? A. A whistleblower is the first to act unethically in an organization. B. Whistleblowers unintentionally disregard the ethics of an act or a decision. C. Whistleblowers are members of management who specifically look out for unethical behavior among employees. D. A whistleblower exposes the misdeeds of others in organizations. E. Whistleblowers are members of law enforcement specifically trained to deal with financial misconduct. Answer: D Page: 71 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

67.

________ describes the obligation of an organization to act in ways that serve both its own interests and the interests of society at large. A. Sustainability B. Corporate accountability C. Environmental stewardship D. Corporate social responsibility E. Corporate citizenship Answer: D Page: 71 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

68.

Stewardship in management means taking personal responsibility to always respect and protect the interests of ________ at large. A. society B. shareholders C. management D. the environment E. the organization Answer: A Page: 71 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

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69.

The ________ evaluates organizational performance on economic, social, and environmental criteria. A. social denominator B. corporate critical line C. stewardship audit D. global value audit E. triple bottom line Answer: E Page: 72 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

70.

The 3 P’s of organizational performance are: A. planning, process, and profit. B. procurement, process, and profit. C. procurement, processing, and planet. D. place, people, and policy. E. profit, people, and planet. Answer: E Page: 72 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

71.

The triple bottom line for assessing organizational performance evaluates how well organizations are doing on: A. economic, social, and environmental performance criteria. B. industrial, market, and customer satisfaction criteria. C. ecological, environmental, and financial criteria. D. humanitarian, sociological, and research criteria. E. geological, anthropological, and lean performance criteria. Answer: A Page: 72 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

72.

Stakeholder power: A. indicates the extent to which stakeholders need immediate attention. B. refers to the managers’ ability to maximize profits. C. refers to the shareholders’ ability to influence managers. D. refers to the capacity of the stakeholder to positively or negatively affect the operations of the organization. E. indicates the validity and legitimacy of a stakeholder’s interests in the organization. Answer: D Page: 73 Learning Objective: 3.4

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Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 73.

Demand legitimacy: A. indicates the extent to which stakeholders need immediate attention. B. refers to the managers’ ability to maximize profits. C. refers to the shareholders’ ability to influence managers. D. refers to the capacity of the stakeholder to positively or negatively affect the operations of the organization. E. indicates the validity and legitimacy of a stakeholder’s interest in the organization. Answer: E Page: 73 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

74.

Issue urgency: A. indicates the extent to which stakeholders need immediate attention. B. refers to the managers’ ability to maximize profits. C. refers to the shareholders’ ability to maximize profits. D. refer to the capacity of the stakeholder to positively or negatively affect the stakes of the organization. E. indicates the validity and legitimacy of a stakeholder’s interest in the organization. Answer: A Page: 73 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

75.

According to the classical view of CSR, the principal obligation of management should be to ________. A. suppliers B. owners C. consumers D. future generations E. the state or local government Answer: B Page: 74 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

76.

According to proponents of the classical view of CSR, what drives businesses to make things like healthier foods and energy-efficient products? A. The government B. Profitability C. Owners and shareholders

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D. A sense of indebtedness to society E. Pressure from civil society Answer: B Page: 74 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 77.

The classical view of CSR is that businesses should focus on ________. A. the environment B. owners and shareholders C. profits D. labor unions E. future generations Answer: C Page: 74 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

78.

The ________ view of CSR is that business should focus on broader welfare of the community as well as profits. A. shared value B. classical C. post-modern D. socioeconomic E. ethnocentric Answer: D Page: 75 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

79.

Which of the following statements is in agreement with the socioeconomic view of corporate social responsibility? A. Financial improvement can be achieved by being socially responsible. B. The primary responsibility of business is to maximize business profits. C. By acting responsibly, businesses avoid government regulation. D. Businesses must be concerned with the broader social concerns and not just with corporate profits. E. Society is served best when businesses are allowed to maximize their profits. Answer: D Page: 75 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

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80.

The ________ view of CSR approaches business decisions with the understanding that economic and social progress are interconnected. A. shared value B. classical C. post-modern D. socioeconomic E. ethnocentric Answer: A Page: 75 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

81.

A company following the shared value view of CSR will most likely: A. become an add-on initiative—funding activities like philanthropy, environmental preservation, and community projects. B. pursue a narrow stakeholder perspective focused on maximizing short-term profits. C. pursue its own interests in competitive settings and make products that are profitable. D. put society and the environment ahead of shareholders and stakeholders. E. integrate socially responsible behavior into everyday business goals and activities for an improved financial performance. Answer: E Page: 75 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

82.

Which of the following is most likely to result in a virtuous circle? A. Felix Educational Services makes anonymous donations to charities every year. B. Compassion Today, a not-for-profit organization, provides free food and shelter to orphans. C. Santro Communication Technology funds frequent AIDS awareness programs held by a notfor-profit organization in the surrounding neighborhood. D. Mould Plastics incorporates environmentally friendly manufacturing techniques that also result in cost savings. E. Cryo Serve uses environmentally hazardous chemicals to reduce the cost of manufacturing its products and to maximize its profits. Answer: D Page: 75 Learning Objective: 3.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

83.

A(n) ________ strategy tries to avoid and resist pressures for social responsibility. A. minimalist B. obstructionist C. defensive D. accommodative E. proactive

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Answer: B Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 84.

In the ________ strategy of corporate social responsibility, social demands lying outside the organization’s perceived self-interests are resisted. A. minimalist B. obstructionist C. defensive D. accommodative E. proactive Answer: B Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

85.

Vector Technologies, a manufacturer of refrigerators, used ozone depleting CFCs in its products. It downplayed the significance of ozone depletion for years, claiming that CFCs do not cause any significant harm to the ozone layer. Which of the following strategies of corporate social responsibility did Vector Technologies employ? A. Minimalist B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: B Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

86.

Which strategy of corporate social responsibility meets only economic responsibilities? A. Resistive B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: B Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

87.

A(n) ________ strategy does the minimum legally required to display social responsibility.

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A. leadership B. obstructionist C. defensive D. accommodative E. proactive Answer: C Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 88.

Trust Inc. is a chit fund company that offers small loans to individuals. Legal guidelines regarding small loans require the terms and conditions of payback be accessible to customers. Trust complies with this rule by putting up a poster with terms and conditions in a back room of their office. Only customers explicitly wishing to see the terms and conditions are taken to the back room. What strategy of corporate social responsibility does Trust Inc. follow? A. Leadership B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: C Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

89.

A(n) ________ strategy accepts social responsibility and tries to satisfy society’s basic ethical expectations. A. resistive B. obstructionist C. defensive D. accommodative E. proactive Answer: D Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

90.

Which strategy of corporate social responsibility meets economic, legal, and ethical responsibilities but not discretionary responsibilities? A. Resistive B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: D

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Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge 91.

A(n) ________ strategy actively pursues social responsibility by taking discretionary actions to make things better in the future. A. resistive B. obstructionist C. defensive D. accommodative E. proactive Answer: E Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

92.

Which corporate social responsibility strategy meets economic, legal, ethical, and discretionary responsibilities? A. Resistive B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: E Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

93.

Washo, a laundry detergent manufacturer, employs unskilled locals and trains them, manufactures its detergent using organic products. It uses biodegradable packaging that is sourced locally, and disposes its wastes using environmentally friendly methods. It follows the advice of its research team and takes discretionary actions in the hopes of making things better in the future. Washo is pursuing the ________ strategy of CSR. A. resistive B. obstructionist C. defensive D. accommodative E. proactive Answer: E Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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94.

Which of the following CSR strategies addresses the most number of responsibilities? A. Resistive B. Obstructionist C. Defensive D. Accommodative E. Proactive Answer: E Page: 76 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

95.

Businesses are required by law to have boards of directors that are elected by ________ to represent their interests. A. customers B. government officials C. stockholders D. union leaders E. all employees Answer: C Page: 77 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

96.

________ is the oversight of top management by a board of directors. A. Ethical administration B. Executive leadership C. Corporate governance D. Final authority E. Command leadership Answer: C Page: 77 Learning Objective: 3.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

97.

________ is making sure day-to-day performance is achieved ethically and in socially responsible manner. A. Corporate governance B. Social leadership C. Ethical self-governance D. Stockholder control E. Command leadership Answer: C Page: 77 Learning Objective: 3.4 Difficulty: Moderate

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AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge Essay Questions 98.

What are instrumental and terminal values? Give examples of each. Answer: Terminal values are preferences about desired ends, such as the goals one strives to achieve in life. Examples of terminal values considered important by managers include selfrespect, family security, freedom, and happiness. Instrumental values are preferences regarding the means for accomplishing these ends. Among the instrumental values held important by managers are honesty, ambition, imagination, and self-discipline. Page: 59 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

99.

Explain the utilitarian view of ethical behavior. Answer: The utilitarian view considers ethical behavior to be that which delivers the greatest good to the greatest number of people. Based on the work of 19th-century philosopher John Stuart Mill, this results-oriented point of view assesses the moral implications of actions in terms of their consequences. Business decision makers, for example, are inclined to use profits, efficiency, and other performance criteria to judge what is best for the most people. Page: 60 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

100.

Write a note on the four dimensions of justice issues in organizations. Illustrate your answer with examples. Answer: Justice issues in organizations are often addressed on four dimensions—procedural, distributive, interactional, and commutative. Procedural justice involves the degree to which policies and rules are fairly applied to all individuals. For example, does a sexual harassment charge levied against a senior executive receive the same full hearing as one made against a firstlevel supervisor? Does a woman with the same qualifications and experience as a man receive equal treatment under a no-discrimination policy for hiring or promotion? Distributive justice involves the degree to which outcomes are allocated fairly among people and without respect to individual characteristics based on ethnicity, race, gender, age, or other particularistic criteria. For example, are members of minority groups adequately or proportionately represented in senior management positions? Do universities allocate a proportionate share of athletic scholarships to males and females? Interactional justice involves the degree to which people treat one another with dignity and respect. For example, does a bank loan officer take the time to fully explain to an applicant why he or she was turned down for a loan? Commutative justice focuses on the fairness of exchanges or transactions. According to this principle, the exchange is deemed to be fair if all parties enter into it freely, have access to relevant and available information, and obtain some type of benefit from the transaction. Page: 60-61 Learning Objective: 3.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

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101.

Write a note on Kohlberg’s levels of moral development. Answer: Lawrence Kohlberg describes the three levels of moral development—preconventional, conventional, and postconventional. There are two stages in each level, and Kohlberg believes that we move step by step through them as we grow in maturity and education. In Kohlberg’s preconventional level of moral development the individual is self-centered. Moral thinking is largely limited to issues of punishment, obedience, and personal interest. Decisions made in the preconventional stages of moral development are likely to be directed toward achieving personal gain or avoiding punishment and are based on obedience to rules. In the conventional level of moral development, the individual is more social-centered. Decisions made in these stages are likely to be based on following social norms, meeting the expectations of group memberships, and living up to agreed-upon role obligations. At the postconventional level of moral development, the individual is strongly principle-centered. This is where a strong ethics framework is evident. The individual is willing to break with norms and conventions, even laws, to make decisions consistent with universal principles. Kohlberg believes that only a small percentage of people progress to the postconventional stages. Page: 65 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

102.

What is ethics intensity? Discuss the conditions that raise the ethics intensity of a situation. Answer: Ethics intensity is the extent to which a situation is perceived to pose important ethics challenges. The conditions that raise the ethics intensity of a situation include the magnitude, probability, and immediacy of any potential harm, the proximity and concentration of the effects, and social consensus. A decision situation will elicit greater ethical attention when the potential harm is perceived as great, likely, and imminent, when the potential victims are visible and close by, and when there is more social agreement on what is good or bad about what is taking place. Page: 65 Learning Objective: 3.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

103.

What are codes of ethics? What do they address? Answer: Code of ethics are formal statements of an organization’s values and ethical principles that set expectations for behavior. Ethics codes typically address organizational citizenship, illegal or improper acts, and relationships with coworkers and customers. Specific guidelines are often set for bribes and kickbacks, political contributions, honesty of books or records, and confidentiality of corporate information. Page: 70 Learning Objective: 3.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Comprehension

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Chapter 4: Environment, Innovation, and Sustainability

True/False Questions

1. Risk taking is a way to step forward and try new things. Answer: True Page: 85 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 2. The general environment comprises the actual organizations, groups, and persons with whom an organization interacts and conducts business. Answer: False Page: 86 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 3. Offshoring is the return of jobs from foreign locations as companies establish new domestic operations. Answer: False Page: 87 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 4. Rising labor costs, higher shipping costs, and public criticisms about destroying local jobs can cause global firms to return to their home countries. Answer: True Page: 87 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 5. The legal-political conditions in the global business environment are uniform across all countries. Answer: False Page: 88 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 6. Internet censorship is the deliberate blockage and denial of public access to information posted on the Internet. Answer: True Page: 89 Learning Objective: 4.1 .

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7. Inflation, income levels, and job outlook are part of the sociocultural conditions in the general environment. Answer: False Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 8. Generational cohorts consist of people born within a few years of one another and who experience somewhat similar life events during their formative years. Answer: True Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 9. The Baby Boomers are “digital natives” who grew up in technology-enriched homes, schools, and friendship environments. Answer: False Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 10. The Millennials are characterized with the ease of multitasking, desire for immediate gratification, continuous contact with others, and less concern with knowing things than with knowing where to find out about things. Answer: True Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 11. A sustainable business both meets the needs of customers and protects the natural environment for future generations. Answer: True Page: 91 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 12. Sustainable business practices generate substantial amounts of waste and toxic materials. Answer: False Page: 91 Learning Objective: 4.1 Difficulty: Easy .

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13. A sustainable business can be initiated by recycling and reusing materials in order to minimize waste and pollution of the environment. Answer: True Page: 91 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 14. Stakeholders are the persons, groups, and institutions directly affected by an organization. Answer: True Page: 92 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 15. Competitive advantage is something that an organization does extremely well, that can be copied by its competitors, and help them gain an advantage. Answer: False Page: 93 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 16. Competitive advantage can be achieved through quality by finding ways and using technology to create products and services that are of consistently higher quality for customers than what is offered by one’s competitors. Answer: True Page: 93 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 17. Competitive advantage achieved through costs will help an organization earn profits with prices that one’s competitors have difficulty matching. Answer: True Page: 93 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 18. The more uncertain the environment, the easier it is to analyze environmental conditions and predict future states of affairs. Answer: False Page: 93 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic skills .

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Bloom’s Taxonomy: Knowledge 19. The number of different factors in the environment is referred to as the rate of change. Answer: False Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 20. The least challenging and certain situation is an environment of organizations that is both complex and dynamic. Answer: False Page: 94 Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 21. High-uncertainty environments require an ability of decision makers to respond quickly as new circumstances arise and new information becomes available. Answer: True Page: 94 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 22. Innovation is a low priority when executives and leaders try to steer organizations through complex and uncertain environments. Answer: False Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 23. Product innovations result in better ways of doing things. Answer: False Page: 94 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 24. Business model innovations result in new ways of making money for the firm. Answer: True Page: 94 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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25. The final step of assessing in the innovation process involves commercializing innovation by turning it into actual products, services, or processes that increase profits by improving sales or lowering costs. Answer: False Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 26. The concept of reverse innovation got its start as global firms moved away from viewing innovation as a “home market” activity that creates new products and services for distribution to “foreign markets.” Answer: True Page: 95 Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 27. Environmental capital is the storehouse of natural resources that we use to sustain life and produce goods and services for society. Answer: True Page: 98 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 28. The executives of Acme Ltd. pay equal attention toward maximizing profits of the firm, maintaining the well-being of its employees, satisfying its customers, and preserving the environment. This indicates that Acme Ltd. uses the triple bottom line approach. Answer: True Page: 98 Learning Objective: 4.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 29. An organization that does not provide health insurance to employees can be categorized as one with poor human sustainability. Answer: True Page: 99 Learning Objective: 4.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 30. Human sustainability emphasizes the importance of employees as they are organizational stakeholders. Answer: True Page: 100 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills .

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Bloom’s Taxonomy: Comprehension

Multiple Choice Questions

31. Which of the following falls on the positive side of risk-taking behavior of organizations? A. Risk taking from position of performance difficulty B. Risk taking motivated by desperation to get out of bad situation C. Risk taking from hard time dealing with problems without losing focus D. Risk taking with the ability to deal with problems as they arise E. Risk taking from little staying power Answer: D Page: 85 Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 32. ________ environment consists of economic, legal-political, sociocultural, technological, and natural environment conditions. A. Specific B. Task C. General D. Stakeholder E. Customer Answer: C Page: 86 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 33. Which of the following represents the economic conditions in the general environment? A. Patents B. Infrastructure C. Internet access D. Unemployment rate E. Norms Answer: D Page: 87 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 34. A country faced a severe recession that resulted in loss of jobs and low income levels, which in turn affected the lifestyles of the consumers. Which of the following conditions are influencing the environment of the country? A. Political conditions B. Legal conditions C. Technological conditions D. Sociocultural conditions E. Economic conditions Answer: E .

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Page: 87 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 35. Lubnia experienced a high rate of inflation. This led to a significant rise in prices, fluctuating market conditions, and a sharp decline in investments and savings. This implies that the inflation had created a negative impact on the ________ conditions in the environment of Lubnia. A. economic B. legal C. technological D. sociocultural E. political Answer: A Page: 87 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 36. Which of the following involves outsourcing of jobs to foreign locations? A. Reshoring B. Offshoring C. Repatriation D. Nationalization E. Backshoring Answer: B Page: 87 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 37. Which of the following examples illustrates the economic conditions in the general environment? A. An organization conducting virtual meetings B. An organization holding a session on business ethics C. An organization providing Broadband facilities at its workplace D. An organization raising the pay of its employees E. An organization discussing the philosophy and objectives of political parties Answer: D Page: 87 Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 38. Mayer Inc., an automobile corporation based in London, shifts its manufacturing activities to China in order to minimize its cost of production. Which of the following is Mayer Inc. engaging itself in? A. Repatriation B. Nationalization C. Backshoring .

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D. Offshoring E. Reshoring Answer: D Page: 87 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 39. Which of the following would qualify as a reason for reshoring? A. Low costs in the target country B. Complicated logistics in the target country C. Excellent customer service in the target country D. Low shipping costs in the target country E. Low labor costs in the target country Answer: B Page: 87 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 40. AZB Inc., a software corporation based in the United States, used to operate from several countries with lower labor costs. When the firm started to incur high costs in the foreign countries and received complaints and criticisms about the loss of local jobs, the firm decided to return to its home country. The change made to the firm’s global strategy is an example of ________. A. offshoring B. outsourcing C. nationalization D. privatization E. reshoring Answer: E Page: 87 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 41. The patent attorney of EII Inc. was accused of stealing the organization’s invention. This scenario is an example of the ________ conditions of the general environment. A. natural B. legal-political C. technological D. sociocultural E. educational Answer: B Page: 88 Learning Objective: 4.1 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 42. The government of Lubnia imposes certain rules and regulations regarding interest rates and other transactions. This is an example of the ________ conditions of the general environment. .

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A. natural B. technological C. sociocultural D. legal-political E. educational Answer: D Page: 88 Learning Objective: 4.1 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 43. Which of the following examples illustrates the legal-political conditions in the general environment? A. Bureaucratic decisions made in a nation B. Financial market situation existing in a nation C. Job outlooks of different individuals of a nation D. Information technology systems or infrastructure of a nation E. Population demographics of a nation Answer: A Page: 88 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 44. BNQ Pvt. Ltd., a media corporation headquartered in California, has its operations across different nations. The activities of the firm are affected by the government policies and the ideologies of the legislative institutions existing in the host countries. Which of the following factors are affecting the firm’s operations? A. Economic conditions B. Sociocultural conditions C. Legal-political conditions D. Technological conditions E. Natural environment conditions Answer: C Page: 88 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 45. Which of the following is a part of the sociocultural conditions in the general environment? A. Inflation B. Financial markets C. Government policies D. Intellectual properties E. Demographics Answer: E Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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46. Diversity issues relating to educational opportunity, access to technology, housing options, and so on are parts of the ________ conditions in the general environment. A. economic B. legal C. technological D. sociocultural E. political Answer: D Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 47. The managers of Axis Inc. emphasize the importance of team norms, business ethics, and respect for human rights in the organization. This implies that the organization is working on the ________ conditions in the organizational environment. A. economic B. legal C. sociocultural D. technological E. political Answer: C Page: 89 Learning Objective: 4.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 48. The marketing executives of Brown Inc. observe the demographics of the population at its different areas of operation. They work toward satisfying the needs and preferences of individuals belonging to various demographic groups. The factors that they analyze include age, ethnicity, income levels, and gender. This implies that Brown Inc. focuses on the ________ conditions in the general environment to make sales. A. technological B. legal C. philosophical D. sociocultural E. political Answer: D Page: 89 Learning Objective: 4.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 49. Which of the following aspects of demographics comprises of generational cohorts? A. Income levels B. Race C. Age D. Ethnicity E. Gender Answer: C Page: 89 Learning Objective: 4.1 .

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 50. ________ are “digital immigrants” that have had to learn about technology as it became available. A. Baby Boomers B. Gen Ys C. Gen Xs D. Millennials E. Gen Zs Answer: A Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 51. Which of the following are characterized by ease of multitasking, desire for immediate gratification, continuous contact with others, and less concern with knowing things than with knowing where to find out about things? A. Millennials B. Gen Xs C. Baby Busters D. Golden Boomers E. Baby Boomers Answer: A Page: 89 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic Bloom’s Taxonomy: Knowledge 52. Meg has the ability to multitask and maintain continuous contact with others. She believes in receiving immediate gratification. This implies that Meg is most likely a ________. A. Baby Boomer B. Millennial C. Gen X D. Baby Buster E. Golden Boomer Answer: B Page: 89 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 53. F5, a financial services organization, advertises its financial products and instruments on social networking sites and other Websites. This implies that the firm is utilizing the ________ conditions in the general environment. A. natural B. legal C. technological D. sociocultural E. political .

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Answer: C Page: 90 Learning Objective: 4.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 54. Bart has a diverse collection of the latest video games. He owns a mobile phone with a number of applications. His school is well equipped with Internet facilities. Which of the following generational cohorts does Bart most likely belong to? A. Baby Boomer Generation B. Gen X Generation C. Baby Buster Generation D. Millennial Generation E. Golden Boomer Generation Answer: D Page: 89 Learning Objective: 4.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 55. Synergy Inc. implements the use of social media, digital sharing of presentations, data, files, and holds regular virtual meetings. This indicates that the firm has reasonably well-equipped ________ conditions in the organizational environment. A. natural B. technological C. legal D. sociocultural E. political Answer: B Page: 90-91 Learning Objective: 4.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 56. Which of the following examples illustrates the technological conditions in the general environment? A. Features and applications available on an individual’s phone B. Income levels of an individual C. Housing options for an individual D. Job options for an individual E. Educational opportunities for an individual Answer: A Page: 90-91 Learning Objective: 4.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 57. Which of the following examples would qualify as a potential problem of the existing everpresent technological condition? A. An organization advertising its products on social networking websites B. An organization’s employees regularly engaging in online pastimes during work hours .

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C. An organization conducting regular virtual meetings D. A musician promoting his debut musical project on the Internet through media Websites E. An organization implementing digital sharing of files, presentations, and projects Answer: B Page: 91 Learning Objective: 4.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Apply 58. A sustainable business: A. is involved in risk-taking from position of performance difficulty. B. has a lack of information regarding what exists in the business environment and what developments may occur. C. creates products or services that become so widely used that they largely replace prior practices and competitors. D. meets the needs of customers and protects the natural environment for future generations. E. is an organization motivated by desperation to escape existing difficulties. Answer: D Page: 91 Learning Objective: 4.1 Difficulty: Moderate AACSB: Analytic Bloom’s Taxonomy: Knowledge 59. The ________ environment includes the people and groups with whom an organization interacts. A. general B. natural C. specific D. macro E. external Answer: C Page: 92 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic Bloom’s Taxonomy: Knowledge 60. Stakeholders: A. are described as employees who move to foreign locations to reduce costs to the organization. B. are individuals who propose laws and regulations, government policies, and the philosophy and objectives of political parties. C. are owners of organizations who take risks motivated by desperation to get out of bad situations. D. refer to the employees who return from different host countries and help in establishing new domestic operations. E. are the persons, groups, and institutions directly affected by an organization. Answer: E Page: 92 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic Bloom’s Taxonomy: Knowledge .

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61. Which of the following is true of stakeholders? A. Members of the specific or task environment are often described as stakeholders. B. Stakeholders are influenced by their stakes but they are not allowed to influence it in return. C. An organization’s performance does not affect the stakeholders. D. All stakeholders belong to the generational cohort of Baby Boomers. E. All stakeholders are “digital natives” who grew up in technology enriched homes, schools, and friendship environments. Answer: A Page: 92 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic Bloom’s Taxonomy: Knowledge 62. Which of the following is true of value creation by businesses? A. Businesses create value for customers through realized profits and losses. B. Businesses create value for employees by wages earned and job satisfaction. C. Businesses create value for competitors through the benefits of long-term business relationships. D. Businesses create value for suppliers by the citizenship they display. E. Businesses create value for local communities by stimulating markets and innovations that didn’t exist before. Answer: B Page: 92-93 Learning Objective: 4.2 Difficulty: Easy AACSB: Analytic Bloom’s Taxonomy: Knowledge 63. Ben Cars Pvt. Ltd. achieves a competitive advantage by spending less than its competitors on labor, operations, promotions, and features offered. This enables the firm to charge relatively lower prices from its customers. Which of the following is a competitive advantage of the firm? A. High quality B. Low costs C. Flexibility D. Delivery E. Adaptability Answer: B Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 64. Which of the following examples illustrates a firm that has achieved competitive advantage through costs? A. A firm that uses patented technology to deliver goods and services to customers on time B. A firm’s ability to adjust and adapt to different demographic segments and satisfy their needs C. A firm that invests only a small amount on promotion and maximizes profits by charging low prices D. A firm’s technology that creates high quality products and services .

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E. A firm that specializes in developing timely new products Answer: C Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 65. Striker Corporation produces mobile phones, smart phones, and laptops. In terms of longevity and user-friendliness, the firm’s products are rated the best. Also, it offers applications and features with the latest technology. Which of the following has enabled Striker Corporation to achieve a competitive advantage over its competitors? A. Quality B. Costs C. Flexibility D. Delivery E. Adaptability Answer: A Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 66. Which of the following examples illustrates a firm that has achieved competitive advantage through quality? A. A firm that invests less on its production processes B. A firm that focuses on producing zero defect products C. A firm that uses technology to deliver products to its customers well in advance D. A firm that has adequate resources to adapt to different customer needs and preferences E. A firm that incurs less expenditures than its competitors, enabling it to charge lower prices than its competitors Answer: B Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 67. Which of the following examples displays a firm with a competitive advantage achieved through quality? A. An organization that is famous for its durable products B. A corporation that reduces its expenses by finding new production processes C. A firm that delivers goods and services faster than its competitors D. An organization that gains profits by charging less prices E. A company that tailors its goods and services to fit consumer needs and preferences Answer: A Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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68. Fittleworth Inc., an online retail firm, owns a patented technology that ensures that its goods and services reach customers on time. The firm also has the ability to develop timely new products. Fittleworth Inc. has gained competitive advantage through ________. A. quality B. costs C. flexibility D. delivery E. adaptability Answer: D Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 69. Which of the following illustrates a firm that has achieved competitive advantage through delivery? A. A firm that uses technology to produce durable products B. A firm that develops timely new products C. A firm that has the flexibility to operate successfully in any business environment D. A firm that makes small financial investments at the time of production E. A firm that can adapt and change according to the needs of different customers Answer: B Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 70. Which of the following illustrates a firm that has achieved competitive advantage through flexibility? A. A firm that creates customized products based on each of its customer’s preferences B. A firm that produces goods by maintaining high quality standards C. A firm that ensures speedy delivery of goods compared to its competitors D. A firm that develops products with unique features that are not made available by any of its competitors E. A firm that develops timely new products Answer: A Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 71. Competitive advantage can be achieved through ________ by finding ways and using technology to adjust and tailor products and services to fit customer needs in ways that are difficult for one’s competitor to match. A. quality B. costs C. flexibility D. delivery E. durability Answer: C Page: 93 Learning Objective: 4.2 .

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 72. Which of the following is true of environmental uncertainty? A. The less uncertain the environment, the harder it is to analyze environmental conditions and predict the future states of affairs. B. The least challenging situation is an environment that is both complex and dynamic. C. High-uncertainty environments require less flexibility in organizational designs and work practices as different circumstances arise every now and then. D. High-uncertainty environments require people to make decisions gradually since new circumstances arise constantly. E. The uncertainty of an organization can be analyzed using degree of complexity and rate of change. Answer: E Page: 93 Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 73. Innovation refers to the: A. lack of information regarding what exists in the environment. B. people and groups with whom an organization interacts. C. process of taking a new idea and putting it into practice. D. return of jobs from foreign locations as companies establish new domestic operations. E. things that an organization does extremely well and that give it an advantage. Answer: C Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 74. Lucy Inc. introduced a new line of deodorized clothes produced with natural ingredients such as flowers and fruits, to reduce the impact of the environmental hazards caused by the production of deodorants. This implies that Lucy Inc. was engaging in _________. A. process innovation B. business model innovation C. product innovation D. skimming E. performance innovation Answer: C Page: 94 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 75. Which of the following is an example of a product innovation? A. A firm launching a new range of candies B. A firm allowing customers to mail the desired designs of goods C. A firm introducing a new online shopping model D. A firm introducing new technology to ease the installation process E. A firm changing its line of business from manufacturing automobiles to producing music .

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Answer: A Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 76. TBZ Inc. introduced a new generation of shoes that prevent any type of injury to the wearer’s feet. This is an example of a: A. process innovation. B. product innovation. C. business model innovation. D. social business innovation. E. paradigm innovation. Answer: B Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 77. Which of the following forms of innovation focuses on better ways of doing things? A. Product innovation B. Process innovation C. Business model innovation D. Social business innovation E. Paradigm innovation Answer: B Page: 94 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 78. Which of the following is an example of a process innovation? A. A firm putting coupons on the Web B. A firm introducing a new social media site C. A firm introducing “ready to assemble” furniture D. A firm converting the movie rental business into a subscription business E. A firm creating the world’s largest online marketplace Answer: C Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 79. Saturn Electronics Inc. offers computer programs and software programs including software drivers and plug-ins that can be self-installed easily. The firm’s introduction of programs that can be self-installed is an example of ________ innovation. A. product B. process C. business model D. reverse E. social business .

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Answer: B Page: 94 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 80. Which of the following is an example of process innovation? A. A firm launching a new car model B. A restaurant where customers are allowed to taste samples of dishes and then get their orders customized C. A footwear manufacturer introducing a unique range of shoes D. A firm introducing a new software to protect computers from viruses E. A firm changing its line of business from manufacturing eyewear to producing watches Answer: B Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 81. A business model innovation results in: A. ways for firms to make money. B. better ways of doing things. C. new or improved goods. D. the creation of new services. E. environmental uncertainty. Answer: A Page: 94 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 82. Jade Inc., a photography firm, entered into other activities such as cinematography, advertisement creations, and short film making, to make more money for the firm. This implies that Jade Inc. had engaged in ________ innovation. A. product B. process C. business model D. reverse E. pricing Answer: C Page: 94 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 83. Which of the following is an example of a business model innovation? A. A firm introducing a new model of its smartphone B. A corporation introducing “ready to install” software C. A firm introducing a range of meals that can be cooked instantly D. A firm introducing the concept of “paying for extras” profitable in free online games E. A firm introducing a new social networking website .

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Answer: D Page: 94 Learning Objective: 4.3 Difficulty: Moderate AACSB: analytic skills Bloom’s Taxonomy: Comprehension 84. Glory Pvt. Ltd. specializes in preparing eco-friendly products out of solid waste, old newspapers, and waste plastic. The firm employs individuals belonging to the weaker economic sections of the city. Glory Pvt. Ltd. is engaged in ________ innovation. A. product B. process C. reverse D. pricing E. social business Answer: E Page: 95 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 85. Which of the following is an example of a social business innovation? A. An organization working on maintaining cleanliness in the cities B. A firm specializing in producing customized clothes and bags based on preferences of the purchasers C. A firm introducing a range of meals that can be cooked instantly D. A firm removing the use of intermediaries to deal with customers directly E. A record label using an exclusive process to record music albums Answer: A Page: 95 Learning Objective: 4.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 86. Micro-credit lending is an example of ________ innovation. A. reverse B. social business C. disruptive D. environmental E. green Answer: B Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 87. Which of the following steps in the innovation process involves thinking about new possibilities? A. Imagining B. Experimenting C. Assessing D. Designing .

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E. Scaling Answer: A Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 88. Which of the following steps in the innovation process involves building initial models, prototypes, or samples? F. Imagining G. Experimenting H. Assessing I. Designing J. Scaling Answer: D Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 89. A group of employees of Jonas Inc., a software firm, were analyzing the practicality and feasibility of a software program by releasing a few samples of the program on the Internet for a month. Which of the following steps of the innovation process were the employees engaging themselves in? A. Imagining B. Experimenting C. Assessing D. Designing E. Scaling Answer: B Page: 95 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 90. Starship Inc., an automobile manufacturer, developed a new car model. The firm worked on identifying the strengths and weaknesses of the new model, the costs that would be incurred in its manufacture, and its target markets. Which of the following steps of the innovation process was the firm involved in? A. Imagining B. Experimenting C. Assessing D. Designing E. Scaling Answer: C Page: 95 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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91. Which of the following steps in the innovation process consists of implementing what has been learned and commercializing new products or services? A. Scaling B. Experimenting C. Assessing D. Designing E. Imagining Answer: A Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 92. Indigo Inc., a firm that specializes in animation, released its latest patented animation software in the market to increase its profits by improving sales. Which of the following steps of the innovation process was executed by Indigo Inc.? A. Imagining B. Experimenting C. Assessing D. Designing E. Scaling Answer: E Page: 95 Learning Objective: 4.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 93. Which of the following is the final step of the wheel of innovation? A. Imagining B. Experimenting C. Assessing D. Designing E. Scaling Answer: E Page: 95 Learning Objective: 4.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 94. Which of the following is true of reverse innovation? A. It taps the potential for innovation existing at higher organizational levels. B. It emphasizes recognition of innovations developed in well-established markets. C. It recognizes innovations existing in diverse settings or locations. D. It involves a lack of complete information regarding what exists in the environment. E. It focuses on identifying strengths and weaknesses, potential costs and benefits, and potential markets or applications of innovations. Answer: C Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge .

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95. Which of the following concepts got its start as global firms moved away from viewing innovation as a “home market” activity that creates new products and services for distribution to “foreign markets”? A. Disruptive innovation B. Product innovation C. Reverse innovation D. Incremental innovation E. Social business innovation Answer: C Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 96. ________ innovation pulls new products and services from settings, where they are often created under pricing constraints, and pushes them into use elsewhere. A. Disruptive B. Reverse C. Luxurious D. Product E. Business model Answer: B Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 97. Which of the following creates products or services that become so widely used that they largely replace prior practices and competitors? A. Disruptive innovation B. Sustainability C. Sustaining innovation D. Transformational innovation E. Incremental change Answer: A Page: 96 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 98. Foster Inc. created a new line of cameras that work on solar energy. These solar cameras reduced the demand for digital cameras and gradually replaced the use of digital cameras and ended competition. Which of the following is prominent in this instance? A. Positioning innovation B. Incremental change C. Process improvement D. Disruptive innovation E. Process innovation Answer: D Page: 96 Learning Objective: 4.3 .

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Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 99. The commitment to protect the rights of present and future generations as co-stakeholders of present-day natural resources is termed as ________. A. disruptive innovation B. sustainability C. environmental uncertainty D. reverse innovation E. scaling Answer: B Page: 97 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 100.

Which of the following is true of sustainability? A. It is a lack of information regarding what exists in the environment and what developments may occur. B. It is a system by which an organization is directed or controlled. C. It refers to the relationship between an organization’s management, its employees, its stakeholders, and the government. D. It is a commitment to live and work in ways that protect the rights of both present and future generations. E. It does not apply to the non-living things present on earth. Answer: D Page: 97 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

101.

The process of using environmental resources to support societal needs today while also preserving and protecting them for future generations is referred to as ________. A. triple bottom line experiment B. global warming C. sustainable development D. scaling E. greenhouse effect Answer: C Page: 98 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

The storehouse of natural resources which sustain life and produce goods and services for society is referred to as ________. A. global warming B. environmental capital C. green innovation D. triple bottom line E. greenhouse effect

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Answer: B Page: 98 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 103.

Which of the following holds true regarding sustainable businesses? A. A sustainable business operates with nature by exploiting it. B. A sustainable business strives for a win-lose outcome where the environment gains and the organization loses. C. A sustainable business creates products or services that become so widely used that they result in the exhaustion of the resources. D. A sustainable business can result in an environmental uncertainty. E. A sustainable business works by meeting the needs of customers while advancing the well-being of our natural environment. Answer: E Page: 98 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

104.

Which of the following would qualify as a main goal of a sustainable business? A. Carbon reduction B. Profit maximization C. Global warming D. Scaling E. Greenhouse effect Answer: A Page: 98 Learning Objective: 4.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

105.

Maze Pvt. Ltd. focuses on providing maximum support to its employees as it considers them its most important organizational stakeholders. The firm has a system of flexible working hours to reduce the stress of employees and zero-day notice periods. It permits employees to work from home through its virtual network. From this information, we can infer that Maze Pvt. Ltd.: A. has a high rate of sustainable innovation. B. focuses on the differences of generational cohorts. C. highlights the importance of the triple bottom line. D. has a high rate of human sustainability. E. both meets the needs of customers and protects the natural environment for future generations. Answer: D Page: 100 Learning Objective: 4.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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Essay Questions

106.

Describe the most important aspects of each dynamic force that surrounds and influences the general environment of an organization. Answer: Things like the overall health of the economy in terms of financial markets, inflation, income levels, and job outlook are important economic conditions in the general environment. Legal-political conditions in the general environment are represented by existing and proposed laws and regulations, government policies, and the philosophy and objectives of political parties. Diversity issues relating to educational opportunity, access to technology, housing options, job options, are part of the sociocultural conditions in the general environment. The sociocultural conditions also include norms, customs, and demographics of a society or region, as well as social values on such matters as ethics, human rights, gender roles, and life styles. The ongoing wave of technological conditions in the workplace ranges from new product development and advertising to employee networking and data sharing to virtual meetings and always-available chats. Environmental conditions include the abundance of natural resources that the environment provides for organizations and society, and the need to protect the availability of those resources for the future. Page: 87-91 Learning Objective: 4.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

107.

What are the dimensions of environmental uncertainty? Answer: The first dimension of environmental uncertainty is the degree of complexity, or the number of different factors in the environment. An environment is typically classified as relatively simple or complex. The second is the rate of change in and among these factors. An environment is typically classified as stable or dynamic. The most challenging and uncertain situation is an environment that is both complex and dynamic. High-uncertainty environments require flexibility and adaptability in organizational designs and work practices, as well as an ability of decision makers to respond quickly as new circumstances arise and new information becomes available. Page: 93-94 Learning Objective: 4.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

108.

What are the three types of innovation? What do they result in? Answer: (1) Product innovations result in the creation of new or improved goods and services. (2) Process innovations result in better ways of doing things. (3) Business model innovations result in new ways of making money for the firm. Page: 94 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

109.

Describe the five steps of the wheel of innovation. Answer: Gary Hamel describes the five steps in the wheel of innovation. Step 1 is imagining—thinking about new possibilities. Step 2 is designing—building initial models, prototypes, or samples. Step 3 is experimenting—examining practicality and financial value through experiments and feasibility studies. Step 4 is assessing— identifying strengths and

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weaknesses, potential costs and benefits, and potential markets or applications. Step 5 is scaling—implementing what has been learned and commercializing new products or services. Page: 95 Learning Objective: 4.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Ch05: Global Management and Cultural Diversity True/False Questions 1.

The growing interdependence among elements of the global economy is known as diversification. Answer: False Page: 108 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

In World 3.0, local needs and priorities are largely ignored compared to the economic gains of global integration. Answer: False Page: 108-109 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

Cultural awareness is an important characteristic of a truly global manager. Answer: True Page: 109 Learning Objective: 5.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Sigma Inc. conducts for-profit transactions of goods and services across national boundaries. Sigma Inc. is an example of an international business. Answer: True Page: 110 Learning Objective: 5.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Comprehension

A common first step into international business is global sourcing. Answer: True Page: 111 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

Most manufacturers today shy away from using global sourcing owing to the growing concerns over issues related to quality. Answer: False Page: 111 Learning Objective: 5.1

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Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge 7.

In exporting, local products are sold abroad to foreign customers. Answer: True Page: 112 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

Franchising refers to acquiring products from abroad and selling them in domestic markets. Answer: False Page: 112 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

China’s foreign direct investment in the U.S. has led to the creation of many American jobs. This is an example of insourcing. Answer: True Page: 112 Learning Objective: 5.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Comprehension

10.

A foreign subsidiary is a foreign operation completely owned and controlled by a local firm. Answer: False Page: 113 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

11.

A foreign subsidiary represents the lowest level of involvement in international operations. Answer: False Page: 113 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

12.

Tariffs are basically taxes that governments impose on imports. Answer: True Page: 114 Learning Objective: 5.1 Difficulty: Easy

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AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge 13.

The goal of most tariffs is to protect local firms from foreign competition. Answer: True Page: 114 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

14.

NAFTA was formed by the United Kingdom, France, and Germany. Answer: False Page: 115 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

15.

Executives of transnationals view the entire world as their domain for acquiring resources. Answer: True Page: 117 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

16.

Extraction of excessive profits by global corporations is a potential host-country benefit. Answer: False Page: 118 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

17.

Long hours of work and poor working conditions are prevalent in sweatshops. Answer: True Page: 120 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

18.

Barbara shocked all her friends when she arrived at the party wearing a silk kimono, a traditional Japanese outfit. The reaction of her friends is an example of culture shock. Answer: False Page: 120 Learning Objective: 5.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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19.

Nigel is very proud of his culture and tends to view other cultures as potentially inferior to his own. This is an example of ethnocentrism. Answer: True Page: 120 Learning Objective: 5.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

20.

Knowledge about foreign cultures is known as cultural intelligence. Answer: False Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

21.

In low-context cultures, what is actually said or written may convey only part, and sometimes a very small part, of the real message. Answer: False Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

22.

Most communication in low-context cultures takes place via the written or spoken word. Answer: True Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

23.

Members of monochronic cultures are more flexible toward time than those of polychronic cultures. Answer: False Page: 121-122 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

24.

Members of polychronic cultures do not like if someone is late or brings an uninvited guest. Answer: False Page: 122 Learning Objective: 5.3 Difficulty: Moderate AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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25.

Proxemics is how people use space to communicate. Answer: True Page: 122 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

26.

Tight cultures are characterized by clear social norms. Answer: True Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

27.

In a tight culture, deviations from norms tend to be tolerated. Answer: False Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

28.

The ecological fallacy refers to the belief that a cultural value such as individualism does not apply equally to all Americans. Answer: False Page: 124 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

29.

People in high-power-distance cultures tend to be tolerant of power and are prone to follow orders. Answer: True Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

30.

People in high-uncertainty-avoidance cultures prefer structure in their lives. Answer: True Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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Multiple Choice Questions 31.

Which of the following is an effect of globalization? A. Reduced cooperation among nations in the global economy B. Weakening of economic integration across countries C. Reduced interdependence among the components in the global economy D. Increasing importance of nation states E. A borderless world Answer: E Page: 108 Learning Objective: 5.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

Which of the following is a common reason for doing international business? A. Reducing imports B. Spreading assets among multiple countries C. Boosting domestic demand D. Establishing market monopoly E. Promoting ethnocentrism Answer: B Page: 110 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

33.

Howard is planning to expand his family business internationally, and is currently in the process of purchasing materials, manufacturing components, and locating business services around the world. Which of the following best describes his actions? A. Global sourcing B. Insourcing C. Licensing D. Franchising E. Outsourcing Answer: A Page: 111 Learning Objective: 5.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

34.

Juan, a wealthy industrialist, owns several coffee plantations in Brazil. Encouraged by the rising sales figures in the domestic market, Juan decides to sell his local brand of coffee in markets around the world. Which of the following terms is applicable to this business strategy? A. Importing B. Insourcing C. Franchising D. Exporting E. Licensing

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Answer: D Page: 112 Learning Objective: 5.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 35.

The growth of export industries ________ the exporting country. A. reduces imports in B. leads to easy access to low-cost labor in C. creates local jobs in D. provides access to a larger pool of financial resources for E. leads to an excess supply of products in Answer: C Page: 112 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

36.

When Zest Inc., a pharmaceuticals company, bought the rights of manufacturing and selling Bayman Pharma’s vitamin supplement Vita Plus in Cuba, Zest engaged in ________. A. exporting B. global sourcing C. foreign direct investment D. insourcing E. licensing Answer: E Page: 112 Learning Objective: 5.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

37.

In ________, the foreign firm buys the rights to use another’s name and operating methods in its home country. A. insourcing B. franchising C. global sourcing D. exporting E. offshoring Answer: B Page: 112 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

38.

Which of the following terms is used to describe local job creation that results from foreign direct investment? A. Restructuring

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B. Franchising C. Offshoring D. Insourcing E. Horizontal integration Answer: D Page: 112 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge 39.

When Iris Inc., a hand-bag manufacturer headquartered in the U.S., decided to invest in Japan, it tied up with a Japanese fashion house in order to pool resources, share risks, and operate the new business together. This is an example of ________. A. a joint venture B. a foreign subsidiary C. a greenfield venture D. diversification E. product development Answer: A Page: 112 Learning Objective: 5.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

A(n) ________ is a local operation completely owned and controlled by a foreign firm. A. franchise B. sweatshop C. foreign subsidiary D. global strategic alliance E. export house Answer: C Page: 113 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

41.

Cases presented before the World Trade Organization for resolution are likely to involve disputes regarding ________. A. cultural appropriateness B. restructuring C. cultural distance D. ecological fallacy E. tariffs Answer: E Page: 114 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy

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Bloom’s Taxonomy: Knowledge 42.

________ are taxes governments levy on imports from abroad. A. Excise duties B. Tariffs C. Pay-offs D. Corporate taxes E. Subsidies Answer: B Page: 114 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

43.

The goal of most tariffs is to: A. improve present working conditions. B. protect transnational corporations from political risks. C. diversify existing jobs. D. protect local firms from foreign competition. E. create jobs for foreign workers. Answer: D Page: 114 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

44.

Which of the following countries is a part of NAFTA? A. Canada B. United Kingdom C. Germany D. Spain E. France Answer: A Page: 115 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

45.

Arguments on the negative side blame NAFTA for: A. lower productivity of U.S. manufacturers. B. lower cross-border trade. C. substantial job losses to Mexico. D. substantial job losses to the U.S. E. deterioration of the Mexican business environment. Answer: C Page: 115 Learning Objective: 5.1 Difficulty: Easy

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AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge 46.

Which of the following is true with regard to the European Union (EU)? A. There is an absence of common consensus between the member states of EU with regard to political integration. B. All the member states of the EU have adopted the Euro as the common currency. C. The common currency of the EU is a weak competitor of the U.S. dollar. D. The EU members are supposed to give one another most favored nation status. E. The EU is an economic and political alliance of major importance. Answer: E Page: 116 Learning Objective: 5.1 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

47.

A ________ is an MNE that operates worldwide on a borderless basis. A. franchise B. transnational corporation C. foreign subsidiary D. greenfield venture E. limited liability company Answer: B Page: 117 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

48.

Home-country criticisms of global firms include complaints about: A. interference with the local government. B. hiring the most talented local personnel at a high cost. C. failure to transfer advanced technologies. D. sending capital investments abroad. E. poor working conditions. Answer: D Page: 118 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

49.

________ involves illegal practices to further one’s business interests. A. Corruption B. Ethnocentrism C. Polycentrism D. Proxemics E. Ecological fallacy Answer: A Page: 118

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Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge 50.

The Foreign Corrupt Practices Act (FCPA) makes it illegal for: A. countries who are not members of the EU to invest in the U.S. B. U.S. firms to invest overseas. C. foreign firms to offer nonmonetary gifts to U.S. officials. D. foreign firms to offer bribes to U.S. firms. E. U.S. firms and their representatives to engage in corrupt practices overseas. Answer: E Page: 119 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

51.

Which of the following is an example of child labor? A. A six-year old boy accompanying his mother to the carpet factory where she works B. A ten-year-old boy working in a chemicals factory C. A ten-year-old girl helping her younger brother with schoolwork D. A thirteen-year-old boy earning $10 for helping his father harvest strawberries from the family garden E. A nineteen-year-old girl working as a salesgirl in the local supermarket Answer: B Page: 119 Learning Objective: 5.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

52.

What are sweatshops? A. Local business operations that expand internationally through foreign direct investment B. Arbitrating firms that settle labor disputes C. Business operations that employ workers at low wages for long hours in poor working conditions D. Foreign firms that hire talented local personnel for training others in the host country E. Foreign firms that are engaged in rampant corruption and bribery to gain easy access to the local resource pool Answer: C Page: 120 Learning Objective: 5.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

53.

Which of the following is a characteristic of a sweatshop? A. Poor working conditions B. High wages C. Low power distance

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D. High degree of foreign investment E. Strong ethics Answer: A Page: 120 Learning Objective: 5.2 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge 54.

Which of the following is an example of a sweatshop? A. Jason & Jason, an American law firm, opened its branch in Taiwan as part of its business expansion strategy. B. Ross Inc., a pharmaceuticals company, bought the rights to manufacture and sell a fertility drug in Greenland from Lena Pharmaceuticals. C. Nice & Patton, an electronic device manufacturing company, housed its employees in poor conditions and also overworked them. D. SayMore, a supermarket, sourced its canned fishes from Asia at a far lower price than most of its local competitors. E. Janus Infotech refused to increase the annual wages of its employees citing poor financial results in the last quarter. Answer: C Page: 120 Learning Objective: 5.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

55.

________ is a shared set of beliefs, values, and patterns of behavior common to a group of people. A. Culture B. Meme C. Folklore D. Conduct E. Moral Answer: A Page: 120 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

56.

Which of the following is true about culture? A. Culture is a set of legal codes. B. Culture occupies a position of peripheral importance in international business. C. Culture is not common to a group. D. Culture remains static over time. E. Cultural miscues can be costly in international business. Answer: E Page: 120 Learning Objective: 5.3 Difficulty: Easy

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AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 57.

An American executive goes to Yemen to finalize a business deal. He hands over his documents to his Yemeni host with his left hand, which Muslims consider unclean. Moreover, he refuses to accept the dry fruits that he is offered, a behavior that deeply offends his host. As a result, the American loses the business deal to his Australian counterpart who was better versed in Yemeni ways. The lack of understanding of ________ is most likely to have resulted in the loss of business for the American executive. A. the business trends in Yemen B. Yemeni ethics C. the business laws in Yemen D. Yemeni culture E. the banking system in Yemeni Answer: D Page: 120 Learning Objective: 5.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

58.

________ is the confusion and discomfort a person experiences when in an unfamiliar culture. A. Cultural appropriation B. Culture shock C. Cultural assimilation D. Cultural relativism E. Culture phobia Answer: B Page: 120 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

59.

Culture shock is: A. a hatred of foreign cultures. B. an individual’s failure to comply with the codes of his culture. C. an assumption that one’s own culture is superior to that of others. D. an assumption that one’s own culture is inferior to that of others. E. the discomfort a person experiences when in an unfamiliar culture. Answer: E Page: 120 Learning Objective: 5.3 Difficulty: Moderate AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Comprehension

60.

Stephanie Mann, an elderly German woman, decides to visit her friend living in Indonesia after many decades. Having never visited the country before, she feels confused, anxious, uncomfortable, and in need of information and advice during her stay. She is most likely experiencing ________.

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A. xenophobia B. culture shock C. cognitive dissonance D. acculturation E. boredom Answer: B Page: 120 Learning Objective: 5.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 61.

________ is the tendency to consider one’s culture superior to that of others. A. Regiocentrism B. Isolationism C. Geocentrism D. Ethnocentrism E. Polycentrism Answer: D Page: 120 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

62.

Which of the following is a trait of ethnocentrism? A. Showing no concern for the cultures of others B. Being eager to adopt the elements of foreign cultures C. Showing preference for foreign cultural values D. Encouraging ethnic minorities to adopt the traits of the dominant culture E. Failing to comply with the cultural values of one’s own group Answer: A Page: 120 Learning Objective: 5.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

63.

Sam, an American national, was sent to India as part of a cultural exchange program in his university. On his arrival in India, he did not respond to his host who greeted him by folding his hands. He also declined the tea that was offered, emphasizing a cultural preference for coffee. Sam displayed ________. A. polycentrism B. idealism C. ethnocentrism D. feudalism E. collectivism Answer: C Page: 120 Learning Objective: 5.3 Difficulty: Hard

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AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 64.

________ is the ability to accept and adapt to new cultures. A. Cultural imperialism B. Cultural intelligence C. Ethnocentrism D. Cultural myopia E. Cultural appropriation Answer: B Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

65.

People with cultural intelligence: A. are flexible in dealing with cultural differences. B. are uncomfortable with cultural differences. C. view one’s culture as superior to that of others. D. view one’s culture as inferior to that of others. E. are eager to adopt the values of foreign cultures. Answer: A Page: 121 Learning Objective: 5.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

66.

Someone high in cultural intelligence views cultural differences as ________. A. threats B. ethical dilemmas C. learning opportunities D. moral dilemmas E. barriers to learning Answer: C Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

67.

The capacities to listen, observe, and learn are building blocks of cultural intelligence. These skills and competencies can be developed by better understanding what anthropologist Edward T. Hall calls the “________” languages of culture. A. graphic B. silent C. transformative D. spectacular E. vocal Answer: B

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Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 68.

________ cultures emphasize communication via spoken or written words. A. High-context B. Popular C. High femininity D. Low-context E. Monochronic Answer: D Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

69.

People who tend to say or write what they mean and mean what they say belong to ________ cultures. A. high-context B. popular C. low-context D. mass E. global Answer: C Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

70.

In ________ cultures, what is actually said or written may convey only part, and sometimes a very small part, of the real message. A. low-context B. monochronic C. polychronic D. popular E. high-context Answer: E Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

71.

Which of the following is true with regard to high-context cultures? A. They rely on nonverbal and situational cues. B. The main part of the real message is conveyed by what is actually said. C. Body language and the physical setting are ignored in the communication process.

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D. They emphasize the importance of doing one thing at a time. E. They focus on using time to accomplish many different things at once. Answer: A Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 72.

Cultures where it is possible to begin making business deals only after social relationships are established are referred to as ________ cultures. A. ethnocentric B. high-context C. xenocentric D. polychronic E. popular Answer: B Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

73.

Monochronic cultures focus on ________. A. gestures B. written language C. social context D. time E. space Answer: D Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

74.

In ________ cultures, people tend to do one thing at a time. A. ethnocentric B. xenocentric C. monochronic D. popular E. high-context Answer: C Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

75.

Most businesspeople in the United States schedule meetings with specific people and focus on a specific agenda for an allotted time. This is characteristic of a(n) ________ culture.

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A. polychronic B. low-context C. ethnocentric D. high-context E. monochronic Answer: E Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 76.

In ________ cultures, time is used to accomplish many different things at once. A. polychronic B. ethnocentric C. low-context D. high-context E. monochronic Answer: A Page: 121 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

77.

Which of the following is true about members of polychronic cultures? A. They are known to be punctual without exception. B. They are generally reluctant to accomplish many different things at once. C. They are flexible toward time. D. They regard time as the primary focus of business. E. They prefer following a pre-determined sequence for accomplishing a given task at a given time. Answer: C Page: 122 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

78.

Thomas Wiegler, a German businessman, decided to meet one of his clients in the latter’s office in Abu Dhabi. He was frustrated to find that after an initial warm greeting, his client continued to deal with the continuous stream of visitors flowing in and out of his office. Thomas concluded that he was not being given the dedicated attention he deserved. Thomas closely identifies with ________ cultural values. A. low-context B. monochronic C. high-context D. xenocentric E. polychronic Answer: B Page: 122

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Learning Objective: 5.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 79.

________ is how people use space to communicate. A. Proxemics B. Kinesics C. Haptics D. Chronemics E. Vocalics Answer: A Page: 122 Learning Objective: 5.3 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

80.

Which of the following is true about proxemics? A. It studies the importance of time in the context of business. B. It emphasizes the importance of gestures in the communication process. C. It emphasizes verbal communication. D. It focuses on the use of space in communication. E. It focuses on the comparative analysis of the cultural traits of different groups. Answer: D Page: 122 Learning Objective: 5.3 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

81.

Ross is currently writing his doctoral thesis which is a comparative study on the use and treatment of physical space in communication between people across cultures. His thesis is a study on ________. A. haptics B. kinesics C. vocalics D. chronemics E. proxemics Answer: E Page: 122 Learning Objective: 5.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

82.

Which of the following describes cultural tightness-looseness? A. The ability to accept and adapt to new cultures B. The strength of social norms and degree of sanctioning within societies C. The confusion and discomfort a person experiences when in an unfamiliar culture D. The tendency to consider one’s culture superior to others

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E. The tendency to rely on nonverbal and situational cues Answer: B Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 83.

Which of the following is a focus of cultural tightness-looseness? A. The tolerance that exists for any deviations from norms B. The superiority of home country values C. The first interaction with a new culture and the anxieties associated with it D. The time when a new culture becomes the subject of one’s criticism E. The ability to interpret the real message from what is being said Answer: A Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

84.

In a ________ culture, people guide their behavior according to expectations set by very clear social norms. A. low-context B. loose C. monochronic D. polychronic E. tight Answer: E Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

85.

Which of the following countries has a tight culture? A. Netherlands B. Hungary C. Malaysia D. Australia E. Ukraine Answer: C Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

86.

The goal set by tight cultures is to: A. fit in. B. stand out.

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C. speak out. D. attract attention. E. question the validity of social norms. Answer: A Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 87.

In a loose culture: A. people guide their behavior according to expectations set by very clear social norms. B. people are expected to fit in. C. people are discouraged to speak out. D. social norms may be broad and ambiguous. E. conformity to social norms is uniform and absolute. Answer: D Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

88.

Which of the following countries has a loose culture? A. South Korea B. Ukraine C. Japan D. Malaysia E. India Answer: B Page: 123 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

89.

Which of the following is true about loose cultures? A. A high degree of conformity to social norms is present B. Tolerance for deviation is absent C. The goal is to fit in D. Social norms are narrow and unambiguous E. Non-criminal deviations from norms tend to be tolerated Answer: E Page: 123-124 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

90.

A mix of cultural tightness and looseness in a cross-cultural team may result in ________. A. synchronized performance

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B. consistent productivity C. soft or unstated conflict D. mitigation of conflict E. uniform and high inclination to volunteer Answer: C Page: 124 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 91.

In a cross-cultural team, a member from the loose culture may show an inclination for which of the following? A. Looking toward formal authority for direction B. Criticizing others C. Being slow to volunteer D. Being slow to display emotion E. Always being on time Answer: B Page: 124 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

92.

Which of the following is a cultural dimension identified by Geert Hofstede? A. Social orientation B. Cultural intelligence C. Social context D. Uncertainty avoidance E. Socialization Answer: D Page: 124 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

93.

The ________ fallacy assumes that a generalized cultural value applies equally well to all members of the culture. A. ecological B. naturalist C. etymological D. definist E. existential Answer: A Page: 124 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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94.

Anna, a resident of Ukraine, decides to travel to the United States for a vacation. Her impression about Americans, who she thinks are strongly individualistic without exception, derives from Jacob. Jacob was once Anna’s tenant, and the only American she has ever met. Anna is in the danger of falling prey to the ________. A. regression fallacy B. ethical dilemma C. Samaritan’s dilemma D. existential fallacy E. ecological fallacy Answer: E Page: 124 Learning Objective: 5.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

95.

________ is the degree to which a society accepts unequal distribution of power. A. Masculinity-femininity B. Proxemics C. Power distance D. Individualism-collectivism E. Power tactics Answer: C Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

Which of the following is true about people in high-power-distance cultures? A. They do not accept differences in rank. B. They tend to be tolerant of power. C. They display a preference for letting people make their own decisions. D. They display egalitarian relationships. E. They have no respect for age. Answer: B Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

97.

The extensive use of words like “I” and “me” in conversations and meetings reflect a cultural tendency toward ________. A. collectivism B. nationalism C. masculinity D. individualism E. socialism Answer: D

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Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 98.

________ had the highest individualism score of any country in Hofstede’s data. A. United States B. United Kingdom C. Canada D. Australia E. China Answer: A Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

99.

________ is the degree to which a society tolerates risk and change. A. Culture shock B. Cultural assimilation C. Imperialism D. Power distance E. Uncertainty avoidance Answer: E Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

100.

In high-uncertainty-avoidance cultures, one would expect to find a preference for ________. A. openness to change B. innovation C. predictability D. openness to risk E. ambiguity Answer: C Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

101.

Members of low-uncertainty-avoidance cultures display: A. apathy toward innovation. B. affinity for rules. C. preference for structure. D. openness to change. E. rigidity toward change.

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Answer: D Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 102.

Sebastian DuPont, a successful artist, lives and works in Paris. He does not travel much. Like many of his peers, he too has declined multiple offers to teach in famous schools of art outside Paris. He does not prefer change and likes predictability, order, and structure in his life. DuPont displays traits of being a member of a ________ culture. A. low-uncertainty-avoidance B. short-term oriented C. long-term oriented D. xenocentric E. high-uncertainty-avoidance Answer: E Page: 125 Learning Objective: 5.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

103.

Which of the following defines masculinity-femininity? A. It is the degree to which a society values assertiveness and materialism versus feelings, relationships, and quality of life. B. It is the ratio of men and women in the workforce at a given point of time. C. It is the degree to which a society values the role of men and women as the propagators of its culture. D. It refers to the core differences of gender that are mirrored in the interaction between a man and a woman. E. It refers to the importance of men versus women in a society. Answer: A Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

104.

________ has the highest masculinity score in Hofstede’s research. A. Malaysia B. Japan C. India D. France E. Germany Answer: B Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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105.

Which of the following expressions points toward a high masculine score? A. Men tend to be physically stronger than women. B. Women tend to have very fixed ideas about what men are like. C. Women tend to be more patient than men. D. Men tend to have a greater tolerance for risk than women do. E. Men tend to have a rigid notion about what women are like. Answer: E Page: 125 Learning Objective: 5.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

106.

________ is the degree to which a society emphasizes short-term or long-term goals. A. Uncertainty avoidance B. Power distance C. Time orientation D. Time preference E. Individualism-collectivism Answer: C Page: 125 Learning Objective: 5.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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Essay Questions 107.

Name and briefly define some common market-entry strategies that help companies go global. Answer: Some common market-entry strategies that help companies go global are global sourcing; exporting and importing; and licensing and franchising. A common first step into international business is global sourcing—the process of purchasing materials, manufacturing components, or locating business services around the world. A second form of international business involves exporting—selling locally made products in foreign markets. The flipside of exporting is importing—buying foreign-made products and selling them in domestic markets. Another form of international business is the licensing agreement whereby foreign firms pay a fee for rights to make or sell another company’s products in a specified region. Franchising is a form of licensing in which the foreign firm buys the rights to use another’s name and operating methods in its home country. Page: 110-112 Learning Objective: 5.1 Difficulty: Moderate AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

108.

Define culture. Explain the importance of cultural intelligence. Answer: Culture is a shared set of beliefs, values, and patterns of behavior common to a group of people. People with cultural intelligence, or the ability to accept and adapt to new cultures, are flexible in dealing with cultural differences and willing to learn from what is unfamiliar. They use

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that learning to self regulate and modify their behaviors to act with sensitivity toward another culture’s ways. In other words, someone high in cultural intelligence views cultural differences not as threats but as learning opportunities. Page: 120-121 Learning Objective: 5.3 Difficulty: Moderate AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 109.

Distinguish between tight and loose cultures. Provide examples. Answer: In a tight culture, such as Malaysia, Korea, or Japan, people guide their behavior according to expectations set by very clear social norms. They try to conform to these norms, understanding that any deviation will be sanctioned and not be tolerated. The goal is to fit in and not stand out. On the other hand, in a loose culture, such as Hungary, Brazil, or Australia, people show general or mixed concern for social norms and these norms may be broad and ambiguous. Conformity is mixed; deviations from norms tend to be tolerated unless they reach criminal territory or the extremes of morality. Page: 123-124 Learning Objective: 5.3 Difficulty: Moderate AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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Ch06: Entrepreneurship and New Ventures

True/False Questions

Self-management is an ability to use objective understanding of personal strengths and weaknesses to keep growing—individually and career-wise. Answer: True Page: 135 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Classic entrepreneurs are risk-taking individuals who take action to pursue opportunities others fail to recognize, or even view as problems or threats. Answer: True Page: 137 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A first-mover advantage comes from being first to exploit a niche or enter a market. Answer: True Page: 137 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Intrapreneurs are entrepreneurs who make significant contributions within large organizations. Answer: True Page: 139 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Entrepreneurs’ belief that they are in control of their own destiny shows that they have an internal locus of control. Answer: True Page: 140 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Entrepreneurs have a tolerance for ambiguity. Answer: True

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Page: 140 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytical skills Bloom’s Taxonomy: Comprehension 7.

Entrepreneurs enjoy being assigned tasks with minimal accountability. Answer: False Page: 140 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Serial entrepreneurship is one way for people, including women and minorities who have hit the “glass ceiling” in their careers or are otherwise cut off from other employment choices, to strike out on their own and gain economic independence. Answer: False Page: 141 Learning Objective: 6.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Classic entrepreneurship is a form of ethical entrepreneurship that seeks novel ways to solve pressing social problems. Answer: False Page: 142 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

Social enterprises have a social mission to help make lives better for underserved populations. Answer: True Page: 142 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

The vast majority of small businesses employ between 100 and 150 persons. Answer: False Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

12.

One of the most common ways to get involved in a small business is to buy and run a franchise. Answer: True

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Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

In a franchise, the franchise parent receives a share of income or a flat fee from the franchisee. Answer: True Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

A startup is a new venture that the entrepreneur is hoping will take shape and prove successful as things move forward. Answer: True Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

Lean startups are permanent, cost-intensive organizations. Answer: False Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

Internet entrepreneurship is the use of the Internet to pursue an entrepreneurial venture. Answer: True Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

In web-based businesses, merchant models involve providing free listings and getting referral fees from online merchants for directing potential customers to them. Answer: False Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

In web-based businesses, freemium models involve selling access to high-value content through a subscription website. Answer: False

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Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 19.

Having a succession plan helps avoid a succession problem. Answer: True Page: 147 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

20.

Small businesses have a high success rate. Answer: False Page: 147 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

Business incubators aid in the development of startups. Answer: True Page: 149 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

The life cycle of an entrepreneurial firm begins with the breakthrough stage. Answer: False Page: 150 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

The breakthrough stage involves establishing the firm and fighting for its existence. Answer: False Page: 150 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

A succession plan describes the direction for a new business and the financing needed to operate it. Answer: False Page: 151 Learning Objective: 6.3

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 25.

In a business plan, the executive summary contains the mission of the company, the details of the owners, and the legal form of the organization. Answer: False Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

26.

A sole proprietorship is simple to start, run, and terminate. Answer: True Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

A sole proprietorship is the most common form of small business ownership in the United States. Answer: True Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

When establishing a corporation, a partnership agreement must be made. Answer: False Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

29.

A limited liability corporation combines the advantages of sole proprietorship, partnership, and corporation. Answer: True Page: 152-153 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

Debt financing requires collateral that pledges business assets or personal assets, such as a home, to secure the loan in case of default. Answer: True Page: 153 Learning Objective: 6.3

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

31.

The term ________ describes strategic thinking and risk-taking behavior that results in the creation of new opportunities. A. business planning B. partnership C. entrepreneurship D. proxemics E. franchising Answer: C Page: 137 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

A ________ entrepreneur is a risk-taking individual who takes action to pursue opportunities others fail to recognize, or even view as problems or threats. A. serial B. classic C. follow-through D. sustainer E. social Answer: B Page: 137 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

The main characteristic of ________ entrepreneurs is that they start and run new ventures over and over again, moving from one interest and opportunity to the next. A. sustainer B. classic C. serial D. first-mover E. necessity-based Answer: C Page: 137 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

A first-mover advantage comes from:

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A. making improvements to existing product lines. B. being the first to exploit a niche or enter a market. C. being the first to take a free-ride on the opportunity created by a pioneer. D. the ability to poach trained personnel from an established business. E. taking risks while strategizing to improve an existing market. Answer: B Page: 137 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 35.

Which of the following is true about intrapreneurs? A. Intrapreneurs are born, not made. B. Intrapreneurs take risks to introduce a new product or process, or pursue innovations that can change the organization in significant ways. C. Intrapreneurs make large investments in new ventures in return for an equity stake in the business. D. Intrapreneurs are entrepreneurs found in small organizations. E. Intrapreneurs are primarily responsible for selling of shares of stock to the public at large. Answer: B Page: 139 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

Rita works at a large cosmetic company. She made an organic hand-softening cream for her personal use. She realized that there was a large market for such a product, and convinced her manager to make her cream a part of the company’s product line. The product soon became a big success, and led to a significant increase in the revenues of her company. Rita is a(n) ________. A. necessity-based entrepreneur B. social entrepreneur C. venture capitalist D. intrapreneur E. serial entrepreneur Answer: D Page: 139 Learning Objective: 6.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

37.

Which of the following is true of entrepreneurs? A. They believe that their destiny is beyond their control. B. They like to avoid risk. C. They have a high need for achievement. D. They are averse to autonomy. E. They have a low tolerance for ambiguity. Answer: C Page: 140

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Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 38.

Entrepreneurs: A. do not like situations with high degree of uncertainty. B. thrive on performance feedback. C. have an external locus of control. D. are unwilling to admit problems and errors. E. do not like autonomy. Answer: B Page: 140 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

Which of the following scenarios demonstrates an entrepreneur who has a tolerance for ambiguity? A. Sam’s decision to modify a pre-existing problem-tackling strategy in his private firm B. Rick’s decision to hire an experienced manager to head his new branch in another state C. Andy’s decision to expand his private firm overseas despite the risk of facing cultural differences D. Stella’s decision to quit her job to enter into a partnership with a well-recognized firm E. Edna’s decision to join her family’s well-established business Answer: C Page: 140 Learning Objective: 6.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

________ takes place because other employment options don’t exist. A. Classic entrepreneurship B. Serial entrepreneurship C. Intrapreneurship D. An initial public offering E. Necessity-based entrepreneurship Answer: E Page: 141 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

Maggie has recently lost her job and has not been able to find employment elsewhere. She has to support her children, and take care of her mortgage. She realizes a niche for chemical-free house cleaning services. Eventually she opens her own house cleaning service. This is an example of ________.

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A. classic entrepreneurship B. serial entrepreneurship C. intrapreneurship D. necessity-based entrepreneurship E. social entrepreneurship Answer: D Page: 141 Learning Objective: 6.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 42.

________ entrepreneurship is one way for people, including women and minorities who have hit the “glass ceiling” in their careers or are otherwise cut off from other employment choices, to strike out on their own and gain economic independence. A. Classic B. Necessity-based C. Follow-through D. Serial E. Sustainable Answer: B Page: 141 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

Social entrepreneurs: A. take risks and create enterprises whose missions are to help make lives better for underserved populations. B. bring buyers and sellers together for online business transactions and take a percentage from the sales. C. are wealthy individuals willing to invest in a new venture in return for an equity stake. D. pursue innovations that can change the organization in significant ways. E. start new ventures because they have few or no other employment and career options. Answer: A Page: 142 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

Drea, a florist, realized the need for easily accessible organic compost in her neighborhood. Her neighborhood consists mainly of senior citizens who are unable to procure their own gardening supplies. She quickly established “We Compost,” a non-profit organization that delivers compost to each household in her neighborhood. This is an example of ________. A. serial entrepreneurship B. classic entrepreneurship C. intrapreneurship D. necessity-based entrepreneurship E. social entrepreneurship

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Answer: E Page: 142 Learning Objective: 6.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 45.

A(n) ________ necessarily has 500 or fewer employees, is independently owned and operated, and does not dominate its industry. A. small business B. social organization C. non-profit organization D. classic entrepreneurship E. Internet entrepreneurship Answer: A Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

46.

A ________ is a business in which the owner of a business sells to another the right to operate the same business in another location. A. non-profit organization B. franchise C. joint venture D. family business E. wholly-owned subsidiary Answer: B Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

47.

Which of the following is true about a franchise? A. It is one of the least common ways to get involved in a business. B. It runs under the franchisee’s name and guidance. C. The franchise parent receives a flat fee from the franchisee. D. It makes use of things like opensource software, while containing costs, staying small, and keeping operations as simple as possible. E. It refers to a business in which material or goods are given to another person, but ownership is retained until the goods are sold. Answer: C Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

48.

A business model is a:

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A. plan that describes the organizational structure of the company. B. plan for making a profit by generating revenues that are greater than costs. C. plan to determine the strengths and viability of a company’s organizational structure. D. model that depicts the detail of an organization’s workflow. E. model that lists the details of all the employees of an organization. Answer: B Page: 144 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 49.

A(n) ________ is a new and temporary venture that is trying to discover a profitable business model for future success. A. family business B. intrapreneurship C. startup D. business incubator E. acquisition Answer: C Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

50.

Lean startups: A. aim to create a sophisticated product with a big budget. B. focus on increasing their acquisitions. C. establish a complex and detailed work structure. D. aim to keep operations as simple as possible. E. focus on making lives better for underserved populations. Answer: D Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

With respect to web-based business models, advertising models involve: A. bringing buyers and sellers together for online business transactions and taking a percentage from the sales. B. providing a meeting point sold by subscription or supported by advertising. C. offering a free service and encouraging users to buy extras. D. providing free information or services and then generating revenues from paid commercials made available to viewers. E. providing free service in exchange for collecting information on users and selling it to other businesses. Answer: D Page: 145 Learning Objective: 6.2

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 52.

Which of the following web-based business models involves bringing buyers and sellers together for online business transactions and taking a percentage from the sales? A. Advertising model B. Brokerage model C. Community model D. Freemium model E. Infomediary model Answer: B Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

53.

A(n) ________ model is a web-based business model that involves providing a meeting point sold by subscription or supported by advertising. A. advertising B. community C. brokerage D. infomediary E. freemium Answer: B Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

The freemium model, a web-based business model, involves: A. providing free information or services and then generating revenues from paid advertising made available to viewers. B. offering a free service and encouraging users to buy extras. C. providing free listings and getting referral fees from online merchants for directing potential customers to them. D. providing free service in exchange for collecting information on users and selling it to other businesses. E. selling access to high-value content through a subscription website. Answer: B Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

The ________ model is a web-based business model that involves providing free service in exchange for collecting information on users and selling it to other businesses. A. advertising

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B. brokerage C. infomediary D. freemium E. referral Answer: C Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 56.

In the context of web-based business models, a merchant model involves: A. bringing buyers and sellers together for online business transactions and taking a percentage from the sales. B. providing a meeting point sold by subscription or supported by advertising. C. offering a free service and encouraging users to buy extras. D. providing free service in exchange for collecting information on users and selling it to other businesses. E. e-tailing or selling products direct to customers through the Web. Answer: E Page: 145 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

Sue had to quit her job to run her mother’s bookstore when her mother passed away. The store was earning good profits and so she decided to open a new branch in another state. What kind of a business does Sue own? A. Limited liability corporation B. Social enterprise C. Family business D. Corporation E. Necessity-based enterprise Answer: C Page: 146 Learning Objective: 6.2 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

58.

In family businesses, ________ refers to the problem that arises when members of the family have major disagreements over how the business should be run. A. budget deficit B. debt financing C. an ethical dilemma D. a reverse culture shock E. a family business feud Answer: E Page: 147 Learning Objective: 6.2

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 59.

A(n) ________ refers to the issue of who will run the business when the current head leaves. A. family business integration B. family business feud C. family disagreement D. succession problem E. role confusion Answer: D Page: 147 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

60.

Todd and Smith are both general managers at Kennith & Sons, their father’s business. After a heart attack, their father decides to retire. He is faced with the challenge of choosing between one of his two equally capable sons to replace him in the business. Which type of problem related to family businesses, is the father facing? A. Family business integration B. Succession problem C. Family disagreement D. Role confusion E. Family business feud Answer: B Page: 147 Learning Objective: 6.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

61.

A(n) ________ plan describes how the leadership transition and related financial matters will be handled when the time for changeover arrives. A. partnership B. startup C. succession D. liability E. equity Answer: C Page: 147 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

Insufficient financing implies: A. not taking the time to consolidate a position, fine-tune the organization, and systematically meet the challenges of growth.

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B. not having enough money available to maintain operations while still building the business and gaining access to customers and markets. C. not having expertise in the essentials of business operations, including finance. D. not keeping track of the numbers, and failure to keep business finances to best advantage. E. not making the best use of existing monies. Answer: B Page: 147 Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 63.

Stating that the failure of a small business was due to “lack of experience” implies: A. not having expertise in the essentials of business operations, including finance, purchasing, selling, and production. B. not taking the time to craft a vision and mission, nor to formulate and properly implement a strategy. C. not keeping track of the numbers, and failure to control business finances and use existing monies to best advantage. D. not taking the time to consolidate a position, fine-tune the organization, and systematically meet the challenges of growth. E. not having sufficient know-how to run a business in the chosen market or geographical area. Answer: E Page: 147 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

64.

Delilah decided to open her first store in Dallas. Being new to the business, she was unable to cope with the demands of running her store, and after several bad decisions, she finally had to shut it down. What was most likely the main reason for the failure of Delilah’s business? A. Lack of experience B. Insufficient financing C. Lack of commitment D. Ethical failure E. Growing too fast Answer: A Page: 147 Learning Objective: 6.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

65.

________ implies that a business owner does not have the skill-sets required in the essentials of business operations, including finance, purchasing, selling, or production. A. Lack of experience. B. Insufficient financing C. Lack of expertise D. Ethical failure E. Growing too fast

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Answer: C Page: 148 Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 66.

Which of the following best describes lack of commitment? A. Not having enough funding to maintain operations while still building the business and gaining access to customers and markets B. Not having sufficient know-how to run a business in the chosen market or geographical area C. Not having expertise in the essentials of business operations, including finance, purchasing, selling, and production D. Falling prey to the temptations of fraud, deception, and embezzlement E. Not devoting enough time to the requirements of running a competitive business Answer: E Page: 148 Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

Which of the following best describes lack of strategy and strategic leadership? A. Not taking the time to craft a vision and mission, nor to formulate and properly implement a plan B. Not having enough funding to maintain operations while still building the business and gaining access to customers and markets C. Not having sufficient know-how to run a business in the chosen market or geographical area D. Falling prey to the temptations of fraud, deception, and embezzlement E. Not having expertise in the essentials of business operations, including finance, purchasing, selling, and production Answer: A Page: 148 Learning Objective: 6.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

68.

Sheila has been successfully running a salon for over a year. She decided to use her profits and expand her business by selling her homemade organic hair care products. This involved miscellaneous costs that exhausted her funds, and she had to file for bankruptcy. Which of the following is most likely the main reason for Sheila’s failure? A. Lack of commitment B. Poor financial control C. Ethical failure D. Late entry into the business E. Lack of motivation Answer: B Page: 148 Learning Objective: 6.2 Difficulty: Moderate

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AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 69.

Mel, who owns a popular restaurant, plans to expand his business. After reading favorable reviews, he decides to invest in an acquisition unaware that it is a dummy corporation. This fraud leads to significant financial losses for him, and he is forced to shut down his business. Which of the following is most likely to be the main reason for the failure of Mel’s business? A. Lack of motivation B. Lack of strategy C. Lack of commitment D. Ethical failure E. Late entry into the business Answer: D Page: 148 Learning Objective: 6.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

70.

________ offer space, shared services, and advice to help get small businesses started. A. Business councilors B. Business incubators C. Succession plans D. Social advisors E. Internet entrepreneurships Answer: B Page: 149 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

The goal of business incubators is to: A. ensure that established businesses retain their competitive advantage. B. aid third generation family businesses resolve family business feuds. C. formulate a succession plan for established family businesses. D. increase the survival rates for new startups. E. establish social enterprises. Answer: D Page: 149 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

72.

Which of the following is true of small business development centers? A. They concentrate on establishing social enterprises. B. They exclusively support all non-profit organizations in the U.S. C. They are supported by the U.S. Small Business Administration. D. They offer guidance to entrepreneurs trying to invest in acquisitions. E. They aid in the development of public sectors.

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Answer: C Page: 149 Learning Objective: 6.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 73.

According to the life cycle of entrepreneurial firms, the birth stage signifies the stage in which the: A. entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. B. entrepreneur experiences the advantages of market success and financial stability. C. entrepreneur faces the continuing management challenge of remaining competitive in a changing environment. D. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. E. entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace. Answer: E Page: 150 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

74.

According to the life cycle of entrepreneurial firms, the breakthrough stage signifies the stage in which the: A. entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. B. entrepreneur experiences the advantages of market success and financial stability. C. entrepreneur faces the continuing management challenge of remaining competitive in a changing environment. D. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. E. entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace. Answer: D Page: 150 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

According to the life cycle of entrepreneurial firms, the maturity stage signifies the stage in which the: A. entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace. B. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. C. entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. D. entrepreneur experiences the advantages of market success and financial stability while facing the continuing management challenge of remaining competitive in a changing environment.

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E. entrepreneur formulates a plan for making a profit by generating revenues that are greater than the costs of doing business. Answer: D Page: 150 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 76.

________ leadership brings the venture into being and sees it through the early stages of an enterprise. A. Transactional B. Entrepreneurial C. Bureaucratic D. Transformational E. Democratic Answer: B Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

________ leadership manages and leads the venture into maturity as an ever-evolving and stillgrowing enterprise. A. Strategic B. Entrepreneurial C. Bureaucratic D. Transformational E. Democratic Answer: A Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

78.

A(n) ________ plan describes the direction for a new business and the financing needed to operate it. A. succession B. business C. structural D. operational E. feasibility Answer: B Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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79.

In a business plan, the overview of the business purpose and the business model for making money is contained in the ________. A. market strategy B. market description C. company description D. industry analysis E. executive summary Answer: E Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

In a standard business plan, an organization’s mission, ownership details and legal forms are listed under ________. A. market strategy B. executive summary C. company description D. industry analysis E. staffing description Answer: C Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

In a business plan outline, the marketing strategy contains the: A. description of the size of market, competitor strengths and weaknesses, and five-year sales goals. B. overview of the business purpose and the business model for making money. C. description of the management and staffing skills needed and available, compensation, and human resource systems. D. details of the product characteristics, distribution, promotion, pricing, and market research. E. description of cash flow projections for one to five years, breakeven points, and phased investment capital. Answer: D Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

82.

In a business plan outline, the operations description contains the: A. description of cash flow projections for one to five years, breakeven points, and phased investment capital. B. details of the product characteristics, distribution, promotion, pricing, and market research. C. manufacturing or service methods, supplies and suppliers, and control procedures used. D. description of the management and staffing skills needed and available, compensation, and human resource systems.

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E. overview of the business purpose and the business model for making money. Answer: C Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 83.

In a business plan outline, ________ detail the amount of funds needed to run the business, amount available, and amount requested from new sources. A. capital needs B. milestones C. performance needs D. liability needs E. capability needs Answer: A Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytical skills Bloom’s Taxonomy: Knowledge

84.

In a business plan outline, the ________ provides details of cash flow estimate for one to five years, breakeven points, and phased investment capital. A. staffing description B. financial projection C. capital need D. milestones E. operations description Answer: B Page: 151 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following forms of ownership holds the business owner personally liable for business debts and claims? A. Sole proprietorship B. Corporation C. Limited liability partnership D. General partnership E. Limited liability corporation Answer: A Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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86.

Nina has a passion for designing clothes and decides to open her own clothing store. She starts it by taking personal loans from family and friends, and hires a few people to run the store She maintains a tight control over costs as she does not want to incur further debts. Nina’s store is an example of a ________. A. sole proprietorship B. corporation C. limited liability partnership D. general partnership E. limited liability corporation Answer: A Page: 152 Learning Objective: 6.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

87.

In the context of business ownerships, a ________ is established when two or more people agree to contribute resources to start and operate a business together. A. corporation B. limited liability corporation C. partnership D. social enterprise E. business incubator Answer: C Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

88.

Harry and Sally own a pet grooming business, “Harry-meets-Sally.” Harry manages the financial responsibilities while Sally manages the customers. This is an example of a ________. A. sole proprietorship B. general partnership C. corporation D. limited liability partnership E. limited liability corporation Answer: B Page: 152 Learning Objective: 6.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

89.

“John’s Designs” is an architectural firm owned by four investors. John is the only one who handles the day-to-day business management of the firm, though the profits are shared equally with the losses being restricted to the amount invested by each. This is an example of a ________. A. limited partnership B. general partnership C. corporation

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D. limited liability corporation E. sole proprietorship Answer: A Page: 152 Learning Objective: 6.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 90.

A ________, common among professionals such as accountants and attorneys, limits the liability of one partner for the negligence of another. A. general partnership B. sole proprietorship C. limited partnership D. limited liability corporation E. limited liability partnership Answer: E Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

91.

Which of the following is true about a corporation? A. It combines the advantages of the other forms—sole proprietorship, partnership, and limited liability corporation. B. Only a for-profit business can be registered as a corporation. C. It exists separately from its owners. D. For tax purposes, it functions as a partnership. E. For liability purposes, it functions as a partnership. Answer: C Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

Which of the following characteristics of a corporation gives it a life of its own that can extend beyond that of its owners? A. It grants the organization certain legal rights. B. It is a legal entity that is chartered by the state. C. The cost for incorporating a corporation is very high. D. The corporation becomes responsible for its own liabilities. E. Incorporated businesses require complex documentation. Answer: D Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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93.

Which of the following is true of a limited liability corporation? A. It is commonly identified by the “Inc.” designation in a name. B. It consists of a general partner and one or more “limited” partners who do not participate in day-to-day business management. C. The business owner is personally liable for business debts and claims. D. For tax purposes, it functions as a sole proprietorship in the case of a single owner. E. It involves the owners going into debt by borrowing money from another person, bank, or financial institution. Answer: D Page: 153 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

For liability purposes, a limited liability corporation functions like a ________ and protects the assets of owners against claims made against the company. A. sole proprietor B. corporation C. general partnership D. limited partnership E. limited liability partnership Answer: B Page: 153 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

________ involves going into debt by borrowing money from another person, bank, or financial institution. A. Debt financing B. Risk management C. Securitization D. Debt consolidation E. Equity financing Answer: A Page: 153 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

________ involves giving ownership shares in the business to outsiders in return for their cash investments. A. Debt consolidation B. Equity financing C. Debt financing D. Securitization E. Risk management Answer: B

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Page: 154 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 97.

________ facilitates making large investments in new ventures in return for an equity stake in the business. A. State-directed financing B. Entrepreneurial capitalism C. Venture capitalism D. Debt financing E. Oligarchic capitalism Answer: C Page: 154 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

When shares of stock are first sold to the public and begin trading on a stock exchange, it is referred to as ________. A. venture capitalism B. equity financing C. angel investing D. an initial public offering E. an Internet entrepreneurship Answer: D Page: 154 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

________ are wealthy individuals willing to invest in a new venture in return for an equity stake. A. Limited liability partners B. Sole proprietors C. General partners D. Debt financers E. Angel investors Answer: E Page: 154 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions

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100.

Write a short note on the attitudes and personal interests of entrepreneurs. Answer: The typical personality traits and characteristics of entrepreneurs are: • Internal locus of control: Entrepreneurs believe that they are in control of their own destiny; they are self-directing and like autonomy. • High energy level: Entrepreneurs are persistent, hardworking, and willing to exert extraordinary efforts to succeed. • High need for achievement: Entrepreneurs are motivated to accomplish challenging goals; they thrive on performance feedback. • Tolerance for ambiguity: Entrepreneurs are risk takers; they tolerate situations with high degrees of uncertainty. • Self-confidence: Entrepreneurs feel competent, believe in themselves, and are willing to make decisions. • Passion and action orientation: Entrepreneurs try to act ahead of problems; they want to get things done and not waste valuable time. • Self-reliance and desire for independence: Entrepreneurs want independence; they are selfreliant; they want to be their own bosses, not work for others. • Flexibility: Entrepreneurs are willing to admit problems and errors, and are willing to change a course of action when plans aren’t working. Page: 140 Learning Objective: 6.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

101.

Give the outline of a sample business plan. Answer: A business plan describes the direction for a new business and the financing needed to operate it. Although there is no single template, it is generally agreed that a good business plan includes an executive summary, covers certain business fundamentals, is well organized with headings and easy to read, and runs no more than about 20 pages in length. Here is a sample business plan outline. • Executive summary—overview of the business purpose and the business model for making money. • Industry analysis—nature of the industry, including economic trends, important legal or regulatory issues, and potential risks. • Company description—mission, owners, and legal form. • Products and services description—major goods or services, with competitive uniqueness. • Market description—size of market, competitor strengths and weaknesses, five year sales goals. • Marketing strategy—product characteristics, distribution, promotion, pricing, and market research. • Operations description—manufacturing or service methods, supplies and suppliers, and control procedures. • Staffing description—management and staffing skills needed and available, compensation, and human resource systems. • Financial projection—cash flow projections for one to five years, breakeven points, and phased investment capital. • Capital needs—amount of funds needed to run the business, amount available, and amount requested from new sources. • Milestones—a timetable of dates showing when key stages of the new venture will be completed. Page: 151-152 Learning Objective: 6.3

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 102.

Write a short note on business partnerships. Answer: A partnership is formed when two or more people agree to contribute resources to start and operate a business together. It is usually backed by a legal and written partnership agreement. Business partners agree on the contribution of resources and skills to the new venture, and on the sharing of profits and losses. The simplest and most common form is a general partnership where the partners share management responsibilities. A limited partnership consists of a general partner and one or more “limited” partners who do not participate in day-to-day business management. They share in the profits, but their losses are limited to the amount of their investment. A limited liability partnership, common among professionals such as accountants and attorneys, limits the liability of one partner for the negligence of another. Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

What is a corporation? What advantages does a corporate form offer? Answer: A corporation, commonly identified by the “Inc.” designation in a name, is a legal entity that is chartered by the state and exists separately from its owners. The corporation can be for profit, such as Microsoft, Inc., or nonprofit, such as Count-Me-In, Inc.—a firm featured early in the chapter for helping women entrepreneurs get started with small loans. The corporate form offers two major advantages: (1) It grants the organization certain legal rights (e.g., to engage in contracts), and (2) the corporation becomes responsible for its own liabilities. This separates the owners from personal liability and gives the firm a life of its own that can extend beyond that of its owners. Page: 152 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

104.

Describe equity financing. Answer: Equity financing is an alternative to debt financing. It involves giving ownership shares in the business to outsiders in return for their cash investments. This money does not need to be paid back. It is an investment, and the investor assumes the risk for potential gains and losses. The equity investor gains some proportionate ownership control in return for taking that risk. Page: 154 Learning Objective: 6.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 07: Information and Decision Making

True/False Questions

The raw facts and observations made useful and meaningful for decision making is called information. Answer: True Page: 163 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Analytical competency is the ability to understand new technologies and to use them to their best advantage. Answer: False Page: 163 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Public information is the information gathered from stakeholders and the external environment. Answer: False Page: 166 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A performance threat occurs when the actual performance is less than desired or is moving in an unfavorable direction. Answer: True Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A performance opportunity offers a chance for a better future if the right steps are taken. Answer: True Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Problem avoiders deal reasonably well with performance threats but miss many performance opportunities. Answer: False Page: 168

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Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Problem solvers actively process information and constantly look for problems to solve. Answer: False Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Intuitive thinking approach tends to work best in situations where facts are limited and few decision precedents exist. Answer: True Page: 169 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Sensation thinkers are comfortable with abstraction and unstructured situations. Answer: False Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

Intuitive feelers prefer broad and global issues, and value flexibility and human relations. Answer: True Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

Structured problems can be dealt with by programmed decisions as they are routine and occur over and over again. Answer: True Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

Decision making in a certain environment requires the use of probabilities to estimate the likelihood that a particular outcome will occur. Answer: False Page: 173 Learning Objective: 7.2 Difficulty: Moderate

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

A risk environment is a decision situation in which factual information is available about the possible alternative courses of action and their outcomes. Answer: False Page: 173 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

Uncertain environments force managers to rely heavily on intuition, judgment, informed guessing, and hunches. Answer: True Page: 174 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

A classical decision model describes decision making within the constraints of limited information and alternatives. Answer: False Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

A manager who is choosing the first acceptable alternative that comes to his or her attention while solving a problem is making an optimizing decision. Answer: False Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

17.

A satisficing decision chooses the alternative that gives the best possible solution to a problem. Answer: False Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

The decision-making process is not complete until results are evaluated. Answer: True Page: 179 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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19.

A spotlight question tests the ethics of a decision by exposing it to scrutiny through the eyes of family and community members. Answer: True Page: 180 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

20.

Heuristics are strategies that help in dealing with complex and ambiguous situations. Answer: True Page: 181 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

The availability bias bases a decision on similarity to other situations. Answer: False Page: 181 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

A person decides that a group is aggressive after finding out that some members of that group are aggressive. This is an example of representativeness bias. Answer: True Page: 181 Learning Objective: 7.4 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

23.

Availability bias occurs when decisions are influenced by inappropriate allegiance to a previously existing value or starting point. Answer: False Page: 182 Learning Objective: 7.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

When a problem is evaluated and resolved in the positive or negative context in which it is perceived, it is likely to result in a framing error. Answer: True Page: 182 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

A confirmation error occurs when focusing only on information that is consistent with a decision already made.

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Answer: True Page: 183 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 26.

The confirmation error is also known as the sunk-cost fallacy. Answer: False Page: 183 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

Big-C creativity occurs when average people come up with unique ways to deal with daily events and situations. Answer: False Page: 183 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

The first step in design thinking is visualizing and brainstorming potential solutions in collaboration with others. Answer: False Page: 184 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

Creative people are good at making connections among seemingly unrelated facts or events. Answer: True Page: 184 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

Creativity potential blossoms best when it has management support and the right organizational cultures. Answer: True Page: 185 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

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31.

________ competency is the ability to locate, gather, and organize meaningful data for use in decision making. A. Technological B. Interpersonal C. Information D. Innovation E. Analytical Answer: C Page: 163 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

The ability to evaluate and examine information to make actual decisions and solve real problems is known as ________ competency. A. innovation B. analytical C. technological D. interpersonal E. information Answer: B Page: 163 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

The term ________ describes the systematic evaluation and analysis of information to make decisions. A. tactics B. assay C. heuristics D. analytics E. strategy Answer: D Page: 163 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

________ is the process of tapping information systems to extract and report data in organized ways that are helpful to decision makers. A. Analytics B. Strategic opportunism C. Satisficing D. Heuristics E. Business intelligence Answer: E Page: 164 Learning Objective: 7.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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35.

________ is the process of identifying a discrepancy between an actual and a desired state of affairs, and then taking action to resolve it. A. Error mapping B. Scenario planning C. Problem solving D. Risk taking E. Opportunity seeking Answer: C Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

Managers who are passive in gathering information, and are unwilling to make decisions and deal with problems are referred to as problem ________. A. seekers B. creators C. defenders D. avoiders E. claimers Answer: D Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

37.

An IT program manager realises that there are defects in the product delivered. However, he assumes that the users will not use the application that is defective and does not make efforts to rectify it. This manager is most likely a problem ________. A. seeker B. creator C. defender D. avoider E. claimer Answer: D Page: 168 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

38.

The managers who are regarded as problem solvers: A. try to solve problems only when they are forced by the situation. B. unwillingly gather information, not wanting to make decisions and deal with problems. C. anticipate performance threats and opportunities, and take action to gain an advantage. D. ignore information that would otherwise signal the presence of a performance threat. E. actively process information and constantly look for problems to solve. Answer: A Page: 168

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Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 39.

The marketing manager of a firm receives a lot of complaints from customers regarding late delivery of products. After he receives the complaints, he takes appropriate measures to rectify the issues in the supply chain. He is most likely a ________. A. problem defender B. problem avoider C. problem claimer D. problem seeker E. problem solver Answer: E Page: 168 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

Which of the following traits is associated with problem seekers? A. They are passive in information gathering, not wanting to make decisions and deal with problems. B. They are willing to make decisions and try to solve problems, but only when forced by the situation. C. They ignore information that would otherwise signal the presence of a performance opportunity or threat. D. They are reactive in gathering information to solve problems after, but not before, they occur. E. They anticipate performance threats and opportunities, and take action to gain an advantage. Answer: E Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

A medical officer in a multispecialty hospital proactively finds customer service deficiencies and takes remedial measures in advance. This trait of the medical officer shows that he is a ________. A. problem defender B. problem avoider C. problem claimer D. problem seeker E. problem solver Answer: D Page: 168 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

42.

Problem solvers differ from problem seekers as problem solvers:

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A. actively process information and constantly look for problems to solve. B. are willing to make decisions and try to solve problems, but only when forced by the situation. C. anticipate performance threats and opportunities, and take action to gain advantage. D. are passive in information gathering, not wanting to make decisions and deal with problems. E. ignore information that would otherwise signal the presence of a performance opportunity threat. Answer: B Page: 168 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 43.

Which of the following is true about systematic thinking? A. It is often imaginative and works best in situations where facts are limited and few decision precedents exist. B. It uses a quick and broad evaluation of the situation and the possible alternative courses of action. C. Managers can be expected to deal with many aspects of a problem at once, and consider hunches based on past experience. D. A person approaches a problem in a rational, step-by-step, analytical fashion. E. It is always possible for the firm’s top managers to make systematic fact-based decisions. Answer: D Page: 169 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

Dr. Watson initially conducts the basic medical tests. Once he examines the reports from these tests, he suggests more specific tests to the patients. He also examines all the reports in detail before suggesting any treatment. This type of problem solving in a step-by-step fashion is known as ________ thinking. A. heuristic B. systematic C. intuitive D. spontaneous E. flexible Answer: B Page: 169 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

45.

Managers who are ________, make a plan before taking action, and carefully search for information to facilitate problem solving in a step-by-step fashion. A. flexible B. systematic C. intuitive D. spontaneous

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E. instinctive Answer: B Page: 169 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 46.

A manager using ________ thinking is flexible and spontaneous in problem fixing. A. systemic B. lateral C. systematic D. design E. intuitive Answer: E Page: 169 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

47.

Alex, a manager at a mining firm, is good at handling crisis situations. He is spontaneous in problem solving, has a flexible approach, and provides quick alternative courses of action. This type of approach for problem solving is known as ________ thinking. A. systematic B. analytical C. intuitive D. systemic E. lateral Answer: C Page: 169 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

48.

________ thinking is an ability to address many problems at once. A. Lateral B. Intuitive C. Systematic D. Critical E. Multidimensional Answer: E Page: 170 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

49.

Daniel, a manager at a restaurant, has the ability to deal with numerous problems at once and provide effective solutions. He has the ability to map many problems into one network, and take decisions that benefit the organization in the short and the long-run. Daniel’s effectiveness reveals that he most likely uses ________ thinking. A. critical

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B. multidimensional C. lateral D. intuitive E. heuristic Answer: B Page: 170 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 50.

Which of the following skills refers to the ability to remain focused on long-term objectives while being flexible enough to resolve short-term problems and opportunities in a timely manner? A. Information competency B. Strategic opportunism C. Systematic thinking D. Management analytics E. Performance planning Answer: B Page: 170 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

Martha has succeeded as a manager due to her ability to remain focused on long-term objectives. She is flexible in her approach and provides effective and timely solutions for most of the problems, maintaining focus on the long-term goals. This skill of Martha is known as ________. A. technological competency B. strategic opportunism C. systematic thinking D. information competency E. intuitive thinking Answer: B Page: 170 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

52.

________ tend to emphasize the impersonal rather than the personal and take a realistic approach to problem solving. A. Intuitive feelers B. Intuitive thinkers C. Sensation feelers D. Intuitive seekers E. Sensation thinkers Answer: E Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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53.

Emily emphasizes on the impersonal, tends to take a realistic approach to problem solving and prefers facts and clear goals. She likes to be in situations of high control and prefers problem solving in a certain environment. Emily can be regarded as a(n) ________. A. sensation feeler B. idealistic thinker C. sensation thinker D. intuitive feeler E. intuitive thinker Answer: C Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

54.

The ________ are comfortable with unstructured situations, and they tend to be idealistic and prone toward intellectual and theoretical positions. A. intuitive feelers B. intuitive thinkers C. sensation feelers D. sensation seekers E. sensation thinkers Answer: B Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

Shaun tends to emphasize on the impersonal and takes a logical approach to problem solving, but usually avoids details. He is prone toward intellectual and theoretical positions and is comfortable with unstructured situations. These traits show that Shaun is a(n) ________. A. sensation feeler B. idealistic thinker C. sensation thinker D. intuitive feeler E. intuitive thinker Answer: E Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

56.

________ are insightful, comfortable with intangibles, and value flexibility and human relationships. A. Sensation feelers B. Intuitive thinkers C. Sensation seekers D. Sensation thinkers E. Intuitive feelers Answer: E

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Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 57.

Kelvin values flexibility and human relations while making decisions. He prefers broad and global issues, tends to avoid details during problem solving, and is comfortable with intangibles. Kelvin is most likely a(n) ________. A. sensation feeler B. idealistic thinker C. sensation thinker D. intuitive feeler E. intuitive thinker Answer: D Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

58.

________ are open communicators, tend to be realistic, and emphasize on both analysis and human relations. A. Intuitive feelers B. Intuitive thinkers C. Sensation feelers D. Intuitive seekers E. Sensation thinkers Answer: C Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

Sharon focuses on facts and tends to take a realistic approach to problem solving. She emphasizes analysis. She is an open communicator, is responsive to feelings, and values human relations. These characteristics show that Sharon is a(n) ________. A. sensation thinker B. intuitive feeler C. intuitive thinker D. sensation feeler E. idealistic thinker Answer: D Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

60.

Sensation thinkers differ from intuitive thinkers as intuitive thinkers: A. are insightful and prefer broad and global issues. B. are comfortable with abstraction and unstructured situations. C. like hard facts, clear goals, certainty, and situations of high control.

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D. tend to emphasize the impersonal rather than the personal and take a realistic approach to problem solving. E. are open communicators and sensitive to feelings and values. Answer: B Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 61.

The problems that are familiar, straight forward and clear with respect to information needs are called ________ problems. A. ambiguous B. undefined C. structured D. framing E. uncertain Answer: C Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

Judith has been asked to prepare a report on the profits the company earned in the current financial year in its domestic market and compare it with the previous year’s reports for the same market. The type of problem faced by Judith in the above scenario is a(n) ________ problem. A. unstructured B. structured C. ambiguous D. framing E. uncertain Answer: B Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

63.

Unstructured problems: A. are clear with respect to information needs. B. can be resolved using solutions that are readily available from past experience. C. can be resolved with a high degree of certainty. D. are ambiguous and contain information deficiencies. E. are routine and occur over and over again. Answer: D Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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64.

Chelsey has been asked to prepare a report on the best advertising campaign for the new product her company is launching in a new market. The type of problem being faced by Chelsey in the above situation is a(n) ________ problem. A. integrated B. anticipated C. computational D. certain E. unstructured Answer: E Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

65.

A(n) ________ decision applies a solution from past experience to a routine problem. A. unique B. nonprogrammed C. tactical D. nonrecurring E. programmed Answer: E Page: 171 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

66.

Melissa, a manager in the customer service division of a company, usually takes decisions to resolve customer complaints based on her previous experiences and the standard procedures set by the company. The type of decision being made by Melissa is known as a ________ decision. A. unstructured B. tactical C. nonrecurring D. programmed E. unique Answer: D Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

67.

A decision that applies a specific solution crafted for a unique problem is referred to as a ________ decision. A. repetitive B. nonprogrammed C. satisficing D. programmed E. standard Answer: B Page: 171 Learning Objective: 7.2 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 68.

Erin is devising a marketing plan for introducing his company’s products into a new market. The decisions being made by Erin involve risk and uncertainty as he is unaware of the market conditions. The type of decision being made by Erin in the above situation is called a ________ decision. A. repetitive B. programmed C. standard D. nonprogrammed E. satisficing Answer: D Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

69.

A ________ decision occurs when an unexpected problem arises that can lead to disaster if not resolved quickly and appropriately. A. nonprogrammed B. strategic C. crisis D. programmed E. standard Answer: C Page: 172 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

70.

A(n) ________ environment offers complete information on possible action alternatives and their consequences. A. uncertain B. speculative C. risk D. certain E. unanticipated Answer: D Page: 173 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

Keith has analysed the performance of his team members in the previous year and is allotting them grades to help in their promotions and appraisals. Keith is sure of his decisions and its possible outcomes as he has all the factual information. This type of situation that is ideal for decision-making is known as a(n) ________. A. uncertain environment B. risk environment C. certain environment D. threat environment

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E. unanticipated environment Answer: C Page: 173 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 72.

A(n) ________ environment lacks complete information but offers “probabilities” of the likely outcomes for possible action alternatives. A. uncertain B. secure C. risk D. certain E. definite Answer: C Page: 173 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

Scot, a manager at a hotel decided to launch a new type of cuisine in his restaurant, as the restaurant was incurring losses because of negative feedback on its existing cuisine. Scot had to take a decision immediately to improve the situation and was aware of the possible consequences of his actions. Scot had to take the decision in a(n) ________ environment. A. uncertain B. risk C. certain D. secure E. anticipated Answer: B Page: 173 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

74.

A(n) ________ environment lacks so much information that it is difficult to assign probabilities to the likely outcomes of alternatives. A. anticipated B. risk C. certain D. threat E. uncertain Answer: E Page: 174 Learning Objective: 7.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

Nicholas and his team have been asked to take a decision on implementing a new technology that might help to decrease the production time at their firm. They do not

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have any factual information about its performance as the technology is new, and it is difficult to predict the outcome of their decision. They are forced to rely heavily on their intuition to take the decision. This represents a(n) ________ environment. A. anticipated B. secure C. certain D. precise E. uncertain Answer: E Page: 174 Learning Objective: 7.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 76.

Which of the following is the first step in a decision making process? A. Generating alternative solutions B. Evaluating results C. Evaluating alternative solutions D. Identifying and defining a problem E. Choosing a preferred course of action Answer: D Page: 174 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

Nicole is trying to solve a problem that has resulted in defective products. Nicole has understood that the problem is due to a technical failure and has realised that it has to be corrected immediately to avoid further loss. The next step in Nicole’s decision making process after collecting all the details regarding the problem is to: A. choose a preferred course of action. B. evaluate the implemented solution. C. implement the decision. D. define the problem. E. generate and evaluate alternative solutions. Answer: E Page: 174 Learning Objective: 7.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

78.

A decision making process ends with the: A. choice of a preferred course of action. B. evaluation of implemented solutions. C. implementation of the decision. D. evaluation of alternative solutions. E. generation of alternative solutions. Answer: B Page: 174 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 79.

Which of the following is a common mistake that can occur in the first step of decision making? A. Choosing the first alternative that gives a satisfactory solution B. Abandoning the search for alternatives too quickly C. Lack-of-participation error D. Focusing on symptoms instead of causes E. Not measuring the performance results Answer: D Page: 175 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

A classical decision model differs from a behaviour decision model as the classical model: A. assumes that people act with only partial knowledge about the available action alternatives and their consequences. B. describes decision making with limited information and alternatives. C. recognizes cognitive limitations to our human information-processing capabilities. D. describes how many decisions get made in the ambiguous and fast-paced problem situations. E. assumes that the choice of preferred course of action is made by a decision maker who is fully informed about all possible alternatives. Answer: E Page: 178 Learning Objective: 7.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

Which of the following describes decision making with complete information? A. Classical decision model B. Satisficing decision C. Bounded rationality D. Behavioural decision model E. Cognitive limitation Answer: A Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

82.

A(n) ________ decision chooses the alternative giving the absolute best solution to a problem. A. satisficing B. intuitive C. optimizing D. experimental E. heuristic Answer: C

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Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 83.

Jane, a manager at an IT firm, likes to focus on facts when making decisions. When she faces a well-defined problem and has all the information regarding the possible action alternatives as well as their consequences, she is most likely to make a(n) ________ decision that gives the best possible solution for a problem. A. intuitive B. optimizing C. satisficing D. heuristic E. experimental Answer: B Page: 178 Learning Objective: 7.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

84.

Which of the following describes making decisions within the constraints of limited information and alternatives? A. Decision optimization B. Management analytics C. Bounded rationality D. Classical decision model E. Business intelligence Answer: C Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following describes decision making with limited information and bounded rationality? A. Classical decision model B. Certain environment C. Optimizing decision D. Behavioural decision model E. Unstructured environment Answer: D Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

86.

A decision that chooses the first acceptable alternative that comes to one’s attention is called a(n) ________ decision. A. optimizing B. fully informed C. influential

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D. satisficing E. absolute best Answer: D Page: 178 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 87.

Jonah is not keen on collecting facts and information while solving problems. He is spontaneous in decision making and usually chooses the first possible alternative that comes to his attention, and provides an acceptable solution to a given problem. The type of decision being made by Jonah in such situations is known as a(n) ________ decision. A. absolute best B. satisficing C. conditional D. optimizing E. fully informed Answer: B Page: 178 Learning Objective: 7.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

88.

________ is failure to involve in a decision the persons whose support is needed to implement it. A. Framing error B. Lack-of-participation error C. Bounded rationality D. Confirmation error E. Strategic opportunism Answer: B Page: 179 Learning Objective: 7.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

89.

Strategies such as framing that are used for simplifying decision making are known as ________. A. algorithmics B. statistics C. data mining D. optimizing strategies E. heuristics Answer: E Page: 181 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

The ________ bases a decision on recent information or events.

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A. framing error B. availability bias C. representativeness bias D. confirmation error E. anchoring bias Answer: B Page: 181 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 91.

Mark, the manager of a company, decides not to invest in a new product based on his recollection of a recent product failure, even though the readily available information is infallible and irrelevant. This is an example of ________. A. confirmation error B. framing error C. availability bias D. escalating commitment E. anchoring bias Answer: C Page: 181 Learning Objective: 7.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

The ________ occurs when people assess likelihood of something happening based on its similarity to a stereotyped set of occurrences. A. availability bias B. lack-of-participation error C. representativeness bias D. confirmation error E. adjustment bias Answer: C Page: 181 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

93.

Rupert, who leads the design team in an automobile firm, decides not to invest in a particular technology that helps to improve the fuel efficiency of cars, as other automobile companies who had invested in similar technologies had not achieved much success. The type of decision making error made by Rupert is known as ________. A. availability bias B. confirmation error C. adjustment bias D. lack-of-participation error E. representativeness bias Answer: E Page: 181 Learning Objective: 7.4 Difficulty: Moderate

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AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 94.

The ________ occurs when decisions are influenced by inappropriate allegiance to a previously existing value or starting point. A. confirmation error B. lack-of-participation error C. representativeness bias D. anchoring and adjustment bias E. availability bias Answer: D Page: 182 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

Jamey was asked to prepare a report on the estimated costs of introducing a new product into the market. He suggested the costs by slightly incrementing the costs the company had incurred while introducing a product into the market the previous year. This might not be accurate, because a number of other factors should also have been considered while calculating the estimated costs for the current year. This type of decision-making error is known as ________. A. availability bias B. confirmation error C. representativeness bias D. anchoring and adjustment bias E. lack-of-participation error Answer: D Page: 182 Learning Objective: 7.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

96.

A(n) ________ occurs when a problem is evaluated and resolved in the context in which it is perceived. A. escalating commitment B. lack-of-participation error C. confirmation error D. availability bias E. framing error Answer: E Page: 182 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

After interviewing a number of candidates for a managerial position in the company, Justin prepares an interview report. In his report, he makes the male candidates look more qualified than the female candidates, because he believes that women cannot manage well. This type of decision-making error is called ________. A. lack-of-participation error B. availability bias

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C. representativeness bias D. framing error E. anchoring bias Answer: D Page: 182 Learning Objective: 7.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 98.

A ________ occurs when focusing only on information that validates a decision already made. A. confirmation error B. escalating commitment C. lack-of-participation error D. anchoring and adjustment bias E. framing error Answer: A Page: 183 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

A manager who completely trusts one of his employee’s decisions due to his previous good performances, always looks for positives in his decisions rather than analysing the employee’s decisions in a rational manner. He generally tends to neglect the drawbacks in his decision-making. This type of error in decision-making is called ________. A. anchoring and adjustment bias B. framing error C. confirmation error D. representativeness bias E. lack-of-participation error Answer: C Page: 183 Learning Objective: 7.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

100.

________ is the continuation of a course of action even though it is not working. A. Confirmation error B. Escalating commitment C. Lack-of-participation error D. Framing error E. Strategic opportunism Answer: B Page: 183 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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101.

Ryan, the marketing manager at a company, decides to invest more money to promote a technology that has earlier failed at the market due to its technical incompetency. Ryan is unwilling to accept that the product lacks the competitive edge to survive in the market. This tendency of managers to not admit their mistakes and apply more resources to pursue a course of action that is not working is known as ________. A. confirmation error B. escalating commitment C. framing error D. strategic opportunism E. lack-of-participation error Answer: B Page: 183 Learning Objective: 7.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

102.

________ unlocks creativity in decision making through a process of experiencing, ideation, and prototyping. A. Problem solving B. Escalating commitment C. Business Intelligence D. Design thinking E. Strategic opportunism Answer: D Page: 184 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

The ideation step in design thinking involves: A. accepting problems as they are delivered. B. defining problems by research and observation. C. visualizing and brainstorming potential solutions in collaboration with others. D. looking for answers to assigned problems through standard procedures. E. testing and modifying the potential solution over and over to achieve the best outcome. Answer: C Page: 184 Learning Objective: 7.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions

104.

What is the use of internal and external information in organizations? Answer: At the organization’s boundaries, information in the external environment is accessed. Managers use intelligence information to deal with customers, competitors, and other stakeholders such as government agencies, creditors, suppliers, and stockholders. Organizations also send vast amounts of public information to stakeholders and the external environment. This often takes the form of advertising,

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public relations messages, and financial reports that serve a variety of purposes, ranging from image-building to product promotion to financial documentation. Within organizations, people need vast amounts of internal information to make decisions and solve problems in their daily work. They need information from their immediate work setting and from other parts of the organization. Internal information flows downward in such forms as goals, instructions, and feedback; it flows horizontally in ways that assist in cross-functional coordination and problem solving; and it flows upward in such forms as performance reports, suggestions for improvement, and even disputes. The ability of technology to gather and move information quickly within an organization can be a great asset to decision making. It helps top levels stay informed, while freeing lower levels to make speedy decisions and take the actions they need to best perform their jobs. Page: 165-166 Learning Objective: 7.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 105.

How has Information Technology helped in breaking barriers within organizations, and between organizations and their external environments? Answer: IT helps people from different departments, levels, and physical locations more easily communicate and share information. IT-intensive organizations are able to and operate with fewer levels than their more traditional counterparts as information systems replace people whose jobs were devoted primarily to moving it around. IT is also breaking barriers between organizations and key elements in the external environment as it plays an important role in customer relationship management by quickly and accurately providing information regarding customer needs, preferences, and satisfactions. It helps in supply chain management to better manage and control costs everywhere from initiation of purchase, to logistics and transportation, to point of delivery and ultimate use. And it helps maintain linkages with outsourcing clients and other strategic partners. Page: 166-167 Learning Objective: 7.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

106.

Differentiate between programmed and nonprogrammed decisions. Answer: Programmed decisions use solutions or decision rules already available from past experience. They are used to solve structured problems which are routine and occur over and over again. As these problems are routine, they allow for decisions to be programmed in advance and then put into use as needed. Nonprogrammed decisions craft novel solutions to meet the demands of the unique situation at hand. Managers use nonprogrammed decisions to deal with unstructured problems that are new or unusual situations full of ambiguities and information deficiencies. They often involve choice of strategies and objectives in some situations of uncertainty. Page: 171 Learning Objective: 7.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

107.

What is cost-benefit analysis? How does it help in decision making?

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Answer: A cost-benefit analysis is a useful approach for evaluating alternatives. It compares what an alternative will cost in relation to the expected benefits. The benefits of an alternative should also be greater than its costs, and it should also be ethically sound. The following list includes costs, benefits, and other useful criteria for evaluating alternatives: • Costs: What are the “costs” of implementing the alternative, including resource investments as well as potential negative side effects? • Benefits: What are the “benefits” of using the alternative to solve a performance deficiency or take advantage of an opportunity? • Timeliness: How fast can the alternative be implemented and a positive impact be achieved? • Acceptability: To what extent will the alternative be accepted and supported by those who must work with it? • Ethical soundness: How well does the alternative meet acceptable ethical criteria in the eyes of the various stakeholders? Page: 177 Learning Objective: 7.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 108.

How does design thinking help in making creative decisions? Answer: Design thinking unlocks creativity in decision making through a process of experiencing, ideation, and prototyping. • Experiencing involves defining problems by research and observation and not simply accepting them as delivered. • Ideation involves visualizing and brainstorming potential solutions in collaboration with others. • Prototyping involves testing and modifying the potential solution over and over to achieve the best outcome. Page: 184 Learning Objective: 7.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 08: Planning Processes and Techniques True/False Questions 1.

The management process involves planning, organizing, leading, and controlling the use of resources to achieve performance objectives. Answer: True Page: 194 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Controlling is the process of setting objectives and determining how to accomplish them. Answer: False Page: 194 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Leading refers to guiding the efforts of human resources to ensure high levels of task accomplishment. Answer: True Page: 194-195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Stretch goals are performance targets that we have to work extra hard to reach. Answer: True Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Plans alone don’t deliver results; implemented plans do. Answer: True Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

An organization with flexibility operates with an orientation toward the past rather than the future. Answer: False Page: 197

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Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Planning helps us avoid simply being carried along by the flow of events, and focuses our attention on priorities. Answer: True Page: 197 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Without planning, control lacks objectives and standards for measuring how well things are going and what could be done to make them go better. Answer: True Page: 197 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

For effective time management, one must become calendar-bound by letting others control one’s schedule. Answer: False Page: 198 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

10.

As the time frames of planning are shrinking nowadays, top management is no longer responsible for setting longer-term plans and directions for the organization as a whole. Answer: False Page: 199 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

Strategic plans are focused only on a specific department of an organization. Answer: False Page: 200 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

Strategic plans ideally set forth the goals and objectives needed to accomplish the organization’s vision in terms of mission or purpose and what it hopes to be in the future.

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Answer: True Page: 200 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

In business, tactical plans often take the form of operational plans that indicate how different components of the enterprise will contribute to the overall strategy. Answer: False Page: 201 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

Operational plans include single-use plans like budgets that apply to one specific task or time period. Answer: True Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

Policies set expectations for many aspects of employee behavior. Answer: True Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

Procedures set broad guidelines for decisions. Answer: False Page: 202 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

17.

Budgets are standing plans that are used over and over again. Answer: False Page: 202 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

18.

To be “over budget” is generally considered bad for a company or an individual; to come in “under budget” is generally good.

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Answer: True Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 19.

Operating budgets allocate resources like labor, equipment, and space. Answer: False Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

20.

A flexible budget allocates resources as if each budget were brand new. Answer: False Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

Qualitative forecasting uses expert opinions to predict the future. Answer: True Page: 203 Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

22.

Contingency planning identifies alternative courses of action to take when things go wrong. Answer: True Page: 203 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Scenario planning is a short-term version of contingency planning. Answer: False Page: 204 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

The purpose of benchmarking is to find out what other people and organizations are doing very well, and then plan how to incorporate these ideas into one’s own operations. Answer: True Page: 206

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Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 25.

Internal benchmarking encourages members and work units to learn from competitors and noncompetitors alike. Answer: False Page: 206 Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

26.

If staff planners are used, people may often lack commitment to implement the plans no matter how good they are. Answer: True Page: 206 Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

Great goals include a stretch factor that moves toward real gains. Answer: True Page: 207 Learning Objective: 8.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

Strategic goals set by top management cascade down the organization step by step to become quality management objectives for lower levels. Answer: True Page: 208-209 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

Participatory planning includes in all planning steps the people who will be asked to help implement them and not the ones affected by the plans. Answer: False Page: 209 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

30.

Even though participatory planning takes more time, it can improve results by improving implementation.

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Answer: True Page: 210 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension Multiple Choice Questions 31.

________ is the process of setting objectives and determining how to accomplish them. A. Directing B. Controlling C. Leading D. Organizing E. Planning Answer: E Page: 194 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

Ryan, the supervisor at MTB Inc., is in the process of setting certain specific goals for his team, and is deciding how his team can reach those goals. Which of the following is Ryan involved in? A. Planning B. Leading C. Organizing D. Controlling E. Directing Answer: A Page: 194 Learning Objective: 8.1 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

33.

Which of the following management functions deals with the allocation and arrangement of resources to accomplish tasks? A. Planning B. Leading C. Organizing D. Controlling E. Directing Answer: C Page: 194 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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34.

________ is a management function that guides the efforts of human resources to ensure high levels of task accomplishment. A. Leading B. Directing C. Administration D. Organizing E. Processing Answer: A Page: 194 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

Which of the following management functions deals with monitoring task accomplishments and taking necessary corrective action? A. Coordinating B. Processing C. Controlling D. Leading E. Directing Answer: C Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

Which of the following is the first step in the process of planning? A. Analyzing alternatives and making a plan B. Defining the objectives C. Implementing the plan and evaluating results D. Determining where one stands vis-à-vis objectives E. Developing premises regarding future conditions Answer: B Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

37.

Janice, the chief technology officer at MB Appliances, is in the process of identifying the results she wants her company to achieve next year. She knows where she wants her company to reach and knows how far off the desired mark she will be along the way. She is most likely in the process of: A. developing premises regarding future conditions. B. defining her company’s objectives. C. analyzing her company’s alternatives and making a plan. D. implementing the plan and evaluating the results. E. determining where her company stands vis-à-vis objectives. Answer: B

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Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 38.

In which step of the planning process would one know where one is placed in reaching the goals, and what strengths work in one’s favor and what weaknesses may hold one back? A. Implementing the plan and evaluating results B. Defining the objectives C. Developing premises regarding future conditions D. Analyzing alternatives and making a plan E. Determining where one stands vis-à-vis objectives Answer: E Page: 195 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

After evaluating the current sales of PCs in relation to the desired sales, Cesar, the marketing manager at Benson & Bros., generates alternative campaigns that may affect the PC’s expected sales. He identifies, for each campaign, things that may help or hinder progress toward the company’s objectives. Cesar is currently in which phase of the planning process? A. Defining the objectives B. Determining where one stands vis-à-vis objectives C. Developing premises regarding future conditions D. Analyzing alternatives and making a plan E. Implementing the plan and evaluating results Answer: C Page: 195 Learning Objective: 8.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

In which phase of the planning process would one choose the alternative to accomplish one’s objectives and describe what must be done to follow the best course of action? A. Analyzing alternatives and making a plan B. Defining the objectives C. Implementing the plan and evaluating results D. Determining where one stands vis-à-vis objectives E. Developing premises regarding future conditions Answer: A Page: 195 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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41.

Cesar, the marketing manager at Benson and Bros., wants to check if the latest marketing campaign was successful in increasing the sales of PCs for the company. Which of the following steps must he take to measure the sales performance? A. Determine where he stands vis-à-vis objectives B. Define the objectives C. Develop premises regarding future conditions D. Evaluate results and revise plans if needed E. Analyze alternatives and make a plan Answer: D Page: 195 Difficulty: Moderate Learning Objective: 8.1 AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

42.

In which step of the planning process does one take action and carefully measure progress toward objectives? A. Define the objectives B. Determine where you stand vis-à-vis objectives C. Implement the plan and evaluate results D. Analyze alternatives and make a plan E. Develop premises regarding future conditions Answer: C Page: 195 Difficulty: Moderate Learning Objective: 8.1 AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

In the planning process, ________ refer(s) to the specific results or desired outcomes that one intends to achieve. A. objectives and goals B. beliefs and culture C. procedures D. policies E. guidelines Answer: A Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

Performance targets that we have to work extra hard to reach are called ________. A. stretch goals B. tactical goals C. objectives D. plans E. missions Answer: A Page: 195

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Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 45.

A(n) ________ is a statement of action steps to be taken in order to accomplish the objectives. A. concept B. objective C. guideline D. goal E. plan Answer: E Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

46.

Paul, who is being given the responsibility to meet certain sales targets for next year, is preparing a list of measures he will take to reach the sales targets. His list includes such specific action items as preparing a log, checking the quality of inputs and outputs, pricing, and details about his advertising strategy. Which of the following is Paul preparing? A. Goal B. Policy C. Plan D. Concept E. Objective Answer: C Page: 195 Learning Objective: 8.1 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

47.

Which of the following is true of planning? A. It is done by managers at scheduled times. B. It is a one-time process. C. It doesn’t need to be evaluated or monitored for viability. D. It can include the active participation of all employees. E. It can deliver results even without implementation. Answer: D Page: 195-196 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

48.

Which of the following is an external source of organizational pressure? A. Quest for operating efficiencies B. Alternative work arrangements C. Government regulations

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D. Concerns for work–life balance E. New organizational structures Answer: C Page: 196 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 49.

Which of the following is an internal source of organizational pressure? A. Government regulations B. Changing social norms and ethical expectations C. Changing technologies D. Greater workplace diversity E. Uncertainties of a global economy Answer: D Page: 196 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

50.

________occurs when an organization allows itself to be carried along by the flow of events. A. Coordination B. Organizational pressure C. The complacency trap D. Ecological fallacy E. Ethnocentrism Answer: C Page: 197 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

A manager who is result oriented: A. makes sure the most important things get first attention. B. creates a performance-oriented sense of direction. C. ensures that all resources are used to the best advantage. D. anticipates problems and opportunities so they can be best dealt with. E. devises plans and acts on them independently. Answer: B Page: 197 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

A(n) ________ oriented manager makes sure the most important things get first attention. A. priority B. result

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C. advantage D. change E. innovation Answer: A Page: 197 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 53.

A(n) ________ oriented manager ensures that all resources are used to the best interest and benefit. A. result B. change C. relation D. priority E. advantage Answer: E Page: 197 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

A(n) ________ oriented manager anticipates problems and opportunities so they can be best dealt with. A. result B. employee C. priority D. change E. advantage Answer: D Page: 197 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

The link between planning and controlling begins with ________. A. anticipating problems and opportunities B. setting objectives and standards C. analyzing the alternatives D. evaluating and monitoring the results E. understanding the internal and external organizational threats Answer: B Page: 197 Learning Objective: 8.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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56.

Which of the following is true about planning? A. Good planning improves rigidity. B. An organization with flexibility starts losing focus. C. Planning allows organizations to get into the complacency trap. D. Planning improves coordination. E. When planning is not done well, it facilitates control. Answer: D Page: 197 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

Without planning, the process of ________ lacks a framework for measuring how well things are going and what could be done to improve things. A. organizing B. control C. leading D. goal setting E. decision making Answer: B Page: 197 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

58.

Without control, the process of ________ lacks the follow-through needed to ensure that things work out as intended. A. planning B. goal setting C. leading D. problem solving E. directing Answer: A Page: 197 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

Which of the following is true about long-range and short-range plans? A. There is a lot more permanency to long-term plans today than there was in the past. B. Long-term plans are not subject to frequent revisions today. C. Long-term plans typically look at least ten years or more into the future. D. The time frames of planning are shifting today. E. Lower management sets its own context to work on short-term plans. Answer: D Page: 199 Learning Objective: 8.2 Difficulty: Moderate

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AACSB: Analytic skills

Bloom’s Taxonomy: Knowledge 60.

Even though the time frames of planning may be shrinking, ________ is/are still responsible for setting longer-term plans and directions for the organization as a whole. A. lower management B. middle management C. shareholders D. top management E. file clerks Answer: D Page: 199 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

61.

A ________ plan identifies long-term directions for the organization. A. procedural B. functional C. strategic D. tactical E. operational Answer: C Page: 200 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

Which of the following is true of strategic plans? A. Plans at the middle and lower levels of the traditional organizational pyramid tend to be strategic. B. They are focused only on a particular department or staff of employees in the organization. C. They are short-range plans to achieve an immediate goal. D. They refer to the “tactical” plans of the organization. E. They ideally set forth the goals and objectives needed to accomplish the organization’s vision. Answer: E Page: 200 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

A ________ clarifies the purpose of the organization and expresses what it hopes to be in the future. A. vision B. mission C. policy D. procedure

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E. budget Answer: A Page: 200 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 64.

________ are developed and used to implement strategic plans. A. Tactical plans B. Visions C. Operational plans D. Missions E. Procedures Answer: A Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

Just before the Thanksgiving weekend, Boyo’s, a toy manufacturer, discovers that its supplier has used lead-based paint on one of its products. The executive committee has assembled a team to devise a plan to mitigate the issue. Boyo’s is using ________ planning. A. tactical B. strategic C. top-down D. production E. visionary Answer: A Page: 201 Learning Objective: 8.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

66.

________ indicate how different operations within the organization will help advance the overall strategy. A. Operational plans B. Policies C. Budgets D. Functional plans E. Missions Answer: D Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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67.

In order to help implement the corporate strategy of Mom Corp., it would most likely develop a(n) ________ plan for the marketing department. A. functional B. operational C. single-use D. production E. zero-based Answer: A Page: 201 Learning Objective: 8.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

68.

Which of the following functional plans deal with work methods and technologies? A. Human resource plans B. Marketing plans C. Facilities plans D. Financial plans E. Production plans Answer: E Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

69.

Functional plans dealing with money and capital investments are called ________ plans. A. marketing B. logistics C. financial D. human resource E. facilities Answer: C Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

70.

Magnadyne Inc. wants to open a new automobile manufacturing unit in Bratislava. Mark’s team is assigned the task of planning the work layout. Hence, Mark is dealing with the ________ plan. A. facilities B. financial C. operational D. marketing E. inventory Answer: A Page: 201 Learning Objective: 8.2 Difficulty: Hard

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AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 71.

As AMD Inc.’s original suppliers have suddenly shut down, AMD is now making plans regarding alternate suppliers to provide resources for its manufacturing plant. Such plans are referred to as ________ plans. A. production B. facilities C. marketing D. logistics E. financial Answer: D Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

72.

________ plans are functional plans that deal with suppliers and acquiring resource inputs. A. Human resource B. Logistics C. Marketing D. Production E. Facilities Answer: B Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

________ plans deal with selling and distributing goods or services. A. Production B. Financial C. Facilities D. Logistics E. Marketing Answer: E Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

74.

Which of the following functional plans deal with building a talented workforce? A. Human resource plans B. Logistics plans C. Marketing plans D. Production plans E. Facilities plans Answer: A

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Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 75.

A(n) ________ plan identifies short-term activities to implement the broad plans of the company, and includes standing plans and single-use plans. A. forecast B. functional C. strategic D. operational E. tactical Answer: D Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

76.

Which of the following is a standing plan? A. A policy B. A budget C. A vision D. A mission E. A forecast Answer: A Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

A sexual harassment zero-tolerance policy is an example of ________ plans used by organizations. A. facilities B. financial C. single-use D. standing E. logistics Answer: D Page: 201 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

78.

Which of the following is a single-use plan? A. A procedure B. A policy C. A budget

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D. A mission E. A vision Answer: C Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 79.

A ________ communicates broad guidelines for making decisions and taking action in specific circumstances. A. vision B. procedure C. policy D. tactical plan E. budget Answer: C Page: 201 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

What is the primary difference between a policy and a procedure? A. A policy focuses on the organization as a whole, but a procedure focuses only on a single department. B. A policy sets a broad guideline, but a procedure defines precise actions to be taken. C. A policy is a single-use plan, but a procedure is a standing plan. D. A policy identifies short-term directions for the organization, but a procedure identifies longterm directions. E. A policy guides fair employment, but a procedure guides ethical principles. Answer: B Page: 202 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

81.

Procedures are stated in employee handbooks and often called ________. A. bureaucratic procedures B. contingency procedures C. standard operating procedures D. experimental procedures E. catalogued procedures Answer: C Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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82.

________ are single-use plans that commit resources for specific time periods to activities, projects, or programs. A. Procedures B. Policies C. Guidelines D. Budgets E. Forecasts Answer: D Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

Financial budgets: A. project cash flows and expenditures. B. plot anticipated sales or revenues against expenses. C. allocate resources like labor, equipment, and space. D. allocate a stated amount of resources for a specific purpose. E. allow resources to vary in proportion with various levels of activity. Answer: A Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

________ budgets allocate resources like labor, equipment, and space. A. Financial B. Operating C. Nonmonetary D. Zero-based E. Flexible Answer: C Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following types of budgets plot anticipated sales or revenues against expenses? A. Zero-based budgets B. Nonmonetary budgets C. Financial budgets D. Operating budgets E. Fixed budgets Answer: D Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 86.

A fixed budget: A. allocates a stated amount of resources for a specific purpose. B. allocates resources as if each budget were brand new. C. allows resources to vary in proportion with various levels of activity. D. allocates resources like labor, equipment, and space. E. always has equal expenditures and revenue. Answer: A Page: 202 Learning Objective: 8.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

In a chain of discount department stores, personnel needs are estimated in three different ways: (a) for a high-demand season, (b) for a moderate-demand season, and (c) for a low-demand season. By taking these three activity levels into account, managers are developing a(n) ________. A. fixed budget B. flexible budget C. zero-based budget D. monetary policy E. operating plan Answer: B Page: 202 Learning Objective: 8.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

88.

ACME Manufacturing budgets a project or activity in each new budget period as if it were brand new. ACME is using a(n) ________ budgeting approach. A. nonmonetary B. operating C. zero-based D. fixed E. flexible Answer: C Page: 202 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

89.

________ is the process of predicting what will happen in the future. A. Benchmarking B. Scenario planning C. Contingency planning D. Staff planning E. Forecasting

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Answer: E Page: 203 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 90.

Bizo-mania, a business periodical, recently predicted a global economic downturn. The periodical attributed the downturn to a predicted increase in the inflation rate. This report is an example of ________. A. benchmarking B. scenario planning C. contingency planning D. staff planning E. forecasting Answer: E Page: 203 Learning Objective: 8.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

91.

Qualitative forecasting uses ________ to predict future events. A. budgets B. expert opinions C. mathematical models D. statistical analyses E. surveys Answer: B Page: 203 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

Alexa, a marketing manager at Magnadyne Corp., predicts a 15% drop in the sales of their SUV, Finesse. She used correlation and regression analyses of previous years’ sales records to arrive at the conclusion. Alexa is using ________. A. contingency planning B. qualitative forecasting C. quantitative forecasting D. internal benchmarking E. external benchmarking Answer: C Page: 203 Learning Objective: 8.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

93.

________ identifies alternative courses of action to take when things go wrong.

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A. Internal benchmarking B. Contingency planning C. External benchmarking D. Goal setting E. Staff planning Answer: B Page: 203 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 94.

Which of the following is a long-term version of contingency planning? A. Benchmarking B. Scenario planning C. Forecasting D. Staff planning E. Operationalizing Answer: B Page: 204 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

________ involves identifying several possible future situations or states of affairs and then making plans to deal with each situation should it actually occur. A. Scenario planning B. External benchmarking C. Forecasting D. Staff planning E. Internal benchmarking Answer: A Page: 204 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

________ is the use of external and internal comparisons to better evaluate one’s current performance and identify possible ways to improve for the future. A. Qualitative forecasting B. Quantitative forecasting C. Scenario planning D. Contingency planning E. Benchmarking Answer: E Page: 206 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 97.

The purpose of benchmarking is to ________. A. identify alternative future scenarios and make plans to deal with each B. identify alternative courses of action to take when things go wrong C. plan how to incorporate the good, profitable ideas of other organizations into one’s own operations D. use expert opinions to predict the future E. use mathematical models and statistical analyses of historical data and surveys to predict future events Answer: C Page: 206 Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

98.

Barnotts, a discount store chain, utilized the best retailing strategies of Walmart to create a market for itself. By learning from Walmart, Barnotts used ________. A. qualitative forecasting B. quantitative forecasting C. scenario planning D. external benchmarking E. internal benchmarking Answer: D Page: 206 Learning Objective: 8.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

99.

Which of the following is true about the use of staff planners? A. It can lead to a communication gap between planners and implementers. B. It leads to an increase in commitment to implement the plans. C. The use of staff planners can lead to a short-term rather than a long-term focus. D. Very few organizations use staff planners as they don’t bring any expertise to the planning process. E. The use of staff planners always reduces the focus of the planning team. Answer: A Page: 206 Learning Objective: 8.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

100.

________ refer to things done by people and organizations that enable them to achieve superior performance. A. Missions B. Scenario plans C. Noncompetitive objectives D. Best practices

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E. Operating activities Answer: D Page: 206 Learning Objective: 8.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 101.

Which of the following is a characteristic of a “great goal”? A. It has no precise timetable. B. It is general and not too specific. C. It is almost impossible to accomplish. D. It can be measured easily. E. It is not challenging. Answer: D Page: 207 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

Goal alignment conversations tend to focus on objectives that are: A. impossible to achieve. B. challenging. C. difficult to measure. D. general. E. not bound by timetables. Answer: B Page: 208 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

When job performance is difficult to quantify, performance objectives can be stated as ________. A. short-range plans B. benchmarks C. verifiable work activities D. measurable end products E. deliverables Answer: C Page: 209 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

104.

ACME Financial requires that their interest rate planning process include its employees, managers, some customers, and others who will be affected by the resulting plans and/or will be asked to help implement them. ACME is utilizing ________. A. contingency planning

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B. scenario planning C. management by objectives D. participatory planning E. benchmarking Answer: D Page: 209 Learning Objective: 8.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 105.

Which of the following is true of participatory planning? A. It reduces the time needed for planning. B. It has less need for forecasting. C. It pays greater attention to contingency situations. D. It can improve results by improving implementation. E. It decreases the creativity of planning. Answer: D Page: 210 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions 106.

Identify and describe the steps in the planning process. Answer: The five basic steps in the planning process are: • 1. Define your objectives––Identify desired outcomes or results in very specific ways. Know where you want to go; be specific enough so that you will know you have arrived when you get there, or know how far off the mark you are at various points along the way. • 2. Determine where you stand vis-à-vis objectives––Evaluate current accomplishments relative to the desired results. Know where you stand in reaching the objectives; know what strengths work in your favor and what weaknesses may hold you back. • 3. Develop premises regarding future conditions––Try to anticipate future events. Generate alternative “scenarios” for what may happen; identify for each scenario things that may help or hinder progress toward your objectives. • 4. Analyze alternatives and make a plan––List and carefully evaluate the possible actions that may be taken. Choose the alternative(s) most likely to accomplish your objectives; decide step by step what must be done to follow the chosen course of action. • 5. Implement the plan and evaluate results––Take action and carefully measure your progress toward objectives. Do what the plan requires; evaluate results; take corrective actions and revise plans as needed. Page: 195 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

107.

Describe the benefits of planning for individuals and organizations. Answer: The benefits of planning for individuals and organizations include the following:

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•

Planning improves focus and flexibility. Focus and flexibility are important to the performance of both people and organizations in highly competitive and dynamic environments. • Planning improves action orientation. Planning keeps people and organizations focused on the actions that are needed to stay competitive and to become better at what they are doing. Planning helps make people and organizations more oriented toward results, priorities, advantages, and change. • Planning improves coordination. Planning helps individuals, groups, and subsystems within organizations make meaningful contributions to the organization as a whole, even as they pursue their specific tasks and objectives. • Planning improves control. Planning facilitates control by defining objectives and desired performance results, and identifying specific actions through which they are to be pursued. • Planning improves time management. Each day, managers are bombarded by a multitude of tasks and demands. They work in a setting of frequent interruptions, crises, and unexpected events. Consequently, it can be easy to lose track of objectives and fall prey to “time wasters.” Page: 196-198 Learning Objective: 8.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 108.

Compare and contrast between strategic and tactical plans. Answer: Strategic plans are longer-term plans that set broad and comprehensive directions for an organization and create a framework for allocating resources for maximum long term performance impact. Strategic planning begins with a vision that clarifies the purpose of the organization and expresses what it hopes to be in the future. It involves determining the goals and objectives that will be pursued in order to accomplish that vision. Also, it specifies how the organization will be positioned for competitive advantage in its external environment to accomplish those goals and objectives. Tactical plans are developed and used to implement strategic plans. They tend to be intermediate term plans that specify step-by-step means for using the organization’s resources to put strategies into action. In business, tactical plans often take the form of functional plans that indicate how different components of the enterprise will contribute to the overall strategy. Such functional plans might include: • Production plans—dealing with the methods and technologies needed by people in their work; • Financial plans—dealing with money and capital investments; • Facilities plans—dealing with facilities and work layouts; • Logistics plans—dealing with suppliers and the flow of raw materials and other product inputs. Page: 200-201 Learning Objective: 8.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

109.

Identify and briefly describe each of the six major planning tools and techniques that managers use. Give examples of how they are used. Answer: The six major planning tools and techniques that managers use are identified and described below: • Forecasting is the process of predicting what will happen in the future.

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•

Contingency planning involves identifying alternative courses of action that can be implemented, if and when an original plan proves inadequate because of changing circumstances. • Scenario planning is a long-term version of contingency planning that involves identifying several alternative future scenarios or states of affairs that may occur, and then making plans to deal with each scenario should it actually occur. • Benchmarking is a technique that makes use of internal and external comparisons to better evaluate current performance and identify possible actions to improve the future. • Staff planners are persons who take responsibility for leading and coordinating the planning function for the total organization or one of its major components. Page: 203-206 Learning Objective: 8.3 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 110.

What are the five characteristics that great goals tend to have? Answer: Great goals tend to have the following five characteristics: 1. Specific—clearly targeted key results and outcomes to be accomplished. 2. Timely—linked to specific timetables and “due dates.” 3. Measurable—described so results can be measured without ambiguity. 4. Challenging—include a stretch factor that moves toward real gains. 5. Attainable—although challenging, realistic and possible to achieve. Page: 207 Learning Objective: 8.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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Ch09: Control Processes and Systems

True/False Questions

Controlling is the process of setting directions and allocating resources in an organization. Answer: False Page: 219 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Planning ensures that performance is consistent with plans, and that accomplishments throughout an organization are coordinated in a means–ends fashion. Answer: False Page: 219 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Feedforward control focuses on what happens during the work process. Answer: False Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

The goal of concurrent controls is to solve problems as they occur. Answer: True Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Preliminary control is also known as steering control. Answer: False Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Steering controls are largely reactive. Answer: False Page: 220 Learning Objective: 9.1

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Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 7.

The feedback provided by the control process about mistakes already made may not be able to correct them, but it can help improve things in the future. Answer: True Page: 221 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

An internal control strategy requires a high degree of trust. Answer: True Page: 222 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Normative control flows through an organization’s hierarchy of authority. Answer: False Page: 222 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

10.

The bureaucratic control system influences behaviour through norms and expectations set by the organizational culture. Answer: False Page: 223 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

11.

The clan control influences employees and members to display common behavior patterns. Answer: True Page: 223 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

12.

Business firms show the influence of market control in the way that they adjust products, pricing, promotions, and other practices in response to customer feedback and what competitors are doing. Answer: True Page: 223

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Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 13.

Output standards measure work efforts that go into performing a task. Answer: False Page: 224 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

14.

Earnings per share, sales growth, and market share are the input standards used by businesses. Answer: False Page: 224 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

15.

Quality of production and error rates are output standards used by businesses. Answer: True Page: 224 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

16.

The second step in the control process is to set the performance standards. Answer: False Page: 226 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

17.

Historical comparisons benchmark performance against that being achieved by other people, work units, or organizations. Answer: False Page: 226 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

18.

Management by exception is the practice of giving attention to situations that show the greatest need for action. Answer: True Page: 226 Learning Objective: 9.2

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Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 19.

CPM/PERT graphically displays the scheduling of tasks required to complete a project. Answer: False Page: 228 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

20.

The critical path is the pathway from project start to conclusion that involves activities with the longest completion times. Answer: True Page: 229 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

21.

Just-in-time scheduling automatically orders a fixed number of items every time an inventory level falls to a predetermined point. Answer: False Page: 229 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

22.

A balance sheet shows profits or losses of a business at a point in time. Answer: False Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

23.

Leverage measures the ability of a firm to meet short-term obligations. Answer: False Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

24.

Inventory turnover is calculated as Sales/Total Assets. Answer: False Page: 230 Learning Objective: 9.3 Difficulty: Easy

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AACSB: Analytic skills Bloom's Taxonomy: Knowledge 25.

Developing a balanced scorecard for any organization begins with a clarification of the organization’s mission and vision. Answer: True Page: 231 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Multiple Choice Questions

26.

________ is a function of the controlling process. A. Creating structures B. Setting directions C. Measuring performances D. Allocating resources E. Inspiring efforts Answer: C Page: 219 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

27.

Which of the following best describes controlling? A. The process of deciding where an individual should go and how to best go about it B. The process of inspiring people to best utilize the resources C. The process of bringing people and material resources together in working combinations D. The process of setting directions and allocating resources E. The process of measuring performance and taking action to ensure desired results Answer: E Page: 219 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

28.

The management function which sees to it that the right things happen, in the right way, and at the right time, is known as ________. A. controlling B. organizing C. planning D. leading E. staffing Answer: A Page: 219

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Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 29.

Which of the following is true of controlling? A. It is all about setting goals and making plans. B. It is primarily involved in creating structures. C. It sees to it that the right things happen, in the right way, and at the right time. D. It sets the directions and allocates resources. E. It brings people and material resources together in working combinations. Answer: C Page: 219 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

30.

________ control is also known as preliminary control. A. Concurrent B. Steering C. Feedback D. Feedforward E. Throughput Answer: D Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

31.

Which of the following is true of feedforward control? A. It focuses on what happens during the work process. B. It is preventive in nature. C. It is largely reactive. D. It solves problems as they occur. E. It focuses on the quality of end results rather than on inputs. Answer: B Page: 220 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

32.

Feedforward control differs from feedback control, in that feedforward control: A. corrects mistakes already made. B. focuses on the quality of end results rather than inputs. C. solves problems as they occur. D. focuses on what happens during the work process. E. takes place before a work activity begins. Answer: E

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Page: 220 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension 33.

________ control is also known as steering control. A. Feedback B. Post-action C. Concurrent D. Feedforward E. Preliminary Answer: C Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

34.

Steering control takes place ________. A. during the work process B. reactively in an organization C. before work begins D. after the work is completed E. to correct mistakes already made Answer: A Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

35.

The function of steering control is to ________. A. focus on the quality of end results rather than throughputs B. focus on activities before they begin C. ensure a proactive and forward-thinking approach to problem solving D. solve problems as they occur E. correct mistakes already made Answer: D Page: 220 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

36.

A manager spots and corrects problems in the manufacturing cycle. Which of the following types of control does the manager practice? A. Output control B. Concurrent control C. Preliminary control D. Feedback control

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E. Post-action control Answer: B Page: 220 Learning Objective: 9.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 37.

________ controls are largely reactive. A. Input B. Concurrent C. Steering D. Post-action E. Feedforward Answer: D Page: 220 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

38.

Feedback control takes place to: A. correct mistakes already made. B. solve problems as they occur. C. focus on activities before they begin. D. ensure the implementation of a proactive approach to problem solving. E. ensure direct supervision during the work process. Answer: A Page: 221 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

39.

When a hair stylist at a salon asks a customer if she liked their services after a hair cut, the hair stylist is engaging in ________ control. A. feedforward B. steering C. feedback D. concurrent E. throughput Answer: C Page: 221 Learning Objective: 9.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

40.

Through ________ control, managers can manage in ways that allow and expect people to control their own behavior. A. normative

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B. internal C. regulatory D. clan E. bureaucratic Answer: B Page: 221 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 41.

The potential for ________ is enhanced when capable people have a clear sense of organizational mission, know their goals, and have the resources necessary to do their jobs well. A. bureaucratic control B. normative control C. regulatory control D. clan control E. self-control Answer: E Page: 221 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

42.

Which of the following increases the potential for self-control? A. Enforcing authority, policies, procedures, job descriptions, budgets, and day-to-day supervision to make sure that people act in harmony with organizational interests B. Ensuring participative organizational cultures in which everyone treats each other with respect and consideration C. Preparing budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits D. Influencing behavior through norms and expectations set by the organizational culture E. Harnessing the power of group cohesiveness and collective identity Answer: B Page: 222 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

43.

Which of the following best describes bureaucratic control? A. It refers to the controls that influence behavior through norms and expectations set by the organizational culture. B. It refers to the influence of market competition on the behavior of organizations and their members. C. It involves the use of authority, policies, procedures, job descriptions, budgets, and day-today supervision to make sure that people act in harmony with organizational interests. D. It refers to the control that is implemented when capable people have a clear sense of the organizational mission, know their goals, and have the resources necessary to do their jobs well.

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E. It refers to the existence of participative organizational cultures in which everyone treats each other with respect and consideration. Answer: C Page: 222 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension 44.

In which of the following systems of control do organizations use budgets for personnel, equipment, travel expenses, and so on to keep behavior targeted within set limits? A. Bureaucratic control B. Clan control C. Normative control D. Regulatory control E. Self-control Answer: A Page: 223 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

45.

Which of the following is true of a bureaucratic control system? A. It influences employees and members to display common behavior patterns. B. It harnesses the power of group cohesiveness and collective identity. C. It expects people to work on their own as they are given the freedom to do so. D. It allows and encourages people to exercise self-discipline in performing their jobs. E. It provides laws and regulations that govern the behavior of an organization’s top executives. Answer: E Page: 223 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

46.

Bureaucratic control differs from clan control in that bureaucratic control: A. influences behavior through norms and expectations set by the organizational culture. B. emphasizes hierarchy and authority. C. harnesses the power of group cohesiveness and collective identity. D. gives people freedom to work on their own. E. encourages participation, empowerment, and involvement. Answer: B Page: 223 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

47.

________ is also known as normative control. A. Self control

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Test Bank

B. Bureaucratic control C. Regulatory control D. Clan control E. Administrative control Answer: D Page: 223 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 48.

Which of the following is true of clan control? A. It influences behavior through norms and expectations set by the organizational culture. B. It uses budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits. C. It flows through the organization’s hierarchy of authority. D. It refers to the influence of customers and competition on the behavior of organizations and their members. E. It gives people freedom to work on their own. Answer: A Page: 223 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

49.

Clan control influences: A. behavior of organizations and the members through market competition. B. managers to give workers freedom to work on their own. C. hierarchy of authority. D. budgets for personnel, equipment, and travel expenses. E. employees and members to display common behavior patterns. Answer: E Page: 223 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

50.

________ is essentially the influence of customers and competition on the behavior of organizations and their members. A. Normative control B. Market control C. Clan control D. Bureaucratic control E. Administrative control Answer: B Page: 223 Learning Objective: 9.1 Difficulty: Easy AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

Test Bank

Bloom's Taxonomy: Knowledge 51.

Which of the following is true of market control? A. It is the way business firms use budgets for personnel, equipment, travel expenses, and the like to keep behavior targeted within set limits. B. It is the way business firms emphasize hierarchy and authority. C. It is the way business firms influence employees and members to display common behavior patterns. D. It is the way business firms adjust products, pricing, promotions, and other practices in response to customer feedback and what competitors are doing. E. It is the way business firms harness the power of group cohesiveness and collective identity. Answer: D Page: 223 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

52.

The first step to the control process is to ________. A. measure actual performance B. compare results with objectives C. set performance objectives and standards D. take corrective actions E. compare results with standards Answer: C Page: 224 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

53.

Which of the following statements is true about the first step of the control process? A. It involves the identification of key results that one wants to accomplish, by the performance objectives. B. It first involves the identification of the standards of measuring performance and then the identification of key results. C. It identifies the point where output standards and input standards are used to carefully document results. D. It involves relative comparisons that benchmark performance against that being achieved by other people, work units, or organizations. E. It focuses attention on substantial differences between actual and desired performance. Answer: A Page: 224 Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

54.

Output standards differ from input standards in that output standards measure ________. A. work efforts B. actual outcomes

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Schermerhorn-Management, 12th edition

Test Bank

C. efficiency in the use of resources D. conformance with rules E. work attendance Answer: B Page: 224 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 55.

Input standards differ from output standards in that input standards measure ________. A. actual outcomes B. earnings per share C. work results D. work efforts E. error rates Answer: D Page: 225 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

56.

After establishing standards of performance, which of the following is the next step in the control process? A. Identifying the key results B. Comparing results with standards C. Comparing results with objectives D. Implementing management by exception E. Measuring the actual performance Answer: E Page: 226 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

57.

In the context of the control process, which of the following statements is true about measuring actual performance? A. It is the point where performance objectives identify key results that one wants to accomplish. B. It involves a situation where outputs are difficult or expensive to measure. C. It is the point where output standards and input standards are used to carefully document results. D. It is the point where past experience becomes the baseline for evaluating current performance. E. It is the practice of giving attention to situations that show the greatest need for action. Answer: C Page: 226 Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

Test Bank

Bloom's Taxonomy: Comprehension 58.

Which of the following is the control equation? A. Need for Action = Desired Performance – Actual Performance B. Breakeven Point = Fixed Costs – (Price – Variable Costs) C. Acid Test = Current Assets – Inventories/Current Liabilities D. Debt Ratio = Total Debts/Total Assets E. Net Income = Sales – Expenses Answer: A Page: 226 Learning Objective: 9.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

59.

A shoe manufacturing company produced 300,000 pairs of shoes at the end of a certain month. If the need for action was 150,000 pairs of shoes, calculate the desired performance using the control equation. A. 650,000 B. 150,000 C. 250,000 D. 450,000 E. 750,000 Answer: D Page: 226 Learning Objective: 9.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

60.

Calculate the need for action from the following information: Desired performance = 800 work units Actual performance = 580 work units A. 1380 B. 220 C. 800 D. 1600 E. 510 Answer: B Page: 226 Learning Objective: 9.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

61.

What is management by exception? A. It is the point where performance objectives identify key results that one wants to accomplish. B. It is the situation where outputs are difficult or expensive to measure. C. It is the point where output standards and input standards are used to carefully document results.

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D. It is the point where past experience becomes the baseline for evaluating current performance. E. It is the practice of giving attention to situations that show the greatest need for action. Answer: E Page: 226 Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension 62.

A Gantt chart differs from a PERT chart in that a Gantt chart: A. uses charts to break a project into a series of small sub-activities that each has clear beginning and end points. B. represents the quickest time in which the entire project can be finished. C. helps with event or activity sequencing to make sure that things get accomplished in time for later work to build upon them. D. shows all the interrelationships that must be coordinated for the entire project to be successfully completed. E. combines critical path method and the program evaluation and review technique. Answer: C Page: 228 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

63.

________ is a combination of the critical path method and the program evaluation and review technique. A. Gantt chart B. CPM/PERT C. Pie chart D. Bar diagram E. Run chart Answer: B Page: 228 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

64.

Which of the following is true of critical path? A. It is essential to perform what-if calculations under different projected cost and revenue conditions. B. It acts as the foundation for analysis using financial controls by using the firm’s balance sheet and income statement. C. It automatically orders a fixed number of items every time an inventory level falls to a predetermined point. D. It represents the quickest time in which the entire project can be finished, assuming everything goes according to schedule and plans. E. It gives top managers, a fast, but comprehensive view of the business. Answer: D

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Page: 229 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension 65.

The ________ form of inventory control automatically orders a fixed number of items every time an inventory level falls to a predetermined point. A. just-in-time scheduling B. breakeven C. balanced scorecard D. asset management E. economic order quantity Answer: E Page: 229 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

66.

Managers rely on ________ to perform what-if calculations under different projected cost and revenue conditions. A. CPM/PERT B. Gantt charts C. critical path method D. breakeven analysis E. just-in-time scheduling Answer: D Page: 229 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

67.

Which of the following is the formula for calculating breakeven point? A. Fixed Costs/(Price – Variable Costs) B. Fixed Costs – Variable Cost/Price C. (Fixed Costs/Variable Costs) – Price D. (Fixed Costs/Price) – Variable Costs E. Fixed Cost – (Price + Variable Costs) Answer: A Page: 229 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

68.

Oodle shoes launches baby shoes at a price of $10 per unit. The fixed costs are $15,000 and variable costs are $5 per unit. What sales volume is required to break even? A. 7500 units B. 3000 units

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C. 4000 units D. 6500 units E. 3500 units Answer: B Page: 229 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 69.

Pary’s doughnuts can produce only 100 doughnuts a day. The variable cost incurred per unit is $2 and fixed costs incurred per day is $500. At what price should a doughnut be sold to break even? A. $10 B. $5 C. $7 D. $4 E. $8 Answer: C Page: 229 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

70.

A bag manufacturing company proposed a selling price of $80 per bag for their new range of bags. Fixed costs are $10,000 and variable costs are $40 per bag. At this point their break even point was 250 units. What will be the breakeven point if the variable costs can be brought down to $30? A. 150 units B. 350 units C. 300 units D. 200 units E. 100 units Answer: D Page: 229 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

71.

According to financial controls, liquidity measures ________. A. the ability to meet short-term obligations B. the use of debt C. asset and inventory efficiency D. the ability to earn revenues greater than costs E. the ability to operate at minimum cost Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills

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Bloom's Taxonomy: Comprehension 72.

In the context of financial controls, which of the following best describes leverage? A. It is the ability to operate at minimum cost. B. It is the ability to earn revenues greater than costs. C. It is the ability to earn more in returns than the cost of debt. D. It is the ability to meet short-term obligations. E. It is the ability to generate cash to pay bills. Answer: C Page: 230 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

73.

In the context of financial controls, asset management refers to the ability to ________. A. use resources efficiently and operate at minimum cost B. earn more in returns than the cost of debt C. earn revenues greater than costs D. meet short-term obligations E. generate cash to pay bills Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

74.

Liquidity differs from leverage in that liquidity is the: A. ability to operate at minimum cost. B. ability to use resources efficiently. C. ability to generate cash to pay bills. D. ability to earn more in returns than the cost of debt. E. ability to earn revenues greater than costs. Answer: C Page: 230 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

75.

Leverage differs from profitability in that leverage measures: A. the ability to operate at minimum cost. B. the ability to meet short-term obligations. C. the ability to earn revenues greater than costs. D. the use of debt. E. asset and inventory efficiency. Answer: D Page: 230 Learning Objective: 9.3 Difficulty: Moderate

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AACSB: Analytic skills Bloom's Taxonomy: Comprehension 76.

Acid Test = ________ A. Net Income/Total Assets B. Net Income/Owner’s Equity C. Sales – Expenses D. Total Debts/Total Assets E. Current Assets – Inventories/Current Liabilities Answer: E Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

77.

Which of the following ratios is also known as acid test? A. Current Ratio B. Debt Ratio C. Asset Turnover Ratio D. Inventory Turnover Ratio E. Quick Ratio Answer: E Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

78.

Calculate the quick ratio from the following information of a manufacturing firm. Cash in hand = $200,000 Cash at bank = $100,000 Total current assets = $450,000 Accrued expenses = $100,000 Taxes payable = $100,000 A. 3:2 B. 1:2 C. 3:1 D. 4:1 E. 2:2 Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

79.

________ = Current Assets/Current Liabilities A. Acid Test B. Current Ratio C. Debt Ratio

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D. Assets Turnover ratio E. Net Current Margin Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 80.

Calculate the current ratio from the following information: Sales = $14,000 Bills receivable = $100,000 Cash in hand = $40,000 Current liabilities = $50,000 Inventories = $40,000 Net Income = $5,600 A. 8:5 B. 3.6:1 C. 0.4:1 D. 3:5 E. 2:3 Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

81.

Which of the following is the formula to measure debt ratio? A. Average Inventory/Total Debts B. Sales/Average Inventory C. Net Income/Owner’s Equity D. Total Debts/Total Assets E. Current Assets/Current Liabilities Answer: D Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

82.

Calculate the debt ratio from the following information. Land and building = $500,000 Machinery = $300,000 Cash in hand = $400,000 Total debts = $300,000 A. 3:4 B. 1:4 C. 2:3 D. 2:2 E. 1:3

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Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 83.

CarZ Ltd., a car manufacturing company, calculated its debt ratio to be 2:5. Calculate the total debt for CarZ Ltd., from the following information: Cash in hand = $120,000 Cash at bank = $180,000 Bills receivable = $200,000 Bills payable = $180,000 Land and building = $250,000 Inventories = $50,000 Machinery = $100,000 A. $360,000 B. $240,000 C. $280,000 D. $300,000 E. $270,000 Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

84.

Which of the following is the formula for measuring asset turnover? A. Current Assets/Current Liabilities B. Current Assets – Inventories/Current Liabilities C. Sales/Total Assets D. Net Income/Total Assets E. Total Debts/Total Assets Answer: C Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

85.

Calculate assets turnover for a car manufacturing company from the following information: Net income = $480,000 Expenses = $120,000 Land and building = $110,000 Cash at bank = $50,000 Inventories = $40,000 A. 2 times B. 3 times C. 5 times D. 4 times

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E. 6 times Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 86.

Inventory turnover = ________ A. Current Assets – Inventories/Current Liabilities B. Net Income/Total Assets C. Total Debts/Total Inventories D. Net Income/Owner’s Equity E. Sales/Average Inventory Answer: E Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

87.

Calculate average inventory if sales is $400,000 and the inventory turnover is 1.6. A. $280,000 B. $250,000 C. $150,000 D. $180,000 E. $140,000 Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

88.

With reference to profitability, Net margin = ________. A. Net Income/Owner’s Equity B. Net Income/Sales C. Net Income/Total Assets D. Net Income/Inventories E. Net Income/Debts Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

89.

Calculate net margin from the following information. Sales $250,000 Expenses $100,000 A. 50%

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B. 60% C. 40% D. 30% E. 80% Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 90.

Calculate the net income if the net margin is 75% and expenses incurred is $160,000. A. $480,000 B. $640,000 C. $360,000 D. $570,000 E. $600,000 Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

91.

Calculate sales if the expenses incurred is $160,000 and the net margin is 75%. A. $480,000 B. $640,000 C. $360,000 D. $570,000 E. $600,000 Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

92.

Return on assets = ________ A. Current Assets/Current Liabilities B. Sales/Total Assets C. Total Debts/Total Assets D. Net Income/Total Assets E. Current Assets – Inventories/Current Liabilities Answer: D Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

93.

Calculate return on assets from the following information:

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Net income $1,800,000 Return on equity 25% Current Assets $350,000 Land and building $250,000 Sales $1,500,000 A. 1:1 B. 3:2 C. 4:1 D. 2:2 E. 3:1 Answer: E Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 94.

Calculate net income from the following information: ROA =35% Sales = $250,000 Current assets = $30,000 Fixed assets = $70,000 A. $87,500 B. $35,000 C. $10,500 D. $24,500 E. $15,000 Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

95.

________ = Net Income/Owner’s Equity A. Return on Equity B. Return on Assets C. Net Margin D. Inventory Turnover E. Acid Test Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

96.

Calculate owner’s equity from the following information: Expenses $700,000 Return on equity 40% Total Assets $2,050,000

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Sales $1,500,000 A. $2,000,000 B. $800,000 C. $375,000 D. $1,250,000 E. $820,000 Answer: A Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 97.

Calculate the expenses incurred if the net income is $500,000 and sales is $1,500,000. A. $800,000 B. $650,000 C. $500,000 D. $250,000 E. $1,000,000 Answer: E Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

98.

Calculate return on equity from the following information: Sales = $400,000 Expenses = $100,000 Debts incurred = $120,000 Owner’s equity = $180,000 A. 2:3 B. 3:2 C. 5:3 D. 4:5 E. 5:1 Answer: C Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

99.

What is a balanced scorecard? A. It shows profits or losses at a point in time, which is displayed in a Sales – Expenses = Net Income format. B. It shows assets and liabilities at a point in time. C. It tallies organizational performance in financial, customer service, internal process, and innovation and learning areas. D. It occurs when revenues are equal to costs.

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E. It reduces costs and improves workflow by scheduling materials to arrive at a workstation or facility just in time for use. Answer: C Page: 231 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension 100.

Cycle times, engineering efficiency, and new product time are sample measures of ________. A. learning B. internal process improvement C. innovation D. financial performance E. customer satisfaction Answer: B Page: 231 Learning Objective: 9.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Application Questions 101.

Bag-a-jute, a jute bag manufacturing company, checks the consistency and quality of all the raw materials before forwarding them to the production department. This is done to ensure that the bags produced are tough and strong. Which of the following types of control is being implemented by Bag-a-jute? A. Feedback control B. Output control C. Throughput control D. Concurrent control E. Feedforward control Answer: E Page: 220 Learning Objective: 9.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

102.

Pan-Incredible, a Spanish bread and biscuits producer, gave out a free batch of cookies to a few customers. These customers were then asked for suggestions to improve the cookies in terms of quality, taste, and variety. Which of the following types of control was implemented by PanIncredible? A. Feedback control B. Steering control C. Feedforward control D. Concurrent control E. Preliminary control Answer: A Page: 220

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Learning Objective: 9.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 103.

Ben, a senior operations manager, was assigned the task of implementing the control process for a particular production process. He first identified the performance objectives and in doing so, he identified the key results that were to be accomplished. Next, he set standards and measured the actual performance. He compared the results with the objectives and standards. Finally, as part of the corrective action step, he implemented ________, a practice that involved focusing attention on substantial differences between the actual and desired performances. A. economic order quantity B. just-in-time scheduling C. management by exception D. breakeven analysis E. critical path method Answer: C Page: 226 Learning Objective: 9.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

104.

Edwin has been working very hard since the establishment of his retail business. He is not far from the time when his revenues will match his expenses. Which of the following would best represent the time described? A. Just-in-time scheduling B. Base period C. Monetary overhang D. Breakeven point E. Buydown Answer: D Page: 229 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

105.

The CFO of a company wanted to analyze the financial strength of his company. He specifically asked for information on the company’s assets and liabilities. Which of the following would provide the necessary information? A. Income statement B. Balance sheet C. Balanced scorecard D. Gantt chart E. Breakeven analysis account Answer: B Page: 230 Learning Objective: 9.3 Difficulty: Hard AACSB: Reflective thinking skills

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Schermerhorn-Management, 12th edition

Test Bank

Bloom's Taxonomy: Application

Essay Questions

106.

Explain briefly the two broad options managers have with respect to control system. Answer: Managers have two broad options with respect to control systems. First, they can manage in ways that allow and expect people to control their own behavior. This puts priority on internal control, or self-control. Second, they can structure situations to make sure things happen as planned. This is external control, and the alternatives include bureaucratic or administrative control, clan or normative control, and market or regulatory control. Effective control typically involves a mix of these options. Self-control: Managers can take advantage of this human capacity for self-control by unlocking and setting up conditions that support it. This means trusting people to be good at selfmanagement, allowing and encouraging them to exercise self-discipline in performing their jobs. Any workplace that emphasizes participation, empowerment, and involvement will rely heavily on self-control. Bureaucratic control: This form of external control uses authority, policies, procedures, job descriptions, budgets, and day-to-day supervision to make sure that people act in harmony with organizational interests. Clan control: This form influences behavior through norms and expectations set by the organizational culture. Sometimes called normative control, it harnesses the power of group cohesiveness and collective identity. Market control: This form is essentially the influence of customers and competition on the behavior of organizations and their members. Business firms show the influence of market control in the way that they adjust products, pricing, promotions, and other practices in response to customer feedback and what competitors are doing. Page: 221-223 Learning Objective: 9.1 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

107.

Briefly explain the four step control process. Answer: The control process involves four steps. They are as follows: (1) Establish performance objectives and standards: The control process begins with planning, when performance objectives and standards for measuring them are set. Performance objectives identify key results that one wants to accomplish. Once these key results are identified, standards can be set to measure their accomplishment. (2) Measure actual performance: The second step in the control process is to measure actual performance. It is the point where output standards and input standards are used to carefully document results. (3) Compare actual performance with objectives and standards: Step 3 in the control process is to compare objectives with results. The control equation states: Need for Action = Desired Performance – Actual Performance (4) Take corrective action: The final step in the control process is to take the action needed to correct problems or make improvements. Management by exception is the practice of giving attention to situations that show the greatest need for action. It saves time, energy, and other resources by focusing attention on high-priority areas. Page: 224, 226

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Learning Objective: 9.2 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension 108.

What is project management? Explain the two techniques of project management. Answer: Project management makes sure that activities required to complete a project are planned well and accomplished on time. It is the responsibility for overall planning, supervision, and control of projects. A project manager’s job is to ensure that a project is well planned and then completed according to plan—on time, within budget, and consistent with objectives. Two useful techniques for project management and control are Gantt charts and CPM/PERT. A Gantt chart graphically displays the scheduling of tasks that go into completing a project. Use of the visual overview of what needs to be done on a project allows for progress checks to be made at different time intervals. It helps with event or activity sequencing to make sure that things get accomplished in time for later work to build upon them. CPM/PERT is a combination of the critical path method and the program evaluation and review technique. Project planning based on CPM/PERT uses a network chart. Such charts break a project into a series of small sub-activities that each has clear beginning and end points. These points become “nodes” in the charts, and the arrows between nodes show in what order things must be done. The full diagram shows all the interrelationships that must be coordinated for the entire project to be successfully completed. Use of CPM/PERT techniques helps project managers track activities to make sure they happen in the right sequence and on time. Page: 228 Learning Objective: 9.3 Difficulty: Moderate AACSB: Analytic skills Bloom's Taxonomy: Comprehension

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Ch10: Strategy and Strategic Management

True/False Questions

Competitive advantage is the ability to do something so well that one outperforms competitors. Answer: True Page: 241 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The purpose of corporate strategy is to guide activities within one specific area of operations. Answer: False Page: 243 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In single-product enterprises, business strategies are distinct from corporate strategies. Answer: False Page: 243 Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

In a large conglomerate, while the enterprise on a whole will have a corporate strategy, each SBU will have its own business strategy. Answer: True Page: 243 Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The strategic management process begins with analysis of mission, values, and objectives. Answer: True Page: 244 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In the process of strategic management, strategic implementation is typically followed by strategic analysis. Answer: False Page: 244

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Schermerhorn-Management, 12th edition

Test Bank

Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Stakeholders are individuals and groups unaffected by the organization and its strategic accomplishments. Answer: False Page: 245 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Core values are broad beliefs about what is or is not appropriate behavior. Answer: True Page: 245 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The presence of strong core values helps build a clear organizational identity. Answer: True Page: 245 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

Emergence of new competitors and resource scarcities are environmental threats. Answer: True Page: 247 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

In a hypercompetition situation, a firm faces only a few competitors. Answer: False Page: 248 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

An unattractive industry is one in which there are high barriers to entry. Answer: False Page: 248-249 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

13.

In an attractive industry, there are many competitors.

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Schermerhorn-Management, 12th edition

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Answer: False Page: 248-249 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 14.

The less attractive the industry structure, the harder it will be to make good strategic choices. Answer: True Page: 248 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

15.

In the context of the BCG matrix, the preferred strategy for Stars is retrenchment. Answer: False Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

The BCG Matrix recommends making further resource investments in dogs. Answer: False Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

A growth strategy involves expansion of the organization’s current operations. Answer: True Page: 252 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

In the context of vertical integration, when a business acquires suppliers, it is referred to as forward vertical integration. Answer: False Page: 252 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

19.

Bankruptcy under U.S. law protects a firm from creditors while management reorganizes to restore solvency. Answer: True Page: 253 Learning Objective: 10.3 Difficulty: Easy

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Schermerhorn-Management, 12th edition

Test Bank

AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 20.

Restructuring by divestiture is mostly followed by organizations that are focused and not complex. Answer: False Page: 253 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

21.

Restructuring by turnaround often occurs along with a change in top management. Answer: True Page: 253 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

A globalization strategy adopts standardized products and advertising for use worldwide. Answer: True Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Dynamics of the global economy Bloom’s Taxonomy: Knowledge

23.

The transnational strategy focuses on working with rivals on projects of mutual benefit. Answer: False Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

In a supplier alliance, firms join together to sell and distribute products or services. Answer: False Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

The strategic objective of the differentiation strategy is to attract customers who stay loyal to the firm’s products and lose interest in those of its competitors. Answer: True Page: 256 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

Test Bank

26.

It is advisable to combine a cost leadership strategy with a differentiation strategy to get better results. Answer: False Page: 257 Learning Objective: 10.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

27.

Failures of substance in strategic management show up in poor analysis and bad strategy selection. Answer: True Page: 259 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

When strategic control fails at the level of top management, it is supposed to kick in at the level of middle management. Answer: False Page: 259 Learning Objective: 10.5 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

29.

Inside directors are chosen from the ranks of middle managers. Answer: False Page: 260 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

A strategic leader needs to reduce the sense of urgency so as to achieve the best results. Answer: False Page: 261 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

31.

It is a strategic leader’s job to teach the strategy and make it a “cause.” Answer: True Page: 261 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

10-5

Schermerhorn-Management, 12th edition

Test Bank

32.

Which of the following best defines the term “sustainable competitive advantage”? A. It is the ability to outperform rivals in ways that are difficult or costly to imitate. B. It is the ability to formulate technology to gain market exposure. C. It is the ability to focus organizational energies on a unifying and compelling goal. D. It is the ability to formulate strategies efficiently to accomplish long-term goals. E. It is the ability to identify the things that the organization has or does exceptionally well in comparison with competitors. Answer: A Page: 241 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

Which of the following best describes a strategy? A. It is a comprehensive plan guiding resource allocation to achieve long-term organization goals. B. It is the same as the mission of the organization. C. It is the document expressing the organization’s reason for existence in society. D. It is the predominant value system of the organization as a whole. E. It is a special strength that gives an organization a competitive advantage. Answer: A Page: 241 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

A ________ strategy typically sets long-term direction for the total enterprise. A. branding B. business C. corporate D. functional E. marketing Answer: C Page: 242 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

A ________ strategy primarily identifies how a division or strategic business unit will compete in its product or service domain. A. branding B. business C. corporate D. functional E. marketing Answer: B Page: 243 Learning Objective: 10.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 36.

Decisions related to choices about product and service mix, facilities locations, and new technologies are most likely to be a part of the ________ strategy of an organization. A. branding B. marketing C. corporate D. functional E. business Answer: E Page: 243 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

37.

The term ________ is often used to describe a business firm that is part of a larger enterprise. A. supplier alliance B. strategic business unit C. joint venture D. cash cow E. co-opetitor Answer: B Page: 243 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

38.

A ________ strategy guides activities within one specific area of operations. A. branding B. divisional C. corporate D. functional E. business Answer: D Page: 243 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

Questions such as “How can we best utilize resources within a specific area of operations to implement our business strategy?” are typically asked while discussing the ________ strategy. A. branding B. divisional C. corporate D. functional E. business Answer: D Page: 243

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Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 40.

The difference between a corporate strategy and a business strategy is that: A. the former sets long-term direction for the total enterprise and the latter is concerned with how a division or strategic business unit will compete in its product or service domain. B. the former focuses on how a division will compete in its product or service domain and the latter is concerned with guiding the use of organizational resources to implement business strategies. C. the former is concerned with formulating and implementing strategies while the latter is involved in crafting strategies to guide the allocation of resources. D. the former adopts standardized products and advertising for use worldwide and the latter seeks efficiencies of global operations with attention to local markets. E. the former adopts standardized products and advertising for use worldwide and the latter customizes products and advertising to best fit local needs. Answer: A Page: 242-243 Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

41.

The difference between a corporate strategy and a functional strategy is that: A. the former focuses on how a strategic business unit will compete in its product domain and the latter sets long-term direction for the total enterprise. B. the former sets long-term direction for the total enterprise and the latter guides activities within one specific area of operations. C. the former is concerned with formulating and implementing strategies while the latter is involved in crafting strategies to guide the allocation of resources. D. the former adopts standardized products and advertising for use worldwide and the latter seeks efficiencies of global operations with attention to local markets. E. the former adopts standardized products and advertising for use worldwide and the latter customizes products and advertising to best fit local needs. Answer: B Page: 242-243 Learning Objective: 10.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

42.

The entire process of formulating and implementing strategies to accomplish longterm goals and sustain competitive advantage is referred to as: A. strategic analysis. B. strategy formulation. C. strategy implementation. D. strategic management. E. strategic outsourcing. Answer: D Page: 243 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

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Bloom’s Taxonomy: Knowledge 43.

Strategic analysis typically refers to the process of: A. crafting strategies to guide the allocation of resources. B. revising objectives and selecting new strategies. C. formulating and implementing strategies. D. directing the total enterprise. E. analyzing the organization’s competitive position. Answer: E Page: 244 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

________ is the process of crafting strategies to guide the allocation of resources. A. Strategic analysis B. Strategy formulation C. Strategy implementation D. Strategic crafting E. Strategic outsourcing Answer: B Page: 244 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

45.

Karen Inc. changes its business strategy from a focused differentiation strategy to a focused cost leadership one. Which of the following steps in the process of strategic management ideally includes this action? A. Strategy analysis B. Strategy formulation C. Strategy assessment D. Strategy identification E. Strategy outsourcing Answer: B Page: 244 Learning Objective: 10.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

46.

Which of the following is the first step in the process of strategic management? A. Strategic analysis B. Strategy formulation C. Strategy implementation D. Strategic marketing E. Strategic outsourcing Answer: A Page: 244 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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47.

Which of the following is the last step in the process of strategic management? A. Strategic analysis B. Strategy formulation C. Strategy implementation D. Strategic marketing E. Strategic outsourcing Answer: C Page: 244 Learning Objective: 10.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

48.

A(n) ________ expresses the organization’s reason for existence in society. A. statement of purpose B. mission statement C. cash flow statement D. net worth statement E. operating objective Answer: B Page: 245 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

49.

________ are broad beliefs about what is or is not appropriate behavior. A. Corporate subcultures B. Marketing values C. Core values D. Diversified values E. Functional values Answer: C Page: 245 Learning Objective: 10.2 Difficulty: Easy AACSB: Ethical understanding and reasoning abilities Bloom’s Taxonomy: Knowledge

50.

________ is the predominant value system for the enterprise as a whole. A. Organizational culture B. Corporate subculture C. Managerial value system D. Functional culture E. Leadership value system Answer: A Page: 246 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

Which of the following is true about operational objectives? A. They set forth an organization’s purpose.

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B. They direct activities toward key performance areas. C. They represent what the strategy or underlying business model is trying to accomplish. D. They guide the behavior of organization members in ways consistent with mission and core values. E. They set standards for accomplishing the mission statement. Answer: B Page: 246 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 52.

A ________ begins with a systematic evaluation of the organization’s resources and capabilities and focuses on identifying the organization’s core competencies. A. functional strategy B. mission statement C. flanking strategy D. branding analysis E. SWOT analysis Answer: E Page: 246 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

53.

Any special strength that gives an organization a competitive advantage is referred to as its ________. A. core competency B. productivity C. co-opetition ability D. emotional intelligence E. monopolistic power Answer: A Page: 246 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

Aquamarine Inc. is the market leader of car batteries primarily because of its unique distribution system. The distribution system that has given the company an advantage over its competitors is an example of the company’s ________. A. co-opetition strategy B. core competency C. technical skill D. emotional intelligence E. monopolistic power Answer: B Page: 246 Learning Objective: 10.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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55.

Which of the following is a defining characteristic of a SWOT analysis? A. It examines the diversity at the work place and increases cohesiveness. B. It is based on the statistical principle of multivariate. C. It identifies things that inhibit performance. D. It determines the level of sales needed in order to breakeven. E. It is based on a year-to-year comparison of a firm’s ratios. Answer: C Page: 247 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

Which of the following is true about oligopoly? A. There are several direct competitors. B. It ensures that there is no competition for resources. C. There are only a few competitors. D. It is seen most often in the fast foods industry. E. There are many substitute products. Answer: C Page: 248 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

According to Porter, which of the following is one of the five forces that affect industry competition? A. Bargaining power of intermediaries B. Market share C. Market growth rate D. Substitute products E. Workplace diversity Answer: D Page: 248 Learning Objective: 10.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

58.

If there are many competitors and the barriers to entry are low, the: A. industry is attractive. B. industry is unattractive. C. customers have low bargaining power. D. industry is mature. E. industry is not mature. Answer: B Page: 248 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

59.

Which of the following increases the attractiveness of a market?

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A. Low barriers to entry B. Many competitors C. Many substitute products D. High power of suppliers E. Few substitute products Answer: E Page: 248 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 60.

________ decreases the attractiveness of the market. A. Few competitors B. High barriers to entry C. Few substitute products D. High power of customers E. Low power of suppliers Answer: D Page: 248 Learning Objective: 10.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

61.

________ analyzes business opportunities according to market growth rate and market share. A. Flanking strategy B. BCG matrix C. Five Forces analysis D. Strategy formulation E. Logistics plan Answer: B Page: 249 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

Businesses or products with high-market-shares in high-growth markets are referred to as ________ in the BCG Matrix. A. cash cows B. stars C. question marks D. dogs E. laggards Answer: B Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

The stars in a BCG matrix typically: A. produce large profits through substantial penetration of expanding markets.

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B. produce large profits and a strong cash flow, but with little upside potential. C. may not generate much profit at the moment, but have upside potential to do so. D. produce little if any profit, and have low potential for future improvement. E. generate high profit for a short span of time and then become inactive. Answer: A Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 64.

The preferred strategy for stars is: A. stability or modest growth. B. targeting only the most promising of the stars. C. retrenchment of some of the stars. D. decrease of current operations. E. growth and further resource investments. Answer: E Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

The preferred strategy for stars is growth because they: A. produce large profits and a strong cash flow, but have little upside potential. B. may not generate much profit at the moment, but have upside potential. C. produce large profits and a strong cash flow for only a short span of time and must be nurtured. D. are not only high performers in the present, but they offer similar potential for the future. E. produce little if any profit, and must be supported so that they perform better. Answer: D Page: 250 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

66.

Businesses or products with high-market shares in low-growth markets are referred to as ________ in the BCG Matrix. A. cash cows B. stars C. question marks D. dogs E. laggards Answer: A Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

The preferred strategy for cash cows is: A. stability or modest growth.

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B. targeting only the most promising of the cash cows. C. retrenchment of some of the cash cows. D. decrease of current operations. E. growth and further resource investments. Answer: A Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 68.

The preferred strategy for cash cows is stability or modest growth because: A. they produce large profits and a strong cash flow, but have little upside potential. B. they may not generate much profit at the moment, but have upside potential. C. the markets offer great growth opportunity given that they are new to the market. D. they are not only high performers in the present, but they offer similar potential for the future. E. they produce little if any profit, and must be supported so that they perform better. Answer: A Page: 250 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

69.

One of the differences between stars and cash cows is that: A. cash cows produce high profits. B. the strategy for cash cows is retrenchment. C. cash cows have little upside potential. D. cash cows can easily penetrate expanding markets. E. the strategy for cash cows is growth. Answer: C Page: 250 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

70.

Businesses or products with low-market shares in high-growth markets are referred to as ________ in the BCG Matrix. A. cash cows B. stars C. question marks D. dogs E. laggards Answer: C Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

The preferred strategy for question marks is: A. stability or modest growth.

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B. retrenchment of all question marks. C. decrease of current operations. D. growth and retrenchment of the question marks. E. growth and heavy resource investments. Answer: D Page: 250 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 72.

The preferred strategy for question marks is to grow or retrench because: A. they produce large profits and a strong cash flow, but have little upside potential. B. they may not generate much profit at the moment, the upside potential is there. C. the markets offer great growth opportunity given that they are new to the market. D. they are not only high performers in the present, but they offer similar potential for the future. E. they produce little if any profit, and must be supported so that they perform better. Answer: B Page: 250 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

73.

Businesses or products with low-market shares in low-growth markets are referred to as ________ in the BCG Matrix. A. cash cows B. stars C. question marks D. dogs E. laggards Answer: D Page: 251 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

74.

The preferred strategy for dogs is: A. stability or modest growth. B. retrenchment of all dogs. C. decrease of current operations. D. to grow or retrench the dogs. E. growth and heavy resource investments. Answer: B Page: 251 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

The preferred strategy for dogs is retrenchment because: A. they produce large profits and a strong cash flow, and the upside potential is

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there. B. they may not generate much profit at the moment, but the upside potential is there. C. the markets offer great growth opportunity given that they are new to the market. D. they are not only high performers in the present, but they offer similar potential for the future. E. they produce little if any profit, and they have low potential for future improvement. Answer: E Page: 251 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 76.

When one hears terms like “acquisition,” “merger,” and “global expansion,” the underlying master strategy is most likely to be one of ________. A. growth B. retrenchment C. downsizing D. turnaround E. restructuring Answer: A Page: 252 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

Tulips Inc., a successful designer brand, has several outlets in the U.S. To push sales growth, Tulips has decided to focus more on its primary business and open up its branches in ten different countries. This approach taken by Tulips is an example of growth through ________. A. strategic alliance B. vertical integration C. liquidation D. diversification E. concentration Answer: E Page: 252 Learning Objective: 10.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

78.

Which of the following is a defining characteristic of growth through diversification? A. It involves extending business within the same business area. B. It involves acquisition of or investment in new and different business areas. C. It involves decreasing the size of operations. D. It involves selling company assets to pay creditors. E. It involves fixing specific performance problems. Answer: B Page: 252 Learning Objective: 10.3 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 79.

Growth through ________ typically occurs by acquiring suppliers or distributors. A. strategic alliance B. vertical integration C. liquidation D. divestiture E. concentration Answer: B Page: 252 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

________ is where a business closes and sells its assets to pay creditors. A. Concentration B. Diversification C. Vertical integration D. Liquidation E. Strategic alliance Answer: D Page: 253 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

Restructuring by downsizing primarily involves: A. decreasing the size of operations. B. working with rivals on projects of mutual benefit. C. customizing products and advertising to best fit local needs. D. joining in partnership to pursue an area of mutual interest. E. adopting standardized products and advertising for use worldwide. Answer: A Page: 253 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

82.

Restructuring by divestiture primarily involves: A. selling off parts of the organization to refocus on core competencies. B. working with rivals on projects of mutual benefit. C. customizing products and advertising to best fit local needs. D. joining in partnership to pursue an area of mutual interest. E. adopting standardized products and advertising for use worldwide. Answer: A Page: 253 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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83.

Which of the following strategies primarily tries to fix specific performance problems? A. Downsizing B. Turnaround C. Multidomestic D. Divestiture E. Co-opetition Answer: B Page: 253 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

A ________ strategy primarily customizes products and advertising to best fit local needs. A. transnational B. co-opetition C. differentiation D. multidomestic E. cost leadership Answer: D Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following is a defining characteristic of the transnational strategy? A. It involves working with rivals on projects of mutual benefit. B. It seeks efficiencies of global operations with attention to local markets. C. It tries to fix specific performance problems. D. It involves expansion of the organization’s current operations. E. It analyzes business opportunities according to market growth rate. Answer: B Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

86.

Ten Inc., an IT company, enters into a partnership with Turnover Finances. The terms of the agreement state that Ten Inc. would purchase the service of Turnover Finance’s finance team for a period of five years. This is an appropriate example of a(n) ________ alliance. A. supplier B. distribution C. outsourcing D. co-opetition E. equity strategic Answer: C Page: 254 Learning Objective: 10.3 Difficulty: Hard AACSB: Reflective thinking skills

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Bloom’s Taxonomy: Application 87.

In a(n) ________ alliance, firms typically join together to sell and deliver products or services. A. supplier B. distribution C. contracting D. vertical E. outsourcing Answer: B Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

88.

The strategy of working with rivals on projects of mutual benefit is referred to as ________. A. downsizing B. turnaround C. divestiture D. vertical integration E. co-opetition Answer: E Page: 254 Learning Objective: 10.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

89.

A differentiation strategy typically seeks competitive advantage by: A. offering products that are unique and different from the competition. B. operating with lower costs than competitors. C. continuously improving operating efficiencies in purchasing. D. controlling and monitoring the performance of top management. E. including key persons in strategic planning. Answer: A Page: 256 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

Lucy Inc. sells a range of premium confectionery products. Although Lucy’s products are priced a little higher than those of its competitors, its customers are ready to pay for its unique flavours. Lucy Inc. uses the ________ strategy to gain an advantage over its competitors. A. cost leadership B. stuck-in-the-middle C. focused cost leadership D. differentiation E. co-opetition Answer: D Page: 256 Learning Objective: 10.4

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Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 91.

Which of the following is a defining characteristic of a differentiation strategy? A. The strategic objective is to attract customers who stay loyal to the firm’s unique products. B. It seeks competitive advantage by operating with lower costs than competitors. C. Success with the differentiation strategy requires tight cost and managerial controls. D. It aims at products or services that are easy to create and distribute. E. It involves working with rivals on projects of mutual benefit. Answer: A Page: 256 Learning Objective: 10.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

92.

Which of the following allows organizations to make profits while selling products or services at low prices their competitors can’t profitably match? A. Cost leadership strategy B. Stuck-in-the-middle strategy C. Focused differentiation strategy D. Differentiation strategy E. Co-opetition strategy Answer: A Page: 257 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

93.

Neptune is a new company in the laundry detergent market, which already has many competitors. Researchers at Neptune have devised a new, cost-efficient formula for manufacturing detergents that has made it possible for Neptune to charge less than its competitors and still make a profit. The strategy used by Neptune is that of ________. A. cost leadership B. stuck-in-the-middle C. focused differentiation D. differentiation E. co-opetition Answer: A Page: 257 Learning Objective: 10.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

94.

Which of the following is true of a cost leadership strategy? A. It seeks competitive advantage through uniqueness. B. It works best with the product differentiation strategy. C. To succeed, it requires tight cost and managerial controls. D. It concentrates on serving a unique market segment better than anyone else. E. It involves working with rivals on projects of mutual benefit.

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Answer: C Page: 257 Learning Objective: 10.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 95.

A ________ strategy typically concentrates attention on a special market segment in the form of a niche customer group, geographical region, or product or service line. A. co-opetition B. downsizing C. turnaround D. focus E. transnational Answer: D Page: 258 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

Which of the following is a defining characteristic of a focused differentiation strategy? A. It offers a unique product to a special market segment. B. It seeks the lowest costs of operations within a special market segment. C. It analyzes business opportunities according to market growth rate. D. It focuses on substantial penetration of expanding markets. E. It involves decreasing the size of operations. Answer: A Page: 258 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

Which of the following is a defining characteristic of a focused cost leadership? A. It offers a unique product to a special market segment. B. It seeks the lowest costs of operations within a special market segment. C. It analyzes business opportunities according to market growth rate. D. It focuses on substantial penetration of expanding markets. E. It involves decreasing the size of operations. Answer: B Page: 258 Learning Objective: 10.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

A lack of participation error is most likely to occur when: A. the planning process becomes an end in itself. B. the performance of top management is not monitored. C. key persons are not included in the strategic planning. D. there is lack of efficiency in vertical communication. E. the cost leadership strategy and the differentiation strategy are used simultaneously.

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Answer: C Page: 259 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 99.

Process failure where the planning process becomes an end in itself, rather than a means to an end is referred to as ________. A. lack of participation error B. goal displacement C. failures of substance D. divestiture E. downsizing Answer: B Page: 259 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

100.

________ is the capability to inspire people to successfully engage in a process of continuous change, performance enhancement, and implementation of organizational strategies. A. Free-riding B. Scientific management C. Strategic leadership D. Social loafing E. Groupthink Answer: C Page: 261 Learning Objective: 10.5 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions

101.

Elaborate on the present day corporate strategies. Answer: A key aspect of corporate strategy today is how to embrace the global economy and its mix of business risks and opportunities. An easy way to spot differences in global strategies is to notice how products are developed and advertised around the world. A firm pursuing a globalization strategy tends to view the world as one large market. It makes most decisions from the corporate headquarters and tries as much as possible to standardize products and advertising for use everywhere. The latest Gillette razors from Procter & Gamble, for example, are likely to be sold and advertised similarly around the world. Firms using a multidomestic strategy try to customize products and advertising as much as possible to fit local references in different countries or regions. McDonald’s is a good example. Although you can get your standard fries and Big Mac in most locations, you can have a McVeggie in India, a McArabia Kofta in Saudi Arabia, and a Croque McDo in France.

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A third approach is the transnational strategy where a firm tries to operate without a strong national identity and blend seamlessly with the global economy. Ford is an example. Its Global Performance strategy draws upon design, manufacturing, and distribution expertise all over the world to build five core car platforms with common parts and components. These platforms are then modified to meet regional tastes. Page: 254 Learning Objective: 10.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 102.

What are the terms on which Porter based his model for choosing competitive strategies? What are the three competitive strategies cited by Porter? Answer: Porter frames the strategy analysis in terms of market scope of the product or service, and source of competitive advantage for the product or service. The three business-level strategies cited by Porter are: cost leadership, differentiation, and focus. A differentiation strategy seeks competitive advantage through uniqueness. A cost leadership strategy seeks competitive advantage by operating with lower costs than competitors. A focus strategy concentrates attention on a special market segment in the form of a niche customer group, geographical region, or product or service line. Page: 256-258 Difficulty: Easy Learning Objective: 10.4 AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

List a few key responsibilities of strategic leadership. Answer: Key responsibilities of strategic leadership are described below: • A strategic leader has to maintain strategic control. This means that the CEO and other top managers should always be in touch with the strategy, how well it is being implemented, whether the strategy is generating performance success or failure, and the need for the strategy to be tweaked or changed. • A strategic leader has to be the guardian of trade-offs. It is the leader’s job to make sure that the organization’s resources are allocated in ways consistent with the strategy. This requires the discipline to sort through many competing ideas and alternatives, to stay on course, and not to get sidetracked. • A strategic leader needs to create a sense of urgency. The leader can’t allow the organization and its members to grow slow and complacent. Even when doing well, the leader keeps the focus on getting better and being alert to conditions that require adjustments to the strategy. • A strategic leader needs to make sure that everyone understands the strategy. Unless strategies are understood, the daily tasks and contributions of people lose context and purpose. Everyone might work very hard, but without alignment to strategy the impact is dispersed and fails to advance common goals. • A strategic leader needs to be a teacher. It is the leader’s job to teach the strategy and make it a “cause.” In order for strategy to work it must become an ever present commitment throughout the organization. This means that a strategic leader must be a great communicator. Everyone must understand the strategy and how it makes their organization different from others. Page: 261 Learning Objective: 10.5

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 11: Organization Structures and Design

True or False

Empowerment refers to letting others make decisions and exercise discretion in their work. Answer: True Page: 269 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

An organization structure is the system of tasks, workflows, reporting relationships, and communication channels that link together the work of diverse individuals and groups. Answer: True Page: 271 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

An organization chart includes major subunits in which positions reporting to a common manager are shown. Answer: True Page: 271 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A social network analysis is a tool that identifies formal structures and their embedded social relationships. Answer: False Page: 272 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Informal networks are sources of emotional support and friendship that satisfy members’ social needs. Answer: True Page: 272 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In a functional structure, people working on the same product, in the same area, with similar customers, or on the same processes, are grouped together. Answer: False Page: 273 Learning Objective: 11.2

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Schermerhorn-Management, 12th edition

Test Bank

Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Functional structures tend to work best in relatively stable environments where problems are predictable and the demands for change and innovation are limited. Answer: True Page: 273 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In a functional structure, the functions become formalized not only on the organization chart, but also in the mindsets of people. Answer: True Page: 274 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

One of the disadvantages of functional structures is that employees do not have a clear career path within functions. Answer: False Page: 274 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

Divisional structures are common in organizations dealing with only one or a few products or services. Answer: False Page: 275 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

A product structure prompts managers to be responsive to changing market demands and customer tastes. Answer: True Page: 275 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

Geographical structures are typically used when there is a need to differentiate products or services in various locations, such as in different parts of a country. Answer: True Page: 275 Learning Objective: 11.2 Difficulty: Easy

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Schermerhorn-Management, 12th edition

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

A customer structure is the least common structure in the consumer products industry. Answer: False Page: 275 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

A divisional structure is characterized by reduced coordination across functional departments. Answer: False Page: 276 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

Divisional structures can create unhealthy rivalries as divisions compete for resources and top management attention. Answer: True Page: 277 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

Workers in a matrix structure are allowed to be part of only one formal group at a time. Answer: False Page: 277 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

Workers in a matrix structure report to two bosses—one within the function and the other within the team. Answer: True Page: 277 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

A matrix structure is characterized by poor customer service. Answer: False Page: 278 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

19.

In a matrix structure, top managers are freed from lower-level problem solving to focus time on more strategic issues.

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Answer: True Page: 278 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 20.

Team meetings in matrix structures are short and quick. Answer: False Page: 278 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

Organizations with team structures make extensive use of both permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks. Answer: True Page: 279 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

Project teams are permanent in nature and cannot be disbanded. Answer: False Page: 279 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Supplier strategic alliances link businesses in preferred supplier–customer relationships that guarantee a smooth and timely flow of quality supplies among the partners. Answer: True Page: 280-281 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

Network structures result in increasing overhead and reducing operating efficiency. Answer: False Page: 281 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

In a virtual organization, when the work is complete, the alliance rests until next called into action. Answer: True Page: 282 Learning Objective: 11.3 Difficulty: Easy

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Schermerhorn-Management, 12th edition

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

26.

An organization structure refers to: A. a relationship between two or more firms to meet a particular business need. B. the group of employees who perform jobs together in the same location. C. the network of employees in a particular team. D. a system of tasks, reporting relationships, and communication linkages. E. a cooperation agreement with another organization to jointly pursue activities of mutual interest. Answer: D Page: 271 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

Sara’s job includes dividing up the work and assigning tasks to each employee. She identifies people responsible for each task, decides the reporting structure, and decides employees’ work relationships. Sarah is a part of the ________ team in her company. A. finance B. public relations C. controlling D. decentralizing E. organizing Answer: E Page: 271 Learning Objective: 11.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

28.

In an organizational structure, division of work refers to: A. lines that show who reports to whom. B. positions and titles that show work responsibilities. C. the vertical layers of management. D. lines that show formal communication flows. E. positions that report to a common manager. Answer: B Page: 271 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

Which of the following are included in the basics of a formal organizational structure? A. Communication channels B. Friendship cliques C. Social relationships D. Grapevine E. Sources of emotional support

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Schermerhorn-Management, 12th edition

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Answer: A Page: 271 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 30.

In an organizational structure, major subunits refer to: A. positions and titles that show work responsibilities. B. lines that show who reports to whom. C. positions that report to a common manager. D. lines that show how formal communication flows. E. the vertical layers of management. Answer: C Page: 271 Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

31.

Which of the following is true of a formal structure? A. Formal structures work only in organizations with diverse operations that extend across many products, customers, and work processes. B. The lines of the formal structure cut across levels and move from side to side. C. Formal structures are characterized by the existence of “in” and “out” groups. D. Lines in a formal structure are drawn from person to person according to frequency and type of relationship maintained. E. A formal structure consists of vertical layers of management. Answer: E Page: 271 Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

Which of the following is true of informal structures? A. They represent supervisory relationships. B. They help in preventing the occurrence of rumors. C. They are sources of emotional support and friendship. D. They show the vertical layers of management. E. They are characterized by the presence of major subunits. Answer: C Page: 272 Learning Objective: 11.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

Which of the following asks people to identify others to whom they turn for help most often, with whom they communicate regularly, and who gives them energy and motivation? A. Social network analysis B. Formal structures C. Forces analysis D. SWOT analysis E. Four corners model

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Answer: A Page: 272 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 34.

Which of the following is a disadvantage of informal structures? A. They are characterized by too many vertical layers of management. B. They are typified by the presence of complex formal communication flows. C. They have very centralized systems that restrict employee freedom. D. They are characterized by the existence of “in” and “out” groups. E. They discourage informal learning as people work and interact together throughout the workday. Answer: D Page: 272 Learning Objective: 11.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

A ________ structure groups together people with similar skills who perform similar tasks. A. product B. divisional C. geographical D. customer E. functional Answer: E Page: 273 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

Polka Corporation, an apparel manufacturer, creates groups of employees with similar skills performing similar tasks. Members of each such group share technical knowledge, skills, and responsibilities. Which of the following structures is being used by Polka Corporation? A. Product structure B. Divisional structure C. Functional structure D. Geographical structure E. Customer structure Answer: C Page: 273 Learning Objective: 11.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

37.

Which of the following is true of a functional structure? A. It is characterized by low-quality technical problem solving. B. It consists of task assignments consistent with expertise and training. C. It does not have the advantage of economies of scale. D. It is common in complex organizations with diverse operations.

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E. It is the ideal structure when there is a need to differentiate products or services in various locations. Answer: B Page: 273 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 38.

Which of the following is an advantage of a functional structure? A. Economies of scale with efficient use of resources B. Improved coordination across functional departments C. A sense of common purpose D. Clear points of responsibility for product or service delivery E. Expertise focused on specific customers, products, and regions Answer: A Page: 273 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

A ________ groups together people working on the same product, in the same area, with similar customers, or on the same processes. A. functional structure B. functional chimney C. divisional structure D. vertical structure E. functional silo Answer: C Page: 274 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

40.

Which of the following is true of a divisional structure? A. It is common in organizations dealing with only one or a few products or services. B. It tends to work best in relatively stable environments where problems are predictable. C. Its main focus is to put together people within the same expertise and help them work together. D. It is an attempt to gain the advantages and minimize the disadvantages of the matrix structure. E. It overcomes the disadvantages of a functional structure, such as the functional chimneys problem. Answer: E Page: 275 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

Petunia Group, a consumer goods company, owns several brands that produce different goods. Each brand is focused on a single product, and has a separate chief executive who is

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Schermerhorn-Management, 12th edition

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responsible for the manufacture, sales, costs, profits and losses of his or her brand. This implies that each brand at Petunia Group is applying a ________ structure in the organization. A. geographical B. product C. customer D. functional E. process Answer: B Page: 275 Learning Objective: 11.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 42.

Which of the following is true of a product structure? A. It groups together jobs and activities being performed in the same location. B. It is used when there is a need to differentiate products or services in various locations. C. It groups together jobs and activities that are serving the same customers or clients. D. It clearly links costs, profits, problems, and successes in a market area with a central point of accountability. E. It helps focus attention on the unique cultures and requirements of different nations. Answer: D Page: 275 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

Twist Inc., a fast food organization operating in many countries, varies its menus in different countries according to local tastes and preferences. It groups together employees and tasks working in the same location. Which of the following structures is Twist Inc. using? A. Geographical structure B. Product structure C. Customer structure D. Functional structure E. Process structure Answer: A Page: 275 Learning Objective: 11.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

44.

Which of the following is true about the geographical structure? A. It helps focus attention on the unique cultures and requirements of particular regions. B. It groups together jobs and activities that are serving the same customers or clients. C. It groups together jobs and activities that are part of the same processes. D. It groups together people with similar skills who perform similar tasks. E. Under this structure, each product division is given a chief executive who is responsible for its own profits and losses. Answer: A Page: 275 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

Test Bank

Bloom’s Taxonomy: Knowledge 45.

Acme Ltd.’s organizational structure combines jobs that serve clients based on factors such as their ages, tastes, and preferences. Which of the following organizational structures exists at Acme Ltd.? A. Geographical structure B. Product structure C. Customer structure D. Functional structure E. Process structure Answer: C Page: 275 Learning Objective: 11.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

46.

An order fulfillment by a catalog retailer, a process that takes an order from point of initiation by the customer to point of fulfillment by a delivered product is an example of a ________. A. functional chimney B. functional silo C. conglomerate D. work process E. strategic alliance Answer: D Page: 276 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

47.

Employees who are involved in designing, engineering, and preparing models are grouped together at Auro Inc. Further, employees who engage in public relations, sales promotion, advertising, and direct marketing are put together in another team. Which of the following structures exists at Auro Inc.? A. Geographical structure B. Product structure C. Customer structure D. Client structure E. Process structure Answer: E Page: 276 Learning Objective: 11.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

48.

Which of the following is an advantage of a divisional structure? A. Expertise focused on specific customers, products, and regions B. Economies of scale with efficient use of resources C. Reduced costs because of common resources and efforts across divisions D. Emphasis on the goals of the organization as a whole E. No scope for unhealthy rivalries within the organization Answer: A Page: 276-277

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Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 49.

Which of the following is a disadvantage of divisional structures? A. There is reduced flexibility in adding, removing, or changing operations to meet changing demands. B. They increase costs through the duplication of resources and efforts across divisions. C. They lead to a lack of communication, coordination, and problem solving across functions. D. There are a lot of chances for functional chimneys to occur under this structure. E. A functional silos problem occurs frequently when this structure is applied. Answer: B Page: 277 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

50.

Which of the following is true of a matrix structure? A. Workers in a matrix structure are allowed to be part of only one team at a time. B. A matrix structures does not have the ability to be flexible while dealing with regional differences. C. It is accomplished by creating permanent teams that cut across functions to support specific products, projects, or programs. D. A matrix structure is made up of temporary teams that are disbanded after each project. E. A matrix structure involves top management in lower-level problem solving. Answer: C Page: 277 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

Which of the following is an advantage of a matrix structure? A. Improved strategic management B. No scope for issues such as “groupitis” across teams C. Clearly defined tasks and no conflict in work priorities D. No power struggles across teams E. Fast and effective team meetings Answer: A Page: 278 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

Which of the following is a disadvantage of a matrix structure? A. The requirement of adding the team leaders to a matrix structure can result in higher costs. B. A matrix structure results in reduced performance accountability through the program, product, or project managers. C. Matrix structures are associated with very poor customer service.

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D. A matrix structure stresses that top managers must engage in both lower-level problem as well as more strategic issues. E. Matrix structures lead to reduced flexibility in adding, removing, or changing operations to meet changing demands. Answer: A Page: 278 Learning Objective: 11.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 53.

Which of the following is true about a team structure? A. A temporary team does not have prominence in a team structure. B. A team structure is most often observed in a vertical organization. C. The intention of a team structure is to create more effective lateral relations around and across the organization. D. In a team structure, cross-functional structures are convened for a particular task or project and disbanded once the task is completed. E. The main focus of a team structure is to improve and maintain the hierarchical system of management. Answer: C Page: 279 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

Which of the following is a horizontal structure that brings together members from different departments such as marketing, production, and accounting? A. Divisional structure B. Functional structure C. Cross-functional team D. Process structure E. Product team Answer: C Page: 279 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

Which of the following is true of a project team? A. Project teams are examples of traditional vertical structures. B. Project teams are characterized by a lack of communication and coordination across functions. C. Project teams are informal structures that group together jobs and activities focused on a single product or service. D. Project teams are temporary and disband once the task is completed. E. Project teams are created at the beginning of a project and cannot be disbanded as they are retained for future projects. Answer: D Page: 279 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

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Bloom’s Taxonomy: Knowledge 56.

Which of the following is a limitation of having a team structure? A. The total time spent together in a team meeting is not productive. B. A team structure is associated with poor performance. C. Project teams are informal structures that group together jobs and activities focused on a single product or service. D. People working in a team structure often experience a reduced sense of identification. E. A team structure is not very effective at mobilizing talents. Answer: A Page: 280 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

A ________ structure has a central core of full-time employees surrounded by outside contractors and partners that supply essential services. A. functional B. divisional C. team D. network E. matrix Answer: D Page: 280 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

58.

A network structure helps lower costs and improves flexibility in dealing with changing environments because: A. it brings together members from different functional departments in the organization. B. the central core is relatively small and the surrounding networks can be expanded or shrunk as needed. C. it uses permanent and temporary cross-functional teams to improve lateral relations. D. it has vertical levels of management and hierarchical levels of authority. E. the central core is relatively big, and that provides the advantage of economies of scale. Answer: B Page: 280 Learning Objective: 11.3 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

59.

Which of the following is true about a network structure? A. It does everything for itself with full-time employees. B. Its “networks” are composed of full-time employees. C. It groups jobs and activities that are part of the same processes. D. It consists of a relatively small central core that results in an increase in costs. E. It employs a minimum staff and contracts out as much work as possible. Answer: E Page: 280 Learning Objective: 11.3 Difficulty: Moderate

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Schermerhorn-Management, 12th edition

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 60.

Noah Books Ltd., an international library headquartered in Alabama, has many branches across different countries. It uses information technology to be in regular contact with its various outside suppliers of books and magazines. Which of the following organizational structures is being used by the library? A. Functional structure B. Network structure C. Divisional structure D. Team structure E. Matrix structure Answer: B Page: 280 Learning Objective: 11.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

61.

A strategic alliance is a(n): A. contract that brings together members from different functional departments in an organization. B. cooperation agreement with another organization to jointly pursue activities of mutual interest. C. organizational structure that combines the functional and divisional structures. D. set-up that eliminates internal boundaries among subsystems and external boundaries with the external environment. E. arrangement that emphasizes formal authority, order, fairness, and efficiency. Answer: B Page: 280 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

Pop Pvt. Ltd., a fast food corporation, entered into an agreement with Arc Inc., a company that manufactures cheese, mayonnaise, and other toppings. Pop Pvt. Ltd. uses the toppings produced by Arc Inc. only. This business agreement has resulted in benefits for both the companies. This is an example of a ________. A. boundaryless organization B. joint venture C. cross-functional team D. co-operative structure E. strategic alliance Answer: E Page: 280 Learning Objective: 11.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

63.

Mickey Juices Co., well-known for its fruit juices with catchy names, has recently signed an agreement with Meridian Books Ltd. According to this agreement, Mickey Juices Co. has an outlet at each Meridian store. This agreement has led to an increase in profits for both the companies, as sales of both have increased. This is an example of a ________.

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A. boundaryless organization B. joint venture C. cross-functional team D. strategic alliance E. co-operative structure Answer: D Page: 280 Learning Objective: 11.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 64.

Which of the following is an advantage of a network structure? A. Network structures are lean and streamlined. B. If one part of the network breaks down or fails to deliver, the other parts of the network will continue working. C. A network structure is characterized by technology that enables the organization to have control over activities contracted out. D. A network structure has an efficient vertical management system. E. Network structures have a relatively large central core that gives them stability. Answer: A Page: 281 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

Which of the following is a disadvantage of network structures? A. The central core of network structures is relatively small and the surrounding networks tend to expand or shrink continuously. B. There is a potential to experience a lack of loyalty among contractors who are used infrequently. C. A network structure is characterized by lack of flexibility which leads to problems while dealing with changing environments. D. Network structures are broad and complex. E. Network structures tend to increase overheads of an organization and reduce its operating efficiency. Answer: B Page: 281 Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

66.

Which of the following is true of a boundaryless organization? A. Internal to the boundaryless organization, formal lines of authority replace spontaneous teamwork and communication. B. A boundaryless organization does not encourage continuous meetings and information sharing. C. A boundaryless organization is characterized by significant hierarchy. D. Impermanence is not accepted in boundaryless organizations. E. In a boundaryless organization, people work together in teams that form and disband as needed. Answer: E Page: 282

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Learning Objective: 11.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 67.

A ________ uses IT and the Internet to engage a shifting network of strategic alliances. A. formal structure B. project team C. virtual organization D. bureaucracy E. matrix organization Answer: C Page: 282 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

68.

Nolan & Sons Inc., a well-established electronics company, uses IT and the Internet to enter into business alliances with software firms spread across different nations, to meet specific operating needs and objectives. Once the work is completed, the alliance rests until next called into action. Nolan & Sons Inc. is a ________. A. cross-functional team B. project team C. virtual organization D. cross-functional team E. formal organization Answer: C Page: 282 Learning Objective: 11.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

69.

An organizational design: A. is the process of creating structures that accomplish mission and objectives. B. is a system of tasks, reporting relationships, and communication linkages. C. is a group of related tasks that collectively creates a valuable work product. D. identifies the informal structures and their embedded social relationships that are active in an organization. E. is a cooperation agreement with another organization to jointly pursue activities of mutual interest. Answer: A Page: 283 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

70.

The best organizational design is the one that: A. emphasizes formal authority, order, fairness, and efficiency. B. is centralized, with many rules and procedures, a clear-cut division of labor, narrow spans of control, and formal coordination. C. emphasizes a vertical structure, hierarchy of authority, and promotion based on competency.

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D. achieves a good match between structure and situational contingencies. E. has narrow spans of control and structures of the pyramid form. Answer: D Page: 283 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 71.

Which of the following implies that an organizational design of the same kind does not apply in all circumstances? A. Every organization emphasizes formal authority, order, fairness, and efficiency. B. Every organization faces its own set of unique problems and opportunities. C. All organizations are not affected by situational contingencies such as task, technology, environment, and people. D. Every organization has narrow spans of control and structures of the traditional pyramid form. E. All organizations have sufficient resources to jointly pursue mutual interests with another organization. Answer: B Page: 283 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

72.

Which of the following emphasizes formal authority, order, fairness, and efficiency? A. Bureaucracy B. Boundaryless organization C. Decentralization D. Strategic business unit E. Strategic alliance Answer: A Page: 283 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

Which of the following is true of a bureaucracy? A. It is characterized by open divisions of labor. B. It encourages worker empowerment and teamwork. C. It is built on a foundation of trust that people will do the right things on their own initiative. D. It is a vertical structure with promotion based on competency. E. It performs well in environments that demand flexibility in dealing with changing conditions. Answer: D Page: 283 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

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74.

PRZ Inc. functions with systematic order and a hierarchical system of management. It is characterized by formal channels of communication. The employees of the firm are required to strictly abide by the formal rules of the company. PRZ Inc. is a(n) ________. A. adaptive organization B. bureaucracy C. decentralized organization D. boundaryless organization E. strategic alliance Answer: B Page: 283 Learning Objective: 11.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

75.

Which of the following is true of a mechanistic design? A. It is a horizontal structure with decentralized authority. B. It is characterized by wide spans of control. C. It is characterized by a precise division of labor. D. It is typified by informal means of coordination. E. It is a design with very few rules and procedures. Answer: C Page: 284 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

76.

The staff at Smith Grocery Store is assigned specific tasks such as receiving supply, arranging stock, making sales, preparing cash registers, and so on. They perform the same task every day. The firm is characterized by formal means of coordination. Smith Grocery Store is functioning with a(n) ________ design. A. organic B. decentralized C. mechanistic D. adaptive E. boundaryless Answer: C Page: 284 Learning Objective: 11.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

77.

Mayer Inc., an advertising firm, has a horizontal structure with simple rules and procedures. It achieves targets by having personal means of coordination. The firm values the existence of informal groups and does not believe in division of labor. Which of the following designs is being used by Mayer Inc.? A. Organic B. Centralized C. Bureaucratic D. Formal E. Authoritative Answer: A Page: 284

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Learning Objective: 11.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 78.

Which of the following is true of an organic design? A. It is a horizontal structure with decentralized authority. B. It has narrow spans of control. C. It has a vertical structure of authority. D. It is typified by many rules and procedures. E. It is characterized by very precise division of labor. Answer: A Page: 284 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

79.

A(n) ________ performs well in environments that demand flexibility in dealing with changing conditions. A. authoritative structure B. centralized system C. mechanistic design D. adaptive organization E. bureaucracy Answer: D Page: 285 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

Which of the following is true of adaptive organizations? A. They work with narrow spans of control and formal coordination. B. They operate with a distinguished feature of promotion based on competency. C. They are built on a foundation of trust that people will do the right things on their own initiative. D. They are characterized by vertical structures with a clear-cut division of labor and a hierarchy of authority. E. They work best for organizations doing routine tasks in stable environments. Answer: C Page: 285 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

The employees of Epic Pvt. Ltd., a graphics design firm, are given the liberty to use their ideas and their personal skills to perform their tasks. The firm’s managers trust that all employees work efficiently without any supervision. The firm uses an organic design and works with informal structures. This implies that Epic Pvt. Ltd. is a(n) ________ organization. A. centralized B. adaptive C. bureaucratic

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D. formal E. authoritative Answer: B Page: 285 Learning Objective: 11.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 82.

Which of the following is true of trends in organizational designs? A. The growth of new technologies for information systems and social media is reducing new possibilities for creativity. B. Managers are trying to minimize the rate of delegation of work as it incurs heavy expenditures. C. Delegation and horizontal structures are contributing to more centralization in organizations. D. The complexity and uncertainty are prompting more organizations to shift toward organic designs. E. Organizations are lowering costs and increasing efficiency by employing more staff personnel and using larger staff units. Answer: D Page: 285 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

The chain of command: A. is the number of subordinates directly reporting to a manager. B. links all persons with successively higher levels of authority. C. horizontally links all positions of an organization’s management. D. operates with a minimum of bureaucratic features. E. is the process of distributing and entrusting work to other persons. Answer: B Page: 285 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

________ refers to the number of subordinates directly reporting to a manager. A. Span of control B. Chain of command C. Delegation D. Empowerment E. Decentralization Answer: A Page: 285 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Polar Inc. is an organization with a tall structure. Which of the following would be a characteristic of Polar Inc.?

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A. Polar Inc. would reduce the number of employees in its organization. B. Polar Inc. would have an inadequate number of managers. C. Polar Inc. would allow for wider spans of control. D. Polar Inc. would incur high costs due to the existence of many managers. E. Polar Inc. would be a highly efficient and customer-sensitive organization. Answer: D Page: 285 Learning Objective: 11.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 86.

Which of the following is true of tall structures? A. They have inadequate levels of management. B. They are characterized by scarcity of employees. C. They reduce overhead costs. D. They are highly efficient and flexible. E. They have narrow spans of control. Answer: E Page: 285 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

Anthony Corporation functions with a flat structure. Which of the following would be a characteristic of Anthony Corporation? A. Anthony Corporation would be functioning with many managers. B. Anthony Corporation would permit workers to make their own decisions. C. Anthony Corporation would tend to be more costly due to the existence of many levels of management. D. Anthony Corporation would have a narrow span of control. E. Anthony Corporation would have a scarcity of employees. Answer: B Page: 285 Learning Objective: 11.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

88.

Which of the following is true of flat structures? A. They are not flexible. B. They help in reducing overhead costs. C. They have narrow spans of control. D. They tend to be very efficient due to the existence of many managers. E. They are not customer-sensitive. Answer: B Page: 285 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

89.

The process of entrusting work to others by giving them the right to make decisions and take action is referred to as ________.

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A. adaption B. mechanization C. delegation D. bureaucratization E. centralization Answer: C Page: 285 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 90.

Which of the following holds true regarding delegation? A. Authority should have equal responsibility when work is delegated from a supervisor to a subordinate. B. When a supervisor delegates a task, the subordinate should not be given authority regarding performance. C. When done well, empowerment leads to delegation. D. When work is delegated, authority of the subordinate should be higher than the responsibility given by the supervisor. E. Delegation is conducted in order to ensure that employees do not make their own decisions regarding performance of tasks. Answer: A Page: 286 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

91.

Which of the following is true regarding the process of delegation? A. The manager does not give the right to the subordinate to take necessary actions along with the assigned task. B. The responsibility given by the manager is an expectation for the subordinate to perform assigned tasks. C. When a subordinate takes an assignment, he does not have an obligation to the manager to complete the job as agreed. D. In the process of delegation, a manager does not have the power to create accountability. E. A manager is allowed to provide the subordinate with responsibility but not the authority to perform. Answer: B Page: 286 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

Which of the following is true of empowerment? A. It includes the concentration of authority for most decisions at the top level of an organization. B. It is a result of successful concentration of authority. C. It is the line of authority that vertically links each position with successively higher levels of management. D. It assigns tasks and rules to employees with the intention of prohibiting employees from making their own decisions.

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E. It results when delegation moves decisions to people who are most capable of doing the work. Answer: E Page: 287 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 93.

Which of the following explains the purpose of empowering employees? A. It encourages employees to work as per the decisions made by the top level managers. B. It vertically links each employee’s position with successively higher levels of management. C. It allows people at all levels to make more decisions that affect themselves and their work. D. It enables employees of an organization to work with strong hierarchical levels of authority. E. It encourages employees to use more formal means of coordination with many rules and procedures. Answer: C Page: 287 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

Centralization refers to the: A. concentration of authority for most decisions at the top level of an organization. B. dispersion of authority to make decisions throughout all organization levels. C. system that allows others to make decisions and exercise discretion in their work. D. process of creating wide spans of control and few hierarchical levels in organizations. E. process of entrusting work to others by giving them the right to make decisions and take action. Answer: A Page: 287 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

At SNN Bank, all operational decisions regarding promotional measures, interest rates, benefits, and customers, are made completely by top management. This implies that SNN Bank has a(n) ________. A. decentralized system B. centralized system C. boundaryless structure D. informal structure E. organic design Answer: B Page: 287 Learning Objective: 11.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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96.

The dispersion of authority to make decisions throughout all organization levels is known as ________. A. span of control B. chain of command C. decentralization D. bureaucracy E. centralization Answer: C Page: 287 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

Franklin Inc. encourages its employees at all levels to provide ideas, opinions, and support the process of decision making. This indicates that the firm has a(n) ________. A. decentralized system B. centralized system C. bureaucratic structure D. formal structure E. mechanistic design Answer: A Page: 287 Learning Objective: 11.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

98.

Which of the following is true with regard to centralization and decentralization? A. Organizations cannot operate with decentralization without giving up centralized control. B. Advances in information technology help top managers maintain centralized control. C. Empowerment and horizontal structures are contributing to more centralization in organizations. D. Organizations with organic designs are highly centralized. E. Organizations with mechanistic designs are highly decentralized. Answer: B Page: 288 Learning Objective: 11.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

People in ________ positions provide technical expertise for other parts of the organization. A. recruiting B. management C. line personnel D. staff E. mechanistic Answer: D Page: 288 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Which of the following is true with regard to use of staff positions? A. Organizations can lower costs and increase efficiency by employing fewer staff personnel. B. When organizations have smaller staff units, they tend to incur high expenditures. C. Line personnel provide expert advice and guidance to people in staff positions. D. Organizations can create a central core of full time staff personnel to improve efficiency. E. Organizations should focus on employing more staff personnel to increase efficiency. Answer: A Page: 289 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions

101.

What are the potential advantages of matrix structures? Answer: The potential advantages of matrix structures include: • Better communication and cooperation across functions. • Improved decision making; problem solving takes place at the team level where the best information is available. • Increased flexibility in adding, removing, or changing operations to meet changing demands. • Better customer service; there is always a program, product, or project manager informed and available to answer questions. • Better performance accountability through the program, product, or project managers. • Improved strategic management; top managers are freed from lower-level problem solving to focus time on more strategic issues. Page: 278 Learning Objective: 11.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

What are the advantages and disadvantages of network structures? Answer: The advantages of network structures include: network structures are lean and streamlined. They help organizations stay cost-competitive by reducing overhead and increasing operating efficiency. Network concepts allow organizations to employ outsourcing strategies and contract out specialized business functions. Within the operating core of a network structure, furthermore, interesting jobs are created for those who coordinate the entire system of relationships. The potential disadvantages of network structures lie largely with the demands of new management responsibilities. The more complex the business or mission of the organization, the more complicated it is to control and coordinate the network of contracts and alliances. If one part of the network breaks down or fails to deliver, the entire system suffers. Also, there is the potential to lose control over activities contracted out and to experience a lack of loyalty among contractors who are used infrequently rather than on a long-term basis. Page: 281 Learning Objective: 11.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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103.

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Describe the steps involved in the process of delegation. Answer: In the first step, the manager assigns responsibility by carefully explaining the work or duties someone else is expected to do. This responsibility is an expectation for the other person to perform assigned tasks. In the second step, the manager grants authority to act. Along with the assigned task, the right to take necessary actions (for example, to spend money, direct the work of others, or use resources) is given to the other person. In the third step, the manager creates accountability. By accepting an assignment, the person takes on a direct obligation to the manager to complete the job as agreed. Page: 286-287 Learning Objective: 11.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 12: Organization Culture and Change

True/False Questions 1.

The organizational culture is what you see and hear when walking around an organization as a visitor, a customer, or an employee. Answer: True Page: 296 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Organizational culture can have a big impact on performance through its influence on employees and customers. Answer: True Page: 296 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Enterprising cultures emphasize collaboration and trust according to LeadershipIQ’s description of common organizational cultures. Answer: False Page: 297 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Collaboration is the process of helping new members learn the cultures and values of the organization. Answer: False Page: 297 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Organizational culture is usually described from the perspective of two levels—the external level, and the internal level. Answer: False Page: 298 Learning Objective: 12.1 Difficulty: Easy

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AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 6.

The observable culture is visible and readily apparent at the surface of every organization. Answer: True Page: 298 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Core values are beliefs and values shared by organization members. Answer: True Page: 299 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

The foundation for ethnocentrism is respect for the full value of human beings. Answer: False Page: 301 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

Workplace spiritualism refers to inclusiveness, pluralism, and respect for diversity in the workplace. Answer: False Page: 301 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

10.

In a truly multicultural organization the organizational culture communicates and supports core values that respect and empower the full diversity of its members. Answer: True Page: 301 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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11.

Socialism is the belief that one’s membership group or subculture is superior to all others. Answer: False Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

12.

Ethnocentrism can creep into organizations and adversely affect the way people relate to one another. Answer: True Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

13.

Ethnic subcultures or national subcultures are formed among persons who share the same skills and work responsibilities. Answer: False Page: 303 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

14.

Occupational and functional subcultures are formed among people who work together and have roots in the same cultural community, country, or region of the world. Answer: False Page: 303 Learning Objective: 12.2

Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 15.

The glass ceiling is not always based on outright gender prejudice. Answer: True Page: 304 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

16.

The leaking pipeline problem is an invisible barrier to advancement by women and minorities in organizations. Answer: False Page: 304

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Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 17.

The glass ceiling leads to the leaking pipeline problem. Answer: True Page: 304 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

18.

Existence of biculturalism in an organization implies discrimination among organizational subcultures. Answer: True Page: 305 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Comprehension

19.

Ideally, every manger should act as a change leader. Answer: True Page: 306 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

20.

A status quo leader is a change leader who is forward-looking, proactive, supportive of new ideas, and open to criticism. Answer: False Page: 306 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

21.

Change leaders are risk-takers. Answer: True Page: 307 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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22.

In the context of change leadership, innovation is embraced by status quo managers. Answer: False Page: 307 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

23.

Bottom-up change tries to tap into ideas and initiative at lower organizational levels and let them percolate upward. Answer: True Page: 307 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

24.

Transformational change is usually led from the bottom. Answer: False Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

25.

Transformational change is at the top of the organizational change pyramid. Answer: True Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

26.

Planned change has a better chance of success when people are used to doing things the traditional way. Answer: False Page: 309 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

27.

The “changing phase” is the first phase in Lewin’s model for planned change. Answer: False Page: 309

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Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 28.

Lewin’s model for planned change depicts change as a non-linear, dynamic process. Answer: False Page: 310 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

29.

Change is a dynamic and complex process. Answer: True Page: 310 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

30.

Education and communication is one of the positive ways to deal with resistance to change that uses discussions, presentations, and demonstrations to educate people beforehand about a change. Answer: True Page: 313 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions 31.

It is important to find a good fit between your personal preferences and the pace and nature of change in the career field and organizations in which you choose to work. To achieve this fit, you have to understand: A. the behavior of your co-workers. B. your tolerance for ambiguity. C. your tolerance for the observable culture of the organization. D. your tolerance for the core culture of the organization. E. how to suppress personal preferences and adhere to organizational changes. Answer: B Page: 295 Learning Objective: 12.1 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 32.

________ is the system of shared beliefs and values that guides behavior in organizations. A. Organizational culture B. Organizational tactics C. Organizational dynamics D. Organizational motives E. Organizational workflow Answer: A Page: 296 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

33.

Harold has been working at “Nero Corp,” a consulting firm, for two days now. He is told by one of his colleagues that instead of being assigned work by their supervisors, the employees are given an option of choosing the assignment they would like to work on. This piece of information gives Harold an insight into the: A. turnover rate in the organization. B. level of employee satisfaction in the organization. C. culture of the organization. D. degree of collectivism in the organization. E. profile of his job at the organization. Answer: C Page: 296 Learning Objective: 12.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

34.

________ is the process through which new members learn the culture of an organization. A. Unfreezing B. Ethnocentrism C. Socialization D. Ethical reasoning E. Creative visualization Answer: C Page: 297 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

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35.

The ________ is what one sees and hears when walking around an organization as a visitor, a customer, or an employee. A. role culture B. power culture C. core culture D. observable culture E. person culture Answer: D Page: 298 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

36.

It is Will’s second month at his new job and he has noticed that people dress casually every Friday. He feels that his co-workers are helpful and his bosses are friendly. He is comforted by the fact that if in doubt he can always ask for help and not be afraid of being shunned and embarrassed. Will has been influenced by which of the following organizational cultures? A. Observable culture B. Power culture C. Core culture D. Task culture E. Role culture Answer: A Page: 298 Learning Objective: 12.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

37.

Segal’s team has successfully completed one of the most important projects of the company. To recognize the long hours and the extra effort that Segal’s team had put in, the organization gives them half a day off and organizes a team lunch. This is associated with which of the following organizational cultures? A. Power culture B. Core culture C. Task culture D. Observable culture E. Role culture Answer: D Page: 298 Learning Objective: 12.1 Difficulty: Easy AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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38.

Which of the following scenarios gives us an insight into the observable culture of “Next Systems,” a tech consulting firm? A. The requirement that all employees wear their ID tags B. The reward and recognition given to the best employees on a monthly basis C. The belief that hard work leads to favorable results D. The priority given to quality E. The expectation of integrity in all tasks Answer: B Page: 299 Learning Objective: 12.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

39.

Which of the following scenarios is an example of the observable culture of an organization? A. Prohibiting the use of camera phones in the office premises B. The requirement that all teams conduct a weekly team meeting C. The rewarding of a team’s achievement by conducting a team outing D. The emphasis on deadlines E. The encouragement of innovation Answer: C Page: 299 Learning Objective: 12.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

Shepherd, who has made the maximum number of sales done in a day at “Sale Away,” a marketing company, is considered the best salesperson at the company. He is portrayed as a hero, and a benchmark that others should reach. This gives an understanding of which of the following organizational cultures of Sale Away? A. Power culture B. Core culture C. Task culture D. Observable culture E. Role culture Answer: D Page: 299 Learning Objective: 12.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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41.

The ________ of an organization consists of the main values, or underlying assumptions and beliefs that shape and guide people’s behaviors in an organization. A. power culture B. core culture C. task culture D. observable culture E. role culture Answer: B Page: 299 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

42.

At Mario’s Café, the owner always treats the customer with respect, and if any customer complains about the quality of the coffee or cakes, the owner himself addresses the issue to the customer’s satisfaction. This has ensured that Mario’s Café has become a very popular coffee shop. This is an example of Mario Café’s ________. A. power culture B. task culture C. core culture D. peripheral culture E. ceremonial culture Answer: C Page: 299 Learning Objective: 12.1 Difficulty: Moderate AACSB: Reflective thinking Bloom’s Taxonomy: Application

43.

Value-based management: A. improves the observable culture of an organization. B. increases an organization’s tolerance for ambiguity. C. communicates and enacts an organization’s core beliefs. D. suppresses the idea of innovation within the organization. E. emphasizes the rigidity of the organization’s regulations. Answer: C Page: 300 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

44.

________ create(s) meaning and shared community among organizational members. A. Ecological fallacy B. Workplace spirituality

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C. Workplace etiquette D. Organizational ethics E. Nepotism Answer: B Page: 301 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 45.

Which of the following is based on the principle that people are inwardly enriched by meaningful work and a sense of personal connection with others inside and outside of the organization? A. Ecological fallacy B. Acculturation C. Ethnocentrism D. Power culture E. Workplace spirituality Answer: E Page: 301 Learning Objective: 12.1 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

46.

Which characteristic of multiculturalism implies that members of both minority cultures and majority cultures are influential in setting key values and policies? A. Structural integration B. Pluralism C. Informal network integration D. Absence of prejudice and discrimination E. Minimum intergroup conflict Answer: B Page: 301 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

47.

With respect to multicultural organizations, structural integration implies that: A. diversity does not lead to destructive conflicts between members of majority and minority cultures. B. a variety of training and task-force activities address the need to eliminate culturegroup biases. C. members of both minority cultures and majority cultures are influential in setting key values and policies.

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D. various forms of mentoring and support groups assist in the career development of minority-culture members. E. minority-culture members are well represented in jobs at all levels and in all functional responsibilities. Answer: E Page: 301 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 48.

In multicultural organizations, informal network integration implies that: A. diversity does not lead to destructive conflicts between members of majority and minority cultures. B. a variety of training and task-force activities address the need to eliminate culturegroup biases. C. members of both minority cultures and majority cultures are influential in setting key values and policies. D. various forms of mentoring and support groups assist in the career development of minority-culture members. E. minority-culture members are well represented in jobs at all levels and in all functional responsibilities. Answer: D Page: 301 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

49.

Which characteristic of multiculturalism implies that a variety of training and task-force activities address the need to eliminate culture-group biases? A. Structural integration B. Pluralism C. Informal network integration D. Absence of prejudice and discrimination E. Minimum intergroup conflict Answer: D Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

50.

In a multicultural organization, minimum intergroup conflict ensures that: A. diversity does not lead to destructive conflicts between members of majority and minority cultures.

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B. a variety of training and task-force activities address the need to eliminate culturegroup biases. C. various forms of mentoring and support groups assist in the career development of minority-culture members. D. minority-culture members are well represented in jobs at all levels and in all functional responsibilities. E. members of both minority cultures and majority cultures are influential in setting key values and policies. Answer: A Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 51.

At the corporate office in Texas, expatriates have been assigned mentors who guide them on new projects. The mentors familiarize the expatriates with American culture and ways of doing business. Which of the characteristics of multiculturalism is evident here? A. Structural integration B. Pluralism C. Informal network integration D. Absence of prejudice and discrimination E. Minimum intergroup conflict Answer: C Page: 301 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

52.

Candies Unlimited is famous for its candies with international flavors such as “Tuscandy,” “Choo-Me-in.” The company has experts from across the globe who develop new flavors from their country of origin. This proof of ________ implies that Candies Unlimited is a multicultural organization. A. structural integration B. pluralism C. informal network integration D. ethnocentrism E. minimum intergroup conflict Answer: B Page: 302 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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53.

In the context of multicultural organizations, ________ are groups of people who share similar beliefs and values based on their work or personal characteristics. A. gender subcultures B. organizational subcultures C. core culture groups D. generational subcultures E. ethnocentric groups Answer: B Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

54.

Which of the following is true about ethnocentrism? A. It leads to cohort disparity in organizations. B. It forms among people who work together and share similar ages. C. It is the belief that one’s membership group or subculture is superior to all others. D. It forms among persons who work together and share the same gender identities. E. It refers to the belief that women cannot handle senior positions in organizations. Answer: C Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

55.

________ are formed among persons who work together and share similar ages, such as Millennials and Baby Boomers. A. Organizational sects B. Generational subcultures C. Ethnic subcultures D. Gender subcultures E. Occupational and functional subcultures Answer: B Page: 302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

56.

Manson’s Inc., a tech support company, ensures that its employees are not overworked. The employees get half a day off every alternate Friday, when the men go to the local sports bar and the women hold their coffee club meetings. Which of the following subcultures is evident at the multicultural Manson’s Inc? A. Ethnocentric subculture B. Generational subculture

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C. Ethnic subculture D. Gender subculture E. Occupational and functional subculture Answer: D Page: 302 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 57.

The manager at “Stinson’s Inc.” noticed that his workforce displayed a very clear distinction between the old timers and the rest of the population. He decided to address this gap between the ________ that could affect the organization’s performance. A. organizational sects B. generational subcultures C. ethnic subcultures D. gender subcultures E. occupational and functional subcultures Answer: B Page: 302 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

58.

A tech company based in Texas sent a core team to their branch in Dublin to solve certain technical issues. The team members from Texas found it difficult to socialize with the rest of the engineers in the Dublin office. They felt discriminated against. This proves the existence of ________ in the organization. A. polycentric subcultures B. generational subcultures C. ethnic or national subcultures D. gender subcultures E. occupational and functional subcultures Answer: C Page: 303 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

59.

________ are formed among persons who share the same skills and work responsibilities. A. Cohort subcultures B. Generational subcultures C. Ethnic or national subcultures D. Gender subcultures

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E. Occupational and functional subcultures Answer: E Page: 303 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 60.

Some employees at “Bloom’s Inc.” have decided to have inter-departmental basketball matches in the organization. There would be four teams: the accounting team, the finance team, the marketing team, and the product delivery team. Senior managers are concerned about this decision as they feel that the emphasis on ________ within their multicultural organization might have adverse effects on the combined workforce. A. organizational sects B. generational subcultures C. ethnic subcultures D. gender subcultures E. occupational and functional subcultures Answer: E Page: 303 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

61.

Which of the following is an invisible barrier to advancement by women and minorities in organizations? A. Generational subcultures B. Ethnocentrism C. Multiculturalism D. Glass ceiling E. Revolving door Answer: D Page: 304 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

62.

Rene has noticed that in her organization, only men are promoted to the senior positions. She feels that she is as qualified as her male counterparts, but has been denied any promotion for the past two years. Though she likes her job, she feels unappreciated and decides to quit the organization. This is an example of ________. A. the leaking pipe problem B. a power distance culture C. a generation subculture

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D. a gender subculture E. ethnocentrism Answer: A Page: 304 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 63.

________ occurs when minority members adopt characteristics of majority cultures in order to succeed. A. Ethnocentrism B. Nepotism C. Discrimination D. Biculturalism E. Segregation Answer: D Page: 305 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

64.

Andy McCormack from the corporate office in Ireland has been working at the American branch of Inventors Inc. since a month. He has joined American conversation classes to overcome his strong accent. Though he misses Irish food, he prefers to eat out with his American colleagues. This is an example of ________. A. ethnocentrism B. socialization C. discrimination D. biculturalism E. diversity Answer: D Page: 305 Learning Objective: 12.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

65.

With respect to diversity leadership, the “affirmative action” leadership approach to diversity refers to: A. creating upward mobility for minorities and women. B. building quality relationships with respect for diversity. C. achieving full utilization of diverse human resources. D. adopting characteristics of majority cultures in order to succeed. E. helping people better understand and respect individual differences.

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Answer: A Page: 305 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 66.

With respect to diversity leadership, the “valuing differences” leadership approach to diversity refers to: A. creating upward mobility for minorities and women. B. building quality relationships with respect for diversity. C. achieving full utilization of diverse human resources. D. adopting characteristics of majority cultures in order to succeed. E. allowing members to reach their full potential. Answer: B Page: 305 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

67.

With respect to diversity leadership, the “managing diversity” leadership approach to diversity refers to: A. creating upward mobility for minorities and women. B. building quality relationships with respect for diversity. C. achieving full utilization of diverse human resources. D. adopting characteristics of majority cultures in order to succeed. E. helping people better understand and respect individual differences. Answer: C Page: 305 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

68.

A ________ in a multicultural organization takes initiative in trying to alter the behavior of another person or social system. A. groupthinker B. change leader C. biculturalist D. mediator E. status quo manager Answer: B Page: 306 Learning Objective: 12.3 Difficulty: Easy

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AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge 69.

Michael has been the manager of “Innovate Systems” for two years. He is known to be a risk taker and always waits for the next big project. He is a hard worker and takes initiative to handle critical issues. Michael is a ________. A. passive manager B. change leader C. arm’s length manager D. groupthinker E. status quo manager Answer: B Page: 307 Learning Objective: 12.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

70.

“NetCo Ltd.” needs to handle its new account in the most effective and innovative way to ensure that its new client signs more contracts in the future. The enthusiastic team members of Michael’s team come up with a number of innovative suggestions and strategies. However, Michael, fearing uncertainty and the unpredictability of a new process, rejects all the innovative ideas and asks his team to stick to the traditional way of working. Harris depicts the characteristics of a ________. A. motivator B. change leader C. proactive manager D. democratic manager E. status quo manager Answer: E Page: 307 Learning Objective: 12.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

71.

With respect to change leadership, which of the following implies initiation of change from senior management? A. Bottom-up change B. Incremental change C. Frame-bending change D. Top-down change E. Organic change Answer: D Page: 307 Learning Objective: 12.3

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 72.

Barry, the director at Grover Inc., decides to make some changes in the structure of his organization. He believes that this will improve the performance of the organization. This change is an example of ________. A. bottom-up change B. incremental change C. organic change D. top-down change E. frame-bending change Answer: D Page: 307 Learning Objective: 12.3 Difficulty: moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

73.

Which of the following is the main reason for the failure of top-down change? A. The inability to include senior staff in the decision making process B. The inability to apply it to use it to make major and comprehensive redirection of the organization C. The unfair advantage given to the lower-level employees over the higher-level management D. Its focus on too much dialogue and participation E. Poor implementation, if perceived as insensitive to the needs of lower-level personnel Answer: E Page: 307 Learning Objective: 12.3 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Comprehension

74.

In the context of change leadership, ________ implies that change initiatives come from all levels in the organization. A. bottom-up change B. radical change C. transformational change D. top-down change E. frame-breaking change Answer: A Page: 307 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 75.

Willis’s company is not able to meet targets and this is affecting the company’s revenues. Will decides to hold weekly meetings with employees from all levels of the organization to find a solution to the company’s problem. He listens to the employees carefully and based on their suggestions, gradually implements certain changes in the organization. This is an example of ________. A. bottom-up change B. radical change C. transformational change D. top-down change E. frame-breaking change Answer: A Page: 307 Learning Objective: 12.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

76.

________ bends and adjusts existing ways to improve performance. A. Radical change B. Incremental change C. Transformational change D. Top-down change E. Frame-breaking change Answer: B Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

Which of the following is true of incremental change? A. It is a radical or frame-breaking change. B. Its execution results in a major and comprehensive redirection of the organization. C. It involves evolutions in products, processes, technologies, and work system. D. It creates fundamental shifts in strategies, culture, structures, and even the underlying sense of purpose or mission. E. Its intent is to break and remake the system. Answer: C Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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78.

TGH, a clothing manufacturer, decides to upgrade its machines and train its workers in order to improve its productivity. These changes are examples of ________. A. radical change B. incremental change C. transformational change D. top-down change E. frame-breaking change Answer: B Page: 308 Learning Objective: 12.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

79.

________ results in a major and comprehensive redirection of the organization. A. Bottom-up change B. Incremental change C. Transformational change D. Frame-bending change E. Continuous improvement change Answer: C Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

Which of the following is true of transformational change? A. It is usually led from the top. B. It is a modest, frame-bending change. C. It does not intend to break and remake the system. D. It involves gradual and continual change toward the desired result. E. It involves evolutions in products, processes, technologies, and work systems. Answer: A Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

81.

“Haley’s perfumes” has recently replaced its CEO. The new CEO has decided to change the entire organizational structure, introduce more transparency, and introduce a new style of communication in the company. This is an example of ________. A. bottom-up change B. incremental change C. transformational change

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D. frame-bending change E. continuous improvement change Answer: C Page: 308 Learning Objective: 12.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 82.

________ is at the lowest level in an organizational change pyramid. A. Radical change B. Incremental change C. Transformational change D. Top-down change E. Frame-breaking change Answer: B Page: 308 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

83.

According to Kurt Lewin’s model for planned change, which of the following phases involves preparing a system for change? A. Unfreezing phase B. Changing phase C. Refreezing phase D. Improvising phase E. Coercing phase Answer: A Page: 309 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

Which of the following scenarios depict the unfreezing stage according to Lewin’s model for planned change? A. A firm firing an employee owing to bad performance. B. A firm rearranging existing teams in order to cope with the new system upgrade that has to be made. C. A firm re-establishing its competency in the market by executing transformational changes. D. A firm hiring new employees because it is experiencing a high rate of employee turnover.

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E. A firm deciding to outsource some of its projects because of lack of appropriate talent and high costs of working in-house. Answer: B Page: 309 Learning Objective: 12.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Application 85.

Not creating a sense of urgency for change and neglecting to build a coalition of influential persons who support it is a major reason for the failure of the ________ phase in the Lewin’s model for planned change. A. unfreezing B. changing C. refreezing D. improvising E. coercing Answer: A Page: 309 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

86.

According to Kurt Lewin’s model for planned change, which of the following phases involves making actual changes in the system? A. Unfreezing phase B. Changing phase C. Refreezing phase D. Improvising phase E. Coercing phase Answer: B Page: 309 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

The final phase in Lewin’s planned change process is ________. A. unfreezing B. changing C. refreezing D. improvising E. coercing Answer: C Page: 309

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Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 88.

According to Kurt Lewin’s model for planned change, which of the following phases involves stabilizing the system after change? A. Unfreezing phase B. Changing phase C. Refreezing phase D. Improvising phase E. Coercing phase Answer: C Page: 309 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

89.

In which of the following phases in Lewin’s planned change process is it important to evaluate results, provide feedback to the people involved, and make any required modifications in the original change? A. Unfreezing phase B. Changing phase C. Refreezing phase D. Improvising phase E. Coercing phase Answer: C Page: 309 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

The most common error in the refreezing phase in Lewin’s model for planned change is: A. facilitating the forgetting or abandoning of change with the passage of time. B. declaring victory too soon and withdrawing support before the change is really fixed in normal routines. C. implementing change before people are prepared and feel a need for it. D. not creating a sense of urgency for change and neglecting to build a coalition of influential persons who support it. E. preparing for more change even before the present one is fully implemented. Answer: B Page: 310 Learning Objective: 12.3 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 91.

Which of the following specifically involves making continual adjustments as changes are being implemented? A. Unfreezing phase B. Changing phase C. Refreezing phase D. Improvising phase E. Coercing phase Answer: D Page: 310 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

The owner of Breads and Cakes has purchased a few new machines. To ensure that the new machines are effective, he continually gathers feedback from his employees and makes relevant changes by customizing the machines based on their feedback. What kind of change is depicted here? A. Frame-breaking change B. Improvisational change C. Transformational change D. Coercive change E. Radical 8change Answer: B Page: 310 Learning Objective: 12.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

93.

Which of the following change strategies in an organization pursues change through formal authority and/or the use of rewards or punishments? A. Rational persuasion strategy B. Environmental-adaptive strategy C. Shared power strategy D. Force-coercion strategy E. Collaborative strategy Answer: D Page: 310 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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94.

With respect to the force-coercion strategy, ________ involves straightforward and unilateral action to “command” that change take place. A. direct forcing B. political maneuvering C. diplomatic coercing D. indirect maneuvering E. alliance forming Answer: A Page: 311 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

With respect to the force-coercion strategy, ________ involves working indirectly to gain special advantage over other persons and thereby make them change. A. direct forcing B. political maneuvering C. unilateral decision-making D. rational persuading E. authoritarian planning Answer: B Page: 311 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

Which of the following change strategies in an organization pursues change through empirical data and sound argument? A. Rational persuasion strategy B. Environmental-adaptive strategy C. Shared power strategy D. Force-coercion strategy E. Authoritarian strategy Answer: A Page: 311 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

With respect to change strategies, a(n) ________ pursues change by participation in assessing change needs, values, and goals. A. rational persuasion strategy

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B. reason-based strategy C. shared power strategy D. force-coercion strategy E. authoritarian strategy Answer: C Page: 312 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 98.

Which of the following change strategies is empowerment based and highly participative? A. Rational persuasion strategy B. Environmental-adaptive strategy C. Shared power strategy D. Force-coercion strategy E. Authoritarian strategy Answer: C Page: 312 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

99.

With respect to change strategies, ________ is more likely to get slower results with high commitment and longer term internalization. A. rational persuasion strategy B. top-down strategy C. shared power strategy D. force-coercion strategy E. authoritarian strategy Answer: C Page: 312 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

100.

________ tries to covertly influence others by selectively providing information and structuring events in favor of the desired change. A. Education and communication B. Explicit and implicit coercion C. Manipulation and co-optation D. Negotiation and agreement E. Facilitation and support

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Answer: C Page: 314 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension Essay Questions

101.

Briefly describe the characteristics of a multicultural organization. Answer: Multicultural organizations have the following characteristics. • Pluralism—members of both minority cultures and majority cultures are influential in setting key values and policies. • Structural integration—minority-culture members are well represented in jobs at all levels and in all functional responsibilities. • Informal network integration—various forms of mentoring and support groups assist in the career development of minority-culture members. • Absence of prejudice and discrimination—A variety of training and task-force activities address the need to eliminate culture-group biases. • Minimum intergroup conflict—Diversity does not lead to destructive conflicts between members of majority and minority cultures. Page: 301-302 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Knowledge

102.

How does the glass ceiling affect women? Answer: One reason why more women aren’t getting to the top is that the glass ceiling still causes many to plateau or drop out at earlier career stages. This glass ceiling isn’t always based on outright gender prejudice. But it may trace to male-dominant organizational cultures and executive mindsets that have a hard time tolerating women who want both families and careers, thus making it hard for them to resolve the “produce or reproduce dilemma.” Even as employers put into place female-friendly human resource policies such as flexible hours or work arrangements, some women may feel forced at times to choose between career and family. It’s a choice that career often loses. The term leaking pipeline problem is now used to describe situations where qualified and high-performing women drop out of upward career paths for these reasons and other glass ceiling obstacles. Page: 304 Learning Objective: 12.2 Difficulty: Easy AACSB: Multicultural and diversity understanding Bloom’s Taxonomy: Comprehension

103.

Write a short note on how resistance to change can be used to achieve a better “fit” among the planned change, the situation, and the people involved.

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Answer: The presence of resistance usually means that something can be done to achieve a better “fit” among the planned change, the situation, and the people involved. Things to check when seeking a better fit include the following. 1. Check the benefits—Make sure the people involved see a clear advantage in making the change. People should know “what is in it for me” or “what is in it for our group or the organization as a whole.” 2. Check the compatibility—Keep the change as close as possible to the existing values and ways of doing things. Minimizing the scope of change helps keep it more acceptable and less threatening. 3. Check the simplicity—Make the change as easy as possible to understand and use. People should have access to training and assistance to make the transition to new ways as easy as possible. 4. Check the triability—Allow people to try the change little by little, making adjustments as they go. Don’t rush the change, and be sure to adjust the timing to best fit work schedules and cycles of high/low workloads. Page: 313-314 Learning Objective: 12.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 13: Human Resource Management

True/False Questions 1.

People low on conscientiousness tend to be laid back, less goal-oriented, less driven by success, and less self-disciplined. Answer: True Page: 321 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Person–organization fit is the extent to which an individual’s values, interests, and behavior are consistent with the culture of the organization. Answer: True Page: 323 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The strategic role of HRM does not extend to supporting core values and corporate culture. Answer: False Page: 324 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The use of bona fide occupational qualifications based on sex, religion, age, and national origin are not allowed under any circumstances. Answer: False Page: 325 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Quid pro quo sexual harassment occurs when job decisions are made based on whether the employee submits to or rejects sexual advances. Answer: True Page: 326 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A job analysis lists the qualifications required of a job holder. Answer: False Page: 329

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Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Recruiting websites such as Indeed, Hot Jobs, and Simply Hired are sources of internal recruits. Answer: False Page: 329 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

External recruitment brings outsider applicants with fresh perspectives, expertise, and work experience; but extra effort is needed to get reliable information on them. Answer: True Page: 330 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Higher levels of early job satisfaction, greater trust in the organization, and less inclination to quit prematurely are among the expected benefits of traditional recruitment practices. Answer: False Page: 330 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

10.

Magnadyne Inc. has an immediate need for accountants and does not have sufficient funds to invest in training. Hence, hiring for best existing qualifications, rather than the best person, should be preferred. Answer: True Page: 331 Learning Objective: 13.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

11.

In an assessment center, applicants are evaluated while performing actual work tasks. Answer: False Page: 333 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

When orientation is weak or neglected, socialization largely takes place informally as newcomers learn about the organization and their jobs through casual interactions with coworkers. Answer: True Page: 334 Learning Objective: 13.3

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Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

Mentoring is a form of off -the-job training in which early-career employees are formally assigned as protégés to senior persons. Answer: False Page: 334 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

14.

The evaluation purpose of performance appraisal focuses on future performance. Answer: False Page: 335 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

All trait-based performance appraisal methods tend to be very subjective and as a result, have relatively poor reliability and validity. Answer: True Page: 335 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

The critical-incident technique is a behavior-based approach that can reduce the influence of recency bias on evaluations. Answer: True Page: 337 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

Results-based performance measures may ignore the impact of circumstances beyond the employee’s control, such as economic conditions or poor performance by someone else. Answer: True Page: 338 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

360-degree appraisals may include self-evaluations by the job holder to identify strengths, weaknesses, and development needs. Answer: True Page: 338 Learning Objective: 13.3 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 19.

If you are part of a merit pay system, your pay increases will be based on some assessment of how well you perform. Answer: True Page: 340 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

20.

In contrast to straight bonuses, profit-sharing plans allow employees to share in cost savings or productivity gains realized by their efforts. Answer: False Page: 341 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

The logic behind stock options is that the option holders will work hard so that the company performs well and they reap some of the financial benefits. Answer: True Page: 341 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

22.

Employee benefits are monetary forms of compensation like travel costs and other reimbursements. Answer: False Page: 342 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

The potential benefits of early retirement incentive programs for employers are opportunities to lower payroll costs by reducing positions and replacing higher-wage workers with less expensive newer hires. Answer: True Page: 343 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

The principle of employment-at-will gives employees the right to quit their job at any time for any reason. Answer: True Page: 343 Learning Objective: 13.4

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 25.

Labor unions are organizations to which employers belong and that deal with workers on the employers’ behalf. Answer: False Page: 343 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

26.

Affirmative action is the process through which labor and management representatives negotiate, administer, and interpret labor contracts. Answer: False Page: 344 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

27.

________ is the degree to which an individual is achievement-oriented, careful, hard-working, organized, persevering, responsible, and thorough. A. Veracity B. Fecundity C. Righteousness D. Conscientiousness E. Precariousness Answer: D Page: 321 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

Which of the following is true of people high on conscientiousness? A. They tend to be laid back. B. They are less goal-oriented. C. They are less driven by success. D. They are more self-disciplined. E. They are often procrastinators. Answer: D Page: 321 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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29.

Which of the following is true of conscientiousness? A. Conscientious individuals pay less attention to the details of their jobs. B. The job performance of conscientious individuals tends to decrease over time. C. Conscientiousness is the most negatively related personality characteristic to work performance across a wide range of jobs. D. Conscientiousness decreases performance in training programs. E. Conscientiousness improves the job knowledge of employees. Answer: E Page: 321 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

30.

_________ is the economic value of people with job-relevant knowledge, skills, abilities, ideas, energies, and commitments. A. Human capital B. Operating capital C. Risk capital D. Venture capital E. Financial capital Answer: A Page: 322 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

31.

________ is a process of attracting, developing, and maintaining a talented work force. A. Customer relationship management B. Human resource management C. Database management D. Supply chain management E. Enterprise feedback management Answer: B Page: 322 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

HRM specialists within organizations deal with ________. A. inventory management B. promotion activities C. publicity D. customer feedback E. employee relations Answer: E Page: 323 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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33.

Which of the following is an HRM job title? A. Copywriter B. Sales representative C. Corporate recruiter D. File clerk E. Marketing manager Answer: C Page: 323 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

The goal of human resource management is to ________. A. maintain the files and databases of an organization B. enhance organizational performance through the effective utilization of people C. control the promotion and advertising expenditures D. represent a business and sell its merchandise to customers in a store E. maintain and audit all the business accounts of an organization Answer: B Page: 323 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

Which of the following is involved in the HRM task of attracting a quality workforce? A. Performance management B. Career development C. Human resource planning D. Labor–management relations E. Compensation and benefits Answer: C Page: 323 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

Which of the following is involved in the HRM task of developing a quality workforce? A. Employee recruitment B. Employee selection C. Employee orientation D. Retention and turnover E. Compensation and benefits Answer: C Page: 323 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

37.

Which of the following is involved in the HRM task of maintaining a quality workforce?

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A. Employee selection B. Training and development C. Performance management D. Labor–management relations E. Employee recruitment Answer: D Page: 323 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 38.

________ fit is the extent to which an individual’s knowledge, skills, experiences, and personal characteristics are consistent with the requirements of their work. A. Person-team B. Person–job C. Person–organization D. Customer-person E. Customer-organization Answer: B Page: 323 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

________ fit is the extent to which an individual’s values, interests, and behavior are consistent with the culture of the organization. A. Customer-person B. Person-team C. Customer-organization D. Person–job E. Person–organization Answer: E Page: 323 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

40.

The purpose of ________ programs is to ensure that women and minorities are represented in the workforce in proportion to their labor market availability. A. realistic recruiting B. bona fide occupational qualifications C. affirmative action D. employee assistance E. discriminative action Answer: C Page: 325 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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41.

The use of bona fide occupational qualifications based on ________ is not allowed under any circumstances. A. sex B. religion C. age D. national origin E. race Answer: E Page: 325 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

42.

________ occurs when someone is denied a job or a job assignment for reasons that are not jobrelevant. A. Discrimination B. Domination C. Acculturation D. Affirmative action E. Nepotism Answer: A Page: 325 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

Title VII of the Civil Rights Act of 1964 prohibits discrimination in all aspects of employment based on ________. A. disabilities B. national origin C. age D. pregnancy E. family matters Answer: B Page: 325 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

Which of the following is true of the ADEA? A. It prohibits the type of discrimination where a qualified individual is replaced with a worker of another race. B. It does not outlaw discrimination in hiring and promotion. C. It requires employers to provide specialized accommodations for aged employees. D. It allows statements in job notices or advertisements of age preference and limitations. E. It prohibits mandatory retirement ages in most employment sectors. Answer: E Page: 325 Learning Objective: 13.1 Difficulty: Moderate

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 45.

Quid pro quo sexual harassment occurs when ________. A. an employee is deliberately provoked by mocking or teasing in an aggressive manner B. an employee is playfully but not maliciously harassed C. any unwelcome form of sexual conduct creates an intimidating, hostile, or offensive working environment D. a job decision is made based on whether the employee submits to or rejects sexual advances E. an employee is threatened with physical attack Answer: D Page: 326 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

46.

________ holds that persons performing jobs of similar importance should be paid at comparable levels. A. Affirmative action B. Equal employment opportunity C. Merit pay D. Comparable worth E. Equality principle Answer: D Page: 327 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

47.

All male mechanics at a local garage are paid $50 per day. However, Alexa, the sole female employee with the same job role is paid $30. Alexa demands that she be paid the same wages as her male counterparts, as she performs the same jobs. Alexa believes in the idea of ________. A. equal employment opportunity B. comparable worth C. realistic pay D. merit pay E. affirmative action Answer: B Page: 327 Learning Objective: 13.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

48.

________ are hired as needed and are not part of the organization’s permanent workforce. A. Part-time workers B. Frontline staff C. Independent contractors D. Flextime employees E. Line managers

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Answer: C Page: 327 Learning Objective: 13.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 49.

________ is the orderly study of job facets to determine what is done when, where, how, why, and by whom. A. Job analysis B. Job description C. Job specification D. Job supervision E. Job detailing Answer: A Page: 329 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

50.

A job ________ details the duties and responsibilities of a job holder. A. specification B. description C. analysis D. evaluation E. supervision Answer: B Page: 329 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

The information in a job analysis can be used to create ________, which list the qualifications required of a job holder. A. job specifications B. job descriptions C. bona fide occupational qualifications D. equal employment opportunities E. job roles Answer: A Page: 329 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

________ is a set of activities designed to attract a qualified pool of job applicants to an organization. A. Recruitment B. Remuneration C. Selection

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D. Orientation E. Training Answer: A Page: 329 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 53.

Which of the following is the first step in a typical recruitment process? A. Preliminary contact with potential job candidates B. Face-to-face interview C. Advertisement of a job vacancy D. Initial screening to create a pool of qualified applicants E. Employment test Answer: C Page: 329 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

Which of the following is the final step of the recruitment process? A. Personal interview B. Behavioral interview C. Preliminary contact with potential job candidates D. Initial screening to create a pool of qualified applicants E. Employment test Answer: D Page: 329 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

Which of the following is a method of external recruitment? A. Divisional transfers B. Company electronic postings C. Manager recommendations D. Expatriation E. Employee referrals Answer: E Page: 329 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

Which of the following is a method of internal recruitment? A. Recruiting websites B. Virtual job fairs C. Managers’ recommendations

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D. Employment agencies E. Headhunters Answer: C Page: 329 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 57.

Which of the following is an advantage of external recruitment? A. It is easier to get reliable information on applicants from outside the organization. B. It brings outsider applicants with fresh perspectives, expertise, and work experience. C. It is usually quicker and focuses on persons whose performance records are well known. D. It helps to reduce turnover rates. E. It aids in the retention of high-quality employees. Answer: B Page: 330 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

58.

Which of the following is true of traditional recruitment? A. It focuses on communicating the positive and negative features of the position. B. The negatives are clearly revealed and not downplayed or concealed. C. It leads to higher levels of early job satisfaction and greater trust in the organization. D. The employer could suffer lost productivity and the added costs of having to recruit again. E. The new employees have less inclination to quit prematurely. Answer: D Page: 330 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

59.

Which of the following is true of realistic job previews? A. It focuses on communicating the most positive features of the job and organization to the applicants. B. The negatives are often downplayed or concealed. C. It creates unrealistic expectations that cause costly turnover when new hires become disillusioned and quit. D. Less inclination of employees to quit prematurely is an expected benefit. E. Lower levels of early job satisfaction and lesser trust in the organization are the expected consequences. Answer: D Page: 330 Learning Objective: 13.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

60.

________ is the process of choosing individuals to hire from a pool of qualified job applicants.

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A. Orientation B. Selection C. Recruitment D. Promotion E. Remuneration Answer: B Page: 331 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 61.

Which of the following is the first step of the selection process? A. Interview B. Screening applicant information C. Site visit D. Pre-employment check E. Employment testing Answer: B Page: 331 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

The ________ of a selection technique refers to the consistency of results provided by the selection device. A. validity B. accountability C. compatibility D. reliability E. sensitivity Answer: D Page: 331 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

________ means that scores on a selection device have demonstrated links with future job performance. A. Compatibility B. Reliability C. Validity D. Equity E. Accountability Answer: C Page: 331 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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64.

The ________ is the most common method of assessment in the selection process. A. assessment test B. face-to-face interview C. work sample D. telephone interview E. virtual interview Answer: B Page: 331 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

In ________ interviews, the interviewer does not work from a formal and preestablished list of questions that is asked of all interviewees. A. structured B. high validity C. standardized D. unstructured E. closed Answer: D Page: 332 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

66.

In an interview, the interviewer asks the candidate, “Describe a situation in which you disagreed with your superior and how you resolved that situation.” This is an example of a(n) ________ interview. A. exit B. reference C. technical D. closed E. behavioral Answer: E Page: 332 Learning Objective: 13.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

67.

In a face-to-face interview with the manager, the candidate is asked how he would dismiss a group of employees during a lay-off, if he was the HR manager. This would be an example of a(n) ________ interview. A. situational B. cognitive C. psychiatric D. technical E. informal Answer: A Page: 332 Learning Objective: 13.2 Difficulty: Hard

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AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 68.

Biodata methods: A. collect certain personal information that has been proven to correlate with good job performance. B. examine how job candidates handle simulated work situations. C. evaluate applicants while performing actual work tasks. D. ask job candidates about their past behavior, focusing specifically on actions that are likely to be important in the work environment. E. ask job candidates how they would react when confronted with specific work situations they would be likely to experience on the job. Answer: A Page: 333 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

69.

In ________, companies ask applicants to do actual job tasks while being graded by observers on their performance. A. bio data methods B. assessment centers C. cognitive interviews D. psychiatric interviews E. work sampling Answer: E Page: 333 Learning Objective: 13.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

70.

________ refers to a set of activities designed to familiarize new employees with their jobs, coworkers, and key aspects of the organization as a whole. A. Training B. Orientation C. Recruiting D. Selection E. Development Answer: B Page: 334 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

Orientation is a form of ________, a process of learning and adapting to the organizational culture. A. interviewing B. socialization C. development D. training E. sampling

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Answer: B Page: 334 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 72.

________ is a set of activities that helps people acquire and improve job-related skills. A. Socialization B. Orientation C. Recruitment D. Training E. Selection Answer: D Page: 334 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

_________ is a common approach of on-the-job training where people are allowed to spend time working in different jobs or departments or even geographical locations, and thus expand the range of their job capabilities. A. Coaching B. Mentoring C. Socialization D. Orientation E. Job rotation Answer: E Page: 334 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

74.

________ is a form of coaching in which early-career employees are formally assigned as protégés to senior persons. A. Job rotation B. Orientation C. Mentoring D. Conditioning E. Inducting Answer: C Page: 334 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

Which of the following is an example of off-the-job training methods? A. Job rotation B. Coaching C. Temporary promotions D. Mentoring

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E. Management development Answer: E Page: 334 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 76.

________ is the process of formally assessing the work accomplishments and providing feedback to an employee. A. Promotion B. Orientation C. Work sampling D. Training E. Performance appraisal Answer: E Page: 335 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

77.

The ________ purpose focuses on past performance and measures results against standards. A. development B. training C. judgment D. evaluation E. selection Answer: D Page: 335 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

78.

________ is an approach that focuses on providing employees with more frequent and more developmental feedback in an effort to improve their job performance. A. Performance coaching B. Performance evaluation C. Job orientation D. Job evaluation E. Remuneration Answer: A Page: 335 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

79.

Which of the following is required for performance appraisal methods to be reliable and valid? A. They should yield different results over time. B. They should yield different results for different raters. C. They should not measure factors indirectly relevant to job performance, and should consistently yield the same results over time and for different raters.

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D. They should be biased. E. They should measure all factors directly and indirectly relevant to job performance. Answer: C Page: 335 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 80.

A graphic rating scale ________. A. uses specific descriptions of actual behaviors to rate various levels of performance B. uses a checklist of traits or characteristics to evaluate performance C. keeps a log of someone’s effective and ineffective job behaviors D. is a slow and difficult approach for performance evaluation E. is very objective and has relatively high reliability and validity Answer: B Page: 335 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

Which of the following performance appraisal methods uses specific descriptions of actual behaviors to rate various levels of performance? A. Graphic rating scale B. BARS C. 360-degree appraisal D. Multiperson comparison E. Critical-incident technique Answer: B Page: 336 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

82.

Which of the following is true of the behaviorally anchored rating scale? A. It is less reliable and valid than the graphic rating scale. B. It is not consistent with the development purpose of the performance appraisal. C. The evaluations tend to focus on recent behaviors rather than on behavior that occurred throughout the evaluation period. D. An employee with a BARS rating of 4 most likely treats his customers rudely and with disrespect. E. It describes expected behaviors for various levels of performance achievement in a job. Answer: C Page: 336-337 Learning Objective: 13.3 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

________ overemphasizes the latest behaviors when evaluating individual performance. A. The critical-incident technique B. Recency bias

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C. A graphic rating scale D. 360-degree appraisals E. A multiperson comparison Answer: B Page: 337 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 84.

The ________ is a behavior-based approach that can reduce the influence of recency bias on evaluations by keeping a running log or inventory of a person’s effective and ineffective job behaviors. A. 360-degree appraisal B. multiperson comparison C. graphic rating scale D. critical-incident technique E. BARS Answer: D Page: 337 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following is true of results-based approaches? A. They focus on employee traits or specific behaviors. B. They are typically qualitative. C. They may ignore the impact of circumstances beyond the employee’s control. D. They are subjective methods of appraisal. E. They focus on recent performances rather than past performances. Answer: C Page: 338 Learning Objective: 13.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

86.

________ is the tendency to give employees a higher performance rating than they deserve. A. Recency bias B. Leniency C. Nepotism D. Neutrality E. Affirmative action Answer: B Page: 338 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

________ are intended to gather feedback from multiple sources in order to provide a more comprehensive evaluation of the employee’s performance. A. 360-degree appraisals

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B. Results-based performance appraisals C. Critical-incident techniques D. Behavior-based performance appraisals E. Trait-based performance appraisals Answer: A Page: 338 Learning Objective: 13.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 88.

________ allows people to more easily balance personal affairs and work responsibilities. A. Recency bias B. Leniency C. Flexibility D. Affirmative action E. Nepotism Answer: C Page: 339 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

89.

________ is a salary or hourly wage paid to an individual. A. Indemnity B. Emolument C. Reimbursement D. Reparation E. Base compensation Answer: E Page: 339 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

In the ________, pay increases are awarded to an employee in proportion to his/her performance contributions. A. merit pay system B. seniority pay system C. employee stock ownership plan D. profit-sharing plan E. early retirement incentive programs Answer: A Page: 340 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

91.

________ plans provide one-time or lump-sum payments to employees who meet specific performance targets or make some other extraordinary contribution, such as an idea for a work improvement.

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A. Profit-sharing B. Gain sharing C. Merit pay D. Bonus pay E. Employee stock ownership Answer: D Page: 341 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 92.

What is the primary difference between profit-sharing and gain-sharing plans? A. Profit-sharing plans provide one-time payments based on performance accomplishments whereas gain-sharing plans provide weekly and/or monthly payments. B. Profit-sharing plans pay increases in proportion to performance contributions whereas gainsharing plans pay in proportion to seniority and experience. C. Profit-sharing plans are most common at the executive level whereas gain-sharing plans are most common at the lower levels. D. Profit-sharing plans are monetary forms of compensation whereas gain-sharing plans are nonmonetary. E. Profit-sharing plans distribute to employees a proportion of net profits earned by the organization whereas gain-sharing plans allow employees to share gains realized by their efforts. Answer: E Page: 341 Learning Objective: 13.4 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

93.

Stock options: A. do not lose value even if the stock price ends up lower. B. are nonmonetary forms of compensation. C. give the owner the right to buy shares of stock at a future date at a fixed price. D. provide one-time or lump-sum payments to employees who meet specific performance targets. E. offer workers to purchase stock in their employing companies whenever they chose to. Answer: C Page: 341 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

94.

________ include nonmonetary forms of compensation that are intended to improve the work and personal lives of employees. A. Profit-sharing and gain-sharing plans B. Stock ownership and stock options C. Employee benefits packages D. Bonus pay plans E. Merit pay system Answer: C Page: 342

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Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 95.

Which of the following employee benefits are mandated by law? A. Personal days and vacations B. Social Security C. Health care D. Retirement plans E. Sick leaves Answer: B Page: 342 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

96.

Family-friendly benefits include ________. A. stock options B. counseling on alcohol C. referrals for sexual abuse D. part-time employment options E. counseling for stress Answer: D Page: 342 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

97.

Martha, an employee at Magnadyne Inc., is experiencing domestic problems due to marital issues. She would be pleased to learn that her employer has a(n) ________ program to help her on such matters. A. employee assistance B. cafeteria benefits C. comparable worth D. collective bargaining E. affirmative action Answer: A Page: 342 Learning Objective: 13.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

98.

________ refers to the involuntary dismissal of an employee. A. Termination B. Retirement C. Affirmative action D. Resignation E. Collective bargaining Answer: A Page: 343

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Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 99.

The employment-at-will doctrine assumes that ________. A. employers must have bona-fide job-related reasons for a termination B. employers can terminate employees at any time for any reason C. workers should be provided legal protections against discriminatory firings D. workers should be provided financial incentives to retire early E. workers should be provided severance packages in the event of dismissal Answer: B Page: 343 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

100.

The principle of ________ gives workers legal protections against discriminatory firings, and employers must have bona-fide job-related reasons for a termination. A. employment-at-will B. collective bargaining C. merit pay D. wrongful discharge E. affirmative action Answer: D Page: 343 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

101.

________ protects employees by recognizing their right to join unions and engage in union activities. A. The Sarbanes-Oxley Act of 2002 B. The Glass–Steagall Act of 1933 C. The Civil Service Reform Act of 1978 D. The Wagner Act of 1935 E. The Taft-Hartley Act of 1947 Answer: D Page: 344 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

________ protects employers from unfair labor practices by unions and allows workers to decertify unions. A. The Fair Labor Standards Act of 1938 B. The Age Discrimination in Employment Act of 1967 C. The Civil Rights Act of 1991 D. The Wagner Act of 1935 E. The Taft-Hartley Act of 1947 Answer: E

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Page: 344 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 103.

________ clarifies the right of government employees to join and be represented by labor unions. A. The Glass–Steagall Act of 1933 B. The Civil Service Reform Act of 1978 C. The Fair Labor Standards Act of 1938 D. The National Labor Relations Act of 1935 E. The Civil Rights Act of 1991 Answer: B Page: 344 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

104.

________ is the process of negotiating, administering, and interpreting a labor contract in labormanagement relations. A. Collective bargaining B. Acculturation C. Mediation D. Nepotism E. Affirmative action Answer: A Page: 344 Learning Objective: 13.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions 105.

Define HRM. Describe its goal and major tasks. Answer: Human resource management is a process of attracting, developing, and maintaining a talented work force. The goal of human resource management is to enhance organizational performance through the effective utilization of people. All managers, not just human resource specialists, share the responsibility to ensure that highly capable and enthusiastic people are in the right positions and working with the support they need to be successful. The three major tasks in human resource management are typically described as: 1. Attracting a quality workforce—human resource planning, employee recruitment, and employee selection. 2. Developing a quality workforce—employee orientation, training and development, and performance management. 3. Maintaining a quality workforce—career development, work–life balance, compensation and benefits, retention and turnover, and labor–management relations. Page: 322-323 Learning Objective: 13.1 Difficulty: Moderate AACSB: Analytic skills 13-25

Schermerhorn-Management, 12th edition

Test Bank

Bloom’s Taxonomy: Comprehension 106.

What is discrimination? List and explain examples of different U.S. laws against employment discrimination. Answer: Discrimination occurs when someone is denied a job or job assignment for reasons that are not job-relevant. The legal protections are quite extensive, as the following examples show: 1. Race, Sex, or Religion—Title VII of the Civil Rights Act of 1964 banned discrimination in all aspects of employment (including hiring, promotion, compensation, and termination) based on race, color, religion, sex, or national origin. 2. Disabilities—The Americans with Disabilities Act of 1990 (ADA) outlaws discrimination against qualified individuals with disabilities—physical or mental impairments that substantially limit one or more major life activities, and requires employers to provide reasonable accommodations for disabled employees. 3. Age—The Age Discrimination in Employment Act (ADEA) of 1967 as amended in 1978 and 1986 prohibits employment discrimination against persons 40 years of age or older. Age discrimination occurs when a qualified individual is adversely affected by a job action that replaces him or her with a younger worker. The ADEA includes a broad ban against age discrimination, and specifically outlaws discrimination in hiring, promotion, compensation, or firing. It forbids statements in job notices or advertisements of age preference and limitations. It also prohibits mandatory retirement ages in most employment sectors. 4. Pregnancy—The Pregnancy Discrimination Act of 1978 protects women from discrimination because of pregnancy. This law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits, such as leave and health insurance, and any other term or condition of employment. 5. Family matters—The Family and Medical Leave Act of 1993 (FMLA) entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month period for specified family and medical reasons such as childbirth, adoption, or serious health conditions involving the employee or his/her family member. To be eligible, an employee must have worked for a covered employer for 12 months and at least 1,250 hours over the previous 12 months. Employers must have at least 50 employees to be covered by this act. Page: 325-326 Learning Objective: 13.1 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

107.

Describe the process of recruiting. What are the different types of recruiting? Explain the advantages and disadvantages of each. Answer: Recruitment is a set of activities designed to attract a qualified pool of job applicants to an organization. The three steps in a typical recruitment process are: 1. advertisement of a job vacancy, 2. preliminary contact with potential job candidates, and 3. initial screening to create a pool of qualified applicants. Recruitment can be external or internal. The recruiting that takes place on college campuses is one example of external recruitment, in which job candidates are sought from outside the hiring organization. Company websites and their social media sites, virtual job fairs, or specialized recruiting websites such as Monster and CareerBuilder, employment agencies and headhunters, university placement centers, personal contacts and employee referrals are all sources of external recruits. Internal recruitment, by contrast, seeks applicants from inside the organization. Most organizations have a procedure for announcing vacancies through newsletters, electronic postings, and the like. They also rely on managers to recommend candidates for advancement.

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Both recruitment methods have potential advantages and disadvantages. External recruitment brings outsider applicants with fresh perspectives, expertise, and work experience. But extra effort is needed to get reliable information on them. Internal recruitment is usually quicker and focuses on persons whose performance records are well known. A history of internal recruitment builds employee commitment and motivation by showing that opportunities exist to advance within the organization. It also helps to reduce turnover rates and aids in the retention of highquality employees. Page: 329-330 Learning Objective: 13.2 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 108.

Describe the process of employee selection. Answer: Once a manager has a pool of qualified candidates, the next step is to select whom to hire. The process of selection involves gathering and assessing information about job candidates and making a hiring decision. Interviews: Very few individuals are hired for professional positions without first sitting through one or more interviews. And, the traditional face-to-face interview with HR staff and/or hiring manager remains the most common method of assessment in the selection process. But rapidly increasing in frequency and importance are the telephone interview and the virtual or online video interview. Both are often part of an initial screening that tests applicants for basics such as technical skill set and experience, as well as communication skills, personal impression, and potential person-organizational culture fit. In unstructured interviews the interviewer does not work from a formal and preestablished list of questions that is asked of all interviewees. Behavioral interviews ask job candidates about their past behavior, focusing specifically on actions that are likely to be important in the work environment. Situational interviews ask applicants how they would react when confronted with specific work situations they would be likely to experience on the job. Employment Tests: Employment tests are often used to identify intelligence, aptitudes, personality, interests, and even ethics. Biodata methods usually take the form of multiple-choice, self- report questionnaires. They collect “hard” biographical information and also include “soft” items that inquire about more abstract things such as value judgments, aspirations, motivations, attitudes, and expectations. When used in conjunction with ability tests, this method can increase the reliability and validity of the selection process. Other types of employment testing involve actual demonstrations of job-relevant skills and personal characteristics. An assessment center evaluates a person’s potential by observing his or her performance in experiential activities designed to simulate daily work. When using work sampling, companies ask applicants to do actual job tasks while being graded by observers on their performance. Generally speaking, organizations should use a combination of methods in order to increase the predictive validity of the selection process. Page: 331-333 Learning Objective: 13.2 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

109.

Describe the different methods of performance appraisal. Answer: Performance appraisal is the process of formally assessing someone’s work accomplishments and providing feedback. In general, performance appraisal methods can be classified as focusing on traits, behaviors, results, or 360-degree feedbacks. Trait-based approaches are designed to measure the extent to which the employee possesses characteristics or traits that are considered important in the job. For example, trait-based measures often assess characteristics such as dependability, initiative, and leadership. One of the oldest and

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most widely used performance appraisal methods is a graphic rating scale. It is basically a checklist for rating an individual on traits or performance characteristics such as quality of work, job attitude, and punctuality. Although this approach is quick and easy, like other trait-based methods it tends to be very subjective and, as a result, has relatively poor reliability and validity. Behavior-based approaches evaluate employees on specific actions that are important parts of the job. The behaviorally anchored rating scale, or BARS, describes actual behaviors for various levels of performance achievement in a job. Because performance assessments are anchored to specific descriptions of work behavior, the BARS is more reliable and valid than the graphic rating scale. Behavioral-based appraisals are also more consistent with the developmental purpose of the performance appraisal since they provide specific feedback to employees on what they need to do better. But, one problem is that a BARS evaluation may be influenced by recency bias, the tendency for evaluations to focus on recent behaviors rather than on behavior that occurred throughout the evaluation period. The critical-incident technique is a behavior-based approach that can reduce the influence of recency bias on evaluations. This technique keeps a running log or inventory of a person’s effective and ineffective job behaviors. Results-based approaches do just what their name implies. Rather than focusing on employee traits or specific behaviors, results-based assessments center on accomplishments. This type of assessment is typically quantitative and objective, making it ideal in some circumstances. But, results-based measures sometimes create more problems than they solve. In some jobs the things that are the easiest to measure quantitatively aren’t the most important. In addition, results-based measures may ignore the impact of circumstances beyond the employee’s control, such as economic conditions or poor performance by someone else. One of the common performance appraisals errors is leniency—the tendency for supervisors to rate employees more favorably than they deserve in order to avoid the unpleasant task of giving negative feedback. While leniency tends to be less pronounced in results-based performance appraisals, it may be further reduced by the use of multiperson comparisons that formally compare one person’s results with that of one or more others. Comparisons can be done in different ways. In rank ordering, all persons being rated are arranged in order of performance achievement. The best performer goes at the top of the list, the worst performer at the bottom; no ties are allowed. In forced distribution, each person is placed into a frequency distribution, which requires that a certain percentage of employees fall into specific performance classifications, such as top 10%, next 40%, next 40%, and bottom 10%. These systems are usually put in place to guard against supervisors giving their employees too lenient or overly positive evaluations. 360-degree appraisals are intended to gather feedback from multiple sources in order to provide a more comprehensive evaluation of the employee’s performance. They typically include input not only from the employee’s supervisor but from peers, subordinates, and even customers— individuals inside and outside the organization who depend on the job-holder’s performance. Most 360-degree appraisals also include self-evaluations by the job holder to identify strengths, weaknesses, and development needs. Page: 335-338 Learning Objective: 13.3 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 110.

What are the different types of benefits received by employees in organizations? Answer: Employee benefits packages include nonmonetary forms of compensation that are intended to improve the work and personal lives of employees. Some benefits are required by law, such as contributions to Social Security, unemployment insurance, and workers’ compensation insurance. Also, some types of unpaid leave are mandated by the Family and Medical Leave Act. Many organizations traditionally offered additional benefits in order to attract and retain highly qualified employees. These discretionary benefits include health care, retirement plans, pay for time not worked (personal days, vacations, and holidays), sick leave, and numerous other perks. 13-28

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Flexible benefits programs are increasingly common. They let the employee choose a set of benefits within a certain dollar amount. The trend is also toward more family-friendly benefits that help employees balance work and nonwork responsibilities. These include child care, elder care, flexible schedules, parental leave, and part-time employment options, among others. Increasingly common as well are employee assistance programs that help employees deal with troublesome personal problems. Such programs may offer assistance in dealing with stress, counseling on alcohol and substance abuse, referrals for domestic violence and sexual abuse, and sources for family and marital counseling. Page: 342 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 111.

Explain the role of labor unions in maintaining labor-management relations. Answer: Labor unions are organizations to which workers belong and that deal with employers on the workers’ behalf. They are found in many industrial and business occupations, as well as among public-sector employees like teachers, police officers, and government workers. Such unions serve as a collective “voice” for their members and act as bargaining agents to negotiate labor contracts with employers. These contracts specify the rights and obligations of employees and management with respect to wages, work hours, work rules, seniority, hiring, grievances, and other conditions of employment. The foundation of any labor and management relationship is collective bargaining, the process through which labor and management representatives negotiate, administer, and interpret labor contracts. It typically involves face-to-face meetings between labor and management representatives. During this time, a variety of demands, proposals, and counterproposals are exchanged. Several rounds of bargaining may be required before a contract is reached or a dispute over a contract issue is resolved. As you might expect, the collective bargaining process is time-consuming and can lead to problems. Too often, labor and management sides view each other as “win-lose” adversaries. Ideally, the goal is a “win-win” outcome that offers benefits to labor in terms of fair treatment, and to management in terms of workforce quality. Page: 343-344 Learning Objective: 13.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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Chapter 14: Leading and Leadership Development

True/False Questions

The two bases of position power are expertise and reference. Answer: False Page: 353 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Coercive power involves use of incentives such as pay raises, bonuses, promotions, special assignments, and verbal or written compliments. Answer: False Page: 353 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

In a reward power relationship, the value of the power is lost as soon as the value of the reward or the reward itself is taken away. Answer: True Page: 353 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Expertise is a power derived from charisma or interpersonal attractiveness. Answer: False Page: 354 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Legitimate power is the ability to influence through identification. Answer: False Page: 354 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Visionary leadership is based on serving others and helping them use their talents fully so that organizations benefit society. Answer: False

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Page: 355 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 7.

Physical characteristics such as a person’s height, weight, and physique contribute in determining leadership success. Answer: False Page: 357 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

A leader high in concern for task, plans and defines the work to be done, assigns task responsibilities, sets clear work standards, urges task completion, and monitors performance results. Answer: True Page: 358 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

A laissez-faire leader emphasizes both tasks and people. Answer: False Page: 359 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

10.

An “impoverished manager” refers to a manager who follows a laissez-faire style of leadership. Answer: True Page: 359 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

11.

Leadership style is a recurring pattern of behaviors exhibited by a leader. Answer: True Page: 359 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

12.

A human relations leader emphasizes people over task. Answer: True

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Page: 359 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 13.

A “team manager” refers to a manager who follows a democratic style of leadership. Answer: True Page: 359 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

14.

Fred Fiedler developed the situational leadership model. Answer: False Page: 359 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

15.

The quality of leader–member relations measures the degree to which the position gives the leader power to reward and punish subordinates. Answer: False Page: 360 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

16.

Fred Fiedler’s research showed that, both the task-oriented and the relationship-oriented leadership styles were effective all the time. Answer: False Page: 360 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

17.

Hersey-Blanchard situational leadership model suggests that leadership style is hard to change. Answer: False Page: 361 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

18.

Path–goal theory contributed to the recognition of substitutes for leadership. Answer: True Page: 363

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Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 19.

An authority decision is made by a leader after receiving information, advice, or opinions from group members. Answer: False Page: 364 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

20.

Consultative and group decisions contribute to leadership development by allowing others to gain experience in the problem-solving process. Answer: True Page: 365 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

21.

A leader’s choice among alternative decision-making methods is governed only by the decision time factor. Answer: False Page: 365 Learning Objective: 14.3 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

22.

Transformational leaders use their position to inspire followers. Answer: False Page: 366 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

23.

A leader strong in emotional intelligence lacks self-awareness. Answer: False Page: 367 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

24.

Interactive leadership uses command-and-control use of position power to get work done. Answer: False Page: 368

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Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 25.

The concept of servant leadership fits with the concept of a moral leader. Answer: True Page: 369 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

26.

Moral leadership begins with personal integrity, a concept fundamental to the notion of transformational leadership. Answer: True Page: 369 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

27.

According to Peter Drucker, effective leadership is primarily based on being clever and not on being consistent. Answer: False Page: 370 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

Multiple-Choice Questions

28.

Which of the following is a function of leading? A. Setting directions and objectives B. Bringing together resources C. Creating structures D. Motivating commitment and hard work E. Ensuring results Answer: D Page: 353 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

29.

Which of the following is a basis of personal power? A. Reward power B. Coercive power

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C. Legitimate power D. Authority power E. Referent power Answer: E Page: 353 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge 30.

Which of the following accurately defines reward power? A. It is the capacity to offer something of value as a means of influencing other people. B. It is the capacity to punish or withhold positive outcomes as a means of influencing other people. C. It is the capacity to influence other people by virtue of formal authority, or the rights of office. D. It is the capacity to influence other people because of specialized knowledge. E. It is the capacity to influence other people because of their desire to identify personally with you. Answer: A Page: 353 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

31.

Coercive power is the capacity to: A. offer something of value as a means of influencing other people. B. influence other people by virtue of formal authority, or the rights of office. C. punish or withhold positive outcomes as a means of influencing other people. D. influence other people because of specialized knowledge. E. influence other people because of their desire to identify personally with you. Answer: C Page: 353 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

32.

Identify the definition of legitimate power from the following. A. It is the capacity to influence other people because of specialized knowledge. B. It is the capacity to influence other people because of their desire to identify personally with you. C. It is the capacity to offer something of value as a means of influencing other people. D. It is the capacity to punish or withhold positive outcomes as a means of influencing other people. E. It is the capacity to influence other people by virtue of formal authority, or the rights of office. Answer: E Page: 354 Learning Objective: 14.1

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Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 33.

Legitimate power differs from referent power, in that legitimate power is the ability to influence through: A. authority. B. skills, knowledge, and information. C. identification. D. punishment. E. rewards. Answer: A Page: 354 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

34.

Which of the following is true of legitimate power? A. This involves use of incentives such as pay raises, bonuses, promotions, special assignments, and verbal or written compliments. B. This power can be gained from experience and accomplishments as well as access to useful information. C. This is the right by virtue of one’s organizational position or status to exercise control over persons in subordinate positions. D. This approach can work well as long as people expect rewards and the manager or leader makes it continuously available. E. This power is derived from charisma or interpersonal attractiveness. Answer: C Page: 354 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

35.

Which of the following statements refer to expert power? A. The capacity to influence other people by virtue of formal authority, or the rights of office. B. The capacity to influence other people because of specialized knowledge. C. The capacity to offer something of value as a means of influencing other people. D. The capacity to influence other people because of their desire to identify personally with you. E. The capacity to punish or withhold positive outcomes as a means of influencing other people. Answer: B Page: 354 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

36.

When a manager uses referent power, he or she has the capacity to: A. influence other people because of specialized knowledge. B. influence other people by virtue of formal authority, or the rights of office.

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C. punish or withhold positive outcomes as a means of influencing other people. D. influence other people because of their desire to identify personally with you. E. offer something of value as a means of influencing other people. Answer: D Page: 354 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 37.

Which of the following bases of power refers to the ability to influence through identification? A. Legitimate power B. Expert power C. Referent power D. Coercive power E. Reward power Answer: C Page: 354 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

38.

Which of the following types of powers is a manager exerting when he or she says, “I am the boss; therefore, you are supposed to do as I ask”? A. Referent power B. Legitimate power C. Coercive power D. Expert power E. Reward power Answer: B Page: 354 Learning Objective: 14.1 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

39.

Which of the following is true of referent power? A. It is maintained by protecting one’s credibility by not overstepping boundaries and pretending to expertise that really isn’t there. B. It is based on serving others and helping them use their talents fully so that organizations benefit society. C. It allows others to exercise power and achieve influence within the organization. D. It can be developed and maintained through good interpersonal relationships that encourage the admiration and respect of others. E. It allows managers to act in a unilateral fashion. Answer: D Page: 354 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities

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Bloom's Taxonomy: Comprehension 40.

Which of the following is a benefit of visionary leadership? A. It allows others to exercise power and achieve influence within the organization. B. It gives meaning to people’s work; it makes what they do seem worthy and valuable. C. It is based on serving others and helping them use their talents fully so that organizations benefit society. D. It allows team members to take decisions and act accordingly. E. It allows managers to act in a unilateral fashion and retain authority and information. Answer: B Page: 355 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

41.

Servant leadership differs from visionary leadership, in that servant leadership: A. is follower-centered. B. influences through authority. C. controls persons in subordinate positions. D. influences through punishment. E. is coercive. Answer: A Page: 355 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

42.

Which of the following accurately defines “empowerment” through leadership? A. The ability to manage our emotions in social relationships. B. The ability to get someone else to do something you want done or to make things happen the way you want. C. The ability to act with honesty, credibility, and consistency in putting values into action. D. The process of explaining task directions in a supportive and persuasive way. E. The process of allowing others to exercise power and achieve influence within the organization. Answer: E Page: 355 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

43.

When a leader is said to have cognitive ability what does it indicate? A. The leader has high energy, displays initiative, and is tenacious. B. The leader is creative and original in his or her thinking. C. The leader has the intelligence to integrate and interpret information. D. The leader enjoys influencing others to achieve shared goals. E. The leader has confidence in his or her abilities. Answer: C

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Page: 357 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 44.

When a leader enjoys influencing others to achieve shared goals, he or she has the personal trait of ________. A. dependability B. flexibility C. cognitive ability D. integrity E. motivation Answer: E Page: 358 Learning Objective: 14.2 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

45.

From the following, identify the function of a leader who is production-centered. A. Sensitivity toward the needs of the workers B. Monitors performance results of the employees C. Shows trust in employees D. Acts with supportiveness toward employees E. Respects the feelings of the employees Answer: B Page: 358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

46.

When a leader is high in concern for task performance, he or she: A. assigns task responsibilities to employees. B. maintains good social relations with employees. C. is sensitive toward employee needs. D. is supportive toward employees. E. shows trust in the employees Answer: A Page: 358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

47.

Which of the following is true of a leader who is production-centered? A. The leader allows employees to choose their own work. B. The leader lets the employees take their own time to complete work. C. The leader sets clear work standards for the employees. D. The leader maintains good social relations with the employees.

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E. The leader shows trust in the employees and allows them to make decisions regarding work. Answer: C Page: 358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 48.

An employee-centered leader: A. monitors the performance of employees. B. urges task completion from the employees. C. sets clear work standards for the employees. D. maintains good social relations with the employees. E. defines the work to be done by the employees. Answer: D Page: 358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

49.

When a leader is high in concern for people, he or she: A. assigns task responsibilities. B. urges task completion from the employees. C. monitors the performance of employees. D. sets clear work standards for the employees. E. acts with supportiveness toward employees. Answer: E Page: 358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

50.

Which of the following is a function of a leader high in concern for people? A. The leader shows trust in the employees. B. The leader plans the work to be done by the employees. C. The leader assigns the work to the employees. D. The leader sets the work standards for the employees. E. The leader monitors the work of each employee. Answer: A Page: 358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

51.

When a leader practices an autocratic style of leadership, he or she: A. shows little concern for the task. B. emphasizes people over task. C. acts in a command-and-control fashion.

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D. lets the team members make decisions. E. acts with a “do the best you can and don’t bother me” attitude. Answer: C Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 52.

An autocratic leader differs from a leader practicing laissez-faire style of leadership, in that an autocratic leader: A. lets the team members make decisions. B. shows little concern for the task. C. emphasizes people over task. D. retains authority and information. E. acts with a “do the best you can and don’t bother me” attitude. Answer: D Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

53.

According to Blake and Mouton’s leadership grid, which of the following management traits would a laissez-faire leader have? A. Low concern for production; low concern for people B. Low concern for people; high concern for production C. High concern for production; high concern for people D. High concern for people; low concern for production E. Balanced concern between people and production Answer: A Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

54.

A(n) ________ manager primarily focuses on getting work done with minimum effort. A. achievement-oriented B. team C. authority-obedience D. country club E. impoverished Answer: E Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

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55.

Which of the following characteristics refers to a leader practicing human relations style of leadership? A. Acting in a command-and-control fashion B. Acting in a unilateral fashion C. Acting with a “do the best you can and don’t bother me” attitude D. Retaining authority and information E. Emphasizing people over task Answer: E Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

56.

According to the Blake and Mouton’s leadership grid, which of the following kinds of management traits would a human relations leader have? A. Low concern for production; low concern for people B. Low concern for people; high concern for production C. High concern for production; high concern for people D. High concern for people; low concern for production E. Balanced concern between people and production Answer: D Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

57.

Which of the following is a feature of an autocratic leader? A. Emphasizes task over people B. Lets the team members make decisions C. Shows little concern for the task D. Encourages participation in decision making E. Helps others develop their skills and capabilities Answer: A Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

58.

An authority-obedience manager focuses on ________. A. balancing work output and employee morale B. people’s needs and building relationships C. efficiency of tasks and operations D. minimum effort to get work done E. building participation and support for a shared purpose Answer: C Page: 359 Learning Objective: 14.2 Difficulty: Moderate

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AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 59.

According to the Blake and Mouton’s leadership grid, which of the following management traits would an autocratic leader have? A. Low concern for production; low concern for people B. Low concern for people; high concern for production C. High concern for production; high concern for people D. High concern for people; low concern for production E. Balanced concern between people and production Answer: B Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

60.

Which of the following is a feature of a laissez-faire leader? A. Acts in a command-and-control fashion B. Lets the team members make decisions C. Retains authority and information D. Emphasizes task over people E. Helps others develop their skills Answer: B Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

61.

Which of the following is a characteristic of a democratic leader? A. Emphasizing task over people B. Emphasizing people over task C. Encouraging employee participation in decision making D. Showing little concern for the task E. Displaying a “do the best you can and don’t bother me” attitude Answer: C Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

62.

According to the Blake and Mouton’s leadership grid, which of the following management traits would a democratic leader have? A. Low concern for production; low concern for people B. Low concern for people; high concern for production C. High concern for production; high concern for people D. High concern for people; low concern for production E. Balanced concern between people and production Answer: C

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Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 63.

A democratic leader differs from an autocratic leader, in that a democratic leader: A. emphasizes task over people. B. acts in a unilateral fashion. C. shows little concern for the task. D. helps others develop their skills and capabilities. E. displays a command-and-control type of leadership. Answer: D Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

64.

The ________ manager follows a human relations style of leadership. A. team B. country club C. impoverished D. authority-obedience E. achievement-oriented Answer: B Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

65.

Which of the following is a characteristic of a democratic leader? A. Gets things done while sharing information B. Retains authority and information C. Acts in a unilateral fashion D. Acts in a command-and-control fashion E. Acts with a “do the best you can and don’t bother me” attitude Answer: A Page: 359 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

66.

In Fiedler’s contingency model, the least-preferred coworker scale is used to: A. increase a leader’s power. B. improve a leader’s leadership traits. C. measure a person’s leadership style. D. measure the rewards to be given to a leader. E. improve a leader’s situational strength.

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Answer: C Page: 360 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 67.

According to Fiedler’s contingency model, the quality of leader-member relations measures _______. A. the degree to which the group supports the leader B. the extent to which task goals and procedures are clearly spelled out C. the extent to which leader has authority over his or her supporters D. the degree to which the position gives the leader power to reward subordinates E. the degree to which the position gives the leader power to punish subordinates Answer: A Page: 360 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

68.

Which of the following is suggested by the Hersey-Blanchard situational leadership model? A. Successful leaders can only be visionary. B. Successful leaders follow the servant leadership style. C. Successful leaders are all task motivated. D. Successful leaders adjust their style of leadership. E. Successful leaders stick to any one particular form of leadership style. Answer: D Page: 361 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

69.

According to the Hersey-Blanchard situational leadership model, the delegating style of leadership works best in: A. the other extreme of low readiness, where followers are unable and unwilling, or insecure. B. low-to-moderate-readiness followers who are able but unwilling, or insecure. C. moderate-to-high-readiness followers who are unable, but willing or confident. D. low -readiness followers who are unable but willing and insecure. E. high-readiness situations with able, willing, and confident followers. Answer: E Page: 361 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 70.

According to the Hersey-Blanchard situational leadership model, which of the following types of leadership styles follows a low-task, low-relationship feature? A. Instructing 9-16

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B. Participating C. Selling D. Telling E. Delegating Answer: E Page: 361 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Knowledge 71.

According to the Hersey-Blanchard situational leadership model, the telling style of leadership works best in: A. low readiness followers who are unable but willing and insecure. B. the other extreme of low readiness, where followers are unable and unwilling, or insecure. C. high-readiness situations with able, willing, and confident followers. D. moderate-to-high-readiness followers who are unable, but willing or confident. E. low-to-moderate-readiness followers who are able but unwilling, or insecure. Answer: B Page: 361-362 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 72.

According to the Hersey-Blanchard situational leadership model, which of the following types of leadership styles follows a low-task, high-relationship feature? A. Instructing B. Participating C. Selling D. Telling E. Delegating Answer: B Page: 361 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Knowledge

73.

In which of the following situations is a participating style of leadership recommended? A. With low-to-moderate readiness followers who are able but unwilling, or insecure B. With moderate-to-high-readiness followers who are unable, but willing or confident C. With low readiness followers who are unable but willing and insecure D. With the other extreme of low readiness, where followers are unable and unwilling, or insecure E. With high-readiness situations with able, willing, and confident followers Answer: A Page: 362 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities

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Bloom's Taxonomy: Comprehension 74.

The selling style of leadership is recommended for: A. low readiness followers who are unable but willing and insecure. B. low-to-moderate-readiness followers who are able but unwilling, or insecure. C. moderate-to-high-readiness followers who are unable, but willing or confident. D. high-readiness situations with able, willing, and confident followers. E. the other extreme of low readiness, where followers are unable and unwilling, or insecure. Answer: C Page: 362 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

75.

According to the Hersey-Blanchard situational leadership model, which of the following types of leadership styles follows a high-task, high-relationship feature? A. Instructing B. Participating C. Selling D. Telling E. Delegating Answer: C Page: 361 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Knowledge

76.

The telling style of leadership has a ________ feature. A. balanced task-relationship B. low-task, high-relationship C. high-task, high-relationship D. high-task, low-relationship E. low-task, low-relationship Answer: D Page: 361 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Knowledge

77.

Which of the following is true of the path-goal theory? A. It disregards the tendency of leaders to develop special relationships with some team members. B. It advances the theory that that one method can fit all situations in decision making. C. It promotes using just two types of leadership styles for varying situations. D. It advances theories against changing leadership styles according to situations. E. It advises leaders to shift among four styles in ways that fit situational needs. Answer: E Page: 362

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Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 78.

According to the path–goal leadership theory, which of the following is a function highlighted in directive leadership style? A. Clarifying the leader’s role in the group B. Showing concern for the well-being of subordinates C. Emphasizing continuous improvement in performance D. Involving team members in decision making E. Displaying confidence in meeting high standards Answer: A Page: 362 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

79.

From the following, identify the function of the supportive leadership style in the path–goal leadership theory. A. Setting challenging goals B. Treating team members as equals C. Expecting the highest levels of performance D. Involving team members in decision making E. Clarifying the leader’s role in the group Answer: B Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

80.

According to the path–goal leadership theory, which of the following is highlighted in the achievement-oriented leadership style? A. Showing concern for the well-being of subordinates B. Clarifying the leader’s role in the group C. Emphasizing continuous improvement in performance D. Consulting team members and asking for suggestions E. Treating team members as equals Answer: C Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 81.

From the following, identify the function emphasized by participative leadership. A. Setting challenging goals B. Expecting the highest levels of performance C. Maintaining definite standards of performance 9-19

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D. Involving team members in decision making E. Clarifying the leader’s role in the group Answer: D Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 82.

Directive leadership differs from supportive leadership, in that directive leadership emphasizes: A. showing concern for the well-being of subordinates. B. involving team members in decision making. C. consulting team members and asking for suggestions. D. using team members’ suggestions when making decisions. E. letting followers know what is expected. Answer: E Page: 362 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

83.

Which of the following is true of directive leadership? A. When job assignments are unclear, directive leadership helps to clarify task objectives and expected rewards. B. When worker self-confidence is low, directive leadership can increase confidence by emphasizing individual abilities and offering needed assistance. C. When task challenge is insufficient in a job, directive leadership helps to set goals and raise performance aspirations. D. When performance incentives are poor, directive leadership can clarify individual needs and identify appropriate rewards. E. When a leader is short of ideas, directive leadership encourages workers to give their suggestions. Answer: A Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

84.

Which of the following is true of supportive leadership? A. When task challenge is insufficient in a job, supportive leadership helps to set goals and raise performance aspirations. B. When worker self-confidence is low, supportive leadership can increase confidence by emphasizing individual abilities and offering needed assistance. C. When a leader is short of ideas, supportive leadership encourages workers to give their suggestions. D. When performance incentives are poor, supportive leadership might clarify individual needs and identify appropriate rewards. E. When job assignments are unclear, supportive leadership helps to clarify task objectives and expected rewards.

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Answer: B Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 85.

Which of the following is true of achievement-oriented leadership? A. When performance incentives are poor, achievement-oriented leadership helps to clarify individual needs and identify appropriate rewards. B. When a leader is short of ideas, achievement-oriented leadership encourages workers to give their suggestions. C. When job assignments are unclear, achievement-oriented leadership helps to clarify task objectives and expected rewards. D. When task challenge is insufficient in a job, achievement-oriented leadership helps to set goals and raise performance aspirations. E. When worker self-confidence is low, achievement-oriented leadership can increase confidence by emphasizing individual abilities and offering needed assistance. Answer: D Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

86.

Which of the following is true of participative leadership? A. When task challenge is insufficient in a job, participative leadership helps to set goals and raise performance aspirations. B. When worker self-confidence is low, participative leadership can increase confidence by emphasizing individual abilities and offering needed assistance. C. When performance incentives are poor, participative leadership helps to clarify individual needs and identify appropriate rewards. D. When work is not scheduled, participative leadership can schedule work in an orderly manner. E. When job assignments are unclear, participative leadership helps to clarify task objectives and expected rewards. Answer: C Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

87.

Achievement-oriented leadership differs from participative leadership, in that participative leadership emphasizes the: A. setting of challenging goals as a method to enhance employee proficiency. B. clarification of task objectives and expected rewards. C. need for continuous improvement in performance. D. importance of setting goals and raising performance aspirations. E. involvement of team members in decision making Answer: E

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Page: 363 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 88.

Which of the following notions is central to the leader-member exchange theory? A. That when worker self-confidence is low, supportive leadership can increase confidence by emphasizing individual abilities and offering needed assistance B. That there is a tendency for leaders to develop special relationships with some team members, even to the point where not everyone is always treated in the same way C. That leaders adjust their leadership styles according to the situation D. That good leadership depends on the match or fit between a person’s leadership style and situational demands E. That leaders are most effective when they make decisions in ways that best fit the problem situation Answer: B Page: 364 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

89.

The Vroom-Jago leader-participation model suggests that: A. not everyone is treated the same by the leader. B. there are aspects of the work setting and the people involved that can reduce the need for active leader involvement. C. there are fundamentally four leadership styles that a leader can shift back and forth among. D. leaders are most effective when they make decisions in ways that best fit the problem situation. E. linking together charismatic qualities like enthusiasm and inspiration. Answer: D Page: 364 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

90.

According to the Vroom-Jago leader-participation model, consultative decisions differ from authority decisions in that in consultative decisions: A. the leader lacks the expertise or information to solve the problem. B. the leader has the information needed to solve the problem. C. the leader only has a supportive contribution in the decision making. D. the followers are likely to accept and implement the leader’s decision. E. the followers make the decisions and the leader follows. Answer: A Page: 365 Learning Objective: 14.3 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

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91.

A transformational leader uses his or her ________ to inspire followers. A. personality B. authority C. position D. power E. expertise Answer: A Page: 366 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

92.

The pathway to transformational leadership starts with ________. A. discharging any decision-making powers that a leader could have. B. promising monetary incentive to incite interest in followers. C. the leader adopting a unilateral, and command-and-control style of leading. D. a willingness to bring real emotion to the leader–follower relationship. E. using coercive measures to influence the behavior of followers. Answer: D Page: 366 Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

93.

Daniel Goleman’s work on leadership development emphasized the influence of a leader using his or her ________. A. educational quotient B. emotional intelligence C. cultural intelligence D. curiosity quotient E. intelligence quotient Answer: B Page: 367 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

94.

According to Daniel Goleman, which of the following influences a leader to be successful? A. The ability to offer something of value as a means of influencing other people. B. The ability to punish or withhold positive outcomes as a means of influencing other people. C. The ability to have a clear sense of the future. D. The ability to monitor the performance results of employees. E. The ability to manage our emotions in social relationships. Answer: E Page: 367 Learning Objective: 14.4 Difficulty: Moderate

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AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension 95.

Which of the following is true of leaders strong in emotional intelligence? A. They work on disruptive impulses. B. They are able to empathize with others. C. They make authority decisions as it works best. D. They lack in emphasizing continuous improvement. E. They are less capable at establishing rapport with others. Answer: B Page: 367 Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

96.

Which of the following emotional intelligence competencies does a leader possess when he or she is able to empathize with others? A. Social awareness B. Self-management C. Relationship management D. Self-awareness E. Motivation and persistence Answer: A Page: 367 Learning Objective: 14.4 Difficulty: Easy AACSB: Analytic skills Bloom's Taxonomy: Knowledge

97.

A leader who possesses the emotional competency of self-awareness has the ability to: A. offer something of value as a means of influencing other people. B. establish rapport with others and to build social capital through relationships and networks. C. understand his or her own moods and emotions, and to understand their impact on his or her work and on others. D. work hard for reasons other than money and status. E. understand the emotions of others and to use this understanding to better relate to them. Answer: C Page: 367 Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

98.

Which of the following is true of authentic leadership? A. It uses coercive measures to influence the behavior of followers. B. It allows others to exercise power and achieve influence within the organization. C. It helps to establish rapport with others and to build social capital through relationships and networks. D. It offers something of material value as a means of influencing other people.

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E. It activates positive psychological states to achieve self-awareness and positive selfregulation. Answer: E Page: 369 Learning Objective: 14.4 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

Application Questions

99.

Calvin, who is Harris’ team lead, suggested that if Harris would get the additional work done in a day, then Calvin would make sure that Harris would get two days of extra pay. Which of the following types of leadership powers is Calvin displaying? A. Coercive power B. Legitimate power C. Expert power D. Reward power E. Referent power Answer: D Page: 353 Learning Objective: 14.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom's Taxonomy: Application

100.

Debra is a manager who believes in being inclusive in decision making. She allows her subordinates to voice their opinion about relevant projects. She believes in helping them use their talents fully so that the organization can benefit the society. She also tries to empower others by providing them with information, responsibility, authority, and trust to make decisions and act independently. Which of the following types of leadership styles does Debra follow? A. Servant leadership B. Autocratic leadership C. Directive leadership D. Achievement-oriented leadership E. Laissez-faire leadership Answer: A Page: 355 Learning Objective: 14.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom's Taxonomy: Application

101.

Warren, a marketing manager, has just handed to his team the next project with the following instructions for project coordination: 1. This does not look like a high profile project. 2. Do not update me on the day-to-day progress of this project. 3. Make all relevant decisions as a group; do not come to me unless absolutely necessary. 4. Do your best to finish the project on time.

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Which of the following leadership styles does Warren employ? A. Autocratic leadership style B. Human relations style C. Laissez-faire style D. Democratic style E. Country club style Answer: C Page: 359 Learning Objective: 14.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application 102.

Jerome, a young manager, strongly believes that his workers have the potential to accomplish better results on their jobs. Jerome believes that setting bold and ambitious objectives for his team members will enhance their overall performance levels. According to the path-goal theory, which of the following leadership styles has Jerome adopted? A. Directive leadership B. Supportive leadership C. Telling leadership D. Participative leadership E. Achievement-oriented leadership Answer: E Page: 363 Learning Objective: 14.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

103.

Gordon, a young manager, was recently asked to repress a growing demand in his team for a team raise. The management had promised him a special bonus if he could achieve this. Gordon, who held strong ethical principles, refused the offer and instead supported his team’s demand. Gordon’s support and reassurance instilled confidence in the team, which in turn helped increase team productivity. Eventually, the management gave in to the team’s demand. Which of the following types of leadership did Gordon display? A. Achievement-oriented leadership B. Moral leadership C. Directive leadership D. Autocratic leadership E. Interactive leadership Answer: B Page: 369 Learning Objective: 14.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom's Taxonomy: Application

Essay Questions

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104.

Define vision and explain the concept of visionary leadership. Answer: Vision is a clear sense of the future. It is a future that one hopes to create or achieve in order to improve upon the present state of affairs. But simply having the vision of a desirable future is not enough. Truly exceptional leaders are really good at turning their visions into accomplishments. The term visionary leadership describes a leader who brings to the situation a clear and compelling sense of the future, as well as an understanding of the actions needed to get there successfully. This means having a clear vision, communicating the vision, and getting people motivated and inspired to pursue the vision in their daily work. Visionary leadership gives meaning to people’s work and it makes what they do seem worthy and valuable. Page: 354-355 Learning Objective: 14.1 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

105.

List out the personal traits of successful leaders identified by Shelley Kirkpatrick and Edwin Locke. Answer: The following are the personal traits of successful leaders identified by Shelley Kirkpatrick and Edwin Locke: Drive—Successful leaders have high energy, display initiative, and are tenacious. Self-confidence—Successful leaders trust themselves and have confidence in their abilities. Creativity—Successful leaders are creative and original in their thinking. Cognitive ability—Successful leaders have the intelligence to integrate and interpret information. Job-relevant knowledge—Successful leaders know their industry and its technical foundations. Motivation—Successful leaders enjoy influencing others to achieve shared goals. Flexibility—Successful leaders adapt to fit the needs of followers and the demands of situations. Honesty and integrity—Successful leaders are trustworthy; they are honest, predictable, and dependable. Page: 357-358 Learning Objective: 14.2 Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

106.

What are the four leadership styles identified by Robert House that can add value in different types of situations for a leaders? Answer: Robert House believes that a leader can use these four leadership styles and actually shift back and forth among them: Directive leadership—letting followers know what is expected; giving directions on what to do and how; scheduling work to be done; maintaining definite standards of performance; clarifying the leader’s role in the group. Supportive leadership—doing things to make work more pleasant; treating team members as equals; being friendly and approachable; showing concern for the well-being of subordinates. Achievement-oriented leadership—setting challenging goals; expecting the highest levels of performance; emphasizing continuous improvement in performance; displaying confidence in meeting high standards. Participative leadership—involving team members in decision making; consulting with them and asking for suggestions; using these suggestions when making decisions. Page: 362-363 Learning Objective: 14.3

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Difficulty: Moderate AACSB: Ethical understanding and reasoning abilities Bloom's Taxonomy: Comprehension

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Chapter 15: Individual Behavior

True or False

Perception affects the impressions we form about ourselves, other people, and daily life experiences. Answer: True Page: 379 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A healthy psychological contract offers a balance between individual contributions made to the organization and inducements received. Answer: True Page: 379 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Fundamental attribution error neglects possible internal explanations for the poor-quality work. Answer: False Page: 380 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Self-serving bias explains personal success by internal causes and personal failures by external causes. Answer: True Page: 380 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Self-serving bias explains personal failures by internal causes. Answer: False Page: 380 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Stereotypes are always negative and ill-intended. Answer: False Page: 381 Learning Objective: 15.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Halo effect errors often show up in performance evaluations. Answer: True Page: 382 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Under selective perception, information that makes us uncomfortable is screened out; comfortable information is allowed in. Answer: True Page: 382 Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Impression management is the systematic attempt to influence how others perceive us. Answer: True Page: 383 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

One of the tactics of impression management states that employees should avoid smiling when engaged in conversations as this creates personal bonds. Answer: False Page: 383 Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

A person who lacks conscientiousness focuses on what can be accomplished and meets commitments. Answer: False Page: 384 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

An open person is broad-minded, receptive to new things, and comfortable with change. Answer: True Page: 384 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

13.

A person with high openness to experience has low curiosity.

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Answer: False Page: 384 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 14.

The Myers-Briggs Type Indicator assesses personalities based on a questionnaire that probes into how people act or feel in various situations. Answer: True Page: 385 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

The sensing vs. intuitive dimension of the Myers-Briggs Type Indicator assesses whether a person tends to rely on logic or emotions in dealing with problems. Answer: False Page: 385 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

Locus of control is the belief that what happens is not within one’s control. Answer: False Page: 386 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

Authoritarianism is the degree to which a person defers to authority and accepts status differences. Answer: True Page: 386 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

A person with a “low-Mach” personality is viewed as exploitative and unconcerned about others, often acting with the assumption that the end justifies the means. Answer: False Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

19.

A high self-monitor is predictable and tends to act consistently regardless of circumstances. Answer: False Page: 387 Learning Objective: 15.2

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Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 20.

A Type A personality feels guilty when relaxing. Answer: True Page: 387 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

The cognitive component of attitude reflects a belief or an opinion. Answer: True Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

The affective component reflects an intention to behave in a manner consistent with the belief and feeling. Answer: False Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Job satisfaction is the degree to which an individual feels positive or negative about a job. Answer: True Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

Employee engagement refers to the willingness to “go beyond the call of duty” or “go the extra mile” in one’s work. Answer: False Page: 390 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

Moods tend to be short term and clearly targeted. Answer: False Page: 392 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Multiple Choice Questions

26.

________ is the process through which people receive, organize, and interpret information from the environment. A. Attribution B. Perception C. Projection D. Conversion E. Distortion Answer: B Page: 379 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

Which of the following is true about perceptions? A. Perceptions have a marginal influence on individual behavior. B. Perceptions will not have an impact on daily life experiences. C. People perceive the same people, things, or situations differently. D. People’s perceptions are immune to their cultural background. E. Perceptions refer to the desire to achieve or to accomplish something. Answer: C Page: 379 Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

28.

A psychological contract refers to: A. the loyalty of an employee to the organization. B. the extent to which an individual is dedicated to a job. C. the mental exhaustion from work stress. D. a strong positive feeling about one’s job and the organization. E. the set of individual expectations about the employment relationship. Answer: E Page: 379 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

Which of the following is a consequence of an unbalanced psychological contract? A. Eustress B. Fundamental attribution error C. Projection D. Withdrawal E. False sense of confidence Answer: D Page: 380 Learning Objective: 15.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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30.

Which of the following refers to attribution? A. It is the set of individual expectations about the employment relationship. B. It is the process of explaining events. C. It is the process through which people receive, organize, and interpret information from the environment. D. It is the tendency to define problems from one’s own point of view. E. It is the assignment of personal attributes to other individuals. Answer: B Page: 380 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

31.

A ________ overestimates internal factors and underestimates external factors as influences on someone’s behavior. A. fundamental attribution error B. stereotype C. halo effect D. projection E. self-serving bias Answer: A Page: 380 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

Oliver’s performance at work was declining as he had to meet unrealistic targets daily. Though he was able to meet the targets, the quality of his work was not very good. His supervisor assumed that this was due to his lack of concentration and laziness. This scenario is an instance of a ________. A. stereotype B. halo effect C. fundamental attribution error D. projection E. self-serving bias Answer: C Page: 380 Learning Objective: 15.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

33.

Which of the following occurs when attributes commonly associated with a group are assigned to an individual? A. Fundamental attribution error B. Psychological contract C. Selective perception D. Self-serving bias E. Stereotype Answer: E Page: 381 Learning Objective: 15.1

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 34.

Jerry, the manager of a research organization, believes that women avoid arithmetic and statistics, whereas men prefer such topics. This assumption made by Jerry is an example of a ________. A. stereotype B. self-serving bias C. projection D. fundamental attribution error E. halo effect Answer: A Page: 381 Learning Objective: 15.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

35.

A ________ occurs when one attribute is used to develop an overall impression of a person or situation. A. projection B. fundamental attribution error C. selective perception D. halo effect E. stereotype Answer: D Page: 381 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

Reese was given a promotion as she met all quality and productivity standards. However, she did not exhibit effective interpersonal skills in her new job role. She was promoted due to her performance skills without taking her people skills into consideration. Which of the following perceptual tendencies is displayed here? A. Anchoring effect B. Selective perception C. Projection D. Fundamental attribution error E. Halo effect Answer: E Page: 381 Learning Objective: 15.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

37.

Selective perception refers to: A. the tendency to define problems from one’s own point of view. B. the assignment of personal attributes to other individuals. C. using a single attribute to develop an overall impression of a person or situation. D. the systematic attempt to influence how others perceive us. E. assigning attributes commonly associated with a group to an individual.

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Answer: A Page: 382 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 38.

The revenues of Edge Corporation had been low for the past few months. The finance department of the firm believed that the financial meltdown in their nation was the primary reason for the poor performance of the firm. They failed to consider any other reason for the poor revenues. Which of the following perceptual tendencies is displayed in this case? A. Stereotype B. Selective perception C. Projection D. Fundamental attribution error E. Self-serving bias Answer: B Page: 382 Learning Objective: 15.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

39.

________ involves the assignment of personal attributes to other individuals. A. Fundamental attribution error B. Self-serving bias C. Projection D. Halo effect E. Stereotype Answer: C Page: 382 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

40.

Ben, a team lead, is quick at understanding concepts and in executing projects. He assumes that all his coworkers have the same ability to complete projects. Which of the following perceptual tendencies is displayed here? A. Stereotype B. Selective perception C. Fundamental attribution error D. Self-serving bias E. Projection Answer: E Page: 382 Learning Objective: 15.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

41.

The profile of characteristics making an individual unique from others is referred to as ________. A. stereotype B. personality

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C. self-serving bias D. locus of control E. cognitive dissonance Answer: B Page: 383 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 42.

The degree to which someone is outgoing, sociable, and assertive is referred to as ________. A. agreeableness B. perceptiveness C. cognitive dissonance D. extraversion E. conscientiousness Answer: D Page: 384 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

Jason is a senior executive at Brown Inc. He is well-mannered and has the ability to cooperate with all his colleagues. When employees have any work-related issues or personal issues, they approach him for support as they trust him. Which of the following personality traits does Jason most likely possess? A. Agreeableness B. Introversion C. Self-serving bias D. Locus of control E. Extraversion Answer: A Page: 384 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

44.

The degree to which someone is responsible, dependable, and careful is referred to as ________. A. agreeableness B. introversion C. perceptiveness D. extraversion E. conscientiousness Answer: E Page: 384 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

45.

Barney often tries to multi-task and fails to do well in any task. He tends to be careless and irresponsible while working on his projects. This implies that Barney:

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A. lacks conscientiousness. B. has low agreeableness. C. lacks emotional stability. D. lacks openness to experience. E. has low extraversion. Answer: A Page: 384 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 46.

Which of the following is true of a conscientious person? A. A conscientious person focuses on new ideas and imaginations. B. A conscientious person is more withdrawn and reserved. C. A conscientious person focuses on what can be accomplished and meets commitments. D. A conscientious person has few interests and is resistant to change. E. A conscientious person often engages in multi-tasking. Answer: C Page: 384 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

47.

Which of the following examples displays the personality trait of emotional stability? A. A manager encouraging unique suggestions from employees for the promotion of a product B. A supervisor being careful about making merger decisions C. A manager staying calm and confident when his team fails to meet quarterly targets D. A proprietor implementing changes in his organization E. A team lead exhibiting good communication skills with his subordinates Answer: C Page: 384 Learning Objective: 15.2 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

48.

Which of the following is true of openness to experience? A. Openness to experience refers to the degree to which someone is outgoing and sociable. B. An open person is a source of conflict and discomfort for others. C. Openness to experience refers to the degree to which someone is good-natured, cooperative, and trusting. D. Openness to experience refers to the degree to which someone is responsible, dependable, and careful. E. An open person is broad-minded and receptive to new things. Answer: E Page: 384 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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49.

Thomas, the business head of an organization, is broad-minded and well-informed. He believes in changing along with the changes in the environment. Also, he encourages all his coworkers to suggest new ideas to help in the growth of the organization. This implies that Thomas has ________. A. low conscientiousness B. low agreeableness C. high openness to experience D. high selective perception E. low emotional stability Answer: C Page: 384 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

50.

Anne, a manager at a bank, is cooperative, sociable, dependable, and unworried. However, she lacks the interest to bring about any changes in the operations of the bank and is narrow minded. This implies that Anne lacks ________. A. conscientiousness B. openness to experience C. agreeableness D. extraversion E. emotional stability Answer: B Page: 384 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

51.

Sensing refers to: A. focusing on details while gathering data. B. relying on emotions while making decisions. C. focusing on the big picture in dealing with problems while gathering data. D. acting with flexibility and spontaneity while gathering data. E. being quiet and shy while interacting with people. Answer: A Page: 385 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

The perceiving work style refers to: A. focusing on details while gathering data. B. focusing on details while working. C. acting with flexibility and spontaneity while working. D. acting with order and control while working. E. relying on rules and regulations while working. Answer: C Page: 385 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 53.

Which of the following is true of locus of control? A. It is the degree to which a person defers to authority and accepts status differences. B. People with an internal locus of control are more prone to blame others for what happens to them. C. Individuals with an external locus of control are more self-confident and accept responsibility for their own actions. D. People with an internal locus of control tend to be more satisfied and less alienated from their work. E. It describes the extent to which someone is emotionally detached and manipulative. Answer: D Page: 386 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

Ashton is an employee with an internal locus of control. Which of the following characteristics would be observed in Ashton? A. Self-confidence B. Lack of job satisfaction C. High alienation from work D. Denial of responsibility for his poor work E. Tendency to blame others for his negative feedback Answer: A Page: 386 Learning Objective: 15.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

55.

Which of the following is true of authoritarianism? A. Authoritarianism is the system that opposes status differences. B. An individual with an authoritarian personality tends to act rigidly and be control-oriented in a follower capacity. C. An individual with an authoritarian personality is likely to be subservient and follow rules when in a leadership capacity. D. People with authoritarian principles never act unethically or illegally. E. Authoritarianism is the degree to which a person defers to authority and accepts status differences. Answer: E Page: 386 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

Joshua is a senior executive at ANMR Inc. He accepts status differences in his organization and tends to be control-oriented when he leads a team of employees. When he interacts with his seniors, he is prepared to obey them unquestioningly. This implies that Joshua has a(n) ________ personality. A. Type A B. authoritarian C. high-Mach

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D. introvert E. self-monitored Answer: B Page: 386 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 57.

Which of the following refers to Machiavellianism? A. The degree to which someone is able to adjust behavior in response to external factors B. The degree to which a person tends to defer to authority C. The degree to which someone is curious, open to new ideas, and imaginative D. The extent to which someone is emotionally detached and manipulative E. The degree to which someone is relaxed, secure, and unworried Answer: D Page: 387 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

58.

Which of the following is true of Machiavellianism? A. A person with “high-Mach” personality is deferential in allowing others to exert power over him or her. B. A person with “high-Mach” personality often acts with the assumption that the end justifies the means. C. A person with “low-Mach” personality tends to be very manipulative. D. A person with “low-Mach” personality is viewed as exploitative and unconcerned about others. E. Machiavellianism is the extent to which one believes that what happens is within one’s control. Answer: B Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

Fred works for a financial consulting firm. He is generally manipulative and not concerned about the interests and values of his coworkers. He does not care about emotions and feelings and lacks basic social skills. This implies that Fred has: A. high self-monitoring skills. B. low authoritarianism. C. a “high-Mach” personality. D. high extraversion. E. an internal locus of control. Answer: C Page: 387 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

60.

A person with a “low-Mach” personality:

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A. often acts with the assumption that the end justifies the means. B. is viewed as exploitative and unconcerned about others. C. is emotionally detached and manipulative. D. is deferential in allowing others to exert power over him or her. E. is not interested in others’ emotions and values. Answer: D Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 61.

The degree to which someone is able to adjust behavior in response to external factors is referred to as ________. A. self-monitoring B. authoritarianism C. locus of control D. extraversion E. Machiavellianism Answer: A Page: 387 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

62.

Which of the following is true of self-monitoring? A. A person high in self-monitoring is not comfortable with feedback. B. A person high in self-monitoring is predictable. C. A person high in self-monitoring tends to act consistently regardless of circumstances. D. A person high in self-monitoring tends to be a good learner. E. Low self-monitors are flexible in changing behavior from one situation to the next. Answer: D Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

George is an executive analyst in the merchandising department of Title Inc. He loves to get feedback for his work as he believes that it helps to improve his performance. He is a fastlearner and has the ability to modify his behavior in response to the immediate situation and to external factors. Which of the following is true about George? A. He is a Type A personality. B. He is a high Mach personality. C. He is high in self-monitoring. D. He is an authoritarian. E. He is low in self-monitoring. Answer: C Page: 387 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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64.

Vanessa is low in self-monitoring. Which of the following characteristics would be observed in Vanessa? A. Learning skills B. Ability to change C. Willingness to change D. Flexibility E. Predictability Answer: E Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

65.

A person with a Type A personality: A. believes in taking breaks during work. B. is oriented toward extreme achievement and perfectionism. C. does not interrupt the speech of others. D. believes in doing one task at a time. E. is oriented toward extreme patience. Answer: B Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

66.

Nick is a general manager in an organization. He always works toward achieving all his goals and believes in perfection. He engages in many tasks at once and tends to hurry the speech of others. Which of the following individual personality variations does Nick possess? A. Authoritarianism B. Machiavellianism C. Self-monitoring D. Type A orientation E. Locus of control Answer: D Page: 387 Learning Objective: 15.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

67.

Amanda is a Type A personality. Which of the following patterns of behavior would be observed in Amanda? A. Slow eating patterns B. Patience C. Multi-tasking D. Laziness E. Lack of stress Answer: C Page: 387 Learning Objective: 15.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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68.

Which of the following components of individual attitudes reflects a belief or an opinion? A. Cognitive component B. Affective component C. Normative component D. Emotional component E. Behavioral component Answer: A Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

69.

Bruno joined a law school in California as he had a good opinion about the institute. This is an example of the ________ component of individual attitudes. A. affective B. normative C. emotional D. behavioral E. cognitive Answer: E Page: 388 Learning Objective: 15.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

70.

The ________ component of an attitude reflects a specific feeling. A. cognitive B. intentional C. affective D. opinion E. behavioral Answer: C Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

Graham is an advertising professional who loves his job. This is an example of the ________ component of Graham’s attitude. A. cognitive B. affective C. intentional D. opinion E. behavioral Answer: B Page: 388 Learning Objective: 15.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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72.

The ________ component of an attitude reflects an intention to act in a manner consistent with the belief and feeling. A. cognitive B. emotional C. affective D. intentional E. behavioral Answer: E Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

73.

Chris received negative feedback for his recent project. He has decided to concentrate and put in more effort in order to improve his work. This is an example of the ________ component of attitude. A. behavioral B. affective C. intentional D. emotional E. cognitive Answer: A Page: 388 Learning Objective: 15.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

74.

Which of the following refers to cognitive dissonance? A. The predisposition to act in a certain way B. The extent to which someone is emotionally detached and manipulative C. The degree to which someone is able to adjust behavior in response to external factors D. The degree to which an individual feels positive about a job E. The discomfort felt when attitude and behavior are inconsistent Answer: E Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

Connie was against the use of animals for testing cosmetics. She believed that it amounted to cruelty toward animals. She worked in a certain organization as it was known for using alternative testing methods. When a special research team revealed that the firm actually used animals for testing purposes, she experienced a psychological discomfort. This discomfort Connie experienced is an example of ________. A. mood contagion B. cognitive dissonance C. constructive stress D. destructive stress E. workplace rage Answer: B Page: 388 Learning Objective: 15.3

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Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 76.

Lily feels that her job is challenging as she has many important responsibilities. She believes that she has been growing along with her organization, and that she has been able to learn many new skills. She is happy that she receives fair pay and promotions on time. Which of the following is Lily experiencing? A. Organizational citizenship B. Mood contagion C. Halo effect D. Job satisfaction E. Machiavellianism Answer: D Page: 388 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

77.

Which of the following would result in job satisfaction? A. Opportunities B. Job attendance C. Cognitive dissonance D. Machiavellianism E. Mood contagion Answer: A Page: 388 Learning Objective: 15.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

78.

Bruce works at Martin Bank Ltd. He receives task-related support from his leads, and has friendly and trustworthy colleagues. His job is stress-free and secure. These working conditions help in increasing Bruce’s ________. A. emotional intelligence B. job satisfaction C. locus of control D. cognitive dissonance E. Machiavellianism Answer: B Page: 388 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

79.

Which of the following is true about job satisfaction? A. Job satisfaction tends to be lower in small firms and higher in large firms. B. The relationship between job satisfaction and temporary absenteeism is not strong. C. Performance does not influence job satisfaction. D. There is a strong relationship between job satisfaction and performance. E. A strong relationship exists between job satisfaction and actual job turnover. Answer: E

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Page: 389 Learning Objective: 15.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 80.

An employee’s strong positive feeling about one’s job and the organization is referred to as ________. A. mood contagion B. emotional intelligence C. cognitive dissonance D. employee engagement E. Machiavellianism Answer: D Page: 390 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

Alan looks up to his organization and speaks positively about it. He involves himself in group discussions and brain storming sessions to improve his skills and help in the overall growth of the organization. He is always ready to help his coworkers. From this information, which of the following does Alan possess? A. Mood contagion B. Employee engagement C. Emotional intelligence D. Cognitive dissonance E. Machiavellianism Answer: B Page: 390 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

82.

Which of the following refers to job involvement? A. The extent to which an individual is dedicated to a job B. A strong positive feeling about one’s job and the organization C. The comfort one feels with one’s coworkers D. The predisposition of employees to act in a certain way E. The willingness to “go beyond the call of duty” in one’s work Answer: A Page: 390 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

Paula generally stays at the office beyond normal work hours in order to complete special projects. She also comes to work every weekend and on other holidays. Paula has high ________. A. personal wellness B. Machiavellianism C. self-serving bias

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D. openness to experience E. job involvement Answer: E Page: 390 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 84.

Which of the following refers to organizational commitment? A. The willingness to “go beyond the call of duty” in one’s work B. The loyalty of an individual to the organization C. The predisposition of employees to act in a certain way D. The extent to which someone is emotionally detached and manipulative E. The degree to which someone is able to adjust behavior in response to external factors Answer: B Page: 390 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

Which of the following is true of organizational commitment? A. Organizational commitment refers to the extent to which an individual is dedicated to a job. B. Rational commitments are based primarily on values and interests of others. C. Rational commitments are generally more powerful in positively influencing performance than are emotional commitments. D. Emotional commitments are based on pay and self-interests. E. Individuals with a high organizational commitment identify strongly with the organization. Answer: E Page: 390 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

86.

As Jeffrey shares mutual interests with his coworkers and respects their values, he has high regard for the company that he works in. This indicates that Jeffery has high ________. A. personal wellness B. rational commitment C. Machiavellianism D. self-serving bias E. emotional commitment Answer: E Page: 390 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

87.

Rational commitments are primarily based on ________. A. values B. interests of other employees

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C. self-interests D. effective employee relationships E. personal wellness Answer: C Page: 391 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 88.

Bertram is loyal toward his organization as he is very happy with his pay, his incentives, and all other employee benefits. This implies that he has a(n) ________ toward his organization. A. emotional commitment B. rational commitment C. self-serving bias D. cognitive dissonance E. affective commitment Answer: B Page: 391 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

89.

Which of the following refers to organizational citizenship? A. It is the loyalty of an individual to the organization. B. It is a willingness to “go beyond the call of duty.” C. It is an ability to understand emotions and manage relationships effectively. D. It is the spillover of an employee’s positive or negative moods onto others. E. It is a strong positive feeling about one’s job and the organization. Answer: B Page: 391 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

William is a financial analyst at Laurie Inc. He works over the weekend and on all public holidays in order to do additional work, without claiming for any extra pay or compensatory benefits. William’s employee behavior is an example of ________. A. organizational citizenship B. personal wellness C. cognitive dissonance D. emotional intelligence E. emotional stability Answer: A Page: 391 Learning Objective: 15.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

91.

Which of the following is true of emotions? A. Emotions tend to be long term. B. Emotions are more generalized positive and negative feelings.

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C. Emotions are states of mind that may persist for some time. D. Emotions tend to be clearly targeted. E. Emotions are not directed toward any person or any particular thing. Answer: D Page: 392 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 92.

Elaine works for a magazine publisher. She worked hard and did intensive research to write an article. When her boss criticized her article, she felt very upset at him for some time. This feeling experienced by Elaine is an example of a(n) ________. A. mood B. attitude C. emotion D. behavior E. projection Answer: C Page: 392 Learning Objective: 15.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

93.

Which of the following is true of moods? A. Moods are clearly targeted. B. Moods are generalized positive and negative feelings. C. Moods tend to be short term. D. Moods are strong feelings directed toward someone or something. E. Moods are feelings that do not last for a long time. Answer: B Page: 392 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

Which of the following implies the difference between an emotion and a mood? A. An emotion is a generalized feeling, while a mood is a strong feeling directed toward someone. B. Emotions have general effect on attitude and behavior, as opposed to moods that have specific effect on attitude and behavior. C. While an emotion tends to persist for some time, a mood tends to be brief. D. An emotion is a positive feeling, while a mood represents a negative feeling. E. Emotions are clearly targeted feelings, whereas moods are generalized states of mind. Answer: E Page: 392 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

Mood contagion refers to the: A. spillover of one’s positive or negative moods onto others.

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B. ability to understand moods and manage relationships effectively. C. collection of strong feelings directed toward someone or something. D. mood of an employee to “go beyond the call of duty” or “go the extra mile” in one’s work. E. discomfort felt when attitude and behavior are inconsistent. Answer: A Page: 392 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 96.

Julia felt very good as she reached office on time and completed her task before the deadline. This positive feeling spilled on to her coworkers as she interacted with them in a very cheerful manner. This is an example of ________. A. emotional intelligence B. organizational citizenship C. eustress D. mood contagion E. self-serving bias Answer: D Page: 392 Learning Objective: 15.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

97.

Which of the following is true of eustress? A. It impairs the performance of an individual. B. It occurs when intense stress breaks down a person’s mental system. C. It encourages diligence in one’s work. D. It acts in a negative way to increase effort and stimulate creativity. E. It helps increase the personal wellness of an employee. Answer: C Page: 394 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

Which of the following is true of distress? A. It is sometimes called constructive stress. B. It is dysfunctional. C. It helps prevent job burnout among employees. D. It acts in a positive way to increase effort and stimulate creativity. E. It enhances diligence. Answer: B Page: 394 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

Which of the following refers to job burnout? A. The aggressive behavior toward coworkers or the work setting

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B. A situation where the individual ends up in a job that does not match his talents C. The potential outcome of eustress D. The spillover of one’s positive or negative moods onto others E. The physical and mental exhaustion from work stress Answer: E Page: 394 Learning Objective: 15.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 100.

Jonathan regularly gets into arguments with his colleagues due to excessive stress at work. He also harms them physically. This is an example of: A. constructive stress. B. workplace rage. C. eustress. D. job burnout. E. a low-Mach personality. Answer: B Page: 394 Learning Objective: 15.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

Essay Questions

101.

Briefly explain the concept of impression management. Answer: Impression management is the systematic attempt to influence how others perceive us. Impression management is a matter of routine in everyday life. We dress, talk, act, and surround ourselves with things that convey a desirable image to other persons. When well done, impression management can help us to advance in jobs and careers, form relationships with people we admire, and even create pathways to group memberships. And some basic tactics of impression management are worth remembering. Dress in ways that convey positive appeal—for example, know when to “dress up” and when to “dress down.” Use words to flatter other people in ways that generate positive feelings toward you. Make eye contact and smile when engaged in conversations so as to create a personal bond. Display a high level of energy that is suggestive of lots of work commitment and initiative. Page: 383 Learning Objective: 15.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

What are the three main distinctions of Jung’s model of personality differences? Answer: Jung’s model of personality differences included three main distinctions. First is how people differ in the ways they relate with others—by extraversion or introversion, as just discussed. Second is how they differ in the ways they gather information—by sensation (emphasizing details, facts, and routine) or by intuition (looking for the “big picture” and being willing to deal with various possibilities). Third is how they vary in ways of evaluating information—by thinking (using reason and analysis) or by feeling (responding to the feelings and desires of others). Briggs and BriggsMyers used all three of Jung’s personality dimensions in developing the Myers-Briggs Type

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Indicator (MBTI). But they also added a fourth dimension that describes how people vary in the ways they relate to the outside world— judging or perceiving. Page: 385 Learning Objective: 15.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 103.

What are the most commonly discussed and measured job satisfaction facets? Answer: The following are among the job satisfaction facets most commonly discussed and measured: • Work itself—Does the job offer responsibility, interest, challenge? • Quality of supervision—Are task help and social support available? • Coworkers—How much harmony, respect, friendliness exists? • Opportunities—Are there avenues for promotion, learning, growth? • Pay—Is compensation, actual and perceived, fair and substantial? • Work conditions—Do conditions offer comfort, safety, support? • Security—Is the job and employment secure? Page: 388 Learning Objective: 15.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Chapter 16: Motivation Theory and Practice True/False Questions 1.

Abraham Maslow classifies physiological needs as lower-order needs in his human needs theory. Answer: True Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

According to the hierarchy of needs theory, the lower-order needs focus on desires for psychological development and growth. Answer: False Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

According to the hierarchy of needs theory, the need to self-actualize can never be fully met. Answer: True Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The lower order needs in Maslow’s hierarchy of needs theory are similar to growth needs in ERG theory. Answer: False Page: 406 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

According to Frederick Herzberg, things related to the work environment are satisfier factors. Answer: False Page: 407 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

According to Herzberg, improving the hygiene factors increases job satisfaction and motivation. Answer: False Page: 407 Learning Objective: 16.1

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

High need achievers prefer achievable but challenging goals and expect feedback on performance. Answer: True Page: 408 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

McClelland believes that the need for personal power is essential to managerial leadership. Answer: False Page: 409 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In McClelland’s view, the successful executive is likely to possess a high need for social power that is greater than an otherwise strong need for affiliation. Answer: True Page: 409 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

The equity theory states that people who are treated unfairly will be motivated to act in ways that reduce the perceived inequity. Answer: True Page: 410 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

Under-reward inequity occurs when an individual perceives that his or her outcomesto-inputs ratio is greater than that of his or her referent. Answer: False Page: 410 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

According to Stacy Adams, to deal with negative inequity, people change their work inputs by putting less effort into their jobs. Answer: True Page: 411 Learning Objective: 16.2 Difficulty: Easy

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Schermerhorn-Management, 12th edition

Test Bank

AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

Benevolents are people who have a desire to be over-rewarded. Answer: False Page: 411 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

Performance-outcome expectancy refers to a person’s belief that successful performance will be followed by rewards and other work related outcomes. Answer: True Page: 412 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

Expectancy theory predicts that high expectancy, instrumentality, and valence will result in zero motivation. Answer: False Page: 413 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

Managers can create positive instrumentalities by rewarding people on a performance-contingent basis. Answer: True Page: 414 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

Locke’s goal-setting theory states that task goals can be motivating when they are set through participatory means. Answer: True Page: 415 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

Verbal persuasion is a way of enhancing self-efficacy by praising the efforts of a person performing a job. Answer: True Page: 416 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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19.

Extinction strategies are employed to strengthen or increase the frequency of desirable behavior. Answer: False Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

20.

An intermittent reinforcement schedule works best to draw forth a desired behavior. Answer: False Page: 418 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

Punishment strategies can be effective when the managers focus on the undesirable behavior rather than the characteristics of the person. Answer: True Page: 419 Learning Objective: 16.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

Job enrichment works best when people have appropriate knowledge, skills, and abilities to perform the job. Answer: True Page: 421 Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Job rotation makes jobs vertically bigger by expanding the job depth. Answer: False Page: 422-423 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

24.

Flexible working hours help to reduce stress and also provide greater autonomy to employees. Answer: True Page: 423 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

Employees receive two consecutive days off from work each week in a compressed workweek schedule.

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Answer: False Page: 423 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge Multiple Choice Questions 26.

Which of the following is regarded as a lower-order need in Maslow’s hierarchy? A. Esteem B. Freedom C. Safety D. Self-actualization concern E. Identity Answer: C Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

According to Maslow’s theory of human needs, ________ is a higher-order need. A. existence B. physical comfort C. safety D. social concern E. esteem Answer: E Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

In Maslow’s hierarchy of needs, lower-order needs differ from higher-order needs as higher-order needs: A. focus on desires for good-interpersonal relationships. B. are addressed by things such as physical comfort on the job and reasonable work hours. C. focus on desires for psychological development and growth. D. are served by job security and adequate compensation and benefits. E. focus on desires for physical and social well-being. Answer: C Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

The ________ states that a satisfied need is not a motivator of behavior. A. expectancy theory B. progression principle C. self-efficacy theory D. deficit principle

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E. frustration-regression principle Answer: D Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 30.

The ________ states that a need does not become activated until the next-lower-level need is already satisfied. A. expectancy theory B. deficit principle C. self-efficacy theory D. frustration-regression principle E. progression principle Answer: E Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

31.

________ satisfies the self-actualization needs. A. Praise and recognition from boss B. Participation in decision making C. Safe working conditions D. Promotion to higher status job E. Pleasant supervisor Answer: B Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

Esteem needs are satisfied by ________. A. promotion to higher status job B. a pleasant supervisor C. adequate compensation and benefits D. participation in decision making E. safe working conditions Answer: A Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

Creative and challenging work, and job autonomy satisfy ________ needs. A. physiological B. esteem C. self-actualization D. social E. safety Answer: C

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Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 34.

Which of the following satisfies social needs? A. Adequate compensation and benefits B. Physical comfort on the job C. Safe working conditions D. Pleasant supervisor E. Promotion to higher status job Answer: D Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

35.

________ needs are served by job security and adequate compensation and benefits. A. Social B. Safety C. Self-actualization D. Esteem E. Physiological Answer: B Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

________ satisfies esteem needs. A. Physical comfort on the job B. Praise and recognition from boss C. Adequate compensation and benefits D. Interaction with customers E. Reasonable work hours Answer: B Page: 405 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

37.

________ satisfies lower-order physiological needs. A. Adequate compensation and benefits B. Physical comfort on the job C. Safe working conditions D. Friendly coworkers E. Creative and challenging work Answer: B Page: 405 Learning Objective: 16.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 38.

According to the ERG theory, ________ needs are desires for physical well-being. A. growth B. safety C. relatedness D. existence E. power Answer: D Page: 406 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

39.

According to the ERG theory proposed by Clayton Alderfer, relatedness needs are desires for: A. physiological and material well-being. B. recognition, responsibility, and job autonomy. C. psychological growth and development. D. personal growth and development. E. satisfying interpersonal relationships. Answer: E Page: 406 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

40.

________ needs described by Clayton Alderfer are essentially the same as the higherorder needs in Maslow’s hierarchy. A. Esteem B. Relatedness C. Growth D. Existence E. Social Answer: C Page: 406 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

Which of the following states that an already satisfied need can become reactivated when a higher-level need is blocked? A. Progression principle B. Self-efficacy theory C. Deficit principle D. Frustration-regression principle E. Expectancy theory Answer: D Page: 407 Learning Objective: 16.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 42.

According to Frederick Herzberg’s two-factor theory, a satisfier factor is found in the job content, such as ________. A. working conditions B. advancement opportunities C. organizational policies D. interpersonal relations E. compensation Answer: B Page: 407 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

43.

In Herzberg’s two-factor theory, interpersonal relations are regarded as ________ factors. A. satisfier B. equity C. valence D. hygiene E. compensation Answer: D Page: 407 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

According to McClelland’s theory, ________ is the desire to do something better, to solve problems, or to master complex tasks. A. need for power B. need for autonomy C. need for achievement D. need for affiliation E. need for participation Answer: C Page: 408 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

45.

Acquired needs theory states that people with a high need for achievement: A. seek satisfying interpersonal relationships. B. prefer collective responsibility for results. C. tend to like jobs that involve working with people. D. take moderate risks in competitive situations. E. behave in ways that have a clear impact on other people. Answer: D Page: 408 Learning Objective: 16.1 Difficulty: Moderate

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 46.

According to McClelland, people with a high need for power: A. put their competencies to work. B. seek satisfying interpersonal relationships. C. must be able to master complex tasks. D. take moderate risks in competitive situations. E. behave in ways that have a clear impact on other people. Answer: E Page: 408 Learning Objective: 16.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

47.

According to the acquired needs theory, the need for ________ is the desire to control other people, to influence their behavior, or be responsible for them. A. power B. achievement C. participation D. affiliation E. accomplishment Answer: A Page: 408 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

48.

Need for ________ is the desire to establish and maintain friendly and warm relations with other people. A. accomplishment B. achievement C. power D. autonomy E. affiliation Answer: E Page: 409 Learning Objective: 16.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

49.

According to the acquired needs theory, people with a high need for ________ seek companionship, social approval, and satisfying interpersonal relationships. A. autonomy B. affiliation C. accomplishment D. achievement E. power Answer: B Page: 409 Learning Objective: 16.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 50.

________ theory suggests that being treated unfairly makes people uncomfortable and motivates them to eliminate the discomfort. A. Acquired needs B. Two-factor C. Equity D. Hierarchy of needs E. ERG Answer: C Page: 410 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

According to equity theory, ________ is an outcome. A. quality of work B. education C. experience D. special skills E. job security Answer: E Page: 410 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

________ occur(s) whenever people feel that the rewards they receive for their work contributions are unfair in comparison to the rewards received by someone else. A. Frustration-regression B. Continuous reinforcements C. Extinction D. Perceived inequities E. Negative reinforcement Answer: D Page: 410 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

53.

Over-reward inequity occurs when an individual perceives that: A. his outcomes-to-inputs ratio is lower than that of his referent. B. the reward he has received for his work is not matching his inputs. C. he is receiving less than he should in comparison to somebody else. D. his outcomes-to-inputs ratio is greater than that of his referent. E. the reward he has received for his efforts is fair. Answer: D Page: 410 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 54.

The concept of ________ proposes that people have different preferences for equity and thus react differently to perceptions of inequity. A. positive reinforcement B. instrumentality C. equity sensitivity D. perceived inequities E. negative reinforcement Answer: C Page: 411 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

People who are less concerned about being under-rewarded are called ________. A. referents B. benevolents C. influencers D. sensitives E. entitleds Answer: B Page: 411 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

________ are those who have a strong preference for rewards to be distributed equitably, so they react as the basic equity theory proposes. A. Influencers B. Altruists C. Sensitives D. Benevolents E. Entitleds Answer: C Page: 411 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

________ are people who try to create situations of positive inequity for themselves and react very negatively to any situations of negative inequity that they experience. A. Altruists B. Sensitives C. Affiliates D. Benevolents E. Entitleds Answer: E Page: 411 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 58.

Benevolents differ from entitleds as benevolents ________. A. create situations of positive inequity for themselves B. have a strong preference for rewards to be distributed equitably C. have a desire to be over-rewarded D. more readily accept situations of negative inequity E. are very concerned about being under-rewarded Answer: D Page: 411 Learning Objective: 16.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

Which of the following is true about sensitives and entitleds? A. Both are less concerned about being under-rewarded. B. Both readily accept situations of negative inequity. C. Both have a strong preference for rewards. D. Both create situations of positive inequity for themselves. E. Both have a strong preference for rewards to be distributed equitably. Answer: C Page: 411 Learning Objective: 16.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

60.

________ is a person’s belief that working hard will result in high task performance. A. Instrumentality B. Expectancy C. Resiliency D. Equity E. Efficacy Answer: B Page: 412 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

61.

According to Vroom’s theory of motivation, if a person believes that he or she can achieve the performance level necessary to get promoted, the person is said to have ________. A. high benevolence B. positive expectancy C. positive instrumentality D. high need for affiliation E. positive valence Answer: B Page: 413 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

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62.

A person’s belief that successful performance will be followed by rewards and other work-related outcomes is known as ________. A. resiliency B. competency C. efficacy D. instrumentality E. valence Answer: D Page: 412 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

According to expectancy theory, if a person has high instrumentality, he will: A. not value the rewards being offered. B. lack the confidence that he will be promoted if he improves his performance. C. believe that he can meet the performance expectations through hard work. D. be able to link high performance and available rewards. E. perceive himself to be under-rewarded for his efforts compared to other coworkers. Answer: D Page: 412 Learning Objective: 16.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

64.

Which of the following is true about valence? A. It is sometimes called performance-outcome expectancy. B. It is the desire to establish good relations with coworkers. C. It refers to a person’s belief that working hard will result in a desired level of task performance being achieved. D. It indicates that successful performance will be followed by rewards. E. It is the value a person assigns to the possible rewards and other work-related outcomes. Answer: E Page: 412 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

According to Vroom’s expectancy theory, managers can build positive expectancies by: A. setting challenging goals and making people work hard to achieve those goals even though they lack the ability and resources to complete the tasks. B. clarifying the rewards for high performance. C. selecting workers with the right abilities for the jobs to be done and providing them with the best training and development. D. increasing the communication with the subordinates to help identify important employee needs and benefits. E. allotting rewards fairly on a performance-contingent basis. Answer: C

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Page: 414 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 66.

Which of the following measures when employed will help managers to create positive instrumentalities among employees? A. Providing employees with the best training and development B. Linking the needs and desires of employees with the rewards that can be earned through high performance C. Increasing communication with subordinates to help identify important employee needs and desires D. Clarifying the possible rewards on high performance and allocating those rewards fairly on a performance-contingent basis E. Selecting workers with the right abilities for the jobs to be done Answer: D Page: 414 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

Managers can effectively obtain the motivational benefits of goal setting by: A. encouraging the employees to do their best instead of mentioning what is expected of them. B. setting goals that are easily attainable so that the employees do not have the fear of failure in performing a task. C. providing feedback on the performance related to the assigned goal and rewarding people on the accomplishment of those goals. D. letting the employees decide the goals they want to accomplish rather than making them aware of management’s expectations. E. giving challenging goals to the employees and pressurizing them to meet the expectations. Answer: C Page: 415 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

68.

________ is a person’s belief that he or she is capable of performing a task. A. Expectancy B. Self-efficacy C. Instrumentality D. Credibility E. Competency Answer: B Page: 415 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

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69.

According to Albert Bandura, if a person gains confidence through positive experience, it is referred to as ________. A. emotional arousal B. vicarious modeling C. social persuasion D. verbal persuasion E. enactive mastery Answer: E Page: 416 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

70.

Which of the following sources helps to enhance self-efficacy through learning by observing others succeed at a task? A. Social persuasion B. Verbal persuasion C. Emotional arousal D. Vicarious modeling E. Enactive mastery Answer: D Page: 416 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

________ is a way of enhancing self-efficacy of a person by telling the person that she or he can, or by encouraging the person to perform a task. A. Emotional arousal B. Vicarious modeling C. Verbal persuasion D. Enactive mastery E. Moral disengagement Answer: C Page: 416 Learning Objective: 16.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

72.

The ________ states that behavior that results in a positive outcome is likely to be repeated, and the behavior that results in a negative outcome is not likely to be repeated. A. law of contingent reinforcement B. progression principle C. law of effect D. deficit principle E. law of immediate reinforcement Answer: C Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 73.

________ is the control of behavior by manipulating its consequences. A. Relative benchmarking B. Verbal persuasion C. Vicarious modeling D. Operant conditioning E. Concurrent control Answer: D Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

74.

________ strengthens behavior by making a desirable consequence contingent on its occurrence. A. Vicarious modeling B. Extinction C. Punishment D. Job rotation E. Positive reinforcement Answer: E Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

Natalie encourages her employees by recognizing and immediately rewarding a good performance, so that it motivates the employee as well as others to consistently perform well. This type of strategy to increase the frequency of desirable behavior is known as ________. A. vicarious modeling B. job rotation C. positive reinforcement D. extinction E. punishment Answer: C Page: 417 Learning Objective: 16.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

76.

________ strengthens behavior by making the avoidance of an undesirable consequence contingent on its occurrence. A. Punishment B. Negative reinforcement C. Extinction D. Job rotation E. Vicarious modeling Answer: B Page: 417 Learning Objective: 16.3

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 77.

Martin encourages the employees who have not been meeting the expectations of the job by ignoring minor issues when they meet his expectations. This type of strategy used to strengthen the desirable behavior is called ________. A. extinction B. intermittent reinforcement C. positive reinforcement D. punishment E. negative reinforcement Answer: E Page: 417 Learning Objective: 16.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

78.

________ is a strategy of reinforcement that discourages behavior by making an unpleasant consequence contingent on its occurrence. A. Positive reinforcement B. Extinction C. Punishment D. Negative reinforcement E. Vicarious modeling Answer: C Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

79.

________ is a reinforcement strategy that discourages behavior by making the removal of a desirable consequence contingent on its occurrence. A. Negative reinforcement B. Vicarious modeling C. Positive reinforcement D. Extinction E. Punishment Answer: D Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

Justin notices that one of his employees has been coming late to work and his team members have been shielding him. Justin counsels the coworkers to stop shielding him and to not encourage him to be late to work. This type of reinforcement strategy is known as ________. A. negative reinforcement B. extinction C. intermittent reinforcement D. positive reinforcement

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E. punishment

Answer: B Page: 417 Learning Objective: 16.3 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 81.

Which of the following is true about punishment and extinction strategies? A. Both of these strategies weaken or eliminate undesirable behaviors. B. Both of these strategies strengthen desirable behavior by making a desirable consequence contingent on its occurrence. C. Both of these strategies make the removal of a pleasant consequence contingent on its performance. D. Both of these strategies strengthen desirable behavior when it occurs. E. Both of these strategies make an unpleasant consequence contingent on its occurrence. Answer: A Page: 417 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

82.

________ is positive reinforcement of successive approximations to the desired behavior. A. Chaining B. Horizontal loading C. Job rotation D. Vertical loading E. Shaping Answer: E Page: 418 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

A(n) ________ reinforcement schedule administers a reward each time a desired behavior occurs. A. conditioned B. continuous C. immediate D. intermittent E. annual Answer: B Page: 418 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

A schedule that rewards desired behavior only periodically is known as a(n) ________ reinforcement schedule.

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A. ongoing B. unconditioned C. intermittent D. continuous E. immediate Answer: C Page: 418 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 85.

The ________ states that for a reward to have maximum enhancement value, it must be delivered only if the desired behavior is exhibited. A. law of effect B. deficit principle C. law of immediate reinforcement D. frustration-regression principle E. law of contingent reinforcement Answer: E Page: 418 Learning Objective: 16.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

86.

The law of immediate reinforcement states that: A. a punishment should be administered in private. B. a behavior that results in a pleasant outcome is likely to be repeated. C. a satisfied need does not motivate behavior. D. an instant delivery of a reward after the occurrence of a desirable behavior enhances the motivation value of the reward. E. a satisfied need can become activated when a higher level need is blocked. Answer: D Page: 418 Learning Objective: 16.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

________ is a process of arranging work tasks for individuals and groups. A. Task analysis B. Operant conditioning C. Work scope D. Resource management E. Job design Answer: E Page: 419 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

88.

________ employs people in clearly defined and specialized tasks with narrow job scope.

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A. Job enlargement B. Job simplification C. Vertical loading D. Job enrichment E. Job rotation Answer: B Page: 420 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 89.

One way to eliminate problems associated with job simplification by total mechanization of a job is ________. A. job sharing B. job enrichment C. automation D. job enlargement E. shaping Answer: C Page: 420 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

________ helps in eliminating the problems associated with job simplification by increasing the task variety by periodically shifting workers between different jobs. A. Job enrichment B. Vertical loading C. Job enlargement D. Job rotation E. Automation Answer: D Page: 420 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

91.

________ increases task variety by combining into one job two or more tasks previously done by separate workers. A. Vertical loading B. Job enlargement C. Job enrichment D. Job rotation E. Automation Answer: B Page: 420 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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92.

Nathan, a supervisor in a tea manufacturing firm, observes that the employees are not happy with their jobs as they find it monotonous. They get bored of doing the same thing everyday. Nathan tries to deal with this problem by combining two or three tasks that were previously done by different employees and allotting a single person to perform the task. The method employed by Nathan to increase the task variety is called job ________. A. sharing B. rotation C. simplification D. enrichment E. enlargement Answer: E Page: 420 Learning Objective: 16.4 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

93.

Job ________ increases job depth by adding work planning and evaluating duties normally performed by the supervisor. A. rotation B. simplification C. enrichment D. sharing E. enlargement Answer: C Page: 420 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

A job that requires a variety of activities to be carried out and involves the use of varied expertise and talent of the employee is high on ________. A. task identity B. skill variety C. autonomy D. task significance E. task analysis Answer: B Page: 420 Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

95.

If a job is redesigned to involve a major part of the work to be completed by a single person in order to produce a visible outcome, then it is high on ________. A. job enlargement B. task significance C. task identity D. skill variety E. task analysis Answer: C Page: 421

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Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 96.

A job that provides a person the complete authority to schedule the work and choose the course of action is high in ________. A. task significance B. task identity C. skill variety D. autonomy E. task analysis Answer: D Page: 421 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

97.

A work schedule that allows a full-time job to be completed in less than the standard five days of 8-hour shifts is referred to as ________. A. seasonal employment B. temp job C. compressed workweek D. flextime E. weekend work schedule Answer: C Page: 423 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

Which of the following helps in providing flexibility to workers by splitting a fulltime job between two or more people? A. Flextime B. Telecommuting C. Office sharing D. Co-working E. Job sharing Answer: E Page: 423 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

________ is an arrangement that allows at least a portion of scheduled work hours to be completed outside the office. A. Compressed workweek B. Automation C. Job sharing D. Telecommuting E. Contingency Answer: D

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Page: 423 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 100.

The workers who are employed on a part-time and temporary basis to supplement the regular workforce are called ________. A. overtime workers B. permatemps C. flextime workers D. virtual workers E. contingency workers Answer: E Page: 424 Learning Objective: 16.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions 101.

How does the Alderfer’s ERG theory differ from Maslow’s hierarchy of needs theory? Answer: Maslow’s theory classifies human needs as lower-order needs and higherorder needs. It states that a satisfied need is not a motivator of behavior. It states that five needs exist in a hierarchy and that a need does not become activated until the next-lower-level need is already satisfied. People are expected to advance step by step up the hierarchy in their attempt to satisfy the lowest-level need that is currently unfulfilled. In contrast, Alderfer’s ERG theory groups human needs into three categories. This theory suggests that any or all needs can influence individual behavior at a given time. ERG theory does not assume that certain needs must be satisfied before other needs become activated. Alderfer also believes that satisfied needs do not lose their motivational impact and that they can become reactivated and influence behavior when a higher-level need cannot be satisfied. Page: 405-407 Learning Objective: 16.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

102.

How can managers effectively use positive reinforcement to increase the frequency of desirable behavior? Answer: Positive reinforcement can be effective when managers: • clearly identify desired work behaviors. • maintain a diverse inventory of rewards. • inform everyone what must be done to get rewards. • recognize individual differences when allocating rewards. • follow the laws of immediate and contingent reinforcement. Page: 418 Learning Objective: 16.3 Difficulty: Moderate AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 103.

What are the advantages and disadvantages of telecommuting? Answer: The advantages of telecommuting are: • Increased productivity • Fewer distractions • Less time spent on commuting to and from work • Freedom to schedule work timings The disadvantages of telecommuting are: • Spending more time on work • Difficulty in separating work and personal life • Devoting less time for family Page: 424 Learning Objective: 16.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Test Bank

Ch17: Teams and Teamwork

True or False Questions

A team is a collection of people who regularly interact to pursue common goals. Answer: True Page: 432 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

In his role as a team leader, a manager is primarily involved in serving as a helpful contributing member of a project team. Answer: False Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Synergy pools individual talents and efforts to create extraordinary results through collective action. Answer: True Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Formal groups emerge from relationships and shared interests among the members. Answer: False Page: 435 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Informal groups are always detrimental to the growth of an organization as they are mostly involved in spreading rumors. Answer: False Page: 435 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Members of informal groups can satisfy needs that are otherwise unmet in their formal work assignments. Answer: True Page: 435 Learning Objective: 1.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

Project teams or task forces work on common problems on a permanent basis. Answer: False Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A cross-functional team operates with members who come from different functional units of an organization. Answer: True Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

The functional chimneys problem is more prominent in the case of cross-functional teams. Answer: False Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

A key feature of any self-managing team is multitasking. Answer: True Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

Members of a self-managing team are held individually accountable for performance results. Answer: False Page: 437 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

In the context of virtual teams, selecting team members high in initiative often leads to a lack of co-ordination among the members. Answer: False Page: 438 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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13.

Team building is a sequence of activities to analyze a team and make changes to improve its performance. Answer: True Page: 438 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

Team effectiveness is inversely proportional to the quality of inputs. Answer: False Page: 440 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

15.

In respect to member satisfaction, members should take pleasure from the team’s performance accomplishments and not focus on their personal contribution. Answer: False Page: 439 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

16.

The available resources and organizational setting can affect how fully team members can use and pool their talents to accomplish team tasks. Answer: True Page: 441 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

The right inputs alone guarantee team effectiveness. Answer: False Page: 442 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

18.

It is in the storming stage that people ideally begin to identify with other members and with the team itself. Answer: False Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

19.

The norming stage is part of the “critical zone” of team development, where successes create long-term gains while failures create long-lasting problems. Answer: False

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Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 20.

Persons in a highly cohesive team are less likely to conform to the norms. Answer: False Page: 444 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

By reinforcing the desired behaviors with rewards, leaders can help their teams in building positive norms. Answer: True Page: 444 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

A strong conformity to norms by members has a beneficial effect on team performance. Answer: True Page: 444 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Increasing membership homogeneity in a team increases team cohesiveness. Answer: True Page: 445 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

It is the sole responsibility of a team leader to minimize the occurrence of disruptive activities in a team. Answer: False Page: 446 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

The best teams use centralized communication network at all times. Answer: False Page: 447 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities

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Bloom’s Taxonomy: Knowledge 26.

Centralized communication networks work better on simple tasks. Answer: True Page: 447 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

27.

The “decision by majority” rule ensures that no coalitions are formed. Answer: False Page: 448 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

Highly cohesive teams have a tendency of losing their critical evaluative capabilities. Answer: True Page: 449 Learning Objective: 1.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

29.

Groupthink is likely to occur when members of a group refuse to look realistically at other groups. Answer: True Page: 449-450 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

In a situation prone to interpersonal conflicts, brainstorming works best in preventing groupthink. Answer: False Page: 451 Learning Objective: 1.4 Difficulty: Moderate AACSB: Communication abilities Bloom’s Taxonomy: Comprehension

Multiple Choice Questions

31.

The process of people actively working together to accomplish common goals is referred to as ________. A. teamwork B. team diversification C. free-riding D. team building E. groupthink

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Answer: A Page: 432 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 32.

In his role as a coach or team developer, a manager is primarily involved in: A. serving as the peer leader and networking hub for a special task force. B. serving as a helpful contributing member of a project team. C. looking out for “free-riding” in groups and preventing its occurrence. D. serving as a team’s advisor on ways to improve processes and performance. E. working together with the team and solving problems through computer-based interactions. Answer: D Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

Which of the following best describes synergy? A. It is the process by which some people avoid responsibility by “free-riding” in groups. B. It is the process of creating a whole greater than the sum of its individual parts. C. It is the process of analyzing business opportunities according to market growth rate and market share. D. It is the process that analyses the strengths, weaknesses, opportunities, and threats involved in a business. E. It is the process that seeks the lowest costs of operations within a special market segment. Answer: B Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

What is social loafing? A. It is the tendency of some people to avoid responsibility by “free-riding” in groups. B. It is the tendency to create an invisible barrier limiting career advancement of women and minorities. C. It is the process by which managers create positive relationships with people who can help advance agendas. D. It is the process by which people actively work together to accomplish common goals. E. It is the tendency of some people to display negative attitudes toward members of diverse populations. Answer: A Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 35.

Which of the following is a drawback closely associated with teamwork? A. Functional chimneys problem B. Glass ceiling effect C. Social loafing D. Ecological fallacy E. Absence of a sense of security Answer: C Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

36.

The market research department, audit unit, and customer service team of a company are examples of a(n) ________ group. A. formal B. informal C. support D. grassroots E. interest Answer: A Page: 435 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

37.

Which of the following is true of informal groups? A. Managers are the key “linking pins” among these groups. B. They emerge from natural or spontaneous relationships among people. C. They are convened for a specific purpose and disband when their task is completed. D. They are officially recognized and supported by the organization. E. Their members have the tendency to avoid responsibility by “free-riding” in groups. Answer: B Page: 435 Learning Objective: 1.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

38.

Which of the following best describes a committee? A. It is convened for a specific purpose and disbands when its task is completed. B. It is unofficial and emerges from relationships and shared interests among members. C. It is designated to work on a special task on a continuing basis. D. It is a team whose members work and solve problems through computer-based interactions. E. It is a team whose members have the tendency to avoid responsibility by “freeriding” in groups. Answer: C Page: 435

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Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 39.

Which of the following is true of committees? A. They are led by a designated head or chairperson, who is held accountable for performance results. B. They emerge from natural or spontaneous relationships among people. C. They are formed to engage group members in an open, spontaneous discussion of problems. D. They bring people together to work on common problems, but on a temporary basis. E. They primarily exist as support groups in which the members basically help one another do their jobs. Answer: A Page: 436 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

40.

A project team or task force is: A. unofficial and emerges from relationships and shared interests among members. B. designated to work on a special task on a continuing basis. C. a team in which members solve problems through computer-based interactions. D. a team in which members have the tendency of “free-riding” in groups. E. convened for a specific purpose and disbands when its task is completed. Answer: E Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

At the headquarters of Meltdown Inc., a temporary team consisting of members from its technical department and marketing department is put together to develop a promotional plan for its new robot, “Nancy.” This team is given a time limit of fifteen days to complete the task. This team is an example of a(n) ________. A. committee B. project team C. informal group D. interest group E. distributed team Answer: B Page: 436 Learning Objective: 1.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

42.

Which of the following is most likely to reduce the functional chimneys problem? A. A cross-functional team B. A self-managing work team C. A committee

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D. A virtual team E. A distributed team Answer: A Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 43.

How does a cross-functional team help reduce the functional chimneys problem? A. By giving the team members the right of self-management and thus the right to work in different departments B. By bringing together people from across functions and thus eliminating the “wall” that may otherwise limit communication through departments and functions C. By encouraging an unofficial network in which members can build relationships and share interests D. By making individual contributions more visible and thus controlling social loafing E. By increasing the motivation of the members and thus increasing work efficiency Answer: B Page: 436 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

44.

The functional chimneys problem: A. emerges from relationships and shared interests among members. B. results from an invisible barrier limiting career advancement of women and minorities. C. is the practice of spreading rumors across functional groups. D. is a lack of communication across functions. E. is the indecisiveness seen in a functional work team. Answer: D Page: 436 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

45.

Which of the following is true of a self-managing work team? A. It refers to a team in which members evaluate one another’s performance contributions. B. It refers to a team of workers that operate with a comparatively lesser degree of task interdependence. C. In these teams the members usually specialize in and focus on performing only one job. D. Each member of these teams is individually held accountable for performance results. E. Members of such a team work together and solve problems only through computer-based interactions. Answer: A Page: 436-437 Learning Objective: 1.2

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Schermerhorn-Management, 12th edition

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Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 46.

Blocs Inc. is headquartered in the U.S. and has a number of branches across the world. The manager at the U.S. branch is in charge of a project involved in creating a new operating system. Her team members are based in different branches in China, India, Brazil, and Canada. Instead of meeting at a common location, the team members hold discussions through Skype. This is an example of a(n) ________. A. informal group B. virtual team C. interest group D. support team E. friendship group Answer: B Page: 438 Learning Objective: 1.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

47.

Members of a(n) ________ typically work together and solve problems through computer-based interactions. A. informal group B. distributed team C. interest group D. support team E. friendship group Answer: B Page: 438 Learning Objective: 1.2 Difficulty: Easy AACSB: Use of information technology Bloom’s Taxonomy: Knowledge

48.

Which of the following is true of a distributed team? A. Its members are less likely to get sidetracked by interpersonal difficulties. B. Its members are more sensitive to nonverbal cues in communication. C. It always ensures that team members do not feel isolated. D. It consists of members across departments who work at one place. E. It has a limited number of members owing to the hassles of expanding such a team. Answer: A Page: 438 Learning Objective: 1.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

49.

Which of the following is one of the most essential characteristic of highperformance teams? A. Intra-team rivalry B. External locus of control C. Groupthink D. Free-riding

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E. Strong leadership Answer: E Page: 438 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 50.

The differences in values, personalities, experiences, demographics, and cultures among the membership are referred to as ________. A. functional chimneys B. glass walls C. team diversity D. groupthink E. culture shock Answer: C Page: 440 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

51.

The main difference between homogeneous and heterogeneous teams is that: A. the risk of occurrence of groupthink is more in the latter. B. the latter has members who are quite dissimilar to one another. C. members of the latter work together through computer-based interactions. D. the latter achieves high levels of task performance and future viability. E. only the latter has a task-driven, results-oriented structure. Answer: B Page: 441 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

52.

As team diversity increases, it is most likely that the: A. risk of the occurrence of groupthink increases. B. complexity of interpersonal relationships increases. C. members become more sensitive to nonverbal cues. D. risk of occurrence of social loafing increases. E. scope for special performance opportunities reduces. Answer: B Page: 441 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

53.

Which of the following is most likely to increase team effectiveness? A. Increase in the complexity of interpersonal relationships B. Good information and material resources C. Involvement in social loafing D. Teams that have more than eight or nine members E. Strong cohesiveness that leads to groupthink Answer: B

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Test Bank

Page: 441 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 54.

As teams increase in size: A. the communication becomes less congested. B. it becomes easier to manage them. C. the number of potential interactions increases geometrically. D. the nature of the task ceases to affect team effectiveness. E. team effectiveness reaches its peak. Answer: C Page: 442 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

________ is the way team members work together to accomplish tasks. A. Team effectiveness B. Team process C. Team managing D. Team leading E. Team controlling Answer: B Page: 442 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

56.

The ________ stage involves the first entry of individual members into a team. A. storming B. norming C. performing D. forming E. adjourning Answer: D Page: 442 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

The forming stage of team development is the stage: A. of initial task orientation and interpersonal testing. B. when subteams are formed around areas of agreement and disagreement. C. when shared rules of conduct emerge and the team feels a sense of leadership. D. of total integration in which members are able to deal in creative ways. E. when team members prepare to achieve closure and disband. Answer: A Page: 442 Learning Objective: 1.3 Difficulty: Easy

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Schermerhorn-Management, 12th edition

Test Bank

AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 58.

The storming stage of team development is the stage: A. of initial task orientation and interpersonal testing. B. when subteams are formed around areas of agreement and disagreement. C. when shared rules of conduct emerge and the team feels a sense of leadership. D. of total integration in which members are able to deal in creative ways. E. when team members prepare to achieve closure and disband. Answer: B Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

It is in the ________ stage that tensions often emerge over tasks and interpersonal concerns. A. storming B. norming C. performing D. forming E. adjourning Answer: A Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

60.

The norming stage of team development is the stage: A. of initial task orientation and interpersonal testing. B. when subteams are formed around areas of agreement and disagreement. C. when shared rules of conduct emerge and the team feels a sense of leadership. D. of total integration in which members are able to deal in creative ways. E. when team members prepare to achieve closure and disband. Answer: C Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

61.

The performing stage of team development is the stage: A. of first entry of individual members into a team of initial task orientation and interpersonal testing. B. of high emotionality when subteams are formed around areas of agreement and disagreement. C. where members develop initial feelings of closeness, a division of labor, and a sense of shared expectations. D. of total integration in which members are able to deal in creative ways with complex tasks. E. when temporary committees, task forces, and project teams disband with a sense that important goals have been accomplished. Answer: D

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Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 62.

Which of the following is the last stage in team development? A. Storming stage B. Norming stage C. Performing stage D. Forming stage E. Adjourning stage Answer: E Page: 443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

The adjourning stage of team development is the stage: A. of first entry of individual members into a team of initial task orientation and interpersonal testing. B. of high emotionality when subteams are formed around areas of agreement and disagreement. C. where members develop initial feelings of closeness, a division of labor, and a sense of shared expectations. D. of total integration in which members are able to deal in creative ways with complex tasks. E. when temporary committees, task forces, and project teams disband with a sense that important goals have been accomplished. Answer: E Page: 443-444 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

64.

A special team was put together at D.M.G. to work on a robotics project. The team is in the process of completing their project, and all the members share the view that they have successfully accomplished their goal. This team is most likely to be in the ________ stage of its development. A. storming B. norming C. performing D. forming E. adjourning Answer: E Page: 443-444 Learning Objective: 1.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

65.

Which of the following best describes a norm? A. It is a behavior, rule, or standard expected to be followed by team members.

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Test Bank

B. It is the degree to which members are attracted to and motivated to remain part of a team. C. It is the tendency of individual team members to engage in self-serving behaviors. D. It is the way team members of any team actually work together as they transform inputs into output. E. It is the differences in values, personalities, experiences, demographics, and cultures among the membership. Answer: A Page: 444 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 66.

________ is the degree to which members are attracted to and motivated to remain part of a team. A. Effectiveness B. Cohesiveness C. Productivity D. Efficiency E. Diversity Answer: B Page: 444 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

Conformity to norms in a team is likely to be the highest when: A. diversity is high. B. diversity is low. C. cohesiveness is high. D. cohesiveness is low. E. the size of the team is big. Answer: C Page: 444 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

68.

Which of the following is true of a highly cohesive team? A. The team members are less likely to conform to the norms. B. The members often violate core values. C. The intensity of rivalry among the members is very high. D. The members are not ethical in their dealings. E. The team members strive to maintain positive relationships. Answer: E Page: 444 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Test Bank

69.

Which of the following is an ideal step that leaders can take to ensure that their teams build positive norms? A. Increase the size of the team B. Increase team diversity C. Impose strict guidelines and penalties D. Strengthen team cohesiveness E. Encourage rivalry among members Answer: D Page: 444 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

70.

Which of the following is the best way to build high team cohesiveness? A. Decrease membership homogeneity B. Increase team size C. Build agreement on team goals D. Reward individual results E. Increase rivalry among members Answer: C Page: 445 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

A(n) ________ activity is an action taken by a team member that directly contributes to the team’s performance purpose. A. maintenance B. disruptive C. task D. social loafing E. orientation Answer: C Page: 445 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

72.

A ________ activity is an action taken by a team member that supports the emotional life of the group. A. maintenance B. disruptive C. task D. social loafing E. self-management Answer: A Page: 445 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Test Bank

73.

James notices that his team always fails to complete projects on schedule. He realizes that this problem can be tackled by prioritizing the projects and setting personal goals. He urges his fellow team members to follow his technique. This leads to a significant improvement in the performance of the team. This action taken by James is an appropriate example of a(n) ________ activity. A. maintenance B. disruptive C. task D. social loafing E. groupthink Answer: C Page: 445 Learning Objective: 1.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

74.

Encouraging team members and developing good interpersonal relationships are part of ________ activities. A. maintenance B. direct performance oriented C. task D. social loafing E. information sharing Answer: A Page: 445 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

75.

Which of the following is an example of a maintenance activity? A. Information sharing B. Elaborating C. Initiating D. Gatekeeping E. Summarizing Answer: D Page: 445 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

76.

________ activities are self-serving behaviors that interfere with team effectiveness. A. Maintenance B. Disruptive C. Task D. Orientation E. Self-management Answer: B Page: 446 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills

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Test Bank

Bloom’s Taxonomy: Knowledge 77.

Activities such as showing incivility toward other members, and withdrawing from the discussion are typical examples of ________ activities. A. maintenance B. disruptive C. task D. orientation E. initializing Answer: B Page: 446 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

78.

All members of a team working on developing a mobile operating system at Lock Inc. contribute helpful task and maintenance behaviors. This team follows the ________ form of leadership. A. authoritarian B. high power distance C. distributed D. centralized E. transactional Answer: C Page: 445 Learning Objective: 1.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

79.

Which of the following is an example of a disruptive activity? A. Gatekeeping B. Controlling C. Being aggressive D. Following E. Opinion giving Answer: C Page: 446 Learning Objective: 1.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

80.

A decentralized communication network: A. allows all members to communicate directly with one another. B. restricts direct communication between individual members and the hub. C. allows limited communication among subgroups. D. decreases cohesiveness in a team. E. allows communication flows only between individual members and a hub. Answer: A Page: 446 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities

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Bloom’s Taxonomy: Knowledge 81.

When team members must interact intensively and work closely together on tasks, this need is best met by a ________ communication network. A. wheel B. chain C. decentralized D. restricted E. top down Answer: C Page: 446 Learning Objective: 1.3 Difficulty: Moderate AACSB: Communication abilities Bloom’s Taxonomy: Comprehension

82.

In a ________ communication network, communication flows only between individual members and a hub. A. restricted B. centralized C. all-channel D. star E. polarized Answer: B Page: 447 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

83.

Which of the following is true of a chain communication structure? A. Its activities are coordinated and results pooled by a central point of control. B. It allows all members to communicate directly with one another. C. It best suits teams when members must interact intensively and work closely. D. Polarized subgroups contest one another and may even engage in conflict. E. It promotes self-serving behaviors that interfere with team effectiveness. Answer: A Page: 447 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

84.

In a(n) ________ communication network, communication between subgroups is limited and biased, with negative consequences for group process and effectiveness. A. restricted B. centralized C. all-channel D. chain E. wheel Answer: A Page: 447 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities

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Bloom’s Taxonomy: Knowledge 85.

In a restricted communication network: A. activities are coordinated and results pooled by a central point of control. B. all team members communicate directly with one another. C. all members of a team contribute helpful task and maintenance behaviors. D. polarized subgroups contest one another and may even engage in conflict. E. self-serving behaviors that interfere with team effectiveness are promoted. Answer: D Page: 447 Learning Objective: 1.3 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

86.

Which of the following best describes decision making? A. It is an action taken by a team member that supports the emotional life of the group. B. It is an action taken by a team member that directly contributes to the group’s performance purpose. C. It is a stage of total integration in which team members are able to deal in creative ways. D. It is the process of making choices among alternative possible courses of action. E. It is the way team members work together to accomplish tasks. Answer: D Page: 447 Learning Objective: 1.4 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

87.

In the ________ method of decision making, one idea after another is suggested without any discussion taking place. A. decision by lack of response B. decision by authority rule C. decision by minority rule D. decision by majority rule E. decision by unanimity Answer: A Page: 447 Learning Objective: 1.4 Difficulty: Easy AACSB: Communication abilities Bloom’s Taxonomy: Knowledge

88.

Jenson supervises the marketing team at Upscale Inc. Instead of having discussions with his team, he takes all the decisions related to marketing policies himself. His approach is an example of ________. A. decision by lack of response B. decision by authority rule C. decision by minority rule D. decision by majority rule E. decision by unanimity Answer: B Page: 448

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Learning Objective: 1.4 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 89.

In the ________ method of decision making, two or three people are able to dominate or “railroad” the team into making a decision that they prefer. A. decision by lack of response B. decision by authority rule C. decision by minority rule D. decision by consensus E. decision by unanimity Answer: C Page: 448 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

In the ________ way of decision making, full discussion leads to one alternative being favored by most members, and the other members agree to support it. A. decision by lack of response B. decision by authority rule C. decision by minority rule D. decision by consensus E. decision by unanimity Answer: D Page: 448 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

91.

When all the members of a team agree to a decision, it is referred to as the ________ way of decision making. A. decision by lack of response B. decision by authority rule C. decision by minority rule D. decision by consensus E. decision by unanimity Answer: E Page: 448 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

Which of the following is a disadvantage typically associated with the team decision making process? A. Minority domination B. Social loafing C. Team diversity D. Downsizing E. Liquidation Answer: A

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Page: 449 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 93.

Which of the following helps one in achieving consensus? A. Every member in the team is kept involved in the decision process. B. Two or three people dominate and lead the team into making a decision. C. The leader, manager, or some other authority figure makes decisions for the team. D. One idea after another is suggested without any discussion taking place. E. A suggestion is provided and then the team is forced into quick agreement. Answer: A Page: 449 Learning Objective: 1.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

94.

Which of the following best describes groupthink? A. It is an action taken by a team member that supports the emotional life of the group. B. It is an action taken by a team member that directly contributes to the group’s performance purpose. C. It is a stage of total integration in which team members are able to deal in creative ways. D. It is the process of making choices among alternative possible courses of action. E. It is a tendency for highly cohesive teams to lose their evaluative capabilities. Answer: E Page: 449 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

Which of the following is a symptom of groupthink? A. Emphasis on centralized communication B. Self-serving behavior C. Decrease in team size D. Illusions of invulnerability E. High team diversity Answer: D Page: 449 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

In which of the following situations is groupthink most likely to occur? A. When members indulge in criticism of their own work B. When members thoroughly consider alternatives C. When members accept consensus prematurely D. When members are skeptical of inherent group morality E. When members communicate personal concerns to the whole team Answer: C

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Page: 450 Learning Objective: 1.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 97.

________ engages group members in an open, spontaneous discussion of problems and ideas. A. Groupthink B. Brainstorming C. Centralized communication D. Restricted communication E. Maintenance activity Answer: B Page: 451 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

Which of the following is likely to be most effective in checking groupthink? A. Assigning the role of critical evaluator to each team member B. Building agreement among team members on team goals C. Increasing membership homogeneity D. Rewarding team rather than individual results E. Providing physical isolation from other teams Answer: A Page: 451 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

Which of the following best describes the nominal group technique? A. It is the technique of making choices among alternative possible courses of action. B. It is the technique of structuring interaction among team members discussing ideas. C. It is the technique of building agreement on team goals and thus increasing cohesiveness. D. It is the technique measuring the degree to which members are motivated to remain as a part of a team. E. It is the technique of measuring the effectiveness and efficiency of individual members of a team. Answer: B Page: 451 Learning Objective: 1.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions

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100.

What are the advantages and disadvantages associated with team work? Answer: Some of the advantages of team work are: • Performance gains through synergy • More resources for problem solving • Improved creativity and innovation • Improved quality of decision making • Greater member commitment to tasks • Increased motivation of members • Increased need satisfaction of members Some of the disadvantages of team work are: • Personality conflicts and work style differences • Ambiguous agendas or ill-defined problems • Social loafing • Groupthink Page: 433 Learning Objective: 1.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

101.

What is a virtual team? What are the potential advantages of a virtual team? Answer: A virtual team is one whose members work together and solve problems through computer-based interactions. In terms of potential advantages, virtual teams can save time and travel expenses when members work in different locations. They can also be easily expanded to include more members as needed and the discussions and shared information can be archived for later access. Virtual teams are usually quite efficient because members are less likely to stray off task and get sidetracked by interpersonal difficulties. Page: 438 Learning Objective: 1.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

What do you understand by the term team process? What are the different stages of team development? Answer: Team process is the way team members work together to accomplish tasks. Teams pass through the following stages of team development—forming, storming, norming, performing, and adjourning. The forming stage involves the first entry of individual members into a team. This is a stage of initial task orientation and interpersonal testing. In the storming stage, task agendas become clarified and members begin to understand one another’s styles. It is in the norming stage that members develop initial feelings of closeness, a division of labor, and a sense of shared expectations. This helps protect the team from disintegration. In fact, holding the team together may seem more important than accomplishing important tasks. Performing is a stage of total integration in which team members are able to deal in creative ways with complex tasks and any interpersonal conflicts. The final stage of team development is adjourning, when team members prepare to achieve closure and disband. Page: 442-443 Learning Objective: 1.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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103.

Test Bank

Discuss the advantages and disadvantages of team decisions. Answer: When teams take time to make decisions by consensus or unanimity, they gain special advantages over those relying more on individual or minority decision methods. The process of making a true team decision makes more information, knowledge, and expertise available. It expands the number of action alternatives that are examined, and helps to avoid getting trapped by tunnel vision and considering only one or a few options. Team decisions also increase understanding and acceptance by members. This helps build commitments of members to work hard to implement the decisions they have made together. The potential disadvantages of team decision making trace largely to the difficulties with group process. When many people are trying to make a team decision, it can be hard to reach agreement and there may be social pressure to conform. There may be minority domination, where some members feel forced or “railroaded” to accept a decision advocated by one vocal individual or small coalition. And, the time required to make team decisions can sometimes be a disadvantage. As more people are involved in the dialogue and discussion, decision making takes longer. This added time may be costly, even prohibitively so, in certain circumstances. Page: 449 Learning Objective: 1.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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Chapter 18: Communication and Collaboration

True/False Questions 1.

Whereas social capital is basically what you know, intellectual capital comes from the people you know and how well you relate to them. Answer: False Page: 460 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Planning is accomplished and plans are shared through the communication of information. Answer: True Page: 460 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Controlling relies on organizing to process information to measure performance results. Answer: False Page: 460 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

An effective communication is always efficient. Answer: False Page: 461 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

To build credibility through expertise, you must be knowledgeable about the issue in question or have a successful track record in dealing with similar issues in the past. Answer: True Page: 461 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Due to information filtering, the higher-levels get biased and inaccurate information from below and end up making bad decisions. Answer: True Page: 463 Learning Objective: 18.1

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Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 7.

An e-mail can be used as documentation when formal policies or directives are being conveyed. Answer: True Page: 464 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

A visitor dropping in during the middle of a meeting is an example of a physical distraction that can interfere with communication effectiveness. Answer: True Page: 465 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Ethnocentrism refers to favoritism shown to relatives or close friends by those in power (as by giving them jobs). Answer: False Page: 466 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

Low communication transparency may have a negative impact on employee engagement. Answer: True Page: 467 Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

11.

Passive listening involves being sincere and trying to find out the full meaning of what is being said. Answer: False Page: 468 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

An active listener must never paraphrase and restate to the source what he thinks he is hearing. Answer: False Page: 468 Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytic skills

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Bloom’s Taxonomy: Comprehension 13.

Feedback is useful and constructive as long as it satisfies some personal need of the sender. Answer: False Page: 469 Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

14.

The distance between people conveys varying intentions in terms of intimacy, openness, and status in interpersonal communications. Answer: True Page: 469-470 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

15.

The physical layout of an office or room is a form of nonverbal communication. Answer: True Page: 470 Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

Substantive conflicts result from feelings of anger, distrust, dislike, fear, and resentment, as well as from personality clashes and relationship problems. Answer: False Page: 470 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

Role ambiguities in the form of unclear job expectations and other task uncertainties increase the likelihood for people to work at cross-purposes. Answer: True Page: 471 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

18.

Unless a conflict is fully resolved, it may remain latent only to emerge again in the future. Answer: True Page: 472 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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19.

Assertiveness is the desire to satisfy another party’s needs and concerns. Answer: False Page: 472 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

20.

The compromise style of conflict management pretends that conflict doesn’t really exist. Answer: False Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

When people are stuck in conflict and just can’t seem to appreciate one another’s points of view, appealing to higher-level goals can sometimes focus their attention on one mutually desirable outcome. Answer: True Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

Changing the reward systems is a way of reinforcing teamwork and can reduce the tendencies of team members to compete with one another. Answer: True Page: 474 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Negotiation is the process of making joint decisions when the parties involved have similar preferences. Answer: False Page: 474 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

Substance goals are tied to the way people work together while negotiating and how they will be able to work together again in the future. Answer: False Page: 475 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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25.

No one should lose in a principled negotiation, and positive relationships should be maintained in the process. Answer: True Page: 475 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

26.

Until the other party’s reservation point is known and each party realizes that a positive bargaining zone exists, it is difficult to negotiate effectively. Answer: True Page: 476 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

27.

The “telling” error occurs when the parties to a negotiation fail to listen well enough to understand what the others are saying. Answer: False Page: 477c Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

A negotiator from a low-context culture is used to getting information through direct questions and answers. Answer: True Page: 477 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

Mediation usually includes a formal hearing in which the mediator listens to both sides and reviews all facets of the case before making a ruling. Answer: False Page: 478 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

The process of alternative dispute resolution utilizes mediation or arbitration, but does so only after direct attempts to negotiate agreements between the conflicting parties have failed. Answer: True Page: 478 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Multiple Choice Questions

31.

________ is the capacity to attract support and help from others in order to get things done. A. Intellectual capital B. Operating capital C. Social capital D. Risk capital E. Venture capital Answer: C Page: 460 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

Which of the following is a difference between intellectual capital and social capital? A. When screening candidates for university internships and first jobs, recruiters give high priority to social capital, but not to intellectual capital. B. Social capital is your ability to connect with others whereas intellectual capital is your ability to move information to and from others. C. Whereas intellectual capital is basically what you know, social capital comes from the people you know and how well you relate to them. D. Capital available for the operations of a firm is called intellectual capital, whereas capital available for investment in new or speculative enterprises is called social capital. E. Social capital is a non-monetary measure, whereas intellectual capital is a monetary measure. Answer: C Page: 460 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

33.

________is the process of sending and receiving symbols with meanings attached to them. A. Propagation B. Conjunction C. Articulation D. Cohesion E. Communication Answer: E Page: 460 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

Communication is the glue that binds together the four functions of planning, organizing, leading, and ________. A. administering B. controlling C. coordinating

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D. processing E. ordering Answer: B Page: 460 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 35.

Effective communication occurs when ________. A. the sender’s message is fully understood by the receiver B. minimum costs are expended in terms of resources C. the manager is connected with others D. everyone is aware of their immediate environment E. a message is supported by everyone Answer: A Page: 461 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

36.

Efficient communication occurs when ________. A. the manager is connected with others B. the sender’s message is fully understood by the receiver C. the message is credible D. a message is supported by everyone E. minimum costs are expended in terms of resources Answer: E Page: 461 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

37.

________ presents a message in a manner that causes the other person to support it. A. Information filtering B. Scientific management C. Ethnocentrism D. Active listening E. Persuasive communication Answer: E Page: 461 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

38.

________ is that which is based on trust, respect, and integrity in the eyes of others. A. Active listening B. Scientific management C. Ethnocentrism D. Credible communication

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E. Information filtering Answer: D Page: 461 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 39.

Mark, a manager at APS Inc., wants to be consistently persuasive when communicating with his team members. To build credibility, Mark must: A. make sure that the rewards for compliance are clear. B. hire similar minded people. C. communicate his decision-making authority to his team. D. be knowledgeable about the issue in question. E. have team members with strong technical skills. Answer: D Page: 461 Learning Objective: 18.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

40.

________ refers to anything that interferes with the effectiveness of communication. A. Deviation B. Fluctuation C. Noise D. Obscurity E. Haphazardness Answer: C Page: 463 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

41.

________ is the intentional distortion of information to make it appear most favorable to the recipient. A. Communication breakdown B. Information filtering C. Persuasive communication D. Exaggerated communication E. Noise Answer: B Page: 463 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

42.

A(n) ________ is the pathway or medium through which a message is conveyed from sender to receiver. A. communication channel B. information filter

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C. communication censor D. information decoder E. information bank Answer: A Page: 463 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 43.

________ are most suitable for simple messages that are easy to convey and for those that require extensive dissemination quickly. A. Written channels B. Spoken channels C. Information filters D. Nonverbal communications E. Mixed messages Answer: A Page: 464 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

Which of the following is a written channel of communication? A. Face-to-face meeting B. Virtual meeting C. Conference D. E-mail E. Seminar Answer: D Page: 464 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

45.

Which of the following is a spoken channel of communication? A. Memo B. Virtual meeting C. E-mail D. Post-it E. Text message Answer: B Page: 464 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

46.

Which of the following is true of communication channels? A. Face-to-face meetings are most acceptable for simple messages that are easy to convey. B. A simple e-mail works best for messages that are complex and difficult to convey.

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C. Where immediate feedback to the sender is valuable, written channels should be used. D. Spoken channels are less personal and less likely to be perceived as supportive. E. Written channels can be considered as documentation when formal policies are being conveyed. Answer: E Page: 464 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 47.

When Jeremy, a manager at Kwiksorb Corp. sets up a virtual meeting to send a complex message that is better delivered face-to-face, the communication process suffers from ________. A. poor proxemics B. a poor choice of communication channels C. substantive conflict D. information overload E. failure to recognize nonverbal signals Answer: B Page: 464 Learning Objective: 18.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

48.

________ takes place through gestures and body language. A. Credible communication B. Information filtering C. Active listening D. Nonverbal communication E. Communication transparency Answer: D Page: 464 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

49.

A(n) ________ results when words communicate one message while actions, body language, or appearance communicate something else. A. information filtering B. mixed message C. persuasive communication D. prevarication E. substantive conflict Answer: B Page: 465 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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50.

The manager at your firm while verbally expressing a statement of probable truth, simultaneously fidgets and avoids eye contact with you. This conveys a(n) ________. A. transparent communication B. mixed message C. poor oral expression D. poor choice of channel E. exaggerated communication Answer: B Page: 465 Learning Objective: 18.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

51.

Which of the following is an example of physical distractions in communication? A. Mixed messages B. Lack of privacy C. Loss of meaning through translation D. Language barrier E. Information filtering Answer: B Page: 465 Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

52.

________ is the tendency to consider one’s culture superior to any and all others. A. Anthropocentrism B. Geocentrism C. Ethnocentrism D. Polycentrism E. Nepotism Answer: C Page: 466 Learning Objective: 18.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

53.

James, a citizen of Country A, joins a firm in Country B. He soon learns that a particular hand gesture commonly used at home is offensive to the locals of Country B. Yet, he continues to use these gestures because he does not have much regard for Country B’s culture. The visitor can be described as ________. A. a passive listener B. ethnocentric C. a persuasive speaker D. an active listener E. polycentric Answer: B Page: 466 Learning Objective: 18.1 Difficulty: Hard

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AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 54.

________ involves being honest in sharing accurate and complete information about the organization and workplace affairs. A. Communication transparency B. Information filtering C. Ethnocentrism D. Proxemics E. Distributive negotiation Answer: A Page: 467 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

55.

Which of the following is an example of high communication transparency? A. A manager who intentionally distorts information to make it appear more favorable to his subordinates B. A manager whose words communicate one message while his gestures communicate something else C. A manager who sets aside adequate time and privacy for a meeting without interruptions D. A manager who openly distributes the company financial information throughout the organization E. A manager who uses electronic channels to convey messages that are complex Answer: D Page: 467 Learning Objective: 18.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

56.

The term ________ describes a form of communication transparency where employees are provided with essential financial information about their companies. A. heralded management B. publicized management C. open book management D. cautious management E. provident management Answer: C Page: 467 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

________ is an ever-present concern in electronic communication. A. Information filtering B. Ethnocentrism C. Mixed message D. Poor written expression E. Privacy

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Answer: E Page: 467 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 58.

________ use(s) electronic media to pass messages and information among members of social networks. A. Electronic grapevines B. Active listening C. Electronic open book management D. Electronic feedback management E. Social reformation Answer: A Page: 468 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

________ is the process of helping the source of a message say what he or she really means. A. Communication transparency B. Information filtering C. Active listening D. Proxemics E. Open book management Answer: C Page: 468 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

60.

Mark asks his colleague Steve, “Don’t you think employees should be promoted on the basis of seniority?” Steve responds, “It seems to you that they should, I take it?” This is an example of ________. A. communication transparency B. active listening C. a mixed message D. information filtering E. communication noise Answer: B Page: 468 Learning Objective: 18.2 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

61.

Which of the following would most likely be the response of an active listener? A. “I don’t think you are right.” B. “You are not allowed to make such accusations.” C. “You are displeased with the management’s decision, aren’t you?”

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D. “May the best candidate be promoted!” E. “I’m not very sure you would be the suitable candidate.” Answer: C Page: 468 Learning Objective: 18.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 62.

________ involves being sincere and trying to find out the full meaning of what is being said. A. Information overloading B. Communication filtering C. Active listening D. Passive listening E. Information filtering Answer: C Page: 468 Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

The process of telling other people how you feel about something they did or said, or about the situation in general, is called ________. A. mixed messaging B. feedback C. compromising D. collaboration E. active speaking Answer: B Page: 468 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

64.

Which of the following is an example of an evaluative feedback? A. “You are unreliable and always late for everything.” B. “You were 30 minutes late for today’s meeting and missed a lot of the context of our discussion.” C. “You missed the deadline for the first time; you need to let me know if you need help.” D. “You are working on too many projects, you should delegate some work to others.” E. “You’re coming late to meetings; you might be spreading yourself too thin and have trouble meeting your obligations.” Answer: A Page: 468 Learning Objective: 18.2 Difficulty: Hard AACSB: Reflective thinking skills

Bloom’s Taxonomy: Application 65.

Which of the following is an example of a descriptive feedback? A. “You are unreliable and always late for everything.” 18-14

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“You were 30 minutes late for today’s meeting and missed a lot of the context of our discussion.” C. “You missed another deadline today.” D. “You are working on too many projects, you should delegate some work to others.” E. “You’re coming late to meetings; you might be spreading yourself too thin and have trouble meeting your obligations.” Answer: B Page: 468 Learning Objective: 18.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application B.

66.

Which of the following guidelines should be followed while giving constructive feedback? A. Feedback should be given indirectly with the help of a middleman. B. Feedback should be general and not specific. C. Feedback should be elaborate and long. D. Feedback should be given on all things the receiver can or cannot be expected to do. E. Feedback should be given at a time when the receiver seems most willing to accept it. Answer: E Page: 469 Learning Objective: 18.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

________ is the study of how we use space in communication. A. Anthropology B. Civics C. Proxemics D. Demography E. Ecology Answer: C Page: 469 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

68.

The physical layout of an office or room is a form of ________. A. communication transparency B. verbal communication C. information filter D. mixed message E. nonverbal communication Answer: E Page: 470 Learning Objective: 18.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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Schermerhorn-Management, 12th edition

Test Bank

69.

A manager removes the door of his office and rearranges the furniture so that his entire team can interact with him. This implies that this manager understands the importance of ________ in communication. A. verbal messages B. space C. written rules D. social media E. information filtering Answer: B Page: 470 Learning Objective: 18.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

70.

________ is a disagreement over issues of substance and/or an emotional antagonism. A. Noise B. Encounter C. Confrontation D. Eustress E. Conflict Answer: E Page: 470 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

________ involves disagreements over goals, resources, rewards, policies, procedures, and job assignments. A. Substantive conflict B. Emotional conflict C. Rebellion D. Structural conflict E. Dysfunctional conflict Answer: A Page: 470 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

72.

Emotional conflicts result from ________. A. disagreement over policies and procedures B. disagreement over distribution of rewards C. personality clashes D. clash over allocation of resources E. disagreements over goals Answer: C Page: 470 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills

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Bloom’s Taxonomy: Comprehension 73.

Which of the following is true about managing conflicts? A. When managed well, conflicts can stimulate creativity. B. Conflicts always result in low performance. C. Substantive conflicts can be addressed by handling personality issues. D. Emotional conflicts do not cause difficulties in organizations. E. Too much conflict leads to groupthink. Answer: A Page: 470 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

74.

Which of the following is true about conflict? A. Positive performance results from very little conflict. B. Moderate levels of conflict are constructive. C. Functional conflict leads to negative performance. D. Too little conflict is constructive. E. Dysfunctional conflict leads to positive performance. Answer: B Page: 470 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

75.

________ conflict harms performance, relationships, and even individual well-being. A. Dysfunctional B. Functional C. Moderate D. Cooperative E. Constructive Answer: A Page: 470 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

76.

________ in the form of unclear job expectations and other task uncertainties increase the likelihood for people to work at cross-purposes. A. Task interdependencies B. Role ambiguities C. Competing objectives D. Structural differentiation E. Resource scarcities Answer: B Page: 471 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

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Bloom’s Taxonomy: Knowledge 77.

________ breed conflict when people depend on others to perform well themselves. A. Task interdependencies B. Role ambiguities C. Competing objectives D. Structural differentiation E. Resource scarcities Answer: A Page: 471-472 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

78.

________ result when goals are poorly set or reward systems are poorly designed, and individuals and groups come into conflict by working to one another’s disadvantage. A. Task interdependencies B. Role ambiguities C. Competing objectives D. Structural differentiation E. Resource scarcities Answer: C Page: 472 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

79.

________ is the desire to satisfy another party’s needs and concerns. A. Ethnocentrism B. Egocentricity C. Cooperativeness D. Individuality E. Assertiveness Answer: C Page: 472 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

________ is the desire to satisfy one’s own needs and concerns. A. Altruism B. Cooperativeness C. Accommodation D. Earnestness E. Assertiveness Answer: E Page: 472 Learning Objective: 18.3 Difficulty: Easy AACSB: Analytic skills

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Schermerhorn-Management, 12th edition

Test Bank

Bloom’s Taxonomy: Knowledge 81.

________ means being uncooperative and unassertive in approaching conflict by staying on a neutral position. A. Competition B. Accommodation C. Avoidance D. Compromise E. Collaboration Answer: C Page: 472 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

82.

________ means being cooperative but unassertive, letting the wishes of others rule, smoothing over or overlooking differences to maintain harmony. A. Accommodation B. Avoidance C. Competition D. Compromise E. Collaboration Answer: A Page: 472 Learning Objective: 18.3 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

Which of the following is true of the accommodating style of conflict management? A. It pretends that conflict doesn’t really exist. B. Everyone withdraws from the conflict and hopes it will simply go away. C. It leads to a win-win situation. D. It plays down differences and highlights areas of agreement. E. One party wins because superior skill allows his or her desires to be forced on the other. Answer: D Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

In the authoritative command approach of conflict management, managers ________. A. pretend that a conflict doesn’t really exist B. play down differences and highlight similarities to reduce conflict C. make each party give up something of value to the other D. make the parties work through conflict differences and solving problems so everyone wins E. use force, superior skill, or domination to “win” a conflict Answer: E Page: 473 Learning Objective: 18.3 Difficulty: Moderate

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Schermerhorn-Management, 12th edition

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 85.

Ross, a manager at Cyberdyne Inc., always looks for solutions where each party in a conflict wins an equal bit and loses an equal bit. Ross follows the ________ approach to conflict management. A. collaboration B. avoidance C. competition D. compromise E. accommodation Answer: D Page: 473 Learning Objective: 18.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

86.

A manager who is cooperative and assertive, and is trying to fully satisfy everyone’s concerns by working through their differences, is an adherent of the ________ approach to conflict management. A. competition B. compromise C. collaboration D. avoidance E. accommodation Answer: C Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

87.

Which of the following conflict management approaches often create lose–lose conflict? A. Competing and compromising B. Avoiding and accommodating C. Competing and collaborating D. Authoritative command and compromising E. Collaborating and compromising Answer: B Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

88.

________ involves working through conflict differences and solving problems so everyone wins. A. Compromise B. Competition C. Smoothing D. Avoiding E. Collaboration Answer: E Page: 473

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Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 89.

________ and ________ styles tend to create win–lose conflict where each party strives to gain at the other’s expense. A. Withdrawing; collaborating B. Avoiding; accommodating C. Smoothing; collaborating D. Competing; compromising E. Collaborating; accommodating Answer: D Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

When personalities and emotions prove irreconcilable, the ________ approach is often helpful. A. avoidance B. structural C. collaboration D. accommodation E. smoothing Answer: B Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

91.

What is the structural solution to managing conflict when people just can’t seem to appreciate one another’s points of view? A. Appealing to higher-level goals B. Making more resources available to everyone C. Altering the physical environment D. Changing reward systems E. Using integrating devices Answer: A Page: 473 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

Which of the following is an integrating device used to help manage conflicts between groups? A. Transferring one or more of the conflicting parties B. Rearranging facilities, work space, or workflows C. Changing reward systems D. Making more resources available to everyone E. Setting up cross-functional teams Answer: E

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Page: 474 Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 93.

________ is the process of making joint decisions when the parties involved have different preferences. A. Recommendation B. Negotiation C. Conferencing D. Proposition E. Integration Answer: B Page: 474 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

Substance goals are ________. A. not concerned with negotiation outcomes B. tied to content issues C. concerned with negotiation processes D. tied to the way people work together while negotiating E. tied to the way people will be able to work together again in the future Answer: B Page: 475 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

Which of the following is one of the criteria of an effective negotiation? A. Harmony B. Timeliness C. Authority D. Validity E. Credibility Answer: A Page: 475 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

________ negotiation focuses on win–lose claims made by each party for certain preferred outcomes. A. Distributive B. Integrative C. Principled D. Collaborative E. Substantive

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Answer: A Page: 475 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 97.

The goal of ________ negotiation is to achieve a final agreement based on the merits of each party’s claims. A. accommodating B. distributive C. principled D. authoritative command E. compromise Answer: C Page: 475 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

Which of the following is true of principled negotiation? A. It uses a win–lose orientation for certain preferred outcomes. B. Its emphasis on substance can become self-centered and competitive. C. Relationships often get sacrificed as process breaks down. D. Results should be based on some objective standard to gain integrated agreements. E. Focus should be on positions, not on interests to gain integrated agreements. Answer: D Page: 475 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

99.

________ in a negotiation is defined as the space between one party’s minimum reservation point and the other party’s maximum reservation point. A. Proxemics B. The arena of indifference C. Glass ceiling D. Mixed message space E. The bargaining zone Answer: E Page: 476 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

100.

The myth of the “fixed pie” in negotiations refers to the ________. A. overconfidence of a party by ignoring the other party’s needs B. assumption that in order for you to gain the other person must give something up C. error that occurs when parties don’t really make themselves understood to each other

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D. error that occurs when parties fail to listen well enough to understand what each other is saying E. error that occurs when a negotiator is too quick to assume that he or she understands well the negotiator from a different culture Answer: B Page: 476 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 101.

Which of the following is true in terms of the role of culture in negotiations? A. Negotiators from a high-context culture are used to getting information through direct questions and answers. B. Negotiators from a low-context culture tend to communicate indirectly. C. Negotiators from a low-context culture tend to use nondeclarative language. D. Negotiators from a low-context culture tend to use nonverbal signals. E. Negotiators from a high-context culture avoid hard-and-fast position statements. Answer: E Page: 478 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

________ involves a neutral third party who tries to improve communication between negotiating parties and keep them focused on relevant issues. A. Collective bargaining B. Mediation C. Avoidance D. Bargaining E. Structural negotiation Answer: B Page: 478 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

A(n) ________ is a neutral third party who issues a binding decision to resolve a dispute. A. mediator B. bargainer C. arbitrator D. avoider E. accommodator Answer: C Page: 478 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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104.

The process of ________ utilizes mediation or arbitration, but does so only after direct attempts to negotiate agreements between the conflicting parties have failed. A. bargaining B. integrative negotiation C. structural negotiation D. collective bargaining E. alternative dispute resolution Answer: E Page: 478 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

105.

A(n) ________ is a designated neutral third party who listens to complaints and disputes in an attempt to resolve them. A. compromiser B. bargainer C. ombudsperson D. advocate E. accommodator Answer: C Page: 478 Learning Objective: 18.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Essay Questions 106.

Describe persuasive and credible communication. Illustrate how you can build credibility in communication through expertise and relationships. Answer: Persuasive communication results in a recipient agreeing with or supporting the message being presented. Managers, for example, get things done through relationships with peers, teammates, coworkers, and bosses. Their success is often due more to convincing than to giving orders. Credible communication is that which is based on trust, respect, and integrity in the eyes of others. Managers must build credibility for persuasive communication through expertise and relationships. To build credibility through expertise, you must be knowledgeable about the issue in question or have a successful track record in dealing with similar issues in the past. In a hiring situation where you are trying to persuade team members to select candidate A rather than B, for example, you must be able to defend your reasons. And it will always be better if your past recommendations turned out to be good ones. To build credibility through relationships, you must have a good working relationship with the person to be persuaded. And it is always easier to get someone to do what you want if that person likes you. In a hiring situation where you want to persuade your boss to provide a special bonus package to attract top job candidates, for example, having a good relationship with your boss can add credibility to your request. Page: 461-462 18-25

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Learning Objective: 18.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 107.

Describe the different sources of noise that interfere with the effectiveness of the communication process. Answer: Common sources of noise include information filtering, poor choice of channels, poor written or oral expression, failures to recognize nonverbal signals, and physical distractions. 1. Information filtering: It is the intentional distortion of information to make it appear most favorable to the recipient. The problem with information filtering is someone telling the boss what they think he or she wants to hear. Whether the reason is a fear of retribution for bringing bad news, unwillingness to identify personal mistakes, or just a general desire to please, the end result is the same. The higher-level gets biased and inaccurate information from below and ends up making bad decisions. 2. Poor choice of channels: A communication channel is the pathway or medium through which a message is conveyed from sender to receiver. Good communicators choose the right channel, or combination of channels, to accomplish their intended purpose. Written channels—paper or electronic—are most acceptable for simple messages that are easy to convey and for those that require extensive dissemination quickly. They are also important as documentation when formal policies or directives are being conveyed. Spoken channels such as face-to-face or virtual meetings work best for messages that are complex and difficult to convey and where immediate feedback to the sender is valuable. They are more personal and more likely to be perceived as supportive or even inspirational. 3. Poor written or oral expression: Communication will only be effective when the sender expresses the message in a way that is clearly understood by the receiver. Words must be well chosen and properly used, something we all too often fail at. 4. Failure to recognize nonverbal signals: Nonverbal communication takes place through gestures, facial expressions, body posture, eye contact, and the use of interpersonal space. Mixed message results when words communicate one message while actions, body language, or appearance communicate something else. 5. Physical distractions: Any number of physical distractions can interfere with communication effectiveness. Some of these distractions include telephone interruptions, drop-in visitors, and lack of privacy. Page: 463-465 Learning Objective: 18.1 Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

108.

Explain the different causes of conflict. Answer: A number of things can cause or set the stage for conflict. Role ambiguities in the form of unclear job expectations and other task uncertainties increase the likelihood for people to work at cross-purposes. Resource scarcities cause conflict when people have to share or compete for them. Task interdependencies breed conflict when people depend on others to perform well in order to perform well themselves. Competing objectives are also opportunities for conflict. When goals are poorly set or reward systems are poorly designed, individuals and groups may come into conflict by working to one another’s disadvantage. Structural differentiation breeds conflict. Differences in organization structures and in the characteristics of the people staffing them may foster conflict because of incompatible approaches toward work. And, unresolved prior conflicts tend to erupt in later conflicts. Unless a conflict is fully resolved, it may remain latent only to emerge again in the future. Page: 471-472

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Learning Objective: 18.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 109.

Differentiate between distributive and principled negotiation. List four rules of principled negotiation. Answer: In distributive negotiation each party makes claims for certain preferred outcomes. This emphasis on substance can become self-centered and competitive, with each party thinking the only way for him or her to gain is for the other to lose. Relationships often get sacrificed as process breaks down in these win–lose conditions. In principled negotiation, sometimes called integrative negotiation, the orientation is win–win. The goal is to achieve a final agreement based on the merits of each party’s claims. No one should lose in a principled negotiation, and positive relationships should be maintained in the process. Four pathways or rules for gaining such integrated agreements are: 1. Separate the people from the problem. 2. Focus on interests, not on positions. 3. Generate many alternatives before deciding what to do. 4. Insist that results be based on some objective standard. Page: 475 Learning Objective: 18.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

110.

Explain the potential pitfalls in negotiation. Answer: The negotiation process is admittedly complex, and negotiators must guard against common pitfalls. The first is the myth of the “fixed pie.” This involves acting on the distributive win–lose assumption that in order for you to gain the other person must give something up. This fails to recognize the integrative assumption that the “pie” can sometimes be expanded or utilized to everyone’s advantage. A second negotiation error is nonrational escalation of conflict. The negotiator gets locked into previously stated “demands” and allows personal needs for “ego” and “saving face” to inflate the perceived importance of satisfying them. A third negotiating error is overconfidence and ignoring the other’s needs. The negotiator becomes overconfident, believes his or her position is the only correct one, and fails to consider the needs of the other party. The fourth error is too much “telling” and too little “hearing.” The “telling” error occurs when parties to a negotiation don’t really make themselves understood to each other. The “hearing” error occurs when they fail to listen well enough to understand what each other is saying. Another potential negotiation pitfall in our age of globalization is premature cultural comfort. This occurs when a negotiator is too quick to assume that he or she understands the intentions, positions, and meanings of a negotiator from a different culture. A negotiator from a low-context culture, for example, is used to getting information through direct questions and answers. But this style might have difficulties when dealing with a negotiator from a high-context culture where the tendency is to communicate indirectly, use nondeclarative language and nonverbal signals, and avoid hardand-fast position statements. It is also important to avoid the trap of ethical misconduct. The motivation to negotiate unethically sometimes arises from pure greed and undue emphasis on the profit motive. This may be experienced as a desire to “get just a bit more” or to “get as much as you can” from a negotiation. The motivation to behave unethically may also result from a sense of competition. This is a desire to “win” a negotiation just for the sake of winning it, or because of the misguided belief that someone else must “lose” in order for you to gain. Page: 476-478 Learning Objective: 18.4

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Difficulty: Hard AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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Schermerhorn-Management, 12th edition

Test Bank

Chapter 19: Operations and Services Management True/False Questions 1.

The span of operations management does not cover the full input–throughput–output cycle. Answer: False Page: 5 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

RyanAir transforming resource inputs into low-cost, dependable air travel is an example of a manufacturing organization. Answer: False Page: 5 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Productivity is a qualitative measure of the efficiency with which inputs are transformed into outputs. Answer: False Page: 6 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Potential drivers of competitive advantage include the ability to outperform based on speed to market. Answer: True Page: 6 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Workers are highly independent in mass production. Answer: False Page: 7 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

Though the equipment used may not be elaborate, a high level of worker skill is often needed in small-batch production. Answer: True Page: 7 Learning Objective: 19.1

19-1

Schermerhorn-Management, 12th edition

Test Bank

Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 7.

Continuous-process production is equipment-intensive, but it can often be operated by a relatively small labor force. Answer: True Page: 8 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Cellular layouts place machines doing similar work together, so that the movement of materials from one to the other is as efficient as possible. Answer: False Page: 8 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Remanufacturing takes used items apart and rebuilds them as products to be used again. Answer: True Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

10.

The service-profit chain consists of all activities involved in the direct link between an organization’s service providers and their employees. Answer: False Page: 9 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

11.

Long-linked technology can function like mass production, where a client is passed from point to point for various aspects of service delivery. Answer: True Page: 9 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

12.

Value creation means that the effort and resources invested to accomplish a task or activity or work process is worth more than its end result. Answer: False Page: 9 Learning Objective: 19.2 Difficulty: Moderate

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Schermerhorn-Management, 12th edition

Test Bank

AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 13.

The value chain includes support activities, such as procurement, human resource management, technology development and support, and financial and infrastructure maintenance. Answer: True Page: 10 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

14.

To leverage buying power, more organizations are centralizing purchasing to allow buying in volume. Answer: True Page: 12 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

15.

An economic order quantity approach to inventory control allows for inventory to be purchased only when suppliers grant quantity discounts. Answer: False Page: 12 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

16.

In the just-in-time approach, almost no inventories are maintained. Answer: True Page: 13 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

17.

The break-even point is achieved when assets equal liabilities. Answer: False Page: 13 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

18.

Customer relationship management applies only to external customers. Answer: False Page: 16 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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19.

Internal customers are the individuals and groups who are found within the organization. Answer: True Page: 16 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

20.

ISO certification uses a process that makes quality principles part of the organization’s strategic objectives, applying them to all aspects of operations and striving to meet customers’ needs by doing things right the first time. Answer: False Page: 16 Learning Objective: 19.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

21.

The basic notion driving continuous improvement is that one can never be satisfied. Answer: True Page: 17 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

22.

In respect to statistical quality control, the lower the Sigma the lower the number of defects. Answer: False Page: 17 Learning Objective: 19.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

23.

Control charts are pictorial ways of displaying trends. Answer: False Page: 17 Learning Objective: 19.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

24.

The goal of business process reengineering is to break old work habits and focus operations management attention on better ways of doing things. Answer: True Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

25.

A work process is a related group of tasks that together create a value for the organization. Answer: False Page: 18

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Schermerhorn-Management, 12th edition

Test Bank

Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 26.

The various parts of a work process must all be completed to achieve the desired results, and they must typically be completed in a given order. Answer: True Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

27.

Through a technique called value chain analysis, core processes are identified and carefully evaluated for their performance contributions. Answer: False Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

28.

The first step of process value analysis is to map the core processes with respect to workflows. Answer: False Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

29.

In process value analysis, one must search for ways to eliminate unnecessary tasks or work, delays, errors, and misunderstandings. Answer: True Page: 19 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

30.

Ideally, a purchase order should result in at least three value-added outcomes: order fulfillment, a paid bill, and a satisfied supplier. Answer: True Page: 19-20 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

Multiple Choice Questions

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Test Bank

31.

________ is the process of managing productive systems that transform resources into finished products. A. Conflict management B. Marketing management C. Financial management D. Human resource management E. Operations management Answer: E Page: 5 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

32.

The span of operations management covers the ________. A. full marketing cycle B. period from prototyping to commercialization C. full financial year D. full input–throughput–output cycle E. period from employee hiring to employee termination Answer: D Page: 5 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

33.

Which of the following do typical operations management decisions address? A. Technologies B. Remuneration C. Fringe benefits D. Capital investments E. Advertising Answer: A Page: 5 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

34.

Organizations that produce physical goods are referred to as ________ organizations. A. manufacturing B. service C. advertising D. non-profit E. virtual Answer: A Page: 5 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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35.

TNC Inc. produces a variety of products, such as toys, furniture, and camping supplies. TNC Inc. is a ________ organization. A. service B. tourist C. manufacturing D. non-profit E. process-based Answer: C Page: 5 Learning Objective: 19.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

36.

Inzo is a company that transforms resource inputs into life and health insurance. Its products are sold all over the country. This is an example of a(n) ________ organization. A. process-based B. eco-friendly C. service D. manufacturing E. sustainable Answer: C Page: 5 Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

37.

The core issues in operations and services management depend mainly on how ________ are achieved. A. productivity and competitive advantage B. effectiveness and efficiency C. profitability and expansion D. savings on tax advantages E. advertising and promotion Answer: A Page: 6 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

38.

________ is the quantitative measure of the efficiency with which inputs are transformed into outputs. A. Effectiveness B. Profitability C. Productivity D. Asset management E. Resource tracking Answer: C Page: 6 Learning Objective: 19.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 39.

The basic productivity equation is: A. Productivity = Efficiency/Effectiveness. B. Productivity = Output/Input. C. Productivity = Input/Output. D. Productivity = Profitability/Efficiency. E. Productivity = Income/Expenditure. Answer: B Page: 6 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

40.

A local auto-manufacturing plant in Denver produces 79 cars in a 6-day week. What is the plant’s productivity per day? A. 9.28 cars per day B. 10 cars per day C. 13.16 cars per day D. 11.28 cars per day E. 15 cars per day Answer: C Page: 6 Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

41.

An organization gains a ________ advantage when it has a core competency that sets it apart from its competitors and gives it an advantage over them in the marketplace. A. home court B. market C. competitive D. late mover E. virtual Answer: C Page: 6 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

42.

The possession of strategic assets like patents has made General Electric (GE) one of the most powerful companies in the world. Holding such strategic assets has given GE a ________ advantage. A. competitive B. late mover C. legislative D. home court E. monopolistic Answer: A

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Page: 6 Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 43.

Potential drivers of ________ include the ability to outperform based on product innovation, customer service, speed to market, manufacturing flexibility, and product or service quality. A. competitive advantage B. skimming C. cartelization D. reverse innovation E. incremental change Answer: A Page: 6 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

44.

The key result of a competitive advantage for a company is an ability to ________. A. sidestep government regulations on preferred activities of the company B. establish a monopolistic market position by dictating consumer needs and preferences C. improve the quality of products in spite of a decrease in the efficiency of production D. consistently do something of high value that one’s competitors cannot replicate quickly or do as well E. promote products that are sustainable and environmentally friendly Answer: D Page: 6 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

45.

________ is the combination of knowledge, skills, equipment, and work methods used to transform resource inputs into organizational outputs. A. Job design B. Organizational structure C. Engineering D. Knowledge management E. Technology Answer: E Page: 7 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

46.

Technology is the way tasks are accomplished using ________. A. legislative procedures and government policies B. consumer preferences and wants C. tools, machines, techniques, and human know-how D. authoritarian management techniques

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E. monopolistic trade practices Answer: C Page: 7 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 47.

An organization that produces large numbers of uniform products with an assembly-line system is using ________ production. A. customized B. mass C. continuous-process production D. niche E. lean Answer: B Page: 7 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

48.

Which of the following is true of mass production? A. Workers are highly independent. B. Each batch of items is tailor-made to fit customer specifications. C. The equipment used is never elaborate or sophisticated. D. Products are manufactured uniformly with a conveyer belt system. E. Workers often follow detailed instructions while performing simplified jobs. Answer: E Page: 7 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

49.

In which of the following would you find the use of mass production? A. An automated chemical plant B. An oil refinery C. A power plant D. An aircraft manufacturing plant E. A racing bicycle shop Answer: D Page: 7 Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

50.

An organization that manufactures a variety of products crafted to fit customer specifications is using ________ production technology. A. continuous-process B. mass C. one-time D. large-scale

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E. small-batch Answer: E Page: 7 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 51.

In which of the following organizations would you find small-batch production? A. A steel mill B. An oil refinery C. An automated nuclear plant D. An aircraft manufacturing plant E. A customized furniture shop Answer: E Page: 7 Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

52.

Cyberdyne Inc. produces its PCs by endlessly processing raw materials through a highly automated production system with largely computerized controls. Cyberdyne Inc. is using ________ production technology. A. one-time B. mass C. continuous-process D. small-batch E. long-linked Answer: C Page: 8 Learning Objective: 19.1 Difficulty: Moderate AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

53.

Oil refineries and power plants are examples of organizations using ________ production. A. continuous-process B. small-batch C. mass D. customized E. one-time Answer: A Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

54.

Which of the following is true about continuous-process production systems? A. They need to be operated by a relatively large labor force. B. They cater to the needs of customers who demand tailor-made products. C. They are equipment-intensive.

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D. They increase the dependence of workers on one another as the product passes from stage to stage until completion. E. They do not require large capital investments. Answer: C Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 55.

The use of robotics involves ________. A. computer-controlled machines that perform physically repetitive work with consistency and efficiency B. taking used items apart and rebuilding them as products to be used again C. automated operations that quickly shift from one task or product type to another D. placing machines doing different work together E. driving product designs, process plans, and manufacturing from a common computer platform Answer: A Page: 8 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

56.

New computer technologies have made possible the use of ________ that allow automated operations to quickly shift from one task or product type to another. A. flexible manufacturing systems B. cellular layouts C. computer-integrated manufacturing technologies D. design for disassembly processes E. lean production technologies Answer: A Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

57.

Efficient large-scale production of products meeting specific customer requirements is referred to as ________. A. mass customization B. remanufacturing C. niche production D. customer-integrated manufacturing E. lean production Answer: A Page: 8 Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

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58.

________ place(s) machines doing different work together, so that the movement of materials from one to the other is as efficient as possible. A. Mass customization B. Computer-integrated manufacturing C. Cellular layouts D. Lean production E. Remanufacturing Answer: C Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

59.

________ accommodate(s) more teamwork on the part of machine operators. A. Lean production B. Computer-integrated manufacturing C. Mass customization D. Cellular layouts E. Remanufacturing Answer: D Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

60.

In ________, product designs, process plans, and manufacturing are driven from a common computer platform. A. remanufacturing B. mass computerization C. cellular layouts D. computer-integrated manufacturing E. computerized axial tomography Answer: D Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

61.

________ continuously innovates and employs best practices to keep simplifying processes, reducing costs, and increasing production efficiencies. A. CIM B. Lean production C. Remanufacturing D. Robotics E. Mass customization Answer: B Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

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62.

The goal of “design for disassembly” is to ________. A. place machines doing different work together B. design and manufacture products in ways that consider how their component parts will be recycled at the end of their lives C. combine flexibility with efficiency by allowing automated operations to quickly shift from one task or product type to another D. accommodate more teamwork on the part of machine operators E. take used items apart and rebuild and redesign them as products to be used again Answer: B Page: 8 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

63.

The goal of ________ is to continuously innovate and employ best practices to keep simplifying processes, reducing costs, and increasing production efficiencies. A. cellular layouts B. remanufacturing C. lean production D. design for disassembly E. mass customization Answer: C Page: 8 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

64.

The process of ________ takes used items apart and rebuilds them as products to be used again to save costs. A. remanufacturing B. business process reengineering C. computer-integrated manufacturing D. lean production E. mass customization Answer: A Page: 8 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

65.

________ technology focuses the efforts and talents of many people to serve clients. A. Mediating B. Long-linked C. Robotic D. Intensive E. Extensive Answer: D Page: 9 Learning Objective: 19.1 Difficulty: Easy

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AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 66.

In which of the following is intensive technology used? A. Banks B. Real estate C. Insurance D. Health care E. Employment agency Answer: D Page: 9 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

67.

________ technology links people together in a beneficial exchange of values, such as a buyer and seller in the insurance industry. A. Mediating B. Intensive C. Remanufacturing D. Long-linked E. Mass-production Answer: A Page: 9 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

68.

In ________ technology, a client is passed from point to point for various aspects of service delivery. A. long-linked B. mediating C. intensive D. mass customization E. cellular layout Answer: A Page: 9 Learning Objective: 19.1 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

69.

ABC Auto Detailing allows its customers to choose the services they are interested in receiving by moving them along to each point in the service delivery that best meets their needs. ABC is utilizing ________ technology. A. mediating B. long-linked C. intensive D. continuous-process E. cellular layout Answer: B Page: 9

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Learning Objective: 19.1 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 70.

Whereas productivity is considered the major efficiency measure in both manufacturing and services, “value creation” should be the target ________ measure. A. scaling B. profitability C. competitive D. break-even E. effectiveness Answer: E Page: 9 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

71.

________ occurs when the result of a work task or activity makes a product or service worth more in terms of potential customer appeal than at the start. A. Productivity B. Profitability C. Value creation D. Asset management E. Core competency Answer: C Page: 9 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

72.

Which of the following is true about value creation? A. It refers to productivity in products and services. B. It focuses the efforts and talents of many people to serve clients. C. It takes used items apart and rebuilds them as products to be used again and saves up to 30% on costs. D. It refers to a production technique in which a variety of products are crafted to fit customer specification. E. It occurs when the result of a work task or activity makes a product or service worth more in terms of potential customer appeal than at the start. Answer: E Page: 9 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

73.

The value chain includes all primary activities as well as support activities. Which of the following is classified as a primary activity? A. Human resource management B. Technology development and support C. Procurement

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D. Financial and infrastructure maintenance E. Outbound logistics Answer: E Page: 10 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 74.

Which of the following is classified as a support activity? A. Operations B. Marketing C. After-sales service D. Financial maintenance E. Inbound logistics Answer: D Page: 10 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

75.

________ involves strategic management of all operations linking an organization and its suppliers, including such areas as purchasing, manufacturing, transportation, and distribution. A. VCM B. CRM C. TQM D. SCM E. CIM Answer: D Page: 11 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

76.

Wal-Mart uses an advanced information system that continually updates inventory records and sales forecasts based on point-of-sale computerized information. This is an example of IT utilization in ________. A. supply chain management B. customer relationship management C. total quality management D. strategic constituencies analysis E. supplier value analysis Answer: A Page: 11 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

77.

Which of the following do organizations do to leverage buying power? A. Centralize purchasing B. Use just-in-time management

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C. Follow total quality management D. Introduce capital-intensive technology E. Spread its purchases over many suppliers Answer: A Page: 12 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 78.

________ refers to the amount of materials or products kept in storage. A. Inventory B. By-products C. Freight D. Lading E. Deliverables Answer: D Page: 12 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

79.

A(n) ________ is used to electronically track the movement of goods, parts, and even people through various steps in the value chain. A. RFID tag B. JIT tag C. access card D. proximity card E. mass surveillance tool Answer: A Page: 12 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

80.

The ________ method of inventory control involves ordering a fixed number of items every time an inventory level falls to a predetermined point. A. inventory control number B. quality control paradox C. economic order quantity D. break-even quantity E. just-in-time scheduling Answer: C Page: 12 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

81.

John, the owner of a local supermarket, has created a policy for ordering supplies within his department such that at any point in time when the inventory of an item drops to less than 10 percent, a new order is created for a fixed number of items. John is utilizing ________.

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A. just-in-time scheduling B. low inventory principle C. inventory control number D. economic order quantity E. break-even quantity Answer: D Page: 12 Learning Objective: 19.2 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application 82.

The ________ refers to the juncture when losses come to an end and the firm begins to make a profit. A. current ratio B. net margin C. debt ratio D. economic order quantity E. break-even point Answer: E Page: 13 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

83.

The break-even point is where ________. A. total fixed costs = total variable costs B. credits = debits C. sum of assets = sum of liabilities D. revenues = costs E. income = expenditure Answer: D Page: 13 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

84.

The formula for calculating the break-even point is ________. A. Break-even point = Variable costs/Fixed Costs B. Break-even point = Fixed costs/(Price-Variable costs) C. Break-even point = Variable costs/(Price-Fixed costs) D. Break-even point = Profit/Loss E. Break-even point = Income/Expenditure Answer: B Page: 13 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

85.

________ calculates the point at which revenues cover costs under different “what if” conditions. A. Just-in-time system

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B. Economic order quantity C. Demand-supply gap D. Break-even analysis E. Cost-benefit analysis Answer: D Page: 13 Learning Objective: 19.2 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 86.

________ uses the latest information technology that allows organizations to maintain intense communication with customers as well as to gather and utilize data regarding the customers’ needs and preferences. A. CRM B. VCM C. TQM D. SCM E. CIM Answer: A Page: 15 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

87.

Omniscia.com, an online bookstore, compiles a significant amount of information regarding the preferences and needs of its customers. Whenever a regular customer visits the Website to purchase a book, Omniscia makes recommendations based on the customer’s previous choices. This is an example of ________. A. internal customer management B. customer relationship management C. value chain management D. total quality management E. supply chain management Answer: B Page: 15 Learning Objective: 19.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

88.

Which of the following is true about external customers? A. They refer to industrial customers only. B. They are the employees of the organization. C. They are the individuals who purchase the goods or services produced by an organization. D. They refer to retail customers only. E. They are the individuals and groups who use or otherwise depend on one another’s work in order to do their own jobs well. Answer: C Page: 16 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills

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Bloom’s Taxonomy: Knowledge 89.

Which of the following is true about internal customers? A. They refer to industrial customers only. B. They are the clients who purchase or use the goods or services directly. C. They are the individuals who purchase the goods or services produced by an organization. D. They refer to retail and wholesale customers. E. They are the individuals and groups who use or otherwise depend on one another’s work in order to do their own jobs well. Answer: E Page: 16 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

90.

Jeremy assembles circuit boards in a computer manufacturing plant. He gets the chips for the boards from David, and after assembling the circuit boards, Jeremy then forwards them to Bill, who places them into finished components. This example illustrates the concept of ________. A. external customers B. efficient task assignments C. internal customers D. total quality management E. supply chain management Answer: C Page: 15 Learning Objective: 19.3 Difficulty: Hard AACSB: Reflective thinking skills Bloom’s Taxonomy: Application

91.

________ certification indicates an organization or product’s conformance with a rigorous set of international quality standards. A. ISO B. AAA C. Platinum D. ISA E. NSIT Answer: A Page: 16 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

92.

________ is given by the president of the United States to business, health care, education, and nonprofit organizations that meet quality criteria. A. ISO certification B. W. Edwards Deming award C. NSIT certification D. Malcolm Baldrige award E. AAA certification Answer: D Page: 16

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Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 93.

________ is the process of managing with an organization wide commitment to continuous improvement, product quality, and customer needs. A. SCM B. ISO C. TQM D. CRM E. QRS Answer: C Page: 16 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

94.

The notion that organization members should never be satisfied with current performance is the foundation of ________. A. performance management B. performance appraisal C. supply chain management D. human resources management E. continuous improvement Answer: E Page: 17 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

95.

Continuous improvement is the attempt to ________. A. continually watch quality control systems to detect errors and inconsistencies B. endlessly search for new ways to achieve better work quality and performance C. search and look for ways to confirm the efficiency of currently utilized production methods D. endlessly seek competitive marketing opportunities to exploit and maximize profits of the organization E. monitor future production and compare it with past standards Answer: B Page: 17 Learning Objective: 19.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

96.

In statistical quality control, the Greek letter ________ is a measure of defects in a work process. A. alpha B. sigma C. beta D. delta E. omega Answer: B

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Page: 17 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 97.

A(n) ________ program sets a quality standard of 3.4 defects or less per million products or service deliveries. A. ISO certification B. Six Sigma C. ISA certification D. NSIT certification E. Eleven Lambda Answer: B Page: 17 Learning Objective: 19.3 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

98.

________ involves taking samples of work, measuring quality in the samples, and determining the acceptability of results. A. Just-in-time scheduling B. Scaling C. Work sampling acceptability analysis D. Statistical quality control E. Break-even analysis Answer: D Page: 17 Learning Objective: 19.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

99.

________ is the systematic and complete analysis of work processes and the design of new and better ones. A. Process reengineering B. Process remanufacturing C. Process restructuring D. Supply chain management E. Decision support system Answer: A Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

100.

A ________ is a related group of tasks that together create a value for the customer. A. job description B. job responsibility C. job profile D. work process E. task group

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Answer: D Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge 101.

________ refers to the way work moves from one point to another in the manufacturing or service delivery processes. A. Work structure B. Job stream C. Workflow D. Value chain E. Process flux Answer: C Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

102.

________ analysis is a technique that identifies and evaluates core processes for their performance contributions. A. Value chain B. Break-even C. Process value D. Profit-benefits E. Quantitative performance Answer: C Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

103.

Which of the following is the first step of process value analysis? A. Map the core processes with respect to workflows B. Search for ways to eliminate delays, errors, and misunderstandings C. Evaluate all core process tasks D. Search for ways to eliminate unnecessary tasks or work E. Identify the core processes Answer: E Page: 18 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge

104.

In the final step of process value analysis, we must search for ________. A. ways to eliminate unnecessary tasks or work in the work process B. efficiencies to eliminate delays in the work process C. ways to eliminate errors in the work process D. ways to eliminate misunderstandings in the work process E. efficiencies to transfer work among people and departments

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Answer: E Page: 19 Learning Objective: 19.4 Difficulty: Easy AACSB: Analytic skills Bloom’s Taxonomy: Knowledge Essay Questions 105.

Explain why the achievement of “productivity” and “competitive advantage” is the core issue in operations and services management. Answer: The core issues in operations and services management boil down to how “productivity” and “competitive advantage” are achieved. This focuses management attention on the various processes and activities that turn resources—in the form of people, materials, equipment, and capital—into finished goods and services. Operations management in both manufacturing and services is very concerned with productivity—a quantitative measure of the efficiency with which inputs are transformed into outputs. The basic productivity equation is: Productivity = Output/Input. Operating efficiencies that increase productivity, by contrast, are among the ways organizations may gain competitive advantage—defined as a core competency that allows an organization to outperform competitors. Potential drivers of competitive advantage include the ability to outperform based on product innovation, customer service, speed to market, manufacturing flexibility, and product or service quality. But regardless of how competitive advantage is achieved, the key result is the same: an ability to consistently do something of high value that one’s competitors cannot replicate quickly or do as well. Page: 6 Learning Objective: 19.1 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

106.

Why is value chain and supply chain management important in operations management? Answer: The value chain is the specific sequence of activities that creates goods and services with value for customers. As an organization, it is important to be able to identify and diagram the components of the value chain so as to focus attention on three major questions. First: What value is being created for customers in each step? Second: How efficient is each step as a contributor to overall organizational productivity? Third: how can value creation be improved overall? Supplier relationships on the input side must be well managed. Supply chain management (SCM) involves strategic management of all operations linking an organization and its suppliers, including such areas as purchasing, manufacturing, transportation, and distribution. The goals of supply chain management are to achieve efficiency in all aspects of the supply chain while ensuring on-time availability of quality resources and products. Page: 10-11 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

107.

Explain the inventory control methods of EOQ and JIT. Answer: The goal of inventory control is to make sure that an inventory is just the right size to meet performance needs, thus minimizing the cost. The economic order quantity (EOQ) method of inventory control involves ordering a fixed number of items every time an inventory level falls to a predetermined point. When this point is reached, a decision is automatically made (typically by computer) to place a standard order to replenish the stock. The order sizes are mathematically

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calculated to minimize costs of inventory. The best example is the local supermarket, where hundreds of daily orders are routinely made on this basis. Another approach to inventory control is just-in-time scheduling (JIT), made popular by the Japanese. JIT systems reduce costs and improve workflow by scheduling materials to arrive at a workstation or facility “just in time” to be used. Since almost no inventories are maintained, the just-in-time approach is an important productivity tool. Page: 12-13 Learning Objective: 19.2 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension 108.

Explain how Six Sigma programs are used in statistical quality control. Answer: Statistical quality control measures work samples for compliance with quality standards. The task of tallying and analyzing defects can be done with a variety of sophisticated statistical techniques. One involves the Greek letter sigma, which in statistics is used to identify estimated standard deviation from a norm. In respect to statistical quality control, this would be a measure of defects in a work process, and the higher the Sigma the lower the number of defects. Many manufacturers now use a Six Sigma program, meaning that statistically the firm’s quality performance standard is set at the Six Sigma level. That is, the quality goal is to have no more than 3.4 defects per million units of goods produced or services completed. This translates to a perfection rate of 99.9997 percent. Page: 17 Learning Objective: 19.3 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

109.

What is process reengineering? How does process value analysis typically take place? Answer: Process reengineering is defined as the systematic and complete analysis of work processes and the design of new and better ones. The goal is to break old work habits and focus operations management attention on better ways of doing things. Process value analysis typically takes place as follows. • Identify the core processes. • Map the core processes with respect to workflows. • Evaluate all core process tasks. • Search for ways to eliminate unnecessary tasks or work. • Search for ways to eliminate delays, errors, and misunderstandings. • Search for efficiencies in how work is shared and transferred among people and departments. Page: 18-19 Learning Objective: 19.4 Difficulty: Moderate AACSB: Analytic skills Bloom’s Taxonomy: Comprehension

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